XME SPDR S&P Metals & Mining ETF : Bullish and Bearish Analyst Opinions

Invest in emerging markets and commodity companies.

New rules impose a 50% tariff on goods made almost entirely of aluminum, steel, or copper. This massive tariff will significantly increase domestic costs and benefit domestic producers of these base metals as foreign competition is priced out. Long domestic steel, aluminum, and copper producers who will benefit from the protective 50% levy. The news is flying under the radar due to the war, and broader market sell-offs could drag down commodity equities.

"In the 2020s has been China's just in case strategy of inventory accumulation... I think this trend only speeds up once the war's over. And I think that provides support to long dated commodity prices sooner or later." Sovereign stockpiling creates a persistent, price-insensitive buyer in the commodities market. This structural shift from efficiency to security guarantees elevated baseline demand for raw materials and industrial metals, benefiting broad commodity indices and the companies that mine them regardless of short-term economic cycles. LONG broad commodities and miners to capitalize on the secular, global shift toward national resource hoarding. A severe global recession destroys end-user demand faster than sovereign stockpiling can absorb the excess supply, leading to a drop in commodity prices.

"Since the middle of last year, we've been pushing commodity as an interesting space to be in... everybody needs to have their secure supply chain. And they will be over inventory, over hoarding." With the Strait of Hormuz choked off, oil prices sustaining above $100, and supply disruptions hitting metals like aluminum and zinc, commodities are structurally supported. Furthermore, with bonds no longer diversifying equity risk (positive correlation), commodities serve as the primary portfolio hedge. LONG. Geopolitical fragmentation and supply hoarding create a multi-year tailwind for energy and materials. A sudden diplomatic resolution to the Middle East conflict or a severe global recession destroying demand.

"This is a summit... to talk basically about critical minerals, minerals and energy. You know, that, of course, was important even before Iran. Now, with the backdrop of oil prices spiking, this has really added a lot of urgency and intensity to these discussions." The vulnerability of global supply chains exposed by the Middle East conflict is forcing Western and Indo-Pacific allies to aggressively secure domestic and allied sources of critical minerals. This will result in heavy government subsidies, fast-tracked permitting, and long-term offtake agreements for non-Chinese, non-adversary mining and rare earth operations. LONG. US and allied metals and mining operators will benefit from a structural, government-backed shift toward supply chain resilience and resource nationalism. A global recession triggered by the energy shock could temporarily depress broad commodity prices, outweighing the long-term strategic investments.

We're moving from that world that was defined in 2014 to 2024... into a regime change. Own the hard assets, own the halos, heavy asset, low obsolescence. The global economy is shifting away from the asset-light, software-driven boom of the last decade. Geopolitical fracturing and supply chain vulnerabilities are forcing a global re-industrialization. This requires massive amounts of physical materials, structurally repricing industrial metals and mining companies higher due to years of underinvestment in the old economy. Long industrial metals and mining equities that control scarce, hard-to-replicate physical assets. A severe global recession driven by high energy costs destroys industrial demand, offsetting the supply constraints.

Own the hard assets, own the HALOs... revenge of the old economy, because it was coming off the back of the dot com boom this time around... I want to own metal. The global economy is shifting from a decade of digital, asset-light growth to an asset-heavy regime that requires massive amounts of physical materials. Rising costs of capital and labor will force a repricing of industrial metals and the companies that mine them, as new supply cannot be brought online quickly enough to meet the demands of this new economic era. Mining and metal equities offer leveraged exposure to the "revenge of the old economy" and the structural shortage of physical commodities. A strong US dollar or a severe manufacturing and real estate contraction in China could suppress base metal prices despite long-term supply constraints.

Sankey notes that while spot oil is $80+, oil companies are budgeting and trading as if oil is $60. Page states T. Rowe Price remains long energy, metals, and mining as a geopolitical hedge. There is a valuation disconnect. Even if spot oil stabilizes, the equities are too cheap relative to the structural floor of energy prices caused by shipping disruptions and the "AI energy tax." LONG. Buy the equities (which are discounting doom) rather than the commodity (which is backwardated and volatile). A sudden, total de-escalation in the Middle East causing spot oil to crash below $60.

HSBC has explicitly "cut their US equity overweight in half" and is rotating capital into Europe and Emerging Markets. The market is obsessed with US Tech/AI, ignoring a "textbook style cyclical recovery" visible in PMI data in manufacturing economies (Sweden, Taiwan, Korea). This favors cyclical sectors over growth tech. LONG European Banks (yield curve play), Industrials, Defense, and Miners (commodity supercycle). LONG Emerging Markets (specifically Latin America/Brazil). US growth accelerates significantly faster than the rest of the world; AI bubble expands further.

