Market Update: U.S. recession outlook and risks
Check out the highlights of this year's second edition of Market Update livestream, having Alejandro Estevez-Breton, our Chief Fixed Income Strategist, and Bernardo Tenreiro Dutra, U.S. Economist at Itaú BBA as guests.
Por Itaú Private Bank

Last Wednesday, February 16, we held our "Market Update" meeting, a monthly livestream about global markets hosted by Marcelo Aagesen, Head of Global Markets, and Niraj Patel, Chief Equities Strategy, both from Itaú Private Bank international.
In this edition, Alejandro Estevez-Breton, Chief Fixed Income Strategist, and Bernardo Tenreiro Dutra, U.S. Economist from Itaú BBA were invited to talk about US recession outlook and risks. Check out the highlights below.
Recession Outlook, U.S. Economy
Global Scenario
Main risks for the global economy:
- The war between Russia and Ukraine, a possible cause of a gas supply problem in Europe, which could create a global recession;
- The pace of China's recovery, following the end of the zero Covid policy, which could impact the scenario if too slow or too fast;
- The levels of inflation, not only in the U.S., but in developed and emerging countries, with central banks reacting and raising interest rates.
These were the risks mapped as indicators of a stronger economic downturn since 2022. Now the first two topics have diminished, the war has stabilized, and the pace of recovery of China's economy is within expectations.
However, the risk of inflation remains.
About a possible conflict between the U.S. and China regarding Taiwan, the expectation is that it will not have a significant impact on the global scenario.
Soft landing vs. hard landing
How will the economy recover? Leaving aside black swans, i.e. improbable events like the one caused by Covid-19, there are two different perspectives on the pace of the U.S. economy recovery: soft landing or hard landing.
In the first case, this means that the Federal Reserve (Fed) will be successful in controlling inflation by slowing activity or even triggering a mild recession.
In the case of a hard landing recovery, controlling inflation would require a bigger drop in activity, with a more significant increase in unemployment, which could even cause a crisis.
There is also a third possible scenario in sight, the ‘no landing’. In this scenario, data would remain very resilient, with no deceleration in inflation. This would mean a further tightening of interest rates before stabilization.
Generally speaking, inflation risks are mapped out and are being increasingly postponed and are now expected for the last quarter of 2023 or even for next year.
Fixed Income x Equities
In the current scenario, riskier assets are doing better. The U.S. Treasury Curve continues to have the recession risk mapped out and is pricing in a soft landing followed by a reacceleration. It is a time when portfolio diversification gains even greater weight.
In the equity market, after a start of the year with more cautious and worried investors, the perspectives are good. The data points to a recovery in consumer spending and stable employment levels.
Companies, and not just Big Techs, are preparing for the slowdown by cutting costs and raising standards, avoiding risks. Layoffs and the advance of artificial intelligence also need to be on the radar, as they impact more cyclical aspects, such as jobs, real estate, among others.
1 00:00:08,580 --> 00:00:11,179 foreign 2 00:00:44,100 --> 00:00:47,280 good afternoon everyone thank you for 3 00:00:45,899 --> 00:00:51,360 joining us for our monthly International 4 00:00:47,280 --> 00:00:52,860 strategy call for February 2023. 5 00:00:51,360 --> 00:00:55,620 we wanted to give everyone an update 6 00:00:52,860 --> 00:00:58,620 before everyone gets ready for Carnival 7 00:00:55,620 --> 00:00:58,620 foreign 8 00:01:23,040 --> 00:01:26,400 for those that are new my name is Raj 9 00:01:24,840 --> 00:01:28,979 Patel and I'm the chief Equity 10 00:01:26,400 --> 00:01:30,840 strategist at editable I'm joined by 11 00:01:28,979 --> 00:01:33,060 Marcella Olson who is the head of global 12 00:01:30,840 --> 00:01:34,439 markets and strategy and as always he 13 00:01:33,060 --> 00:01:35,820 will be the moderator for our 14 00:01:34,439 --> 00:01:39,060 discussions today 15 00:01:35,820 --> 00:01:40,920 we plan to focus on recession risks 16 00:01:39,060 --> 00:01:43,320 it's been a topic for the last 12 to 18 17 00:01:40,920 --> 00:01:44,939 months and it seems like 18 00:01:43,320 --> 00:01:46,740 it's been the most talked about 19 00:01:44,939 --> 00:01:50,100 recession in history 20 00:01:46,740 --> 00:01:51,899 with us we've invited a few guests one 21 00:01:50,100 --> 00:01:53,820 person from the economic team I did talk 22 00:01:51,899 --> 00:01:56,159 about BBA and our fixed income 23 00:01:53,820 --> 00:01:58,979 strategist to discuss this in addition 24 00:01:56,159 --> 00:02:01,200 we'll discuss briefly the end of 25 00:01:58,979 --> 00:02:02,520 earnings for the S P 500 and what 26 00:02:01,200 --> 00:02:04,079 companies are telling us about the 27 00:02:02,520 --> 00:02:06,780 economy and their Outlook 28 00:02:04,079 --> 00:02:08,160 perfect thank you right so thank you 29 00:02:06,780 --> 00:02:10,200 very much for the introduction it's very 30 00:02:08,160 --> 00:02:12,840 good to be here again today I'm going to 31 00:02:10,200 --> 00:02:14,520 be moderating once again this live and 32 00:02:12,840 --> 00:02:17,640 the idea for the panel today is we 33 00:02:14,520 --> 00:02:20,040 brought Raj of course as usual uh he's 34 00:02:17,640 --> 00:02:21,959 going to be oversight overseeing um the 35 00:02:20,040 --> 00:02:23,700 equity space so the impacts of recession 36 00:02:21,959 --> 00:02:26,840 for the equities Market internationally 37 00:02:23,700 --> 00:02:30,900 we also brought in invite Alejandro 38 00:02:26,840 --> 00:02:33,120 to be who is Chief fixed income strategy 39 00:02:30,900 --> 00:02:35,400 for the for the for the private bank so 40 00:02:33,120 --> 00:02:37,379 we got both a look from equities 41 00:02:35,400 --> 00:02:42,000 perspective and also for fixed income 42 00:02:37,379 --> 00:02:44,400 and uh Bernardo who works for ital BBA 43 00:02:42,000 --> 00:02:47,700 he's a US Economist senior Economist 44 00:02:44,400 --> 00:02:51,360 from Italian also joined us was very 45 00:02:47,700 --> 00:02:53,280 kind to join us from a overview in terms 46 00:02:51,360 --> 00:02:55,019 of U.S economy 47 00:02:53,280 --> 00:02:56,879 so why don't we kick off with that if 48 00:02:55,019 --> 00:02:58,739 I'm going to switch to Portuguese and we 49 00:02:56,879 --> 00:03:01,200 do half and half as usual but you do 50 00:02:58,739 --> 00:03:04,200 have the option for the uh translation 51 00:03:01,200 --> 00:03:04,200 questions 52 00:03:23,159 --> 00:03:26,159 observation 53 00:03:27,720 --> 00:03:30,560 this is 54 00:03:34,560 --> 00:03:36,680 um 55 00:03:45,370 --> 00:03:48,419 [Music] 56 00:04:10,819 --> 00:04:15,599 excuse me 57 00:04:12,599 --> 00:04:15,599 Fortune 58 00:04:26,460 --> 00:04:29,460 interviews 59 00:04:32,100 --> 00:04:34,160 um 60 00:05:12,780 --> 00:05:15,780 foreign 61 00:05:29,260 --> 00:05:32,380 [Applause] 62 00:05:55,530 --> 00:05:58,560 [Music] 63 00:06:00,800 --> 00:06:05,120 supercloud team um 64 00:06:26,699 --> 00:06:29,699 foreign 65 00:06:37,860 --> 00:06:43,680 [Music] 66 00:06:57,560 --> 00:07:00,660 [Music] 67 00:07:29,590 --> 00:07:32,640 [Music] 68 00:07:43,500 --> 00:07:45,740 foreign 69 00:08:23,099 --> 00:08:26,099 foreign 70 00:09:23,100 --> 00:09:26,100 families 71 00:09:48,660 --> 00:09:54,480 okay 72 00:09:50,360 --> 00:09:56,480 but no machine stations 73 00:09:54,480 --> 00:09:56,480 um 74 00:10:48,220 --> 00:10:51,289 [Music] 75 00:10:56,300 --> 00:11:02,040 Bernardo I'm gonna switch to so now we 76 00:10:59,940 --> 00:11:03,360 have the backdrop now I have the whole 77 00:11:02,040 --> 00:11:05,880 scenario about 78 00:11:03,360 --> 00:11:07,920 how the economy is moving what do you 79 00:11:05,880 --> 00:11:09,540 think what the risks are and how do we 80 00:11:07,920 --> 00:11:12,060 do you want to play this out in terms of 81 00:11:09,540 --> 00:11:14,760 a recession risk so maybe getting a 82 00:11:12,060 --> 00:11:16,500 sense of how do we see this from a fixed 83 00:11:14,760 --> 00:11:18,060 income and also equities perspective 84 00:11:16,500 --> 00:11:21,000 I'll kick off with Alejandro if you 85 00:11:18,060 --> 00:11:23,339 don't mind Market seems to be 86 00:11:21,000 --> 00:11:25,200 rallying at