US MANUFACTURING PMI
S&P Global: Stronger improvement in manufacturing conditions driven by stockpiling amid rising prices and supply disruptions
The headline index from the report, the seasonally adjusted S&P Global US Manufacturing Purchasing Managers’ Index™ (PMI®) recorded 54.5 in April. That was up from 52.3 in March and signaled the strongest expansion in the manufacturing economy since May 2022.
Stronger growth emanated from a quicker expansion in new order intakes. The increase was strong, and the steepest in four years. That said, growth was largely limited to the domestic market as exports were a source of demand weakness after falling for the eleventh consecutive month.
Tariffs were reported to have weighed on export sales, though some companies stated that the war in the Middle East had hindered international sales.
Increased new order inflows led to a stronger uplift in output, again the strongest since April 2022. However, firms often mentioned that growth in both new orders and output was the result of stock building efforts to protect against increasing price and supply pressures related to the war. Indeed, latest data showed a net increase in finished goods inventory, the first growth in three months.
In response to stronger production requirements, purchasing activity rose at the sharpest rate for four years during April. Where buying rose, this was also linked to additional purchases of inputs to protect against further price rises and supply chain disruption. In turn, there was a renewed upturn in pre-production inventories. However, growth was marginal amid difficulties receiving inputs due to widespread material shortages. These drove average lead times higher in April, with the latest lengthening the most marked since August 2022.
Backlogs of work rose at an accelerated rate in April as increased orders, material shortfalls and a smaller workforce placed additional strain on capacity. Latest survey data show that employment levels had in fact fallen over the month, marking the first instance of job shedding for nine months and the most pronounced for a year-and-a-half.
Cost concerns placed some downward on employment, with firms noting the non-replacement of leavers as material shortages and supply disruption pushed up input prices sharply during April. Overall, input cost inflation strengthened to a ten-month high and remained historically elevated. Goods producers responded by recording their most pronounced uplift in charges since June 2025.
Finally, manufacturing firms held a positive outlook regarding the year ahead for production. Upbeat business activity expectations were linked to confidence that the impact of the war would not be as pronounced as previously feared, while the impact of tariffs would likely soften over the coming months. As a result, the degree of confidence improved to the highest since February 2025.
(…) The Prices Index remained in expansion (or ‘increasing’ territory), registering 84.6 percent, a 6.3-percentage point jump from March’s reading of 78.3 percent. In the last three months, the Prices Index has increased 25.6 percentage points to reach its highest level since April 2022 (84.6 percent). (…)
In this second month of the Iran War (at the time of data collection), 31 percent of the comments were positive and 69 percent negative, with a positive to negative sentiment ratio of 1 to 2.2. Among comments, the war was mentioned in 47 percent and tariffs in 18 percent. As was the case last month, some panelists referenced both topics within a single comment or in mixed sentiment. (…)
“All imports [prices] from China are up 15 percent to 25 percent, which is impossible for us to absorb or to fully pass along. Our suppliers in China are telling us that oil is at an all-time high, which is putting huge challenges on their cost structures.” [Chemical Products]
“Have not yet started to see the full impact of fuel increases but are aware they are coming.” [Machinery]
“However, higher cost pressures are impacting margins.” [Fabricated Metal Products]
@GlobalMktObserv
CANADA: Strong growth of manufacturing sector in April as stock building supports notable uplift in new orders
- Production, employment and purchasing all increase
- Fears of higher prices and product availability supports demand
- War in Middle East leads to heightened supply disruption and steeply rising costs
(…) anecdotal evidence suggested that April’s growth was often driven by stock building. According to panellists, the war in the Middle East led to considerable concerns regarding product availability, supply-chain robustness and the likelihood of higher prices in the months ahead.
Moreover, April’s survey highlighted the immediate impact of the war: higher fuel and freight prices pushed up overall operating costs to a degree not seen in over three-and-a-half years whilst vendor delivery times lengthened at the greatest rate
since March 2025. (…)
Panellists stressed that stock building was in part linked to expected reductions in availability and the likelihood of rising prices in the coming months. (…)
Manufacturers responded by raising their own charges wherever possible with latest data showing the greatest increase in selling prices since late 2022.
