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In this episode of Insight Talks, our experts reflect on UK news flow over the last month, including the most recent Bank of England meeting, various economic data releases and the looming Autumn Budget which has been grabbing a lot of column inches in recent weeks.
James, Isabel and Giles discuss the start of the Federal Reserve’s rate cutting cycle in the US, plus the ongoing malaise in the Chinese economy including policymakers’ recent stimulus package announcement.
We then consider the ongoing and escalating conflict in the Middle East and touch on the latest developments in the US presidential race.
This podcast is brought to you by Close Brothers Asset Management – closebrothersam.com – and features James Tulloch, Senior Investment Specialist, in conversation with Isabel Albarran, Investment Officer and special guest Giles Parkinson, Head of Equities.
We’ve created this podcast to set out possible approaches. Please do not view it as financial advice, or its content as investment recommendations. Just because an investment or an investment strategy has performed well in the past, does not mean it will continue to do so. Our predictions are based on information that is currently available, however events and markets can and do change rapidly.
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What is Insight Talks?
Our in-house experts share our views on the current market conditions facing investors. Brought to you by TrinityBridge.
This podcast is brought to you by Close Brothers Asset Management. We've created this podcast to set out possible approaches. Please do not view it as financial advice or its content as investment recommendations. Just because an investment or an investment strategy has performed well in the past does not mean that it will continue to do so. Our predictions are based on information that is currently available.
Speaker 1:However, events and markets can and do change rapidly.
Speaker 2:Hello, and welcome to the October edition of the Close Brothers Asset Management podcast with me, James Tulloch. And wonderful as usual to be joined today by Isabelle Albrand. Hello, Isabelle. Hi, James. And very fortunate today to be joined also by Giles Parkinson, head of equities here at Close Brothers.
Speaker 2:Hello, Giles. Hey, James. Afternoon. Afternoon. Great to have you with us.
Speaker 2:So, into the Q4 of 2024, and the Q3 ended pretty positively, with, pretty positive returns across most major asset classes, despite the bouts of volatility, which we've discussed on on recent podcast. September finally saw the start of the Federal Reserve's rate cutting cycle, which, along with a new round of stimulus measures announced by, Chinese policymakers went a long way towards laying investor concerns, and stock markets rallied towards towards the end of the quarter. Although the return from from global equity indices, which are, of course, dominated by the US, was somewhat more muted in sterling terms due to a weaker dollar or stronger pound, although that trend has reversed course a little during the early days of of October. And then elsewhere, Asia ex Japan equities and emerging market equities were, were very strong in sterling terms, actually, up around 6.2% and 4 a half percent, respectively, over the course of the month. Beyond that, there were some strong returns from parts of the stock market, which had previously been suffering due to persistently high interest rates, such as small cap stocks, and, and and property vehicles, such as real estate investment trusts.
Speaker 2:And fixed income markets were also bolstered by the prospect of lower rates as one would expect. Commodity performance was somewhat more muted with Brent crude oil prices falling around 17% over the course of the quarter amid concerns around the the ongoing conflict in the Middle East, and global growth, in particular, ongoing malaise in. The Chinese economy, although as I say, that trend reversed a little, and the oil price rebounded somewhat in early October following the stimulus measures, announced by the Chinese government late in the month. Elsewhere, gold continued its march higher, continuously rising to a new all time highs, and breaching the $2,600 an ounce level. So we've lots to get into over the course of the podcast.
Speaker 2:We'll, of course, reflect on that all important Fed rate decision, and we'll also delve into, that stimulus package announced by Chinese policymakers. We'll look at the latest u UK news flow, with the Bank of England leaving rates, unchanged at the last meeting and, of course, the looming budget and grabbing a lot of column inches as well. We'll touch on the ongoing and sadly escalating conflict, in the Middle East, and we'll perhaps also touch on latest developments, in the US presidential race, as well. But we'll begin as usual with a little fact, little question, and I believe it's, Isabel, your turn to try and flummox us this month.
