WEBVTT - Bloomberg Surveillance TV: February 9th, 2026 0:00:02.360 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordernt. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.840 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.200 Terminal and the Bloomberg Business app. We begin this hour 0:00:37.240 --> 0:00:40.080 Stops pulling back following the biggest one day rally since May. 0:00:40.360 --> 0:00:43.160 Cameron Dawson of neweged Wealth, writing, for now, we see 0:00:43.200 --> 0:00:48.040 recent market volatility as a positioning evaluation recalibration, not a 0:00:48.080 --> 0:00:50.560 growth scare. Cameron joins us now for more camera. Good morning. 0:00:51.120 --> 0:00:53.880 It did not feel like a positioning recalibration through much 0:00:53.920 --> 0:00:56.120 of last week. All that volatility, and we were down 0:00:56.200 --> 0:00:59.320 just zero zero point one percent on the SMP. What 0:00:59.360 --> 0:01:00.000 was last week? 0:01:00.200 --> 0:01:03.200 Well, at the beginning of every bout of market volatility, 0:01:03.200 --> 0:01:06.080 we always ask ourselves, did anything happen that would cause 0:01:06.120 --> 0:01:09.399 EPs or GDP estimates to get revised lower. If the 0:01:09.480 --> 0:01:12.480 answer is no, it shortens shallow. If the answer is yes, 0:01:12.600 --> 0:01:15.760 it's typically deeper and more protracted. And so as we 0:01:15.800 --> 0:01:18.280 looked at the outlook over the course of last week, 0:01:18.360 --> 0:01:20.560 we thought that the answer to that growth question was no. 0:01:20.720 --> 0:01:22.840 And the way that we got to that is looking 0:01:22.840 --> 0:01:26.000 at something like highield spreads not blowing out. Highild spreads 0:01:26.000 --> 0:01:27.840 are at three hundred and forty eight basis points. 0:01:27.880 --> 0:01:29.040 This is not a bond. 0:01:28.800 --> 0:01:31.479 Market that is freaking out about growth. You also look 0:01:31.520 --> 0:01:37.320 at market leadership. You've had really strong leadership out of industrials, energy, materials, financials, 0:01:37.600 --> 0:01:40.040 all areas of the market that would not be rallying 0:01:40.120 --> 0:01:42.720 if we were really concerned about growth. So the net 0:01:42.760 --> 0:01:45.920 of everything is that it seems to be more about positioning, valuation, 0:01:46.160 --> 0:01:49.360 and sentiment recalibration, not a deeper growth scare Well's. 0:01:49.120 --> 0:01:51.360 Stay on valuation. Could it have a damping of FANCTOM 0:01:51.440 --> 0:01:53.440 valuations through the year ahead. 0:01:53.560 --> 0:01:56.120 Yeah, I think that that is probably the biggest risk. 0:01:56.440 --> 0:01:58.440 If we all sit back and think about all the 0:01:58.560 --> 0:02:01.360 justifications as to why the US equity market should trade 0:02:01.400 --> 0:02:04.040 it twenty two times forward or thirty eight times on 0:02:04.120 --> 0:02:05.040 the cape ratio. 0:02:05.240 --> 0:02:07.600 The argument went that because. 0:02:07.200 --> 0:02:09.359 The components of the S and P five hundred are 0:02:09.400 --> 0:02:12.079 that much more quality than they used to be, because 0:02:12.120 --> 0:02:14.320 of the higher weighting in tech, you have things like 0:02:14.400 --> 0:02:17.360 higher free cash flow margins, higher return on invested capital. 0:02:17.639 --> 0:02:19.399 But if we're starting to ding. 0:02:19.320 --> 0:02:21.760 The outlook for free cash flow margins for the big 0:02:21.840 --> 0:02:25.680 hyper scalers, lower potentially return on invested capital for the 0:02:25.720 --> 0:02:29.440 software names, given AI uncertainty, it raises the question of 0:02:29.680 --> 0:02:33.760 is that justification forever higher valuations something that we should 0:02:33.760 --> 0:02:34.320 push back on. 0:02:34.480 --> 0:02:36.440 Well, and this is the reason why, and we'll get 0:02:36.480 --> 0:02:38.799 to the fundamentals in just a minute. People