CHINA: Strongest improvement in manufacturing conditions since December 2020
The headline seasonally adjusted RatingDog China General Manufacturing Purchasing Managers’ Index™ (PMI) posted above the 50.0 no-change mark for the fifth month running in April and rose to 52.2, from 50.8 in March. The latest reading signalled the strongest improvement in manufacturing conditions since December 2020.
Production increased at the fastest pace in nearly two years, driven by robust demand, operational improvements and the launch of new products. The expansion was broad-based and particularly strong in the consumer goods sector.
Supporting output growth was a faster rise in new orders, which grew at the second-fastest rate in nearly five years, almost matching February’s pace of expansion. Manufacturers attributed new orders to increased customer demand, improved market conditions and the introduction of innovative products. Expanded sales channels further contributed to growth momentum. New export orders rose for the fourth consecutive month, albeit at a comparatively modest rate to total demand.
Business sentiment for the coming year strengthened notably in April. The production outlook improved since March and exceeded the trend over the past two years. Expectations for continued growth were underpinned by rising market demand, ongoing product innovation, capacity expansion and efficiency gains. Companies also anticipate successful new projects, business development initiatives and supportive government policies.
Employment was broadly stable in April, following continuous gains in the opening quarter of 2026. While consumer goods firms increased their workforces, slight declines were observed in the intermediate and investment goods sectors.
Backlogs of work continued to accumulate in April, driven by higher new orders. Investment goods manufacturers reported the most pronounced increase in incomplete workloads. The rate of growth eased slightly from March, however. Finished goods inventories were broadly stable.
Supply chain pressures persisted, with input lead times lengthening again in April. Although the degree of delays moderated compared to March, ongoing raw material shortages, delivery disruptions, rising input prices and geopolitical tensions — particularly in the Middle East — continued to impact supply chains. All three sub-sectors experienced delays in April.
Cost pressures rose further in April, with input price inflation the highest in just over four years. Rising costs for raw materials and higher oil prices coupled with geopolitical uncertainty had reportedly pushed input prices upward.
As a result, Chinese firms raised their output prices at the fastest rate in four-and-a-half years, with manufacturers passing higher costs on to customers. Export charges also increased at the fastest pace since October 2021.
Manufacturers responded to rising demand by expanding purchasing activity for the fourth consecutive month, with the rate of increase among the strongest seen over the past year. Input stocks grew for the fifth month in a row, reflecting efforts to bolster supply chain resilience.
The motivation for enterprises to expand production came from both the increase in both quantity and price.
On one hand, the objective growth of new orders was evident, as the PMI for new orders significantly improved. At the same time, new export orders have continued to expand this year.
On the other hand, the effect of price hikes was significant. Policy-induced price hikes in the past year and imported price hikes since March have led to a significant increase in product factory prices. Despite the price hikes, demand did not show a significant weakening or even continued to strengthen, which provided certain support for enterprises to expand production and replenish inventories.
JAPAN: Manufacturing production expands at quickest rate since February 2014
- Output growth accelerates as sales rise at fastest rate since January 2022
- Input cost inflation surges to three-and-a-half-year high
- Supply chain performance deteriorates at steepest rate in 15 years
(…) Companies generally attributed the upturn to higher new order intakes and efforts to build inventories due to uncertainty over the war in the Middle East.
(…) firms often noting that concerns over future supply chain delays and price increases due to the war in the Middle East had led customers to place new orders. There were also reports that higher sales had been supported by greater demand for AI-related technology. (…)
Supplier shortages and price revisions led to the strongest rise in overall production costs since October 2022. Panel members frequently mentioned higher prices for raw materials, oil and transport in the latest survey period.
To help ease pressure on margins, companies raised their selling prices at a quicker pace in April. Notably, the rate of output charge inflation was also the fastest recorded since
late-2022.
S&P Global purchasing managers indexes released Monday showed that while production sped up in major economies last month, that was partly because of fears about shortages and higher prices as the conflict choked trade flows. (…)
Headline manufacturing PMIs rose in Taiwan, Japan and South Korea in April as anxiety over future supply-chain delays and price increases prompted more purchasing.
