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Speaker 1: Our guest is Robert Shine, c I O at Blankie

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Speaker 1: Shine Wealth Management. Well, nothing goes up forever, and so

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Speaker 1: in this instance, I'm referring to inflation. We often say,

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Speaker 1: Robert that the cure to higher prices is higher prices.

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Speaker 1: I'm not sure if we're anywhere near it yet, but

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Speaker 1: that's what everyone is trying to figure out. You're not

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Speaker 1: going to get the all clear from the Fed, uh,

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Speaker 1: probably anytime soon. That's just sort of baked into They

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Speaker 1: made a mistake last year on transitory, so they gotta

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Speaker 1: kill it this time. Are you seeing any signs that

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Speaker 1: inflation is rolling over? Well, thank you for having me again,

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Speaker 1: and you're right, um, the cure for higher prices are

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Speaker 1: higher prices, and we're seeing some of that demand destruction

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Speaker 1: is at least what the FED is hoping for as

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Speaker 1: a as a result of raising interest rates. But I

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Speaker 1: think the challenge could be and we can get this

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Speaker 1: economic data this week, which is bigger, one of the

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Speaker 1: biggest weeks we've seen in quite some time, with the

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Speaker 1: economic data as well as all of the earnings reports.

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Speaker 1: But the answer your question, it really comes down to,

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Speaker 1: is it entrenched in broadening in the balance sheets by

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Speaker 1: way of wages, So is that wage inflation? Is it consistent?

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Speaker 1: Is it persisting? Because it's one thing to have, you know,

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Speaker 1: wage inflation in there, it's it's nothing to take it away.

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Speaker 1: So we're gonna also pay attention to the jobs market

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Speaker 1: as well. But I think the key right there is

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Speaker 1: the concern for the FED is on the balance sheets

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Speaker 1: of corporate America. Is it the wages and the inflation within?

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Speaker 1: The other key is what they flag ahead after this

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Speaker 1: week's meeting to Roberts. So if we have seventy five

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Speaker 1: basis points kind of baked in, is it likely that

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Speaker 1: we see smaller hikes forecast moving forward? Yeah, we believe

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Speaker 1: we're gonna see seventy five this week. And keep in mind,

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Speaker 1: the next day after their announcement with the Fed, uh,

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Speaker 1: we have the GDP report for the second quarter, so

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Speaker 1: it's gonna be very telling and revealing. And then in August,

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Speaker 1: the FED is off in September. They have some time

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Speaker 1: between now our next meeting to sort of digest and

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Speaker 1: see if what they're doing is actually playing out. We

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Speaker 1: also have energy, as you know, traded down this week

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Speaker 1: that's helping basically um balance sheets for individuals as well

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Speaker 1: as corporations. But we believe we could see the reversal

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Speaker 1: in that trade and energy trading higher as a result

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Speaker 1: of sort of all the geopolitical tensions and policies here.

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Speaker 1: So we we like energy going forward, um, and this

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Speaker 1: is an opportunity add energy as a result of that. Yeah.

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Speaker 1: I like your first answer. I think it was well

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Speaker 1: thought out, nuanced about whether or not some inflation just

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Speaker 1: gets baked in through higher wages. Uh, that could be troublesome,

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Speaker 1: you know, But if you look out, say a year,

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Speaker 1: do we still have an inflation problem? Well, what's gonna

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Speaker 1: I think with the FETE is hoping for. And I

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Speaker 1: think we're already seeing this, let's say in pockets of

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Speaker 1: tech is where they're turning over in terms of hiring

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Speaker 1: freezes or just quite laying off um. And that's going

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Speaker 1: to be ultimately long term a cyclical pure right, sort

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Speaker 1: of the recessionary shot across the bow for corporate Americas

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Speaker 1: when they stop hiring, and then we're going to see

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Speaker 1: the job market, the labor market sort of equalized, and

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Speaker 1: so the equilibrium much like we're see the FED going

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Speaker 1: after real estate here in the United States. Uh, you know,

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Speaker 1: they targeted the stock and bond market. Six months ago

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Speaker 1: we saw the froth come out of the cryptocurrency. Between

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Speaker 1: that time and now, real estate is coming to a

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Speaker 1: grinding halt uh simply because the affordability is down by

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Speaker 1: over Mortgage mortgages have just basically stopped right now. Um

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Speaker 1: because the people that I'm talking to the mortgage markets.

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Speaker 1: So that's gonna be another negative down uh sort of

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Speaker 1: component to the U S economy that could all then

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Speaker 1: bake into the FED sort of case of trying to

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Speaker 1: stay ahead of inflation, which is a recession. Now the

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Speaker 1: question is is it a milder session or is it

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Speaker 1: a de procession or will be a double depercession in

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Speaker 1: the future, depending upon you know how how they will

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Speaker 1: stick this landing. But this maek is gonna tell us

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Speaker 1: a lot and is your view very quickly that it

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Speaker 1: is deep or shallow? I think this could spiral into

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Speaker 1: a deeper dive later on, depending upon what the FED does.

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Speaker 1: You know, they're going to go until they break something,

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Speaker 1: and their question is is a geopolitical Is it's something

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Speaker 1: we're not seeing on a radar. You know, there's also

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Speaker 1: the Eurozone stress that we're seeing in bond yields on

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Speaker 1: the and then the strength of the dollar is also concerning.

