00:00From your perspective, how are you positioned?
00:04I mean, right now, do you want to take more risk?
00:06Are you looking for yield,
00:07or are you looking for defense ahead of greater opportunities?
00:12So when we spoke in January at Davos,
00:16I mentioned how the setup was poor for credit and good for equities.
00:21Historically, when you've had stretched valuations in a mid-cycle
00:26where the economy is expected to grow at 2% or better,
00:29your returns in credit are less than the coupon.
00:35And that's exactly what's happened so far.
00:37In contrast, usually that's a great environment for equities,
00:40and that's what's happened.
00:42And even if you look at the equal-weighted S&P,
00:44it's certainly beginning to catch on.
00:46So it's been a more broader rally, particularly the last few weeks,
00:50even in the face of Iran on-again, off-again conversations.
00:53Credit has still been, is still languished.
00:57And we expect that to continue.
00:59Now, that's not to say that it can't have a better second half,
01:03but I do think there are some pockets of opportunity.
01:08But this is historically a tough time to be in credit in terms of in the cycle.
01:14Because of inflation and growth,
01:17that doesn't really benefit the instruments.
01:19It's just how it's priced.
01:21It's priced as if defaults are going to be low,
01:27and that the corporate earnings are going to,
01:31and that they're more likely to disappoint.
01:33You're getting, you're not getting paid to increase corporate earnings
01:37or for earnings to surprise on the upside.
01:40And you're being heavily penalized if they surprise on the downside.
01:44In the equity market, there's still some acceptance or excitement
01:48if you're taking up numbers.
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