The Kobeissi Letter (@KobeissiLetter)

Money supply is significantly outpacing economic growth across major economies: Canada's M2 money supply has grown +368% since January 2004, the largest increase among G7 economies. By comparison, the Canadian economy has expanded +159% over the same period. The US follows, with M2 growth of +279% versus a +171% increase in nominal GDP. Meanwhile, M2 in France has surged +258% and +211% in the Euro Area, both outpacing nominal GDP growth of +84% and +102%, respectively. In Japan, M2 has grown +90% since 2004, while its economy expanded just +25%, the slowest pace among G7 economies. The gap between money creation and economic growth is widening.

The AI boom is creating a generational divide in software jobs: US software developer employment for those aged 22-25 has declined -23% since November 2022, when ChatGPT was launched. At the same time, the 26-30 age group has seen a decrease of -5%. By comparison, employment among software developers aged 41-49 has risen +18% over the same period. This creates a 41 percentage point gap between the youngest and one of the most experienced groups within the same profession. Meanwhile, early-career workers in the most AI-exposed jobs have experienced a -16% decline in employment relative to less-exposed occupations and more experienced peers since November 2022, even after adjusting for firm-specific shocks. By contrast, employment among workers in less AI-exposed fields, as well as more experienced workers within the same occupations, has remained steady or continued to grow. The AI revolution is wiping out entry-level tech jobs.

The AI infrastructure buildout is entering a new phase: US tech companies are committing to spend a record $850 billion on data center leases over the next several years. This marks a +$570 billion YoY increase, or +204%, and +$200 billion QoQ increase, or +31%. Meta, $META, added the most in Q1 2026, committing +$79 billion in new leases, a +76% QoQ increase, bringing its total to ~$183 billion. At the same time, Microsoft, $MSFT, added +$41 billion, a +26% QoQ increase, bringing its total to ~$197 billion. Oracle leads with the largest total commitments at ~$250 billion, having already secured many of the key sites needed to fulfill its contract with OpenAI. Tech companies are doubling down on AI.

What is happening in Hong Kong? Chinese semiconductor exports to Hong Kong rose to a record $15 billion in May. This figure has soared over +200% since early 2025. At the same time, Chinese chip exports to the world surged to a record $35 billion, tripling over the same period. As a result, Hong Kong accounted for 43% of China’s semiconductor exports in May. Over the first 5 months of 2026, China exported $239 billion of chips globally, with Hong Kong absorbing over 50% of this total, a record proportion and up from ~33% a decade ago. Hong Kong has become a dominant logistics hub for China’s chip trade.

China’s is seeing unprecedented money supply growth: China's M2 money supply is up to a record ~240% of GDP, the highest among any major economy in the world. This metric has surged +100 percentage points since the 2008 Financial Crisis. Over this period, China’s M2 money supply has surged +500% in Dollar terms. By comparison, the country's gold reserves and total FX reserves have risen +100% and +60%, respectively. To put this into perspective, Japan's M2-to-GDP ratio, the next highest, stands at ~185%, while the US sits at ~70%. China's monetary expansion is unlike anything seen among major economies.

BREAKING: Microsoft, $MSFT, announces price hikes for Xbox devices due to memory chip costs just hours after Apple hiked prices on MacBooks and iPads. Among the price increases: 1. Xbox Series S 1TB increased +$150 to $599 2. Xbox Series X 1TB increased +$150 to $799 3. Xbox Series S 512GB increased +$100 to $499 4. Xbox Series X 1TB Digital increased +$150 to $749 AI-induced price hikes have begun.

What just happened? In just 27 minutes, the Nasdaq 100 just fell -1,000 points and the S&P 500 erased -$1 TRILLION without any major headlines. The Nasdaq opened +1% higher then fell -3% between 9:30 AM and 9:57 AM ET. What does it all mean? Let us explain. (a thread)

BREAKING: Apple, $AAPL, has raised the prices of its Macs and iPads due to soaring chip costs. Among the price increases: 1. MacBook Air increased +$200 to $1,299 2. Base MacBook Pro increased +$300 to $1,999 3. Base MacBook Neo increased +$100 to $699 4. iPad Air increased +$150 to $749 5. iPad Pro increased +$200 to $1,199 Tim Cook said soaring chip costs made the price hike "unavoidable."