Speaker 3:Indeed. And it's pumpkin season. So Okay.
Speaker 4:Pumpkin related facts.
Speaker 3:The water cultural enthusiasm among us too. So the world's largest pumpkin, did it weigh as much as, a, an African elephant
Speaker 4:Right.
Speaker 3:B, a narwhal, or, c, 2 polar bears.
Speaker 2:Oh, Christ.
Speaker 3:I think James should go guess first because he's had most experience with, guessing the facts.
Speaker 2:Okay. I will guess. I'll go with 2 polar bears.
Speaker 3:2 polar bears? Okay. Cool. How about you, Giles?
Speaker 4:I was also gonna go for 2 polar bears, but I've got a reason behind it, which is pumpkins are gonna be hollow Oh. Sort of. So, actually, it might be surprisingly large, maybe not that heavy. Narwhals, don't know. So, yes, can I also double up on the, 2 polar bears?
Speaker 3:Yes. This question does involve you having a a bit of knowledge about both horticulture and the weight of various animals. Well, I'll put you out of your misery. Unfortunately, you're both wrong.
Speaker 2:No. I didn't.
Speaker 3:It weighed 1.23 tons, which is very close to the weight of the average narwhal, which is 1.25. An African elephant is 4.8 tons on average. 2 polar bears would be just shy of a ton.
Speaker 4:Gotcha.
Speaker 3:So no prices this week.
Speaker 4:Small margin difference, though, between 2 polar bears and 1 narwhal. I am think we've got separate prices
Speaker 2:on it. I went to what I thought would be the lightest, and it was the lightest, but not the light. Okay. Thank you, Isabelle. Okay.
Speaker 2:We'll begin with that, Fed rate cut. So a full 14 months on from the last interest rate hike, the Federal Reserve delivered their first, rate cut in more than 4 years, with a, 50 basis point move, in September. Now ahead of the meeting, I think we knew that the Fed were more or less certain to cut rates. The question was really by by how much, and the bumper naught 0.5 percentage point cuts, surprised some observers, didn't it?
Speaker 3:I think that's very much true. And I think sort of thinking about it from the Fed's perspective, to some extent, this was an exercise in realigning themselves with where market expectations were.
Speaker 2:Yeah.
Speaker 3:So we had a sort of increasingly large gap between what the Fed's own forecast, the dot plot, was saying was going to happen to interest rates and where market pricing was. Mhmm. And this adjustment in the policy rate and in the dot plot itself brought the fed a bit closer to where the market was. So about 50 basis points lower this year compared to, the previous indication.
Speaker 2:Okay.
Speaker 3:That said, the market is still a little bit ahead of the Fed in terms of expecting more cutting.
Speaker 4:Mhmm.
Speaker 3:And that gets more pronounced the further out we look in that forecast. So if we look to sort of end of 2025, beginning of 2026, then the market is expecting rates to be very close to 3%. Mhmm. And that's very much at the lower end of what the Fed considers the neutral rate of interest to be. And given that we're still seeing economic data looking quite strong, I think there remains a question.
Speaker 3:And that's why we've had the Fed pushing back on those expectations.
Speaker 2:Okay. Okay. And, Gels, clearing that that hurdle of the first, Fed cuts, is something which you've been looking to for for some time. And with inflation cooling, we've seen other Western Central Banks sort of deem it appropriate to to cut rates further as well. The European Central Bank delivered its second rate cut in September, taking rates there to 3 a half percent.
Speaker 2:Has the month of September altered your outlook at all? Does a a hefty rate cut against a pretty resilient US economic backdrop risk sending the wrong signal to to financial markets? And could markets get ahead of themselves a little bit here? Well, James, the argument for a half point cut,
Speaker 4:I think, rests on several pillars. Crucially, the Fed's confident that it's on track to bring inflation under control. Price rises have slowed. It's not far from its target 2%. And as you mentioned, with oil prices sagging just recently and rent, those shelter costs rising more slowly, I think there's a good chance inflation will soon ease further.
