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Speaker 1: All right, let's get now to our guests. Also worth

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Speaker 1: waiting for his insights here is Ryan Belinger, managing principle

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Speaker 1: and founder at Clara Advises, joining us from Boston. So

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Speaker 1: we had the I m F doubling down on its

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Speaker 1: warning about outlook Coots and Moody saying that the US

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Speaker 1: risks talking itself into recession. How worrying are these recessionary

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Speaker 1: concerns on your market outlook for the remainder of the year. Yeah,

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Speaker 1: ness be with you again. Yeah, I think there's a

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Speaker 1: great concern for a recession moving forward. I mean, it's

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Speaker 1: clear the Fed it's behind. They've bent behind for a while.

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Speaker 1: I think they've got to get closer to four percent

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Speaker 1: on the Fed funds rate. If they can do that,

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Speaker 1: I think we can tamp down the inflation. I do

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Speaker 1: think a recession still happens, but the good news is

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Speaker 1: not all recessions are so severe as the ones in

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Speaker 1: recent history. So I think it is you're you are

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Speaker 1: able to have a recession, which in some ways is healthy.

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Speaker 1: It's part of an economic cycle without it being a

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Speaker 1: real catastrophe. Catastrophe for the economy. So that's what we're

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Speaker 1: hoping happens. Yeah, and there is, of course, um, some

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Speaker 1: suggestions that we could already be in a recession. You're saying, though,

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Speaker 1: that the data doesn't support that view. I don't think so.

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Speaker 1: I mean, look, you could always yeah, I could be wrong.

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Speaker 1: But the consumer spending is still up. You've got household

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Speaker 1: finances are you know, seemed very well positioned, Corporate cash

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Speaker 1: and balance shoots are very healthy. Uh so on that

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Speaker 1: on some of those data points, you really doesn't look

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Speaker 1: like we are in intercession. Um, but obviously everyone knows that,

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Speaker 1: you know, the weaker points of the data certainly leading

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Speaker 1: with inflation, that's gonna be a big cause for concern.

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Speaker 1: And and inflation is kind of a tricky thing. You've got,

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Speaker 1: you know, eighty thousand or a hundred thousand data points

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Speaker 1: that go into it, and um, you know, just there's

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Speaker 1: just a few staples that everyone kind of uses, and

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Speaker 1: housing one of the biggest one. But but rent isn't

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Speaker 1: really a big part of the housing figures. So that's

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Speaker 1: kind of something that I'm watching for the second half

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Speaker 1: of the year. And against the backdrop of rising process

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Speaker 1: as well, we've had king dollar and there's a lot

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Speaker 1: of calls that dollar strength risk becoming a self reinforcing

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Speaker 1: feedback loop, or this dollar doom loop, as John Terek

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Speaker 1: from JST Advisors put it, in the sense that that

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Speaker 1: could become ahead wind then to world economic growth. What

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Speaker 1: assets are most at risk from a continuing strong dollar? Yeah,

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Speaker 1: no question, the dollars incredibly strong. I think that's great

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Speaker 1: for for the imports, right price, imports will go down,

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Speaker 1: but not great for for US goods. Obviously, if there's

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Speaker 1: cheaper goods elsewhere, people are going to tend to buy those.

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Speaker 1: So I think the strong dollar actually, you know, will

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Speaker 1: will hurt the global economy just as forecasted. And um,

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Speaker 1: you know, it's just the domestic products are going to

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Speaker 1: be much less attractive. So that leads to some more

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Speaker 1: weakening data points in my opinion coming down the road.

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Speaker 1: You've also pointed that a lot of the dollar strength

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Speaker 1: has been driven by the feds hal kishness. If we

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Speaker 1: start to see them suggest that, you know, potentially September

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Speaker 1: is the end of the aggressive rate hike cycle. Does

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Speaker 1: that there bode well for some kind of asset rally

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Speaker 1: into the latter part of the year. I think so,

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Speaker 1: Although you know, is it possible that the market has

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Speaker 1: lost some confidence in the FED. Um, you know, given

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Speaker 1: the last year or so, I mean, certainly inflation isn't

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Speaker 1: anywhere close to being transitory, so you know, it used

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Speaker 1: to be all eyes were on the FED. I'm kind

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Speaker 1: of curious to know whether the market's lost a little

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Speaker 1: confidence in their predictive capabilities. So even if they came

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Speaker 1: out and say, hey, things are looking really good, are

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Speaker 1: people going to trust it. We've been talking about some

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Speaker 1: of your I guess suggestions for where you could see

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Speaker 1: some moves in the second half of the year. You're

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Speaker 1: saying you like consumer staples, financials and large KIPT technology.

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Speaker 1: What are you staying away from? Well, there's certainly a

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Speaker 1: lot to be fearful of. I think any asset that

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Speaker 1: relies on cheap money you have to stay away from that. So,

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Speaker 1: you know, nonprofitable companies were not really interested investing in

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Speaker 1: those types of stocks any longer. Um, when the fixed

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Speaker 1: thing comes side, there's been a lot that's become really attractive.