Other factors contributed to the upswing in sales and output, including artificial-intelligence-related demand in Japan and Taiwan, and new product launches in South Korea.
In April, Taiwan’s manufacturing industry saw expenses rise at one of the fastest rates since the PMI survey began 22 years ago, she said.
That was echoed in South Korea, where manufacturers reported record increases in cost burdens and charges. Input costs hit multiyear highs in Japan, Indonesia and Vietnam too, as raw materials became more expensive.
Similar cost pressures were seen in India, where factory growth stayed sluggish—marking the second-slowest improvement in operating conditions in nearly four years.
In Indonesia and Vietnam, the spike in costs came alongside a pullback in output, signaling higher vulnerability among emerging economies.
New orders in Vietnam fell for the first time in eight months in April, and output will follow suit ahead unless the price and supply environment improves soon, said Andrew Harker at S&P Global Market Intelligence.
Output has already contracted in Indonesia, and economists warn that manufacturing sectors elsewhere could follow suit once stockpiling tailwinds fade, even in countries benefiting from continued global demand for tech and AI exports. (…)
The last PPI data was for March, one month into the war with Iran. Manufacturing prices jumped even more in April per the PMIs.
While consumer inflation is pointing up throughout the world.
@alexanderineichen
(…) The Cadillac-maker estimated that commodity inflation — including logistics and higher DRam memory chip costs — could reduce its adjusted operating profit by up to $2bn this year, compared with its earlier forecast of up to $1.5bn.
Ford also warned of supply chain costs of up to $2bn, a year-on-year increase of $1bn. Stellantis, which owns Fiat, Peugeot and Chrysler, said it was mostly hedged against the commodity price increases during the first quarter but projected the impact could reach roughly €1bn ($1.2bn) in 2026.
The estimated $5bn in additional costs from commodity inflation means that its impact will be equivalent to the $6bn hit the carmakers expect from higher US tariffs. (…)
The rise in oil and gas prices and shortages of naphtha, a material derived from crude oil and used to produce plastics, will also put pressure on various car components from interiors and coatings to rubber tyres.
“We do expect raw material [costs] to step up further in the remainder of the year, higher than what we anticipated at the beginning of the year,” Mercedes-Benz finance chief Harald Wilhelm told investors this week. (…)
Automakers have also cited higher costs for DRam chips, as memory chip companies shift production away from the less advanced semiconductors used in cars towards chips for AI data centres. (…)
Consumers are already stretched given elevated vehicle costs following the pandemic, limiting the scope for price rises.
“But obviously at some point you will be just forced to increase prices. And as long as everybody is doing it, you basically keep your market share,” he said.
(…) Aluminum has become a key commodity for automakers looking to boost the fuel economy and efficiency of their vehicles with a metal that is lighter than steel and doesn’t sacrifice strength.
The auto industry in North America consumed 3.7 million metric tons of aluminum last year, nearly 30% more than in 2020, according to metals-market consulting firm CRU.
Lately, however, higher aluminum prices from the Iran war, a 50% U.S. tariff and a production outage by a major supplier have strained automakers. (…)
The U.S. cost of primary aluminum from smelters is nearly 90% higher than a year ago. The war in Iran is driving up prices by effectively choking off shipments from the Persian Gulf countries, which supply about one-fifth of the aluminum consumed in the U.S.
The U.S. aluminum industry is also heavily dependent on imported primary aluminum, mostly from Canada, but automakers and other buyers pay the tariff no matter where the metal comes from. With the global aluminum price at about $3,500 a metric ton, the tariff and delivery-related charges raise the U.S. price to $6,100, compared with $3,220 paid a year ago, according to S&P Global Energy. (…)
Ford recently asked the Trump administration to waive the 50% tariff on imported aluminum until the Oswego plant returns to full service, according to people with knowledge of the conversations. So far, administration officials haven’t budged. (…)
The Fuel-Price Crunch That’s Turning Into a Disaster for Airlines The higher costs that took down Spirit are squeezing the entire industry, especially budget carriers
Across the world airlines have been trying to deal with rising fuel costs that are threatening to add billions of dollars in unexpected expenses this year, and forcing carriers to raise fares and trim routes to stem their mounting costs.
