Volatility is due to the 'AI scare'. The market entered the year with elevated, crowded valuations, making it vulnerable to the smallest expectation mismatches from AI disruption. The market is unsure how the AI rally will proceed, with clear winners and losers emerging.

Affirms it's true but notes the need to keep redefining the AI/software trade as news evolves. They have become selective within AI names and are diversifying beyond them.

States it's difficult to know winners/losers in the next 24 months. The best approach is to diversify beyond the trade. They still like infrastructure, semiconductor, chip, and EV battery stories, and are expanding beyond the US to emerging markets.

Currently a 'pocket risk', not systemic. The private credit market has been fond of AI names, with lending possibly around 20% to the sector. The key question is how many of these companies will survive. The risk is contained but can spread; one cannot be complacent.

Private credit/equity are buy-to-hold assets. Mispricing can lead to redemptions, causing a domino effect across asset classes, spreading to public credit spreads and back to private markets due to reduced risk appetite—a vicious cycle.

It's surprising; was looking for curve steepening. The reason is the bond market is finally reacting as a safe haven to geopolitical risk and the 'AI scare', driving flows from equity and other risk assets into bonds.

Expects oil to be extremely volatile. Believes there is about $10 of geopolitical risk premium embedded. Fundamentally, demand is not booming and non-OPEC supply is healthy, putting fair value around $60. Until the geopolitical situation resolves, the oil market will be volatile.