Markets Happy Hour Podcast with Aoifinn Devitt

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.

We were delighted to be back in NYC for our second live podcast - joined by 25+ year veteran Jai Jacob. Jai overseas multi-asset and equity strategies and has built platforms that translate data science into practical portfolio decision. He speaks on modernization, customization and disciplined investment process in evolving markets. This special live podcast digs deeply into AI and investing, and Jai strips the discipline of investment back to 8 verbs e- Observe, Believe, Categorize, Qualify, Analyze, Rank, Weight and Commit. We go through each one and assess the different that AI will make, and explore areas where it might be less effective - such as in fiduciary oversight (can AI be a board member for example) and in creativity. We also tackle the problem of nurturing and training human capital and what that means for th next layer of ingenuity and resilience.

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.

In this week's Markets Happy Hour we discuss the long winter that has descended on the East Coast of the US and the ongoing chill and flurries of anxiety and activity that we are experiencing in markets. We suggest with the new injection of volatility in the aftermath of the US Supreme Court striking down the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are in at 6:3 decision. This uncertainty is continuing to unsettle markets which are already coping with the rupture that AI is continuing to create in market expectations. This week was a particularly busy one for this kind of existential thinking, between the continuing fallout from the SAAS-apocalypse as well as well as more contagion. Much of this was due to the 5000-word viral Citrini research piece, has started to cascade through financial services and beyond. We parse this, as well as two other pieces of critical newflow – the standoff between Anthropic and Pentagon with respect to the use of its models in citizen surveillance as well as autonomous weapons, and just overnight the announce of Block cutting 40% of its workforce as it pivots to a more lean business model. Block’s announcement was met by a surge in the stock price. So will it be a sign of things to come? Nvidia’s earnings were blowout, but not that well-received given the already fraught mood in markets. Moving then to private credit we note the “winter” that has descended on sentiment there, which awkwardly is coinciding with a full throttle advance by that segment into the burgeoning private wealth (and retirement savings) business. Clearly a time to be highly selective. Finally the recent fallout for Bitcoin seems to have levelled out somewhat and we analyze this hints at a “floor” or simply a broadening of the depth. Don't forget to tune in next week to our live event in NYC - we will be featuring multi-asset specialist Jai Jacob for a special discussion on AI. Details here.https://www.eventbrite.com/e/1983274102228?aff=oddtdtcreator

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

Full Episode: INUNDATED linked below https://www.youtube.com/watch?v=fWxIlGvENsQ&t=10s

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 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.

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 this week's Markets Happy Hour Podcast we cover the post-Davos week, which, as is now typical has been filled with newsflow, most recently chatter regarding the pending appointment of the next Fed Chair. As we go to print it seems likely to be Kevin Warsh - a current Fed Governor, one of the youngest, and considered to be an "orthodox" pick, given his existing reputation as a Fed Governor and expectation that he will not be necessarily a channel for political preferences. The recent Fed decision to leave rates flat was difficult to parse - as the message was essentially more of the same. There is clearly a mixed message in terms of jobs, the perception of jobs being plentiful and being hard to find are now roughly the same – so clearly no big gap as there was post Covid. The employees in tech industries are flat to trending lower despite revenues and capacities soaring – this points to productivity gains and will continue to matter for jobs. Other equity market sectors have diverged, there are some indications of saturation points being met in certain areas of tech – there is a fall and stabilization of TikTok users, while Apple (which has had a mixed AI launch) has had a set of 8 consecutive weekly declines. Other sectors such as “gridTech” – a new sector coined by Bloomberg – which contains a basket of companies exposed to the pick-up in investment in the electricity grid. It is notable that this, as well as the utilities index more broadly have not generally performed as well as other equity sectors. This latency is interesting – as clearly the one broadly accepted truth is that more electricity will be needed going forward and that this will have to be met from all sources, including solar, which has accounted for 61% of the increase in electricity demand in the US. The performance in precious metals has continued to define the risk off appetite from time to time – with gold moving to a record $5,500 per oz, and US markets considerably weaker compared to the gold. There is some indication that Chinese retail holders of gold have peaked considerably pointing to the potential for some speculative interest there and the potential for more volatility. Silver, similarly, has seen a stark ascent, as well as sharp intra-day volatility just in the past week. The podcast ends with a comment on the use of precious metals in a portfolio and the role that they play.

