Markets seek bottoms. The trade is anti-AI hedges, nuclear, Japan.

Transcript

Tom Markets are hunting for bottoms everywhere you look — beaten-down IT consultants, Chinese internet stocks, even bitcoin. And there's a juicy DJIA rebalancing trade to boot. Let's get into it.

Marie Good morning, it's Wednesday June twenty-fourth, the London Edition. I'm Marie, joined by Tom and Gerald. Tom, you sound ready to buy the dip — but careful, there are plenty of landmines.

Tom Ha, I know. But hey, that quantum ETF call from yesterday is already printing — QTUM up another couple percent pre-market.

Gerald To be fair, Tom, you were also bullish on Infosys yesterday and that one's looking like a milk carton left in the sun.

Tom Alright, alright — one out of two isn't terrible. Anyway, let's start with the most contrarian call on the board: IT consultants.

Gerald Yeah look, FT Lex is running against the panic. Accenture down fifty-one percent year to date, Capgemini crushed, and they say the sell-off overestimates these firms' inability to fight back.

Marie Wait — Capgemini is French, Gerald. This is a European angle you actually care about.

Gerald Ha, fair enough. But honestly, ACN just eight percent above its fifty-two-week low after a twenty-three percent weekly wipeout, that reeks of forced selling.

Tom Buddy, a twenty-three percent weekly crash and you're calling a bottom? That's like catching a falling knife.

Marie No but think about it — they have some of the smartest tech talent, they're pivoting to AI services. The market is pricing extinction, not adaptation.

Gerald And to be fair, Accenture trades at about fifteen times forward P-E ratio now. That's not stretched for a company that's still growing.

Tom Fair enough, but the momentum is brutal. I'd wait for a bounce confirmation.

Marie Exactly. That's the whole risk — calling turns in names that are down fifty percent has been a serial wealth destroyer this year.

Gerald One hundred percent.

Tom Right. Next up: DJIA rebalancing. Verizon out, Alphabet in, effective June twenty-ninth. That's a mechanical pop for GOOGL.

Marie Wait — hold on. GOOGL is already up almost ten percent year to date, but it's still fifteen percent below its high. Passive buying will help, but it won't fix the AI overhang.

Gerald And Verizon, which is out, actually rallied three percent last session. The market's already pricing the forced selling?

Tom Maybe, but passive flows near the rebalance date can still move the needle. I'd play it for a quick trade.

Marie I'm going to push back here, Tom. This is a mechanical event, not a fundamental catalyst. Once the rebalance is done, it's back to worrying about ad revenue.

Gerald That's spot on. And the Dow ETF itself? It's a hold — rebalancing changes weightings but the net effect is negligible.

Tom Okay, fair. Let's talk bitcoin then. CoinDesk has two bullish pieces: cheap vol ahead of a ten-billion-dollar options settlement, and a contrarian moving-average indicator saying downside is limited.

Gerald Honestly, cheap vol is exactly when you worry about a spike. And a contrarian indicator that's been wrong for six months is just noise.

Marie But Tom, the correlation with risk assets is still tight. If equities roll over, bitcoin goes with them. It's not a safe haven yet.

Tom I get that, but the setup is for a volatility spike post-settlement. If you're a vol trader, this is interesting.

Gerald Alright, I'll give you that one — for options players, maybe. But for spot, I'd wait.

Marie Meanwhile, Indian energy transition: Zerodha's Nikhil Kamath is betting big on it, and the US-Iran war reinforces the push. The clean energy ETF ICLN is up twenty point nine percent year to date.

Tom I like that — global clean energy tailwind, and INDY, the India fifty ETF, is down twelve percent year to date, near support.

Gerald To be fair, ICLN fell four point four percent last session. So it's not immune to broader pressure.

Marie But the structural push is there: India needs energy, and clean is the path. The valuation reset could be an entry.

Tom Alright, but now the ugly: Korean chips. Leveraged ETFs sold six billion dollars of Samsung and SK Hynix during Tuesday's rout.

Gerald Yeah look, that's forced selling on top of weak fundamentals. If volatility persists, there's more downside pressure — no valuation relief in sight.

Marie And this is a crowded trade unwinding. Samsung is the poster child of the AI supply chain. It's not done yet.

Tom Right — and Indian IT isn't any prettier. Infosys down forty point six percent year to date, just three percent above its fifty-two-week low. Nifty share at a record low.

Gerald That one stings, Tom, because you were buying it yesterday. The AI disruption fear is real — these firms are getting squeezed.

Tom Ha — yeah, yeah. That call aged about as well as a milk left in the sun, as you said. Wipro's down twenty-one percent too.

Marie Okay, shifting to Japan: China is throttling mineral exports, and that hammered the Japan ETF EWJ down four point three five percent last session.

Gerald This is a direct supply shock, and it's putting pressure on PM Takaichi. Export curbs bite hard in manufacturing-heavy Japan.