Budget carriers are especially squeezed. (…)
The finances of larger companies are also suffering, while passengers face sticker shock from costs to travel. (…)
Carriers from Air France to Cathay Pacific and Lufthansa have trimmed routes to save on fuel costs.
American Airlines in April estimated its fuel costs would jump by $4 billion and warned that it could lose money in 2026. Three months earlier, the Fort Worth, Texas-based carrier had projected adjusted earnings reaching as high as $2.70 a share.
United Airlines also slashed its profit outlook. (…)
Budget airline executives separately met last month with government officials, including Transportation Secretary Sean Duffy and Federal Aviation Administration Administrator Bryan Bedford, for a financial wellness check. Many of them are struggling under the weight of surging fuel prices.
After the meeting, the carriers asked the Trump administration for $2.5 billion in aid to offset the rising price of fuel.
Spirit’s demise is a silver lining for the airlines it competes with. Rivals will backfill some of the vacuum Spirit’s absence leaves behind—JetBlue immediately announced 11 new destinations from Fort Lauderdale, Fla. Analysts have said that Spirit’s closure will take unprofitable flying out of the market, giving the remaining airlines more pricing power. (…)
Longtime airline executives say they are pulling out the familiar playbook: raising fares and cutting flight schedules. (…)
“You can’t just pass on a fare increase of that magnitude overnight,” Levy said. But airlines have little choice. “No way around it,” he said.
Carriers said they expect to be able to recoup just about all of the run-up in fuel prices by the end of the year.
Airfares have gone up five times since the Iran war squeezed jet fuel supplies, sending prices soaring. A sixth price increase was under way late last month, according to executives.
Travelers are absorbing much of the hit from higher prices so far, but that could change. (…)
Trump auto tariff hike could cost Germany nearly $18 billion in output, institute says
ECB Rate Hike in June Is ‘All but Inevitable,’ Kazimir Says
(…) “It is becoming increasingly likely that we must prepare for a prolonged period of broad-based price increases coupled with visibly weaker growth across the euro zone.” (…)
Most economists and investors expect a quarter-point hike next month. Markets see two moves beyond that before the year is out.
(…) Kazimir said higher oil and gas prices are also “bound to spread to the rest of the economy.”
EARNINGS WATCH
From LSEG IBES:
314 companies in the S&P 500 Index have reported earnings for Q1 2026. Of these companies, 83.1% reported earnings above analyst expectations and 12.1% reported earnings below analyst expectations. In a typical quarter (since 1994), 67% of companies beat estimates and 20% miss estimates. Over the past four quarters, 78% of companies beat the estimates and 17% missed estimates.
In aggregate, companies are reporting earnings that are 11.5% above estimates, which compares to a long-term (since 1994) average surprise factor of 4.4% and the average surprise factor over the prior four quarters of 7.1%.
Of these companies, 78.4% reported revenue above analyst expectations and 21.6% reported revenue below analyst expectations. In a typical quarter (since 2002), 63% of companies beat estimates and 37% miss estimates. Over the past four quarters, 73% of companies beat the estimates and 27% missed estimates.
In aggregate, companies are reporting revenues that are 2.0% above estimates, which compares to a long-term (since 2002) average surprise factor of 1.3% and the average surprise factor over the prior four quarters of 1.9%.
The estimated earnings growth rate for the S&P 500 for 26Q1 is 27.8%. If the energy sector is excluded, the growth rate improves to 29.3%.
The estimated revenue growth rate for the S&P 500 for 26Q1 is 10.5%. If the energy sector is excluded, the growth rate improves to 11%.
The estimated earnings growth rate for the S&P 500 for 26Q2 is 22%. If the energy sector is excluded, the growth rate declines to 19%.