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".

We started the year with some chilly weather, some American football inspired blocking and tackling and a tech challenged yet warmly engaging live podcast in New York. The video and slides will follow next week, but for now please enjoy the audio. In front of a live audience we discussed the inflation picture, the delayed transmission effect of tariffs and the ongoing disconnect with consumer's price experience on the ground. We examined the market reaction to the announcement last week of a criminal investigation into former Chairman Powell. The decisive push back, via video recorded by Chairman Powell, seems to have been viewed as a form of checks and balances working as they should, and, as ever in recent years, bond markets have reacted calmly, being decidedly unbothered. Equity markets have been somewhat lack luster this week, coming off the prevailing uncertainty in geopolitics and domestic checks and balances, but the US market still stands alone in having experienced few "flight" events in recent years - a flight event being defined here as a simultaneous fall in equities, bonds and currency. This underscores the sense of "might is right" that dominates not just in equity markets but also - now - in geopolitics. We discuss some of the tangential effects of the recent rhetoric around Venezuela and the importance of military power. We examine whether this is galvanizing efforts in Europe to join forces, as well as within other trading partners - namely China, which is seeing its largest ever trade surplus.

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.

In this first Markets Happy Hour Podcast of the New Year, we reflect on the dark turn that many of the “Year in Review and Look Ahead” commentaries took over the traditionally slow period between Christmas and New Year. Some of this related to the new financial “nihilism” and not only was there a Wall Street Journal on the topic but an X post describing a degenerate generation attained over 20 million views. This suggestion that Generation Z is increasing opting out when it comes to traditional professional paths and paths of wealth creation and are opting to “bet the house” to aim for large and outsized gains, hence the increase in gambling and betting, such as Kalshi and Polymarket. This suggestion that there is divergence in terms of meaning and wealth creation is also a subcurrent of one of our themes for 2026, which is a theme of “enough”. Equity markets have ended the year on a positive note, although recent sharp sell-offs in silver after the margin requirements were altered by CME have been a reminder of the volatility that has now become a feature instead of a bug in markets, and another reminder of the perils of leverage. We discuss some positive news in real estate which shows how some real estate is becoming affordable due to overbuilding as well as the technical factors that baby boomers will be downsizing at around the same time that many Gen Z buyers are (belatedly) preparing to buy their first home. This may make affordability fall within reach for some, and is a welcome antidote the common doom-laden refrain about housing being out of reach for an entire generation. Financials have had a strong year and the top 6 US “too big to fail” banks now top $2 trillion, with JP Morgan representing one third of that. Similarly green energy has had a surprisingly strong year despite the headwinds presented by the Trump administration, as the demand for energy and electricity has been so high. In a final sweep through other asset classes we note how the Bitcoin Treasury frenzy has died down given the volatility in Bitcoin. As we have done before we compare it to other diversifiers such as metals – and note that the drivers for using these diversifiers is actually quite different. While metal purchasers may be driven by greed, it may also be fear – fear of currency debasement, fear of rising fiscal imprudence, lack of trust in traditional assets. Bitcoin, on the other hand, is driven more by greed than fear, particularly as it is still not a universal store of value.

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.

