Asks about the structural trade of selling tech winners and rotating into names less affected by AI volatility.
Romaine Bostick
Alessio de Longis
Confirms the rotation into traditional cyclical industries, mid-cap, and small-cap value sectors. Sees this as a way to participate in broader market participation while avoiding uncertainty in AI-related sectors.
Asks about the conviction behind this view, requiring conviction on the state of the economy.
Romaine Bostick
Alessio de Longis
States conviction is high. Describes a Goldilocks scenario: growth rising in US and globally, inflation coming down gradually, monetary policy not tightening (easing bias ending), and expansionary fiscal policy.
Asks how the Goldilocks view extends to the bond market and the recent steepening of the global yield curve.
Kristine Aquino
Alessio de Longis
Explains the initial steepening was driven by the short end coming down due to monetary policy. Current steepening is driven by the long end rising due to real rates increasing.
Asks how the Fed's recent caution over inflation fits into his view and if it's justified.
Kristine Aquino
Alessio de Longis
Agrees central banks are now in a holding pattern, which is justifiable with stable inflation and commodity volatility. The Goldilocks scenario is no longer fueled by expectations of additional rate cuts.