00:00Now, with the big swings that we've seen and rebound this week, there is still a fair amount
00:06of net shorts. So this could be still unwinding. So perhaps short squeezes are still there.
00:15However, given investors are really tired of trying to play the headlines that are changing
00:23every hour, we think that now is the time to step back and think, wait a minute, okay,
00:28so the market is now trading 3% or 2% below year-to-date highs when it comes to
00:34Europe.
00:34Is it fair? What is the market pricing in? So we have this proprietary model that tries
00:39to capture what kind of EPS outlook is priced in by the markets. And this is where the
00:45fundamentals view comes in as we are heading into the reporting season. And what it tells
00:50us is that European market is still priced for upgrades. And that is a problem.
00:55Yes. So that suggests that markets are complacent, too optimistic?
01:00Probably. And of course, the conflict is not the only issue we'll be trying to understand
01:08this year, right? Reporting season to fundamentals and trying to understand how much damage has
01:15been done and what the companies are going to say about the future. Probably it's going
01:21to be a lot of uncertainty, right? Because it's hard to say right now. So it's hard, even
01:27if the war finishes today, it's hard to just unwind all the damage that has been done. And
01:35right, so we are not going back to the words the market has been putting bets on at the start
01:42of the year. Some of this comes back, but not fully. That's our view.
01:46you
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