彭博播客：油价与美债收益率相关性创新高及AI产业链投资逻辑

Look, everybody's talking about rates and long rates. And the main question is why are long rates rising? You could say maybe because of growth and productivity. You could say maybe because of inflation, you could say maybe because rates are rising in other countries. You could say, well, it's this wonky term, the term premium. And we don't really know how it's measured, but maybe it's that or you could say is is a deficit.

The prevailing narrative, Paul, is that it's probably the deficits. But I've been looking into this how the ten year is trading relative to oil prices. I calculated the rolling 30 day correlation between changes in the ten year and changes in oil prices. And I went back 40 years. And guess what? It's at 80% plus 80% correlation between oil and the ten year yield. And that is the 99th percentile basically as high as it's been over that 40 year period.

Right now the ten year is actually quite responsive to oil prices. So I would not underestimate the inflation impact and also the fact that market participants might be thinking, well, if the war continues that means more deficits as well. So these things are all related. But my message is do not underestimate the oil price and inflation component of rising long rates. Okay a market's overdoing though the idea of rate hikes I mean, looking at Bloomberg's chief US economist Anna Wong I'll take her word for it.

Yes. August will see tepid jobs growth this month usually surprises to the downside. So we got, you know, the marquee report on Friday, the nonfarm payrolls number and then the CPI out next week. So are we overdoing it potentially are US economists Marina bureau chief she's often on Bloomberg. As you know, she has the probability of a hike following Jackson Hole at about 50% and the market mispricing maybe a hike of 70%.

So the bigger question is, is this going to move markets whether we get a small hike or not? I think we tend to overestimate the impact of the fed when we have 3 trillion, 1 trillion a year expected of annual spending for the IE trade. And when corporate earnings are growing, S&P earnings are growing at 30%, 50%. If you had the special adjustment. So Caroline, I would say sometimes they just overthink the run, the role of the fed in the macro economy and in S&P earnings.

Sebastian, what is the. I don't know what is the eye trade today in the marketplace. Where do you think we are in the evolution of investors thinking about I. You know Paul I don't know when you covered row how many analysts we had, but we have over three. We had over 300 across our platform. Our analysts published 10,000 research notes a year. They do 4000 CEO meetings. It's one of the top research platforms in the world, and a discussion in our investment meetings is about the difference.

Your question the definition of the IE trade. Where are the bottlenecks? The bottlenecks are moving. The eye trade itself is quote unquote broadening. It's not just CPUs or it's just memory. It's cooling systems. It's the electrical grid. It's even in some ways aerospace and even some small companies that end up producing this little golden component. Right? This little piece of the supply chain for AI that becomes a bottleneck.

And all of a sudden those stocks go vertical. So studying understanding the eye trade where the bottlenecks are moving is a big role for fundamental analysts. Now the bottom line when we look at all of it is that the eye trade continues. You just need to be. And I hate to say it because it sounds like a cliche, but you do need to be selective in how you play the I or Trey. Yeah. Okay. Selective. I mean, and you're also very hopeful about the next quarter in terms of earnings out of the US.

I really have to flip the narrative, because when I sit in Europe and I'm in London, I'm crying. A lot of it is about the difficulties, the pressure that European businesses are under to grow. I come to New York, I'm energized. Businesses are growing. What are you thinking about this quarter and the strength of earnings that we're going to see? I mean, expectations are higher now. So higher now. You know, it's the same on our asset allocation committee.

Our colleagues dialing in from Europe tend to be a bit more bearish and worried about. I think the big risk for Europe is just the energy prices and the sensitivity to of the economy to the energy prices, because you don't have this massive AI CapEx cycle, but the valuations ultimately are more attractive relative to the U.S. we land in our asset allocation committee neutral between Europe, may maybe slightly underweight and we add a little bit more to emerging markets equities because believe it or not, emerging markets are now a way to play the eye trade.

Maybe a cheaper way to play it as well. But we see the exact same distinction between the mood in New York City and London. And a lot of it has to do. You look at oil prices with this energy. I don't want to say an energy shock, but it's been quite a while with elevated oil prices, and this will have more of an impact on energy dependent economies. Uh, Sebastian I see the Russell 2000 up 1,718% this year kind of beating the S&P 500.

Is this a prolonged outperformance period do you think for small cap stocks. Um we like the broadening trade. We've been long the small and mid caps for over a year. There is a convergence in the earnings growth at some point between small and mid caps and large caps. You do have an economy in the US to the prior question That's growing at maybe 6% nominal. That's decent growth impulse for small caps. Small caps are also now participating in different ways in the eye trade.

There are lots of opportunities to differentiate between stocks for skilled active management and the valuation. Well, if you look at the S&P 600, which has the companies that are generating positive earnings, that index relative to large cap in terms of its price earnings ratio, is still in the bottom 30% of its long run historical range. So you have a valuation advantage. And while small caps are participating increasingly in the eye trade, this golden component, for example, it is clear that when markets sell off on eye news, counter-intuitively, because you think of small and make caps as more cyclical, they're right.

They actually do better. There's a there's a sort of a diversification aspect to being long, small and mid-cap in a world that is essentially eye on, an eye off.