00:00Are you ripping up this positive outlook for 2026 given what we've had in geopolitics or
00:05do you have faith that Trump is going to chicken out? This is just a negotiating ploy.
00:09No, I am not ripping out and I haven't set the strategy for 2026 but the business cycle
00:15indicators I wouldn't expect them to change and the corporate profit cycle, the investment cycles
00:20are strongly in upswing in the US in the same goes for Europe. Real lending rate, the cost of
00:28capital is appropriately priced in Europe so bringing it all together is the business
00:37cycle expansion continuing firmly on that path and overweight equities and okay of course
00:43there's geopolitics and Trump and Greenland but two points there. One is he's using it
00:51as leverage to negotiate and the question is what are the options and second is any disruptions
00:57to markets is an opportunity to buy. Okay, well I mean as I say we're risked off firmly
01:02on both sides of the Atlantic this morning, the US closed but no one seems to be focused
01:06on the earnings picture at the moment. How quickly does that focus return?
01:11Depends on whether the investors, right, are they being driven by noise and there was a lot
01:15of, you know, you look at 2025 and we thought 26 was going to be a quieter year after 2025 and
01:22a lot of investors last year didn't do well because they were reacting to the noise. It depends
01:26on whether you focus on fundamentals or noise really. I mean how does it change your outlook
01:31for Europe if at all because it's not just the threat on Greenland of course, it's the
01:35tariff threat that backs that up. If those tariffs that Oli has been setting out do materialize
01:40on February 1st and in June, how does that affect the earnings picture in Europe? You know,
01:46the European profit cycle has is still in upswing but it has moderated and you know my from my view
01:52had always been that the biggest loser in Trump 2.0 would be Europe and it's done really badly on the
02:00first trade deal, right? Think about it, you know, 15% tariff, US industrial goods enter Europe with no
02:08tariffs at all. Then a commitment of 600 billion to invest in the US. That's about 3.3% of EU but GDP and
02:17they're struggling to get to 2% NATO. So they've got military commitments. So what the tariff war and
02:24all and even the renewed tariff tensions, what it's exposing is Europe's structural weaknesses and
02:31that's where the problem is. And even though the cyclical in the business cycle indicators are
02:35positive, the problem of what kind of drag are you going to get from the structural? Well, yeah,
02:39when you think about it from the bonds perspective, there's two sides to it, right? You could have a hit to
02:44growth from the tariffs. You could see the central bank stepping in. But on the flip side, increased
02:49defense spending. So is it net positive or net negative for bonds in Europe? A very good question.
02:55I would say it's a net negative, right? Because you've got Ukraine and the money that's going there.
03:00They've got the commitments to NATO. European fiscals are deteriorating. You know, I don't believe the
03:07official numbers that, you know, portray them as kind of very rosy. The underlying numbers are
03:13get are in deteriorating. And that's because you're getting massive debt and mutualization from Brussels,
03:18right, which is not reflected on national government balance sheets. So I would say it is a net negative
03:25for bonds. And does the rise in precious metals that we're seeing on the safe haven to man today last?
03:31I don't see it lasting because, you know, the rise in precious metals, it's, you know, risk appetite,
03:40as you said. And today there's zero risk and bonds, you know, given the fiscals in the US and in Europe,
03:46bonds are less attractive and therefore go into precious metals. The other one is, of course,
03:51it's an inflation hedge. And, you know, the inflationary spiral that everyone was for consensus
03:56was forecasting last year has not materialized. So from if growth picks up, as I expect, equity markets
04:05and earnings do well. I see the shine coming off precious metals as we go through the course of this
04:10year.
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