00:00Mark, Anna mentioned the oil price. They're not as high as they began the day oil prices.
00:05They have been flirting with one hundred and twenty dollars a barrel.
00:07Brent's now at one oh seven. The barrel on this report that G7 ministers will be discussing a possible joint
00:14release of oil reserves.
00:15But you say that the relief will be short lived. Why?
00:20Yeah, I mean, look, only as recently as Friday afternoon.
00:23So the last kind of trading session Friday afternoon in Europe, people were saying if we get to one hundred
00:29dollars a barrel,
00:30that will be really, really bad for Scott stocks at the time we're trading below 90.
00:34Well, now we're hoping that oil can fall below one hundred dollars a barrel.
00:38And bear in mind, we're only one trading session later. It's it's quite bad out there.
00:42I actually think that stocks are trading amazingly well so far.
00:45And you've got to remember that away from the fact that we've got this this inflation shock coming through from
00:50energy prices,
00:51coming through from fertilizer into food chains, coming through from the delay in other supply chains,
00:55because the Middle East is a major air freight route as well.
00:58We've also got private credit woes, which are now going to have an inflation shock and higher yields,
01:03which is going to exacerbate that. And we've got a terrible jobs report out of the U.S.
01:06So I have to say short term, it's very bleak. Now, this is not to suddenly go crazily doom mongering.
01:13I reiterate that until a few weeks ago, the tailwinds for this year were incredibly bullish and most of them
01:18haven't gone away.
01:19There's still massive fiscal spending. We still got relatively easy monetary policy out of the U.S.
01:24We had OK growth until this factor. But this is a major risk event happening right now.
01:29And until the Strait of Ramos is sustainably looking like it's going to be open, sustainably, I should say,
01:35this is going to keep on getting worse and worse. So I think this week's going to be really, really
01:39bad for stocks,
01:40because I don't see where we're going to get that visibility of an open Strait of Ramos anytime soon.
01:45So I think it's going to get much worse this week.
01:48And Mark, you were consistent in calling out the complacency that you saw in the equity markets last week.
01:53To be clear, do you see a less complacent equity market now?
01:57And do you continue to see the same dynamics that played out this week, playing out this week,
02:01in that Asia has hit worse, then it's Europe, and then it's the U.S., which has relative resilience?
02:06How do you see that dynamic shifting through this week?
02:10Yeah, it's a good question, Tom. I actually think complacency is still very high.
02:14I'm still seeing the same complete divergence in narrative between geopolitical experts who go,
02:20we have no visibility to where the end of this war will be. We don't see why it'll end soon.
02:25We don't see what the end game is planned for the U.S. side.
02:30We don't see U.S., Israel, Iran showing any signs they want to stop the war.
02:34That's what I'm hearing from the geopolitical experts.
02:36Meanwhile, almost everyone in markets is going, Trump will surely tackle soon.
02:40Trump will surely want to end the war, so they'll declare war.
02:42Now, I'm not a geopolitical expert either, but I have to say, if I'm going to listen to some random
02:47macro tourists
02:48or some geopolitical experts on the geopolitical outcome, I'm going to go for the geopolitical experts.
02:52And therefore, I think people in markets are completely complacent still.
02:56And yes, of course, we can rally very violently when we find out the Strait of Ramirez will be open
03:02sustainably.
03:02I just don't see why that's any time soon.
03:05And therefore, yes, I think stock markets in particular is where the most complacency is and much downside is ahead.
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