least for the past month and 87 00:11:23,339 --> 00:11:28,500 I have a little bit more but definitely 88 00:11:25,200 --> 00:11:31,440 2023 has been a positive year for risky 89 00:11:28,500 --> 00:11:33,240 assets uh then we can name a few of 90 00:11:31,440 --> 00:11:36,660 course but I would love to hear your 91 00:11:33,240 --> 00:11:38,100 your thoughts on the not only price in 92 00:11:36,660 --> 00:11:40,860 the recession but how markets are 93 00:11:38,100 --> 00:11:44,700 reacting to the latest data and and 94 00:11:40,860 --> 00:11:47,060 speeches from power and and the rest of 95 00:11:44,700 --> 00:11:47,060 the Fed 96 00:11:47,640 --> 00:11:51,720 first of all thanks for inviting me 97 00:11:49,380 --> 00:11:53,519 pleasure to be able to kind of share our 98 00:11:51,720 --> 00:11:55,100 thoughts with clients hopefully this is 99 00:11:53,519 --> 00:11:58,380 going to be useful for everyone 100 00:11:55,100 --> 00:12:00,300 second I think it's there's there's a 101 00:11:58,380 --> 00:12:02,399 lot of things at the same time so it's 102 00:12:00,300 --> 00:12:05,160 difficult to disentangle exactly what's 103 00:12:02,399 --> 00:12:06,839 driving what but I I think the the 104 00:12:05,160 --> 00:12:09,079 message in general from the fixed income 105 00:12:06,839 --> 00:12:12,240 markets over the last let's say a year 106 00:12:09,079 --> 00:12:14,519 let's say the treasury curve has been an 107 00:12:12,240 --> 00:12:16,140 inversion an inversion let's not get too 108 00:12:14,519 --> 00:12:18,180 technical it's basically that the 109 00:12:16,140 --> 00:12:20,399 shorter term treasuries are higher than 110 00:12:18,180 --> 00:12:21,720 the longer terms right so the the curve 111 00:12:20,399 --> 00:12:24,839 is telling us that there's a lot of 112 00:12:21,720 --> 00:12:26,640 tightening conditions for financing and 113 00:12:24,839 --> 00:12:29,519 basically the monetary policy of the FED 114 00:12:26,640 --> 00:12:31,500 is making things more difficult at least 115 00:12:29,519 --> 00:12:33,600 temporarily right that's what the curb 116 00:12:31,500 --> 00:12:35,399 thinks but that potentially could be a 117 00:12:33,600 --> 00:12:37,320 signal or a risk that you know things 118 00:12:35,399 --> 00:12:39,300 will decelerate and eventually you could 119 00:12:37,320 --> 00:12:41,459 have a relatively high risk of recession 120 00:12:39,300 --> 00:12:43,440 right that's with a curve inversion 121 00:12:41,459 --> 00:12:45,180 generally tells you and it's pretty 122 00:12:43,440 --> 00:12:46,440 reliable right there's been some you 123 00:12:45,180 --> 00:12:48,959 know failed signals it doesn't work 124 00:12:46,440 --> 00:12:50,639 perfectly like everything else but it 125 00:12:48,959 --> 00:12:53,459 kind of tells you to be a little bit 126 00:12:50,639 --> 00:12:56,160 let's say on the warning sign right it's 127 00:12:53,459 --> 00:12:57,420 a let's say an orange light not a red 128 00:12:56,160 --> 00:12:59,100 light 129 00:12:57,420 --> 00:13:00,540 um and of course there's called there 130 00:12:59,100 --> 00:13:02,820 could be some distortions right because 131 00:13:00,540 --> 00:13:04,200 the central bank has been intervening in 132 00:13:02,820 --> 00:13:06,720 this market right they've been buying 133 00:13:04,200 --> 00:13:09,120 treasuries uh that they stopped doing so 134 00:13:06,720 --> 00:13:11,760 since uh at last year or early this year 135 00:13:09,120 --> 00:13:13,380 so the buying of treasuries could create 136 00:13:11,760 --> 00:13:16,380 a little bit of a distortion in this 137 00:13:13,380 --> 00:13:18,540 signal but the question is shouldn't it 138 00:13:16,380 --> 00:13:20,700 be inverting even more and it did so 139 00:13:18,540 --> 00:13:22,380 right the curve has been inverted the 140 00:13:20,700 --> 00:13:24,540 levels we haven't seen since the 80s 141 00:13:22,380 --> 00:13:26,820 right so let's say the signal is 142 00:13:24,540 --> 00:13:28,680 probably yes the risk in line with what 143 00:13:26,820 --> 00:13:30,839 Bernardo is saying I think the risk is 144 00:13:28,680 --> 00:13:33,120 there right maybe not the base case but 145 00:13:30,839 --> 00:13:35,100 it's a risk but it's relatively high and 146 00:13:33,120 --> 00:13:36,839 worth monitoring I think that's what 147 00:13:35,100 --> 00:13:37,920 probably the fixed income markets are 148 00:13:36,839 --> 00:13:39,480 telling us 149 00:13:37,920 --> 00:13:42,360 um I think that the fixed income Market 150 00:13:39,480 --> 00:13:44,459 has been trying to kind of price exactly 151 00:13:42,360 --> 00:13:46,740 what's happening and I think probably 152 00:13:44,459 --> 00:13:48,899 what's happening is from a very high 153 00:13:46,740 --> 00:13:52,260 risk of recession a few months ago it's 154 00:13:48,899 --> 00:13:55,019 starting to maybe think maybe what we're 155 00:13:52,260 --> 00:13:57,720 getting is a soft landish right so the 156 00:13:55,019 --> 00:13:59,700 economy will cool but maybe there's a 157 00:13:57,720 --> 00:14:02,040 probability that it can avert recession 158 00:13:59,700 --> 00:14:03,899 that's I think what the market is doing 159 00:14:02,040 --> 00:14:05,820 right uh this is the kind of the 160 00:14:03,899 --> 00:14:07,620 treasury market there's other markets 161 00:14:05,820 --> 00:14:10,320 riskier markets in the credit space 162 00:14:07,620 --> 00:14:12,720 which are pricing something different 163 00:14:10,320 --> 00:14:15,180 and look every market prices different 164 00:14:12,720 --> 00:14:18,240 things right I mean I think the riskier 165 00:14:15,180 --> 00:14:20,760 assets are a little bit more positive uh 166 00:14:18,240 --> 00:14:22,980 I think they're probably pricing in 167 00:14:20,760 --> 00:14:24,720 something like a Slowdown but then a 168 00:14:22,980 --> 00:14:27,300 re-acceleration but things are going to 169 00:14:24,720 --> 00:14:28,920 be relatively good if you look in the 170 00:14:27,300 --> 00:14:31,079 high yield which is a non-investment 171 00:14:28,920 --> 00:14:32,820 rate or let's say the poor rated uh 172 00:14:31,079 --> 00:14:35,100 company bonds 173 00:14:32,820 --> 00:14:36,839 um what you see there basically is a 174 00:14:35,100 --> 00:14:39,300 re-acceleration of implied row of 175 00:14:36,839 --> 00:14:42,779 expectations probably since November 176 00:14:39,300 --> 00:14:44,519 maybe even before maybe August September 177 00:14:42,779 --> 00:14:46,320 sort of the growth expectations 178 00:14:44,519 --> 00:14:47,820 decelerate to the minimum and they 179 00:14:46,320 --> 00:14:50,399 started to kind of re-accelerate even 180 00:14:47,820 --> 00:14:52,079 before January but in January we did see 181 00:14:50,399 --> 00:14:54,660 a re-acceleration that was substantial 182 00:14:52,079 --> 00:14:56,459 right so I think this this is consistent 183 00:14:54,660 --> 00:14:59,339 with what we're seeing right and some of 184 00:14:56,459 --> 00:15:01,500 the data you know even you know the jobs 185 00:14:59,339 --> 00:15:03,420 data there might be distortions right 186 00:15:01,500 --> 00:15:05,760 and Bernardo might be better uh talking 187 00:15:03,420 --> 00:15:07,800 about this but seasonality and other 188 00:15:05,760 --> 00:15:09,600 things but clearly it seems the economy 189 00:15:07,800 --> 00:15:10,980 is gathering some momentum on the margin 190 00:15:09,600 --> 00:15:12,779 the question is how you know how 191 00:15:10,980 --> 00:15:14,459 sustainable that is right so I think 192 00:15:12,779 --> 00:15:15,540 markets are trying to adapt to those 193 00:15:14,459 --> 00:15:18,240 things 194 00:15:15,540 --> 00:15:20,160 um I think in general riskier assets are 195 00:15:18,240 --> 00:15:22,199 more optimistic than the treasure curve 196 00:15:20,160 --> 00:15:24,540 but the treasury curve is still pricing 197 00:15:22,199 --> 00:15:26,279 in a relatively you know decent risk of 198 00:15:24,540 --> 00:15:27,660 recession which is I think in mind with 199 00:15:26,279 --> 00:15:30,060 what Bernardo said I don't think the 200 00:15:27,660 --> 00:15:33,120 market is completely disconnected with 201 00:15:30,060 --> 00:15:35,220 this so um I think that's kind of the 202 00:15:33,120 --> 00:15:36,800 basic take 203 00:15:35,220 --> 00:15:39,240 yeah no 204 00:15:36,800 --> 00:15:41,339 that's that's my view as well and I 205 00:15:39,240 --> 00:15:44,820 appreciate you sharing that the 206 00:15:41,339 --> 00:15:46,860 so putting that into a more Trader 207 00:15:44,820 --> 00:15:48,540 perspective right are we buying are we 208 00:15:46,860 --> 00:15:50,220 selling so