Asks what has really changed as a result of the weekend's attacks on Iran, given the already fragile market.
Carol Massar
Michael Contopoulos
It's too soon to tell exactly, but uncertainty is the key word. Wars are never disinflationary or deflationary.
Notes there were already inflationary concerns before the attacks.
Carol Massar
Michael Contopoulos
Inflation was already ticking up meaningfully. Core PCE bottomed in April last year. ISM input prices and PPI suggest higher inflation.
Asks if this could impact midterm elections where voters care about inflation.
Tim Stenovec
Michael Contopoulos
What matters for markets is liquidity and earnings trajectory, not politics. Midterms will be less exciting for markets than most expect.
Asks about major risks, citing warnings from Lloyd Blankfein and Jamie Dimon about parallels to past crises.
Carol Massar
Michael Contopoulos
The stage is set for credit weakness, particularly in illiquid private credit.
Asks about the push for private credit in retirement accounts, calling it democratization of an opaque asset class.
Tim Stenovec
Michael Contopoulos
Democratization of markets is a key makeup of a bubble, similar to gamification of trading.
Asks for investment advice in this moment.
Carol Massar
Michael Contopoulos
Investors should think long-term. Underweight expensive, liquidity-driven assets: long-duration assets, speculative US tech, China. Overweight shorter-duration assets, dividend payers, value, and high-quality fixed income.