Extraordinary (!!!) earnings growth rates. But Goldman Sachs provides important details:
61% of S&P 500 companies have beaten consensus EPS expectations by more than a standard deviation of estimates, above the historical average of 49%. So far, only 5% of companies have missed earnings estimates, the smallest share in over 25 years of data history outside of the 2021 COVID reopening period. Revenue surprises have been similarly positive.
Q1 2026 S&P 500 EPS is on pace for the strongest growth rate in five years even after adjusting for some one-time distortions. Combining realized results and consensus estimates, S&P 500 year/year EPS growth is tracking at 25%, more than twice the consensus estimate of 12% coming into the season.
Much of this strength is attributable to the mega-cap technology stocks, some of whose earnings have been boosted by the appreciation of equity stakes in private companies. However, even excluding those figures, S&P 500 EPS growth would be on pace to register 16% in Q1, the strongest quarterly growth rate since 2021. Earnings growth for the median S&P 500 stock is tracking at 11%, compared with a consensus estimate of 8% ahead of the season.
In addition to strong backward-looking results, both corporate guidance and analyst EPS revisions have signaled confidence in the forward outlook for earnings. Of the 51 S&P 500 companies that have provided quarter-ahead guidance, 45% have guided EPS above consensus estimates, modestly above the 10-year average. Reflecting the combination of this explicit guidance and other signals, analysts have raised estimates for Q2 2026 S&P 500 EPS by 1% since the start of the season and also lifted estimates for Q3, Q4, and 2027.
Management commentary so far this quarter has reflected an increased focus on commodity input costs. (…)
Reflecting input cost pressures, analysts have trimmed margin estimates so far this season but continue to model a large increase in profitability in coming quarters. Among companies that have reported so far, analysts have cut estimates for Q2 2026 net profit margins by a median of 8 bp, with estimates falling in all sectors but Energy and Info Tech.
Nonetheless, estimates continue to point to 129 bp of margin expansion for the median S&P 500 stock this year and 180 bp of expansion through 2027 from the near record high reached in 2025. While these numbers look aggressive, consensus margin estimates are typically too optimistic. Operating leverage and AI-driven productivity gains make margin expansion our base case as well, but we expect consensus estimates will continue to decline in coming quarters.
The AI hyperscalers reported sales, earnings, and capex guidance that again exceeded consensus estimates. Alphabet (GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) reported aggregate year/year sales growth of 20% and EPS growth of 61% for Q1 2026.
The hyperscalers’ earnings growth this quarter was boosted by an unusually large contribution from equity stakes in private companies. Alphabet and Amazon generated “other income” totaling $53 billion in Q1 2026, which accounted for nearly 60% of those two companies’ income in Q1 and 34% of the total $155 billion in income this quarter across the five largest hyperscalers.
This represents the group’s largest collective share of earnings attributable to “other income” in at least a decade. Of this $53 billion in “other income,” $49 billion was explicitly due to equity stakes in private companies.
Consensus forecasts for AI hyperscaler capex in 2026 have risen by nearly $80 billion since the start of the earnings season. Analysts now expect the five largest public AI hyperscalers (AMZN, GOOGL, META, MSFT, and ORCL) will spend $751 billion on capex in 2026, representing 83% growth vs. 2025. This estimate compares with $673 billion at the start of the season and $546 billion at the start of 2026.
Continued upward revisions to AI capex estimates continue to spur upward revisions to earnings estimates for AI infrastructure stocks. To estimate the earnings of AI infrastructure stocks we utilize S&P 500 companies that are constituents of the GS AI Semis (GSCBSMHX), GS AI Data Centers (GSTMTDAT), or GS Power Up Americas (GSENEPOW) basket. Analyst estimates for these stocks’ earnings in 2026 and 2027 have risen by 20% and 27% YTD in aggregate, driving upward revisions to EPS estimates for the S&P 500.
The strength of the AI investment boom increases the upside risks to our S&P 500 EPS forecasts. Coming into the quarter, we estimated that AI infrastructure stocks would account for roughly 40% of S&P 500 EPS growth this year and 30% of growth in 2027, but that impulse appears larger today than it did just a few weeks ago.