Tom But wait — rare earths! That same story creates a buy for REMX, the rare earth ETF. It's up nineteen point six percent year to date, but last session's five point six percent dip is a pullback entry.

Marie That's actually a clean supply-shock play. China restricts, REMX benefits.

Gerald And on the flip side, Japanese buybacks are soaring past one hundred billion dollars, driven by Sony and Hitachi. Sony is literally one percent above its fifty-two-week low.

Tom No way — Sony at that level with a buyback catalyst? That's an oversold opportunity.

Marie But Gerald, isn't Japan getting hit by both the mineral choke and a strong dollar? The buyback wave is nice, but it's a capital return in a down market.

Gerald To be fair, that's exactly what value investors want — support near the lows. Hitachi down seven percent year to date, but buybacks put a floor.

Tom And don't forget Blackstone's thirty billion dollar Japan AI data center plan. BX is down twenty-four percent year to date — if that story sticks, it's a catalyst.

Marie But that's a single-source story from Nikkei Asia. Blackstone hasn't confirmed the scale publicly.

Gerald Alright, now the real anti-AI trade: Evercore ISI explicitly recommends Exxon and Mondelez as negative beta stocks to hedge an AI bubble burst.

Marie See, THIS is what I mean. Exxon at thirteen times forward P-E ratio, Mondelez at eighteen times — classic defensive rotation against the tech froth.

Tom Sure, but if AI keeps crushing it, you underperform. It's a hedge, not a trade I'd want to be in.

Gerald Look mate, it's about correlation. These names have negative beta to tech. If the AI bubble pops, you're protected.

Marie Totally.

Tom Alright, but what about Chinese AI? The US ban on Anthropic in Hong Kong is the best advert for Chinese alternatives, says SCMP. KWEB at its fifty-two-week low.

Marie No, Tom — this is actually an interesting contrarian long. Alibaba near its low, down thirty-four percent year to date. If the narrative shifts to domestic AI, these names could re-rate.

Gerald To be fair, Chinese tech has been on sale for years and keeps getting cheaper. What changes the narrative?

Marie The catalyst is the unintended consequence of US policy: it forces demand onto local alternatives. Baidu down twenty-seven percent is a value entry.

Tom I'm with Marie on this one — the risk-reward looks asymmetric.

Gerald Alright, I'll concede that it's a story. But let's talk cruise lines: Carnival warned the Iran war disrupted bookings, issued a soft outlook. CCL down nearly five percent last session.

Marie Wait — this is the real-world AI fatigue. Geopolitical risk hits consumer travel. Royal Caribbean has held up better, but it could catch down.

Tom Sell Carnival, and I'd fade Royal Caribbean too. Industry-wide headwind.

Gerald Now, the reason we're not all doom and gloom: nuclear renaissance. The US Energy Department is providing billions in low-cost loans to kick-start reactor orders.

Marie This is huge for the sector. NLR, the nuclear ETF, is down eight percent year to date — that could get a major policy catalyst.

Tom And Constellation Energy, down twenty-six percent year to date, is a direct beneficiary. Deep value with a catalyst.

Gerald To be fair, nuclear is a decade-long game, not a quick trade. But the signal is clear: government backing.

Marie Exactly. That's the whole story.

Tom And finally, quantum computing: IBM scaling up, shares jumped five percent last session. QTUM, the quantum ETF, up forty-five percent year to date.

Marie Wait — that QTUM call yesterday? That's you, Tom.

Tom Ha, I'll take the credit. But seriously, the IBM news moving the needle by five percent shows the market is paying attention.

Gerald Alright, let's synthesize. The FT says IT consultants are oversold, CoinDesk sees a bitcoin bottom, and SCMP thinks Chinese AI is a buy. Bottom-fishing galore.

Marie But the case against: momentum is still terrible. ACN down fifty-one percent year to date, Infosys down forty. Calling turns has been a serial wealth destroyer all year.

Tom Yeah, and the DJIA addition of Alphabet might pop, but it won't fix the structural AI wreck in Indian IT or Korean chips.

Gerald And what's missing — and I mean totally absent — is any mention of monetary policy. Not one article discusses rates, the Fed, or inflation. The VIX is at thirteen — implied calm — while the whole buy-the-dip thesis rests on a steady macro backdrop.

Marie That's exactly it. A hawkish BOJ or a hot C P I print could blow up these crowded short-vol trades.

Tom So the trade is the anti-AI basket: long Exxon and Mondelez for negative beta, add nuclear through NLR, and quantum via IBM.

Gerald And on the pure contrarian side, Japan is messy: mineral choke hit EWJ hard, but buybacks are at records and Blackstone is betting on AI data centers.

Marie Honestly, that's where the press is placing its chips — anti-AI hedges, nuclear, Japan. Scattered but fitting for a market that doesn't know where the next leader will come from.

Tom Yeah, and as always, none of this is investment advice. We're just reading 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.

Gerald We're back at nine a.m. New York time. See you then.