James Brodie
Head of Learning & Development, Flux
AI Back, Equity Markets Ignoring Oil&Gas, Tariffs Tighten, Oracle Warns
AI rebounds as semis surge, but bonds warn of risks. Oil, credit, tariffs and uranium supply gaps build pressure.
AI Is Back. Bonds Are Breaking. Nobody Seems to Care About the Second One.
The AI Trade Roars Back
Nasdaq +1.9%, SOX bouncing over 5%, Micron surging 12%-plus. Chipmakers led, geopolitics were ignored, and AI is firmly back in favour. Consumer Staples, Financials, and Real Estate lagged. When semis rip and defensives fade, the market is sending one signal: risk on.
The Bond Market Is Quietly Screaming
U.S. 30-year yields sit just 6bp from cycle highs. UK 30s are 10bp off theirs. The long end of the curve is tightening the screws while equity markets celebrate. This is the story nobody wants to tell - and usually the one that matters most. Watch this slowly unfold.
Oil, Gas & A Risk Premium Equity Markets Are Ignoring
WTI settled at $84.90, Brent at $91 - up 2% - as U.S.-Iran strikes and Houthi threats to Red Sea shipping continue to escalate. European gas prices are climbing in tandem. Energy markets are pricing in a geopolitical risk premium. Equity markets are not.
Dollar, Gold & the Sidelines Trade
USDJPY broke through 163 - a 40-year high - as currency markets price U.S. outperformance and relative policy tightening. Gold broke out of its recent range with a 4% move over four days (Chart: Bloomberg),
With silver, platinum and palladium recovering alongside it. Cash on the sidelines has fallen to a record low (Chart: BCA Research) - the dry powder that historically cushions drawdowns is gone.
Tariffs Tighten
Trump is preparing 10% tariffs on dozens of countries this week per the FT, with 100% tariffs on generic drugs from August 2028 rising to 200% a year later. The policy direction is clear - and the second-order effects on margins, supply chains, and inflation are still being underpriced.
Oracle: A Credit Warning Worth Taking Seriously
Oracle's 5-year credit default swaps hit 198bps - a record high, surpassing even 2008 peaks - after S&P downgraded the stock to BBB-, one notch above junk (Chart: Bloomberg, zerohedge).
U.S. margin debt sits at historic extremes (Chart: FINRA, Econovis). When credit and leverage flash red simultaneously, history suggests paying attention.
Uranium: The Supply Math Simply Doesn't Work
Global nuclear capacity is projected to grow 44% over the next decade. Each new 1GW reactor requires ~400 tonnes of uranium for its initial core load, plus ~160 tonnes annually thereafter. The first core loads alone for currently planned reactors would consume uranium equivalent to nearly 90% of today's entire annual global mine output. The supply story is becoming impossible to ignore.
AI rallies get the headlines. Bonds, credit spreads, a 40-year dollar high, and a uranium supply gap write the next chapter. Stay alert.
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