1 00:00:00,040 --> 00:00:03,720 Speaker 1: Let's get to our guest, Checho, financial advisor and managing 2 00:00:03,720 --> 00:00:08,840 Speaker 1: director at UBS. It's a very complicated picture now for China. 3 00:00:09,320 --> 00:00:13,280 Speaker 1: Investors are quite pleased that the authorities are relaxing some 4 00:00:13,320 --> 00:00:16,119 Speaker 1: of the restrictions and opening up, but the reopening is 5 00:00:16,200 --> 00:00:18,720 Speaker 1: causing some some issues here and we can talk a 6 00:00:18,720 --> 00:00:21,960 Speaker 1: little bit more about that. And you also have complicated 7 00:00:21,960 --> 00:00:25,480 Speaker 1: relations with the West, for China, Japan and the Netherlands 8 00:00:25,560 --> 00:00:28,280 Speaker 1: now agreeing to join the US in these curbs on 9 00:00:28,400 --> 00:00:33,960 Speaker 1: semiconductor equipment making technology. So you put all that together 10 00:00:34,120 --> 00:00:37,680 Speaker 1: and I think you probably um, you probably would agree 11 00:00:37,720 --> 00:00:39,960 Speaker 1: that it's it's more time to be cautious than to 12 00:00:40,000 --> 00:00:45,160 Speaker 1: be backing up the truck. Yes, absolutely, I mean, um, 13 00:00:45,200 --> 00:00:49,240 Speaker 1: I think China's incriminal leavening of the Vario COVID related restrictions. 14 00:00:49,600 --> 00:00:52,280 Speaker 1: I mean that certainly has dominated the news headlines in 15 00:00:52,280 --> 00:00:56,800 Speaker 1: the recent weeks. And we believe that eventually China will 16 00:00:56,800 --> 00:01:00,440 Speaker 1: reach to afore reopening, but most likely in UH quarter 17 00:01:00,560 --> 00:01:04,240 Speaker 1: or third quarter or two thousand twenty three. So um 18 00:01:04,480 --> 00:01:09,720 Speaker 1: expecting us continued volatile and a bumpy transition period ahead. 19 00:01:10,560 --> 00:01:13,120 Speaker 1: So if it's going to be that long, do you 20 00:01:13,160 --> 00:01:15,160 Speaker 1: buy now or do you sit on the sidelines for 21 00:01:15,200 --> 00:01:19,640 Speaker 1: a while. UM, we're very neutral in China, as auspointing, 22 00:01:19,680 --> 00:01:22,720 Speaker 1: the potential is big, UM, but build UM. You know, 23 00:01:22,760 --> 00:01:26,679 Speaker 1: there's potential further policy announcements and the effectiveness of the 24 00:01:26,720 --> 00:01:31,240 Speaker 1: policy implement implementation. UM. And there's also you know, whether 25 00:01:31,319 --> 00:01:35,039 Speaker 1: the progress and the eldern vaccination is going to UM 26 00:01:35,080 --> 00:01:37,759 Speaker 1: if that those rates are gonna go up. I mean, 27 00:01:37,760 --> 00:01:42,559 Speaker 1: there's just still more uncertainty surrounding the reopening that. Yes, 28 00:01:42,680 --> 00:01:46,679 Speaker 1: we're huge in China because of the potential, but we 29 00:01:46,680 --> 00:01:49,040 Speaker 1: we we just want to be very cautious at this point. Still, 30 00:01:50,000 --> 00:01:53,600 Speaker 1: it seems that some of your preferred strategies have been 31 00:01:53,640 --> 00:01:58,280 Speaker 1: working UM. And one wonders why you think they'll continue 32 00:01:58,400 --> 00:02:01,640 Speaker 1: when you know, many probably think that we're at an 33 00:02:01,640 --> 00:02:04,280 Speaker 1: inflection point here. Uh. And I can just tell our 34 00:02:04,280 --> 00:02:08,720 Speaker 1: our audience just to some you prefer energy, healthcare, and 35 00:02:08,720 --> 00:02:13,639 Speaker 1: and fixed income yes, um, and we still very much 36 