00:00Lots of things to talk about today. Rotation within the U.S. session, some of the metal stories that are dominating.
00:05I'll mention the metals and the commodity space for now because this could be something that has an impact on the London market, of course.
00:11We travelled up a long way, it seems, on geopolitical tension and now we retreat a little bit.
00:16So oil prices weaker, silver weaker. I guess this just illustrates how some of that story was about geopolitical tension and nervousness there.
00:23I think that's absolutely right, Anna. And you're right that commodities are the exciting movement we've seen so far today in markets in the Asia session.
00:34Oil particularly and also silver has just been completely crazy. Oil is the one of the more pure geopolitical play.
00:42You know, the structural story here is that we've got an overhang of excess supply, but that's a longer term story.
00:48In the short term, there's the problem about physical delivery, some short-term supply constraints compounded by geopolitical concerns.
00:56Now, some of those geopolitical concerns were eased up overnight.
00:59As, you know, Donald Trump said, they weren't likely to invade Iran immediately.
01:03That kind of removed some of that immediate kind of pressure that put in there.
01:06So oil prices have fallen heavily. And silver has been absolutely crazy.
01:11To silver, it's a slightly different story. This is a diversifying trade.
01:15It's people trying to get away from the U.S. dollar to seek out other assets.
01:18We've talked about it a lot recently. Fundamentally, that's a good trade.
01:23The problem is silver's double in price from where it was only a few months ago.
01:27So it's gone just way too far ahead of itself.
01:30It's been an extraordinary bubble. And as you know, we talk about a lot on this show that if you find a bubble, run towards it and hop on board.
01:36You don't fight it initially.
01:37I think this is now the stage of the silver bubble where if you have been fortunate to be on board it, you maybe want to get out.
01:43But I think it's definitely too early to fight it. I'm not convinced that precious metals have topped out yet.
01:47They've just entered the kind of more volatile endgame. But it might be the beginning of the endgame.
01:53OK, so keep an eye on that one. I hard to read what is going on.
01:57Mark, what do you make of the rotation in U.S. stocks at the moment out of big tech towards small caps?
02:04This kind of run it hot economy story that some people are talking about in the States.
02:09Is that something that that has got legs? Because muscle memory tells me that small caps run for a little while and then and then fall over.
02:18You're correct, guy. And you're kind of picking on me because I'm the guy who falls for every value trap going.
02:26So I'm the guy who always loves the small cap trade and always thinks they should come back and outperform.
02:31And of course, in recent years, I've been generally wrong on that until kind of last year.
02:36Maybe it kind of has been more exciting.
02:38It's certainly the end of last year. Small caps have started doing well again.
02:41So whenever small caps start doing well, I'm one of the muppets who always get enthusiastic that this time it's sustainable.
02:47But is it really? Perhaps this time it'll be like you say, it'll it'll fade at some point.
02:52And that's because the AI capex bubble is not finished inflating yet.
02:55That's that's still the big driver of markets this year.
02:57And while we're going to probably have some short term volatility, it's not going to be the dynamic for the next couple of weeks.
03:01I think we've still got some more months to play out of that AI inflation trade.
03:06And that means growth will get another big kind of run again from a longer term point of view.
03:10I absolutely believe that small caps will continue to outperform, but I'm not sure if I hold that view on a six month horizon.
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