Ram states, "The higher level is crowdedness. Anything thematic is crowded... and that quantity is getting unwound." When thematic growth trades (Crypto, AI) unwind, capital rotates into "unsexy" sectors with tangible free cash flow. Ram explicitly suggests rotating into "waste management, maybe oil field services." LONG defensive, cash-flow-positive real economy sectors. A resurgence in risk-on liquidity or a "soft landing" that reignites growth stock speculation.

Ram observes that "anything thematic is crowded" (AI, Crypto, Data Centers) and is currently unwinding. Conversely, PayPal (PYPL) is trading at 52-week lows with a ~17% free cash flow yield. The market is rotating out of high-valuation narratives (Trump trades, AI) and into "unsexy" assets with tangible cash flows. The "death spiral" of thematic tech creates a buying opportunity in neglected value stocks and essential services. Rotate capital into Metals, Waste Management, Fuel Services, and deep value Fintech like PayPal. Continued "higher for longer" rates could compress multiples for all equities; value traps in fintech if growth creates structural headwinds.

The mining sector offers a defensive long position as it is structurally insulated from the AI-driven disruption risks facing most other industries.

There is a "confluence of forces" driving demand for critical minerals (power up, AI, re-industrialization). Capital providers are active, and M&A pipelines are full. Despite tariff noise, the structural demand for copper, lithium, and rare earths is agnostic to short-term policy. The "friend-shoring" narrative (US/Canada integration) favors North American miners. LONG Critical Minerals and North American Mining. Global recession crushing commodity demand.

The CEO notes a "confluence of two forces" where "the newest industries are literally dependent on the oldest industries." He specifically highlights the need to expedite licensing for projects like "the copper mine in Arizona" due to a "massive demand push" hitting a "bottleneck on the supply side." AI and data center expansion requires immense power and grid infrastructure, which is physically impossible without copper and critical minerals. The current supply is constrained by regulation. If the "positive developments" on regulatory reform occur as the CEO suggests, existing major miners (like Freeport-McMoRan in Arizona) will see volume and pricing power increase as they unblock supply to meet AI demand. Long Copper and Copper Miners as the physical derivative of the AI trade. Failure of regulatory reform to materialize; global recession dampening industrial demand.

Mike highlights that after the temporary Section 122 tariffs, the administration will look to "Section 232, the national security issue" or "Section 201" which allows up to "50% additional tariff... for those industries" that have been injured by trade. Section 232 and 201 are historically used to protect heavy domestic industries like Steel and Aluminum. If the administration uses the 150-day window to prepare these specific investigations, domestic metals producers stand to gain market share and pricing power by summer. WATCH domestic industrial producers for entry if investigations are formally announced. These investigations take time and the midterm election timeline may make unpopular protectionist measures difficult to implement.

The speaker notes a "structural bull run in the metals space," highlighting that silver and precious metals have performed well recently after a long period of dormancy. He also mentions "Gold is pretty much on everyone's recommendation list." This is part of a "structural regime change" driven by global policy divergence and geopolitics. As traditional fiat/equity correlations break down, hard assets like silver and gold act as the primary hedge. LONG Precious Metals. A strengthening US Dollar or resolution of geopolitical tensions reducing safe-haven demand.

There has been a "record ramp up in industrial metals." Major miners like BHP are reporting earnings this week against a backdrop of surging metal prices. LONG miners heading into earnings due to favorable commodity pricing. Disappointing guidance on production costs or demand from China (which is closed for Lunar New Year).

Reports indicate "metal tariffs are going to come in." The speaker expects a "very bumpy ride" regarding tariff implementation, despite potential exemptions for countries like India. The reintroduction or adjustment of metal tariffs introduces input cost uncertainty and volatility for the metals market. While the long-term view is that tariffs may come down, the immediate path involves repricing risk. Watch the sector for entry points once tariff policies stabilize; avoid taking large directional bets during the initial "bumpy" implementation phase. Tariffs could be higher or more permanent than expected, spiking prices and hurting demand.

President Trump is planning to narrow the scope/roll back the 50% tariffs on aluminum and steel to address cost of living. The removal of protectionist tariffs increases foreign supply in the US market, forcing domestic prices down (Aluminum and Steel prices already dropping in response). Short domestic metals producers as pricing power erodes. The report could be false, or the rollback might be smaller than expected.

Emanuel states that sectors "least likely to be disrupted" by AI are outperforming, specifically naming Metals/Mining, Agriculture, and Consumer Staples. Investors are suffering from "AI Anxiety" regarding white-collar industries (Software, Financials). They are rotating capital into physical industries that AI cannot automate away. This is a "hide from disruption" trade. LONG physical/defensive sectors as a hedge against AI displacement fears. If the "soft landing" narrative strengthens without AI fear, defensive sectors may underperform high-beta growth.

