Markets Happy Hour Podcast with Aoifinn Devitt

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.

For today's Markets Happy Hour Podcast we gathered our first Salon together in London with six opinionated guests - for a fantastic discussion from AI to geopolitics to the UK real estate market. We had bulls and bears present, and cycled through our usual topics of inflation, interest rates, equity markets geopolitics and other asset classes.With the title "Paying it Forwards" we discussed consumers bringing forward expenditure as expectations of inflation rise, discuss the allure of equities amid the "debasement" trade and whether the current geopolitics are a real concern for markets - do they render them "different this time" or will it pass. We look then at the productivity revolution and ask where in the market cap spectrum the most productivity gains are likely to be felt.Turning to the concept of "resilience" we discuss a different kind of resilience this time - not simply market resilience, although a streak of 10 days positive market performance suggests that markets really are simply looking through the war. This resilience is the one that KKR describes as the "Resilience of Everything". We ask if this is a new trend or if markets and operators have always cared about resilience and security, particularly when it comes to energy, cybersecurity and security of supply chains.We end by discussing the real estate market in London and the dynamics that are prevailing around residential as well as office, and ask whether real estate will likely form a solid component of a portfolio diversification going forward.

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 this week’s Markets Happy Hour podcast we are joined by special guest Christian Abuide, Christian brings an international perspective to our discussion, with more than 20 years’ experience managing multi-asset portfolios and asset allocation strategy for private and institutional clients.He is the former Head of Asset Allocation at Lombard Odier, where he chaired the firm’s Global Investment Committee with responsibility for investment strategy and positioning over CHF 200bn in assets.Our conversation is heavily grounded in portfolio construction and how to counter some of the current stresses in market where a hierarchy of risk is prevailing with investors forced to sift through the risks and rank them, acting to protect or participate accordingly. We start with the shift in inflation expectations and reflect how they have ticked up in 2026, driven by the geopolitical stresses, while they remain heading downwards in 2027. We reflect on how this has been a bad outcome for the balanced portfolio – with the traditional 60/40 portfolio seeing its worst month since 2022. One question is asked regarding how many investors still hold 60/40 portfolios at this stage, given the low return potential in bonds, particularly with a backdrop of persistently higher inflation.The conversation turns to oil prices and demand destruction and we look at a few examples where this is already taking place - such as in Malaysia where there has been a return to remote working in some sectors in order to save on fuel.Moving to the situation for government bonds we reflect on a few interesting factors in the bond market today – volatility seems to be low, while rates on government bonds have been spiking in countries such as the UK and Italy, as well as in the US over the past month. There is a discussion of the foreign holdings of US treasuries, which are continuing to see their own form of “demand destruction”, while recently government bonds have started to see a shift back into favour as the expectations turn to rate cuts once more. Equity markets continue to demonstrate their core fortitude with earnings doing the “heavy lifting” and noise such as the Space X IPO and a number Open AI fundraise indicating the strong underpinning of FOMO that is driving equity market flows.

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 this week’s Markets Happy Hour Podcast we are joined by special guest Richard Tomlinson, CIO of Local Pensions Partnership Investments, who brings a strong institutional investing lens to our discussion today.We obviously can’t discuss market events without the oil price moves as a starting point, and we start there, noting that the situation remains very fluid with prices spiking past $110 per barrel today. Equity markets are remaining relatively resilient to the price moves, which is somewhat surprising, as we can see the very direct impact that fuel prices have on the savings rate, and therefore the cushion against adverse conditions that consumers can maintain. Equity markets were less impressed by new messaging regarding the trajectory of interest rates, and while the US Fed maintained rates on hold, their telegraphing regarding current uncertainty and likely future rate moves, triggered a negative reaction. Otherwise traditional safety trades are not working as intended, and we distinguish in our conversation between maintaining shock absorbers in a portfolio and cushioning against shocks and building in far more long-term protections around something like Stagflation, which is now rearing its head not just in the UK where it has been a frequent interloper. Now that fund managers see this as a likely scenario in the near term we turn to the thought experiment as to what works when inflation is high and growth is anemic to stagnant. There are few obvious answers to this – although we do toy with the idea that defensive and staple holdings – the last bastion of consumer spending will remain resilient in this scenario.Our conversation takes a whistle stop tour through the UK and China – taking a view on their respective economic states of health, and then turns to analyzing the behavior of gold and short term government bonds as the uncertainty in markets continues to cascade.Our last word is on private credit and the nagging concerns that plague this market. Stay tuned for next week’s podcast which will be live from Washington DC.

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