we have a lot of risk but at 209 00:15:48,540 --> 00:15:52,620 the same time the opportunity cost is 210 00:15:50,220 --> 00:15:54,240 very high especially rates at least on 211 00:15:52,620 --> 00:15:57,300 an absolute term they look very 212 00:15:54,240 --> 00:15:58,680 attractive now what is the from a fixed 213 00:15:57,300 --> 00:16:01,620 income 214 00:15:58,680 --> 00:16:04,620 um asset class perspective what which 215 00:16:01,620 --> 00:16:07,380 which is the most vulnerable 216 00:16:04,620 --> 00:16:09,720 um space here or or which asset class 217 00:16:07,380 --> 00:16:11,279 would be the most vulnerable in this 218 00:16:09,720 --> 00:16:13,920 spectrum knowing that the opportunity 219 00:16:11,279 --> 00:16:16,139 cost is fairly High 220 00:16:13,920 --> 00:16:18,180 yeah I mean I I think it's a great 221 00:16:16,139 --> 00:16:19,920 question I I think clearly if you look 222 00:16:18,180 --> 00:16:21,779 at historical relationships when the 223 00:16:19,920 --> 00:16:23,579 economy the risk here is a recession 224 00:16:21,779 --> 00:16:25,800 right that the market is clearly not 225 00:16:23,579 --> 00:16:29,040 pricing and the market at this pricing 226 00:16:25,800 --> 00:16:30,959 at the least is high yield so the the 227 00:16:29,040 --> 00:16:32,399 rates are very high yields if you look 228 00:16:30,959 --> 00:16:35,160 at yields in high yield are very high 229 00:16:32,399 --> 00:16:36,899 above eight percent the question is the 230 00:16:35,160 --> 00:16:39,120 market is very optimistic right so if 231 00:16:36,899 --> 00:16:40,980 the market is pricing something like a 232 00:16:39,120 --> 00:16:43,440 soft landing and then a re-acceleration 233 00:16:40,980 --> 00:16:45,959 and therefore imply the fault rates are 234 00:16:43,440 --> 00:16:47,940 very low uh but if the market is wrong 235 00:16:45,959 --> 00:16:50,100 and there's a hard Landing a recession 236 00:16:47,940 --> 00:16:52,740 and a protractor that says slow down 237 00:16:50,100 --> 00:16:54,060 that leads to a rebound maybe in 2024 or 238 00:16:52,740 --> 00:16:55,680 something like that then you're going to 239 00:16:54,060 --> 00:16:57,120 see a lot of the faults so I think 240 00:16:55,680 --> 00:16:59,940 that's probably the market that's more 241 00:16:57,120 --> 00:17:02,279 vulnerable uh it's very optimistic but 242 00:16:59,940 --> 00:17:04,020 it has a very good carry right so I 243 00:17:02,279 --> 00:17:07,199 guess it's it's hard it's not entirely 244 00:17:04,020 --> 00:17:08,819 easy right in a way I mean if that's 245 00:17:07,199 --> 00:17:11,339 your view and you think as a base case 246 00:17:08,819 --> 00:17:13,199 that the economy will do okay you're 247 00:17:11,339 --> 00:17:14,939 probably going to be okay right but I 248 00:17:13,199 --> 00:17:16,740 guess the downside is huge if the 249 00:17:14,939 --> 00:17:18,839 economy does decelerate and that there's 250 00:17:16,740 --> 00:17:20,880 a recession right I mean I guess you can 251 00:17:18,839 --> 00:17:22,319 have more losses there in terms of the 252 00:17:20,880 --> 00:17:23,939 fault and maybe the eight percent is not 253 00:17:22,319 --> 00:17:25,319 going to protect you as much 254 00:17:23,939 --> 00:17:27,540 um so you could have the even better 255 00:17:25,319 --> 00:17:29,220 yields at some point right I think 256 00:17:27,540 --> 00:17:31,200 that's kind of the more uh vulnerable 257 00:17:29,220 --> 00:17:33,600 part I think you know s p and high yield 258 00:17:31,200 --> 00:17:35,160 have both repriced over the last few 259 00:17:33,600 --> 00:17:38,460 months and I think especially January 260 00:17:35,160 --> 00:17:41,280 the implied growth of you know sort of 261 00:17:38,460 --> 00:17:43,679 expectations are relatively better than 262 00:17:41,280 --> 00:17:45,059 the way there were six months ago so I 263 00:17:43,679 --> 00:17:47,640 think yeah high yield I would say it's 264 00:17:45,059 --> 00:17:49,860 more vulnerable and in general terms I 265 00:17:47,640 --> 00:17:51,419 mean I think you know just being more 266 00:17:49,860 --> 00:17:52,860 defensive if you want to be defensive 267 00:17:51,419 --> 00:17:54,660 and you're concerned about recession 268 00:17:52,860 --> 00:17:57,240 being at the very short end of the 269 00:17:54,660 --> 00:17:59,039 treasury curve and even you know some 270 00:17:57,240 --> 00:18:00,419 some part of that is very very safe and 271 00:17:59,039 --> 00:18:03,440 you get you know good returns might 272 00:18:00,419 --> 00:18:03,440 might make more sense right 273 00:18:04,700 --> 00:18:10,380 there's also the the discussion about 274 00:18:07,980 --> 00:18:12,900 the high care right the higher care so 275 00:18:10,380 --> 00:18:14,400 you know portfolio sense it might be it 276 00:18:12,900 --> 00:18:18,120 might be a more complex situation but 277 00:18:14,400 --> 00:18:19,799 definitely a vulnerable asset class Raj 278 00:18:18,120 --> 00:18:22,860 do you mind do you mind if you move to 279 00:18:19,799 --> 00:18:25,740 you towards Equity space how how's the 280 00:18:22,860 --> 00:18:27,900 equity markets reacting to the again so 281 00:18:25,740 --> 00:18:30,360 much has been said about data depending 282 00:18:27,900 --> 00:18:33,660 anything but at the same time we can see 283 00:18:30,360 --> 00:18:35,520 SQL co-shares outperforming defensive so 284 00:18:33,660 --> 00:18:37,200 the market seems to be risk taken right 285 00:18:35,520 --> 00:18:41,039 now and also just because we went 286 00:18:37,200 --> 00:18:44,400 through the uh earnings uh announcements 287 00:18:41,039 --> 00:18:47,400 just for for Q4 last year so a bunch of 288 00:18:44,400 --> 00:18:50,760 CEOs and CFOs also lay down their their 289 00:18:47,400 --> 00:18:52,020 their forecast for 2023 which can carry 290 00:18:50,760 --> 00:18:53,100 a lot of information as well through my 291 00:18:52,020 --> 00:18:56,400 channel a little bit of that because 292 00:18:53,100 --> 00:18:59,280 yeah I mean look the equity markets have 293 00:18:56,400 --> 00:19:01,740 um you know repriced higher as you know 294 00:18:59,280 --> 00:19:03,240 we started the year I think investors 295 00:19:01,740 --> 00:19:04,380 were generally a little bit more 296 00:19:03,240 --> 00:19:06,240 cautious 297 00:19:04,380 --> 00:19:08,760 um you know worried about the Outlook 298 00:19:06,240 --> 00:19:10,980 but as the data has come out 299 00:19:08,760 --> 00:19:13,799 um in a Bernardo and Honda discussed 300 00:19:10,980 --> 00:19:15,840 this the economic data seems to be 301 00:19:13,799 --> 00:19:17,700 pointing to a actually pickup in 302 00:19:15,840 --> 00:19:19,679 consumer spending and you know jobs 303 00:19:17,700 --> 00:19:21,299 number I know which is lagging is still 304 00:19:19,679 --> 00:19:22,980 showing strength 305 00:19:21,299 --> 00:19:25,080 um and then the inflation numbers you 306 00:19:22,980 --> 00:19:26,700 know initially showed uh better numbers 307 00:19:25,080 --> 00:19:28,860 in January right so I mean you know 308 00:19:26,700 --> 00:19:30,360 maybe the more recent number 309 00:19:28,860 --> 00:19:32,940 um maybe have some noise in it but you 310 00:19:30,360 --> 00:19:34,380 know the equity Market is almost um you 311 00:19:32,940 --> 00:19:36,780 know there's a term Goldilocks you know 312 00:19:34,380 --> 00:19:38,820 it's the best of all worlds inflation is 313 00:19:36,780 --> 00:19:41,340 coming down growth is re-accelerating 314 00:19:38,820 --> 00:19:42,720 jobs are stable jobs are stable it's you 315 00:19:41,340 --> 00:19:44,039 know what do we have to worry about you 316 00:19:42,720 --> 00:19:46,500 know it's it's there's nothing to worry 317 00:19:44,039 --> 00:19:48,660 about you mentioned companies 318 00:19:46,500 --> 00:19:51,179 um you know CEOs and CFOs when they're 319 00:19:48,660 --> 00:19:53,580 reported in the middle of January 320 00:19:51,179 --> 00:19:55,080 um took a cautious tone right they have 321 00:19:53,580 --> 00:19:57,600 to give their annual forecast you know a 322 00:19:55,080 --> 00:19:59,539 board of a company you know City officer 323 00:19:57,600 --> 00:20:03,780 what is my projections for the full year 324 00:19:59,539 --> 00:20:05,640 and a lot of banks in the US forecasted 325 00:20:03,780 --> 00:20:08,520 a recession to start in the third or 326 00:20:05,640 --> 00:20:10,320 fourth quarter of this year and so that 327 00:20:08,520 --> 00:20:12,000 was in their guidance 328 00:20:10,320 --> 00:20:13,919 um just this week you know actually just 329 00:20:12,000 --> 00:20:17,340 yesterday I met with