Indonesia is cutting its nickel production quota for the year from ~42 million tons down to 12 million tons. Indonesia accounts for two-thirds of global production. This is a massive, state-directed supply shock designed to squeeze the market. A ~70% reduction in approved quota from the dominant global supplier mathematically forces prices higher to clear demand. LONG Nickel futures or miners with exposure outside of Indonesia (or those with secured quotas). Indonesia reverses policy mid-year or demand for EVs/batteries collapses further.

Lombard Odier has "upgraded our outlook for 2026 in terms of global growth." Better global growth explicitly "bodes well" for cyclical sectors. The speaker states "materials is one sector that we really like" and notes that "metals are playing a very important role" in this environment. LONG. Global growth failing to materialize; commodity price volatility.

Oliver highlights the "commodity category" as low-risk and high-reward. He specifically lists "grain related," "fertilizer companies," and "base metal miners" as sub-sectors to own. As inflation becomes structural and the commodity cycle turns up (the "second major uptrend"), agricultural inputs (fertilizers) and industrial metals (base miners) will reprice higher, uncorrelated to the broad stock market. Long Agriculture (Grains/Fertilizers) and Base Metals to diversify the commodity bet beyond energy and gold. Weather events impacting crop yields or a slowdown in industrial manufacturing (China) hurting base metals.

Haseeb observes that metals had a "blowoff top" and are now "trading like meme stocks," exhibiting extreme volatility (up to highs, then pulling all the way back). Gold is typically a safe-haven asset. When it begins trading with meme-stock volatility, it loses its utility as a stabilizer in a portfolio. The "blowoff top" technical pattern suggests a period of distribution and downward consolidation is likely. Step aside until volatility dampens; the asset class is currently behaving irrationally. Geopolitical shocks could force a bid regardless of technical structure.

Feldman argues the global narrative has shifted from "globalism to mercantilism" and "resource nationalism." He specifically highlights that "metals, the miners, the steel makers, the electricity makers" have been completely underinvested. As nations on-shore supply chains and secure their own resources (mercantilism), demand for domestic industrial inputs (Steel, Electricity, Mining) will outstrip supply due to decades of underinvestment (CAPEX starvation). Long Metals & Mining (XME), Steel (X), and Utilities/Electricity (XLU). A global recession crushing industrial demand or peace treaties that restore globalized trade efficiency.

1. THE FACT: Data shows a significant shift in the business cycle, with the industrial economy recovering, highlighted by a positive turn in industrial equipment spending and increased industrial investment. 2. THE BRIDGE: A recovery in the industrial sector directly translates to increased physical demand for industrial commodities and metals, which should support their prices. 3. THE VERDICT: Go long industrial commodities/metals as a direct expression of the thesis that the US economy is re-accelerating, led by a recovery in its industrial base.

1. THE FACT: Peter Brandt believes all markets (equities, metals) are in a grand finale before "very hard times," suggesting "much money to be made on the short side." 2. THE BRIDGE: This indicates a broad bearish outlook on major asset classes. 3. THE VERDICT: Short equities and metals, anticipating a significant downturn.

1. THE FACT: "Short MAG7 and long commodities, cyclicals, and metals continues to be our key theme and today’s price action and dispersion really is the nail on the head." 2. THE BRIDGE: The speaker's key theme is to long commodities, cyclicals, and metals, and recent price action and dispersion confirm this view. 3. THE VERDICT: Long commodities, cyclicals, and metals due to ongoing theme and confirming price action.

1. THE FACT: Trump has done more for the resource industry and their stakeholders, especially in mining, than all Western politicians for the past 35 years combined. In Guyana, the risk premium is now zero, unlike Australia. 2. THE BRIDGE: Pro-resource policies from the Trump administration are reducing risk premiums and fostering a more favorable environment for the mining sector, particularly in certain regions like Guyana. 3. THE VERDICT: Trump's policies are creating a more favorable environment for the mining sector, reducing risk and potentially increasing investment/profitability.

1. THE FACT: The Chinese crisis is "nothing the world has ever seen before," making the Japanese 90s bust look like a "children’s birthday." Sooner or later, the Chinese economy, and with it demand for energy commodities and base metals, "will fall into an 'air-pocket'." 2. THE BRIDGE: The extreme severity and unprecedented nature of the Chinese economic crisis will lead to a sharp contraction in economic activity, directly translating to a significant drop in demand for energy commodities and base metals. 3. THE VERDICT: Strongly bearish on the Chinese economy, energy commodities, and base metals due to an inevitable and severe downturn caused by an unprecedented economic crisis.