are saying 0:02:38.880 --> 0:02:41.760 it feels more than just a violent shift in positioning 0:02:41.800 --> 0:02:44.919 that can really revert back. There has been a change 0:02:44.960 --> 0:02:47.680 in the way people view tech companies, how cash rich 0:02:47.760 --> 0:02:49.960 they are, how much they can keep giving dividends, and 0:02:49.960 --> 0:02:52.320 how much they can keep doing share bad buybacks, which 0:02:52.320 --> 0:02:55.200 have been a huge tailwind to this stock market. At 0:02:55.200 --> 0:02:58.040 what point do you see the technicals really turning against 0:02:58.240 --> 0:02:59.400 the US equity market? 0:02:59.520 --> 0:03:01.560 Yeah, I think think it's first important to note that 0:03:01.639 --> 0:03:05.040 at the peak of the growth trade back in November 0:03:05.080 --> 0:03:08.240 of last year, you had max positioning and megacap growth 0:03:08.400 --> 0:03:11.440 and max underweight positioning and cyclical so there has been 0:03:11.480 --> 0:03:15.280 a big, huge positioning recalibration. I think your questions are 0:03:15.360 --> 0:03:18.080 really important because the whole notion is that these are 0:03:18.400 --> 0:03:21.280 very capital late businesses that don't need a lot of 0:03:21.280 --> 0:03:24.040 incremental investment. And if you look at that over the past, 0:03:24.080 --> 0:03:26.160 what you saw is that all of these companies are 0:03:26.160 --> 0:03:29.080 able to grow earnings by double digits without having to 0:03:29.120 --> 0:03:29.919 spend any money. 0:03:30.000 --> 0:03:31.120 That was incredible. 0:03:31.280 --> 0:03:33.839 But now they're growing earnings by double digits, but they're 0:03:33.840 --> 0:03:36.640 having to spend hundreds of billions of dollars to. 0:03:36.640 --> 0:03:37.720 Do so well. 0:03:37.760 --> 0:03:40.080 This raises the issue of the fundamentals, right, And we've 0:03:40.120 --> 0:03:41.840 seen this broadening out trade and you think that it 0:03:41.920 --> 0:03:42.720 might might have legs. 0:03:42.720 --> 0:03:44.560 We see the equal Weight reaching all time. 0:03:44.360 --> 0:03:46.960 Highs even amid the carnage that we're seeing in the 0:03:47.160 --> 0:03:48.120 SaaS coppolps. 0:03:48.200 --> 0:03:49.480 I think I said that correctly. 0:03:49.840 --> 0:03:52.720 Going forward, how much is that broadening out and frankly, 0:03:52.760 --> 0:03:55.760 the entire index going high or crimped by the story 0:03:55.760 --> 0:03:58.200 that's taking place with a fundamental shift in the way 0:03:58.200 --> 0:04:02.200 that tech companies are being valued in front are performing 0:04:02.320 --> 0:04:03.720 and existing in this world. 0:04:03.840 --> 0:04:04.760 Yeah, I think It's. 0:04:04.600 --> 0:04:07.360 Such a fascinating point because if you think about the 0:04:07.520 --> 0:04:11.080 driver of all of this growth within tech spending, which 0:04:11.120 --> 0:04:15.160 is also leading into growth within value sectors, how much 0:04:15.200 --> 0:04:17.799 of this is dependent on some of these software names 0:04:17.839 --> 0:04:21.120 continuing to make investments that would be demand of AI. 0:04:21.279 --> 0:04:23.120 So I think some of this is all just a 0:04:23.160 --> 0:04:23.960 circular reference. 0:04:24.000 --> 0:04:27.599 If we start questioning the KAPEX growth going forward, does 0:04:27.640 --> 0:04:30.039 that also question some of these value rallies that we 0:04:30.120 --> 0:04:32.160 have seen lead the market since November? 0:04:32.360 --> 0:04:34.520 You also talk about how these software companies are the 0:04:34.560 --> 0:04:36.119 ones that are going to be the ones to lead 0:04:36.240 --> 0:04:39.000 when it comes to AI and are the ones that 0:04:39.040 --> 0:04:40.919 have the most to gain. So would this be a 0:04:40.960 --> 0:04:42.560 moment to step in and get. 0:04:42.400 --> 0:04:45.400 Some of those stocks after the accompli. 