Markets Happy Hour Podcast with Aoifinn Devitt

In today's Markets Happy Hour Podcast, we are back in a salon-style session - this time live from Sydney on the eve of Tuesday's budget. Our special guest if Annette Beacher, investment manager of Hesta, an Australian Superannuation fund with over AUD$100 m in assets under management. This conversation is in the usual podcast format but we include data points and discussions of Australian economic fundamentals such as the recent third consecutive rate hike by the Royal Bank of Australia, and the inflation and led to it. We discuss the unique structure of the housing market here, the role it plays for consumers, and the state of the jobs market.We spend some time on the Superannuation system and the split of assets that most clients experience, the underpinning demand for Australian equities and the need to seek return abroad too, given the rising volume of assets in the mandated system. After a breakdown of the drivers of the Australian equity market snd a comparison with the AI and tech narrative driving the US indices we bring things back to local again by looking at the likeky contents of the next day's budget.

In today's Markets Happy Hour Podcast, which we held "salon style" in Singapore with a diverse group of guests, we bring you highlights from our multi-faceted discussion. First we track the spread of the inflation epidemic into this part of the world - note the divergence from economies with inflation at a six year high (Vietnam) and economies where inflation has succumbed to longer term deflationary expectations - as in Japan.We track the inflationary changes - which are impacting the region - in some areas more than others and ask whether affordability is an issue.This leads to a question as to whether an markets have the same K shape as the US market, and whether inequality is likely to persist and impact consumer demand – just as in the US a small percentage of the population (10%) are responsible for 50% of the consumer spending. We discuss recent equity market volatility and the new highs just reached, then assess the latest news regarding GameStop and E-Bay, as well as the consulting ventured being pursued separatelyThen we move to what investors are underestimating about this region - and the swiftness and dynamism behind AI rollouts, healthcare advances, and building from the ground up particularly in China are noted. The recent blocking of Meta's acquisition of Manus highlights the perceived threats to national security as well as IP and the protectionist responses that this is inducing.

In this week's Markets Happy Hour Podcast we are joined with Dr. David Kelly of J P Morgan Asset Management. Both of us are delicately negotiating stairs based on having run Monday's Boston Marathon, so we share our race experiences and - naturally - relate them to some of our market observations. The first of these is - "Beware the Downhill" - the Boston marathon is notorious for its long downhill section at the beginning and for the uninitiated, or undisciplined or the simply euphoric, it can be a damaging start - particularly to the quads. The second is pattern recognition - while 8 year consecutive runners like David can rely on the pattern recognition of the 130 year old course, in markets pattern recognition has been more difficult given the length of the upswings and the downswings are shifting to become longer, and shorter, respectively. The third is innovation - we discussed the appeal of products such as the super shoes as well as gel products - and while David prefers the unique marathon fuel of dense traditional Christmas cake (of the fruitcake variety) he does wear "super shoes" and does believe in making small changes designed to generate small, incremental improvements. And clearly they were successful for him in 2026.We move then to the question of inflation and the "landmark" analogy we have used of the Eiffel Tower - inflation tends to rise steeply and then fall steeply. David's view is that this is a temporary aberration in that the economy is not "inflation prone". We dig into this concept at little looking at the three factors that render the economy not inflation prone, and suggest that this leaves more leeway for interest rate cuts in time.Staying on the factors that render the economy not inflation prone, we discuss the waning power of labor and pricing power that workers enjoy, discuss how this translates into earnings, which have remained strong. We compare the resilient US consumer to the European consumer, and David suggests that there may be a case of a different mindset around austerity that applies in the US and Europe and certainly a different approach to spending.We cycle through equity markets dynamics, the validity of the rotation into the Russell 2000 stock market and other factors that have been underpinning the markets and end with a quick discussion of the current private credit dynamics, asking if the current concentration is really a concern, and likely to be a systemic problem or something that adjusts and plays out over time.