00:02:13,919 --> 00:02:19,079 Speaker 1: like energy UM and and and healthcare and also defensive 37 00:02:19,160 --> 00:02:22,839 Speaker 1: value stocks. UM. You know, I think in general it's 38 00:02:22,840 --> 00:02:27,280 Speaker 1: gonna be long ways before we can reach uh kind 39 00:02:27,320 --> 00:02:30,920 Speaker 1: of more lower inflation, which is the FED is you 40 00:02:30,919 --> 00:02:33,840 Speaker 1: know that's their target. So were rates is going the 41 00:02:33,880 --> 00:02:36,160 Speaker 1: next you know, this this month, because we're gonna see 42 00:02:36,160 --> 00:02:37,600 Speaker 1: a lot of that. We're gonna see cp I come 43 00:02:37,600 --> 00:02:40,240 Speaker 1: out tomorrow, We're gonna see you know, h the Fed 44 00:02:40,280 --> 00:02:44,560 Speaker 1: meeting having a decision for December Wednesday. So we we 45 00:02:44,680 --> 00:02:47,120 Speaker 1: believe even whether rates are going to go up tippy 46 00:02:47,160 --> 00:02:50,040 Speaker 1: basis points or seventy five basis points, um, you know, 47 00:02:50,040 --> 00:02:52,040 Speaker 1: there's going to be that lag effect on the economy, 48 00:02:52,080 --> 00:02:56,160 Speaker 1: and we are expecting a lower economy um flower earnings. 49 00:02:56,200 --> 00:02:58,799 Speaker 1: So we still like to focus on the defensive and 50 00:02:58,880 --> 00:03:02,680 Speaker 1: value of vectors. So in terms of the pace of 51 00:03:02,760 --> 00:03:05,040 Speaker 1: hikes going ahead, we know they're probably going to be smaller. 52 00:03:05,120 --> 00:03:06,760 Speaker 1: But how long are they going to go on? For 53 00:03:09,560 --> 00:03:12,800 Speaker 1: the page? I mean that you know, it's really hard 54 00:03:12,880 --> 00:03:15,639 Speaker 1: to predict at this point. It's a kind of too 55 00:03:15,639 --> 00:03:18,400 Speaker 1: early to signal about where the end of the hiking 56 00:03:18,440 --> 00:03:21,640 Speaker 1: cycle is or how you know how or the pace 57 00:03:21,720 --> 00:03:25,480 Speaker 1: of the hiking cycle. But I think it's gonna depend 58 00:03:25,720 --> 00:03:29,880 Speaker 1: still on a couple very important data points, and that's 59 00:03:30,000 --> 00:03:32,720 Speaker 1: you know, the job data and the service sector survey. 60 00:03:33,120 --> 00:03:38,000 Speaker 1: I mean, until those numbers can can starts to lead 61 00:03:38,040 --> 00:03:42,120 Speaker 1: to a lower inflation, we just don't see um of 62 00:03:42,200 --> 00:03:47,000 Speaker 1: fed pivoting or or slowing down the cycle, you know, 63 00:03:47,080 --> 00:03:49,080 Speaker 1: and even if it does, I mean, we still have 64 00:03:49,200 --> 00:03:52,000 Speaker 1: to deal with a slower economy and in slower and 65 00:03:52,360 --> 00:03:54,720 Speaker 1: started and in the beginning of next year, so we 66 00:03:54,800 --> 00:03:57,000 Speaker 1: see some of the fund of mental challenges of higher 67 00:03:57,040 --> 00:03:59,880 Speaker 1: rates and slowing growth. This will linger into two twenty three. 68 00:04:01,360 --> 00:04:04,360 Speaker 1: So you work with ultra high net worth individuals, and 69 00:04:04,400 --> 00:04:07,800 Speaker 1: this creates a kind of interesting dichotomy. Um, some of 70 00:04:07,800 --> 00:04:12,200 Speaker 1: those individuals that you you work with, our technology entrepreneurs, 71 00:04:12,760 --> 00:04:15,560 Speaker 1: and yet you're you're not very positive on technology at 72 00:04:15,560 --> 00:04:18,800 Speaker 1: the moments when one of the least preferred areas for you. 73 00:04:19,160 --> 00:04:21,080 Speaker 1: But what I'm curious about is what do they think? 