0:04:44.920 --> 0:04:47.160 Of potentially the most to gain, they have the most 0:04:47.200 --> 0:04:49.880 to lose. But I think if applied properly, they actually 0:04:49.880 --> 0:04:51.440 have a lot to gain given the fact that they 0:04:51.480 --> 0:04:55.800 typically have high headcount, they typically have very strong customer relationships. 0:04:55.839 --> 0:04:58.080 But if they don't move quickly on AI, then they 0:04:58.080 --> 0:05:00.320 have a lot to lose. I think it's important with 0:05:00.360 --> 0:05:02.360 the software names to take a step back and think 0:05:02.360 --> 0:05:05.800 about the technicals because they are very, very oversold. If 0:05:05.800 --> 0:05:07.640 you look at them on a daily, they're oversold. On 0:05:07.720 --> 0:05:10.280 a weekly they're oversold. If you look at them, they're 0:05:10.320 --> 0:05:13.080 now trading at the two hundred week moving average that 0:05:13.080 --> 0:05:15.640 would support back in twenty twenty five, back in twenty 0:05:15.680 --> 0:05:18.000 twenty two, So that would suggest that you have some 0:05:18.160 --> 0:05:20.880 kind of bounce. I think the big question is can 0:05:21.400 --> 0:05:24.760 software regain its leadership coming out of this bounce. I 0:05:24.760 --> 0:05:27.279 think that's a lot more in question, just simply because 0:05:27.279 --> 0:05:30.039 there's all these doubts of things that effectively software companies 0:05:30.080 --> 0:05:33.400 can't disprove at this point, because it's ai risks that 0:05:33.480 --> 0:05:36.080 could be out one, two, three, four years in the future. 0:05:36.160 --> 0:05:38.080 Look at where the leadership's coming from right now. Regional 0:05:38.080 --> 0:05:40.800 bank stocks up every single day through last week on 0:05:40.839 --> 0:05:42.880 the week, up by seven percent, and it wasn't just 0:05:42.880 --> 0:05:45.559 the small names bank for America City JP Morgano somewhere 0:05:45.560 --> 0:05:47.640 between five to six percent through last week. 0:05:47.760 --> 0:05:50.159 What do you think that speaks to deregulation. 0:05:50.760 --> 0:05:53.440 I think it speaks to this question if banks would 0:05:53.480 --> 0:05:55.920 be allowed to grow their balance sheets further, if they're 0:05:55.960 --> 0:05:58.919 allowed to take on more leverage. I think it's fascinating 0:05:58.920 --> 0:06:01.240 that for the banks they have been growing earnings over 0:06:01.240 --> 0:06:03.240 the course of the last two years at a faster 0:06:03.360 --> 0:06:06.960 pace than even prior to the Great Financial Crisis, which 0:06:07.040 --> 0:06:10.479 just suggests that banks have been in an extraordinary period 0:06:10.560 --> 0:06:13.240 of operating leverage as they cut costs and still see 0:06:13.279 --> 0:06:15.760 really strong top line growth. But it also, i think 0:06:15.839 --> 0:06:18.760 is a reflection of this cyclical optimism, because just as 0:06:18.760 --> 0:06:21.760 you saw the regional banks rallying hard, you also saw 0:06:21.800 --> 0:06:24.680 things like transportation stocks rallying hard. And if you look 0:06:24.680 --> 0:06:27.799 at everything within the transportation side of things, you're seeing 0:06:27.839 --> 0:06:30.800 better shipping rates, you're seeing better rejection rates coming out 0:06:30.839 --> 0:06:34.000 of the truckers, You're seeing a demand start to really 0:06:34.120 --> 0:06:38.120 cause a capacity tightening, which all suggests that there's cyclical 0:06:38.240 --> 0:06:41.000 underpinning of a little bit of a fire being lit 0:06:41.040 --> 0:06:42.000 in that part of the market. 0:06:42.040 --> 0:06:43.839 The question, of course, is can it continue. 0:06:43.960 --> 0:06:46.039 Well, let's talk more about that at the index level. 0:06:46.080 --> 0:06:48.080 This is something Jim Reid of Deutsche Bank has raised 0:06:48.120 --> 0:06:50.279 many other people upon during the same question. At the moment, 0:06:50.480 --> 0:06:52.640 can you have the kind of vicious rotation we're having 0:06:52.960 --> 0:06:55.720 over a prolonged period without index level stress. 