MARKETS HAPPY HOUR PODCAST

In today’s podcast we come to you from a conference room in New York City with a two guest roster fresh off an investment committee where we all play a role. I’m delighted to be joined by Jon Chesshire of Sindia Capital and Jesus Amadeo, CFO of MDRC. We gathered to discuss our usual five topics – reflecting on the fact that New York City, like other key metropolitan centers, is experiencing a higher level of inflation than the “national” rate across the rest of the country. This underscores the unevenness with which inflation is felt, and why every institution and investor needs to factor their own inflation experience into a return assessment. We move then to discuss the new Chair at the Fed, the fact that Susan Roberts suggested that persistent inflation might lead them to hike and not cut next, and pondered whether the new Fed Chair was likely to set a new direction – with fewer updates, signalling and telegraphing of intention. We ask whether this might trouble markets that are used to a more regular diet of communication from the current Fed. Might we need to wean ourselves off the relative certainty and approach of “no surprises” that the current Fed has promoted? We ask what a U turn in bonds would look like and stress that the economic picture is unlikely to be robust enough to absorb a change of direction. Turning to jobs, we discuss the relatively strong recent jobs picture in the US and note that wages have started to decouple from deflation again – being largely flat over recent months. Moving to equity markets we examine the earnings season like no other that is continuing to stun markets, not just here but also in Asia, and markets are exhibiting a very clear rotation from the Mag 7 names into the semi-conductor picks and shovels names in order to “follow the money”. Finishing with a look outside the US we ask what opportunities exist in countries such as China, which is growing market share significantly in areas like robotics, maritime engineering and advanced railway, and where the stock market is displaying similar exuberance. Even Europe has unearthed some gems in the semi-conductor and AI adjacent space, underscoring that not all of the tech action has to happen in the US, and that there is an abundant and maybe underserved market in Europe that might need attention.