00:00I think probably the biggest worry is that our baseline scenario of a very low probability of a recession in the U.S. could be wrong.
00:07I mean, that's probably the biggest risk from a fundamental perspective because, you know, when we look at the fundamentals, well, the situation is still pretty good.
00:15We think the labor market is in this low-firing, low-hiring environment, which is not a bad place to be.
00:21Real wage growth continues to be supportive for the consumer, which is the backbone of the U.S. economy.
00:26So I think that's probably what keeps us awake.
00:29You know, if we were to be wrong on that side, the other side, obviously, I'm sure we might touch on that is AI.
00:34You know, if we were to see some bubbles around, some waves around AI, that would obviously have the potential to distort markets going forward.
00:42Well, to your point, it's very timely to have that conversation, given we have those NVIDIA earnings after the bell.
00:47Walk us through, though, the outperformance of tech or underperformance of tech that could be emanating out of the United States.
00:52What is the read-through into European stocks?
00:55Yeah, I mean, it looks right now, to be honest, that everything seems kind of correlated, right?
00:59I mean, our sense is that the recent corrections we're having right now is actually more driven by liquidity than by anything else.
01:07And I think, you know, if you look at the internal market dynamics, it's interesting, actually, you will see that those U.S. large-cap, high-quality tech names actually have been holding up pretty well.
01:18And for us, this is kind of indicating that this is probably more liquidity-driven than fundamentally-driven.
01:24And what we are seeing on the crypto side is probably going in the same direction.
01:29But when we look at the fundamentals, actually, we think that the picture is not too bad.
01:33A question, though, you're tying this recent struggles in the equity market to the liquidity picture.
01:40It's tied to the Federal Reserve, the recent hawkish comments we've gotten out.
01:44That does seem to be there is some sort of issues going on at the Fed in terms of what to do with this December decision.
01:52How are you viewing the fact that at least we've not gotten a clear update from the Bureau of Labor Statistics?
01:57It doesn't seem like they're going to clear this backlog before the Fed convenes again.
02:01They're still going to be in a data fog when it comes to that December decision.
02:05Do you think that means they're going to be on hold?
02:08Look, I think clearly, you know, we've been flying a bit in the dark recently with the U.S. shutdown.
02:13And it clearly increased uncertainty around macro data.
02:17And I think to some extent, this probably explains why some of the pricing around the December cuts have been repriced.
02:24And to us, it does explain why, to some extent, you know, this has kind of tightened the liquidity condition recently in the market
02:30and probably explained the recent correction.
02:34Going forward, we still believe the Fed is going to cut in December.
02:39So we think that, you know, with having more clarity going forward, both around the labor market but inflation,
02:44there is more space for the Fed to cut.
02:46So if you're assuming that the Fed is going to flip to maybe a more dovish stance, are you buying the dip here?
02:51Or is that one reason why you think this equity market, you know, could rally and you see value in this drawdown?
02:56So we're staying positive risk.
02:57We've been positive equity for most of the year.
03:00And again, you know, we don't see that further than just a correction.
03:04So we're happy to stay long equity at this level.
03:08So we're happy to stay long equity at this level.
03:14So we're happy to stay long equity at this level.
03:16So we're happy to stay long equity at this level.
03:18So we're happy to stay long equity at this level.
03:20So we're happy to stay long equity at this level.
03:22So we're happy to stay long equity at this level.
03:24So we're happy to stay long equity at this level.
03:26So we're happy to stay long equity at this level.
03:28So we're happy to stay long equity at this level.
03:30So we're happy to stay long equity at this level.
03:32So we're happy to stay long equity at this level.
03:34So we're happy to stay long equity at this level.
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