BofA sees 'bull capitulation' — sell stocks.

Transcript

Tom BofA says sell. Burry says buy. And someone just occupied a cobalt mine in Congo. We're breaking it down on Investment Flash.

Marie May 20th, 2026. London Edition. I'm Marie, with Tom and Gerald. The market's serving up a contradiction today, and we're going to dig in.

Gerald Contradiction's the word, Marie. Bank of America calling it bull capitulation—run from stocks. Meanwhile, JPMorgan says AI is finally getting real. So who's right?

Tom I mean, Gerald, you know my bias. AI execution sounds a lot better than 'sell everything' to me. Nvidia at nineteen times forward earnings? That's not a bubble, buddy.

Marie Hold on, Tom. The BofA signal isn't just about tech. It's a macro call—investors are all-in, cash levels dropping. When has that ended well?

Gerald Exactly. And Michael Burry is buying value stocks and warning about an AI bubble. When the Big Short gets twitchy, I at least listen.

Tom Okay, but the last time Burry went full bear, the S&P ripped higher for another year. Being early is the same as being wrong, Gerald.

Marie No, but that's exactly my point—timing these macro signals is impossible. The BofA note has no sell-by date. What we do have are pockets getting hit, like solar. The solar ETF down four and a half percent this week.

Gerald Right, and the FT and WSJ both flagging solar at an inflection point. Trade barriers as a catalyst. That's unusual alignment.

Tom First Solar is a U.S. manufacturer—import tariffs are a direct win. And it's twenty-three percent below its fifty-two-week high. That's a dip I want to buy.

Marie But the timing, Tom. We don't know when those policy moves come. Meanwhile, the stocks keep bleeding. Enphase dropped almost six percent last session alone.

Gerald Yeah, look, solar's a theme I can get behind, but I need a clearer signal. Like a steel company literally selling a stake to buy back shares. ArcelorMittal down eight percent this week, trading under nine times forward earnings.

Tom That's value, Gerald. Boring, steady value. But what about the battery storage play? NextEra's mega-deal and the cobalt occupation in Congo—that's the most original take today.

Marie Yes—Bloomberg's piece on military-backed intruders taking over a cobalt deposit. That's not artisanal mining, it's organized extraction. If that disrupts supply, battery metals could spike.

Gerald Cobalt's a key piece. But the battery ETF is down over eleven percent this week. Lithium ETF down nearly nine percent. Tom, your lithium call from yesterday is getting absolutely hammered.

Tom Ha—yeah, timing, right? But Gerald, the thesis hasn't changed. The EV adoption story is still there. BYD is surging in Australia as oil prices push people to electric. Toyota is getting crushed.

Marie And that's a structural shift—Nikkei Asia reporting Chinese auto imports overtaking Japanese for the first time. That's not a blip.

Gerald Toyota at under twelve times forward earnings, down fifteen percent year to date. That's tempting for a value guy like me, but if EV adoption keeps accelerating, it's a value trap.

Tom Exactly. I'm sticking with BYD. And while we're on metals, Barclays says AI rollout will boost copper and emerging market currencies. The copper ETF down six percent this week—another pullback buy.

Gerald Barclays is playing the long game—AI infrastructure means copper demand for years. But I'd rather play the Chilean peso directly if I believed it. Emerging markets have too much policy risk for me.

Marie Speaking of policy risk—Indonesia planning tighter controls on coal and palm oil exports. That could lift coal prices near highs, but the Indonesia ETF is near a fifty-two-week low, down twenty-eight percent year to date.

Tom Coal ETF is four percent off its high. If they restrict supply, that's got room. But it's a volatile trade.

Gerald Alright, let's talk about Standard Chartered. The CEO called workers 'lower-value human capital' and is cutting thousands of jobs for AI. The stock is flat this week, but AI-driven cost cuts could re-rate it.

Marie I'm going to push back here—calling your workforce that is a PR disaster. But from a pure margin perspective, it's bullish. Banks are basically saying AI lets them do more with fewer people.

Tom I mean, Microsoft is up three percent this week at twenty-one times forward earnings. AI execution is real. And JPMorgan's mergers and acquisitions chair says the investment phase is delivering.

