If that core exposure to the strongest fundamental themes, which brings you back to technology one way or another, is going to remain there, what do you grab for diversification against it? I mean, I assume you're suggesting you don't just kind of lock in longer-term Banyu.

I mean, so many times people ask us this.

Our clients ask us this, my colleagues, some of my competitors.

We're all having this conversation.

Is there a magical number, a magical yield at which we would be buying duration? And I got to tell you, the answer is no, because we're paying attention to why yields are moving up.

not the actual level.

So how do we diversify a portfolio? I mean, we've been looking at commodities.

Is that just because of rates or are we worried about a front load or an over earning type situation?

Will it change?

Yeah, I don't think it's going to.

Look, we've been underweight bonds for a good period of time, for the duration of my time as CIO at Citi, and we have continued to say, like, in all of our investment committee meetings, are we now at a point where we wanna add duration back into the portfolio, where we wanna get to a more neutral position? And we just can't make the case, frankly.

In fact, we think the economic data remains very strong, that we're in a sustainable expansion.

Um, but combined with that, the fiscal deficit story is no joke, and I think investors are not wholly focused on it, but they're also aware of it.

And our expectation is that even if the Fed starts the path of policy tightening, that we're gonna stay at a rate of inflation that is above Fed target for a while.

It's gonna take time for that.

If you take a step back and you don't see long-term yields as, or long-term bonds as being a haven, and longer or higher yields aren't really offering competition to equities, at what point does that lead to just lower returns overall for a longer period of time? Because ultimately it has to constrain the multiples on equities if people are looking for more returns, if they're looking for higher dividends, if they're looking for more payouts, and if they're expecting more in terms of growth at a time where you already potentially have had peak growth.

And so to get a

fine point on the brushes, the women are taught to lip point.

So they literally suck on their brushes so that the bristles will taper to a point.

And they do that over and over again.

The girls are paid by the watch, so they have to be precise, but also fast.

And Grace, by the time she is trained, is painting 250 dials every single day.

They take full advantage.

There was one Italian girl who once painted her teeth with the glow-in-the-dark radium paint because she had a date that night and she wanted a smile that would knock him dead.

Let's put it that way.

Yes.

Yes.

No, I, I guess my, my mom would tell you that I'm almost halfway through my life living in America.

So it was getting close, which is kind of hard to think about.

But yeah, I just started playing golf, got decently good.

Then one of my friends actually that lives in Melbourne said, She was also playing in a bunch of junior tournaments with me.

So Kate- what do you do at the CGA?

Did the Radium Girls get any help? The Radium Girls

did get help.

They got help from a really special lawyer called Leonard Grossman.

And I had the pleasure of meeting his son during my research for the book, who was awesome.

And Leonard Grossman, the lawyer, was this super cool dude from Chicago.

He would wear spats, which are these like fancy shoes that are black and white.

And he was brilliant at giving speeches and had a really sort of theatrical bent to the way he performed in court.

But they got that moral victory

And I think one thing to mention sort of

when we're talking about this and that they were handling it wrong and how should they have handled it.

something that i think is really shocking about this story is the radium girls were instructed to lip point you know to put the brushes in their mouth to swallow the paint but in the laboratories of these same companies the workers in the labs were issued with safety instructions this is at the exact same time that the women are lip pointing so those workers who were handling large amounts of this dangerous element they were told they had to wear um gloves.

They had to use ivory-tipped tongs to handle the radium.

They had to wear lead aprons to prevent the radioactivity from getting to their bodies.

And so people did know how to handle radium safely.

It was just there was this belief that only a large amount was dangerous and that a small amount was not only safe, that actually good for your health which is why people might drink it as a health tonic for example so that's the sort of situation that we're in you've got these mixed messages and partly it came about because when radium was discovered in 1898 very quickly they discovered the powerful radioactivity And that it was dangerous that it would give you a radiation burn on your skin if it was next to you.

she

Yeah.

Yeah.

Yeah, so it would be important to, uh, report sightings of invasives wherever you do find them, and, um, that just helps us track our spread, and then that can feed into the work that other organizations are doing.

So they take the data from the National Biodiversity Data Centre, and that influences policy or even conservation projects and likely feeds into the work that ACRES is doing as well so that we can actually map where the species are.

So I've put, um, a link there in the chat to where people can report their sightings.

And we do ask that people include a photo 'cause then that helps us verify the identification of the species as well.

I just wondered there, so for, so in those areas, is, is there a, you know, a point of reference? Where's the first point of contact? Is it back to your group, Kate, or, or where else should people like that who are concerned about what's happening locally?