Speaker 4:So the Fed's worries have shifted over to the job market. And here, the unemployment rate of 4% is low, but it is nearly a full percentage point higher than early last year. And companies we know from talking them, we know from reading newspapers, companies are paid back their hiring. Now Jerome Powell, chairman of Federal Reserve, he portrayed, I think, this rate cut as a recalibration of monetary policy in line with the lessening of inflation and an increase in those unemployment risks. So it's definitely a shift in what side of their mandate they're thinking about.
Speaker 4:Look. It also, as you mentioned, takes months for rate cuts or hikes to really filter through the economy. This is the notorious long and variable lags. And given the lags, and the expectation that the economy is gonna continue to slow from here, I think it does perhaps make sense for the Fed to make a bigger move now in order to get ahead of the coming weakness. This is the same central bank which was accused of being too late perhaps to raise rates in 2022.
Speaker 4:Now this time, I think it and we hopes that by starting with a bigger cut, that's gonna steer the economy towards a soft landing, avoiding recession, which many market participants and even, I think, the Fed themselves privately probably thought was inevitable. But this big rate cut does pose some dangers. Despite slowly rising unemployment level, the economy as a whole appears to be holding up rather well. Yeah. Residient consumption, it's been on track for good growth in in, the current quarter.
Speaker 4:So that 50 basis point rate cut gets a strong backdrop, could send a wrong signal to markets. Potentially, the Fed is focused too much on the employment side, not enough on the inflation side. However, although the current forecast of Fed officials in their most recent dot plot is they're gonna cut rates by 1 a half percent by the end of next year, they could easily dial that back and make fewer cuts if inflation proves to be more stubborn.
Speaker 2:Yeah. Yeah. Sure. I think it's important to sort of recognize that although further rate cuts are expected, the market implied path for for rates and where they'll get to in, say, 12 months' time is is consistent with monetary policy still remaining relatively restrictive, isn't it, not a looming recession?
Speaker 3:Yeah. Modestly so. I mean, it depends what's happening with the economy. Right? Because if you have a recession, well, then that amount of that level of rates would be too too high for the economy.
Speaker 3:But if the economy evolves as we expect, and, you know, Giles referred to the fact that data has been stronger. Last Friday, we got this extraordinarily strong nonfarm payroll report out of the US. In that context, then, yes, it would be sort of relatively sort of sensible amount of interest rates to have.
Speaker 2:Okay. Okay. Alright. We'll see see how things play out. Over in China then, Isabel, as you said, the Chinese Central Bank announced a series of measures, just the other week designed to improve economic growth, to improve confidence in the the moribund, property market, and therefore, hopefully, consumer confidence as well, and hopefully bolster stock markets and further arrest deflation.
Speaker 2:Now we've seen policy announcements from the Chinese previously, which have been aimed at loosening monetary policy conditions as these are, and thus far, they have underwhelmed. Do these latest measures announce to the, quote, unquote, big bazooka, which markets seem to be, seem to be looking for?
Speaker 3:Well, let's just sort of let's look at what the policy announcements were. I think broadly, I'd put them in 3 and a half categories. So you mentioned measures to support the market itself. Mhmm. Actually, supporting financial institutions and companies themselves with, to facilitate buybacks, and that should sort of support prices, measures to support the housing market.
Speaker 3:So you remember, there was this big initiative to try and buy up inventory to use as social housing Yeah. Things to make that a bit easier, and then measures also around mortgages. And then lastly, keeping a really close eye on financial stability. So an interest rate cut for banks, but supporting the banks as well with a possible capital injection. So what is, notable here is the broad range of different policies that we've seen, but I think alone, these are probably not enough to radically alter the path of the economy.
