Oil rips, chips diverge. The market is split in half.

Transcript

Tom Alright, folks—oil just ripped ten percent in three days, and chip stocks can't make up their mind. The market is literally split in half this morning. Let's get into it.

Marie Good morning, welcome to Investment Flash, London Edition, Thursday, June fourth. I'm Marie, with Tom and Gerald.

Marie Tom, you sound almost cheerful about a market that's tearing itself apart.

Tom Hey, volatility's just opportunity with a scarier name, Marie. And Gerald, your buy call on the oil fund yesterday—how's that looking?

Gerald To be fair, I said buy the oil fund, not that I'd be doing cartwheels. But yeah, it's working. The peace-talk hopes fizzling out is the story.

Tom And US crude oil jumping almost ten percent in three days—that's genuine supply fear, not just headlines. The energy sector ETF is only up three percent on the week and still eight percent below its high. That's a catch-up trade right there.

Marie Hold on—oil spikes based on peace talks collapsing can reverse just as fast if talks reignite. How much of this is durable?

Gerald Look mate, if US crude hangs above a hundred and feeds into the consumer price index, the bond market's going to reprice rate cuts brutally. That's the story nobody's telling. Long-duration Treasuries are only eight percent off their low, but it could get ugly.

Tom That's the macro wildcard.

Marie One hundred percent.

Gerald Exactly.

Tom Fair point, Gerald. But while it lasts, energy stocks have room. And speaking of chips, Nvidia's taking AI from data centers to laptops, straight into Intel and AMD's turf.

Tom Nvidia at seventeen times forward price-to-earnings ratio, nine percent off its high, making a laptop play that could extend its dominance. I mean, come on—this is a buying opportunity.

Marie Tom, AMD is up a hundred forty-three percent year to date and within one percent of its high. Intel is up one hundred eighty-six percent. How much chip rally is already baked in?

Gerald And Qualcomm, Apple—they're all on the sell list if Nvidia wins the laptop war. It's crowded, Tom. Remember when you said semis were cooked in Q2? Now you're all in again.

Tom That was different, buddy. But seriously, Nvidia's forward price-to-earnings of seventeen is cheap if the laptop expansion delivers. This isn't hype, it's a new revenue stream.

Marie I'm going to push back here. The laptop chip market is already competitive. It's not a done deal. And with oil driving inflation fears, growth multiples might not hold.

Gerald Yeah look, the Journal's Spencer Jakab is calling for boring stocks to make a comeback. The Russell 1000 Value ETF is at an all-time high. But as Marie said, no catalyst yet.

Tom Value without a catalyst is just expensive safety, Gerald. The Dow dipped one point one percent last session, but it's still near highs. Where's the juice?

Marie Calling a value rotation without a catalyst is like forecasting rain in a drought—you might be right eventually, but until then you're just thirsty.

Gerald Ha, fair enough.

Marie The juice might be in Asia. Goldman Sachs calling for another forty percent upside in Korea and Taiwan—markets that have already doubled this year. But foreign investors aren't buying it.

Gerald The South Korea ETF is two percent off its fifty-two-week high, and the Taiwan ETF is one percent away. That Goldman call is aggressive, to say the least.

Tom But the chip cycle is real, Gerald. If Goldman is right, there's still room. But the outflow data spooks me. It's a watch, not a buy.

Marie And India is losing out. The India ETF is down eleven percent year to date. The AI investment is flowing to Korea and Taiwan, not Mumbai. That rotation is happening.

Tom Crowded.

Gerald Exactly.

Marie Nail on the head.

Tom Now, Quantinuum's billion six-eighty I P O—that's a jolt for quantum computing. Honeywell's a major backer, and it dipped five percent last session. That might be an underappreciated entry.

Marie The quantum sector ETF is just one percent off its all-time high. So the I P O momentum could lift the whole sector.

Gerald Tom, you've got Nvidia laptops, quantum IPOs—any minute now you'll tell me stablecoins are the next big thing.

Tom Ha—actually, since you mention it: Stripe, Visa, Mastercard, and maybe Coinbase are backing a new stablecoin platform.

Gerald Of course they are.

Tom Payment giants jumping in—that's mainstream adoption. Visa is seventeen percent below its high, Mastercard twenty-two percent below. Undervalued.

Marie Wait—Coinbase is sixty-three percent below its high, deeply oversold. If they're involved, that's a huge catalyst. But regulation remains the cloud.