a few of the the 330 00:20:13,919 --> 00:20:19,799 bank CEOs and CFOs so the Bank of 331 00:20:17,340 --> 00:20:22,260 America CEO I was actually here in Miami 332 00:20:19,799 --> 00:20:23,220 meeting with investors the CFO of JP 333 00:20:22,260 --> 00:20:26,520 Morgan 334 00:20:23,220 --> 00:20:28,140 and they now sounded better I said look 335 00:20:26,520 --> 00:20:30,299 you know our 336 00:20:28,140 --> 00:20:32,400 probability or chance of a recession is 337 00:20:30,299 --> 00:20:34,679 pushed out it used to be you know maybe 338 00:20:32,400 --> 00:20:36,480 third quarter going into fourth now it's 339 00:20:34,679 --> 00:20:38,640 more fourth quarter maybe going into 340 00:20:36,480 --> 00:20:40,559 next year you know the one month of 341 00:20:38,640 --> 00:20:41,580 spending data has been has been pretty 342 00:20:40,559 --> 00:20:43,320 good 343 00:20:41,580 --> 00:20:45,900 um it seems like you know loan growth is 344 00:20:43,320 --> 00:20:48,720 still good credit credit losses are are 345 00:20:45,900 --> 00:20:51,360 not you know increasing and actually you 346 00:20:48,720 --> 00:20:52,919 know the the FED funds Futures curve has 347 00:20:51,360 --> 00:20:54,299 increased so that gives us more you know 348 00:20:52,919 --> 00:20:58,260 earnings in terms of net interest income 349 00:20:54,299 --> 00:21:00,419 so the CFOs and CEOs just in one month 350 00:20:58,260 --> 00:21:02,640 um sounded a little bit better some 351 00:21:00,419 --> 00:21:05,700 companies are forecasting no slow down a 352 00:21:02,640 --> 00:21:07,919 recession American Express said you know 353 00:21:05,700 --> 00:21:09,299 we're we're not seeing it and you know 354 00:21:07,919 --> 00:21:11,220 American Express is very different right 355 00:21:09,299 --> 00:21:12,960 it's a different 356 00:21:11,220 --> 00:21:16,260 um customer base right High net worth 357 00:21:12,960 --> 00:21:18,299 individuals uh corporates but they said 358 00:21:16,260 --> 00:21:20,160 you know they're they're pretty 359 00:21:18,299 --> 00:21:22,380 confident about the share so there is a 360 00:21:20,160 --> 00:21:23,760 lot of different uh variations 361 00:21:22,380 --> 00:21:25,679 um so I have to wait and see how the 362 00:21:23,760 --> 00:21:27,419 year your progresses but it seems like 363 00:21:25,679 --> 00:21:29,159 you know in in just one month you saw a 364 00:21:27,419 --> 00:21:30,539 shift in terms of how companies are 365 00:21:29,159 --> 00:21:32,280 thinking about this and it'll probably 366 00:21:30,539 --> 00:21:35,400 change as we go through the year maybe 367 00:21:32,280 --> 00:21:37,679 one final Point um you know CEO of Bank 368 00:21:35,400 --> 00:21:40,200 of America for example said even though 369 00:21:37,679 --> 00:21:42,120 it looks like the chances have decreased 370 00:21:40,200 --> 00:21:44,880 and you know the Outlook so far is good 371 00:21:42,120 --> 00:21:46,980 we're still preparing the bank for a 372 00:21:44,880 --> 00:21:49,980 Slowdown so you know we're looking at 373 00:21:46,980 --> 00:21:51,840 yeah how do we cut costs what can we do 374 00:21:49,980 --> 00:21:53,340 to pair back lending and maybe increase 375 00:21:51,840 --> 00:21:55,740 some of the standards so we don't get 376 00:21:53,340 --> 00:21:58,500 into a situation where you know 377 00:21:55,740 --> 00:22:00,419 um you know lending poorly right before 378 00:21:58,500 --> 00:22:01,440 a recession so you know there is a there 379 00:22:00,419 --> 00:22:03,419 is a little bit of a difference there 380 00:22:01,440 --> 00:22:05,220 where companies just want to be a little 381 00:22:03,419 --> 00:22:07,620 bit more cautious you know because the 382 00:22:05,220 --> 00:22:09,480 Outlook is I'm sorry yeah and same 383 00:22:07,620 --> 00:22:11,580 question that I made to Alejandro in 384 00:22:09,480 --> 00:22:13,559 terms of 385 00:22:11,580 --> 00:22:15,900 where's the weakness here in the equity 386 00:22:13,559 --> 00:22:18,179 space like last year maybe 387 00:22:15,900 --> 00:22:20,400 July or summer last year we were very 388 00:22:18,179 --> 00:22:23,220 concerned about Europe going going 389 00:22:20,400 --> 00:22:27,000 through the winter at some point all the 390 00:22:23,220 --> 00:22:28,980 gas and energy uh situation now things 391 00:22:27,000 --> 00:22:31,980 seems to be a little bit 392 00:22:28,980 --> 00:22:33,780 they changed right then we are 4300 or 393 00:22:31,980 --> 00:22:36,179 whatever in the s p space everything 394 00:22:33,780 --> 00:22:37,799 seems to be very positive where do you 395 00:22:36,179 --> 00:22:39,720 see weakness in the equity space I mean 396 00:22:37,799 --> 00:22:41,460 look historically the the areas that you 397 00:22:39,720 --> 00:22:42,780 see the the biggest risk are the 398 00:22:41,460 --> 00:22:44,760 cyclical ones you mentioned right so 399 00:22:42,780 --> 00:22:47,340 Banks um because of the credit losses 400 00:22:44,760 --> 00:22:49,740 but you know again I I like to stress 401 00:22:47,340 --> 00:22:51,240 this um when I meet with um with people 402 00:22:49,740 --> 00:22:53,460 is the banks are different than previous 403 00:22:51,240 --> 00:22:55,740 Cycles because of the 2008 financial 404 00:22:53,460 --> 00:22:57,360 crisis at least the big banks have to 405 00:22:55,740 --> 00:22:58,860 have more Capital they haven't been 406 00:22:57,360 --> 00:23:00,780 allowed to yeah I haven't been allowed 407 00:22:58,860 --> 00:23:01,919 to take as much risk you know where 408 00:23:00,780 --> 00:23:03,600 would you see it maybe credit card 409 00:23:01,919 --> 00:23:05,340 companies for example just thinking of 410 00:23:03,600 --> 00:23:07,260 broad you know because that's something 411 00:23:05,340 --> 00:23:08,580 where you know if you're if you're 412 00:23:07,260 --> 00:23:10,380 taking out credit card debt it's it's 413 00:23:08,580 --> 00:23:12,120 you know that's usually a very high 414 00:23:10,380 --> 00:23:14,100 interest rate you know you you know 415 00:23:12,120 --> 00:23:17,400 there's no recourse in terms of an asset 416 00:23:14,100 --> 00:23:18,960 so that's a it's a risky part uh of of 417 00:23:17,400 --> 00:23:20,880 the equity Market 418 00:23:18,960 --> 00:23:23,280 um and then you know any other kind of 419 00:23:20,880 --> 00:23:24,419 cyclical you know housing Auto those 420 00:23:23,280 --> 00:23:26,280 things you know 421 00:23:24,419 --> 00:23:27,720 um when people don't have jobs they're 422 00:23:26,280 --> 00:23:28,679 probably not going to buy a new car 423 00:23:27,720 --> 00:23:30,240 right they're not going to replace the 424 00:23:28,679 --> 00:23:31,860 existing car that they have they let it 425 00:23:30,240 --> 00:23:33,419 run for a little bit longer so those are 426 00:23:31,860 --> 00:23:35,460 kind of the areas where you'll see kind 427 00:23:33,419 --> 00:23:37,020 of weakness it makes makes a lot of 428 00:23:35,460 --> 00:23:39,860 sense thank you Raj 429 00:23:37,020 --> 00:23:39,860 OS 430 00:23:44,460 --> 00:23:47,460 foreign 431 00:24:18,960 --> 00:24:21,960 foreign 432 00:24:23,100 --> 00:24:29,520 well yeah but if it is foreign 433 00:24:33,270 --> 00:24:36,369 [Music] 434 00:24:50,490 --> 00:24:53,579 [Music] 435 00:25:29,240 --> 00:25:33,900 in town education 436 00:25:54,840 --> 00:26:01,579 [Music] 437 00:26:11,520 --> 00:26:14,520 whatever 438 00:26:48,179 --> 00:26:52,799 okay perfect and it's something that Raj 439 00:26:50,940 --> 00:26:55,140 mentioned as well instead of the 440 00:26:52,799 --> 00:26:57,179 inflation risk may not be fading out but 441 00:26:55,140 --> 00:26:58,919 it's being pushed out right we always 442 00:26:57,179 --> 00:27:01,140 we're pushing out a couple of quarters 443 00:26:58,919 --> 00:27:03,059 pushing out a couple of semesters 444 00:27:01,140 --> 00:27:04,980 whatever whatever that is so that brings 445 00:27:03,059 --> 00:27:07,200 me to my next question maybe Alejandra 446 00:27:04,980 --> 00:27:09,960 can take this one uh 447 00:27:07,200 --> 00:27:11,760 the discussion around fed terminal rate 448 00:27:09,960 --> 00:27:14,400 that that we're not just mentioned right 449 00:27:11,760 --> 00:27:15,960 it's it's being back and forth when the 450 00:27:14,400 --> 00:27:18,960 FED is actually going to Pivot meaning 451 00:27:15,960 --> 00:27:21,240 where they we're gonna stop hiking rates 452 00:27:18,960 --> 00:27:23,640 and actually starting or even sideways 453 00:27:21,240 --> 00:27:26,220 or cutting at some point and that's very 454 00:27:23,640 --> 00:27:28,020 dependent on how fast we get there how 455 00:27:26,220 --> 00:27:31,919 fast you get to The Landing wherever the 456 00:27:28,020 --> 00:27:33,659 landing uh looks like so uh what is it 457 00:27:31,919 --> 00:27:35,460 what's currently price team in the 458 00:27:33,659 --> 00:27:38,159 market in terms of pet pivot the 459 00:27:35,460 --> 00:27:41,100 terminal rate uh Alejandro and 460 00:27:38,159 --> 00:27:44,179 well did that change a lot from the mess 461 00:27:41,100 --> 00:27:44,179 last month or so 462 00:27:46,679 --> 00:27:49,640 I think 463 00:27:49,740 --> 00:27:54,299 you know quite substantial 464 00:27:51,600 --> 00:27:57,840 um I would say today the curve is 465 00:27:54,299 --> 00:28:00,539 pricing in more or less three hikes and 466 00:27:57,840 --> 00:28:02,880 maybe maybe one cut by the end of the 467 00:28:00,539 --> 00:28:05,299 year first what is a pivot right so a 468 00:28:02,880 --> 00:28:08,700 pivot technically I mean is when the FED 469 00:28:05,299 --> 00:28:10,679 shifts from hiking rates to cutting 470 00:28:08,700 --> 00:28:12,600 rates I I don't think stopping is is 471 00:28:10,679 --> 00:28:15,299 good enough for a pivot dividend is is 472 00:28:12,600 --> 00:28:17,220 changing direction right and why is 473 00:28:15,299 --> 00:28:19,440 changing direction important because it 474 00:28:17,220 --> 00:28:21,720 means a reversal cycle right the cycle 475 00:28:19,440 --> 00:28:23,700 the cycle of tightening has some 476 00:28:21,720 --> 00:28:25,260 implications in terms of asset classes 477 00:28:23,700 --> 00:28:27,299 and an easing cycle has some other 478 00:28:25,260 --> 00:28:28,799 implications I think what we discussed 479 00:28:27,299 --> 00:28:31,159 before regarding the yield curve right 480 00:28:28,799 --> 00:28:33,840 the inverting inverted yield curve 481 00:28:31,159 --> 00:28:36,480 generally the inverted yield curve is a 482 00:28:33,840 --> 00:28:38,279 warning sign but to really see a 483 00:28:36,480 --> 00:28:40,559 recession you have to see a reversion of 484 00:28:38,279 --> 00:28:43,080 that so A normalization in the curve 485 00:28:40,559 --> 00:28:45,480 could be a nominal sign depending on 486 00:28:43,080 --> 00:28:48,120 what drives it and how fast it happens 487 00:28:45,480 --> 00:28:49,679 right so that's why the difference 488 00:28:48,120 --> 00:28:52,080 between a soft landing and a hard 489 00:28:49,679 --> 00:28:53,760 Landing is extremely important in both 490 00:28:52,080 --> 00:28:56,039 scenarios you'll see a normalization of 491 00:28:53,760 --> 00:28:58,200 the curve but the normalization of the 492 00:28:56,039 --> 00:29:00,000 curve in a soft and hand hard Landing 493 00:28:58,200 --> 00:29:01,679 are very different and have very 494 00:29:00,000 --> 00:29:03,720 different implications on risky assets 495 00:29:01,679 --> 00:29:05,820 so just to give you an example we've 496 00:29:03,720 --> 00:29:08,340 done some studies on that and heart 497 00:29:05,820 --> 00:29:10,200 Landing means that you know basically 498 00:29:08,340 --> 00:29:12,120 there is an expectation that the FED 499 00:29:10,200 --> 00:29:14,640 will cut you know rates dramatically 500 00:29:12,120 --> 00:29:17,039 because if the economy isn't basically 501 00:29:14,640 --> 00:29:19,020 almost in recession which is not the 502 00:29:17,039 --> 00:29:21,600 case right now so what you know the base 503 00:29:19,020 --> 00:29:23,279 case is going to be assault planning 504 00:29:21,600 --> 00:29:24,899 that that seems to be more or less what 505 00:29:23,279 --> 00:29:27,240 the market is pricing right now there's 506 00:29:24,899 --> 00:29:30,720 a pivot but the pivot means you know 507 00:29:27,240 --> 00:29:33,539 maybe three more hikes 525 or so and 508 00:29:30,720 --> 00:29:35,700 then one cut or maybe a little bit more 509 00:29:33,539 --> 00:29:38,760 by January of next year which is not a 510 00:29:35,700 --> 00:29:40,919 lot right it's just a minor pivot a 511 00:29:38,760 --> 00:29:43,740 month ago the market was pricing three 512 00:29:40,919 --> 00:29:47,220 hikes actually two hikes with the the 513 00:29:43,740 --> 00:29:48,899 recent hike and three Cuts meaning quite 514 00:29:47,220 --> 00:29:50,700 an aggressive pivot right so we've 515 00:29:48,899 --> 00:29:54,120 switched from aggressive pivot a month 516 00:29:50,700 --> 00:29:56,159 ago to well barely a pivot now but I 517 00:29:54,120 --> 00:29:59,159 guess the the critical point here is the 518 00:29:56,159 --> 00:30:00,899 studies we've done is the hard Landing 519 00:29:59,159 --> 00:30:02,460 which means you know the pivot is 520 00:30:00,899 --> 00:30:04,039 aggressive right they start cutting 521 00:30:02,460 --> 00:30:06,480 quite aggressive in the next year or two 522 00:30:04,039 --> 00:30:08,460 that means that risky assets are not 523 00:30:06,480 --> 00:30:10,200 going to perform very well right so in a 524 00:30:08,460 --> 00:30:13,320 recession risky assets tend to perform 525 00:30:10,200 --> 00:30:15,720 poorly in a soft Landing brisky assets 526 00:30:13,320 --> 00:30:17,580 tend to perform well actually so if you 527 00:30:15,720 --> 00:30:19,919 look at the average so when the curve 528 00:30:17,580 --> 00:30:21,240 normalizes and it normalizes signaling 529 00:30:19,919 --> 00:30:24,179 that there's a soft Landing things 530 00:30:21,240 --> 00:30:26,039 should be okay but if it's normalized as 531 00:30:24,179 --> 00:30:28,080 signaling or a recession then things are 532 00:30:26,039 --> 00:30:29,700 not going to be okay so but when the 533 00:30:28,080 --> 00:30:32,700 market says oh the FED pivot will save 534 00:30:29,700 --> 00:30:34,679 the day it's a it's a qualified yes it 535 00:30:32,700 --> 00:30:36,600 depends it depends on how the career 536 00:30:34,679 --> 00:30:40,279 normalizes right 537 00:30:36,600 --> 00:30:42,120 yeah I agree 538 00:30:40,279 --> 00:30:45,240 Raj 539 00:30:42,120 --> 00:30:47,820 going back to the equity space anything 540 00:30:45,240 --> 00:30:49,520 else in the in the discussions because 541 00:30:47,820 --> 00:30:51,539 we've been discussing a lot of the macro 542 00:30:49,520 --> 00:30:53,399 side of it right it's all about 543 00:30:51,539 --> 00:30:55,380 inflation and 544 00:30:53,399 --> 00:30:58,020 how's the FED gonna react whether 545 00:30:55,380 --> 00:31:00,720 employment will soften up at some point 546 00:30:58,020 --> 00:31:02,880 but anything else being discussed across 547 00:31:00,720 --> 00:31:04,559 the meetings and and the calls you've 548 00:31:02,880 --> 00:31:06,779 been you've been getting yeah I mean 549 00:31:04,559 --> 00:31:09,480 look I think a big obviously the 550 00:31:06,779 --> 00:31:11,640 technology sector is a big um sector 551 00:31:09,480 --> 00:31:13,200 within the U.S Equity market right the S 552 00:31:11,640 --> 00:31:15,360 P 500 553 00:31:13,200 --> 00:31:17,220 um I think the big topic or theme was 554 00:31:15,360 --> 00:31:19,080 you know in terms of around the the job 555 00:31:17,220 --> 00:31:22,140 cuts that the sector announced you know 556 00:31:19,080 --> 00:31:24,840 that was to you know improve the margin 557 00:31:22,140 --> 00:31:27,299 uh uh outlook for those companies they 558 00:31:24,840 --> 00:31:28,860 did staffed up very aggressively 559 00:31:27,299 --> 00:31:30,419 postcoded you know there was a covet 560 00:31:28,860 --> 00:31:32,700 bubble in some sense 561 00:31:30,419 --> 00:31:34,020 so you know you're seeing a reversal of 562 00:31:32,700 --> 00:31:36,299 that so you've seen you know pretty 563 00:31:34,020 --> 00:31:38,340 meaningful you know layoffs more 564 00:31:36,299 --> 00:31:40,740 targeted in the tech sector so again 565 00:31:38,340 --> 00:31:42,659 it's not spreading outside of that to to 566 00:31:40,740 --> 00:31:44,640 kind of a systematic you know concern 567 00:31:42,659 --> 00:31:46,679 for the overall economy that was one 568 00:31:44,640 --> 00:31:48,720 thing the second theme you know 569 00:31:46,679 --> 00:31:50,100 artificial intelligence has been you 570 00:31:48,720 --> 00:31:52,080 know the buzzword right everyone wants 571 00:31:50,100 --> 00:31:54,899 to know what what is AI going to mean 572 00:31:52,080 --> 00:31:56,340 you know everyone Chad GTP everyone is 573 00:31:54,899 --> 00:31:57,899 using it trying to see what you know 574 00:31:56,340 --> 00:31:59,159 what questions they can ask and what 575 00:31:57,899 --> 00:32:02,220 what the answers are going to look like 576 00:31:59,159 --> 00:32:04,020 so you know Microsoft you know clearly 577 00:32:02,220 --> 00:32:05,760 um is one example because they they are 578 