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Speaker 1: Let's get to Katherine Kaminski, our guests for the half hour.

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Speaker 1: Katherine is chief research strategist also a portfolio manager at

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Speaker 1: Alpha Simplex Group. She joins from Boston. Catherine, glad you

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Speaker 1: could be with us. Let's talk about the interest rate story.

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Speaker 1: I think we have to begin there. Looks like a

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Speaker 1: vice chairl brainer is kind of the laying setting the table,

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Speaker 1: so to speak, for a moderation in the size of

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Speaker 1: these rate hikes. This is something though that the market

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Speaker 1: has been expecting, right. Yes, we've seen a lot more

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Speaker 1: I mean, I'm coming from the momentum side. We've seen

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Speaker 1: a lot more dissipation and signals. We've also seen that

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Speaker 1: the strength of what has been one of the greatest

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Speaker 1: trends of this year has come down some, especially volatility

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Speaker 1: and bonds has increased as well. So you're starting to

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Speaker 1: see um some dissipation of that narrative. And I think

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Speaker 1: for us, it's really the difference between the shorter term

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Speaker 1: view and the longer term view for for interest rates

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Speaker 1: that is really sort of at odds right now. So

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Speaker 1: we're seeing a lot of evidence that the economy is slowing.

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Speaker 1: I mean, whether you look at the real estate market,

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Speaker 1: housing sales activity is down, home prices are down. Today,

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Speaker 1: we got news that Amazon is planning to cut about

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Speaker 1: ten thousand jobs, just one example. We're seeing a lot

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Speaker 1: of concern about the strength of the economy in the

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Speaker 1: new year, and maybe corporates are beginning to act a

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Speaker 1: little preemptively and anticipate a lot more weak demand going forward.

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Speaker 1: Has this been adequately reflected? Do you think inequity prices

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Speaker 1: right now when you consider the earnings part of the story? Yeah,

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Speaker 1: I think this is where the longer term view is

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Speaker 1: kind of looking like we have to continue fighting inflation

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Speaker 1: and getting there um. But the shorter term view is

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Speaker 1: a lot of people have money on the sidelines, a

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Speaker 1: lot of people have been waiting, um to see, you know,

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Speaker 1: could this get better? Um? So I think that's where

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Speaker 1: there's a mismatch in time horizons. I mean, clearly the

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Speaker 1: FED is thinking this very through gathering data points, and

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Speaker 1: when they say soon, I unfortunately think that soon is

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Speaker 1: not the same soon at the market things. The market

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Speaker 1: thing soon is tomorrow sometimes, So that's one thing to

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Speaker 1: think about from that perspective. So if we can agree

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Speaker 1: that the FED may adjust the pace or the magnitude

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Speaker 1: of these radio increases somewhat, I'm wondering if we can

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Speaker 1: make a call on the dollar because for a lot

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Speaker 1: of these multinationals, the dollar has been a big headwind.

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Speaker 1: Oh yes, I mean that has been probably the most

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Speaker 1: surprising trend to me this year, because, as you know,

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Speaker 1: the dollar generally is more rangebound then UM some of

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Speaker 1: the other assets that we trade. And I think it

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Speaker 1: is continued to a degree that I didn't expect UM.

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Speaker 1: And this is clearly putting pressure on many other currencies,

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Speaker 1: and so you may see some reversion. You've already seen

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Speaker 1: it last week, UM, But it's going to really come

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Speaker 1: to whether or not the fed UM is more aggressive

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Speaker 1: or not UM. And if they end up being more

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Speaker 1: aggressive than people think, then I think the dollar could

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Speaker 1: rage back a little bit more. Again. So I referred

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Speaker 1: to the story on China. Last Friday, we had some

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Speaker 1: sweeping relaxations of controls, not only on the property market

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Speaker 1: but COVID policy as well. Look at the market in

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Speaker 1: Hong Kong Friday, the Hanks Hang was up seven point

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Speaker 1: seven percent. Yesterday we gained about one point seven percent,

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Speaker 1: but the market in Hong Kong finished off the best levels.

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Speaker 1: Is it a time to look at em particularly in Asia.

