Some but not enough. Geopolitical risk premium could go meaningfully higher given military buildup and threats to Strait of Hormuz.
Asks how high oil could go if conflict breaks out, given oversupply.
Paul Ellen
Mark Franklin
Depends on extent of Strait of Hormuz disruption (20-30% of global seaborne throughput). Meaningful disruption ? spike in short-term prices. No disruption ? muted response.
Asks how positioning US vs other markets amid saber-rattling.
Paul Ellen
Mark Franklin
Diversifying away from US towards EM, Japan, Europe. Broadly risk-supportive macro backdrop: easy financial conditions, procyclical fiscal policy, most central banks easing.
Asks which sectors AI disruption targets next after software/real estate.
Paul Ellen
Mark Franklin
Profound dislocations in legacy economy. Bad: outsourcing commoditized software development at risk as corporates bring AI in-house. Good: productivity gains margin-accretive for many sectors (e.g., financials - labor-intensive manual processes).
Asks about India case study - software stocks battered but traditional stocks outperforming.
Paul Ellen
Mark Franklin
India example of global secular shifts affecting markets differently. Large exposure to outsourced software hurt, but domestic-oriented growth sectors (consumer penetration) fare well.
Asks if H-shares action is sentiment gauge for Chinese equities post-holiday.
Paul Ellen
Mark Franklin
Onshore markets may fare better than offshore HK. Pickup in onshore trade volumes suggests retail re-engagement. HK more susceptible to institutional flows sensitive to policy stimulus uncertainty.