00:32:04,020 --> 00:32:07,799 you know invested in chat GPT but I 579 00:32:05,760 --> 00:32:09,659 think broadly you know you know 580 00:32:07,799 --> 00:32:11,640 investors are asking what does this mean 581 00:32:09,659 --> 00:32:13,860 for your company what one are you going 582 00:32:11,640 --> 00:32:15,480 to be a player again the tech sector is 583 00:32:13,860 --> 00:32:18,299 obviously in Focus but even outside of 584 00:32:15,480 --> 00:32:19,919 tech what does it mean for your industry 585 00:32:18,299 --> 00:32:21,179 um you know semiconductor is another 586 00:32:19,919 --> 00:32:23,159 example because you know all these 587 00:32:21,179 --> 00:32:25,020 companies will need to spend on the 588 00:32:23,159 --> 00:32:26,880 computing power that's needed 589 00:32:25,020 --> 00:32:28,740 um you know we briefly discussed this in 590 00:32:26,880 --> 00:32:30,000 a recent publication of the of the 591 00:32:28,740 --> 00:32:32,760 weekly globe and you know we're going to 592 00:32:30,000 --> 00:32:34,620 plan to to have a future kind of events 593 00:32:32,760 --> 00:32:36,000 to kind of hopefully discuss this topic 594 00:32:34,620 --> 00:32:38,100 but it is a very 595 00:32:36,000 --> 00:32:40,020 um you know thematic 596 00:32:38,100 --> 00:32:42,659 um area that companies are talking about 597 00:32:40,020 --> 00:32:45,720 really it's really so it sounds positive 598 00:32:42,659 --> 00:32:47,159 actually so instead of yeah the dire 599 00:32:45,720 --> 00:32:48,539 comments that we're doing about 600 00:32:47,159 --> 00:32:51,600 inflation in the market and recession 601 00:32:48,539 --> 00:32:53,640 this actually looks like Yeah The Noise 602 00:32:51,600 --> 00:32:55,919 around you know every every um every 603 00:32:53,640 --> 00:32:57,539 month whether it's inflation recession 604 00:32:55,919 --> 00:32:58,860 inflation recession you know which way 605 00:32:57,539 --> 00:33:00,299 are we going this is you know I think 606 00:32:58,860 --> 00:33:01,740 for all of us interesting right I think 607 00:33:00,299 --> 00:33:02,940 we've all fooled around with it if if 608 00:33:01,740 --> 00:33:04,440 you haven't you know you can go online 609 00:33:02,940 --> 00:33:07,820 and check it out it's pretty cool in 610 00:33:04,440 --> 00:33:07,820 terms of the technology yeah 611 00:33:08,039 --> 00:33:12,779 not 100 related but we got a couple of 612 00:33:10,679 --> 00:33:14,940 questions around Commodities that I 613 00:33:12,779 --> 00:33:17,399 might want to ask you and Bernardo as 614 00:33:14,940 --> 00:33:19,620 well and from a more macro perspective 615 00:33:17,399 --> 00:33:21,659 and on the economy so last year 616 00:33:19,620 --> 00:33:24,720 a lot of the 617 00:33:21,659 --> 00:33:26,100 inflation drives came from Commodities 618 00:33:24,720 --> 00:33:30,000 of course we can always 619 00:33:26,100 --> 00:33:33,240 uh all the several different factors 620 00:33:30,000 --> 00:33:36,419 Kobe for shared all of the fiscal 621 00:33:33,240 --> 00:33:39,059 expansion but the Commodities were the 622 00:33:36,419 --> 00:33:41,279 jump into Community price was huge yeah 623 00:33:39,059 --> 00:33:44,220 now we're talking about either recession 624 00:33:41,279 --> 00:33:46,380 slow down inflation and China reopening 625 00:33:44,220 --> 00:33:48,480 we can also we discussed that last time 626 00:33:46,380 --> 00:33:51,000 over around China in the market update 627 00:33:48,480 --> 00:33:54,240 how 628 00:33:51,000 --> 00:33:56,940 how how this whole scenario in your view 629 00:33:54,240 --> 00:33:59,220 fits with the with the commodity 630 00:33:56,940 --> 00:34:00,539 is perspective and and maybe if you want 631 00:33:59,220 --> 00:34:02,159 to I don't know if that's their 632 00:34:00,539 --> 00:34:04,019 specialty but if you want to discuss a 633 00:34:02,159 --> 00:34:05,940 little bit about the goal as well I know 634 00:34:04,019 --> 00:34:07,860 Paul Marshall has his wheels and yeah 635 00:34:05,940 --> 00:34:10,020 you guys have been disgusting I'll leave 636 00:34:07,860 --> 00:34:11,639 gold um outside of the conversation I 637 00:34:10,020 --> 00:34:13,619 think you know just Commodities 638 00:34:11,639 --> 00:34:14,940 generally we had a discussion last month 639 00:34:13,619 --> 00:34:17,460 um like you mentioned around China 640 00:34:14,940 --> 00:34:20,099 reopening so you know there is a demand 641 00:34:17,460 --> 00:34:21,419 pull that we'll probably see over the 642 00:34:20,099 --> 00:34:25,740 next few quarters 643 00:34:21,419 --> 00:34:27,119 um you know oil uh copper iron or steel 644 00:34:25,740 --> 00:34:28,980 um and I think you know that's the 645 00:34:27,119 --> 00:34:31,020 demand side coming from China reopening 646 00:34:28,980 --> 00:34:32,700 the other side is you know we have a 647 00:34:31,020 --> 00:34:34,440 view that the dollar um you know can 648 00:34:32,700 --> 00:34:36,480 weaken or we'll continue the weekend so 649 00:34:34,440 --> 00:34:37,859 that that will you know help 650 00:34:36,480 --> 00:34:40,260 um Commodities so you kind of have two 651 00:34:37,859 --> 00:34:42,899 things that are you know positive 652 00:34:40,260 --> 00:34:45,780 um you know the the offset in some ways 653 00:34:42,899 --> 00:34:47,879 is you know what is U.S demand for 654 00:34:45,780 --> 00:34:50,099 certain Commodities um but I think we 655 00:34:47,879 --> 00:34:51,300 discussed the right now the data is good 656 00:34:50,099 --> 00:34:53,700 right it's not like we're worried about 657 00:34:51,300 --> 00:34:54,960 you know us um you know recession in the 658 00:34:53,700 --> 00:34:56,879 near term you know there is a 659 00:34:54,960 --> 00:34:59,760 probability around that but so here USA 660 00:34:56,879 --> 00:35:01,740 is probably okay and then you know 661 00:34:59,760 --> 00:35:03,359 lastly we discussed this briefly last 662 00:35:01,740 --> 00:35:06,060 month the live you know what is Russian 663 00:35:03,359 --> 00:35:07,200 production gonna look like right with 664 00:35:06,060 --> 00:35:09,060 the war 665 00:35:07,200 --> 00:35:10,980 um you know Russian production so far 666 00:35:09,060 --> 00:35:12,540 has been you know holding up better than 667 00:35:10,980 --> 00:35:13,980 most expected 668 00:35:12,540 --> 00:35:15,900 um and so you know I have to kind of 669 00:35:13,980 --> 00:35:17,579 wait and see uh and see how that kind of 670 00:35:15,900 --> 00:35:18,960 progresses so uh I think that's maybe 671 00:35:17,579 --> 00:35:20,520 The quick summary that you know that 672 00:35:18,960 --> 00:35:21,900 everyone is looking at the China demand 673 00:35:20,520 --> 00:35:23,880 you know what is it going to look like 674 00:35:21,900 --> 00:35:25,380 you know what's the intensity of that 675 00:35:23,880 --> 00:35:27,660 that demand and so I think that's going 676 00:35:25,380 --> 00:35:29,640 to be probably the the energy and metals 677 00:35:27,660 --> 00:35:30,960 right exactly copper iron R steel 678 00:35:29,640 --> 00:35:32,700 because you know you know the property 679 00:35:30,960 --> 00:35:35,400 Market on other parts of the Chinese 680 00:35:32,700 --> 00:35:37,020 economy were definitely much slower when 681 00:35:35,400 --> 00:35:38,640 they were in the covet shutdown and 682 00:35:37,020 --> 00:35:40,980 again you know this was something that 683 00:35:38,640 --> 00:35:42,420 uh the economists last month discussed 684 00:35:40,980 --> 00:35:43,880 and now you're seeing this reopening and 685 00:35:42,420 --> 00:35:46,200 so it kind of an increase in demand 686 00:35:43,880 --> 00:35:48,920 across the board and it seems like in 687 00:35:46,200 --> 00:35:48,920 terms of commodities 688 00:35:49,880 --> 00:35:54,839 to a 689 00:35:51,839 --> 00:35:54,839 Specializes 690 00:36:24,710 --> 00:36:27,769 [Music] 691 00:37:13,520 --> 00:37:17,520 foreign foreign 692 00:37:34,640 --> 00:37:37,719 [Music] 693 00:37:57,180 --> 00:38:00,180 responsibility 694 00:38:13,440 --> 00:38:19,440 I got a question and I think this might 695 00:38:15,960 --> 00:38:21,180 be towards your direction I mean you 696 00:38:19,440 --> 00:38:23,880 kind of discussed this a little bit in 697 00:38:21,180 --> 00:38:26,160 terms of the turnover rate for for fed 698 00:38:23,880 --> 00:38:28,380 funds right now so the question is do 699 00:38:26,160 --> 00:38:30,780 you think that uh 700 00:38:28,380 --> 00:38:33,300 from from where I'm hearing the 701 00:38:30,780 --> 00:38:35,400 probability of a soft Landing seems to 702 00:38:33,300 --> 00:38:39,000 be the base case here not only for the 703 