74 00:04:21,120 --> 00:04:24,120 Speaker 1: I mean, are they are they doubling down on technology 75 00:04:24,120 --> 00:04:28,840 Speaker 1: with their private investments or are they cautious? I think 76 00:04:28,839 --> 00:04:32,080 Speaker 1: a lot of technology entrepreneurs are very you know, they 77 00:04:32,600 --> 00:04:35,240 Speaker 1: believe in a company. Uh you know, some some of 78 00:04:35,240 --> 00:04:37,239 Speaker 1: them started a company, some of them are very early 79 00:04:37,400 --> 00:04:41,480 Speaker 1: employees of the company. I think, Um, it's hard for 80 00:04:41,520 --> 00:04:45,040 Speaker 1: a lot of technology technology entrepreneurs to diversify. I mean, 81 00:04:45,080 --> 00:04:48,160 Speaker 1: I've always been a challenge because they believe in what 82 00:04:48,200 --> 00:04:50,960 Speaker 1: they do so much right and it's hard to see 83 00:04:50,960 --> 00:04:55,000 Speaker 1: that in a bigger macro economic environment. So, you know, 84 00:04:55,080 --> 00:04:57,479 Speaker 1: part of our job is to have them you know 85 00:04:57,560 --> 00:05:03,080 Speaker 1: kind of um, you know, kind basically lessen their holdings 86 00:05:03,200 --> 00:05:06,040 Speaker 1: UM you know, so they can do risk UM and 87 00:05:06,080 --> 00:05:08,920 Speaker 1: eventually look at other areas that maybe they don't know 88 00:05:09,200 --> 00:05:13,440 Speaker 1: as much energy, healthcare, UM and other you know, type 89 00:05:13,440 --> 00:05:16,320 Speaker 1: of defensive sectors and be able to kind of de 90 00:05:16,520 --> 00:05:22,359 Speaker 1: risk some of their concentrated holdings in technology and or 91 00:05:22,560 --> 00:05:26,760 Speaker 1: for see down the track where you might recommend technology stocks. 92 00:05:26,760 --> 00:05:28,400 Speaker 1: Do you feel the tide is starting to turn on 93 00:05:28,400 --> 00:05:34,640 Speaker 1: the Sammy's picture. I think Simmy's are still gonna be challenging. 94 00:05:35,160 --> 00:05:39,200 Speaker 1: UM tech in general, the evaluation is still overstretched, is 95 00:05:39,240 --> 00:05:42,200 Speaker 1: a lot cheaper than it was UM and, but it 96 00:05:42,279 --> 00:05:45,520 Speaker 1: could could go down more just because of the given 97 00:05:45,520 --> 00:05:49,360 Speaker 1: them conditions of where rates are and a floor economy 98 00:05:49,400 --> 00:05:51,680 Speaker 1: going into two thousand twenty three. Still the challenges are 99 00:05:51,760 --> 00:05:54,719 Speaker 1: still there in technology, but certainly there are gonna be 100 00:05:55,400 --> 00:05:57,880 Speaker 1: you know, very high quality stocks in tech that you 101 00:05:57,920 --> 00:06:01,640 Speaker 1: can look into and you can you know, invest, but 102 00:06:02,279 --> 00:06:03,960 Speaker 1: it needs to be for an investor that has a 103 00:06:04,000 --> 00:06:07,400 Speaker 1: long term horizon like three or five years. It's not 104 00:06:07,480 --> 00:06:09,880 Speaker 1: going to turn around that quickly. And you know, and 105 00:06:09,960 --> 00:06:12,400 Speaker 1: with everything that's happened right now, we don't have decided 106 00:06:12,400 --> 00:06:14,880 Speaker 1: to come into you save us anymore. Right we are 107 00:06:15,160 --> 00:06:19,240 Speaker 1: you know, we're going into a higher rate environment. So um, 108 00:06:19,480 --> 00:06:21,920 Speaker 1: we actually we are already in the higher rate environment. 