Oil below $100, tanker rates at record. One is wrong.

Transcript

Tom Alright folks, big divergence today: oil below a hundred, tanker rates at a record. One of those is wrong, and we're going to figure out which.

Marie Good morning, it's Wednesday, September twenty-third, and this is the London Edition of Investment Flash. I'm Marie, joined by Tom and Gerald. We've got eleven signal groups, a private credit risk transfer, gold miners using AI, and a crypto wash-trading question. Let's get into it.

Tom So Bloomberg's report says record supertanker earnings are now spilling into smaller vessels, lifting the whole fleet. But the tape refuses to confirm—Frontline fell almost four percent last session, DHT Holdings and International Seaways down nearly five percent each, all within a few percent of their fifty-two-week highs after huge year to date runs. The divergence between story and tape is the point.

Gerald Yeah look, the trailing price-to-earnings ratios of around seven times say these cash flows are real, not a freight-cycle mirage. But after triple-digit runs, is this just a breather, or is the market telling us the oil break below a hundred will kill the tanker trade?

Marie No but that's exactly my point—record tanker rates sitting next to oil below a hundred is the actual story. One of them is wrong, and if rates hold, these valuations are cheap. We're long cash flow, not momentum.

Gerald The Wall Street Journal's Alison Sider reports JPMorgan has explored letting partners underwrite rejected applicants for its co-branded cards, and private credit firms are interested. JPMorgan keeps the fee stream while someone else eats the credit. JPMorgan fell three point four percent last session but is still seven percent below its high.

Tom Wait, JPMorgan offloads rejected-card risk and keeps the fees? That's a win-win for JPMorgan. And Blackstone down twenty percent year to date—if any deal materialises, that's a discounted entry into a new yield source.

Marie Hold on, not so fast. The catch is it's exploratory—no partner, size, or terms. And selling Capital One here is a crowded short; it's already down seventeen percent year to date and the market hasn't priced any deal. Optionality is cheap only if you're right.

Tom The Information reports Barrick Gold signed a five-year AI deal ahead of an initial public offering—a deliberate pre-listing equity story. The tape liked it: gold miners ETF up three point six percent, Barrick up two point eight, even with gold twenty-two percent below its high. At ten times forward earnings, the bull case is margin, not metal.

Gerald Right, so an AI deal with no vendor, no dollar value, no venue disclosed, and the stock pops. Only in mining—sorry, only in any sector where 'AI' is the magic word. But hey, the tape didn't care, so who am I?

Tom Ha, yeah—only Gerald could turn an AI deal into a valuation warning.

Marie No but that's the actual thesis—Barrick at ten times forward earnings is pricing cost cuts, not gold price. If AI can lower all-in sustaining costs, that's margin expansion. That's the bull case.

Marie The Information's headline is bearish—America's AI buildout is failing to launch—but the available text has no bottlenecks, projects, or numbers. Nvidia sits three percent below its fifty-two-week high, semiconductor ETF up almost sixty percent year to date. Vertiv is down a third—that's the tell, some slippage already priced.

Tom But Marie, the tape is priced for acceleration, and this headline has no facts—no order pushouts, no delays. I can't short Nvidia on a headline without numbers. I need specific project delays before I touch that trade.

Gerald To be fair, Vertiv already de-rated, so the market may share this worry. We keep these on watch until order cutbacks surface. Not a trade yet.

Marie And as always, none of this is investment advice—just three friends reading the tape.

Gerald The Wall Street Journal confirms crude broke below a hundred dollars and stock futures caught a bid. The oil ETF is down five percent on the week, but still up over a hundred percent year to date—so it's a pullback inside a monster run. And Tom, your WTI crude watch yesterday was timely, buddy.

Tom Ha, yeah—crude below hundred, airlines are the clean expression. Delta at about ten times forward earnings, the airlines ETF only up two and a half percent year to date—it hasn't priced this oil slide at all. Lower jet fuel is pure margin.

Marie Right, and lower oil feeds disinflation, which is the rate-path story the Fed should notice. But the market hasn't connected it yet. That's exactly the gap we'll get to.

Tom MarketWatch says don't wait for a pullback to buy—the Nasdaq 100 ETF closed at its exact fifty-two-week high, up almost twenty-one percent year to date, and the VIX printed fourteen point two, down sixteen percent in a week. And yeah, I know I said don't wait last quarter too—but this time it's a record high, not a hope.

Gerald Ha, yeah—and last quarter you said the same about semis. But look, the VIX at fourteen is the cheapest insurance of the year—tells you the crowd stopped paying for downside. Breadth is thin: small caps still six percent below their high. You're buying the headline, not the whole market.

Marie And that's where I push back, Tom—when the VIX is this low, everyone thinks no pullback, then one catalyst squeezes. The crowded trade is shorting volatility, not riding momentum. I'd be careful chasing that.

Gerald DoorDash is paying one hundred thirty-one point five million dollars to settle New York City's minimum pay probe, mostly over on-call time between deliveries. It removes an overhang, but it validates a cost standard other cities can copy.

