00:00Let's get some market perspectives with Greg Cullinan, who's a Global Head of Public Investing at Goldman Sachs Asset Management.
00:06So, just in the last few minutes or so, we kind of painted the picture of that bifurcation of these
00:10markets, right?
00:11On the one hand, really the revival of the memory chip trade that continues to drive markets like Korea,
00:18even Japan where you are with semiconductor names being listed there, to new highs.
00:23On the other hand, the macro picture still holds the potential to be so dire.
00:31Yeah, that's right. And it's good to be with both of you. Thank you for having me.
00:34I'd like to point out, I think it's a very exciting time to be here in Tokyo.
00:39I've met with a number of clients and large asset allocators.
00:42And this question that you're asking me is the question that we've been dealing with and getting from clients really
00:47over the last couple of days.
00:49How can it possibly be that we have a war in Iran? We have fallout still continuing from AI winners
00:55and losers.
00:55We still have some questions around private credit. And yet, markets continue to grind higher.
01:01And I would say there's really three reasons for this. And maybe I'd center them a bit from a U
01:05.S. perspective.
01:06But I would say they apply more globally as well.
01:08The first is that the economy in the U.S. continues to do quite well, right?
01:12We'll have 2% GDP growth this year.
01:15We have a Fed that's expected to cut two more times throughout the rest of the year.
01:19And so the economy is generally doing pretty well.
01:23The big driver, I would say, is the corporate sector and corporate earnings more generally.
01:27It's expected that we'll have 12% earnings growth this quarter, which will be the sixth consecutive quarter of double
01:35-digit earnings growth.
01:36That is real momentum in the corporate market.
01:38We also have record buybacks. We have 100% increase in M&A volume.
01:43There's a lot of momentum within the corporate sector.
01:46And so the obvious big risk is, does this ceasefire hold?
01:49Does the straight reopen within a couple of weeks?
01:52But if it does, which is what the market is pricing in, then I think you can see some calm
01:57be restored back to the markets,
01:58which I think is what we're seeing today.
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