Markets Happy Hour Podcast - January 9, 2025 - Fire and Ice

In this week's Markets Happy Hour podcast we were sadly not live from Dallas, where we had hoped to be hosting a group of you at the gorgeous Old Parkland campus. Unfortunately a forecast winter storm got in the way of our plans, and we will be rescheduling that for a later date - hopefully well out of the winter storm woods - in April.

On a day that markets are closed for President Carter's funeral, we reflect on some unease at the start to the year, and the return of the good news is bad news conundrum. The "good" news in this case was the positive US employment numbers and a revised (upwards) PMI which only gave more substance to the notion that the formerly predicted pace of rate cuts would not happen (10) as expected. The expectations are now around 6 rate cuts, 4 of which have already happened in the US.

The bond market continued to swing around quite wildly, with the yields on 10 year bonds rising sharply - and this was a global phenomenon. We discuss how certain markets have more intrinsic resilience around these developments that others - with a case in point being the UK which is experiencing perhaps some PTSD around the Liz Truss Mini-Budget chaos of the end of 2022, and fearing a similar sell-off.

We move then to discuss the "message in a bottle" whereby geopolitics are moving around the volatility of President Trump's tweets - in this case with respect to Greenland, Panama and Canada, and we ask if this reflects a fundamentally different world order with different security concerns etc. Finally we turn to the devastating Los Angeles fires which continue to burn at the time of writing, and ask whether we need to factor this risk assessment into all investments - particularly real estate - in a more intentional way.