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Speaker 1: So there's a lot of things in the dashboard to

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Speaker 1: pay attention to it. So you're saying, amidst these depressed

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Speaker 1: levels that we're seeing in markets, it's good to diversify,

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Speaker 1: which is always a good point. Where exactly are you

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Speaker 1: looking away from US markets? Well in the you know,

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Speaker 1: value over growth, Um, you know, it's the risk off

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Speaker 1: trade that we're seeing globally. Um, you know, and and

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Speaker 1: we like, you know, the healthcare sector as well as energy.

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Speaker 1: We believe energy we'll see your researchence of higher energy

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Speaker 1: prices as well. So um, we're looking yeah, for the

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Speaker 1: value trade, dividends, strong balance sheets, well run companies, take

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Speaker 1: advantage of sort of markets a little bit more defensive

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Speaker 1: as we are seeing that this market is sort of

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Speaker 1: the risk off trade all over. We always seem to

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Speaker 1: come around to China. We've got these mortgage boycott boycott

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Speaker 1: issues that are spreading there and it's it's a little

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Speaker 1: bit of a vicious um circle there in China where

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Speaker 1: you know, homeowners are getting put off by by what's

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Speaker 1: happening with you know, the boycotts and and with the

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Speaker 1: developers being in in monetary difficulty and that drives up

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Speaker 1: some of the money that those property companies need. Are

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Speaker 1: you net net Are you positive on China or negative

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Speaker 1: on China given its position at the moment, Just cautious

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Speaker 1: right now, I think right now, especially the story you

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Speaker 1: just point out is UM, it's growing every day, the

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Speaker 1: evergrand scenario with the mortgages and UM, that could turn

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Speaker 1: into something bigger. So we're gonna be cautious. We're gonna

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Speaker 1: We're gonna also pay attention to the dollar. You know,

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Speaker 1: the ffex trade is is you know what the US

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Speaker 1: dollar strong? UM, you know, emerging markets and a few others.

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Speaker 1: It could be a wrecking ball if it continues with

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Speaker 1: its strength. Obviously the dollar was um, you know, sort

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Speaker 1: of sold off a little bit, a little pull back

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Speaker 1: this week. UM, but I think we could see dollar

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Speaker 1: strength between now and year end as well as energy.

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Speaker 1: So that could be a havoc on global markets all over,

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Speaker 1: and that could you know, add some more concern stress

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Speaker 1: wise if we go to Europe. If you know, we

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Speaker 1: just had the ECB raised interest rates, but at the

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Speaker 1: same time they have to do cautiously. As cautious as

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Speaker 1: they can because they have Italy to worry about. So

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Speaker 1: we're gonna pay attention to Italy's bond yields um if

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Speaker 1: there's pressure there. UM. And you know, the strong dollar

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Speaker 1: and just interesting in policy around the world. You know,

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Speaker 1: I think all of the central banks are willing to

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Speaker 1: accept recession as the base case, whether mild or great,

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Speaker 1: versus the inflation that's out of hand. Everywhere you talk

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Speaker 1: about Europe and everyone is sort of saying Europe is

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Speaker 1: anyone's guess it doesn't seem great to outlook there, Why

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Speaker 1: do you still want to own a basket of European

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Speaker 1: equities long term? You could pick up some really good

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Speaker 1: valuations here, but Europe is still in You know, Europe

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Speaker 1: is showing signs of recession. Uh. You know they're there first,

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Speaker 1: we were, we're following. Uh, So we don't know are

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Speaker 1: We're gonna see global central banks and monetary policy pause

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Speaker 1: or pivot. And the only way we're going to find

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Speaker 1: that out is um, you know, to see the inflation bottery. Uh.

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Speaker 1: In the meantime, once we had that pause or pivots,

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Speaker 1: whether by central banks around the world, then you know

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Speaker 1: you can see that risk trade back on and so

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Speaker 1: in the meantime, we don't ever know that's going to happen.

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Speaker 1: But again, for our clients, what we're doing is we're

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Speaker 1: just basically maintaining a dollar cost average strategy because if

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Speaker 1: you're taking a longer term view, we're all going to

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Speaker 1: look back, you know, uh, you know, six twelve, nine months,

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Speaker 1: you know, even a couple of years from now and say, wow,

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Speaker 1: that would have been a good opportunity. So it's hard

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Speaker 1: to do that when everything's sliding. Uh. It's also providing

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Speaker 1: an opportunity longer term, so we like, uh, you know,

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Speaker 1: opportunities and yeah, we we got it. Um. I wanted

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Speaker 1: to ask you kind of a labor versus capital story.

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Speaker 1: We run a story of the weekend workers globally are

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Speaker 1: turning much more assertive in asking for a better deal.

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Speaker 1: Is this going to be tough time ahead for companies. Yeah,

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Speaker 1: you're gonna see a bifurcation of basically the worker you know,

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Speaker 1: companies need. And we've seen this all the way through

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Speaker 1: cycles of economic cycles, where companies are are after that

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Speaker 1: war on talent and there is the bification of those

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Speaker 1: who are are really that valued employee. Something that you

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Speaker 1: need to run your business, you know, and then those

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Speaker 1: that are kind of just better offering you every week

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Speaker 1: because they want to stick around and see what they

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Speaker 1: can do. Robert, we thank you so much. Robert Sean

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Speaker 1: is ce io at Blankie Sean Wealth Management with us

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Speaker 1: on Daybreak Asia