00:00Mark, I see from your notes that you are getting increasingly bearish, becoming increasingly bearish on stocks, just not sure
00:07which ones.
00:08And I share this level of confusion. I was reading a story this morning talking about China being an area
00:13of resilience.
00:13And we all know that a lot of the energy needs have to come from the Middle East.
00:17So what is your latest thinking, the latest questions you're asking about where the resilience and pain falls in stocks?
00:27Yes, you're right, Anna. I am getting a lot more bearish up until really the last kind of 48 hours.
00:34I had been in the mindset, well, look, before this conflict, the macro backdrop for 2026 is so incredibly bullish.
00:40We have a massive amount of private sector spending at the same time as we have a massive amount of
00:44government spending.
00:45We have easy monetary policy. We have growth. This is just the golden era for global stock markets is the
00:51backdrop for 2026.
00:52Then we got this conflict. And over the past week, I felt people have been complacent.
00:56I now just feel that I'm looking at it all wrong. It's actually which stock market has got to really
01:01slump first.
01:02It's not when do you buy the dip because we're really not pricing the damage from this yet.
01:06We're getting a proper energy price shock. Even if you look far out, December futures are now trading about 17
01:12or 18 percent above the one year average.
01:14That's for December oil futures. The straight's not opening anytime soon.
01:18We've definitely got a supply shock coming through and stock markets have been a little bit impervious.
01:21Now, I think China probably should be more resilient. They've been stockpiling for ages.
01:26They've got don't they're not vulnerable to an inflation shock. In fact, they've been struggling with deflation.
01:31It's not the right kind of inflation shock, but still they're better placed on the right side.
01:35So China should be a relatively haven. But I do think other Asian stock markets might particularly suffer.
01:40Korea, Taiwan have done really well. India hasn't been a particular performer recently, but it's getting hit in the AI
01:45trade as well.
01:45So I think Asian stock markets should get hit further. The European stock markets should get hit further.
01:50Generally, I'm just getting really bearish on stocks. And I think that at some point in March, we're going to
01:55have a real panic and a real washout when people realize, hey, the straight's still not open.
01:59We're now day 10 of it not being opened and there's no real sign.
02:04So on that point, Mark, if this IEA oil release goes ahead, will it be taken as intended as a
02:11release valve or will it be another sign of panic to this market?
02:17It doesn't matter if the straight doesn't get open.
02:20I thought it interesting that the last three times we've had a release from the IEA oil traded higher a
02:25week later to go to that point.
02:27You just said, Lizzie, it's taken more as a panic rather than reassurance.
02:30So ultimately, yeah, we might get a little bit of a knee jerk move lower and that might be where
02:35the pain point is.
02:36But until the straight opens, we're going to continue to have drifting higher energy prices.
02:40And it's not just oil. This is what's really, really important compared to other crises.
02:44It's LNG, it's LPG, it's oil products, it's jet fuel.
02:48There's just a massive supply chain disruption in energy products on a quite sizable scale that we've not seen before.
02:55Basically, we need the straight to be sustainably opened for this to go away.
02:58And I just don't see how that's on the horizon anytime soon, given that we're understanding the scale of the
03:02drain capabilities of Iran.
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