00:00Mark, good morning to you. Let's do three minutes on the markets then. And let's start with risk appetite and whether you see any reason to be bearish right now. President Trump's talking positively about the trade deal he wants to do with China. There's a lot of excitement, should we put it that way, around tech stocks, NVIDIA in focus, all of the tech earnings. Do you see any reasons to be bearish?
00:22There are no fundamental reasons to be bearish right now. What I mean by that is we're about to get another Fed cut. We're getting trade deals promised all over the case. We're getting, you know, generally growth is kind of holding up okay. Earnings stories is good. Everything is positive. Now, I guess the reason people are worried is because we all know that. It's all priced. And I think that, you know, valuations are expensive. But valuations are never a reason to be bearish in Iceland.
00:52isolation. And the fact it's all priced maybe means you don't want to be bullish anymore because it's already fully priced. But it's not a reason to be bearish. You've got to wait for that negative catalyst. And there's not one just now.
01:05Well, Mark, maybe push ahead to it for us if you can when it comes to that Federal Reserve decision. If everything is going well, what could Jay Powell say to shake this market?
01:13Theoretically, I mean, if he was super hawkish, yeah, it would upset the market a little bit. But I just don't see how the Fed is going to be much of an event at all.
01:25You two both know that I think the ECB is always boring or almost always boring. The Fed is normally really interesting. Today's Fed is super boring because there's no data for them to provide an updated view on.
01:36We get no dot plot. We get no updated forecasts. The Powell can't really say much. The most controversial thing he's going to say is, you know, he's going to get a question about the shutdown and maybe he might kind of err on how he phrases things.
01:46But he's a super experienced communicator. Jerome Powell is good at his job in terms of communicating clearly and not stepping over the line.
01:53So I don't think he's going to say anything too controversial. But he's going to have to say that he can't provide much forward guidance.
01:58They just don't have certainty. So I don't expect him to be, you know, overly hawkish or dovish, which means market pricing will stay roughly the same.
02:06Expecting another cut in December. People are trying to get excited about the end of QT because they've got nothing else to get excited about.
02:12Of course, QT is going to end. Sure, there's a little bit of nuance exactly which month and the composition about how it ends.
02:17But it's really not exciting. It's still trying to generate excitement because they've got nothing else to look at.
02:21OK, well, let's try and talk about volatility, shall we?
02:24In 2025, we've seen lots of news headlines and they've driven some volatility in specific asset classes for short periods, but not necessarily for very long, Mark.
02:33Do you see a return to volatility? Is that possible to predict?
02:38No, I think it's going to be a kind of a sustaining of what you've just outlined there.
02:41And I think we're going to have some more big dips in the weeks ahead.
02:45As I outlined, everything's bullish at the moment, but it's priced super bullishly, which means just one thing falters.
02:49Trade talks disrupt. The Fed manages to upset. Something goes wrong and grows.
02:54Some earnings upset. We'll get a powerful dip because of how things are priced.
02:57But with all the other drivers still positive, it'll just be a dip, and that's important.
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