CEO Confidence fell 12 points (20%) in Q2.
For whatever reason they take the survey through May 18th but still, down a lot in 3 months is NOT GOOD by any standards. For comparison, only 59% of Americans disapproved of Trump on Feb 28th and now, on May 28th, it’s 66% – that’s only 12% worse! So congratulations to President Trump for sucking less than CEO Confidence though, overall, only 53% of CEOs have a negative outlook – Trump is beating that by a mile!
Of course, as we just heard in the Q1 earnings reports – CEOs are generally a confident bunch (as is Trump) BUT, when asked how their CURRENT conditions were compared to 6 months ago – only 15% (not a typo!) said better off (Defense contractors? Oil men?) and that is down from 39% in Q1. I guess Trump is lucky those guys are not all Republicans?
Only (lots of onlies here) 24% of the CEOs expect conditions to improve and that is down from 43% in February and a terrifying 40% expect things to get WORSE!!! 31% of the CEOs are expecting to lay people off and wage expectations are +3.5%, keeping up at least with the Government’s pretend levels of inflation.
Still, 37% of the CEOs expect to increase Capital Spending but, as we’ve noted, they kind of have to as Cyber Security is considered the top risk to the business of 2/3 of the respondents – just ahead of Geopolitics and AI and, of course Supply Chains and Energy prices were added as new concerns they didn’t have in February.
Fortunately, President Trump, who is always tuned in to the concerns of his subjects, got right on it and BOMBED IRAN, again, last night, taking out a drone launch site and some drones and a ship for good measure, in what was termed a “defensive attack.”
“They’re negotiating on fumes,” Trump said Wednesday at the White House. “Maybe we have to go back and finish it,” he added, without elaborating on whether that meant further military action.
Both Kash Patel and Pete Hegseth indicated they would be happy to negotiate on fumes…
So the war is back on, Consumer Sentiment is in the low 40s – a 70-year low and Consumer Confidence is 92, lower than it was during Covid – when we were locked in our homes and afraid of other people or touching things and now CEO Confidence has dived to negative territory with only 15% of them saying the Economy is getting better. Yikes!!!
So what’s the good news?
Oh, sorry – I was genuinely asking – what’s the good news? I have no idea…
Well, the good news is Microsoft is giving $10Bn worth of Azure (cloud, which they have a 60% margin on) Credits to OpenAI, who tells investors they got a $1Tn valuation from MSFT and then OpenAI promises to buy $100Bn worth of chips from NVDA when they do their IPO and NVDA invests $10Bn (in chips that they have 60% margin on) in OpenAI in exchange (which is really just a 10% discount on their chip purchase) and now OpenAI can say NVDA invested in them too!
Somebody has to build the data centers for all this cloud credit and GPU swapping. The top Hyperscalers are now on track to spend over $700B on capex in 2026, roughly three‑quarters of it on AI infrastructure, up 75% from about $400B last year. Those projects ALREADY use around 4–5% of U.S. electricity and could push data‑center demand toward 7–12% of the national grid by 2028 – even as households tell Michigan they feel worse about the economy than at any time in the last 70 years. Imagine how bad they’ll feel when the lights go out!
So the “good” news is: the AI money machine is real, the capex boom is real, and the inflation it creates in energy, land, and construction is also very real — just not in a way that helps anyone answering those sentiment surveys.
Now that I have that off my chest we’ll take a break (I will, at least) and wait for the 8:30 data dump, which includes the 2nd estimate of Q1 GDP, which was 2% when last we looked…
IN PROGRESS
