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Speaker 1: Let's get to our guest, Sylvia Jablonsky, co founder, CEO

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Speaker 1: and CIO at Defiance et S. Sylvia, you probably heard

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Speaker 1: me mentioned that it seems like the fact that higher

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Speaker 1: rates might squelch growth seems to be the number one issue.

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Speaker 1: And it's been a rough couple of weeks, our investors

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Speaker 1: losing faith of a rebound in risk assets high and

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Speaker 1: good evening. Uh. You know, I think that after after

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Speaker 1: the end of last week, that Thursday and Friday trading

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Speaker 1: session in the US sort of sealed the deal that

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Speaker 1: investors are you know, not expecting that Santa claus rally

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Speaker 1: and they are essentially afraid and sort of caving into

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Speaker 1: the idea that you risk assets are are a good

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Speaker 1: place to be. I think the FEDS, you know, speech

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Speaker 1: and and focus on jat terminal rate going to five

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Speaker 1: point one percent and you know, being perhaps more firm

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Speaker 1: than the market expected. UM definitely spooked a lot of investors.

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Speaker 1: It's it's really interesting because you know, CPA gave the CPI,

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Speaker 1: gave the markets UM some great winds in their sales,

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Speaker 1: and you kind of saw those immediate, you know, two

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Speaker 1: to three percent moves across the major induicries and then

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Speaker 1: that quickly kind of softened up, and and you know,

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Speaker 1: the FED fluin and and you know, let's just say,

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Speaker 1: Santa claus Is slide just hit a big chunk of ice.

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Speaker 1: So I think I think we're done for the end

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Speaker 1: of the year in terms of you know, waiting for

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Speaker 1: an amazing rally. But um again, and you know, we

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Speaker 1: often talk about this, UM on your show. I do

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Speaker 1: think that in times like this you do have to

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Speaker 1: think about, you know, an inflection point, right there will

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Speaker 1: be a point where the market will look through this news.

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Speaker 1: The market will look, you know, through the expectations of

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Speaker 1: a future recession at some point and come back in

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Speaker 1: because you know, equally, they're starting to look cheaper and

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Speaker 1: cheaper as as we go along here, do you think

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Speaker 1: stocks have actually fully priced in those recession risks right now?

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Speaker 1: In the US? It's it's it's it's a tough debate,

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Speaker 1: right I think, you know, on the surface, you could

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Speaker 1: argue that the last shoot drop is earnings rights and

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Speaker 1: earnings haven't really fully priced in idea that there will

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Speaker 1: be a recession. But um, you know, if you look

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Speaker 1: at the market, I do think that UM, sort of

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Speaker 1: the hawkishness of of the FED. The idea that there

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Speaker 1: will be, you know, either a rolling recession or a softwarecession,

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Speaker 1: and slower growth is priceding is mostly priced into the

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Speaker 1: market anyway. But you know, the tricky thing, right is

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Speaker 1: that stocks don't usually bottom out until we know we're

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Speaker 1: actually in that recession, right and then and then they

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Speaker 1: tend to recover about five months before it ends. So

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Speaker 1: we don't know for certain, you know, whether we're we're

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Speaker 1: we're in one or whether we're going to get one.

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Speaker 1: But I think that either way, you know, whether we're

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Speaker 1: in a software session now or rolling recession. Now, you

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Speaker 1: can argue rolling recession for sure. You know, if you

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Speaker 1: look at sort of housing, that's that's a great spot

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Speaker 1: to sort of prove that point. But um, I think

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Speaker 1: whether we're in when we're going to have one, um,

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Speaker 1: you know, we might get it, we might retest lows.

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Speaker 1: I don't think that it's going to be a massive

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Speaker 1: drop off though. From here, let me ask you a

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Speaker 1: kind of lofty question about the wage price spiral. Uh,

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Speaker 1: we had unemployment get to during the pandemic and then

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Speaker 1: magically it dropped to a historic low of around three

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Speaker 1: point seven percent. Are the two related And the reason

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Speaker 1: I asked that is if yes, then we can make

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Speaker 1: the case that it would normalize eventually. But if the

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Speaker 1: answer is no, then it really is we have a

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Speaker 1: problem with a wage price spiral. So I think that

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Speaker 1: you'll start to see wage prices normalize, and you know,

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Speaker 1: part of the reason for the spiral, like, there are

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Speaker 1: some good inputs with with that data, right, you had

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Speaker 1: you had a good amount of people retire, right, you

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Speaker 1: had a good amount of labor loss to COVID, whether

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Speaker 1: it was through childcare or or medical issues things like that, um,

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Speaker 1: and you had a lot of people that just didn't

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Speaker 1: come back into the workforce, right. But I think that

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Speaker 1: it's it's taken a year to sort of sort of

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Speaker 1: all this out right and figure out the supply chain issues,

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Speaker 1: figure out the inventory issues, figure out how to sort

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Speaker 1: of cut costs and become more efficient. And what I

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Speaker 1: think will happen is one of two things. Either you know,

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Speaker 1: some of the workers that match the jobs that are

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Speaker 1: unfilled are going to come back in or as we

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Speaker 1: see now, you're gonna have enough of enough of sort

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Speaker 1: of layoffs, right that are going to strain the job market.