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Speaker 1: You know, there's municipal bonds is one area, and we're

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Speaker 1: looking at yields are three times higher than they were

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Speaker 1: in January. So you've still got a ton of states

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Speaker 1: and municipalities that are flushed with catch off of record

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Speaker 1: tax revenues. And don't forget you still have the Cares

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Speaker 1: Act that pays out this year and next year to

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Speaker 1: a lot of the municipalities. So municipal bonds is an

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Speaker 1: area that we like on the second half of the year.

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Speaker 1: I know when it comes to outside the US, you

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Speaker 1: use mutual funds to invest. But I just wanted to

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Speaker 1: get your thoughts in terms of what we're seeing in

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Speaker 1: China because there are a few calls now that the

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Speaker 1: equity bull run may have run its course, because there's

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Speaker 1: still so many economic challenges in China. We've got COVID

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Speaker 1: nineteen cases continuing to climb those warriors as well about

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Speaker 1: further lockdowns and authorities in Shanghai saying that the situation

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Speaker 1: in the city remains relatively severe. Your outlook on on

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Speaker 1: I guess China equities, but also the growth picture there

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Speaker 1: as we continue to see COVID zero play a part. Yeah,

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Speaker 1: it's it's it's been trying to quite a difficult situation

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Speaker 1: in China zero COVID policy, but I think those are

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Speaker 1: all kind of shorter term things. My biggest concern in

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Speaker 1: China is just the ruling party government. I mean they

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Speaker 1: can come in at any point and just and shutdown businesses,

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Speaker 1: shutdown sectors. We saw that a little bit in Big

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Speaker 1: China Tech at the end of last year. So you

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Speaker 1: can be running really nice, profitable companies um, and then

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Speaker 1: the ruling party decides that you know, you're not going

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Speaker 1: to be in favor and you got to tow the line,

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Speaker 1: and then all of a sudden stopped ups. So it's

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Speaker 1: it's a it's a huge risk to be putting your

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Speaker 1: capital there. I think you've got to stay in the

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Speaker 1: companies that are really healthy, have you know, huge business

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Speaker 1: modes um, and they can stick around for a period

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Speaker 1: of stress. And I think that the short term stress

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Speaker 1: of the COVID and the and the growth story, I

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Speaker 1: think we'll play it stuff out as well. Do you

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Speaker 1: buy into the thought that perhaps that regulation cracked down

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Speaker 1: on take has ended, or a d S trying to

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Speaker 1: take a d something you would be staying away from.

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Speaker 1: I mean, if I if I was an investor there,

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Speaker 1: I would be hopeful that there that's ended. But I

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Speaker 1: don't think we've seen any signaling of that. I don't

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Speaker 1: think anyone really could predict that from being honest, I

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Speaker 1: think that's uh inside the mind of one person, but

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Speaker 1: it's it feels like it's a it's a difficult place

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Speaker 1: to invest in, and if you are an investor, you

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Speaker 1: just got to know what your own. You've got to

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Speaker 1: know the risks, and you've got to know that you know,

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Speaker 1: any short term investment could become a long term investment

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Speaker 1: pretty quickly. All right, we'll tell us what you are

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Speaker 1: invested outside the US. I had mentioned earlier, European and

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Speaker 1: Japanese stocks through mutual funds. Just what do you like there? Yeah,

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Speaker 1: So we use asset managers to get our st allocation

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Speaker 1: in those parts of the world, and predominantly they like

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Speaker 1: to developed markets, so you're talking about the UK, France, Germany, um.

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Speaker 1: And then if you're going into Asia, you know you've

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Speaker 1: got to be invested there too, just probably a smaller investment.

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Speaker 1: So the most part it's gonna be large cap developed companies,

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Speaker 1: and those companies are actually trading at near recessionary multiples already.

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Speaker 1: I mean, the US is trading at sixteen times, but

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Speaker 1: you've got plenty of companies trading in the in the

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Speaker 1: high single digits UM in Europe, and we think you know,

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Speaker 1: the downside is pretty much charity factored if you can

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Speaker 1: buy in at those levels, all right, And just bringing

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Speaker 1: it back to the FED, as you say, they've been behind.

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Speaker 1: What do you expect at their next meeting? Do you

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Speaker 1: think we will see seventy five basis points at least?

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Speaker 1: I'm hoping for I'm hoping for a hundred, you know.

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Speaker 1: I think they've decided they've got to do whatever they

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Speaker 1: can to stamp out the inflavation. I think it's smart.

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Speaker 1: You can't be worried about the short term at this point.

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Speaker 1: I think historically speaking, you've got to get the inflation, uh,

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Speaker 1: the interest rate at above at a spot at or

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Speaker 1: above where prevailing long term inflation levels will be. So

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Speaker 1: at the long term inflation levels are looking at four

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Speaker 1: percent right now, I think you've got to get at

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Speaker 1: least to that point. All right. Ryan, Great to have

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Speaker 1: you with us. Thank you so much for your insights.

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Speaker 1: Ryan Bellinger is managing principle and founder at Clara advises

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Speaker 1: on the line from Boston for us here on Bloomberg

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Speaker 1: Daybreak Asia