Stocks Hit Record High on Jobs as Chipmakers Surge

0:00 Do you see the momentum continuing?

0:01 That's a a timing question.

0:03 What I see is that the macro is very resilient,

0:06 and there's no reason for the stocks to turn down

0:09 for as long as we have such a resilient macro economy.

0:11 We have, of course, AI is super powerful.

0:14 You know, I I'm starting to think that AI feels a little bit like QE.

0:18 It's it's almost like unconditional liquidity coming to the market all the time.

0:23 What we can cause too much Liquidity too much.

0:26 Cause problems.

0:26 Exactly.

0:27 And that's the conversation we wanna have

0:29 with our clients is don't get lulled into it.

0:32 But that that brings up a lot of questions

0:34 about the association or the the ramifications of increased productivity,

0:37 and that has to do with fewer people.

0:39 And if there are fewer people needed, then fewer people will be working in it.

0:44 Opens up this whole question about what that economy ends up looking like.

0:48 Yeah.

0:48 Absolutely.

0:48 I think I mean, honestly, this is really still far out.

0:51 So we're gonna take it one after the other.

0:54 For now, what we're seeing and you can't disentangle, you know,

0:57 the the normal economy with what's already coming from AI,

1:00 But what you see is unemployment rates are still low.

1:03 The growth is still strong.

1:05 And so we let let's take it one at a time.

1:08 Are you talking unemployment US Unemployment US.

1:11 And, you know, on this, you you have to also put against

1:13 the the AI trend that's allegedly gonna take out so many jobs.

1:17 The fact that the demographics in most parts of the the world,

1:21 let's say, the developed world, they're also pretty negative.

1:24 So I'll I'll I'll wait and see a little bit on this one.

1:27 Christine, you guys are a global wealth management firm.

1:30 You're based in Switzerland.

1:31 Right?

1:32 And I'm just curious.

1:33 You know, I'm looking at the MSCI World Index up about 7% year to date.

1:37 World index, x US up about six and a half percent.

1:41 S and P is up 8% year to date.

1:43 The Nasdaq one hundred's up 15% year to date.

1:46 Emerging markets are up 22% year to date.

1:48 I didn't even break it down in terms of European markets and so on and so forth.

1:52 You can presumably look at the world.

1:54 Which parts of the world do you like the most?

1:57 What what I like the most?

1:59 Diversification.

1:59 Honestly, that is the conversation to be had.

2:02 So what is diversification from a global perspective?

2:05 So so I'll tell you what what is the conversation

2:07 that I wanna have with the clients is about three c's,

2:12 concentration, currency, custody.

2:13 And the concentration is that we have one of the largest market in the world,

2:20 The US equity market, which has a third of its valuation in seven stocks.

2:24 That's a historical high.

2:25 Mhmm.

2:26 And that trend is so powerful that you actually find it.

2:30 It ripples into other asset classes.

2:32 You have corporate debt from tech firms now.

2:35 You know, when I left managing fixed income, there was no debt from tech firms.

2:39 That's right.

2:40 Now there is actually quite a substantial problem, though?

2:42 I mean, great the debt markets largely seem to like it.

2:46 Yeah.

2:46 Right?

2:46 Their investor interest, but I do get a little nervous.

2:49 These guys have deep pockets, lots of money.

2:51 I don't know.

2:51 It's you know, it's not a problem per se.

2:53 It's just as an investor, investor,

2:55 you you you don't wanna have all your eggs on one theme only.

2:58 So pick your theme.

2:59 And if I picked one,

3:01 I'd pick the equity part probably for the AI because that's it's a growth story.

3:05 So underweight or overweight US?

3:07 Oh, what did you say?

3:08 Underweight or overweight US?

3:11 Neutral?

3:11 Can I say that?

3:12 You can say neutral.

3:13 I Yeah.

3:14 I'd say neutral, to be honest.

3:15 I'd say neutral, but I wouldn't be on the weight.

3:18 So it's it's a neutral positive for some of you.

3:21 So are you then skewed?

3:22 Because I know what you said about market concentration here in The US,

3:24 but you like the AI play.

3:26 So are you skewed though towards those big tech names?

3:29 I'm this is not in a sense I mean,

3:33 that is a very it's a very hard call to be made.

3:35 I think what I'm skewed toward is saying the macro theme is real.

3:39 Okay.

3:39 You don't wanna over concentrate around that.

3:41 Oh, okay.

3:42 And that are the this is precisely the conversation we're

3:45 having with the clients is where do you express that view,

3:48 how much, and what other asset classes,

3:51 other geographies, other currencies you wanna hold.

3:54 Because, ultimately, remember, the key call for your wealth is

3:58 how you allocate across asset geographies, etcetera.

4:01 It's the under most underrated call.

4:03 Even in the with the decline of energy prices

4:05 that we've seen in in the past few days,

4:07 oil is still up more than 65% this year.

4:11 Could that derail what you view as a resilient macro environment?

4:16 It it could if it lasts long enough, and I don't have I don't know.

4:19 You're gonna ask me how long is this too long.

4:22 Yeah.

4:22 I don't know either.

4:23 We'll know.

4:24 We'll know what is.

4:25 We'll know what that is.

4:26 We'll we'll see it.

4:27 In Europe, certainly,

4:28 in Asia to this conflict that was started by The US and Israel,

4:33 they are feeling the pain more than we are.

4:36 Yes.

4:36 It it that's true in terms of the energy dependency.

4:39 I would say the consumer headlines might actually

4:42 be stronger in The US because of the tank,

4:44 you know, price on the tank, which is always a very sensitive topic in The US.

4:49 But, yes, you're right.

4:50 And and the longer it lasts, the more it will have an impact on the economy.

4:55 Is there another market that you like, though?

4:57 I am curious.

4:58 Like, we've talked a lot about defense spending

5:00 that seems to be increasing throughout Europe and other places.

5:03 You like it.

5:04 It's very clear.

5:05 You do like The US market, but you're kind of neutral.

5:09 I like the I like the fixed income as well, to be honest Okay.

5:12 Because I didn't buy that argument in 2022.

5:15 This is the 6040.

5:16 I think it was just the I feel like it never goes away even if

5:19 people talk about It was a nice reminder that, you know, rates can go up.

5:23 And in that period, when you cool the economy,

5:25 everything goes down at the same time.

5:27 Doesn't mean you don't we wanna do without.

5:29 And the other part that I like is is can

5:30 you do something with the the volatility in the market?

5:33 And I think you can.