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Speaker 1: All right, let's get to Eddie. Eddie Lowey is ce

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Speaker 1: IO at may Bank Group Wealth Management. Eddie, these are

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Speaker 1: turbulent times and it's very hard to find reasons to

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Speaker 1: be bullish, particularly in in China, in Europe and in

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Speaker 1: the United States. You've got an inverted yield curve, You've

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Speaker 1: got an economy that looks like it is progressing toward recession,

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Speaker 1: a very aggressive federal reserve, and to the extent that

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Speaker 1: inflation is starting to slow, there's no indications that it

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Speaker 1: will race to the downside. And we're just looking over

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Speaker 1: these these um comments by Scott Miner. I thought we

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Speaker 1: could start off by this because he's actually saying that, uh,

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Speaker 1: and this is sort of loosely citing this rule of

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Speaker 1: twenty where you have markets fairly valued when you have

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Speaker 1: the inflation rate plus the pe equaling twenty and we're

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Speaker 1: much above that right now. Um, do you do you

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Speaker 1: see the possibility? I mean, he's saying you'll see a

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Speaker 1: twenty fall in the SMP five dred by sometime in

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Speaker 1: October your output, right. I think you're right in the

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Speaker 1: sense that I think the anston my cool back group

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Speaker 1: definitely warrants a defensive stance in asset allocation. You know,

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Speaker 1: we have held the view that the market was really

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Speaker 1: premature to President Alta pivot when it rallied in July

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Speaker 1: and early August, and so that view was reinforced by

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Speaker 1: Powell's very pocklished speech at Jackson Pole. Now moving forward,

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Speaker 1: having said that, I think the expectations are now more

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Speaker 1: reasonably priced now, although we are not expecting any positive

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Speaker 1: surprise from on a brick expectation, but I think what

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Speaker 1: is going to be dragging the market is really on

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Speaker 1: growth expectations, especially for corporate learnings. So the debate now

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Speaker 1: is really on whether it's going to be a shallow

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Speaker 1: kind of decline or is it going to be deeper

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Speaker 1: time on the time. And so I think at this

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Speaker 1: juncture we are still on more on the shallow camp.

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Speaker 1: So the twenty percent, I think it's more we'll likely

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Speaker 1: more occur. Uh should we getting deeper than expected growthy

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Speaker 1: Pliner recesstion, What does it mean for the dollar? The

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Speaker 1: dollar strength and how that flows through into Asia when

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Speaker 1: you're continuing to see these outflows, and that's saying indexes

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Speaker 1: around more than two year lows, right, I think the

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Speaker 1: dollar index really surprised US. Actually, uh, it looks a

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Speaker 1: little bit overbought in the near term, although you know,

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Speaker 1: given the fat Hawkers stands, is likely to support the

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Speaker 1: dollar in a possible future, and historically a stronger dollar

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Speaker 1: has worked against Asian markets, so I think that's going

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Speaker 1: to be put a dampener on Asian risk as performance

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Speaker 1: as well. By having said that, we did see more

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Speaker 1: resilience coming out from Salvage Asia Economist this year, especially

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Speaker 1: for Indonesian equities, given the fact that I think the

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Speaker 1: countries are a chievely benefiting from robust moodity exports as

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Speaker 1: well as a consumption activities um. But overall, we do

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Speaker 1: believe that the dollars should stockten um, perhaps towards the

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Speaker 1: year and as the US economy growth becomes more pronounced,

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Speaker 1: and at the same time the yield differential between US

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Speaker 1: and the other global economy is narrow. I wanted to

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Speaker 1: bring up China markets and something we've seen of late,

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Speaker 1: which I think has to be in a sense of

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Speaker 1: negative for Hong Kong and China stocks, that you have

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Speaker 1: these legendary bets getting unwound, Naspers selling down its early

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Speaker 1: ten cents, Steaks, Soft Bank unloading, Ali Baba and Warren

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Speaker 1: Buffett selling me y D. What do you read into that, Well,

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Speaker 1: I mean it's a like different investors cell that you

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Speaker 1: know piled out their stock or sticks for different reasons.

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Speaker 1: But you know the names that you mentioned, they have

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Speaker 1: pl the sticks for a long time. Um, so they

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Speaker 1: may be just looking at their portfolio doing some re adjuncments,

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Speaker 1: you know, and and and uh and and taking some

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Speaker 1: profit off the table as we speak. But for China,

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Speaker 1: we currently still call a new CRAO stands on Chinese equities.

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Speaker 1: You know, we knew, we know that. You know, our

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Speaker 1: market valuation is very is inexpensive given the stele out

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Speaker 1: there with witness over the past top to eighteen months.

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Speaker 1: But having said that, the growth uncertainties, especially with that

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Speaker 1: very stringent zero COVID policy in place, and that's going

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Speaker 1: to put a lid on the up side. And therefore

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Speaker 1: we we we do expect you know, markets that remain

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Speaker 1: pretty chocolate quick follow. Um. Not only that, but I

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Speaker 1: mean it's fair to say that President Shi Jinping is

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Speaker 1: tightening the government's grip on the private sector and that

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Speaker 1: doesn't go well for stocks. Well, yes, I mean the

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Speaker 1: regulatory tightening that started you know since last year. That

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Speaker 1: is definitely uh, you know, putting a lid on the

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Speaker 1: growth rates, especially for the new economy stocks, the giants

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Speaker 1: that the tech giants as we speak, No, but having

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Speaker 1: said that, we are actually seeing reducing intensity of regulatory tightening.

