Monday, 25 May 2026 · London Edition · 07:30 London

Oil's deal-hope dip masks the tightest supply in years.

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Signals

⚡ Convergence radar: Watch USO×4

Oil: deal hopes vs tight supply

Oil prices slid as ships moved toward the Strait of Hormuz on hopes of a US-Iran deal reopening the waterway (WSJ Business, WSJ Markets, MarketWatch). But Nikkei Asia warns global inventories are set to fall below 100 days of demand because the blockade has already done damage. The divergence leaves crude in a tug-of-war: any deal confirmation could send prices lower, but supply losses are real and inventories are historically tight.

USO

Watch Oil⚡ — Two source clusters (WSJ, MarketWatch) point to oil price declines on Hormuz deal hopes, while Nikkei Asia warns inventories falling below 100 days; USO down 1.1% last session but still up 104% YTD, reflecting extreme uncertainty.

$140.9 -1.14%

Momentum stocks record run

Bloomberg reports momentum investors are seeing their best returns in decades, driven by the AI rally. The world's hottest stocks are powering ahead despite Iran war worries, pushing momentum factors to record highs. The run is broad-based, with NVIDIA and other AI plays at the center.

NVDA

Buy Nvidia — Bloomberg reports AI-driven momentum delivering best returns in decades; NVDA at forward P/E 17.0x, pulling back 1.9% last session but still up 14% YTD, trade remains compelling.

$215.3 -1.90%
MTUM

Buy Momentum ETF — Momentum ETF near 52-week high, up 20.1% YTD, capturing the record run described by Bloomberg.

$303.6 +0.48%

Brazil debt crisis

Nikkei Asia reports over 82 million Brazilian adults are behind on payments—nearly half the adult population—driven by high interest rates and rapid fintech expansion. The consumer debt crisis threatens bank asset quality and broader market sentiment, although government relief measures are rolling out.

EWZ

Sell Brazil equities — Nikkei Asia details 82 million Brazilians behind on payments; EWZ down 1.7% last session, YTD +13%, but consumer strain could derail gains, with P/B 0.99 offering little buffer.

$36.37 -1.73%
BBD

Sell Banco Bradesco — Forward P/E 6.3x, but direct exposure to household credit deterioration per Nikkei, YTD only +3.3% reflecting fragility.

$3.47 -2.53%
NU

Watch Nubank — Forward P/E 10.9x, down 25.2% YTD, caught between fintech growth and default risks from Brazil's debt crisis.

$12.73 -3.27%

Fertiliser cuts on sulphur squeeze

FT reports fertiliser groups are cutting production as the Iran war squeezes sulphur supplies, a key input for phosphate fertilisers. Farmers in poorer countries face lower yields as they reduce phosphate application. The supply disruption is a direct second-order effect of the Hormuz blockade.

WEAT

Buy Wheat — Up 22.8% YTD, with lower fertiliser use threatening yields and supporting grain prices per FT report.

$24.55 +0.20%
MOS

Sell Mosaic — FT reports fertiliser production cuts due to sulphur squeeze; MOS down 10% YTD with forward P/E 11.5x, but input costs could deepen margin pressure.

$22.51 +2.60%
NTR

Sell Nutrien — Similarly exposed, forward P/E 13.1x, down 2.1% in 1w, production cuts could weigh.

$70.13 -0.16%

Japan retail trading boom

FT reports average daily trading volume on the Tokyo Stock Exchange's prime market nearly doubled over 12 months, driven by AI fever and an off-exchange boom among Japanese retail traders. The surge points to bullish sentiment and increased retail participation.

EWJ

Buy Japan equities — FT notes volumes nearly doubled on AI fever; EWJ at 3% below 52-week high, up 12.6% YTD, could see continued inflows.

$91.61 +0.26%
DXJ

Buy Japan hedged — Up 17% YTD, positioned for tech-driven gains with reduced currency risk.

$169.6 +0.27%

Uber bids for Delivery Hero

FT exclusive: Uber is considering a higher bid for Delivery Hero after its €11.5bn offer was rebuffed, and has approached a major shareholder. A deal would consolidate the food delivery landscape, though it carries integration and overpayment risks.

DHER.DE

Buy Delivery Hero — FT exclusive: Uber weighs higher bid; DHER.DE up 7.8% in 1w, near 52-week high, bid speculation could drive further upside.

€33.59 +1.88%
UBER

Buy Uber — Down 4.3% in 1w, forward P/E 16.5x, a deal could expand its delivery footprint but risks overpaying.

$71.82 -2.43%

UK financial reforms boost

FT reports a government assessment says financial reforms will give a £1.6bn boost to the City of London, championed by Rachel Reeves as a driver of economic growth. Specifics are thin, but the headline could lift sentiment for UK financial assets.

FXB

Buy British pound — FT: reforms set to boost City by £1.6bn; pound ETF flat near 52-week lows, could see a re-rating if reforms materialize.

$129.3 +0.05%
LSEG.L

Buy LSEG — Up 5.9% YTD, forward P/E 17.4x, direct beneficiary of increased City activity.

$9326 +0.56%
EWU

Buy UK equities — Up 5.9% YTD, with financials-heavy index poised to benefit.