In today's Markets Happy Hour Podcast we talk about two sorts of ships passing in the night - the ships that are stalled, or slowly passing through the Strait of Hormuz, as well as the Artemis II mission that will be shortly returning to earth - a symbol of persistent technological progress and pace towards a new frontier in energy extraction. Markets have come down to earth too as geopolitical risk has increased although since Tuesday's announcement of a fragile ceasefire have shown intermittent attempts at take off again - fuelled by resilient earnings and strong economic data. The inflation picture remains mixed - short term focused on transitory drivers, such as gas at the pump (up over 20% year to date) and the spike in oil and other supplies such as fertiliser. However the long-term picture is more muted and more in line with historic norms. This settling into long-term norms has also led to interest rates enjoying a soft landing too - with a new Fed chair on the horizon and the expected "points on the board" he seeks to score with an early concessionary rate cut (or cuts). Moving to the economic vibes we saw a stark rally in global markets in the aftermath of the cessation of escalation rhetoric. We ask whether the new normal is in fact the “new chaos” as markets have now normalized a rupture in the old world order as we knew it – starting with the new unorthodox foreign policy of President Trump and punctuated by Canadian Prime Minister Mark Carney’s “rupture” speech at Davos. This same chaos has been now the norm in oil markets and the movement in oil prices this week – which ranks with other dramatic oil price sell-offs in history, reflecting the real impact of these geopolitical tensions.Flows have told another interesting story about risk appetite. The US has been seen as a safe-haven, despite being one of the real actors in the current conflicts. We have seen a surge of flows into US assets including US treasuries and the US Dollar has essentially seen a recovery of its slump. The Euro has levelled out with its weakness. Meanwhile flows have continued out of emerging markets although there has been some parsing of the difference within emerging markets with some countries clearly more dependent on the Middle East for its energy supplies and these countries suffering accordingly.We cycle quickly through other trends in markets – the sustained underperformance of software, the surprising underperformance of defence stocks despite the increase in kinetic warfare and rising concern around trust and security around AI. This adds to the uncertainty around AI business models just as the increase in fund raising in this sector breaks prevous records. We ask ultimately whether this breakdown of geopolitical trust and the need to reduce dependency on single sources of energy supply will lead to deglobalizing forces or enforce alliances between “middle powers” such as Europe. This echoes what is termed as the “energy trilemma” – the tension between energy security, energy affordability and energyEnding with private credit while much remains unknown about the nature of the contagion and underlying default rate across this segment the policy of “sell first, ask later” continues to apply, particularly in some high profile funds, and given that in the worst affected funds there has not been the same level of satisfaction or meeting of redemptions, which of course compounds the negative impression and the selling pressure. This has become a crisis management exercise at this point – a public relations quest to stem panic and shore up confidence and trust. Jamie Dimon’s recent statement on the matter suggested that the risk was not likely to be “systemic” due to the relative small size of the private credit sector, but he did continue to stoke concern.

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.