0:06:56.520 --> 0:06:59.000 If you think of times like twenty twenty two or 0:06:59.040 --> 0:07:01.440 going back to two th thousand to two thousand and two, 0:07:01.480 --> 0:07:04.080 the answer would be no. If the largest weights in 0:07:04.120 --> 0:07:07.480 the market are continuing to come under significant pressure and 0:07:07.640 --> 0:07:11.240 really leading the market lower, then it's really hard for 0:07:11.400 --> 0:07:13.720 names that are a much smaller portion of the market 0:07:13.800 --> 0:07:16.640 to drag the overall index higher. So you could be 0:07:16.680 --> 0:07:20.160 in an environment where index level returns are kind of 0:07:20.200 --> 0:07:23.080 shoulder shrugging and ho hum, but you have very strong 0:07:23.120 --> 0:07:25.560 returns and pockets of the market that are much smaller. 0:07:25.720 --> 0:07:27.560 I think it's an important point as well that you're 0:07:27.560 --> 0:07:31.000 effectively moving liquidity out of very deep liquid parts of 0:07:31.000 --> 0:07:33.880 the market in tech and into much shallower, smaller parts 0:07:33.880 --> 0:07:36.480 of the market in these cyclicals, which can help explain 0:07:36.600 --> 0:07:38.360 some of the magnitude of these upside moves. 0:07:38.520 --> 0:07:40.920 Cameron Dawson of New h Weeth joins us. Now for more, Cameron, 0:07:41.080 --> 0:07:44.320 let's continue this conversation. The sull America trade, you actually 0:07:44.360 --> 0:07:46.720 sing in the data because we're seeing it in the headlines. 0:07:46.800 --> 0:07:47.760 Yeah, definitely not. 0:07:47.880 --> 0:07:50.680 If you look at last year, we saw record numbers 0:07:50.720 --> 0:07:53.640 of influence into treasuries as well as equities, So we 0:07:53.840 --> 0:07:57.280 ended twenty twenty five with record foreign holdings in both. 0:07:57.080 --> 0:07:58.360 Treasuries and equities. 0:07:58.480 --> 0:08:01.360 You saw five hundred billion dollars worth of treasury increase 0:08:01.480 --> 0:08:04.360 in the overall holding. So sell America was definitely the 0:08:04.440 --> 0:08:07.160 narrative last year. It did not play out in practice. 0:08:07.360 --> 0:08:09.680 But it is good to remember that prices are set 0:08:09.680 --> 0:08:12.080 at the margin and there's a great Bloomberg screen that's 0:08:12.200 --> 0:08:14.360 debt go and what you can see is the treasury 0:08:14.360 --> 0:08:15.840 holdings of different countries. 0:08:16.200 --> 0:08:17.880 And for the last thirteen. 0:08:17.520 --> 0:08:20.800 Years, China has effectively cut its treasury holdings in half. 0:08:20.880 --> 0:08:22.640 So this is not a news story. 0:08:22.920 --> 0:08:26.280 The question is do you see less treasury buying from China? 0:08:26.360 --> 0:08:28.920 Do you also see less treasury buying potentially from Japan 0:08:29.040 --> 0:08:32.440 because home yields are higher, and potentially less treasury buying 0:08:32.559 --> 0:08:35.959 from Europe. You've seen a huge increase, a threefold increase 0:08:36.000 --> 0:08:39.400 in treasury holdings from the UK, for example. So could 0:08:39.480 --> 0:08:41.319 you see that at the margin start to come down 0:08:41.360 --> 0:08:42.960 and put pressure up on long term yields? 0:08:43.080 --> 0:08:44.880 Have we already seen that priced in? I mean, I'm 0:08:44.880 --> 0:08:46.880 asking this with respect to how much the Bank of 0:08:46.920 --> 0:08:51.199 Japan and frankly Takaichi is putting pressure on us tenure yields. 0:08:51.280 --> 0:08:54.000 Yeah, I think you have potentially seen some of the 0:08:54.000 --> 0:08:57.520 fiscal worries get priced in early on within Japan, because 0:08:57.520 --> 0:09:00.600 you're seeing the response this morning is not nearly as violent. 