Speaker 3:They've definitely been enough to alter the path of the stock market. Yep. We're amazed to be seen how long that lasts. But is it enough to really turn around the problems that we're seeing in real estate and with consumer confidence? And I think the policy measures are now so far, the answer is no, but there is very much a possibility and, in fact, a likelihood that we will see more.
Speaker 3:But still, you know, economists, following China are still expecting sub 5% GDP prints both this year and next year. So still very much softer than what we had seen in previous years.
Speaker 2:Yeah. Yeah. Sure. And then Giles, as as Isabelle says there, Chinese stock markets have soared on on the news, although the market reaction elsewhere in global equity is a little bit more more muted. Valuations in China have been and remain pretty cheap.
Speaker 2:Does this change the outlook for Chinese and or emerging market equities at all? And perhaps the example of Russia previously serves as a recent example of a market which, appeared very cheap, but wasn't really investable for Western retail investors, was it?
Speaker 4:Yeah. Chinese equity is, I mean, simply wow. I mean, we've had a confluence of interest rate cuts, relaxation on the rules for home purchases, and extra liquidity, and they've seen this equity market really bounce hard Mhmm. Off its trough. I think, look, to key off Isabelle's comments, what markets are pricing in but is yet to transpire is this fiscal spending.
Speaker 4:We've had a lot of monetary measures. We've had promises about the fiscal side, but we haven't actually seen this trillions of renminbi, so that might be 2, 4, 6. Maybe I've seen numbers as high as 8% of GDP on the fiscal side. But for consumers to feel better off, they do need home prices to stabilize. The consumption picture in China is nuanced.
Speaker 4:It's a bit different to other western markets. So houses are generally important, but it the the housing economy is really important in China. So the hope is that these stimulus measures are gonna affect consumption to then trickle through to earnings. And if the stock market rallies to be sustained, it has to be built on a foundation of first cheap valuations, but then really feed through to earnings growth. There's been a lot of volatility.
Speaker 4:So one stat for you, at the Chinese equities, we've just seen the best weekly return, the best weekly return since the financial crisis and the worst one day return Wow. Since the financial crisis.
Speaker 2:Okay. So debatable perhaps whether the rally can be sustained longer term, but certainly in the short term, that sort of knock on effects. Elsewhere in the region, we're evident too, as we say, with Asian, ex Japan, equity indices performing strongly over over the month. But Japanese stocks, remained pretty volatile, didn't and really found themselves at the other end of the the rankings down around 2.6% in in sterling terms. So how do you view the the the dynamic there?
Speaker 4:The first point to make is Japanese equities in sterling terms have had a good start to the year before we got into the Q3. But, yes, there were a few events came to the surface, in the Q3. That Bank of July Bank of Japan's July rate hike and comments, that guided towards future rate hikes ahead were almost immediately followed by a very weak US labor market print in August. So the one we've had, just now in October for the month of September was very strong, but Yeah. Print before that was extremely weak.
Speaker 4:Mhmm. And currencies often move on interest rate differentials. And as those narrow between the US and Japan, the Japanese yen appreciated sharply against an abrupt unwind of the so called carry trades. Now one as a carry trade, effectively, people have borrowed in something where they think the cost of that financing is very cheap, but the yen was actually having more of a yield on it because interest rates were going up. So those carry trades unwound.
Speaker 4:Now a more reassuring tone from the Bank of Japan officials did later help Japanese stock to pair losses, but the market, as you say, James, did still end up the 3rd quarter slightly in the red.
Speaker 2:Yeah. Yeah. Okay. Okay. Lindbeck, close to home, Isabelle, status quo from from the Bank of England, after a rate cut in August, the bank's Monetary Policy Committee decided to hold interest rates at 5% in in September.