In today's Markets Happy Hour Podcast we start "happy hour" early on Thursday morning, which is an essential disclosure - given the pace of newsflow affecting market expectations and trends in real time. We kick off with a discussion of the oil price shocks, and how oil has now for some months been the marginal responder to geopolitical news. We illustrate how much it moved in one day alone in response to a (later rebutted) assertion that some oil tankers were being escorted through the Straits of Hormuz.Inflation was - prior to the current oil shock - trending downwards and had been subdued both in terms of pressure from labour and from services, although there were pockets of concern that the next rate move - at least by the ECB - would be upwards following their current pause. Interest rate expectations have seen a significant U turn in recent days - suggesting that expectations around the effect of the current conflict would not be transitory. This has manifested as spikes in government bond yields - particularly the 2 year GILT and the US 10 Year Treasury. This is an interesting development as it begs that question as to whether these - supposedly - risk free assets are behaving like safety assets. It would seem not, perhaps it is because the overhang of currency debasement, rising fiscal deficits (only rising more with defence and war expenditure) and general skittishness that is preventing investors from fleeing to government bonds. Gold similarly has not been seeing many inflows - falling 2% over the last few weeks - since the outbreak of the conflict. Again, this could be due to unique factors driving technical levels in gold over recent weeks. In equity markets there has been volatility but no clear move down - indicating the level of assets on the sidelines that will be risk seeking as they seek to deploy cash. Certain markets such as Korea were particularly exposed to oil price movements, as we saw last weeks market movement there. Moving then to private markets, the current newsflow is certainly a distraction from the spotlight being shone on private credit and private equity. The nagging concerns persist however, with a concern around contagion from SAAS companies and their travails, a general lack of due diligence (MFS in the UK) and crowding in the general space. Our final comment is regarding AI and the current wave of interrogation that is facing that segment, which is around governance. The spat between the Department of War and Anthropic underscored the moral pivot points that will define the AI rollout and now that companies themselves are concerned about guardrails of their own systems, is an indication that reviews will be forthcoming.

In today’s Markets Happy Hour Podcast we discuss the unfolding geopolitical events that are impacting markets and are joined by special guest Ryan Boothroyd. Ryan is Head of External Manager Research at Border to Coast Pensions Partnership a pool of over £100bn which manages the assets of 18 UK local government pension funds. He is responsible for the management of over £20bn of funds across equities and credit. Our conversation starts with the recent jumps in inflation, which are bucking a trend of steadily declining inflation that we have seen in recent months. Just as headline UK inflation seemed to be showing it was coming closer to 3% we have seen a spike in food price inflation to 4.3%, while European inflration rose to 1.9%, up from 1.7%. These inflation pressures are likely to be more intense due to rising fuel prices, and Ryan discusses the more general pattern that we are seeing in inflation more generally. While some headlines describe this as a “phony inflation scare” due to the immediate circumstances, it is certainly true that they are likely to increase the strain on the consumer, which is already showing some stress.Moving to equity markets, we discussed the immediate fallout from the war in Iran – a fall in gold, US Treasuries and emerging markets – particularly the Kospi, which is particularly exposed to imported oil, while the USD and US assets were broadly winners, as well as oil of course. We look back at some of the experience from recent history in which market downturns had been more pronounced than the current drawdown, but ask whether this is because the current geopolitical shock had the clear shock absorber of the boon in AI and tech stocks to support it – as indeed it has propped up most of the economy and markets for months.Moving to AI and the current state of investor thinking we reveal the divergence of outcomes that investors are currently grappling with and ask whether it is possibly to modify one’s exposure in reaction to this. We conclude with a discussion of private credit and the current negative tailwinds there.Tune in to our second podcast of the day later when we hold a LIVE discussion in NYC with Jai Jacob, a 25+ year veteran and have a particular focus on AI and investing.

Full episode: INUNDATED linked belowhttps://www.youtube.com/watch?v=fWxIlGvENsQ&t=101s

In this week’s Markets Happy Hour Podcast we deal with the inundation – both literal and metaphorical that markets and populations are contending with this week – whether the flooding of the zone with newsflow and the actual inundation with rain and snow and parts of Europe. We kick off with apparent evidence that inflation continues to ease – particularly in the case of the service component which is now lower.This could, of course be a further indication of the waning power of labor and indicate the source of some of the consumer discontent we highlighted last week - all in all though, inflation is subdued in major developed markets, and in the UK in particular, there was a surprise drop to 3%, leading to heightened expectations of a near-term rate cut by the Bank of England.Returning to the “calm” in fixed income discussed last week, we again refer to the diminished volatility in fixed income markets, as well as the record tight investment grade spreads, which are back to levels not seen since before the 2008 crisis. Equity markets continue to be a model of “rotation” in action, as well as shifting investor sentiment away from lavish AI expenditure. The rotations that we discussed before are in evidence still - growth to value, Mag 7 to the other 493 stocks, and from US stocks to Asian and European markets. AI expenditure is continuing to get scrutiny - and the Apple example is held up as an outlier, whereby the company has preferred to outsource its solutions to other companies while waiting on the sidelines when it comes to its own spend.We end with a discussion of geopolitics, and ask whether the same inundation that we discussed at the beginning has led to investors capacity to understand and digest developments, particularly those as severe as the building tensions between the US and Iran. We do a brief thought experiment on what this could mean for markets were it to intensify . . clearly the oil price would be affected, but it might rattle anotherwise jittery set of investors.