0:09:00.920 --> 0:09:03.080 The selloff in bonds is not nearly as violent as 0:09:03.120 --> 0:09:05.640 what we're seeing as the rise in equities. I do 0:09:05.679 --> 0:09:08.480 still think that there's a very little direction within the 0:09:08.520 --> 0:09:11.240 tenure Treasury. It's at four point two percent. All of 0:09:11.280 --> 0:09:13.920 its moving averages are just kind of coalesced in one 0:09:13.960 --> 0:09:17.000 tight area, which says that there's really no conviction within 0:09:17.040 --> 0:09:18.280 the tenure treasury yield. 0:09:18.640 --> 0:09:19.679 If the tenure. 0:09:19.440 --> 0:09:22.640 Treasury believed the equity market and the cyclical rebound, I 0:09:22.679 --> 0:09:24.400 don't think that we would be seeing ten years at 0:09:24.400 --> 0:09:27.200 four point two percent. They'd likely be closer to four 0:09:27.200 --> 0:09:28.000 point six percent. 0:09:28.160 --> 0:09:30.320 Which is the reason why people are looking at Kevin 0:09:30.360 --> 0:09:34.080 worsh the potentially a new incoming Fed SHAIRT should he 0:09:34.120 --> 0:09:37.920 get confirmed or even heard. Secretary Bust had some really 0:09:37.920 --> 0:09:40.520 interesting things to say over the weekend about how it 0:09:40.600 --> 0:09:42.480 was probably going to take about a year or more 0:09:42.720 --> 0:09:46.000 in order to really start to wind down the balance 0:09:46.000 --> 0:09:49.120 sheet in any significant way, and he made some other comments. 0:09:49.240 --> 0:09:50.960 At a time when we're looking at something of a 0:09:51.000 --> 0:09:53.800 Fed Treasury accord or something like that. Do you have 0:09:53.840 --> 0:09:55.320 a sense of what that could look like. 0:09:55.559 --> 0:09:59.280 Yeah, well, we've been joking that they should rebrand quantitative 0:09:59.320 --> 0:10:02.480 easing on a dative freedom in order to be able 0:10:02.480 --> 0:10:06.240 to navigate this balance sheet runoff. I think it's a 0:10:06.240 --> 0:10:09.520 really big question because we know that Treasury wants yields 0:10:09.559 --> 0:10:11.640 to move lower, not just on the front end, in 0:10:11.760 --> 0:10:15.000 order to reduce treasury borrowing costs, which interest expense is 0:10:15.120 --> 0:10:16.480 over one trillion dollars. 0:10:16.520 --> 0:10:18.080 It's larger than defence spending. 0:10:18.120 --> 0:10:19.840 So this is something that they want the front end 0:10:19.880 --> 0:10:22.000 to come down, but they also want the back end 0:10:22.000 --> 0:10:24.200 to come down. They want to have relief within the 0:10:24.240 --> 0:10:27.120 housing market with mortgage rates coming lower, cyclical areas of 0:10:27.160 --> 0:10:30.280 the market getting stimulated by lower long term yields. It's 0:10:30.400 --> 0:10:33.000 really hard to do that in a very pro growth, 0:10:33.120 --> 0:10:37.079 pro stimulus kind of backdrop, which means that it suggests 0:10:37.080 --> 0:10:40.360 in order to accomplish three percent growth and three percent 0:10:40.400 --> 0:10:43.600 treasury yields, you need some kind of treasury market intervention. 0:10:43.760 --> 0:10:46.000 It can't do it alone. So what would that look like? 0:10:46.040 --> 0:10:47.400 And I'm glad you bring this up because just a 0:10:47.440 --> 0:10:49.600 few hours ago, the President actually put on truth Social 0:10:49.640 --> 0:10:52.640 a Bloomberg story talking about a Barclay's note about how 0:10:52.679 --> 0:10:55.640 this president wants to see mortgage rates drop to five 0:10:55.679 --> 0:10:56.560 percent this year. 0:10:56.640 --> 0:10:57.679 Can they actually get to that? 0:10:58.080 --> 0:11:00.640 Well, some of the things are within their control. We 0:11:00.800 --> 0:11:03.720 saw the mortgage buying that was that was pushed through 0:11:03.800 --> 0:11:05.560 back a couple of months ago, and then there's of 0:11:05.559 --> 0:11:08.000 course things that are out of their control. And the 0:11:08.040 --> 0:11:09.840 best way to think about the yield curve is that 0:11:09.920 --> 0:11:11.959 the