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Speaker 1: If you can kind of establish the notion that maybe

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Speaker 1: maybe China's economy is going to begin to recover soon,

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Speaker 1: that's a good point, I mean. And if you look

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Speaker 1: at the relative size that you saw on e M

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Speaker 1: versus the US, I mean, it's pretty it's a pretty

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Speaker 1: big difference. I mean, and you've really seen a lot

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Speaker 1: of a lot of value taken out of some of

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Speaker 1: those innesses. So it could be an interesting point right

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Speaker 1: now to reinvest. And I think that's probably why you're

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Speaker 1: seeing a lot of investors do that, um, because they're thinking,

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Speaker 1: you know, it could be a good time to see

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Speaker 1: the tides term. Yeah, looking at this GDP number that

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Speaker 1: we got out of Japan a short while ago, negative

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Speaker 1: one two percent, I'm just wondering in my own mind

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Speaker 1: whether this reflects the weakness of the Chinese economy. Because

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Speaker 1: Japan does rely on China, it exports a great deal

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Speaker 1: into that economy. So I think it's fair to say

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Speaker 1: that so much of the world, particularly the Asia Pacific,

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Speaker 1: relies on a very very strong China. And it seems

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Speaker 1: as though now that we're on the other side of

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Speaker 1: the Party Congress, Beijing has got that message, and and

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Speaker 1: maybe a small modification in the COVID policy as well

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Speaker 1: could help out. But if is there a segment of

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Speaker 1: the Chinese market that you would look to put money

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Speaker 1: to work? And yet we were talking yesterday about some

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Speaker 1: of the relaxations that the property market may benefit from,

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Speaker 1: and I'm wondering whether or not there are segments like

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Speaker 1: property that I have been so decimated that you feel like, Okay,

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Speaker 1: I'll take a liar and I'll put some money to

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Speaker 1: work there. I mean, I think that's a good point

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Speaker 1: for us. It's probably something more of a commodity story. Um,

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Speaker 1: anything linked to commodities and anything linked to a resurgence

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Speaker 1: in demand is going to mean positive opportunities, whether it's

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Speaker 1: outside China or inside China. So I think that's something

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Speaker 1: that I would probably want to think about. We're still

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Speaker 1: not seeing that yet. I mean, we're still seeing um

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Speaker 1: lack of demand for things like oil and other products.

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Speaker 1: So I think eventually you're going to start seeing some

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Speaker 1: some sectors that have been much more affected by this

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Speaker 1: situation coming back. So I guess it's good to see

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Speaker 1: that there is some chance of a buying opportunity right now. Yeah,

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Speaker 1: and to your point. Today, OPEC cut it's demand outlook

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Speaker 1: for global crude, and we were down quite a bit

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Speaker 1: in New York trading, and we were weaker still here

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Speaker 1: in the electronic session around w T I I want

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Speaker 1: to get your take on crypto. Maybe you don't play

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Speaker 1: in the space, Okay, I get it. But in terms

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Speaker 1: of the psychological impact when you have a crypto chaos

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Speaker 1: story that's been kind of playing out now for it

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Speaker 1: seems like days and days and a major meltdown in

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Speaker 1: one of the key crypto exchanges, how do you read

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Speaker 1: this in terms of its impact on overall market psychology. Well,

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Speaker 1: I think it's been a really interesting environment for that

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Speaker 1: because a lot of people started asking us before these situations,

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Speaker 1: is crypto a safe haven asset? And it's kind of

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Speaker 1: funny when you think about it at this point now

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Speaker 1: that it's just an asset that is highly volatile, and

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Speaker 1: volatility goes both directions, UM, and I think this is

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Speaker 1: what we're starting to see is that there are a

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Speaker 1: lot of cracks and this is something that's new to

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Speaker 1: a lot of investors. So volatility is something that needs

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Speaker 1: to be respected. UM and this story is just sort

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Speaker 1: of a reminder of that for those of us in

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Speaker 1: the space. So maybe we need some more regulation. Maybe

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Speaker 1: there is some correction that will come to kind of

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Speaker 1: bring order and stability to the market. But talk to

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Speaker 1: me a little bit about the application of blockchain, digital currencies, cryptocurrencies.

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Speaker 1: Is this something that's going to have kind of lasting,

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Speaker 1: durable impact on on the global economy. It certainly will,

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Speaker 1: but there's gonna be a lot of mishaps along the way,

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Speaker 1: and I think these are the moments where you remember

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Speaker 1: that you know, new technologies, new new ways of investing

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Speaker 1: have to be tried out, and you have to figure

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Speaker 1: out how do you manage these types of assets. I mean,

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Speaker 1: I think there's always a lot of excitement and innovation,

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Speaker 1: but along the way, it's not a straight line, and

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Speaker 1: you're going to see um people who kind of are

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Speaker 1: lured in by something that sounds too good to be true,

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Speaker 1: too good to be true, it sounds that way, it

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Speaker 1: probably is. Uh, Katherine, thank you so much for joining

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Speaker 1: with us. Katherine Kaminski, chief research strategist portfolio manager at

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Speaker 1: Alpha Simplex, joining us here on debreak Asia