In today's Markets Happy Hour Podcast we digest another busy week of market movements, economic data, momentum shifts and shifting expectations. We start with the surprisingly low (and under control) inflation data from Europe, where Eurozone inflation came in at 1.7%. This has led to the ECB maintaining rates on hold and Christine Lagarde suggesting that the Eurozone is in a “good place” (at least with respect to inflation), and similarly the Bank of England kept its rates on hold at 3.75% although did hint at a further cut later in the year (its inflation had surprised on the upside in December at 3.4%). Turning to the economy vibe checks, it is interesting to see that there remains a divergence between customer's actual experience (trending downwards) and expectations (low and remaining low), as actually expectations have never really been too elevated, despite the foaming at the mouth that has occurred by onlookers of the "red hot" economy. Employment numbers have been weaker than expected, while expectations are weaker still, so there is definitely a cloud hanging over the K shaped economy, especially as the oil price gets higher on geopolitical concerns, which could drive pump prices.All eyes remain on the putative Chair of the Fed, Kevin Warsh, and there has been some vacillation around his expected positioning. It is clear he is in favor of a smaller Fed, with a shrunken balance sheet, but his positioning around inflation is less clear. Is he a hawk and mindful of inflation - or does he not consider it important - as calculated by economists anyway. The answer to this question could dictate his positioning around rate cuts and for now, he is a bit of a challenging study. The initial expectation that he would be hawkish (another Volcker?) sent the dollar higher and other assets into somewhat of a tailspin this week. Gold and silver were particularly hard hit, with both falling precipitously, silver more than gold. This may have been due to technical factors such as silver being essentially thinly traded, but either way it was spectacularly bad timing for an asset class that had been recently driven upward by a large degree of retail buying. Bitcoin had an even worst trajectory - and has now fallen back to its pre-election levels, below $70,000 as we write. There is no particular fundamental reason for this, although it is clearly a risk-off trade, and it could be an indication of the risk aversion coursing through tech exposures currently.Finally turning to tech stocks, the focus on capex after the Alphabet earnings call indicates that investors are increasingly scrutinizing capex to see if the expenditure will be justified. There is more skepticism regarding tech stocks broadly, particularly after the staggering revelations about Moltbook, a social network for AI agents. This perhaps sent a chill - a reminder that the pace of advancement in AI has been rapid, and perhaps that it has got ahead of our ability to control it. More skepticism ensued. The fallout from this skepticism was a rise in rotations - from growth to value (value has outperformed growth for the last three months, from tech stocks into smaller and mid-cap stocks and out of the US into non-US equities. For clients with a broadbased portfolios this will be rewarding.