surer you are in the yield curve, the ward's 0:11:12.000 --> 0:11:15.040 controlled by the FED. As you move longer and longer out, 0:11:15.080 --> 0:11:17.719 it's controlled by supply and demand. The supply side of 0:11:17.760 --> 0:11:19.920 the course is what's going on within the fiscal side 0:11:19.960 --> 0:11:22.960 of things, and the demand side is demand from not 0:11:23.120 --> 0:11:25.520 just domestic owners, but foreign orders. And I think that 0:11:25.520 --> 0:11:27.920 that's one of the big questions that everybody's wrestling with. 0:11:27.960 --> 0:11:28.400 This morning. 0:11:28.520 --> 0:11:31.040 Found a word on Torston slock of Apollo. You saw 0:11:31.040 --> 0:11:32.760 the quote, I'm sure you read it over the weekend, 0:11:32.920 --> 0:11:35.000 right hikes at the end of the athink. That's the conversation. 0:11:35.280 --> 0:11:37.600 Well, if you look at the warp screen, they actually 0:11:37.600 --> 0:11:40.400 have a slight probability of rate heights starting in twenty 0:11:40.480 --> 0:11:43.520 twenty seven. I don't think that This is something that 0:11:43.600 --> 0:11:46.520 worsh will necessarily want to push through, but it is 0:11:46.559 --> 0:11:47.440 a committee vote. 0:11:47.440 --> 0:11:49.760 And think of us going forward in just June. 0:11:50.240 --> 0:11:53.080 If we have this kind of of strong economy where 0:11:53.080 --> 0:11:56.240 we see some reacceleration, are we in an environment where 0:11:56.280 --> 0:11:57.480 the chairs were the. 0:11:57.559 --> 0:11:59.559 Only one blas coming up? 0:12:00.040 --> 0:12:00.760 What about. 0:12:09.400 --> 0:12:11.480 That's turn to the metals market. Some major moves in 0:12:11.520 --> 0:12:13.640 the last week in both gold and in silver the 0:12:13.679 --> 0:12:16.800 Treasury Secretary scale best and also pointing the finger over 0:12:16.840 --> 0:12:18.680 the wild swings in precious metals. 0:12:20.360 --> 0:12:24.160 The gold move things have gotten a little unruly in China. 0:12:24.320 --> 0:12:28.080 They're having to tighten margin requirements. So the gold looks 0:12:28.120 --> 0:12:31.559 to me kind of like a classical specut in below. 0:12:31.240 --> 0:12:34.200 All gold hovering around five k after a stretch of 0:12:34.280 --> 0:12:37.720 historic volatility. Amy, Gareth, Mork and Stanley seeing more upside 0:12:37.720 --> 0:12:40.440 ahead with a bullcase of fifty seven hundred for the 0:12:40.440 --> 0:12:42.559 second half of the year. Amy joins us now for more, 0:12:42.600 --> 0:12:44.880 Amy going to see you. Welcome to New York. Great here, 0:12:45.080 --> 0:12:47.839 wild wild swings not just in gold, but silver too, 0:12:47.880 --> 0:12:50.160 And if we can bring up the silver chart here today. 0:12:50.400 --> 0:12:52.439 The silver chart is one of the most ridiculous things 0:12:52.480 --> 0:12:55.920 I've ever seen. Covering financial markets, a runny of sixty percent, 0:12:55.960 --> 0:12:59.720 and then a complete round trip on what Yeah, Look. 0:12:59.600 --> 0:13:02.640 I think silver you do always expect more volatility. It 0:13:02.679 --> 0:13:06.040 has generally lower liquidity, there's smaller trading volumes going through. 0:13:06.520 --> 0:13:07.520 I think we could say. 0:13:07.559 --> 0:13:10.800 Look, the setup was reasonably supportive in terms of we'd 0:13:10.840 --> 0:13:13.320 eroded a lot of the inventory, and so when somebody 0:13:13.400 --> 0:13:16.120 needs metal immediately and that metal is not available, it 0:13:16.160 --> 0:13:17.960 sort of goes to the highest bidder and the price 0:13:17.960 --> 0:13:20.760 can accelerate very rapidly. And clearly there was an element 0:13:20.800 --> 0:13:23.120 of momentum here as well. And then of course when 0:13:23.160 --> 0:13:26.080 we had that turnaround in both gold and silver, with 0:13:26.160 --> 0:13:30.120 potentially the nomination of wash coming through and some of 0:13:30.120 --> 0:13:32.439 that