00:00Paul, I don't know what's going to happen this weekend. I don't think anybody does. Maybe President Trump does.
00:05Geopolitics is dominating. The oil price is climbing. How big a risk to risk assets is this?
00:13Yeah, good morning, Guy. Well, I was joking with my manager a while back telling him, you know, we've got
00:19the risk of a collapse of the British monarchy.
00:22We've got the brink of a wall. We've got, you know, private markets under extreme pressure, possible threat of an
00:29alien invasion.
00:31You know, Asian index gives back 0.3, 0.4 percent and U.S. futures rallies. So far, as far
00:38as today's session is concerned, you know, risk markets are taking it relatively in their stride.
00:42Well, we are seeing the pressure play out is in the crude oil market. Of course, we've got Brent crude
00:47pushing up out of the range to the highest levels this year.
00:51And so that does tell you that there are some nerves out there. But the communication from Trump seems to
00:56be around this idea that there's another couple of weeks worth of negotiation time before we would get to any
01:02kind of action in the market seems to be relatively comfortable with that.
01:06Yes, we did have a little bit of a risk off in the U.S. session yesterday. But the gains
01:10in the futures today sort of have raised pretty much all of that already.
01:14So, at least as far as Asia's concerned, the risk sentiment is still looking pretty resilient and strong.
01:21Paul, the list of risk factors then for these markets. I love the way you illustrated it. So aliens and
01:27an alien invasion. So let's go there.
01:29How do you price in that?
01:30How do you price in an alien invasion, Paul? OK, private credit, Paul. Blue Owl is in focus. The whole
01:36space was under pressure. Stock selling off yesterday. How much of a risk is this, do you think?
01:43Yeah, nobody really knows. And that's the biggest problem, isn't it? There's so much opacity within that market. And so
01:50some people are crying wolf, you know, saying, oh, my goodness, they've shutted some funds.
01:55This is exactly like the start of the financial crisis. It was much more relaxed, including the private credit companies
02:00themselves, which are saying defaults are extremely low.
02:02You know, and the track record so far would seem to prove that. But we don't know exactly what that
02:08exposure looks like. And the fact that there's a lack of obvious data out there by the very fact that
02:14it is private markets is one of the things that has markets worried.
02:17So that's why we're seeing those stocks of asset managers are rattled and worried a little bit about what a
02:24contagion might look in the rest of the in the rest of the market universe.
02:30In terms of kind of where we go next, what are you watching, Paul? We've got Asian markets beginning to
02:37come back.
02:37How big a factor is that in terms of broadly what people are thinking about? You've got U.S. data
02:42we're going to be watching a little bit later on.
02:44What's caught your eye this morning in terms of the market moves you're watching?
02:49Yeah, so I think that the China return is going to be interesting. We've seen a couple of the AI
02:54startups are really rallying hard today, Minimax and Jepu.
02:58But we've seen those platform companies are still under pressure. They've been trying to drum up business. But nonetheless, Alibaba,
03:04Tencent still fading.
03:06And I think that that speaks to the weakness within the Chinese economy. So it'll be very interesting when they
03:10start trading again on Monday to see just how strong the markets can hold up there.
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