While rising input costs and slowing economic growth pose downside risks to corporate earnings, the boost to earnings from AI investment means risks around our forecast for 12% S&P 500 EPS growth in 2026 are skewed to the upside, and we will revisit those forecasts at the end of the earnings season.
- S&P500 Companies’ Aggregated Employment: interestingly though for S&P500 companies in aggregate, the total number of employees dropped slightly in 2025. Maybe a combination of tariff uncertainty (and growth-scare concerns last year) + AI efficiency, and general margin-defense/ongoing cost-optimization.
Source: @MikeZaccardi
Various charts on hyperscalers:
How Caterpillar is becoming an AI play amid data center boom
The equipment maker is enjoying a sales boom from the surge in development of AI data centers and power plants.
Caterpillar on Thursday recorded a 22% increase in revenue, compared with a year earlier, to $17.4 billion.
- That crushed S&P Capital IQ estimates of $16.4 billion.
- It included a 38% increase in construction industry revenue and a 22% rise in its power and energy segment.
- Caterpillar makes the engines and turbines that supply both primary and backup power to those facilities, as well as the electrical infrastructure to run them.
Creed said Caterpillar has accumulated a “record” backlog in orders.
- The backlog totaled $63 billion, up 79% from a year earlier.
- “Customers are committing to longer-term orders with some orders well into 2028,” Creed said.
(…) something is shifting in the CFO suite. The function that has been approving AI budgets for everyone else while remaining skeptical of the technology’s value closer to home is beginning to move.
The capital commitment to AI is real and growing, and finance is catching up. A recent Bain & Company survey of senior finance executives shows 56% are increasing enterprise-wide AI investment by more than 15% this year. Over the next two years, 83% of CFOs plan AI budget increases above 15%, with 42% expecting increases above 30%
A significant share of that spending will be allocated to finance, and CFOs see the pull-through: In a concurrent survey of 264 finance department heads, about 75% expect AI budgets in their area to rise, while 22% expect a substantial jump. This is not incremental experimentation; it’s a serious commitment to AI in the operations of a function known for fiscal discipline.
The shift matters because it has not been easy to make. Results from early AI investments have been mixed, with only 31% of CFOs rating AI outcomes in finance as strongly positive. CFOs are doubling down not because early returns have been spectacular, but because the gap between those who have scaled AI and those who haven’t is becoming too large to ignore.
When CFOs describe their biggest AI win, speed and cycle-time reduction leads at 48%, ahead of headcount or cost savings at 34%. That ordering matters. Tighter close cycles, streamlined reconciliations, and early variance insight improve a company’s ability to detect exceptions, correct course, and redeploy capital faster.
The strategic stakes are higher than the metrics suggest. In an environment defined by shifting trade policy, volatile rates, and supply chain disruption, the finance function’s ability to reforecast quickly, reallocate capital on short notice, and surface risk in real time is a competitive advantage, not just an operational one. A finance function that compresses the cycle from market signal to management decision from weeks to days is better positioned to help the business move faster than its competitors. (…)
The satisfaction data we collected makes the case for scaling more powerfully than any theoretical argument. Among all CFOs, 31% rate AI outcomes as strongly positive. Among those who have scaled any type of AI (machine learning, GenAI, or agentic) into full production, that figure rises to 41%, compared with 25% among those still in pilot mode.
Among top-quartile organizations by AI maturity, it exceeds 60%. The return on AI investment is not primarily a function of how much you spend but of how far you scale. For CFOs seeking broader organizational support, this is the data worth sharing. (…)
Meanwhile:
Berkshire Hathaway continued to sell stocks in its first quarter under the command of new chief executive Greg Abel, pushing its net cash on hand to over $380 billion, an ~2% increase from the $373.1 billion tallied at the end of 2025. The firm offloaded a net $8.1 billion of equity holdings in the period, a net seller of stocks for a 14th consecutive quarter (and at $24 billion the largest quarter of sales since 2024), though it bought back some of its own stock for the first time since 2024.
