Iran war's supply shock is being priced commodity by commodity.

Transcript

Tom Commodities are on fire, supply chains are snapping, and India just slapped a massive tariff on gold and silver to defend its currency. Welcome to the new normal. I'm Tom, and this is Investment Flash.

Marie Good morning, everyone. It's Wednesday, May 13th, 2026, the London edition. With me, the man who loves a good copper rally, Tom. And Gerald, who's probably eyeing the value in beaten-down steel stocks. Hello, boys.

Gerald Morning, Marie. Yeah, look, there's a lot of macro stress out there today. Let's start with that India tariff move. Bloomberg and the Journal are reporting that India more than doubled import duties on gold and silver.

Tom Right, to defend the rupee. But buddy, that's a panic move. It's a clear signal that capital outflows are biting hard. The India ETF is down almost two percent on the day already.

Marie Voilà. And down twelve point nine percent year to date. The rupee is under immense pressure. The non-deliverable forwards show further weakness. This tariff is just a band-aid. It might curb metal imports temporarily, but it screams distress. Short the India ETF, and the dollar-rupee pair, no?

Gerald Yeah, and the spillover to precious metals is worth a mention. The Gold ETF is down a touch, but honestly, it's still fifteen percent below its fifty-two-week high. So the global price impact from India's demand destruction is limited. The Silver ETF is actually up on the day thanks to broader commodity strength, so the trade isn't clean.

Tom For real. Gold's under its high, but selling it here feels like you're betting on India moving the needle globally. I'd rather short that India ETF directly.

Marie Ah, Tom mon trésor, you just want to chase the momentum plays. But I agree, the distress is most acute in the equity market. India's forex reserves are under fire, and this tariff move is a desperate lunge. Gerald, any value plays here?

Gerald Not in India. The rupee's weakness might be temporary if the tariff works, but it's a short-term fix. Moving on—let's talk about a different kind of headline: Nvidia's Jensen Huang hitching a ride on Air Force One.

Tom Yeah! Huang got a personal call from Trump and flew to Alaska to join the China trip delegation. Nikkei and CNBC say he was initially left out, but now he's in. Nvidia's stock is just one percent off its fifty-two-week high.

Marie And up almost seventeen percent year to date. Mais bien sûr, Tom, you see this as chip export control relief, yes?

Tom Exactly. That's the market's take—lower regulatory risk. If the US and China are talking, maybe we avoid the worst of the chip ban escalation.

Gerald Alright, I'll push back a bit. One CEO on a plane doesn't rewrite decades of tech rivalry. But the market's the market, and Nvidia is pricing in a softer landing. We've seen this before—remember when Huawei sanctions just shifted the problem? The real risk is that any deal is fragile.

Marie Écoute, from a European perspective, we are watching closely. If US chip controls ease, it could free up supply for our automakers and industrials. But it's not just about Nvidia. The whole semiconductor sector benefits from any thaw.

Tom Semis are the play. Speaking of which—the memory shortage is deepening because of the AI buildout. Bloomberg is highlighting that, and Micron is up fifteen percent in a week. It's still cheap on a forward price-to-earnings ratio of seven point five, despite being up one hundred forty-three percent year to date. Tell me that's not compelling.

Gerald Tom, Tom, Tom—one hundred forty-three percent in the rearview mirror is not an argument to buy. Yes, the shortage gives pricing power, and Micron's multiple looks low, but memory cycles are vicious. When supply eventually catches up, those margins can vanish.

Marie Boys, boys. The structural demand from AI is different this time, non? Data centers are eating memory like croissants. But Gerald, you're not wrong that the cycle will turn. Perhaps the safer bet is the semiconductor ETF, which is up fifty point three percent year to date but still three percent off its high, giving it a bit of room.

Tom I like that. Diversified, and you still catch Nvidia's coattails. But let me tell you, copper is also screaming higher. The supply disruptions from mines are pushing prices toward $14,000 per ton—near the 2026 record. Freeport-McMoRan is up twenty-seven percent year to date, Southern Copper up thirty percent. The copper ETF is hugging its fifty-two-week high.

Gerald And there's the problem. The copper ETF is at the absolute top of its range—zero percent headroom. That's not an early-cycle play; that's a momentum trade betting on the crisis persisting. If we even get a whisper of a ceasefire, that's going to mean-revert violently.

Marie Ooh la la, what a multiple on some of these miners. But no, Gerald chéri, the supply thesis is solid. Mines are disrupted globally. The Iran war is just the icing on the cake. Still, I'd be cautious adding here.

Tom Fair enough. But the crisis is spreading to other materials. The Hormuz closure is stalling construction projects worldwide—the Financial Times reports soaring oil-derived material costs. Cleveland-Cliffs, the domestic steel play, could benefit from import substitution. It's down twenty point seven percent year to date and trades at barely book value.

