1 00:00:00,560 --> 00:00:01,720 Speaker 1: Heather duple Clan. 2 00:00:02,040 --> 00:00:04,640 Speaker 2: Most equity markets around the world continue to break all 3 00:00:04,720 --> 00:00:07,400 Speaker 2: new high, all time highs. You don't need me to 4 00:00:07,440 --> 00:00:09,480 Speaker 2: tell you, obviously that there are risks attached to that. 5 00:00:09,600 --> 00:00:11,879 Speaker 2: To talk us through those risks, Sam Dickey, Official Funds 6 00:00:11,880 --> 00:00:15,600 Speaker 2: with US, Hey, samm, Let's start with why these what 7 00:00:15,640 --> 00:00:17,640 Speaker 2: the markets are? First? What markets are the ones that 8 00:00:17,680 --> 00:00:19,720 Speaker 2: are hitting the all time highs? 9 00:00:20,120 --> 00:00:23,959 Speaker 1: Yes, overall global equalities that are making new lifetime highs 10 00:00:23,960 --> 00:00:26,239 Speaker 1: almost every day, and we're up another twelve cent this year, 11 00:00:26,239 --> 00:00:28,880 Speaker 1: and that's again been driven by the US, but Japan, 12 00:00:28,960 --> 00:00:30,720 Speaker 1: Europe and I was a year all sitting kind of 13 00:00:30,800 --> 00:00:32,480 Speaker 1: right near those all time highs. 14 00:00:32,640 --> 00:00:33,600 Speaker 2: And why is this happening? 15 00:00:35,280 --> 00:00:37,279 Speaker 1: It does remind us how far we've come. So who 16 00:00:37,320 --> 00:00:40,440 Speaker 1: are back to the lows of October twenty twenty two, 17 00:00:40,520 --> 00:00:43,400 Speaker 1: and back then we know global inflation was right near 18 00:00:43,440 --> 00:00:46,440 Speaker 1: as forty year peak of ten percent. In markets, we're 19 00:00:46,440 --> 00:00:49,519 Speaker 1: expecting an eminent recession globally, and then in fashion it's 20 00:00:49,560 --> 00:00:52,480 Speaker 1: fall and sharply as we know, and global economic growth 21 00:00:52,479 --> 00:00:54,640 Speaker 1: has been much more of vice bor robust and expected, 22 00:00:54,680 --> 00:00:57,640 Speaker 1: and that's driven a fifty one percent rally from that 23 00:00:57,720 --> 00:00:59,360 Speaker 1: low point in October twenty twenty two. 24 00:01:00,000 --> 00:01:03,680 Speaker 2: Now, obviously, Sam, if you're whenever you hear that markets 25 00:01:03,680 --> 00:01:06,440 Speaker 2: are heading all time highs and breaking records and stuff 26 00:01:06,480 --> 00:01:08,720 Speaker 2: like that, you should know that there is risk, right, 27 00:01:08,760 --> 00:01:10,720 Speaker 2: So what are the key risks that investors are focused 28 00:01:10,720 --> 00:01:11,360 Speaker 2: on right now? 29 00:01:12,560 --> 00:01:14,800 Speaker 1: That's right. There's always risk in investing, and there's always 30 00:01:14,800 --> 00:01:17,559 Speaker 1: many things to worry about. But there are three things 31 00:01:17,560 --> 00:01:21,160 Speaker 1: in particular that investors are grappling with right now. And 32 00:01:21,280 --> 00:01:25,559 Speaker 1: the first one is decelerating global and especially US economic growth, 33 00:01:25,640 --> 00:01:27,959 Speaker 1: and I talked about this present. Second one is the 34 00:01:27,959 --> 00:01:30,960 Speaker 1: return of animal spirits or height in some pockets of 35 00:01:31,040 --> 00:01:33,959 Speaker 1: the market, and the third one is and as a 36 00:01:34,000 --> 00:01:36,600 Speaker 1: result of both of those two things I just mentioned, 37 00:01:36,640 --> 00:01:39,200 Speaker 1: the global stock market values once again been driven by 38 00:01:39,200 --> 00:01:41,920 Speaker 1: a much narrower subset of companies. So just to go 39 00:01:41,920 --> 00:01:44,160 Speaker 1: through each one of those really briefly, key com of 40 00:01:44,200 --> 00:01:48,240 Speaker 1: growth rivers have shifted from surprising positively for eighteen months 41 00:01:48,920 --> 00:01:51,680 Speaker 1: as 'n interrupted is now surprising negatively. And as a 42 00:01:51,680 --> 00:01:54,920 Speaker 1: result of that twenty twenty four US GDP growth you 43 00:01:54,960 --> 00:01:56,720 