Well, certainly people can report the, the sightings of the invasive species to us at the National Biodiversity Data Centre, and you can, you can log on to our website, invasives.ie.

How good are we at being able to get rid of them?

It is difficult.

I would say that the main thing is for people to be able to recognise them in the first place.

So to learn how to identify what they look like.

So people can log on to invasus.ie and we have lots of resources there.

And if you do spot one, you can report sightings to us at the National Biodiversity Data Centre through the online forum.

And we also ask that people include a photo so that we can verify the identification.

I mean, if you look at the false widow spider as a case in point, it can't have started with that many of them and now they're everywhere.

Mm-hmm

... not just in terms of yield, right? And in this case, you know, equities, not credit, have had, uh, kind of a, a step down in valuation over the course of 2026 because, of course, earnings have been much stronger than the price movement.

And so, you know, we're still close to that kind of 15-year high in terms of credit valuations, but we've come, you know, significantly lower in equities.

We prefer to take our risk asset exposure in equities over credit.

We've positioned that way over the course of the year.

That doesn't mean no credit, but we just wanna be more selective, frankly, and I wish I didn't just love equities so much and think they were gonna go higher.

Actually a, a pause, a, a, to breathe, I think as we've seen over some last trading sessions is a, is a good thing going into the summer.

So it might be an opportunistic moment for the Fed to take a step back on supportive financial conditions when financial conditions can stand on their own.

Mm-hmm

... not just in terms of yield, right? And in this case, you know, equities, not credit, have had, uh, kind of a, a step down in valuation over the course of 2026 because, of course, earnings have been much stronger than the price movement.

And so, you know, we're still close to that kind of 15-year high in terms of credit valuations, but we've come, you know, significantly lower in equities.

We prefer to take our risk asset exposure in equities over credit.

We've positioned that way over the course of the year.

That doesn't mean no credit, but we just wanna be more selective, frankly, and I wish I didn't just love equities so much and think they were gonna go higher.

Actually a, a pause, a, a, to breathe I think as we've seen over some last trading sessions is a, is a good thing going into the summer.

So it might be an opportunistic moment for the Fed to take a step back on supportive financial conditions when financial conditions can stand on their own.

Mm-hmm

... not just in terms of yield, right? And in this case, you know, equities, not credit, have had, uh, kind of a, a step down in valuation over the course of 2026 because, of course, earnings have been much stronger than the price movement.

And so, you know, we're still close to that kind of 15-year high in terms of credit valuations, but we've come, you know, significantly lower in equities.

We prefer to take our risk asset exposure in equities over credit.

We've positioned that way over the course of the year.

That doesn't mean no credit, but we just wanna be more selective frankly.

And I wish I didn't just love equities so much and think they were gonna go higher.

So it might be an opportunistic moment for the Fed to take a step back on supportive financial conditions when financial conditions can stand on their own.

does this make you think about credit? Would you be changing any of your allocation to it or

what you prefer? Yeah, we think about credit, of course, in the risk asset spectrum, too, not just in terms of yield, right? And in this case, you know, equities, not credit, have had kind of a step down in valuation over the course of 2026 because, of course, earnings have been much stronger than the price movement.

And so we're still close to that kind of 15-year high in terms of credit valuations, but we've come significantly lower in equities.

We prefer to take our risk asset exposure in equities over credit.

We've positioned that way over the course of the year.

That doesn't mean no credit, but we just want to be more selective, frankly.

And I wish I didn't just love equities so much and think they were going to go higher.

So it might be an opportunistic moment for the Fed to take a step back on supportive financial conditions when financial conditions can stand on their own.

Mm-hmm

... not just in terms of yield, right? And in this case, you know, equities, not credit, have had, uh, kind of a, a step down in valuation over the course of 2026 because of course earnings have been much stronger than the price movement.

And so, you know, we're still close to that kind of 15-year high in terms of credit valuations, but we've come, you know, significantly lower in equities.

We prefer to take our risk asset exposure in equities over credit.

We've positioned that way over the course of the year.

That doesn't mean no credit, but we just wanna be more selective frankly.

And I wish I didn't just love equities so much and think they were gonna go higher.

So it might be an opportunistic moment for the Fed to take a step back on supportive financial conditions when financial conditions can stand on their own.

I mean, what do, what do you make of the sort of bounce back, maybe lack of bounce back that we saw today?

Look, it was a very tepid recovery today.

I think we can all agree on that.

But Melissa, I think last time I was on with you, we, um, I used the word uncomfortable like three or four times when talking about the relentless move upward in the market despite incredibly strong fundamentals.

