00:00Mark, price action, metals, where does it go next? How much further do we have to go? I keep
00:07seeing limit down in China, which tells me that there may be more selling still to come. Is that
00:11the right interpretation? That's my bias as well, Guy. But obviously, that's kind of the trillion
00:19dollar question. And I mean, literally trillion dollar question, because we're kind of at this
00:23spillover stage. Obviously, those asset class themselves aren't going to have that big losses.
00:27But what's interesting is that the pain that we're seeing, particularly in silver at the end
00:32of last week, but also gold, was very much kind of retail focused. And that's why generally where
00:37you're seeing most of the pain everywhere across asset markets at the moment is retail focused.
00:41It is the obvious tech names. It's in crypto. It's in silver and gold. It's into those trades,
00:47which retail got really excited about in the last couple of months, less so in the professional
00:51space, which is why there's much less of a volatility spillover into dollar and treasuries,
00:55even though the supposed initial catalyst for all this was all about the Fed chair,
00:59which should be a treasury's Fed dollar play, which shows how marginal that was. It was the
01:02catalyst that started this, but not really the driver. Retail has taken over. Now, what's
01:06happened is the pain has got so bad in things like gold, where there is a large professional
01:11exposure and we're into a new month, which means new month to month accounting, that this is going
01:15to clearly spill over into being, you know, some fund knock on effect. And it looks like it might get
01:20quite a bit worse. But with wild treasuries or wild rates markets and FX stay a little bit more
01:25contained, there is hope that this may not spiral much more. But certainly we're on tenterhooks right
01:30now. And you touch on it there, Mark. How concerned are you in the team? And what are you
01:35watching for when it comes to those potential contagion risks? Yeah, I think if gold kind of finishes
01:4410 percent down again today, where it has kind of traded down to those lows, I think that's going
01:49to be really, really problematic. And then the other bit is then leading into the tech space. As we
01:54know, the big underlying theme of everything over the end of the last year or the last couple of
01:58years is the AI theme. And we've talked a lot about how we believe we're in the expansion phase
02:02of that CapEx bubble. And therefore, that's ultimately a bullish tailwind. But traders,
02:07momentum traders have taken it too far in the short term. We've had some poor news flow around that
02:12with, you know, NVIDIA kind of the comments around the open AI investment. Suddenly, Oracle are
02:17talking about raising more money. That's slightly poor timing. We're also in the midst of tech
02:20earnings. I think if this spills them over more dramatically into the tech space, that's where
02:24I'm concerned this really spirals across other asset classes as well. Mark, the thing that has
02:30supported markets that has allowed people to buy dip after dip after dip has been this belief that
02:34stocks will never go down because the Fed balance sheet will be there to protect them. Is that still the
02:38case? I don't know. The balance sheet might not be there as much as possible. But ultimately,
02:46Kevin Warsh, if he successfully becomes Fed chair, he's confirmed, would like to shrink the balance
02:50sheet, but he may not be able to, given what's happening in market conditions. And he'll obviously
02:53choose the right time to do that. I don't think really that's the issue here. Remember, stocks had
02:57a really horrendous fall last April and then they recovered quickly. It's just we've not had a proper
03:03washout for a while since last April. And even then, that was very brief. So we could get a very,
03:08very painful washout, given the extent of gains we've seen around the world. Ironically enough,
03:12because U.S. has underperformed for the past year, it may not see the focus of the pain. We're going
03:17to see some of the retail favourites like Kospi and Taiwan. Some of those markets get really hurt
03:21if AI falls out of bed.
Comments