00:00Mark, we've been busy worrying negatively about what's happening with the AI trade just in the
00:05last couple of minutes. But actually, let's put all that to one side, because, you know,
00:09stocks at records, the S&P, the Dow, the DAX, the Stock 600, all at records in the past 24
00:15hours.
00:15Is it all about the weaker oil price? Is that all it takes?
00:21I think about 50 percent of the euphoria in markets this week is probably around optimism
00:27about U.S.-Iran. And there definitely is euphoria. As you say, stocks are at records.
00:33You know, almost every asset is doing well. Bonds are rallying, which is playing into the stock story.
00:37So I'd say about 50 percent is U.S.-Iran, even though we've been here before.
00:41And it's precisely because we've got deja vu about the situation of a promise of a deal that's holding
00:47some investors back, which means we still probably have even more upside if there is finally a deal
00:52which seems viable and sustainable and is actually validated on both sides.
00:56What's the other 50 percent? I think the other 50 percent really is largely just kind of technical relief
01:02that the route in Korean stocks is over, that the situational awareness fund is kind of resolved.
01:10And we've rolled into a new month and we can kind of put July behind us.
01:13So I think 50 percent is that and 50 percent U.S.-Iran optimism.
01:18So then, Mark, has the S&P turned a corner now? It's out of the narrow range it was stuck
01:22in for several months.
01:26I mean, look, S&P 500 never went far from its record highs, even in July turmoil, which was very
01:33much sector specific.
01:34S&P 500 has been doing final year. I mean, I think we remain in the inflationary stage of the
01:40AI CapEx bubble
01:41and we remain in an overall very bullish environment for stocks.
01:46We've got massive fiscal injections from around the world, both in the private sector and the public sector.
01:50We're having monetary policy being held in ordinarily low.
01:54We keep on getting promises of relief in the U.S.-Iran, which is the one big risk out there.
02:00Earnings are incredibly strong. So the macro environment is still very, very positive.
02:04As we've discussed since about May, I think we're in the more this more volatile stage of the of the
02:10AI kind of bubble.
02:12And therefore it's but that still means higher prices.
02:15So, you know, look, S&P 500, yeah, it hasn't gone much further, but it's not far off record highs,
02:21which is, you know, extraordinary gains the last couple of years.
02:26Mark, are we still adjusting to what we heard last week from the Fed, do you think?
02:29Do you think it's still working through markets that the lack of guidance that we're getting and what is that
02:37doing,
02:37do you think, to risk assets as well as to the long end of the of the yield curve?
02:43I'm not sure we're still kind of working through it, but I think that the message from that meeting is
02:50going to remain very relevant.
02:52And, you know, for the long term, one is we're going to have more volatility around data points, which is
02:57one aspect.
02:58And because we've got some big data points to come this week with jobs in particular, that's going to be
03:03interesting.
03:04And I think the second one is that because of that kind of slight surprise in how dovish war sounded
03:13in the conference relative to expectations,
03:15I think that the next data points in particular will either kind of validate that view or make it seem
03:21more like a policy mistake if the data is strong.
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