Treasuries over stocks: Lombard Odier's five-year first is the signal.

Transcript

Tom Treasuries are finally beating stocks, and one Swiss allocator just flipped overweight for the first time in five years — that's our weekend signal.

Marie This is Investment Flash, Weekend Edition, September twenty-sixth. I'm Marie, with Tom and Gerald.

Tom Lombard Odier turned overweight US Treasuries for the first time in at least five years, arguing yields now beat stocks. That's a real institutional seat at the table taking the other side of the crowded short.

Gerald Yeah look, one Swiss allocator turning bullish after a five-year hiatus isn't exactly a stampede, but the positioning gap is real — the long Treasury fund is one percent above its low while the S&P 500 fund is one percent below its high.

Marie That's the widest optimism gap we've seen all year. Early, not expensive. The long Treasury fund one percent above its low, intermediate fund eight percent below its high, and the short Treasury fund up seventeen percent year to date — that's the trade to fade.

Tom Speaking of early, Gerald, your Meta short from yesterday? Down another half percent after the drift. Looking prescient.

Gerald Ha, fine, but no victory lap yet — the AI crowd is still crowded.

Marie As always, none of this is investment advice, just our read on the flow.

Tom Blackstone's top private equity executive Joseph Baratta is leaving after almost three decades, possibly for a public service role. That's a key-man risk.

Marie And the stock trades thirty-three percent below its high, so the succession angle isn't fully priced. The market hasn't caught up.

Gerald Key-man risk for a firm that's basically a franchise of key men, and it's not priced? That's a short setup. KKR might pick up flows if Blackstone unsettles investors, but no evidence yet.

Tom Bitcoin ETFs erased a five point eight billion dollar outflow hole and flipped to roughly eight hundred million of net inflows. The flow recovery is real.

Marie But the same day we get prosecutors seizing accounts linked to Tether, alleging hundreds of millions moved at a Caribbean bank's direction. Enforcement is the reason not to chase beta.

Gerald So buy the flow, watch the rails. Coinbase is right in the middle.

Tom Xi now says the US and China can avoid the 'Thucydides Trap' after talking to Trump. Both CNBC and Nikkei point the same way: less tail risk for Chinese assets.

Marie So the China large-cap ETF at nineteen percent below its high, the internet ETF at forty-three percent below — the geopolitical discount still has room to compress.

Gerald Internet names carry the heaviest delisting premium, so warmer ties lift them most. But one readout doesn't change everything.

Tom Exactly.

Marie One hundred percent.

Gerald Yeah, yeah.

Tom Bank of America cut Nike to Sell, and Bloomberg says sentiment is the lowest in at least twenty-five years. So everyone hates it.

Gerald Sentiment at a twenty-five-year low? So analysts finally caught up to what shoppers knew two years ago.

Tom Ha — fair enough.

Marie The contrarian read is tempting, but no fresh estimate detail. The bear case is already in the price — Nike is fifty-four percent below its high and just two percent above its low.

Tom And Adidas is the obvious relative winner if the share-loss story holds. Trading twenty-nine percent below its high.

Marie FT Alphaville asks where all the announced data centres actually are. Build-out is falling far short of the pipeline.

Tom And the UN says the world's eighty million kilometre grid needs a huge rise in investment. The bottleneck is power, cooling, transmission.

Gerald So the direct expression is the physical layer: Vertiv, GE Vernova, Eaton. Not the announced capacity itself.

Tom Exactly.

Marie That's the story.

Gerald Bernstein says Wall Street is under-modelling how component costs hit Apple's gross margins. Apple trades within one percent of its high at thirty-five point six times forward earnings.

Marie So no cushion for a guide-down. Short Apple, long the supplier with pricing power — that's Taiwan Semiconductor.

Tom Taiwan Semi is six percent below its high and up forty-one percent year to date. The margin squeeze has a winner.

Gerald BASF confirmed initial talks to take over Evonik. Evonik jumped seven point two percent last session, BASF slipped three point six percent as the acquirer.

Tom BASF wants to buy Evonik? So they're consolidating to have someone to talk to about that antitrust review.

Gerald Oh, that's rough.

Marie Evonik four percent below its high, but antitrust is an obvious hurdle in Europe. The sector consolidation story is real, but BASF as acquirer slipping says the market isn't cheering yet.

Tom Bloomberg says South America is now Big Oil's top hunting ground after Exxon's Guyana blockbuster. Exxon, Chevron, Petrobras all in the crosshairs.

Marie South America is Big Oil's top hunting ground? Next thing you know, the merger arb desks are setting up camp in Guyana.

Tom Ha — yeah, yeah.

Gerald Energy's already run hard — the sector fund up thirty-six percent year to date — so this is a multi-year story, not a gap trade. Petrobras at five point one times forward earnings still looks cheap.

Marie Pimco faces a roughly thirty-five million dollar loss on a bond tied to a Philadelphia office complex. One asset doesn't make a trend, but it lands while office REITs are below highs.

Gerald BXP is seventeen percent below its high and still trades at twenty-eight point five times forward earnings. The value trap remains alive.

Tom So short the office REIT or just avoid it. The write-downs keep coming.

Marie Russian strikes on Ukraine's data centres caused two days of internet outages. The targeting is expanding from the power grid to the digital layer.

Tom That keeps European defence and cyber names bid. Rheinmetall is down thirty-eight percent year to date and fifty-one percent below its high — the pullback doesn't match the war.

Gerald Cybersecurity fund is five percent below its high after up forty-nine percent year to date. Both sides of that threat.

Tom Airbus offered divestments to get Brussels to bless its space merger with Leonardo and Thales. The acquirer is willing to sell assets to clear the deal.

Marie Airbus trades thirteen percent below its high at twenty-two times forward earnings. The merger optionality isn't fully reflected.

Gerald Brussels backing is still a long runway, but if they clear it, that's a re-rating.

Marie The most original take today is FT Alphaville asking where all these data centres actually are. The announced capacity vastly exceeds what's built, and satellite imagery would show it.

Tom So the physical infrastructure story is overstated at the headline level. The chip, power, cooling demand tied to it might disappoint.

Gerald That attacks the consensus AI-buildout trade at its weakest point: the concrete and steel nobody verifies.

Marie So our view: the day's real signal is rotation, not correction. The long Treasury ETF sits one percent above its low, the S&P 500 ETF one percent below its high. That's the widest optimism gap we've seen all year.

Tom And Lombard Odier's first Treasury overweight in five years is the institutional expression of that gap.

Gerald Blackstone's senior exit and Pimco's thirty-five million dollar Philadelphia loss are the first cracks in private markets.

Marie OK but the bear case is: the tape doesn't care about our interpretation. The long Treasury ETF at a low is a downtrend, not a base, and one Swiss allocator doesn't halt a five-year rate cycle.

Tom Apple at one percent below its high and thirty-five point six times earnings? The Bernstein margin call may just be the first downgrade catching up to a fully priced stock.

Gerald And BASF-Evonik still has to run Brussels. None of these trades are confirmed; they are early.

Marie Notable absence: nobody connects the short-vol complex or risk-parity unwind that a simultaneous duration-and-credit wobble implies. The short Treasury ETF is up seventeen percent year to date — that's been the consensus. The moment it rolls over is the real signal, and nobody's watching.

Tom Our second-order preference is the boring stuff: long the physical layer of AI, long Treasuries, short Apple's margin risk.

Gerald That's a book that assumes AI promises need concrete build-out and the bond market has already panicked enough.

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

Marie We're back tomorrow, Weekend Edition at ten a.m. London time.

Gerald Until then, watch the long bond and the data centre concrete. See you tomorrow.