BREAKING: The Fed’s balance sheet rose +$11 billion in the week ending June 17th, to $6.74 trillion, the highest since March 2025. Total assets have risen +$162.8 billion since the start of the year. This has been driven by Treasury holdings, which have surged +$251.8 billion over this period, to $4.49 trillion, the highest since June 2024. At the same time, holdings of Mortgage-Backed Securities have declined -$74.2 billion, to $1.96 trillion, the lowest since September 2020. The Fed's balance sheet is now 76% above pre-pandemic levels. The Fed's balance sheet continues to expand.

BREAKING: The US has released the full text of its 14-point "Memorandum of Understanding" with Iran. Key terms include: 1. The US, Iran, and their allies agree to immediately and permanently end military operations on all fronts, including in Lebanon 2. The US and Iran agree to respect each other's sovereignty and territorial integrity and not interfere in each other's internal affairs 3. The US and Iran commit to negotiating and reaching a final deal within 60 days, unless mutually extended 4. The US will begin removing its naval blockade immediately and fully end the blockade within 30 days 5. Iran will use its best efforts to ensure safe passage for commercial vessels through the Strait of Hormuz for 60 days with no charge 6. The US and regional partners will develop a mutually agreed plan of at least $300 billion for Iran's reconstruction and economic development 7. The US will work toward terminating all types of sanctions against Iran, including UN, IAEA, primary, and secondary sanctions 8. Iran reaffirms that it will not procure or develop nuclear weapons and agrees to address its enriched material stockpile under IAEA supervision 9. Until a final deal is reached, Iran will maintain the current status quo of its nuclear program, while the US will impose no new sanctions and deploy no additional forces 10. The US Treasury will issue waivers for Iranian crude oil, petroleum products, derivatives, and associated banking, insurance, and transportation services 11. The US will make frozen or restricted Iranian funds and assets fully available for use 12. The US and Iran will establish an executive mechanism to monitor implementation of the MOU and future compliance with the final deal 13. After signing the MOU and implementing key ceasefire, blockade, shipping, oil waiver, and asset-release provisions, the US and Iran will begin final deal negotiations 14. The final deal will be endorsed by a binding UN Security Council resolution The memorandum will trigger a 60-day window to negotiate a final deal.

Retail investors are piling in to SpaceX stock: Over the last 2 trading sessions, retail investors bought nearly as much SpaceX, $SPCX, as every other US single stock combined in the entire prior week, according to Vanda Research data. On Monday alone, retail purchased +$93.8 million of $SPCX shares, accounting for ~73% of all retail single-stock purchases during the day. In the first 10 minutes of Monday’s session, retail investor turnover in the stock exceeded $7 million. Individual investors also bought some semiconductor stocks such as Marvell $MRVL, Micron $MU, SanDisk $SNDK, and Broadcom $AVGO. Retail appetite for risk shows no signs of slowing.

Absolutely incredible. SpaceX, $SPCX, is now trading above $220/share in overnight trading. This makes SpaceX worth nearly $2.9 TRILLION, less than $100 billion away from surpassing Microsoft. This also puts SpaceX up +63% from its IPO price of $135/share. Furthermore, the combined market cap of both SpaceX and Tesla is now at a record $4.4 trillion. That’s bigger than the market cap of Apple and roughly equivalent to the market cap of Google. To top it all off, SpaceX raised a record $85.7 billion after underwriters exercised the "greenshoe" overallotment. Never in history has an IPO ever come remotely close to what we are seeing right now. Truly incredible.

BREAKING: SpaceX stock, $SPCX, surges +9% in overnight trading and hits $2.7 trillion in market cap. SpaceX has officially surpassed Amazon to become the 5th largest public company in the world.

BREAKING: SpaceX, $SPCX, is now worth $2.5 trillion and the 6th largest public company in the world. SpaceX is now just 5% away from surpassing Amazon as the 5th largest public company in the world.