MARKETS HAPPY HOUR PODCAST

In today’s markets happy hour podcast we host a group of investors in Washington DC, with representation across public funds, the buy side and industry bodies representing LPs and their interests. We start with our usual examination of inflation, and clearly the stealth mode and creep of service inflation as well as rising wages are continuing to press upon the consumer, while the stark spike in the oil price has now reached a crisis level for oil consumers outside the US. On the interest rate side government bonds are starting to fell “oily” – i.e. moving on geopolitical news and showing a gap out in all markets – relating to concern, perhaps, regarding government debt levels and fiscal guardrails. Speaking of guardrails, we look to where investors can look to diversify today epecially amid the lack of the safety trades working as they should c.f. gold and government bonds. We ask what is behind the flighty behavior in the quarterly liquidity funds – is it the clients themselves feeling jittery, is it financial advisers losing conviction around some of their erstwhile high conviction recommendations. One guest asked whether this stemmed from the mergers of mainstream institutional consulting firms merging with the private wealth channel, and some disconnect in terms of the communication of the use of such products? We ask then where rebalancing out of private credit and private equity will go? There are few options today given the current levels of valuations – but arguably the rotation trades will still be compelling. With thanks to our wonderful guests for allowing us such a robust discussion.