109 00:06:22,279 --> 00:06:26,240 Speaker 1: So I think, um, technology sector is We're cautious, you know, 110 00:06:26,360 --> 00:06:29,200 Speaker 1: we definitely think you know, it is a sector will 111 00:06:29,240 --> 00:06:31,839 Speaker 1: that that will come back. Growth will come back, you know, 112 00:06:32,080 --> 00:06:35,080 Speaker 1: if the strategy of tech and growth is not uh 113 00:06:35,560 --> 00:06:37,919 Speaker 1: will come back. But you know, in the in the meantime, 114 00:06:37,960 --> 00:06:40,440 Speaker 1: the near term, there's still a lot of uncertainty and 115 00:06:40,960 --> 00:06:45,440 Speaker 1: and we still prefer uh, you know, defensive and value sectors. 116 00:06:46,640 --> 00:06:50,120 Speaker 1: You've said that you see a short mild recession in 117 00:06:50,120 --> 00:06:53,440 Speaker 1: in the Eurozone. How would you characterize what's coming in 118 00:06:53,480 --> 00:06:59,960 Speaker 1: the US? I think the US, I mean we are already. 119 00:07:00,080 --> 00:07:02,160 Speaker 1: I mean, there's a lot of debate on whether we're 120 00:07:02,200 --> 00:07:04,719 Speaker 1: in a recession or not in a recession. I mean 121 00:07:05,200 --> 00:07:08,240 Speaker 1: I think we're we it's it's it's a reality that 122 00:07:08,279 --> 00:07:12,679 Speaker 1: our economy it's slowing down and earnings is gonna slow down. 123 00:07:12,760 --> 00:07:15,520 Speaker 1: So I mean, I think investors can call it whatever 124 00:07:15,600 --> 00:07:18,920 Speaker 1: they want, but we are going into a slower market, 125 00:07:19,280 --> 00:07:23,520 Speaker 1: and so um, you know, we we it really depends 126 00:07:23,720 --> 00:07:27,360 Speaker 1: on how our markets. Uh, it's going to kind of 127 00:07:27,360 --> 00:07:30,880 Speaker 1: weather through this. You know, hopefully two thousand twenty three 128 00:07:30,920 --> 00:07:33,520 Speaker 1: won't be as that. Hopefully it will just be the 129 00:07:33,560 --> 00:07:36,280 Speaker 1: first quarter that we're gonna you know, have a lack 130 00:07:36,400 --> 00:07:38,640 Speaker 1: effect and then things will get better. And we are 131 00:07:38,680 --> 00:07:40,480 Speaker 1: predicting that it will get better by a mid of 132 00:07:40,560 --> 00:07:43,800 Speaker 1: next year. So um, you know, I I think we 133 00:07:43,880 --> 00:07:45,800 Speaker 1: just we have to see how how we're going to 134 00:07:45,840 --> 00:07:51,800 Speaker 1: weather do. This is a risk that's on your rightar. Yes, 135 00:07:51,920 --> 00:07:54,760 Speaker 1: that's all that's yeah, that's always something that's there. And 136 00:07:54,800 --> 00:07:57,880 Speaker 1: then also uh, but but we are hoping you mean, 137 00:07:57,920 --> 00:08:00,240 Speaker 1: looking at the numbers and and and and g p 138 00:08:00,560 --> 00:08:05,200 Speaker 1: I and inflation coming cooling down a little bit. Um, 139 00:08:05,280 --> 00:08:08,080 Speaker 1: we hope that you know, inflation will be I mean, 140 00:08:08,440 --> 00:08:10,600 Speaker 1: inflation will be less of a risk next year and 141 00:08:10,720 --> 00:08:13,280 Speaker 1: we'll start to come down. So that will you know, 142 00:08:13,480 --> 00:08:17,560 Speaker 1: meaning a kind of a healthier turn for the economy. Okay, 143 00:08:17,560 --> 00:08:20,640 Speaker 1: Well interesting, Thanks very much for joining us. She Chiao 144 00:08:20,800 --> 00:08:24,120 Speaker 1: has been with this financial advisor and managing director at 145 00:08:24,280 --> 00:08:24,960 Speaker 1: UBS and