Tom Oil's spiking, bonds are tanking, and chip stocks just hit another all-time high. Yeah, it's that kind of day. Hold on tight.
Marie Good morning, everyone. Tuesday, May twelfth, twenty twenty-six. This is Investment Flash, New York edition. I'm Marie, with Tom and Gerald. Let's get into it.
Marie The big macro: US inflation jumped to three-point-eight percent in April, a near three-year high. Core C P I beat estimates, and that's fueling a bond selloff. MarketWatch and Bloomberg both flag it. Rate-hike wagers are coming back.
Gerald Yeah look, the bond selloff is right. TLT, the long-duration Treasury ETF, is hugging its fifty-two-week low. The market's finally pricing higher for longer. This C P I just locks in the pain.
Tom And it's not just the US. Bloomberg reports China's central bank warned of imported inflation from rising oil. That's a global tightening vibe. Not great for my growth stocks, but... it's all connected to oil, honestly.
Gerald Your growth stocks have been ignoring rates for months, Tom. This might sober them up. But go on.
Marie Which brings us to oil markets. The disruptions are piling up. Bloomberg reports only one Russian crude cargo loaded at Novorossiysk last week — drone strikes and storms. The Financial Times says the UAE's Habshan gas plant won't be fully repaired until twenty twenty-seven after those Iranian attacks. And the Wall Street Journal flags Hormuz closure fears driving prices higher. USO, the US Oil Fund, jumped three-point-eight percent today on all this. Compounding risk.
Gerald Alright, but here's the thing — USO is already one hundred and ten percent above its fifty-two-week low. The positioning is extremely stretched. And there's a counter: Nikkei Asia quotes a Japanese petroleum company, Idemitsu, expecting Hormuz tensions to subside by July. If that proves right, oil could snap back violently. I'm just saying, chasing here is dangerous. Analysts raising price targets after the fact is basically a free retirement plan — they never get fired for being bullish too late.
Tom Come on, Gerald, you can't fade every rally. The physical market is tight. But I'll give you that — one hundred ten percent above the low is rich. Still, if Hormuz stays closed, we go much higher. Did you see natural gas? UNG up six-point-two percent on that UAE damage.
Marie Gerald chéri, must you puncture every rally before breakfast? But you have a fair counter. The supply risks are real, but so is the positioning extreme. Now, here's a twist: the Financial Times reports hedge funds are piling into biofuels — corn ethanol and soy biodiesel — betting high oil prices will boost demand dramatically. CORN is near its fifty-two-week high, and SOYB is up nearly fifteen percent this year. It's a direct derivative of the oil spike.
Tom Yeah, it's a clever derivative. CORN is near its fifty-two-week high, SOYB up almost fifteen percent this year. If oil stays elevated, ethanol and biodiesel demand surge. But it's crowded — hedge fund territory. High beta.
Gerald Fair enough, but I find it a bit tail-wags-dog. Corn for fuel drives food prices.
Marie It's trading, Gerald, not a moral judgment. If the charts say go...
Tom Exactly, momentum is momentum. I'm not betting the farm on corn, but the trend is there.
Gerald Alright, fair enough. Now let's move to the real momentum — A-I and chips.
Tom Oh, it's beautiful. The Wall Street Journal calls it the NACHO trade — that's their acronym for this new commodity complex. Semiconductors, the SMH ETF, hit an all-time high today. It's up ten-point-three percent just this week. No overhead resistance, no valuation ceiling when you're in a mania. It's the A-I infrastructure build, baby. Chips are the new oil.
Marie Tom mon trésor, you're practically glowing. But it's not just chips. C-N-B-C says the parabolic A-I rally has bulls eyeing uranium — a one-time meme metal. The thesis: A-I data centers will need nuclear power. Uranium miners ETF, URNM, up four-point-nine percent today.
Tom For real? I love it. It's speculative, but the energy demand is real. Cameco, top uranium producer, up two-point-nine percent, with a forward P-E of sixty-one times. Yeah, it's pricey, but growth is growth.
Gerald Sixty-one times? Only Tom could call that 'not too bad'. Look mate, uranium's a meme that nearly bankrupted folks a few years ago. It's up on a narrative about data centers that aren't even built. I'll pass. And SMH at all-time highs — when the music stops, it's ugly.
Marie But Tom, URNM is still twenty percent below its high. It's not at extremes like oil.
Tom True, there's room to run if the nuclear narrative sticks. But it's still a meme at heart.
Tom Gerald, you've been saying that since the Dow was at thirty thousand. Some stopped clocks are right once.
Gerald And I'll be right eventually. But go on, enjoy the ride.
Marie Boys, focus. But you both have points. This is pure momentum. The convergence is interesting — chips and energy linking up. But speaking of energy, the Wall Street Journal says energy stocks are cheap despite the war. XLE up two-point-six percent today, but still ten percent below its high, with a trailing P-E of twenty-point-eight. The war premium hasn't fully priced in equities.
Tom That's a good point. If oil stays high, earnings catch up, and multiples stay low. XLE up twenty-five percent this year, but down nearly four percent this week — a potential dip. Maybe better risk-reward than USO.
Gerald To be fair, I can get behind that. Energy equities haven't run like the commodity. The valuation gap is there. But remember, oil stocks always look cheapest at the top.
Tom That's the bear case, buddy. I'd still rather own Exxon than oil futures.
Marie Alright boys, focus. Now, the dark side of the A-I buildout: Bitcoin miners. CleanSpark reported a net loss of three hundred seventy-eight million dollars. Their mining cost per bitcoin? Eighty-eight thousand dollars — well above the current price around eighty thousand. Their stock only up point-seven percent today on some glimmer of A-I hope, but the fundamentals are awful. It's a cash-burning machine right now.
Tom Yeah, not everything A-I is golden. MARA sold one point five billion dollars in bitcoin and is pivoting to A-I data centers. It's desperation. The stock's up three-point-five percent today, but it smells like a dead cat bounce. I'd stay away.
Gerald Right, so two clear sells in the miner space. Moving along, two quick geopolitical items. South Africa: Bloomberg says the rand shrugged off an impeachment threat against Ramaphosa. So no panic. Hold.
Marie And U-S-China: a Wall Street Journal opinion piece argues Trump holds a strong hand in Beijing, and could win concessions that boost Chinese stocks. The China large-cap ETF, FXI, is up point-six percent today but still sits eleven percent below its fifty-two-week high. It's a speculative, binary trade based on negotiation outcomes. Nothing concrete yet, so we're watching.
Tom Both are wait-and-see. Now, let's hit the most original take: C-N-B-C's piece on uranium as the A-I meme metal comeback. We touched it, but it's worth digging. The chain from chips to nuclear reactors is long, but the market is pricing it now.
Marie It's a speculative chain, Tom darling. Years of approvals and construction. But the narrative is powerful. Just remember uranium's history — it's a boom-bust cycle. I'd be careful.
Gerald Exactly. And our view ties it together: the market is splitting in two. Oil and inflation tighten — bonds sell off, TLT at lows. A-I mania drowns rate fears — chips at highs, uranium catching bids. This is the NACHO trade: duration crushed, commodities and tech diverge.