About the war
The WSJ Editorial Board Saturday, pushing again for the US to “finish the job”: “Worse is the whisper campaign sowing doubts from inside Mr. Trump’s own administration. Damaging leaks about U.S. munition stocks surfaced in this paper and the New York Times on the same day last week.”
Well, in the same Saturday WSJ:
The war has also shown the challenges facing the U.S. in replenishing the huge stocks it has run through in just weeks of fighting.
Before the April 8 cease-fire, the U.S. and Israel were typically hitting more than 600 targets daily, compared with about 20 strikes from Iran a day, said Mark F. Cancian, co-author of a new report on U.S. munition use in Iran by the Center for Strategic and International Studies, a Washington, D.C.-based think tank. The Pentagon had to shift key military assets and Marines from Asia to the Middle East.
Of seven key U.S. munitions used in the Iran conflict, four may have expended more than half of their prewar inventories, according to the report.
Fully replacing the U.S.’s offensive and defensive missiles could take up to six years, the Journal reported separately last month.
Saturday’s FT: US warns Europe of delays to arms shipments as Iran war drains stockpiles
Washington has warned European allies, including the UK, Poland, Lithuania and Estonia, to expect long delivery delays for US weapons as it scrambles to replenish stockpiles depleted by the Iran war.
The Pentagon had told the countries to expect serious delays for several missile systems, according to nine people familiar with the matter. Two people said there were also talks about postponing shipments to Asia.
The delays are partly driven by acute concerns about US inventory levels given the high volume of weapons used in the past two months in Iran. The American military has already been forced to move weapons from other regions, including the Indo-Pacific, to make up for the shortfalls. (…)
In addition to sparking alarm across Europe, the delays are bad news for Ukraine amid concerns about US support for the country after four years of war since Russia’s full-scale invasion. (…)
The Pentagon said it was “carefully evaluating new requests for equipment from partners as well as existing arms transfer cases to ensure alignment with operational needs”. (…)
Several people said the delays were not aimed at punishing Europe but reflected US worries about its stockpiles. (…)
Trump on Friday dismissed concerns about stockpiles. “All over the world, we have inventory, and we can take that if we need it.” (…)
“Japan was already deeply frustrated with delivery delays for systems they have paid for, including the Tomahawk cruise missiles,” Johnstone said. “This reality will drive Japan, South Korea and other allies to focus more heavily on indigenous and non-American options, even in areas where US equipment is clearly superior.”
(…) inventories will remain strained as delivery schedules already take several years.
Admiral Samuel Paparo, Indo-Pacific commander, last month said it would take as long as two years for the big defence contractors to increase production to the scale needed to tackle inventory shortfalls. (…)
A senior Ukrainian official said US weapons for Kyiv had faced delays since the start of the Iran war. Late arrivals have sometimes left Patriot launchers empty during Russian missile barrages, according to Ukrainian President Volodymyr Zelenskyy. (…)
- US to withdraw 5,000 troops from Germany in dispute over Iran conflict
- Trump also voiced his anger at Italy and Spain over their refusal to allow US military planes to use their bases, saying he “probably will” pull American forces out of these countries. “Italy has not been of any help to us, and Spain has been horrible, absolutely horrible,” he told reporters in the Oval Office on Thursday. (The Guardian)
China has ordered its companies to ignore US sanctions, an unprecedented act of defiance that threatens to trap a vast banking sector in the crossfire as tension rises between the world’s largest economies. (…)
Saturday’s announcement — coming before a long-awaited meeting later this month between President Donald Trump and his counterpart Xi Jinping — signals a far more aggressive stance. Beijing has now directed companies not to abide by US sanctions on private refiners linked to the Iranian oil trade, including heavyweight Hengli Petrochemical (Dalian) Refinery Co. which was sanctioned last month.
Within China, state media outlets and academics who advise the government sought to frame the retaliation as a forceful but calibrated response against US overreach. A commentary on the People’s Daily app, the Communist Party mouthpiece, called it “a pivotal step” in using the legal instrument to restrain what it called the “long-arm jurisdiction” of the US.
