Markets Happy Hour Podcast with Aoifinn Devitt

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.

In this special edition of the Markets Happy Hour Podcast we are joined by Paula Campbell Roberts who is the Chief Investment Strategist for the Global Wealth business and a Managing Director on KKR’s Global Macro & Asset Allocation team As usual we debate the implications of the shifting inflationary, interest rate and equity market environments for our clients and end with a discussion of the asset mix that KKR espouses for wealth clients according to their investment objectives - income generation, capital preservation and return seeking. Starting with inflation we examine the higher "resting heart rate" of inflation and the role that higher electricity prices play in that. Given the demand for data centers and power usage relating to that we draw upon recent charts showing the power demands of data centers and comparing them to the power consumption of entire countries. We move then to some of the indicators around AI and technology stocks, and in particular the massive amounts of capex needed as well as how this will be funded (increasingly by resorting to debt). Finally we move to the trajectory of the USD, which has stabilized and is somewhat stronger now. The topics presented herein are related to financial markets, geopolitics, and world news. This material is provided for educational purposes only and does not constitute any recommendation. Please see the important disclosures within the video contained on the presentation slides.

In today's Markets Happy Hour Podcast we feature the legendary Pete Drewienkiewicz of Thoughts from The Loft (TFTL) fame (of Gallagher Benefit Company, formerly Redington in the UK) and a robust discussion ensues. Starting with "Food Glorious Food" and its driver of inflation, we examine whether inflation will rest at the higher 3.6% level in the UK and what trajectory is likely in the US. We move then to the different apparent interest rate plateaus across the US, the UK and Europe, and ask whether the UK should be "resting" at a higher level than the US, given the clear strains on its economic growth. We turn then to discussing what this means for holding cash today. Equity markets again take centre stage, and we reflect on the recent Nvidia earnings release and then turn to a fascinating piece of analysis that Pete has drawn upon in TFTL the strong earnings growth across all markets, not just the US. While US margins still trump those in other countries, other valuation metrics don't necessarily point to stark US exceptionalism. This underscores the challenge of true diversification today. Finally we touch on the recent excellent analysis of Total Portfolio Approach by Toby Nangle in the Financial Times, and ask whether it is all it is cracked up to be. We do note, however, that some asset class "walls" have started to become porous as new asset classes evolve and investors allocate between them. You can write to Pete directly to get on his weekly distribution list for his excellent newsletter.

Full Episode: Too Big to Fail - 2.0 and Beyond https://www.youtube.com/watch?v=BQeihjN5UO0

In today's live podcast from Dublin we do a comparative vibe check on the Irish economy compared to the US economy. We speak about the pressure of inflation on investor portfolios and ask what investors should do to guard against that. In looking like a now-familiar chart plotting the size of the US stock market v. the rest of the world the question is asked as to whether investors are in fact happy running that level of risk, particularly as it pertains to US stocks and tech stocks in particular. One guest suggested that the best approach was to communicate early and often to investors about the realistic expectations as to risk and return and how to modify their portfolios accordingly. We cycled back to AI, the bubble question and the use case and collected some "anecdata" from the guests in the room as to how they were using AI in their personal and professional lives, citing some of the shortcomings of the dataset so far. In general there was a skepticism around its broader, aspirational use case, and definitely a sensitivity to cost. When discussing AI as a kitchen table issue it was clear that when translated into monthly consumer expenditure the revenue projections seem untenable. This begs the question as to who will pay - inevitably enterprises - and where they will take money from in order to achieve this.

In today's Markets Happy Hour Podcast we are delighted to host Rich Nuzum, Head of OCIO at Franklin Templeton, for our usual canter through the macro drivers of investor portfolios - inflation, interest rates, equity markets, geopolitics and other asset classes. We look at inflation firstly - and ask about expectations, which, remarkably, are diverging along political lines in the US. It seems that inflation is very much in the eye of the beholder - an aspect noted by Rich who suggests that averages "often lie" and are not an accurate depiction of client by client inflation. We move then to central banks and their challenging task of navigating in the fog without even less data than usual, and we move then to geopolitics where Rich discusses the oil price and demand and supply issues as well as the importance that investors think through the ramifications that current geopolitical forces have on their portfolios. We move to US equity markets and the AI underpinning, the effect of the shutdown and why non-US markets seem to be signalling something else today. We end with a detailed discussion of credit markets and Rich gives an alternative take on some of the weakness that seems to have recently been noticed in credit markets.

In this week's Markets Happy Hour Podcast (our second recorded this week - there will be a special episode featuring Paula Campbell Roberts from KKR released shortly), we focus on recent rumbles in markets around the integrity of the AI story, the increased concern about power costs and how our "discovery phase" around Bitcoin is continuing, with more and more clues added weekly. We start with the usual inflation analysis and the strain that power costs are likely to have for the lower income consumer. Fixed income volatility continues to be subdued, even among government bonds which suggests an interesting sense of calm among a cohort (bond investors) which continues even in the government bond arena. Equity markets continue to be rattled by the scope of spending on AI infrastructure as well as some high profile shorting in the space, and it is worth recalling three hallmarks of bubbles - as suggested by a Financial Times journalist - Leverage, Liquidity and Lunacy. We trace each of these with reference to the current market context. Finally we examine recent behavior in Bitcoin and see how it has decoupled from gold and ask what this tells us about its characteristics as an asset class.