00:38:35,400 --> 00:38:41,760 market but definitely withinito plus uh 704 00:38:39,000 --> 00:38:44,760 inflation is still kind of sticky can 705 00:38:41,760 --> 00:38:48,660 that can that Force fed's Hand or Paul's 706 00:38:44,760 --> 00:38:50,339 hand to go above five as a terminal rate 707 00:38:48,660 --> 00:38:54,060 and we've seen I think Market is not 708 00:38:50,339 --> 00:38:55,619 pricing 520 or 525 is this is this your 709 00:38:54,060 --> 00:38:57,060 your view as well and maybe that that 710 00:38:55,619 --> 00:39:00,240 can actually 711 00:38:57,060 --> 00:39:03,599 uh affect treasure is up to two years 712 00:39:00,240 --> 00:39:06,000 well I'm assuming this is just how long 713 00:39:03,599 --> 00:39:08,220 the the time Horizon for for this thing 714 00:39:06,000 --> 00:39:11,900 is this your base case as well now we're 715 00:39:08,220 --> 00:39:11,900 probably gonna go above five 716 00:39:12,720 --> 00:39:17,160 yeah I mean I I think the market is is 717 00:39:14,760 --> 00:39:19,560 already pricing 525 I guess 718 00:39:17,160 --> 00:39:21,359 question probably is is the risk if 719 00:39:19,560 --> 00:39:23,339 inflation is a little bit more sticky 720 00:39:21,359 --> 00:39:25,020 and soft I mean it all depends on what 721 00:39:23,339 --> 00:39:26,400 kind of soft Landing you you think about 722 00:39:25,020 --> 00:39:28,200 right I mean there could be a 723 00:39:26,400 --> 00:39:30,180 self-landing that it's very selfish 724 00:39:28,200 --> 00:39:31,920 which is close to recession but not not 725 00:39:30,180 --> 00:39:33,540 negative there could be a self Landing 726 00:39:31,920 --> 00:39:35,760 that's very mild and you still grow you 727 00:39:33,540 --> 00:39:37,740 know close to potential uh but inflation 728 00:39:35,760 --> 00:39:40,260 is very sneaky right so in that scenario 729 00:39:37,740 --> 00:39:41,700 clearly there's a risk that the economy 730 00:39:40,260 --> 00:39:43,800 looks stronger than the FED would like 731 00:39:41,700 --> 00:39:47,160 the FED will have to go higher right 732 00:39:43,800 --> 00:39:49,260 maybe 550 575 so one or two more hikes 733 00:39:47,160 --> 00:39:51,119 and that would that affect the two-year 734 00:39:49,260 --> 00:39:53,460 yeah probably I mean the the two year 735 00:39:51,119 --> 00:39:55,680 clearly now the two-year not only 736 00:39:53,460 --> 00:39:57,359 depends on where how high you go but how 737 00:39:55,680 --> 00:40:00,060 fast do you reverse that right because 738 00:39:57,359 --> 00:40:02,640 two years includes the the cycle between 739 00:40:00,060 --> 00:40:04,740 this year and next year right so the 740 00:40:02,640 --> 00:40:07,020 trajectory from here to December or to 741 00:40:04,740 --> 00:40:09,599 you know January 2025 is what matters 742 00:40:07,020 --> 00:40:11,460 for the two-year so it is a little bit 743 00:40:09,599 --> 00:40:13,200 more complicated than just how high they 744 00:40:11,460 --> 00:40:15,780 get it's also how fast they reverse 745 00:40:13,200 --> 00:40:18,480 right uh but yes fairly that's a risk 746 00:40:15,780 --> 00:40:20,339 for sure I mean if it's hard to predict 747 00:40:18,480 --> 00:40:21,900 inflation in general and I think this is 748 00:40:20,339 --> 00:40:23,160 even more complicated than normal just 749 00:40:21,900 --> 00:40:24,839 because they've been us but not least 750 00:40:23,160 --> 00:40:26,820 that there's been multiple shocks one 751 00:40:24,839 --> 00:40:28,320 over the other and they're distorting 752 00:40:26,820 --> 00:40:30,660 all the data right even seasonalities 753 00:40:28,320 --> 00:40:33,000 affecting so many kind of data points so 754 00:40:30,660 --> 00:40:35,700 yes there is that's a risk for sure yeah 755 00:40:33,000 --> 00:40:38,400 that we could go closer to six percent 756 00:40:35,700 --> 00:40:39,780 and that actually affects the the very 757 00:40:38,400 --> 00:40:42,359 front end of the curve that means a 758 00:40:39,780 --> 00:40:44,820 further inversion of the curve right 759 00:40:42,359 --> 00:40:46,380 um again I'll just clarify that the 760 00:40:44,820 --> 00:40:47,880 inversion of the curve doesn't mean that 761 00:40:46,380 --> 00:40:49,859 there's a recession it means that the 762 00:40:47,880 --> 00:40:52,020 probability of recession the next 12 to 763 00:40:49,859 --> 00:40:53,700 24 months is relatively high right so 764 00:40:52,020 --> 00:40:56,160 the inversion of the curve is giving us 765 00:40:53,700 --> 00:40:58,260 a sense of the risks but it doesn't give 766 00:40:56,160 --> 00:41:00,359 us a timing issue right so the the 767 00:40:58,260 --> 00:41:03,060 normalization of the curve can tell you 768 00:41:00,359 --> 00:41:04,920 the recession is coming right so what we 769 00:41:03,060 --> 00:41:06,660 should really fear is an Abrupt 770 00:41:04,920 --> 00:41:08,400 normalization of the curve that's what's 771 00:41:06,660 --> 00:41:10,079 when when it tells you the recession is 772 00:41:08,400 --> 00:41:11,460 here right 773 00:41:10,079 --> 00:41:12,960 um not the inversion the inversion is 774 00:41:11,460 --> 00:41:15,480 more of a warning that's why I mentioned 775 00:41:12,960 --> 00:41:16,800 orange and maybe it sounds weird to some 776 00:41:15,480 --> 00:41:18,839 people like shouldn't that be read 777 00:41:16,800 --> 00:41:20,700 because it's so negative I don't think 778 00:41:18,839 --> 00:41:23,099 the magnitude of the negativeness or the 779 00:41:20,700 --> 00:41:25,500 inversion itself tells you much it just 780 00:41:23,099 --> 00:41:27,300 gives you a sense of risk whereas the 781 00:41:25,500 --> 00:41:29,040 normalization of the curve is much more 782 00:41:27,300 --> 00:41:31,200 ominous it actually gives you a sense 783 00:41:29,040 --> 00:41:33,780 recession might be here actually 784 00:41:31,200 --> 00:41:36,119 it's very that's fair and from for my 785 00:41:33,780 --> 00:41:38,520 benefits I know you look at several 786 00:41:36,119 --> 00:41:40,380 different curvy versions but when you 787 00:41:38,520 --> 00:41:42,900 say the curvy version usually looking at 788 00:41:40,380 --> 00:41:45,119 what two and ten what what is the the 789 00:41:42,900 --> 00:41:47,579 basic one I I know I'm oversimplifying 790 00:41:45,119 --> 00:41:49,500 but just for my benefit sure no I mean I 791 00:41:47,579 --> 00:41:52,020 think that the normal one is to intend 792 00:41:49,500 --> 00:41:54,119 two being the monetary policy sort of 793 00:41:52,020 --> 00:41:55,500 indicator and 10 being the long-term 794 00:41:54,119 --> 00:41:58,140 normal conditions of growth and 795 00:41:55,500 --> 00:41:59,820 inflation right so the normal is 10 and 796 00:41:58,140 --> 00:42:02,040 the two years the current cycle so you 797 00:41:59,820 --> 00:42:04,079 know how do you distorted that is means 798 00:42:02,040 --> 00:42:06,119 how tight the the situation is compared 799 00:42:04,079 --> 00:42:07,800 to what it should be right uh but 800 00:42:06,119 --> 00:42:09,300 there's even a more stringent one which 801 00:42:07,800 --> 00:42:11,040 is the three month which is almost 802 00:42:09,300 --> 00:42:13,560 current monetary policy right like just 803 00:42:11,040 --> 00:42:15,540 what the FED is doing right now two year 804 00:42:13,560 --> 00:42:17,880 includes what I was talking about right 805 00:42:15,540 --> 00:42:19,859 what will happen is the next year so but 806 00:42:17,880 --> 00:42:22,380 yeah I guess any any of those two curves 807 00:42:19,859 --> 00:42:24,000 uh are basically telling you similar 808 00:42:22,380 --> 00:42:26,040 things right you're very very inverted 809 00:42:24,000 --> 00:42:27,720 which means policy is very tight and 810 00:42:26,040 --> 00:42:30,240 there's a huge risk that the economy can 811 00:42:27,720 --> 00:42:33,359 decelerate including recession right 812 00:42:30,240 --> 00:42:36,240 yeah yeah and maybe another one to you 813 00:42:33,359 --> 00:42:38,700 Alejandro is this is more related to the 814 00:42:36,240 --> 00:42:40,560 committee actually how so there are lots 815 00:42:38,700 --> 00:42:42,180 of volatility for that for the for the 816 00:42:40,560 --> 00:42:44,599 curb in general purpose but for the 10 817 00:42:42,180 --> 00:42:47,820 year for sure we've been seeing 818 00:42:44,599 --> 00:42:51,300 days with 15 beeps movement which is not 819 00:42:47,820 --> 00:42:53,940 normal for for American market so we're 820 00:42:51,300 --> 00:42:56,220 currently at what called 380 or 821 00:42:53,940 --> 00:42:57,780 something like that but it's been 3 40 822 00:42:56,220 --> 00:43:00,839 maybe a month