So let me say this.

I see no degradation in the fundamentals, and in fact, a broader macro backdrop that is actually really quite supportive for a broad range of sectors.

That said, you know, it did feel like the market was getting a little bit ahead of itself, in that it was looking for an excuse, a pause to breathe.

How skittish would you say the institutional base that you're talking to regularly is here, or are they not and therefore, um, nothing has changed?

Does it threaten to sort of get us a little bit even further out of balance in terms of that's the only thing working right now? We're going to, you know, kind of take that to its fullest extent.

Yeah.

Look, it's a little bit uncomfortable and full disclosure.

I mean, I was looking back at my notes that I gave to our internal global call about a month ago at the early start of the reporting season in earnest.

And I basically said, hey, 14 to 16 percent earnings growth sounds pretty good.

And here we are a month later and we're in the mid to high 20s.

I would never have expected this type of momentum.

And I wonder if finally one of the things you can look forward to if you get a resolution, if the Strait reopens, if it's all about, OK, let's rebuild the supply chain and supplies, then what you can do is at least have the other side of that debate for looking through it and saying disinflation should reengage again.

Uh, what do you see as an indication that that keeps going, and how can the Fed insist, uh, assist with that?

Yeah.

Tom, one of the things we've been focusing on, and something our investment committee was talking about earlier today, is the massive dispersion in terms of sectoral earnings, not just this quarter but through the balance of 2026.

Um, and this is also kind of what we're seeing in the overall economy.

We've gotten tired, I think, of talking about the K-shaped consumer because even the bottom part of the K seems to be holding up relatively well with decent real wages.

But there is an huge amount of dispersion, uh, below the surface in the equity market fundamentals and in the macro, um, fundamentals.

Uh, and that can make people uncomfortable, but unfortunately, what's really driving the market higher has been extremely strong, uh, earnings and expected free cash flow from the large parts of the market cap.And we continue to stay kind of anchored to the equity risk and loving US large caps, even as we recognize it is gonna be a very uneven experience, and perhaps a better opportunity for some more active management as we go through this year.

It's still gonna be buoyant, I guess, but it's a different nominal GDP, isn't it?

Uh, what do you see as an indication that that keeps going, and how can the Fed insist, uh, assist with that?

Yeah.

Tom, one of the things we've been focusing on and something our investment committee was talking about earlier today is the massive dispersion in terms of sectoral earnings, not just this quarter, but through the balance of 2026.

Um, and this is also kind of what we're seeing in the overall economy.

We've gotten tired, I think, of talking about the K-shaped consumer because even the bottom part of the K seems to be holding up relatively well with decent real wages.

But there is a huge amount of dispersion, uh, below the surface in the equity market fundamentals and in the macro, um, fundamentals.

Uh, and that can make people uncomfortable.

It's still gonna be buoyant, I guess, but it's a different nominal GDP, isn't it?

What do you see as an indication that that keeps going, and how can the Fed assist with that?

Yeah, Tom, one of the things we've been focusing on and something our investment committee was talking about earlier today is the massive dispersion in terms of sectoral earnings, not just this quarter, but through the balance of 2026.

And this is also kind of what we're seeing in the overall economy.

We've gotten tired, I think, of talking about the K-shaped consumer because even the bottom part of the K seems to be holding up relatively well with decent real wages.

But there is a huge amount of dispersion below the surface in the equity market fundamentals.

and in the macro fundamentals.

And that can make people uncomfortable.

It's still going to be buoyant, I guess, but it's a different nominal GDP, isn't it?

Uh, what do you see as an indication that that keeps going, and how can the Fed insist, uh, assist with that?

Yeah.

Tom, one of the things we've been focusing on, and something our investment committee was talking about earlier today, is the massive dispersion in terms of sectoral earnings, not just this quarter, but through the balance of 2026.Um, and this is also kind of what we're seeing in the overall economy.

We've gotten tired, I think, of talking about the K-shaped consumer because even the bottom part of the K seems to be holding up relatively well with decent real wages.

But there is an huge amount of dispersion, uh, below the surface in the equity market fundamentals and in the macro, um, fundamentals.

Uh, and that can make people uncomfortable.

But unfortunately, what's really driving the market higher has been extremely strong, uh, earnings and expected free cash flow from the large parts of the market cap.

It's still gonna be buoyant, I guess, but it's a different nominal GDP, isn't it?

Uh, what do you see as an indication that that keeps going, and how can the Fed insist, uh, assist with that?

Yeah.

Tom, one of the things we've been focusing on, and something our investment committee was talking about earlier today, is the massive dispersion in terms of sectoral earnings, not just this quarter, but through the balance of 2026.

