00:00And Max, of course, oil is the most important asset to be looking at right now.
00:04We're seeing a little bit of a bounce back, but we saw a massive drop yesterday in NYMEX
00:09from $117 down to $91 a barrel.
00:12Do you think traders got a little bit over-optimistic about the ceasefire?
00:17I don't think so.
00:18I think particularly when we look at the equity market and the equity market relationship
00:23with oil prices, I think that makes perfectly sense to me.
00:27Because at the end of the day, what we are trading and what we're doing in financial
00:31markets is we don't really care about the level of activity.
00:34We don't really care about the level of things, right?
00:37So think six years ago, COVID.
00:39By the time mobility indices, by the time things like restaurant bookings, all these fancy high
00:44frequency data that we were looking at back then, by the time they were back to the pre-COVID
00:49levels, the January, February 2020 levels, that took about a year and a half.
00:53That was only about late summer 2020.
00:55But by the time the S&P was already almost 50% higher than it was in January and February
01:012020.
01:01Why?
01:02Because the moment the market sniffed that actually it's getting less bad in end of March
01:082020, April 2020, that already, that positive rate of change from going catastrophic to
01:15actually, it's only catastrophic now.
01:17It's only going to be, you know, the rate of change is already starting to be a little
01:21bit positive, so it's less bad.
01:23That already was enough for markets.
01:26It was the same thing with Liberation Day last year.
01:28Remember Liberation Day, all the high frequency data only troughed in about June, July.
01:33By that time, equities were already back to the all time highs.
01:36So I think this is actually a pretty rational reaction by equity markets in particular and
01:42the relationship with oil prices.
01:44Now, on oil prices, you could debate, yeah, maybe dated Brent is going to be still sticking
01:48around there.
01:48But I think we are on a sort of gliding path by the end of this year towards the 80
01:53levels.
01:53And that, I think, for markets overall, for equities, for credit, for EM, really for the
01:58whole asset class spectrum, that's good enough.
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