ago so it's very very 823 00:42:57,780 --> 00:43:02,819 volatile how do we feel in terms of 824 00:43:00,839 --> 00:43:06,119 um portfolio location right strategic 825 00:43:02,819 --> 00:43:09,240 location for the for the 10 years or are 826 00:43:06,119 --> 00:43:10,560 we still is that still attractive are we 827 00:43:09,240 --> 00:43:13,260 taking any kind of view in terms of 828 00:43:10,560 --> 00:43:14,640 overweight underweight how do we how are 829 00:43:13,260 --> 00:43:16,920 you playing that in the in the committee 830 00:43:14,640 --> 00:43:19,619 so we're neutral at this point I think 831 00:43:16,920 --> 00:43:21,599 uh there's probably an opportunity if it 832 00:43:19,619 --> 00:43:24,000 gets closer to four I think there's two 833 00:43:21,599 --> 00:43:25,800 things that I would look uh to see if 834 00:43:24,000 --> 00:43:27,960 it's attractive for duration one is 835 00:43:25,800 --> 00:43:29,880 levels right it will get closer to four 836 00:43:27,960 --> 00:43:31,680 I think you're being compensated for 837 00:43:29,880 --> 00:43:34,380 whatever happens there's enough carry to 838 00:43:31,680 --> 00:43:36,540 protect you and the second thing is if 839 00:43:34,380 --> 00:43:38,160 the prospects of recession become more 840 00:43:36,540 --> 00:43:40,020 realistic then you want to have duration 841 00:43:38,160 --> 00:43:42,300 right that's the only thing that really 842 00:43:40,020 --> 00:43:43,680 protects you your portfolio against you 843 00:43:42,300 --> 00:43:45,839 know the worst case scenario so those 844 00:43:43,680 --> 00:43:49,400 those two things right levels four 845 00:43:45,839 --> 00:43:51,480 percent and potential for you know 846 00:43:49,400 --> 00:43:53,280 generally what you would think is when 847 00:43:51,480 --> 00:43:54,660 the market is too happy maybe that's a 848 00:43:53,280 --> 00:43:56,040 good opportunity to start thinking about 849 00:43:54,660 --> 00:43:57,420 you know being not as you know 850 00:43:56,040 --> 00:43:59,099 optimistic and the other way around 851 00:43:57,420 --> 00:44:01,319 right so being a little bit contrary and 852 00:43:59,099 --> 00:44:03,000 sometimes sometimes pays off but I I 853 00:44:01,319 --> 00:44:05,640 think at this point we're not we're not 854 00:44:03,000 --> 00:44:07,500 very kind of interested in duration but 855 00:44:05,640 --> 00:44:09,900 they might come at a moment where it's 856 00:44:07,500 --> 00:44:12,240 more attractive yeah no that makes sense 857 00:44:09,900 --> 00:44:13,560 just just to make it clear neutral 858 00:44:12,240 --> 00:44:15,300 doesn't mean that we don't we're not 859 00:44:13,560 --> 00:44:18,660 adding any just means that we are in our 860 00:44:15,300 --> 00:44:21,000 currently our basic allocation which we 861 00:44:18,660 --> 00:44:23,700 do carry 10 year Treasures in in a 862 00:44:21,000 --> 00:44:25,980 portfolio but we just don't have a view 863 00:44:23,700 --> 00:44:27,599 to be overweight or underwriting relates 864 00:44:25,980 --> 00:44:29,940 to benchmarks 865 00:44:27,599 --> 00:44:31,800 um Raj I know that you look up at a 866 00:44:29,940 --> 00:44:33,420 bunch of and I'm going through a couple 867 00:44:31,800 --> 00:44:35,880 of questions there are a bunch of them 868 00:44:33,420 --> 00:44:39,240 popping up but uh I know you look 869 00:44:35,880 --> 00:44:42,000 markets in general uh but there's a lot 870 00:44:39,240 --> 00:44:43,740 of going on in the EM space right do you 871 00:44:42,000 --> 00:44:45,119 think that that 872 00:44:43,740 --> 00:44:47,280 can I 873 00:44:45,119 --> 00:44:48,780 it's more about how do you how do you 874 00:44:47,280 --> 00:44:51,300 communicate a lot with Rodrigo Lopez 875 00:44:48,780 --> 00:44:53,880 which are em guy for em strategies for 876 00:44:51,300 --> 00:44:56,819 uh equities 877 00:44:53,880 --> 00:44:59,940 do you think that that can maybe uh 878 00:44:56,819 --> 00:45:02,339 affect Brazil or Dem space as a whole I 879 00:44:59,940 --> 00:45:03,660 understand this is not your yeah so yeah 880 00:45:02,339 --> 00:45:06,240 I know it's a question that came up 881 00:45:03,660 --> 00:45:07,980 obviously like you mentioned um Rodrigo 882 00:45:06,240 --> 00:45:09,960 Lopez is the expert on emerging market 883 00:45:07,980 --> 00:45:11,460 equities and Brazilian equities 884 00:45:09,960 --> 00:45:13,319 um I think there's a there's a 885 00:45:11,460 --> 00:45:15,780 discussion around that actually going on 886 00:45:13,319 --> 00:45:17,460 as we speak in terms of 887 00:45:15,780 --> 00:45:19,800 um you know we talked about China 888 00:45:17,460 --> 00:45:22,200 reopening last month 889 00:45:19,800 --> 00:45:24,180 um you know the commodity question that 890 00:45:22,200 --> 00:45:25,980 you also got in terms of you know what 891 00:45:24,180 --> 00:45:27,839 is the China reopening mean for for 892 00:45:25,980 --> 00:45:29,880 Commodities and obviously 893 00:45:27,839 --> 00:45:31,680 um you know one there's the immediate 894 00:45:29,880 --> 00:45:33,420 impact is you know Chinese equities have 895 00:45:31,680 --> 00:45:34,859 done well to start the year 896 00:45:33,420 --> 00:45:36,839 um you know emerging market equities 897 00:45:34,859 --> 00:45:38,520 have done well and you know clearly if 898 00:45:36,839 --> 00:45:39,900 the commodity backdrop is good it you 899 00:45:38,520 --> 00:45:42,180 know it could ultimately have 900 00:45:39,900 --> 00:45:44,520 implications for 901 00:45:42,180 --> 00:45:46,500 um Brazil but you know I'd leave it to 902 00:45:44,520 --> 00:45:47,880 to Rodrigo in terms of you know opining 903 00:45:46,500 --> 00:45:49,500 on what it means specifically for 904 00:45:47,880 --> 00:45:52,079 Brazilian equities but you know you can 905 00:45:49,500 --> 00:45:53,880 see there is a I mean Brazil is driven 906 00:45:52,079 --> 00:45:57,359 in some sense by what goes on with China 907 00:45:53,880 --> 00:46:00,540 and the commodity markets so hopefully 908 00:45:57,359 --> 00:46:03,540 that helps in terms does thank you 909 00:46:00,540 --> 00:46:03,540 Bernardino 910 00:46:07,319 --> 00:46:09,319 um 911 00:46:09,660 --> 00:46:11,900 foreign 912 00:46:40,920 --> 00:46:43,920 foreign 913 00:47:22,560 --> 00:47:25,560 effective 914 00:47:34,440 --> 00:47:37,440 um foreign 915 00:47:40,120 --> 00:47:43,210 [Music] 916 00:47:59,190 --> 00:48:02,239 [Music] 917 00:48:34,319 --> 00:48:36,500 foreign 918 00:49:14,500 --> 00:49:17,559 [Music] 919 00:49:29,300 --> 00:49:32,709 [Music] 920 00:49:40,400 --> 00:49:45,720 perfect perfect 921 00:49:42,260 --> 00:49:47,400 I think I'm gonna wrap it up uh first of 922 00:49:45,720 --> 00:49:49,619 all thank you very much for you guys for 923 00:49:47,400 --> 00:49:52,020 for joining the conversation I I learned 924 00:49:49,619 --> 00:49:53,160 a lot I think was very insightful the 925 00:49:52,020 --> 00:49:55,440 the 926 00:49:53,160 --> 00:49:57,240 I'm getting out of here 927 00:49:55,440 --> 00:50:01,140 with a bunch of information I think soft 928 00:49:57,240 --> 00:50:03,599 Landing is our base case between private 929 00:50:01,140 --> 00:50:06,800 bank and of course you guys in in Italia 930 00:50:03,599 --> 00:50:11,160 uh I think inflate the discussion around 931 00:50:06,800 --> 00:50:13,079 inflation slash recession is how 932 00:50:11,160 --> 00:50:16,200 how fast that's going to come in terms 933 00:50:13,079 --> 00:50:19,400 of Are We pushing out the this this soft 934 00:50:16,200 --> 00:50:21,540 Landing or not always 935 00:50:19,400 --> 00:50:24,240 considering the risk of a hard landing 936 00:50:21,540 --> 00:50:26,940 at some point how risk assets and and 937 00:50:24,240 --> 00:50:30,000 fixed income and and the horoscope 938 00:50:26,940 --> 00:50:31,260 actually is is behaving so uh if you do 939 00:50:30,000 --> 00:50:33,300 wanna 940 00:50:31,260 --> 00:50:36,480 conclude with any kind of any kind of 941 00:50:33,300 --> 00:50:38,400 sense please go ahead Raj Alejandro and 942 00:50:36,480 --> 00:50:40,980 Bernardo but if not I think this was 943 00:50:38,400 --> 00:50:42,720 very very helpful no just I would like 944 00:50:40,980 --> 00:50:45,180 to say thanks uh for everyone FC 945 00:50:42,720 --> 00:50:46,619 Bernardo for joining us and you know we 946 00:50:45,180 --> 00:50:49,760 look forward to uh to seeing everyone 947 00:50:46,619 --> 00:50:49,760 again next month 948 00:50:52,910 --> 00:50:57,119 [Music] 949 00:50:54,900 --> 00:50:59,720 we're not 950 00:50:57,119 --> 00:50:59,720 thanks 951 00:51:01,859 --> 00:51:05,839 bye everyone bye thanks very much