Gerald Right, Cleveland-Cliffs is dirt cheap—price-to-book of one point oh six. That's the kind of value I can get behind if the trend holds. Conversely, the homebuilders ETF is down five and a half percent in a week; soaring costs and delays are going to eat into margins.

Marie Tom, you're such a darling with your steel play. But we must talk about energy. The Wall Street Journal's Jinjoo Lee has a piece today arguing energy stocks are cheap despite the oil crisis. The energy sector ETF trades at twenty point nine times trailing earnings, well below its five-year average. And the oil fund is up over one hundred nine percent year to date, just five percent off its high.

Gerald Yeah, that's the most original take today, and I buy it. The oil fund is crowded; everyone owns the commodity. The stocks have lagged—the ETF is only up twenty-six percent year to date and still nine percent below its high. If you believe oil stays elevated, buy the stocks, not the barrel.

Tom Alright, buddy, you're speaking my language—asymmetric upside. But I'm still bullish on the commodity itself because the Hormuz standoff is tightening supply. USO is not finished yet.

Marie And the US natural gas story fits right in. Europe's reliance on American gas is expected to hit a record in 2026 as Middle East supplies are disrupted. Cheniere Energy, the US LNG exporter, is a direct play. It's up twenty-three point five percent year to date, but has actually pulled back six and a half percent this week, giving a better entry at twelve point seven times forward earnings.

Gerald Cheniere's multiple is reasonable, and the natural gas fund, UNG, is still down nine point five percent year to date despite a recent bounce. That's not yet crowded. If the EU demand thesis holds, there's room to run.

Tom Alright, I'll take the natural gas trade. But fertilizer is another supply shock play. Gulf shipping standoffs are hitting fertilizer supply, and CF Industries, the nitrogen producer, is up sixty-two point seven percent year to date and still trades at eleven point seven times trailing earnings.

Marie That's a bitter pill, though. Bloomberg highlighted the farmers in Malawi being hit. The agribusiness ETF is a more measured way to play it—up twelve point one percent year to date. It benefits from rising crop prices without single-name risk.

Gerald Diversification, even in a crisis. Speaking of diversification—or lack thereof—GameStop tried to buy eBay for fifty-six billion dollars, half cash, half stock. eBay rejected it, calling it 'neither credible nor attractive.'

Tom No way. GameStop is like a meme stock with a bitcoin fetish. Its stock is down eleven percent in a week. Selling it here is probably a continued short. eBay, though, is holding up near its fifty-two-week high—a rejection might actually be a relief.

Marie Ah non, this is not serious. GameStop's strategy is just… ooh la la. Back to real markets—what about China? Morgan Stanley is breaking from the consensus, saying the yuan's rally is slowing. The China large-cap ETF is down six point three percent year to date and flat on the day. If yuan appreciation stalls, the equity tailwind fades.

Gerald Yeah, the yuan divergence is one to watch. The bulls are betting on significant undervaluation, but Morgan Stanley is waving a caution flag. I'd want to see the currency signal resolve before diving into Chinese equities.

Tom Meanwhile, Indonesia is a mess. MSCI removed eighteen stocks from its global indexes due to concentrated ownership. The Indonesia ETF is hugging its fifty-two-week low, down twenty-two point seven percent year to date. That's a governance red flag.

Marie C'est vrai. This forces passive fund selling and erodes investor confidence. Structural governance issues—this is what I always warn about. It's not just a sell; it's a stay-away.

Gerald Alright, let's zoom out. As always, none of this is investment advice—just our reading of today's signals. And the aggregate picture is a global supply chain stretched thin by the Iran war. Copper, oil, gas, fertilizer—every disruption is being priced in isolation, but the message is cascading shortages.

Tom But here's the catch: positioning in oil and copper is stretched. The oil fund sits just five percent off its high, the copper ETF at zero headroom. These are momentum trades that rely on the crisis persisting. Any credible ceasefire whisper—and there's zero press chatter today—and those crowded longs could snap back.

Marie And what I find notable: no central bank coordination talk. Commodity price spikes feed inflation expectations, yet no Fed speak, no ECB emergency signaling. If oil stays above one hundred thirty dollars, the rate-cut narrative for the second half evaporates. That's the macro underbelly no one is touching.

Gerald Frankly, the cleanest expression is to rotate from commodity momentum into cheap energy equities. The energy sector ETF trades at a discount to its history, while oil futures are screaming. The stocks have lagged the commodity—that's the gap to close.

Tom I can get behind that. The WSJ's take is spot on. Buy the lagging stock proxy, not the euphoric commodity. And if the crisis deepens, you still have upside. If it eases, you're not holding the top-tick oil contract.

Marie Well, boys, that's a wrap for today. War, tariffs, and one surprise plane ride. Remember to tread carefully out there. Back tomorrow morning.

Gerald See you then. Cheers.

Tom Later, everyone.