Speaker 1: know I've been talking about for months, there has been 44 00:01:56,720 --> 00:01:59,560 Speaker 1: getting upgraded is now getting trimmed by economists for the 45 00:01:59,560 --> 00:02:01,640 Speaker 1: first time in a while, and that's driven a sharp 46 00:02:01,720 --> 00:02:05,680 Speaker 1: underperformance of economic sentitive stocks like transport and housing related 47 00:02:05,720 --> 00:02:08,919 Speaker 1: companies in the US. On the second thing, we are 48 00:02:09,000 --> 00:02:11,280 Speaker 1: seeing the return of animal spirits, so mean stocks are 49 00:02:11,280 --> 00:02:13,079 Speaker 1: on the move. We've talked about that one game stop 50 00:02:13,120 --> 00:02:16,280 Speaker 1: at AMC up hundreds of percent, and there's lots of 51 00:02:16,280 --> 00:02:19,440 Speaker 1: hot money in AI stocks. And the third thing is 52 00:02:19,440 --> 00:02:21,360 Speaker 1: because of those two factors of the stock market rally, 53 00:02:21,680 --> 00:02:23,799 Speaker 1: you and I talked about being much healthier and much 54 00:02:23,840 --> 00:02:26,760 Speaker 1: broader than Q one after that March quarter is now 55 00:02:26,800 --> 00:02:28,960 Speaker 1: quite narrow. And to give you an example of that, 56 00:02:29,720 --> 00:02:31,960 Speaker 1: while the broad use of stock market is up sixteen 57 00:02:31,960 --> 00:02:34,960 Speaker 1: percent this year, almost half of those stocks in that 58 00:02:35,040 --> 00:02:37,960 Speaker 1: index are actually negative on the year, and we know 59 00:02:38,000 --> 00:02:39,920 Speaker 1: that it's been driven by a few log tech companies, 60 00:02:39,919 --> 00:02:42,720 Speaker 1: and that tells us that the average stock is not 61 00:02:42,800 --> 00:02:45,639 Speaker 1: as healthy as the headline stock market index, whatever you believe. 62 00:02:46,400 --> 00:02:49,760 Speaker 2: So what does all of this mean for investors? 63 00:02:50,240 --> 00:02:52,839 Speaker 1: There are always risks, like you said here, and we've 64 00:02:52,840 --> 00:02:55,120 Speaker 1: had a fifty cent rally in twenty odd so investors 65 00:02:55,160 --> 00:02:58,560 Speaker 1: should not be surprised that that comes for evaluations and 66 00:02:58,600 --> 00:03:02,240 Speaker 1: more exuberance. But the good new users. Central banks are 67 00:03:02,240 --> 00:03:05,120 Speaker 1: in a very different position now than they have been 68 00:03:05,160 --> 00:03:07,440 Speaker 1: at most times in marteen or fifteen years. So they 69 00:03:07,520 --> 00:03:11,600 Speaker 1: have significant firepower pushing any economic growth your pocket or 70 00:03:11,600 --> 00:03:14,520 Speaker 1: other risk. And that is quite different to that twenty 71 00:03:14,600 --> 00:03:16,800 Speaker 1: and nine to twenty and sixteen period in twenty twenty, 72 00:03:17,040 --> 00:03:20,280 Speaker 1: twenty twenty one, when central banks had already set benchmark 73 00:03:20,320 --> 00:03:22,480 Speaker 1: rates to zero and had less mo to cut rates 74 00:03:22,480 --> 00:03:24,680 Speaker 1: and Cushing a blow. So that's the first bit of 75 00:03:24,680 --> 00:03:27,080 Speaker 1: good news. The other bit of good news to opposite 76 00:03:27,120 --> 00:03:30,320 Speaker 1: these risks is means that outside of that narrow subset 77 00:03:30,360 --> 00:03:33,240 Speaker 1: of companies we've talked about the driving these markets, there 78 00:03:33,280 --> 00:03:35,080 Speaker 1: are more attractive valuations on offer. 79 00:03:35,920 --> 00:03:38,320 Speaker 2: Well that's something I suppose Sam. Thank you very much 80 00:03:38,440 --> 00:03:41,680 Speaker 2: as always really appreciate you expertise at Sam Dickey if 81 00:03:41,720 --> 00:03:42,680 Speaker 2: for your funds. 82 00:03:43,320 --> 00:03:46,520 Speaker 1: For more from hither Duplassy Allen Drive, listen live to 83 00:03:46,600 --> 00:03:49,640 Speaker 1: news talks it'd be from four pm weekdays, or follow 84 00:03:49,680 --> 00:03:51,400 Speaker 1: the podcast on iHeartRadio.