In today's Markets Happy Hour Podcast we conduct a "review" of the drama (and at times melodrama) that has played out at Davos this year, and digest what it has meant for markets.We are joined by CIO and founder of Vistamark and former CIO of the consulting firm Fiducient - Matt Rice, who works with institutional investors and shares his insights on market dynamics and portfolio construction. Starting at our usual starting point of inflation Matt shares his view of the long term deflationary impact that AI is likely to have we touch on the impact of the oil price weakness that will in the more immediate term depress prices. Turning then to the economic "vibe check" we note the sensitivity of equity markets to the prevailing geopolitical drama around both the rhetoric on Greenland as well as the on-again/off-again tariff announcement on European countries.The uncertainty over recent days has been reflected in equity markets, which clearly still show some sensitivity to geopolitical risk, and the ascent of metals continues - clearly reflecting a risk aversion and a concern about currency debasement. Oil, on the other hand, remains flat - reflecting high inventories and only some sensitivity to geopolitical news (in this case the news from Iran). Moving to other sources of risk, even Secretary Bessent has attributed some of this week's weakness in US equity markets to the dramatic movements in the Japanese long dated government bond market over the past week. In what may be Japan's Liz Truss moment (echoing the weakness in UK markets which ultimately led to the downfall of Prime Minster Liz Truss towards the end of 2022). In recent developments the Japanese 40 year bond yield had surpassed 4% for the first time, while the 30 year bond had never suffered such a large drop in a single day. In our discussion Matt suggests that this correction was well overdue and could be the canary in the coal mine for other economies with high levels of government debt. We end our discussion with a reflection on Europe, firmly in the cross-hairs now at Davos, and remind ourselves of the positive impact on European defense stocks that has been a direct response to the challenge from President Trump, as well as on some of the other areas said to be trailing (IT infrastructure) as well as "financial plumbing".

In this week's Markets Happy Hour Podcast, we are joined by Alan Dunne, founder of Archive Capital, who has written a recent white paper on the regime adaptive portfolio. It is a particularly appropriate topic given the heightened discussion of regime change that we have seen over the past week – both at the level of a specific country, as well as at a broader level as a new form of foreign policy is now emerging, fairly unprecedented its scope. We start our discussion by reflecting on the likely impact on the oil price that the Venezuelan situation may have – so far the impact has been muted, and an increase of supply should – according to traditional metrics, lead to lower prices. The mixed signals that inflation is sending – lower oil prices on the one hand – continuing pressure on services on the other is also being noted by the US Fed, and the latest minutes of their most recent meeting underscore the divide that is in place there. Moving to the outlook for interest rates, Alan underscores the mixed data facing the Fed as well as the rising fiscal burden and concern about central bank independence that defines this regime as different from the last one.Equity markets remain robust, particularly according to market commentators in the US, but we ask whether it is likely to be a 1995 or a 1999 in terms of market outcome, and we then proceed to examine the sectors that are most likely to offer diversification and resilience.Alan then sets forth his thesis on what a regime adaptive portfolio should look like. We discuss the characteristics of the current regime, how different asset classes are behaving and the role that traditional diversification will play.

This week’s Markets Happy Hour Podcast comes to you the day after Christmas and is the last of 2025. We ask whether in what often seems to be a season of plenty – we are about to enter the year of “enough”. Will 2026 be the year when consumers declare that they have had enough of the productivity enhancements that technology – and particularly AI – can bring? Will they have had enough of price rises and vote with their feet accordingly? Will affordability become the new siren call? Will they have had enough tokenization and cut some of their streaming subscriptions – again hearkening back to affordability?Consumer spending data continues to underscore the sharp K shaped divide – with over 50% of consumer spending in the US coming from only 10% of the households. This supports the fact that thus far in this cycle, the struggles of the consumer at the lower end of the spectrum don’t move markets. Markets buy what they know. Most market participants come from the upper earning end of the spectrum. Other trends of note in the markets as we near the end of the year are the strong contribution of cyclicals and the fact that Asian markets have actually outperformed US and European equity markets year to date. Flows into ETFs are at record levels, and now are approaching $60 trillion in traded value with over $1.5 trillion in flows and over 1000 ETFs launched in 2025 alone. While this data does not differentiate between active and passive ETFs the majority of ETFs are passive (90%) which suggests that the flows into passive investing remain extremely robust. Meanwhile Gold is on a trajectory to have its best year since 1979, having hit records on no less than 50 occasions this year alone. The year has been framed as a “defining” one for metals. The dollar, on the other hand, is set for its largest annual drop since 2017.