Corporate America Is Doing Well, SGMC Capital's Bondurri Says

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00:00What are you watching on for what could potentially move the markets?

00:06Well, clearly, we're already seeing quite a lot of positive headlines and what you have just

00:11covered, meaning a number of deals potentially within the ASEAN countries and obviously the Fed

00:16coming and expected to cut again. All of that is likely to continue fueling the rally that we have

00:22been experiencing over the last few weeks and, to be honest, over the last three years. Therefore,

00:26we do continue to be constructive. Clearly, earnings are going to be a very important focus for global

00:31investors. So far, the numbers have come in line and slightly better than expectations, with a few

00:37exceptions, namely Netflix last week. But overall, we continue to see that corporate America is doing

00:43well. Again, the headlines from potential trade deals with the U.S. and other countries, especially

00:48here in Southeast Asia, seems to be quite constructive. And therefore, yes, we're going to be rallying quite a

00:54lot of this optimism over the coming days. And then let's hope that the Fed is not going to be

00:59spoiling the party. But we don't think so. The cut, we feel, is already more or less priced in. And we'll

01:04see what they say in terms of forward guidance.

01:07What about big tech earnings guidance as well? Could that be spoiling the party, given how stretched

01:12we are already?

01:16Well, yes, we are stretched in terms of, of course, valuations are not cheap. But let's not remember

01:22that the valuations are not cheap for reasons. Everything that we're seeing with respect to the

01:26AI and how it is going to be improving the overall efficiency and productivity of companies

01:31going forward, probably we have still not grasped that. We've probably still not seen that. Now, whether

01:37earnings could be a little bit of a risk of scenario, there's always the risk, clearly. But we believe that

01:44the AI industry, even though, of course, short term tactical, let's say risk of environment and trade,

01:52it's could happen. We believe that the long term growth continues to be constructive, continues to

01:57be upwards sloping. And we believe that even the forward guidance of a loss of the semiconductor

02:01companies, big tech, are going to remain relatively bullish.

02:09Max, just picking up on your point on the positive sentiment based on these trade packs or trade

02:15frameworks that have come out from Southeast Asian countries with the U.S. here in Malaysia. To what

02:22extent is that going to help Southeast Asian stocks specifically? Because I think some of my colleagues

02:28have also been highlighting how in terms of EM regions, the Southeast Asian ones, they are the most

02:34unloved this year. Yes, they are. And this could definitely be a catalyst in order to turn that

02:42around. So we have clearly been seeing a huge rally in terms of the American indices and the Southeast Asian

02:49indices have not really been following up as much as they could have. Clearly, a reason for that was a bit

02:55of lower visibility with respect to what was happening within China. And clearly that has weighted on the

03:01geographical area. But because of the deals that we're seeing and because of the gain, the fact that global

03:07investors are now looking for alternatives and maybe looking to take some profits from the U.S.

03:12geographical area into this area, that we could see really the valuations over here increasing over the

03:19short term. And because keep in mind that both from a relative and absolute valuation, as you have correctly

03:24pointed out, we're seeing we're still much more on the cheaper side with respect to the U.S.

03:29counterparts. And we do believe that there are excellent opportunities out there.