In today's live recording of the Markets Happy Hour Podcast we gathered a group of allocators, hedge fund, private credit and real asset specialists to debate the changing shape of inflation and whether certain assets continued to represent paths to inflation resilience. We also dug deeper into the private credit landscape and asked whether the recent poor performance in diversified financials firms was merited, and what might be behind it? Stay tuned for some exceptional detailed insight into the trajectory of direct lending and its fee structure. We finish with an analysis of the AI segment, examine how hedge funds are exploiting or taking advantage of bubble talk and stretched valuations. This moves then to a discussion on market concentration and whether all of these changing factors will affect fundamental tenets of asset allocation.

In this week's Markets Happy Hour Podcast we sit down with Michael Blayney, who is General Manager, Dynamic Asset Allocation at Hesta, an Australian Superannuation fund with $100 bn AUD in assets under management. The sting in the tail is a reference to AI and the "sting" being the job losses that have moved from murmurs to full-blown company announcements, with more to come. As always we kick off with our inflation discussion, where it does indeed appear that 3% is now the new normal in the US, where expectations and core measures are all higher, and Australia too is experiencing a negative surprise - it's number jumped to 3.2% for the year in the latest print, up from 2.1% in the last quarter, in that case due to electricity rebates expiring in some states. Whereas in Australia that might herald a pause in interest rates, in the US a 25 bps cut came as expected, but it was, as Michael suggests, a "hawkish cut" given the abundance of caution in Chairman Powell's statement about "slowing down", "driving in the fog" etc. Spreads are still tight across the board in fixed income, suggesting that risk is either being underpriced or that risks are low, and this euphoria has indeed carried over from the fixed income area to the equity market, with a few exceptions, one of which is discussed below. Equity markets continue to grind higher, with the S&P in reaching distance of a 7000 target and Nvidia just crossing the $5 trillion market cap barrier, which is greater than the market cap of the UK public market and Singapore combined. One exception to the ebullient treatment is the diversified financials segment - which includes many alternative asset managers. The shares of these companies have struggled year to date and we ask whether investors are signaling their concern about some of the fundamentals in private credit as well as structural headwinds in private equity given a low level of distributions and some issues with fund raising. We look outside the US to China and its strong pace of growth as well as the dependency that both China and the US have on the outcome trade negotiations. Finally we examine the areas for R&D for an allocator at present - which may include bitcoin as a new "element" and gold as an traditional element that is continuing to act differently. While these are portals of discovery for allocators, they often do not represent mainstay or even token investments, and we discuss the kind of insights that these emerging asset classes can provide about investor sentiment and market risk.

In this week's Markets Happy Hour Podcast we are joined by Luba Nikulina, Head of Global Strategy for IFM Investors. She is responsible for leading the development of IFM’s global strategy with a focus on private markets solutions that meet the needs of Australian and global pension funds and their members. Luba has always thought in an orthogonal way, finding links between different factors in the economy and trying to apply a fresh perspective to common problems. This podcast does not disappoint in this respect - we first focus on the complexity of the inflation problem - the role of food and oil prices, as well as expectations more broadly. We speak then about how investors are approaching this dilemma and preparing their portfolios for inflation resilience. Moving to interest rates Luba refers to the high level of government debts and the destabilizing backdrop that this presents, and then we discuss the oft stated cockroach analogy this week - with Luba noting that the ethos and high standing of the commentators noting this issue (Jamie Dimon and the Governor of the Bank of England) only adds to its integrity as a potential real issue. The "data desert" in the title referred to the dearth of data in the private area, which makes knowing whether a problem is in fact endemic very difficult. We don't forget the tariff turmoil either - noting that it has again dragged on markets this week, and in another spot of orthogonal thinking talk about the way that the arteries of global trade are clogged and what this might mean for risk factors. The challenge of estimating risk, particularly when it comes to geopolitics should not be overlooked either, we note, and overall relying on diversified portfolios with careful monitoring remains sound counsel for institutional investors.

In this week's Markets Happy Hour Podcast we dig through some "anecdata" to see what is driving global markets through white knuckle moments and back again. We are forced to rely on "anecdata" due to the ongoing shortage of data due to the US government shutdown, so are missing official inflation figures and jobs data. Anecdotally, however, CEOs (Walmart in particular) are reporting that consumers remain resilient (notable given that the Walmart consumers will not be the highest earners) and we can also see firm data that oil prices are hovering close to 5 year lows, which will drive lower prices at the pump. While an easing in Middle East hostilities was in the news this week this may more be a sign of growing US inventories that are keeping a lid on prices. There remains actual data around the world outside the US and UK inflation data showed a stickiness at a challenging 3.8% level, although there some positive soundings out of the UK as the Chancellor committed to cut spending and raise taxes, and market seemed to indicate their approval by buying long dated UK gilts, which saw their largest drop in yields since April. US stock markets have experienced a rocky week, from the "white knuckle moment" of the surprise tariff news regarding China last weekend, to the emergence of worries around regional banks - in particular Zions Bank and Western Alliance which spooked investors with a sense of "deja vu" from early 2023, when other regional banks created worries. The entire financial sector suffered in this case, as the news came close to the news of the credit issues around First Brands and Tricolor, which Jamie Dimon described as the "cockroach" that could well signify other sources of trouble around. We conclude the podcast with some interesting - lateral thinking around the actual effect of AI on GDP and jobs, some positive suggestion re. the lowest quintile of wage earners and analyze what the Nobel Prize in Economics for 2025 can teach us about growth and innovation. Finally we look at the unstoppable march of gold (up 65% ytd) as well as the correlation that Bitcoin is showing to China/US trade relations, which is an interesting relationship to unpack with time.