Gerald Alright, Tom, but CoreWeave stock fell on the Google-Blackstone cloud venture. More competition in AI cloud means not everyone wins. CoreWeave down ten percent this week, nearly halved from its high.

Marie But Google—um, Alphabet—is down under four percent this week. That might be the smarter play, riding the cloud buildout. And Tom, you called Alphabet a buy yesterday.

Tom Right, and I'm not bailing yet. Alphabet's got the balance sheet to compete. Blackstone too, down four and a half percent this week. I like the cloud infrastructure theme.

Gerald Look mate, I'd rather own the physical infrastructure—NextEra's battery storage deal is tangible. That's real demand, not just cloud hype.

Marie And that's what makes the battery and solar plays interesting. They're pulled back, and the catalysts—trade barriers, storage demand, supply disruptions—are concrete. Not just AI evangelism.

Tom Exactly.

Gerald One hundred percent.

Tom Alright, fair point. But let's not ignore Bitcoin. K33 Research says this bear market is different because traders are uniquely defensive. That could mean a floor.

Gerald Pff, Bitcoin. Every bear market is supposedly 'different' until it isn't. But fine, if short-sellers are all hiding, maybe the downside is limited. I still don't know how to value it.

Marie Wait—wait a second. The K33 note is interesting because it's a sentiment play. If everyone's already pessimistic, the selling pressure is exhausted. That's a contrarian long case, even if I'm not a crypto person.

Tom Yeah, yeah, exactly. That's the whole story.

Marie Totally.

Tom And speaking of contrarian, Pimco says Japan's thirty-year yield curve is too steep. If yields fall, that's a tailwind for Japan equities. The Japan ETF down three percent this week.

Gerald That's a bond trade, Tom. I'd play the JGB directly. But for equities, it's an indirect effect. Still, if the curve flattens, it removes a headwind. I can get behind that.

Marie Alright, let's pull this together. The market is selective. AI executors like Microsoft and Nvidia are holding up, but solar, battery metals, and emerging markets are getting sold. That's a stock-pickers' market.

Tom Right—so I'm long the pullback in solar and battery, long AI names like Nvidia, and maybe short the S&P if the BofA signal plays out.

Gerald Short the S&P near its high is brave, Tom. I'd rather just buy value—ArcelorMittal, Toyota maybe if it stops falling. And I do like the steel buyback.

Marie Hold on—Tom, you said short the S&P? The BofA signal could flip violently if the Fed signals a pause. None of the articles mention the June meeting, but that's the real catalyst.

Tom Fair, Marie. So do I wait for the Fed minutes? Timing is everything. I'm just saying the setup is there.

Marie Look, I think the cleanest expression is dispersion. Long the pullbacks in solar and battery storage—First Solar, NextEra, the lithium ETF—and if you must, short the S&P only after confirmation.

Tom Exactly.

Gerald Nailed it.

Gerald And don't forget the cobalt story. If that supply tightens, battery metals could rally irrespective of the macro. That might be the highest-conviction idea.

Tom Absolutely. And Microsoft and Nvidia still look cheap if AI execution keeps rolling. But Gerald, what about Standard Chartered? AI job cuts—that's a margin story.

Gerald At one point three times book, it's not screaming cheap, but the efficiency gains are real. For a UK bank, it's a decent play. I'm not doing backflips, but I'd watch it.

Marie Okay, before we wrap, let's not forget: as always, none of this is investment advice. Just our takes on the stories making the rounds.

Tom And the round is full today. We didn't even get to everything—like the Google-Blackstone cloud venture really shaking up CoreWeave. But we hit the big ones.

Gerald One thing's for sure: the BofA call is getting a lot of airtime. But it's worth remembering they've been wrong before. Cash levels are still high.

Marie Exactly. The counterargument to the sell signal is that the rotation from cash might have further to go. AI could rescue earnings. So don't just panic.

Tom Right. So I'm buying dips, not selling rips. At least for now.

Gerald Alright, Tom. We'll check in on that lithium call tomorrow.

Tom Ha—ouch. But yeah, LIT down nine percent hurts. I still believe, buddy.

Marie And that's the show. We're back for the New York Edition later today at nine a.m. New York time. Catch us then.

Tom And if you're just finding us, hit follow on Spotify or check investmentflash.com for the full digest with charts and sources.