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Speaker 1: It's not going to go away, but the company is

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Speaker 1: the private companies are just going to have to adapt

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Speaker 1: and live with just a new regulatory regime, right uh.

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Speaker 1: And I we do believe that the innovation capabilities of

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Speaker 1: these companies are still there, and I don't think the

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Speaker 1: government is really out there to kill it, given especially

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Speaker 1: when given the fact that these companies are increasingly becoming

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Speaker 1: an important component of the economy and they do employed

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Speaker 1: quite a fab fabric of people. And we have already

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Speaker 1: hurt news that you know, the lights of Tencent and

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Speaker 1: Baba looking to cut jobs, so you know, doing over

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Speaker 1: killing it. I think that's going to be an unemployment

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Speaker 1: issues which I think the government wants to the boy

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Speaker 1: we've been talking about your thoughts there on on China.

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Speaker 1: I want to get your thoughts in terms of what

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Speaker 1: you're saying in the Japanese equity picture. When you've got

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Speaker 1: the year this nineteen ninety eight level, and of course

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Speaker 1: more speculation that you could see some intervention here, right.

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Speaker 1: I think the Japanese stock market, if you look at

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Speaker 1: the negative to five, they have actually held up a

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Speaker 1: little bit that expected compared to the likes of SMP

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Speaker 1: five hundred and as well as you know the European markets.

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Speaker 1: But if you take into account of the currency in

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Speaker 1: dollar terms, they obviously Japanese equities have not done well.

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Speaker 1: Given the fact that you know, yen has retreated to

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Speaker 1: twenty four year high against the dollar, I think we

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Speaker 1: are now looking at above the one forty level. The

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Speaker 1: problem I guess with the yend you know, our Japanese

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Speaker 1: is that the boj has been you know, very dubblish,

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Speaker 1: and they do not really have the Bank Santra that

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Speaker 1: does not really have an urgency to tighten manfer policies

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Speaker 1: like the fact or the e c B because of

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Speaker 1: the fact that inflation is still pretty benign in Japan.

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Speaker 1: And I think the talk was that the talks are

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Speaker 1: that you know, the BOG is lightly unlikely to move

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Speaker 1: really until Croda, the central bank governor Cluda, steps down

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Speaker 1: early next year. So I think that Neil differential is

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Speaker 1: still going to keep yen week for the time being. Uh.

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Speaker 1: And that's going to you know, the fact that that

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Speaker 1: the performance of the currency. Having said that, you know,

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Speaker 1: a week agen bods well for Japanese exporters, Yeah exactly.

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Speaker 1: I mean it's within their power to make a change

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Speaker 1: if they want, not by intervention, but just ditch y

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Speaker 1: c C. You know, these yield curve control is keeping

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Speaker 1: those yields low. If those yields go up, the yen

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Speaker 1: will strengthen, right, So I mean they can't really complain

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Speaker 1: too much. This is their own policy decision. Yeah, yeah, exactly.

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Speaker 1: But I think I think it's just as I mentioned,

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Speaker 1: you know, they they that is that seems to be

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Speaker 1: this reluctant is really to to do any major changes

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Speaker 1: at this juncture. And and because of the fact that

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Speaker 1: inflation is really still quite i would say, but now

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Speaker 1: within Japan compared to the other major economy, so there

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Speaker 1: is really no agency for them to do so. Indonesia

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Speaker 1: and our performer at these records, how much for the

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Speaker 1: upside do you see there? Right? I think Indonesia is

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Speaker 1: one of the few markets that we are posted on

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Speaker 1: since the beginning of this this year. Uh. And we're

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Speaker 1: glad that there's the call has turned out pre okay

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Speaker 1: for US. Um if we look at the economy, Um, yes,

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Speaker 1: as I mentioned commodities, I think that has been a

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Speaker 1: key driver. Maybe some of the tail winds are fading,

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Speaker 1: but on top of that we still have that, you know,

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Speaker 1: consumption activities being boosted by reopening, and of course tourists

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Speaker 1: are actually going back to Indonesia as we speak, as

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Speaker 1: the country we opened uh their borders, right, So so

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Speaker 1: we do believe that the market performance will still be

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Speaker 1: supported in the near term by these are robust micro conditions. Um.

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Speaker 1: There is some optic and inflation. The BI that's actually

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Speaker 1: taken a step to title monetary policies, but not to

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Speaker 1: a bessively yet to kill growth. I think time valuation

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Speaker 1: is still pretty inexpensive, so I think that's still pretty

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Speaker 1: good risk of one as we speak, Eddie, am I

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Speaker 1: too overly confident If I just say, never mind what

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Speaker 1: the Fed says, I'll just watch real rates. If inflation

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Speaker 1: comes down you know two around four percent and and

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Speaker 1: the FED funds rates above that, we got negative rates

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Speaker 1: on long stocks. Well, I think rates is definitely something

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Speaker 1: that has a very significant impact on the mark that

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Speaker 1: uh you know. And when we look at the beginning

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Speaker 1: of the UH, when we look at how the fat

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Speaker 1: fund futures are pricing in fat fund fair fund rates,

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Speaker 1: they're they're looking at below one percent right now. Is

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Speaker 1: actually present two more than I think, it's about three

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Speaker 1: point five percent as we say, see I May Bank

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Speaker 1: Group Wealth Management. We're gonna have to live it there.

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Speaker 1: Thank you as always,