Um, and this is also kind of what we're seeing in the overall economy.

We've gotten tired, I think, of talking about the K-shaped consumer because even the bottom part of the K seems to be holding up relatively well with decent real wages.

But there is an huge amount of dispersion, uh, below the surface in the equity market fundamentals and in the macro, um, fundamentals.

Uh, and that can make people uncomfortable, but unfortunately what's really driving the market higher has been extremely strong, uh, earnings and expected free cash flow from the large parts of the market cap.

It's still gonna be buoyant, I guess, but it's a different nominal GDP, isn't it?

You, you, you sort of agree with this resilient consumer theme.

I definitely agree with the resilient consumer theme.

In fact, we've seen the consumer in pretty good health really for the last number of quarters.

But you remember it's been now like eight quarters where everyone has been calling for the death of the consumer.

And I'll be honest, I've been also talking about the K shape, but instead, we've actually seen even the lower-end consumer, because the labor market's been pretty solid, um, hold up even better than many people expected.

I think one thing I was reflecting on actually, Sarah, was you were, as you were talking, was, you know, expectations for Fed rate cuts and inflation, and I will say some folks are trying to get back to the policy is gonna ease, and that'll be really good, especially for, um, interest rate sensitive consumers.

You know, we've been in the camp since last fall, frankly, uh, that the Fed should not be cutting rates because of the stability in the labor market and frankly, because the breadth of actually core inflation, um, that was running higher than 4% or 5% annual clip.

I mean, it, it's a, it's a glass half full kind of approach that the market's taken, given the magnitude of the rally last week on hopes of a peace deal that didn't come to fruition.

They're at the mercy of foreigners, many in the Middle East, in a way that should not be shocking.

Rick, thanks.

Always great to speak with you.

Rick Santelli.

Today's market action reflects cautious optimism around a de-escalation.

And in, in the event a near-term resolution is reached, our next, next guest says the backdrop for global equities is still constructive.

Joining us now is Kate Moore, Chief Investment Officer at City Wealth.

Now, is that actually improving the risk/reward, or is that implying it's discounting earnings declines to come?

Is that correct?

Yeah, I want to, and I know so many people have written their year ahead report saying, once again, same thing they did at this time last year, uh, next year is gonna be a year of broadening.

It's gonna be a year of broadening in sectors.

It's gonna be a year of broadening in terms of regions, and I'm not a buyer of that today, this first week in December.

And let me explain why.

Because we, uh, we are kind of later in the cycle.

Um, we are at a point where you can pick and choose whatever economic data you want to s- to fit the narrative you wanna tell about the overall macro and what policy might do to, uh, respond to that macro, and I think you have to be very anchored to fundamentals.

You have deregulation push from this administration, and the trade policy uncertainty is now behind us.

Does it keep going?

Look, I think so much of what happens to the equity market into the back end of this year is going to be about earnings.

One of the key things that we've anchored on has been that most of the return this year has been driven by earnings.

And this week, because of the big tech names, the mega caps that everyone has really anchored in their portfolios are reporting, I think it's going to be really, really important for sentiment.

Perhaps as important for sentiment or even more than the policy decision from the Fed where, of course, the market's pricing in close to 100% probability of a 25 basis point cut.

I do think that we need to hear consistently from the market leaders as well as from companies leading their sectors and industries across the board that they're getting benefits from the AI and technology investment they've made throughout the course of 2025 And they have great hope and expectation for what that will be into 2026 and may cite productivity gains or, you know, enhancements that will lead to better earnings and stronger margins over quarters ahead.

Do you stay domestic or do you look internationally?

Gosh, I think the U.S. still has the highest quality companies, and frankly, from a fundamental perspective, looks the strongest.

If this is a Fed willing to err on the dovish side, does that mean something that materially is higher with respect to returns and with respect to risk appetite?

Look, markets love certainty, and our investors love certainty.

And we want a certainty in terms of the process around making monetary policy decisions.

So, I don't have any insight into, uh, who might be named next Fed chair.

But what I will say is, if there is a sense that the process is changing, I think that will lead to some pause and perhaps some volatility in the market.

You know, our expectation is that regardless of who takes the next chair and what seats are filled, uh, we'll have a continuous, continuation of the process of being data dependent, of being thoughtful, of having, you know, great debate and discussion amongst the, uh, Fed governors and their staff.

Um, but if that were to change, I think that would introduce volatility.

Does that worry you in terms of a bubble forming or some sort of, uh, excess spending that would push up inflation because of, uh, inflated asset prices?