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Speaker 1: Our guest is Max Bondori, founder and CEO of s

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Speaker 1: GMC Capital. Max, I want to put a point to you,

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Speaker 1: and you tell me whether it's whether it's on on

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Speaker 1: point or not, and then offer some of your thoughts

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Speaker 1: on it. It would seem if you look at the number,

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Speaker 1: is that the bond market has better discounted what the

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Speaker 1: Fed is doing than the stock market. If you look

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Speaker 1: at the two year yield pushing up there ever, closer

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Speaker 1: to four percent is probably not that far off of

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Speaker 1: what we're expecting to be the terminal rate, whereas the

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Speaker 1: stock market still seems to have a little bit of

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Speaker 1: opium in there. Your thoughts, well, you're absolutely correct. The

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Speaker 1: fixed income market tends to be always a little bit

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Speaker 1: or rustion tefe one than the stock market. But even

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Speaker 1: the fixed income market still has some way to go.

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Speaker 1: Um they're still pricing in cuts in September next year

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Speaker 1: from the Fed. We still don't think that a Doubbish

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Speaker 1: pivot is going to happen that quickly that early, and

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Speaker 1: the actual final rate even be a little bit north

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Speaker 1: of what is currently priced. Because you're currently seeing around

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Speaker 1: for a quarter four and a half, you could actually

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Speaker 1: get closer to five after the very poor inflation data

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Speaker 1: that we saw last week. In terms of the stocks stocks,

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Speaker 1: of course, there's still a little bit more optimistic, but

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Speaker 1: as the FED is going to be meeting and as

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Speaker 1: the data comes through, you're probably going to have to

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Speaker 1: see a little bit of a further correction in the

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Speaker 1: ectuity markets as well, which is going to put them

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Speaker 1: a little bit more in part with respect to what

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Speaker 1: the FEDS actions are likely going to be. So in

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Speaker 1: terms of hedging there, you say, protect yourself against that

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Speaker 1: potential retest of June lows. How do you do that? Well,

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Speaker 1: the best way they were currently doing it as we

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Speaker 1: have put sprints, So basically you buy a long poot

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Speaker 1: more or less that the money, and you sell the

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Speaker 1: short put at the levels of the June lows. That's

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Speaker 1: about another ten percent from here, depending on what the

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Speaker 1: index are you're looking at, Because we definitely do feel

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Speaker 1: that the retest of June lows is going to happen,

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Speaker 1: but we also think that the first test hold, so

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Speaker 1: you could see a bit of a tactical bounce from

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Speaker 1: there before. If that is the case scenario of the

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Speaker 1: food spreads, that's the best way to play it, and

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Speaker 1: then you'll be looking to take profit should the stock

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Speaker 1: market get there, and then take it from there and

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Speaker 1: potentially then had a bit of exposures should we get

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Speaker 1: to those levels. So you're doing that particularly on on

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Speaker 1: solid names. As you put it, the companies that you like,

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Speaker 1: just having to look at Microsoft is down about thirty

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Speaker 1: year today. There's a range between something like that and

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Speaker 1: something like Ali Bamba, which is down seventy two. When

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Speaker 1: you describe quality, I mean, how do you measure it

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Speaker 1: in looking at companies, Well, let's keep it very simple.

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Speaker 1: Company with quality means a company which has been growing

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Speaker 1: consistently over the last five years, which has very little debt,

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Speaker 1: and which can contain and keep going with relatively high margins.

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Speaker 1: Because if you have a company which keeps growing at

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Speaker 1: healthy margins with basically not that of course, short term

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Speaker 1: the stock market can move, but in the longer term

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Speaker 1: you're more or less sure that definitely have a winner

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Speaker 1: in your hands. And of course you have to look

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Speaker 1: at the prospects. Clearly, the numbers is not everything, but Microsoft,

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Speaker 1: for example, is definitely a good case BABA. The problem

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Speaker 1: with BABA is the headlines risk that we're seeing in China.

