Mideast fallout impacts investments

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1:00helps to have a big petrol tank at this time. Right, for more on all of that and to try and get across some of the detail on what is behind it, I'm joined here in the studio by Alice Mew from Craig's Investment Partners. Good morning, Alice. We're in a gaff, are you? Fantastic, great to have you here in the studio. Thank you. Look, everybody's talking about it. Yeah. It doesn't feel like the story at the moment is not so much less bad news in the last little while as not really good news. Yeah, interestingly, the equity markets have been relatively complacent, which is interesting, as you saw today, equity markets are actually up, and we've only seen single-digit equity market moves since the crisis began. So that says to us that equity markets are pricing in inflation concerns, but at the moment not a big shock to either earnings or growth, longer term. I guess we're sort of seeing continual interest in the news that's coming out of there. There was some talk overnight about more oil movements starting to come out of the straight-of-war moves,

2:01the US allowing Iranian tankers to sort of move and supply China and so on. So it feels like people are trying to define the crisis or define the conflict to the players and let those that are at one remove from it carry on doing business. I think so. I mean, the fundamentals going into this crisis or this conflict were very strong and I think that's put the economic, the global economy in good stead. I mean, it's going to continue to be volatile, there's volatile geopolitics at the middle of this. So I think it will bounce around for the next few months, but our base case, which is the scenario that we put the most probability on, is that there will be a de-escalation in time for this to not have a lasting impact on structural inflation or earnings and growth. And I guess at some point, you have to start altering that base case, right? We haven't reached that point yet. We're going at closely and having a lot of conversations about it, but no, at the moment, we're pretty comfortable with our base case, but we're obviously looking for troops on the ground, signs that this will go on for a lot longer,

3:02which could have a bigger impact. I think there were some remarks over the weekend, or probably more like in the last 24 hours, our time scale from the Israeli Defence Force, that they had a three-week program of attacks from this, and then perhaps thoughts of another three weeks after that, is that the kind of, I mean, obviously there's this, you know, pretty terrifying use for the people involved, but is that the kind of data point that people look at when they're saying how long is this thing going to go on? I think so. I think most of the market are expecting a couple of months, so it'll be interesting if it goes on longer than that, that could cause the misuse for markets. So where are I guess people thinking about if they are more active trying to respond to this, and how are they weighing up their risks, do you think? So we're slightly, we've kept our TAA, which is our tactical asset allocation view, which is slightly overweight growth. So we are monitoring to see where there's areas that we could actually act on that and add a bit more, a bit more risk, so one of those is emerging markets.

4:03Obviously, the emerging markets, some of the Asian ones are reliant on the oil coming out of there, but underlying fundamentals are really strong, so we see that as an area. So AI infrastructure, so broadening out exposure there. Yeah, and we'll hear I think probably about the next half hour or so out of San Jose, Jetson Wang, the sort of superstar CEO of Nvidia talking about what's likely to come there. Anyone's guess really, I think a little bit of market interest in whether he's going to report an even greater lift in the back audits that Nvidia's got some of its chips. Yeah. Yeah.