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Speaker 1: And and you know that um, coupled with the increase

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Speaker 1: in technology and robotics and AI and things like that

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Speaker 1: to replace some of the jobs that never came back.

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Speaker 1: You know, these things are going to eventually level out.

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Speaker 1: So I don't think that we are actually in a

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Speaker 1: wage price spiral. I think it's just taking time to

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Speaker 1: show up in the data. And maybe just let's we'll

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Speaker 1: talk through some of your sort of trades that that

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Speaker 1: you're looking at, UM, everything from hotels, healthcare, hydrogen stock.

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Speaker 1: Just walk us through some some of these themes that

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Speaker 1: you're looking out for next year. Yeah, sure, so, so

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Speaker 1: you know, I love hydrogen stocks. I think there's there's

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Speaker 1: always a place to look in diversify. You know, this

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Speaker 1: would fall into that alternative energy commodity type of play.

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Speaker 1: You know, the inflationar Reduction Act as a tail when

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Speaker 1: their commitments from global governments to go carbon neutral by

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Speaker 1: you know, Bank of America's twitting this is a an

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Speaker 1: eleven trillion dollar business in twenty UM at some point um.

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Speaker 1: You know, the the International Renewable Energy Center forecast that

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Speaker 1: hydrogen will satisfy twelve percent of the world's energy demand,

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Speaker 1: and right now that's basically zero UM. And then if

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Speaker 1: you go to that number, it will be about a third.

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Speaker 1: So I think that these stocks like like plug, Ballard

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Speaker 1: and fuel that already supply you know, backup power plants

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Speaker 1: for companies like Microsoft and Amazon, UM and NASA. You know,

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Speaker 1: they're already you know, in a good spot to sort

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Speaker 1: of benefit in the short term. But I think in

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Speaker 1: the longer run there's going to be a huge investment

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Speaker 1: in this space. Um. So that's a long term for me.

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Speaker 1: Health care for session proved defensive paced. You didn't mention

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Speaker 1: emerging markets or or Asia or China. Let's talk a

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Speaker 1: little bit about China. We're reporting today on on a

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Speaker 1: push to stimulate the economy in a in a business

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Speaker 1: friendly way. That's something that came out of the work

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Speaker 1: conference that finished up late last week. What would what

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Speaker 1: would induce you to looking at China here overcoming six months? Yeah,

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Speaker 1: so I'm absolutely actually looking at China and a lot

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Speaker 1: of that that came um from the reopening, Right, So

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Speaker 1: I do think that I think it's a couple of things, Right,

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Speaker 1: I think they kind of get past the fears of

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Speaker 1: instability or like delisting risks for the major China tech stocks. Um,

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Speaker 1: You'll you'll get US investors highly interested in jumping back

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Speaker 1: into those stocks, and that's really where the money was

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Speaker 1: going there. I also think that there's going to be

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Speaker 1: you know, money stimulus in three. I think the Chinese

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Speaker 1: government is trying to turn things around. So you know,

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Speaker 1: absolutely just just the reopen I think is going to

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Speaker 1: be a big um boost for for um, for for

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Speaker 1: stocks in in China. So I am looking there actually,

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Speaker 1: and I would probably in towards some of those tech

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Speaker 1: names I mentioned. Okay, so so in terms of how

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Speaker 1: to play the reopening story, you're you're saying, focus on

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Speaker 1: the A d R s and the US listed companies,

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Speaker 1: um more so than looking off shore a bit. Yeah,

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Speaker 1: I mean that's that's more of what I look at personally. UM.

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Speaker 1: So you know, I would tend to look at companies

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Speaker 1: like like a K Web or a K Tech. You know,

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Speaker 1: they give you those are those are creatures actually believe

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Speaker 1: they give you exposure to. Yeah, like the Googles, the

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Speaker 1: facebooks to Amazon and the Ebays of of China. And

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Speaker 1: I think that you know, those stocks have been just

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Speaker 1: absolutely beat up. Um some of them are down to

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Speaker 1: the two of six. And again you get that reopening,

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Speaker 1: you get people spending um, you know, kind of getting

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Speaker 1: back getting back out there in the factories, building the electronics,

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Speaker 1: getting the chips into the different technology, the laptops, the

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Speaker 1: AI and all that. So I think that's trade there,

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Speaker 1: all right, Sylvia, thanks so much for joining us. Sylvia

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Speaker 1: Jablonski co founders CEO and c I with definan CTFs