00:00Mark, let's start with the clues you're getting about global growth from various asset classes.
00:04Stocks seem to be trading with enthusiasm for a growth narrative.
00:07President Trump is talking about 15 percent growth.
00:10Are we getting all those clues consistently from all asset classes?
00:15No, I'm super confused by the price action this morning.
00:19I think the news flow this week was very negative for long end bonds,
00:22not just the Taikaichi election victory, but of course, we have political problems in the UK.
00:26We have the fact that, you know, Trump's talking about Walsh, you know, getting growth up to 15 percent.
00:33You know, we have the AI corporates continue to kind of go on a debt binge.
00:37Everything should have pointed to kind of higher yields.
00:40And yet bonds are trading tremendously well all around the world.
00:43Now, normally you'd get that scenario of people are saying, hey, I'd love to lock in yields at these levels, long term yields at these levels.
00:50It's about the long duration bonds that I'm worried about,
00:52which would imply that they kind of think that we're going into a negative growth situation.
00:56We're going to have to cut rates significantly.
00:59That doesn't make sense.
01:00It is not tallying with all these other assets out there like stocks that are trading pretty positively.
01:05So to me, there's something weird about how the price action is this week.
01:09I don't think it's sustainable.
01:10I don't have high conviction about which way it breaks.
01:13My bias, which is I'm warning this because it's dangerous to lean into your bias.
01:17My bias at the start of the week was that it should be bonds should be weaker, yields should be higher, which is the bit that's going wrong.
01:22So I'm on the back foot right now.
01:24So you probably shouldn't listen to me at all.
01:27I always listen to you, Mark.
01:28Of course we do.
01:30Stocks yesterday still squeezy.
01:31Is this still a continuation of the squeeze?
01:33Big squeezes tend to be quite negative.
01:38Yeah, look, absolutely.
01:40You know, you get the most powerful rallies, short term rallies in bear markets.
01:44That's absolutely the case.
01:45I think that the price action there is is still kind of relatively fragile.
01:52My narrative for the week was that we had all this these reasons for yields to go higher and then that would be the next catalyst to kind of knock stocks for another bit of a broader kind of washout.
02:01We're not really seeing that yet.
02:03So I'm a little bit confused.
02:04If yields continue to trade like this, you know, it's very supportive.
02:08And so maybe we continue to consolidate in stocks for a while.
02:11I don't think we roar away to the top side.
02:13As you know, my structural view for 2026 is quite positive, is quite bullish.
02:18But I'm just quite worried about the short term price action.
02:20And that's not gone away.
02:21Which way we break right now, I really don't know.
02:24If I'm forced to choose, I still think we break with a little bit more of a washout in the momentum trades, the meme kind of trades.
02:32I still think crypto, precious metals, some of the tech names are trading in a not great way, despite some of the power of the rallies.
02:40Yeah, Bitcoin down again today to your point.
02:42Mark, do you have conviction around the rotation trade and the diversification we're seeing?
02:48Again, the outperformance of Europe yesterday.
02:52Yeah, I think the diversification trade makes sense.
02:56You know, I'm the person who always falls for every value trap.
02:58And as you know, I've talked for a long time about U.S. stocks, you know, will underperform because the rest of the world will outperform because they're kind of cheaper.
03:05It's that value play.
03:05We move away from the tech space.
03:07So I kind of believe in that.
03:08It's kind of a long, long way now, which kind of worries me.
03:10Small caps, for example, in the U.S., can't drag the stock market forever.
03:13I think some of the indiscriminate targeting of the software space has gone overboard.
03:18I think some names in software should suffer by what's happening in AI, but not all of them.
03:23So I think that, you know, the rotation as a fundamental theory makes sense.
03:27It's probably gone too far, which maybe sums up a lot of how I'm thinking about markets at the moment.
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