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Speaker 1: Shane Solly Harbor Asset Managements with US. Hello Shane, all right,

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Speaker 1: so the brings oil price increased another two percent today,

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Speaker 1: sitting at one one five USD a barrel. How have

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Speaker 1: the investment markets reacted to the latest move and what

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Speaker 1: economic sectism of factors are markets pricing in do you think?

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Speaker 2: Yeah, Look, I'll start with the second piece first. Soonly

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Speaker 2: we're starting to see, excuse me, markets think about a

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Speaker 2: stagflation light type environment, so higher inflation, lower growth. And

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Speaker 2: when we think about that, investors are pricing in the

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Speaker 2: first round effect of inflation from oil prices, and now

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Speaker 2: they're starting to think about sorry, higher inflation going through

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Speaker 2: the interest rates, and now they start to think about

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Speaker 2: what it means for earnings and things like credit ratings.

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Speaker 2: So we've seen bond yields. There's this government ten year

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Speaker 2: bond years in particular increase with inflation risk. So US

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Speaker 2: tenure bond yards roads to four forty three last week.

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Speaker 2: We've seen US on ten year bond years today up

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Speaker 2: to four point eight percent, getting up there to recent

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Speaker 2: highst shear markets continued to forward lower growth risk. Were

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Speaker 2: shre mark it down two percent last week to be

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Speaker 2: down seven point four percent month to day when we

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Speaker 2: were down one point four percent today Helen driven by

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Speaker 2: weakness and fish and buckle Health, Gaet and Brittill e

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Speaker 2: Bos the big losers on the day with Fletcher Building, Westpac, Enrymans.

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Speaker 2: More cyclical names, the more sensitive to slower activity. So yeah,

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Speaker 2: we're we're down seven point one percent month to day

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Speaker 2: here in his yard.

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Speaker 3: So seeing me a risk off?

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Speaker 1: Yeah, now, I see markets are talking about a bear flattener.

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Speaker 1: What does a bear flatner?

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Speaker 3: Yeah?

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Speaker 2: So being flaten is unusual. It means that the yield

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Speaker 2: curve shape is for has changed. It's where the shorter

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Speaker 2: termb interest rates, the nearer to maturity interest rates have

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Speaker 2: increased faster than the longer term rates. So we've seen

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Speaker 2: rates across the yelk curve increase across all maturities, but

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Speaker 2: they've increased more the short end.

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Speaker 3: The nearer turm maturity.

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Speaker 2: Does it matters because the bearer should often signals that

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Speaker 2: the markets are expecting higher managed to policy central banks

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Speaker 2: increasing rates to combat inflation, but it frequently proceeds growth

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Speaker 2: slowing down and potential recession.

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Speaker 3: So yeah, it's certainly a bit of a harbinger of things.

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Speaker 3: To turn down.

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Speaker 1: Okay, now listen, tell me what you think of that

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Speaker 1: deal between Zero and Anthropic on Fridays. It's going to

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Speaker 1: boost the share price for Zero.

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Speaker 3: Well, look on the face that we think it's a

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Speaker 3: positive step.

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Speaker 2: It sort of suggests that AI doesn't necessarily replace or

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Speaker 2: dis intermediate software and they can actually work together because

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Speaker 2: this has been the big shock we've had the macro

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Speaker 2: of Iran and now we've with the micro of which

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Speaker 2: had been software over the last few months.

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Speaker 3: So this is a good deal for Zero Andthropics.

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Speaker 2: Claude will probably do a lot of the heavy lifting

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Speaker 2: for Zero's AI agent jacks. But what we don't know

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Speaker 2: heither is what Zero is going to pay for the service.

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Speaker 2: We don't know where the economic monetization is going to sit,

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Speaker 2: so the market's been a little bit wiry about it.

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Speaker 2: We think it's an important deal with it actually helps

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Speaker 2: change market sentiment or perspectives about long run termin or

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Speaker 2: value res for Zero. But unfortunately on the day at

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Speaker 2: the Zero share price is actually down three point two

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Speaker 2: seventy fifty, really reflecting weakness and your software stock. So

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Speaker 2: a good to your bet you can really roll through.

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Speaker 1: Yeah, Shane, thank you. Very much, really appreciate your time, mate.

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Speaker 1: That's Shane Sally Harborist Management. For more from Hither Duplessy

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Speaker 1: Allen Drive, Listen live to news talks it'd be from

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