$47.09 -0.53%

Short sellers hit gambling

FT reports short sellers have made more than $2.3bn profit betting against gambling companies, as online groups face pressure from the jump in prediction market popularity in the US and steep tax rises in the UK. The sector is under significant regulatory and competitive stress.

DKNG

Sell DraftKings — FT: short sellers made $2.3bn betting against gambling firms; DraftKings down 29.6% YTD, forward P/E 14.7x but faces regulatory and competitive headwinds.

$25.12 -1.10%
FLTR.L

Sell Flutter — Down 54.2% YTD, 69% below 52-week high, reflects severe pressure from UK taxes and prediction markets.

$7376 +3.13%

IPO mania as market top?

FT warns that a potential deluge of AI-related IPOs could signal a market top. The new equity supply would remove a key source of upthrust for share prices, especially in high-growth tech names where the scarcity premium has been a major driver of momentum.

SPY

Sell S&P 500 — FT warns IPO mania could signal market top; SPY near all-time high, up 9.1% YTD, increased supply could weigh.

$745.6 +0.39%
QQQ

Sell Nasdaq 100 — QQQ up 17% YTD, concentrated in tech/AI names most likely to see IPO competition, at 1% below 52-week high.

$717.5 +0.42%
ARKK

Sell ARK Innovation — ARKK down 2.4% YTD, exposed to hyper-growth names that could be diluted by new issuance.

$76.40 -0.29%

Iran war adds to US debt costs

FT Markets notes the Iran war could add billions in interest payments to US debt, with government borrowing costs at their highest since 2007. Three months of conflict are pushing yields higher, pressuring long-duration bonds.

TLT

Sell Long Treasuries — FT: Iran war pushing US borrowing costs to 2007 highs; TLT down 2.7% YTD, near 52-week low, further pressure if rates rise.

$84.68 +0.55%
IEF

Sell Intermediate Treasuries — Intermediate bonds also vulnerable; IEF down 2.3% YTD, rising interest costs could extend duration pain.

$93.88 +0.09%

Indonesia stagflation warning

Nikkei Asia reports a Japanese consumer goods firm warns of 'vicious' stagflation in Indonesia. The warning is anecdotal but highlights severe economic strains in the emerging market, with high inflation and slowing growth.

EIDO

Sell Indonesia equities — Nikkei Asia: Japanese firm warns of stagflation; EIDO down 30.4% YTD, already reflecting stress, further downside possible.

$13.09 +0.08%

Chip partnership: Korea-Netherlands

Nikkei Asia reports the South Korea-Netherlands chip partnership extends beyond ASML into photonics. Both countries have an outsized tech influence, and deeper cooperation could benefit equipment makers. ASML is the immediate linkage.

ASML

Buy ASML — Nikkei Asia: partnership deepens beyond ASML; ASML up 10.9% in 1w, hit all-time high, at forward P/E 34.4x, beneficiary of sustained semiconductor capex.

$1633 +2.57%

Most original take

FT Companies · 24 May 2026

Why IPO mania could signal top of the market

The FT argues that a wave of AI-related IPOs could mark a market top by soaking up equity capital that has propelled stock prices. As new shares flood the market, the scarcity premium driving momentum could evaporate, particularly in tech names. This supply-side shock is often overlooked amid AI euphoria.

Read original ↗

Our view

Today's signals collectively point to an oil market split between a deal-driven sell-off and historically tight supply. USO is still up 104% YTD despite a 1.1% dip last session, and TLT languishes near 52-week lows as the war adds to interest costs. The market is pricing a quick resolution to the Hormuz standoff, but supply losses are real—inventories below 100 days are a dangerous vulnerability that the recent slide ignores.

The counterargument: deal hopes may be premature. Trump says 'no rush,' and if negotiations stall, oil could spike back. Record momentum in stocks also warrants caution: MTUM sits at a 52-week high, but NVDA has already slipped 3% in a week. If the AI IPO wave the FT warns about materializes, it could dilute the very names driving the momentum trade, turning a supply story in oil into a supply story in equities.

What's missing from the coverage is OPEC's likely response to a Hormuz reopening. If sanctions ease and Iranian crude returns, OPEC+ may have to cut quotas elsewhere—a second-order effect not priced in. Also, no one is discussing how sustained high oil prices are gutting demand in vulnerable EM economies beyond Indonesia's stagflation warning from a single firm. That demand destruction would, eventually, put a ceiling on crude.

The cleanest cross-asset expression isn't a single ticker but a pair: fade rich momentum via QQQ puts while staying long oil's supply backstop through XLE call spreads. The war premium is under threat from deal talk, but physical scarcity hasn't gone away.

Friday's signals, today

From the London Edition on 22 May 2026 — 3/5 signals moved in the predicted direction.

Today's scan: 113 articles considered · 15 surfaced · across 10 publishers

Generated Mon 25 May 2026 6:36am London · 4,548 views

Bloomberg Markets · CNBC Investing · CNBC Markets · CoinDesk · FT Alphaville · FT Companies · FT Lex · FT Markets · MarketWatch Top · Nikkei Asia · SCMP Business · The Information · WSJ Business · WSJ Markets

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