In today’s Markets Happy Hour Podcast - our last before the Christmas break, we ask ourselves how happy markets are feeling in this market are joy - and the answer is, well, a touch of Bah, Humbug. We first start with the surprise drop in UK inflation which may well serve as a welcome Christmas treat for the UK consumer. With inflation now coming in at 3.2% in the UK (and US inflation expectations of closer to 3.1%) could it be that the UK has slayed the stagflationary beast of Christmas past? The Bank of England is poised to cut rates today to 3.75% (from 4%), just as the US did in early December and current expectations in the US are around one further rate cut in 2026, although it is quite clear that there could well be more if the new Chair decides to start with a splash. Despite this lower inflation and recent rate cut, the consumer remains hyper focused on inflation and affordability, which continues to hurt consumer sentiment and has become elevated to a live and real election issue. Markets have been unsettled recently despite clear signs that commentators and strategists are bullish, and investors too, evidenced by the flows into equity funds and the fact that cash levels have fallen to recent lows. This is somewhat surprising given the still meaningful return on cash and it is in sync with the broad optimism that are seeing in the now ubiquitous 2026 outlooks. The wrinkle in this optimism is the recent skittishness in equity markets just in the last few days, most of it traceable to AI concerns, and we discuss the unease around Meta’s “turbulent” AI trajectory, which has led to it underperforming some of its Magnificent 7 counterparts. In fact, if we look to the breadth of the Magnificent 7 Counterparts and how they have performed year to date it has really been Alphabet and Nvidia that have been outliers, as the chart below shows. Tesla has had the most negative sentiment, probably due to some unique leadership and market factors, but even the other stocks - despite dominating the newsflow - remain bare round trips year to date. We look at some of the change in sentiment around China, which has seen a fascinating U turn of its own - having gone from “uninvestable” in the aftermath of rising trade tensions, concern about regulatory overreach and concern about a precarious retail sector. While fund managers assiduously removed China from EM portfolios - creating EM ex China strategies, behind the scenes something was changing. This came to the fore during Covid, when it was apparent that surveillance and technology in China had reached sophisticated levels, but also the launch of Deepseek sealed the impression that there was a giant emerging in not only AI but also EVs. This has now dawned upon investors and it has been not lost on them that Chinese stock markets have started to really resemble technology sector developments and could be a real play on technology - but maybe a questionable diversifier to the US, which is also, itself, a play on technology. It has also been a time of turbulence in geopolitics with governments in Europe now openly speaking about the threat from Russia, and President Trump imposing a blockade on Venezuelan oil. This has already been reflected in the oil price and is likely to be a fairly contained regional skirmish, but it is nonetheless yet another piece of flooding of the zone, which will make 2026 hard to navigate. Moving to other asset classes we reflect on the fourth annual loss for Bitcoin, although it significantly lower than previous annual losses, but ask what this means for risk sentiment broadly and the likely behaviour of this asset class. We reflect on where portfolios may sit now that we are at the end of 2025. Clearly equity markets have done well and we do now see breadth creeping in, not only to markets themselves but also by investors seeking to diversify into other cap sectors and other asset classes. Bonds remain expensive, so are less interesting as return drivers, and we continue to stress diversified (global) equity exposure as strong growth drivers as well as infrastructure and real assets, which build in both diversification and inflation resilience. Finally, we wish all of our listeners and followers a wonderful holiday season. See you on December 26th for our next episode, and thank you for your support in 2025.

Today’s Markets Happy Hour Podcast is recorded live in St. Louis, just ahead of the holidays, and features a wide-ranging and candid conversation with Stephen Douglass, Chief Economist at NISA. We begin with an economy “vibe check,” exploring the growing disconnect between headline inflation data and lived experience. From partisan consumer sentiment to the K-shaped reality facing households and businesses, we discuss why inflation still feels very real for lower-income consumers even as markets remain buoyant. We then turn to monetary policy, unpacking the high probability of a near-term Fed rate cut, the concept of “risk-management cuts,” and how the Fed is balancing downside labor risks against renewed tariff-driven inflation pressures. We compare the US outlook with other major central banks and ask whether policy rates may now be flatter — and higher — for longer than markets expect. A deeper dive into fixed income follows, focusing on why bonds are behaving unusually. Despite tight credit spreads, all-in yields remain attractive, raising important questions about portfolio construction, liquidity, and the growing fragility of the Treasury market as supply rises and traditional sources of demand wane. From there, we explore the K-shaped economy across multiple dimensions — consumers, corporations, and capital markets — including why large firms continue to add jobs while small businesses shed them, and what that means for the resilience narrative. We spend significant time on private credit, examining where stress is building beneath the surface, the rise of PIK interest and “extend and pretend” dynamics, and why headline default statistics may understate the true level of risk. This leads naturally into a discussion of private equity, venture capital, and whether the current wave of retail democratization is well-timed. Turning to real estate, we assess surprising shifts in vacancy rates across industrial and residential markets, alongside emerging shortages in top-tier office space. We also touch on data centers, infrastructure demand, and the energy and power implications of the AI build-out. Finally, we tackle equities and AI, discussing valuation concentration, bubble dynamics, and why timing matters as much as narrative. We close with a sobering look at US fiscal sustainability, the limited policy levers available, and what all of this means for investors as we look ahead to 2026. As always, the conversation ends with a clear focus on what these macro crosscurrents mean for real-world portfolios.

