Uh-huh

... uh, with only a one in three chance price, it, it'll be a bit of a surprise.

And, and so, uh, think the market sell off on that.

But I, I, I think at the end of the day, uh, when it comes down to it, the, the ... what drives stocks is earnings, and we're having another great earning season.

Uh, and really what's impressive is the median stock is up 17% year over year.

So, um, as much as, you know, the AI stocks, uh, the, the AI infrastructure sho- stocks are running out of steam a little bit, um, we're actually seeing really good performance, uh, breadth across, uh, across the market.

How do you think about that if we were to see a slowdown, if we were to see CapEx come back a little bit?

Yeah.

So Jumping right into the main topic on investors' minds as we are now five weeks into the Iran war, and what's your latest view on some of the economic impacts associated

with it? Thanks, Mark.

And we should probably timestamp this.

It's April 1st at 1.30. And as we all know, the news seems to flip every hour.

And with that, the outlook for the economy and markets.

But I think big picture, we're undergoing a supply shock.

That's where inflation is going up and growth is going down.

And continuing with the topic of inflation, and given some of this kind of inflationary episode, and we've seen periods of stocks and bonds sell off at the same time, where some are likening today's experience to 2022, how would you compare this shock, this inflationary shock, to the experience a few years ago?

So jumping right into the main topic on, on investors' minds as we are now five weeks into the Iran war, um, Evan what's your latest view on some of the economic impacts associated with it?

Thanks, Mark, and, uh, we should probably timestamp this.

It's April first at one thirty, and as we all know, the, you know, the news, um, seems to flip every, every hour, and, and with that the, uh, the outlook for, for the economy and markets.

But, um, you know, I, I, I think big picture, we're, we're undergoing a supply shock.

That's where, uh, you know, inflation is going up and growth is going down, and the longer the Strait of Hormuz is essentially closed, the, the more painful for the global economy.

It's disproportionately negative for Asia and Europe.

They, they rely heavily on, on Middle East imports of oil and, and gas.

And continuing with the, the topic of inflation and given some of the, you know, this kind of inflationary episode, and we've seen periods of stocks and bonds sell off at the same time, where some are likening, you know, today's experience to twenty twenty-two, how would you compare this shock, uh, this inflationary shock to the experience a few years ago?

It's okay.

No, look, I mean, I think what we're seeing right now is really encouraging in that it's not everyone throwing all this money at the wall at the AI wall.

We're seeing more discerning price action.

We're seeing a little bit more like a decline in correlations between these names.

And so for the market that's been talking about a bubble and this and that, I think what we're seeing is quite healthy.

We've seen the hyperscalers, their correlation has gone from 80 percent three months ago down to 20 percent.

Why? because we're seeing some in the Gemini ecosystem, that doing a little bit better, and you're seeing in the ChatGPT ecosystem a little bit worse.

Evan, real quick, where's the consumer? Are you allocating and are you thinking about places in retail and discretionary, which there's argument on both sides of the fence here?

You are looking for other ways, though, to play the AI theme, and you're saying to look at China, which is interesting.

Yes, definitely.

So, I mean, China is just, A, it's a lot cheaper way to play a theme, less crowded.

But also it's a different kind of approach to AI where here in the U.S. we're trying to build the greatest model possible and reach super intelligence and all this.

Whereas in China, it's, you know, whether it's by choice or just limitations in terms of not having the same access to the chips.

They're focused on efficiency, and they're more focused on, okay, what are the immediate applications right here? And I think there's something to be said for that.

So

But right now, doesn't there seem to be a big divide between what the market is willing to suggest productivity is going to be and then this job opening situation?

So was Friday the beginning of a growth scare in your view?

I mean, it was jarring to see $150,000 three-month moving average drop to $35,000.

We've been of the view, I think everyone's been of the view that there's going to be a soft patch and we're in it.

But if you're slowing that quickly, that raises the potential that something breaks.

There's some kind of shock.

and then you get a bunch of layoffs.

We're not seeing that in the data right now, but we're getting dangerously close.

Those roads still continue to lead to gold.

But at what point does it, if any?

Yeah, so the dollar dynamics have been really fascinating this year, to your point.

I mean, we saw the dollar go down when stocks were going down.

We saw the dollar go down when stocks were going up.

I think what that reflects is global investors who have become probably over-allocated to U.S. assets are realizing that they don't want to sell the underlying U.S. assets themselves.

They don't want to sell the S&P.

They don't want to sell Treasuries, still deep liquid markets.

Is there a shift, though, within these sectors to mid and small cap, recognizing a rotation that seems to be underway here, a search for lower-valued companies relative to the S&P 500?