MARKETS HAPPY HOUR PODCAST

In this week's Markets Happy Hour Podcast we ask where is the love? As Valentine's Day approaches, it seems that consumers, and investors themselves are not displaying a whole lot of love for the AI and tech stocks of which they had been quite enamored not long ago. There is, similarly, a bit of a shift away not only from them but also the US as a market, as other markets such as Japan and Europe start to show their relative strengths. In the discussion of inflation we reflect on soaring food prices and how – in the US at least – this has started to affect footfall and spend at restaurants such as McDonalds and Burger King. There has been a shift in the spending from restaurants towards grocery stores. We move from discussing the K shaped economy to a new concept that Alex introduces – the W shaped economy, in which there are two key segments – those that shop at Wholefoods and those who shop at Walmart, each of whom are struggling in their separate ways. This vibe check notes the recession in consumer confidence and the fact that the labor market is no longer putting as much pressure on inflation. Interest rate expectations have moderated again, as markets have digested the announcement of the next Fed Chairman, while fixed income volatility remains very low relative to its history. Moving to equity markets, the calling cries of markets are of a US tech detox and the continuing rotation into European tech, Japanese equities value from growth and sectors such as infrastructure and financials. This is all occurring against a backdrop of “sell now, see later” whereby AI automation threats are cascading through different sectors – first SAAS and now wealth management as new intelligent tools are released at a fast pace.