Today's Markets Happy Hour Podcast is live from Miami, and was kindly accommodated by the ALTSMIA conference in Miami. We start with a discussion of an economy vibe check where one guest describes a basket of identical goods being tracked from Whole Foods, which is up a whopping 30% year on year - significantly higher inflation than is being reported in the data. We turn then to the seemingly high probability of a US rate cut this week, and compare the trajectories of other central banks, which, interestingly have been thought to have reached a bottom in terms of rates again after some stabilization. Moving to equity markets we reflect on what our expectations were at the beginning of 2025, and whether the concept of resilience to threat is going to be "forever" or whether we should still be mindful of cracks that can be seismic to a sector such as banks or private credit. We look in particular at real estate and some of the bright spots (e.g. London office) as well as the warning signs - e.g. vacancy rates ticking up in residential and some areas of industrial. We also examine some stats regarding private equity and venture capital returns and ask whether now is the right time for democratization.

In today's Markets Happy Hour Podcast we were delighted to feature David Miller, Director of Investments at Conficap based in Finland. David is a long-term commentator and markets expert, having spent years as a portfolio manager, most recently at Quilter Cheviot in London. He has written a regular market newsletter for many years, and currently it is called "Northern Lights" - always a stimulating and riveting read. We start with our usual analysis of inflation, and David shares his insights from a low-inflation, relatively high tax jurisdiction, and we return to the US analysis of wage inflation which shows that lower end earners have seen their wage inflation trail that of higher earners, which only accentuates the K shaped inequality in US markets. We move then to interest rates, and the consolidating probability around a rate cut trajectory in the US, and compare it to the current viewpoint in the Eurozone, where the risk of overheating is significantly different. We turn then to the somewhat unusual behavior of bond markets, whereby long term government yields remain elevated, even in Japan, which indicates a shift that has not been seen for decades. We reflect on the reasons for this shift - suggesting that it shifts the definition of government bonds as a risk free asset, but by the same token also presents them as reasonable ways to generate a yield, while inflation remains subdued. This may alter the use case for bonds as investors learn how to price in the looming fiscal problems with developed economies. Coming to equity markets, there has been a spot of indigestion in the US in the aftermath of a volatile but ultimately flat November and the declaration of a Code Red by Open AI as it downs tools to focus on its core models, sensing encroachment from Google and others, has only sparked more concerns of cracks in the AI ediface. Earnings present a robust picture with the virtually all sectors displaying a high percentage of components beating expectations, and healthcare at the top of the list. This is positive news and suggests there could be a broadening of market strength beyond the concentration that has been in place year to date. The flipside of this positive story has, of course, been what strong earnings mean for corporate costs, and what this in turn means for labor. Finally after a discussion of the Northern European perspective on the current global economy - compressed into an impossibly short space of time, we move to other asset classes that are of interest - David comments on his positive view on India as well as gold, and we discuss some of the key dynamics that drive that.

In today's Markets Happy Hour Podcast we are celebrating Thanksgiving Day, and noting the many things that US investors have to be thankful for - a market that pulled itself together sufficiently to end the month broadly flat, a likely incoming Fed chairman who is positively inclined towards rate cuts, and an economy that continues to show its resilience. Plus Thanksgiving staples seem to be down in price - which is good news for lovers of Turkey and cranberry sauce! We were delighted to welcome Lindsey Stewart on to the podcast to discuss Morningstar's Institutional Insights across our usual five topics, and we debate whether inflation is in fact down (outside the Thanksgiving basket) while taking the temperature on the economy, this time focusing on fund managers who are definitely "glass half full" at this time. We look at the ongoing "low hiring/low firing" job market and ask whether it is likely to change, then move to look at the recovery in equity markets, which has brought a relatively volatile November to a close. Interesting dynamics currently in markets include Nvidia driving market volatility, an increasing discernment between stocks (e.g. Google and Nvidia) and a pickiness among stockpickers. Moving on to the UK budget we discuss the highest tax regime in history and the nature of this experiment which seems set to rival the NYC mayoral elections in terms of the concern that it will lead to an exodus of high earners. Markets have received this news relatively well and we will watch to see whether it is in fact a quencher of growth as has been widely surmised. Finally, we examine Bitcoin's torrid performance of late and the fact that so called "DeFi" companies have trailed traditional finance companies recently, suggesting that old stalwarts still have value in today's markets' craving for some certainty.