The Deal of a Lifetime? & Inflating Realities – Top 3 Takeaways – May 14th, 2026
Takeaway #1: The Deal of a Lifetime?
The Louisiana Purchase, Tom Brady in the 6th round, Apple’s stock at 4 cents per share. These are among the greatest deals of all time. The reason this comes to mind is that the author of the Art of the Deal, has assembled the most impressive collection of business and innovative talent that’s ever traveled together at the same time to one place not just in American history, but likely in world history. The value of the companies run by the CEOs that have accompanied Trump on his Chinese trip total over $16.5 trillion. To put that into perspective – those companies equal almost the entire value of the Chinese economy (and more than the annual value of the next four countries – Japan, Germany, India and the UK – combined). Perhaps the only dealmaker in the world who could rival the talent Trump has brought Chinese President Xi’s way would be The Fantastic Man in Pakistan. Based on the size of this contingent – one might expect that perhaps the deal of a lifetime could potentially come out of it? Of course, the deal that most Americans want to hear emerging from these two-day talks would involve a resolution in Iran and perhaps with Russia and Ukraine too. Instead, heading into the two-day meeting what we heard previewed was that China wasn’t inclined to intervene with Iran and President Trump saying we didn’t need China to be able to resolve the situation with Iran...and that perhaps there could be some tech for soybean trade taking place. In other words, not exactly the kind of news that’s likely to excite you. But maybe the tempered commentary going in is all part of the deal making plan? It remains to be seen, but regardless, the talent assembled in Beijing today is literally the best that this country has to offer. Stay tuned for news...that hopefully at some point over the next two days involves the Strait of Hormuz...and about that...
Takeaway #2: But wait...there’s more!
Texting while driving, most of what happens on social media, almost all elected democrats, stepping in dog poo, the homosexual alphabet (and the corrupting of rainbows), the Mullahs in Iran. These are of course examples of things or people who’re bad. Speaking of less-than-ideal things... Tuesday’s Consumer Price Index Report was no good, very bad news. As I mentioned in my takeaways yesterday... The headline inflation rate, which includes the total cost of goods year-over-year in April, and the ‘core’ inflation rate which strips out the more volatile prices of food and energy. The headline inflation rate reflected an acceleration of inflation to 3.8% - which was the highest in almost three years. It’s a number that was higher than wage growth last month meaning that gas price powered inflation was now in fact leading to the average American falling behind economically. But for as bad as the consumer price index was last month...producer price index, which measures wholesale inflation, was much, much worse. With the one-two impact of tariffs and high gas prices hitting companies, the increase in the price to produce things was the worst we’ve seen in 3.5 years. Wholesale inflation ran at a rate of 6% over the past year – the worst since December of 2022. What does that mean to you? It means companies actually ate 2.2% of the inflation rate most recently, meaning that if current pricing pressures were to stay higher for longer at some point...
Takeaway #3: Companies will pass those higher costs along to you
Basically, from a consumer perspective, the CPI report looks in the rearview mirror providing perspective on what just happened, while the wholesale inflation report provides insight into what could occur in the future. It’s obviously not good at 6%...and that’s an understatement. This further illustrates the importance of President Trump finding a resolution in Iran rather quickly and should lead to him reconsidering his existing tariff policy. As I mentioned yesterday – the ‘sticky’ inflation rate is still ‘only’ 2.8%, meaning that much of the current impact of inflation can mitigated if there’s resolution to with Iran, and/or Russia and Ukraine, however – the ‘sticky’ rate has been rising for well over a month and is becoming stickier by the day. It’s safe to say that if consumer inflation were to get to 6% this year – it wouldn’t just be a massive problem for President Trump and Republicans during this midterm election cycle, it would become a massive problem for the economy. The stakes were already incredibly high for President Trump’s trip to China. The latest economic data shows that they are actually even higher. The bottom line is that what we’re seeing playout right now isn’t sustainable. Something will give, and if it isn’t a resolution to conflicts overseas rather quickly, it will be the economy domestically. Let’s pray that’s not the case and that some serious deal making moves the needle. After all, with 47% of the country’s oil coming through the Strait of Hormuz, China wants resolution with Iran even more than we do.