Marie Exactly—Uber and Lyft will bear the next rounds. Uber is down fourteen and a half percent year to date, Lyft down nearly twenty-three percent. The regulatory cost stack is the next leg down for weaker balance sheets.

Tom Fair point, but Uber at fifteen times trailing earnings isn't pricing replication risk, and Lyft's margin floor just got lower. This is structural, not cyclical—the bear case has legs.

Marie The Wall Street Journal's Carol Ryan flags a twenty twenty-one vintage multifamily apartment pool that is already fifty-three percent delinquent. That's a specific ugly number, not a general commercial real estate worry.

Gerald The mortgage REIT ETF is seventeen percent below its high and only two percent above its fifty-two-week low, while regional bank ETF is nine percent below its high. The loan book is telegraphing something equities haven't priced.

Tom But Gerald, that's one vintage, one deal. Regional banks are up ten percent year to date and only nine percent off highs—they're not breaking. I need more than one data point to short the banks.

Tom AutoZone guided to accelerating growth in every region, and sales rose. The stock popped over three percent last session, O'Reilly up three point six. Both are still down twenty to thirty-three percent from their fifty-two-week highs—a retail growth story trading like a value name.

Marie Right, and the details are thin—no revenue, comps, or earnings per share—but direction is enough. AutoZone at sixteen point six times forward earnings, down a third from its high, growth not in the price.

Gerald Classic aftermarket resilience—people fix old cars in a downturn, so this is the defensive retail growth story. But the market decided it's value, not growth. That's the setup, honestly.

Gerald CoinDesk crunched Kalshi's trade tape and found one five thousand four hundred ninety-nine dollar trade made up fifty-seven percent of sampled ether perpetual volume, while recurring two thousand five hundred and five thousand dollar clips made up fifty-four percent of bitcoin perpetual volume. That's not a market, that's a pattern.

Tom Wait, if the newest crypto derivatives venue is manufacturing flow, the regulated incumbents get stronger—CME Group is nineteen percent below its high, trades at about twenty point seven times forward earnings. That's the cheap laggard.

Marie Exactly—this is the most original take today. If Kalshi's volumes are wash or bot activity, the fragility of new venues is the bigger story, not just one platform. Watch bitcoin until they explain the pattern.

Tom Needham initiated GE HealthCare at buy, telling investors to buy the dip. The stock bounced over two percent last session, still twenty-six percent below its high, down nearly twenty-two percent year to date. At twelve times forward earnings, the stock prices a recession that hasn't shown up.

Gerald A sell-side upgrade after a long selloff—that's basically 'we missed the bottom, please buy now.' But at twelve times forward, maybe the dip is actually cheap. Fair enough.

Marie And that's the structural point—med-tech is pricing in a recession that isn't in the order book. GE HealthCare's backlog is fine. Needham's call is late, but the direction is right.

Gerald Alright, let's pull this together. Multiple publishers today are converging on energy and credit divergence: Bloomberg on tanker rates, The Wall Street Journal on oil below a hundred, The Wall Street Journal on that delinquent apartment pool. Meanwhile MarketWatch says don't wait, Nasdaq at a record. Two different markets.

Tom Right, the equity tape is screaming momentum, but the loan book and energy complex are saying the soft-landing bet is getting too comfortable. That's the gap we're watching.

Marie No but that's exactly the convergence—record tanker rates next to oil below a hundred is one wrong, and a fifty-three percent delinquent pool is the other. The market is trading the second derivative, momentum, not the level.

Tom Exactly.

Marie One hundred percent.

Gerald That's the whole story.

Gerald And the case against our worry is straightforward. The AI buildout piece has no numbers behind the headline, and Nvidia trades at fourteen point six times forward earnings—hardly a bubble. The fifty-three percent delinquent pool is one vintage, one deal. Shorting momentum with the VIX at fourteen is the crowded trade; any bullish catalyst would squeeze it violently.

Tom But if lower oil feeds disinflation and the AI order book holds, our credit and energy worries become noise. That's the bull case, honestly.

Marie What we don't see anywhere this morning is the Fed. Sub-hundred oil, a fifty-three percent delinquent commercial real estate pool, and record tanker rates should all be rate-path stories, yet no one connects them to policy. The gap will fill at the first Fed speaker.

Gerald So the cleanest expression is dispersion, not direction. Long tanker cash flow—Frontline and DHT at around seven times trailing earnings—against short the crowded parts: semiconductor ETF up sixty percent year to date, or regional banks holding delinquent loans. We're not sizing it here, but the tape is paying you to be patient while the loans decide.

Tom Right.

Gerald Yeah, yeah.

Marie Spot on.

Tom Alright folks, that's the London Edition. 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 with the New York Edition, later today at nine a.m. New York time. Until then, keep your positions small and your coffee strong.

Marie And remember, oil below a hundred, tanker rates at record—one is wrong. We'll see which one by nine a.m. New York. Cheers.