Beijing’s move will test the US sanctions system at a time when it’s already under pressure, as Washington vacillates on curbs against Russia, Venezuela and Iran. With Trump’s war against Iran straining its global alliances, China has seized the opportunity to defend a major piece of its economic system while expanding its arsenal of economic weapons. (…)
China is deploying a blocking measure introduced in 2021 that was aimed at protecting its firms from foreign laws it deemed unjustified. (…)
“Judging by its specific provisions, the prohibition order primarily targets the concrete US sanctions imposed on particular Chinese firms,” Ji Wenhua, a law professor who’s advised the Commerce Ministry, wrote in an opinion piece for the state-run Economic Daily. “Its central objective is to nullify their legal effect within Chinese territory, rather than simultaneously resorting to more aggressive retaliatory measures.”
The US measures unlawfully restrict normal trade with third countries and breach international norms, the country’s Commerce Ministry said in a statement on Saturday. It banned recognition, enforcement, and compliance with the sanctions aimed at the five companies.
“The Chinese government has consistently opposed unilateral sanctions that lack authorization from the United Nations and a basis in international law,” the department said. (…)
The pitch was straightforward: Invest in the cryptocurrency venture of Donald Trump and his family, back the industry’s most powerful ally at the peak of their influence, and share the spoils.
Investors said yes, putting in more than $550 million across two fundraising rounds.
What happened next was not publicly explained. (…)
What is unfolding has no precedent in American financial life. A sitting president’s family holds financial stakes in a live token project — one setting governance rules, directing treasury sales, collecting proceeds — while the people who signed up find themselves with limited options to exit.
World Liberty Financial was co-founded by members of the Trump and Witkoff families alongside other business partners, with Zach Witkoff serving as chief executive. Both Trump and Steve Witkoff, who serves as the president’s special envoy to the Middle East, were listed as co-founder emeritus on the project’s website. The project recently removed a page listing its co-founders; a spokesperson said the company regularly updates its site. (…)
“President Trump’s assets are in a trust managed by his children. There are no conflicts of interest,” said White House spokesperson Anna Kelly. (…)
The broader Trump family business has been reshaped by crypto. The family built its fortune on licensing the Trump name — real estate, Bibles, sneakers — but digital assets have opened a new revenue stream.
For World Liberty’s investors, things have worked out differently from what many expected. Early buyers remain locked out of 80% of their token holdings, unable to sell into a market that has already moved sharply against them. WLFI traded below 6 cents this week to new lows in open trading.
“It is surreal to have the Trump family not only profiting off this financial venture that features glaring conflicts of interest but doing so in a way that blocks other investors from sharing in the gains,” said Eswar Prasad, a professor at Cornell University. (…)
With token prices falling, World Liberty’s broader corporate orbit is showing strain. Alt5 Sigma, a Nasdaq-listed company that raised $1.5 billion in August 2025 to accumulate WLFI tokens, announced a pivot to artificial intelligence. A recent filing said it may “redeem or monetize a portion of its token holdings to fund operations, satisfy obligations, or pursue strategic initiatives.” Tony Isaac, Alt5’s chief executive, told Bloomberg the company has no plans to sell the token, and may in fact continue to accumulate it.
Zach Witkoff, World Liberty’s co-founder and chief executive, chairs Alt5’s board. Zak Folkman, a World Liberty co-founder, also sits on Alt5’s board.
The troubles are unfolding against a broader reckoning. Across the Trump family’s crypto empire — a memecoin that’s down more than 40% this year and 93% from its post-inauguration peak, a Bitcoin mining venture whose shares have lost much of their value, and now Alt5, down roughly 90% since its pivot to accumulate WLFI — the pattern is similar: projects that rose on the Trump brand are now pivoting or restructuring, as the political trade that drove initial enthusiasm collides with a cooling crypto market. Anyone who bought shares of Trump Media & Technology Group, the parent of Truth Social, over inauguration weekend 2025 has lost roughly three-quarters of their money.
For the investors impacted by the market disruption, there is little formal recourse. Token projects operate outside the requirements governing public companies — no audited financials, no mandatory reporting of insider transactions, no independent board oversight. (…)
Hmmm…