Gerald I need to see the business model first. A stablecoin platform backed by big names sounds great, but how do they make money?

Tom That's the Gerald of Investment Flash—asking for a business model in a crypto story.

Marie Somebody has to.

Gerald To be fair, Visa and Mastercard have real moats even without crypto. So if stablecoins add even a little revenue, it's upside.

Tom And that's why we're seeing these legacy payment names actually moving into crypto, not just talking about it. The stablecoin platform could be a real revenue stream, not a press release.

Gerald Show me the revenue, and I'll show you the multiple.

Tom Deal.

Tom And on the crypto front, Citi says the real problem for bitcoin isn't Strategy's selling—it's a dearth of new investors.

Marie Citi's point is demand-side: no new wallet growth means any bounce is fragile. The narrative has flipped from a single seller to a structural adoption issue. That's the most original take today.

Gerald Strategy Inc—that's the bitcoin treasury company—down seventy-two percent from its high, and another seven percent last session. That's a leveraged bitcoin bet that's gone very wrong.

Tom And while we're on Asia, Alibaba's opening its Qwen AI ecosystem to developers, taking on Tencent. The stock's down eighteen percent year to date, thirty-four percent below its high, trading at thirteen point eight times forward earnings. Deep value.

Marie That's interesting, but Alibaba's had false dawns before. The AI agent race in China is heating up, and regulatory risks linger. But at that multiple, it's worth a look.

Gerald Coupang's Rocket Now in Japan—six million downloads, ten thousand restaurants. That's a threat to Uber Eats. Coupang is down thirty percent year to date, fifty-two percent below its high. Could be oversold.

Tom And Uber down thirty percent too, but facing a low-price rival. That's pressure. I'd rather be in Coupang if they gain traction.

Marie On the policy side, the EU's allowing budget leeway for energy crisis aid, but with a green string attached—curbing fossil fuel consumption. Clean energy ETFs like the global clean energy ETF and the solar ETF have rallied thirty-five percent year to date, but slipped last session. The policy could accelerate renewables.

Gerald The global clean energy ETF is three percent off its high; the solar ETF is seven percent off. Not bad entry points if the green push is real.

Tom But green energy has been a trade of hope before. Is this time different?

Marie Yes, because it's tied to fiscal relief. Countries get budget flexibility only if they cut fossil fuel use. That's a carrot and a stick.

Gerald Vietnam's inflation highest since January twenty-twenty, trade deficit widening. The Vietnam ETF is down five point seven percent year to date. Not a buy.

Tom Rising energy prices hitting Vietnam hard. No argument there.

Gerald And it's not just Vietnam—rising oil prices squeeze emerging markets across Asia.

Marie Right, that's the macro transmission: energy spikes feed into inflation, then central banks get hawkish. It's a headwind for a lot of the growth stories we love.

Tom So the split deepens: oil beneficiaries on one side, emerging markets and growth on the other.

Marie And that's exactly today's picture. So the market is split: oil ripping, chips diverging. Quantinuum's billion-six-eighty I P O and Nvidia's laptop push show risk appetite is alive, but the Asian chip trade is crowded, and the oil spike threatens the soft landing script.

Tom The cleanest expression is to pair long energy—the energy sector ETF still eight percent below its high—against a crowded short in long-duration assets. If oil sticks, the AI party gets expensive.

Gerald The counterargument, and it's a fair one, is that oil's jump is temporary and tech earnings season will justify these multiples. If peace talks rekindle, crude could drop as fast as it rose, and the AI narrative would quickly reclaim center stage. Nvidia at seventeen times forward is actually cheap if the laptop expansion delivers, and AMD's hundred forty-three percent surge reflects real chip-cycle earnings, not just hype.

Marie But no one's talking about the dollar's reaction to oil-driven inflation. If West Texas Intermediate hangs above a hundred and feeds through to the consumer price index, the bond market could reprice the rate-cut timeline brutally. That would be the real regime change—not a sector rotation, but a duration unwind that hits everything from crypto to growth stocks. Nobody's writing that story yet.

Tom And nobody's writing that story yet. Gerald, your bond market doom-loop is back.

Gerald Always lurking, Tom. Alright, as always, none of this is investment advice. We're just talking through the signals.

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

Tom We're back later today for the New York Edition at nine a.m. New York time. See you then.