00:00Well, I guess it was a tough call to make, or maybe a brave call to make, right? Because a
00:05lot
00:05of people at the peak were calling for recession probabilities to go up, and there were calls for
00:11stress test scenarios of what if we stayed 120 plus barrel of crude oil. And I think what we
00:17ultimately looked at is, you know, fortunately, we went into this largest supply outage with
00:24buffers, and whether it's the inventories that we had on hand, and we could cover 200 days worth of
00:30net imports. And so that, you know, allowed for a lot of cushion that I, in my view, would have
00:36prevented us from going into recession. And then the other side of that is, you know, we never,
00:42I don't like really anybody thought that this conflict would drag on for quarters and quarters
00:46in years. We know that there's a political time clock. And, you know, there's a level of market
00:51patience that was going to force a resolution at some point. So I'm glad to see that we are here.
00:57And it's been a stunning turnaround of the price of oil, Tom, to your point, from 120 to now,
01:02you know, the forward strip pricing in $75 average for the back half of the year. That is a much,
01:08much better backdrop, fortunately, for risk assets now. So I guess investors are probably, you know,
01:14over the last several days trying to reset a little bit. And what do we focus on now? Is it
01:19earnings? What do we focus on? The Fed, we heard from the Fed yesterday, they're not going to give
01:24us any love there. So what do you think the market's focusing on these days? Well, I think it is
01:28that
01:28interplay between where we are with the state of the economy and where we are with a state of
01:32interest rates. And the focus should be on the strength of economic activity, first of all,
01:37whether you look at the consumer and this continued momentum that we see there, whether you look at the
01:42corporations and the great earnings season that we just came out of, you know, you look at the
01:46upsizing of earnings estimates, for example. And then there's the CapEx story. If you look at the
01:52last quarter's GDP, you know, the kind of the bright object there has actually been the fixed
01:56asset investment. The CapEx is accelerating in the U.S. thanks to hyperscalers, but also others.
02:02So that's the economic backdrop. That's why I think you stay in the markets. The other side is the Fed.
02:08And look, my take on that is the markets have interpreted this as in, you know, this is hawkish
02:13guidance. We're going to hike rates. It's not guidance. As you know, there was no forward
02:17guidance. And I think a lot is going to change in the next few months. Anastasia Amorosa with us.
02:22We will continue with her. Edward Yardini to join in a moment. Future's up 55. The VIX is surprising.
02:28I thought it'd be in. It's in a stick. 17.27, but it's screaming 16 handled to me. The Bank
02:34of
02:34England just does a seven to two vote. Megan Green, who's been on the show many times,
02:39and Hugh Pill, a few Pill times over the years. But Megan Green and Pill vote against it, looking
02:48for a rate increase. Bank of England stays static. Pound retreats. Gilt's retreat. And Paul,
02:55it goes to this idea of a backdrop of fighting inflation.
02:58Fighting inflation, Tom. So, Anastasia, one of the issues for this market is AI. And we're trying
03:03to figure out, obviously, investors, how to play it other than NVIDIA. And it's been an ongoing,
03:08I think, play for this marketplace to figure out, where do we go? How do we play it? How are
03:13you
03:13guys thinking about it? Sure. I mean, look, there's actually so much more to do in both public and
03:18private markets beyond NVIDIA. You know, first of all, you know, one thing that's happened, Paul,
03:22is over the last few years, the total addressable market for semiconductors because of AI has expanded.
03:27So, it started with GPUs. But now, as we know, the total addressable market for CPUs, for memory
03:32chips, all of that is being upsized. So, that trade on its own has broadened out. You know, then you
03:38think about the infrastructure. And, you know, look, there was the first leg, I would say, of the data
03:42center opportunity. And, you know, there's some concern about maybe we've done too much too fast.
03:47But the reality is, looking ahead, what's happening is we're transitioning from the use of chatbots,
03:52the conversational commerce, to the use of agentic AI and workflow automation. And what that does is
03:59it's likely to drive much more token consumption over the next few years. And that's going to require
04:05a whole lot of compute. So, the next phase of the data center build out has to support this move
04:11to
04:11agentic AI. So, we're absolutely looking at data centers. We have several portfolio companies
04:16companies in the space. And, you know, they're seeing very strong appetite for their compute
04:23capacity. Partner Group is out of Switzerland. You've got to handle on continental Europe because
04:26you have to go over there and speak to people about American exceptionalism. Do they still want
04:31to buy American after all we've been through with the president and the war? Yes. The answer is yes.
04:37And look, you know, there's been a kind of an evolution there. But absolutely. And I was in Europe
04:42recently. And look, when you think about Europe, you've got extremely depressed consumer confidence.
04:48You have sluggish consumer spending. You have the ECB that hiked rates, presumably, or arguably,
04:54they shouldn't have. You know, you don't have the CapEx momentum. You don't have the support of
04:58corporate tax rates. And then if you flip all of that around and look into the United States,
05:03we've checked all those boxes. So, I think that's why, whether in Europe, whether you're Asian
05:09investor, you continue to look to the United States, not for the political backdrop that we have,
05:15but for the economic backdrop that we have. What are we doing with emerging markets here?
05:20Because that's been a play, really, for the last, I don't know, couple of years,
05:24emerging markets have done very well. Yeah, I think some parts of emerging markets
05:28are quite interesting. And, you know, let's kind of extend the AI trade to Asia, for example. And it
05:36was also recently in Asia, you know, you look around and 60 or 70% of what we need to
05:41actually
05:41build out AI infrastructure is manufactured right there in Asia, whether it's, you know, data center,
05:47chips, whether it's servers, you know, whether it's all the components. So, I like emerging markets
05:52that are enabling that tech trade. Then selectively, you know, I wouldn't say that you just invest in all
05:58emerging markets, but if you can identify a theme, for example, we have invested in a company in
06:03Brazil, which is a fintech company, because that's what scaling and fintech is not just a US story.
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