momentum coming off, you know, it's not surprising we've 0:13:32.440 --> 0:13:34.280 pulled back a long way. I think what we've been 0:13:34.320 --> 0:13:37.360 struggling with is what is the right valuation for silver here? 0:13:37.600 --> 0:13:39.960 And especially when you see, you know, a fifty dollars 0:13:40.000 --> 0:13:42.360 trading range for something that only started the year at 0:13:42.360 --> 0:13:44.640 seventy five dollars. That's quite difficult to do. 0:13:44.800 --> 0:13:46.680 And the Treasury Secretary was porn in the finger at 0:13:46.760 --> 0:13:48.760 China with regards to gold. He said things were getting 0:13:48.760 --> 0:13:52.240 a little unruly in China. Can you translate what does 0:13:52.280 --> 0:13:52.960 it mean by that? 0:13:53.400 --> 0:13:54.000 So I think. 0:13:53.880 --> 0:13:57.560 Definitely there's been an element of momentum and high volumes 0:13:57.559 --> 0:13:59.640 going through and we've seen this across the metals, very 0:13:59.679 --> 0:14:02.400 very high trading volumes in China, and so we've seen 0:14:02.400 --> 0:14:05.280 some sort of controls from the exchanges and position limits 0:14:05.280 --> 0:14:08.360 trying to cab things back into place. We might also 0:14:08.400 --> 0:14:10.880 be seeing a bit of positioning taken off ahead of 0:14:10.960 --> 0:14:13.920 Luna New Year, because things will generally be slowing down there. 0:14:14.240 --> 0:14:17.120 So I think partly that's probably been having a hand here. 0:14:17.120 --> 0:14:19.360 But I think also unsurprising when you get sort of 0:14:19.400 --> 0:14:21.440 a straight line up in metals to have a bit 0:14:21.440 --> 0:14:24.400 of consolidation take a pause, that's not unusual. 0:14:24.720 --> 0:14:26.760 So it seemed like Scott Bessett was talking about the 0:14:26.840 --> 0:14:30.120 hat he's currently blaming this one trader who had an 0:14:30.120 --> 0:14:33.040 incredible slew of losses in China and then fled the country. 0:14:33.200 --> 0:14:35.359 I mean, it just raises the question of how financialized 0:14:35.520 --> 0:14:37.920 some of these metals markets have gotten. The idea that 0:14:37.960 --> 0:14:41.320 suddenly people are turning to precious metals as an alternative 0:14:41.320 --> 0:14:44.360 to things like treasuries, which are a very deep liquid market. 0:14:44.880 --> 0:14:48.400 How comfortable is the gold market? Is this silver market 0:14:48.440 --> 0:14:51.360 with this moniker of an alternative as an attorney to 0:14:51.400 --> 0:14:53.960 be treated as an alternative to full faith and credit 0:14:53.960 --> 0:14:55.440 in the Unitedity's government. 0:14:56.160 --> 0:14:58.320 So I think gold has kind of always had this 0:14:58.440 --> 0:15:00.560 role as a safe hay and traditional so you have 0:15:00.680 --> 0:15:03.960 had yes, financial flows, but also real physical buying from 0:15:03.960 --> 0:15:06.640 central banks, from ETFs, and kind of we're used to 0:15:06.640 --> 0:15:08.880 this sort of flowing gold. I think for silver, because 0:15:08.920 --> 0:15:11.440 it's also got that industrial metal hat, probably this is 0:15:11.440 --> 0:15:14.000 where it's a little more difficult because there are real 0:15:14.120 --> 0:15:16.600 end users who also need silver. So when people are 0:15:16.640 --> 0:15:20.960 suddenly trying to buy quite large volumes for financial reasons 0:15:21.160 --> 0:15:23.400 and then you still have the physical buyers, that's where 0:15:23.400 --> 0:15:26.160 things get a little tense. So gold, I would say, 0:15:26.360 --> 0:15:29.040 should be okay with this silver obviously a lot of 0:15:29.080 --> 0:15:30.200 volatility as we're seeing. 