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Speaker 1: But if you look back at the US, a lot

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Speaker 1: of those large cap tech names, whether in the micro

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Speaker 1: in the finds of the world, but even the videos

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Speaker 1: and some of the semiconductor's names have definitely corrected a

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Speaker 1: lot this year and are starting to show quite a

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Speaker 1: bit of value. We're just getting your thoughts there on

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Speaker 1: what we've seen in China. The loan primary's remaining unchanged

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Speaker 1: and yet again moved by the PBOC to defend that

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Speaker 1: week you and Max well. Definitely in terms of micro

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Speaker 1: comic environment, China is a little bit under pressure, but

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Speaker 1: expect more headlines to come out next month after the

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Speaker 1: party's meeting. But you also can expect the narrative to

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Speaker 1: continue being focused. They will need to provide the further

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Speaker 1: monetary and fiscal stimular studio economy overall, but obviously they

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Speaker 1: need to do that in a very targeted way and

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Speaker 1: in terms of the U and yes, they will try

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Speaker 1: and make sure that it doesn't appreciate too much further

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Speaker 1: from the current levels. But in general, do not expect

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Speaker 1: big headlines before the meeting of the next month, and

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Speaker 1: after next month then you're likely to see um further

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Speaker 1: stimulus coming in. I wonder if we could draw the

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Speaker 1: conclusion that you know, they're not stimulating as much as

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Speaker 1: as many would expect. We even heard the World Bank

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Speaker 1: President David Malpass talk about that. But they are they

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Speaker 1: are stepping in to to keep the slide on the

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Speaker 1: un from getting worse. Does that mean they're worried about

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Speaker 1: capital flight? That's definitely something that they're thinking about. Clearly,

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Speaker 1: given everything that is happening, and given the depreciation of

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Speaker 1: the currency before, they want to make sure that that

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Speaker 1: does not materialize. But also in terms of the actual economy,

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Speaker 1: they will need to um continue having targeted health because

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Speaker 1: again the data that is coming out is not encouraging

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Speaker 1: and and they will need to fix also the narrative

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Speaker 1: in order for investments and to remain in China and continue.

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Speaker 1: Where is the best bit in UH in Asia? Now?

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Speaker 1: I mean we're looking at sort of some of the

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Speaker 1: emerging markets excluding China fair a little better given the

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Speaker 1: inflatory pressures and not quite as strong as what you're

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Speaker 1: saying in developed markets. We're still relatively very show emerging

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Speaker 1: markets in general just because of the strength in the

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Speaker 1: US dollar, and that's never a good factor for emerging markets.

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Speaker 1: We tend to prefer more developed market, especially in Asia.

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Speaker 1: We like Singapore for example. It's actually one of the

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Speaker 1: industries which has done very well, I mean relatively very well.

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Speaker 1: It's actually the green near today in Asia, and that's

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Speaker 1: likely to continue because again it provides a kind of

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Speaker 1: lower beta exposure and a bit more solidity. UH. Indonesia

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Speaker 1: and the stock market force and local currency has done well,

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Speaker 1: but that's likely to continue to because with respect to

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Speaker 1: its position, it's relatively better than some of the other countries.

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Speaker 1: And before we think those two industries could continue perform

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Speaker 1: relatively better. Give me a good contrarian call. At the moment, Uh, well,

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Speaker 1: I we still think that the interest rates have more

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Speaker 1: to run. So um, that's the ten year and the

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Speaker 1: two year. We still think there is more to run.

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Speaker 1: People are still thinking that the Fed will need to

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Speaker 1: pivot dolishly next year. That's very unlikely to happen. Before

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Speaker 1: shorting the treasury rates depending on the toward the tenure,

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Speaker 1: depending what you're looking at, but that's definitely something that

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Speaker 1: we're looking at. And obviously if you want to go

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Speaker 1: a bit higher risk, you were shorting the j g

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Speaker 1: vs on the tenure could be an interesting trade, but

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Speaker 1: that's a different kind of ball game, you say potentially

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Speaker 1: rightly as as many do. The European markets are the

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Speaker 1: ones and most at risk, and we're continuing to watch

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Speaker 1: the energy shortage and the Ukraine war. How does this

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Speaker 1: impact green investments? Green investments again is something which will

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Speaker 1: remain there. But the problem with green investments is that

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Speaker 1: people mean energy now, and if you need energy now,

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Speaker 1: you need oil and eat coal and you need those

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Speaker 1: kind of resources. Therefore, green investing will remain the problem

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Speaker 1: is that it's down in the future and the people

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Speaker 1: need to sort out their positions now and need to

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Speaker 1: have access to energy now today. Therefore, it's likely to

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Speaker 1: remain there, but again be a little bit on the

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Speaker 1: back burner because economies need energy that they consume. As

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Speaker 1: of now, the four expect nuclear to again have a revamp.

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Speaker 1: You've seen that in a number of European countries, and

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Speaker 1: structural change will need to happen. Final question, true or false?

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Speaker 1: Chinese policy is not what it used to be, and

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Speaker 1: I think is what it used to be, so easy out,

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Speaker 1: easy out saying true Max when Darry found it and

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Speaker 1: CEO STMC Capital with US