0:15:30.280 --> 0:15:33.000 Then you overlay the fundamentals, which is that every country 0:15:33.000 --> 0:15:35.320 in the world is trying to build up as strategic 0:15:35.360 --> 0:15:37.920 reserves of some metals as well as try to build 0:15:37.920 --> 0:15:40.320 out their infrastructure. We still heard about the vault from 0:15:40.320 --> 0:15:42.880 President Trunk that he wants to stackpile certain metals. Do 0:15:42.880 --> 0:15:44.520 you have a sense of how much there could really 0:15:44.560 --> 0:15:45.520 skew valuations. 0:15:45.600 --> 0:15:46.680 Is that already prosed in. 0:15:47.400 --> 0:15:50.560 Yeah, So I think the stockpiling theme is super interesting. 0:15:50.600 --> 0:15:53.320 So we have as you say, Project Vault launched in 0:15:53.320 --> 0:15:55.720 the US, which is looking for any critical minerals. Now, 0:15:55.760 --> 0:15:58.440 the US critical minerals list is about sixty different metals. 0:15:58.560 --> 0:16:00.560 Some of these are very very small market, some of 0:16:00.560 --> 0:16:03.000 these are much bigger, and so I think we need 0:16:03.040 --> 0:16:05.200 to see what ultimately is going to be top priority 0:16:05.200 --> 0:16:07.840 in terms of stockpiling. I can think, you know, it's 0:16:07.840 --> 0:16:10.240 probably you know, it could be any of those metals, 0:16:10.240 --> 0:16:13.280 but it's the larger ones could be more easily able 0:16:13.320 --> 0:16:16.000 to absorb that stockpiling. You could say for copper, actually, 0:16:16.040 --> 0:16:18.600 already the US has already built quite a large stockpile. 0:16:18.840 --> 0:16:21.840 Last year, the US imported probably two thirds again what 0:16:21.880 --> 0:16:23.840 it would normally need, and most of that is just 0:16:23.920 --> 0:16:26.440 sat in the warehouse system. So actually you could say 0:16:26.440 --> 0:16:28.400 the US may have an incentive to try and keep 0:16:28.400 --> 0:16:30.880 that in the country rather than letting that be exported. 0:16:30.920 --> 0:16:32.600 I was going to ask you about copper too, because 0:16:32.680 --> 0:16:35.920 really this matters with demand in China. How weak is 0:16:35.960 --> 0:16:37.720 the demand is so off the demand right now for 0:16:37.760 --> 0:16:38.840 copper and China. 0:16:39.000 --> 0:16:41.960 Yeah, I think it's remarkable how strong copper has been 0:16:42.040 --> 0:16:44.440 considering what we're seeing in the Chinese demand. And this 0:16:44.520 --> 0:16:46.520 is not a new story. This is something that started 0:16:46.600 --> 0:16:49.640 back in September October time Q four. We saw Chinese 0:16:49.640 --> 0:16:52.920 apparent consumption down around twelve percent year on year. Is 0:16:52.960 --> 0:16:55.600 that really weighing on the sort of total full year 0:16:55.680 --> 0:16:58.760 twenty twenty five demand number. We're going into lunar New year, 0:16:58.800 --> 0:17:02.480 which is where activity typically slows down. So often you 0:17:02.560 --> 0:17:06.400 see the semi fabricators slowing down their activity, but yet 0:17:06.480 --> 0:17:09.240 copper has proved remarkably resilient, which I think tells you 0:17:09.280 --> 0:17:12.160 there's broader macro factors at play. There's this theme around 0:17:12.200 --> 0:17:16.840 the AI trade, stockpiling, scarcity, supply chains, and then also 0:17:16.960 --> 0:17:21.000 these macro overlays of rake cuts still coming through demand 0:17:21.000 --> 0:17:22.520 for real assets from investors. 0:17:22.720 --> 0:17:24.480 WESA mentioned Project Vault. 0:17:24.520 --> 0:17:27.719 What about the fact this administration also has tariffs on 0:17:27.760 --> 0:17:28.680 some of these metals. 0:17:29.359 --> 0:17:31.560 Yeah, so at the moment, you've got your steel and 0:17:31.600 --> 0:17:34.439 aluminium tariffs in place, and what it looks like, if anything, 0:17:34.520 --> 0:17:37.679 is actually the US has been importing less aliminum than 0:17:37.720 --> 0:17:40.240 it needs at the moment, so that would imply actually 0:17:40.320 --> 0:17:43.879 the stocking rather than stocking and copper. We only have 0:17:43.960 --> 0:17:46.919 tariffs on things like copper wire, not on copper itself. 0:17:46.960 --> 0:17:47.880