Speaker 2:And fairly conclusively, the committee's vote was 8 to 1 with only 1 member voting to cut rates by, 25 basis points. Now following the meeting, the Bank of England's governor Andrew Bailey explained that it was vital that in inflation stays low, and he noted, that the MPC needs to be careful not to cut rates too fast or by too much, and reiterated the view that policy will need to remain restrictive until the risks of inflation not returning sustainably to the 2% target had completely dissipated. However, later in the month, Bailey said the bank could become, quote, a bit more aggressive and move a bit more aggressively, to lower borrowing costs, in in in an interview he gave to The Guardian. And before the bank's chief economist warned, the very next day against cutting interest rates, having too far or too fast with, Hugh Pills saying that, there should be a gradual reduction in interest rates, to make sure inflation remains near the bank's target. So slightly mixed messaging here.
Speaker 2:What's, what's going on, do you think?
Speaker 3:What's going on indeed? That's a good question. I mean, I think it's, been well telegraphed by the MPC members that there are a range of views even within that cohort who agreed to hold pass on rates. Some people are clearly more concerned about the persistence of inflation than others. I think, this sort of recent having a range of views perhaps has, emphasized that confusion and the sort of, difference of opinion that's there.
Speaker 3:I think the good news is in November, we will get a bit more clarity from the Bank of England because at the next monetary policy meeting in November, we will get a new set of forecasts. So there will be, you know, some numbers to kind of hang hang your hat on a bit more in a bit more of a kind of concrete way.
Speaker 2:Okay.
Speaker 3:And where we are anticipating that there could be another cut delivered then. And, obviously, also, by November, we will have had the detail of the budget. So that will be, a bit clearer. And, you know, we'll have had a couple more months of economic data. I think holding on to the economic data is the best thing to do for now.
Speaker 3:And, generally, economic data has been relatively okay. We're seeing, property data beginning to pick up once more. Yep. The consumer kind of carries on. Growth has not been stellar, but it's been higher than had been broadly expected.
Speaker 2:Yeah. Absolutely. And in terms of the economic growth, data that we have had, we did have the news that the UK economy grew by a little bit less than previously estimated between April June, expanding by about 0.5, of 1%, down a smidge from the initial reading of 0.6 after the output in manufacturing and the construction sectors fell by a little more than first thought. But some way from evidence of the economy turning down significantly and I don't think expected to lead to any changes in the forecast the Office of Budget Responsibility is preparing ahead of the the budget at the end of the month, are they?
Speaker 3:No. Absolutely not. So I think on that GDP print, some of that softness is likely to be a sort of intertemporal shifting of activity. So we should see a bit of a pickup in some of those sectors, in the later quarter. And then on the OBR, well, I think we're probably actually going to see a bit of an uptick to OBR forecast compared to the last set that we had in March.
Speaker 3:So I think the last forecast was 0.8% for 2024, and I think the current sort of street estimate is around 1.1. So chances are a bit of an uplift there, but that uplift in GDP forecast is probably not going to be enough to offset the fact that there's gonna be a big uplift in borrowing requirements. Sure. So those fiscal rules will still need to take a look at.
Speaker 2:Okay. And on the subject of the of the budget, Giles, it's something obviously which Isabel and I have discussed a number of times on previous podcasts. And I know there are various communication pieces we are planning for the week of or even the day of this, hotly anticipated announcement from from the chancellor. But it would be interesting really to get your thoughts on on what's expected and and the impact that it that it might have from
Speaker 4:a a stock market perspective because it does seem that investors have turned a little bit cautious on on UK equities and Sterling, after the the summer rallies we've we've seen, doesn't it? Is this just pre budget caution and profit taking perhaps? Yeah. I think so. Look, James, my take on this is that I think the hopes of new labor leadership reviving growth and investments, has become overshadowed by concern about the debt laden, economy and the government hiking taxes in this month's budget.
Speaker 4:Yes. Thinking back a few months ago after summer rallies, Sterling has since faltered in UK stocks, bounced back sharply from depressed valuations earlier this year, have actually turned lower just very recently. There's been some declining trends in UK business, consumer confidence. And, yeah, I I think it is important to acknowledge these nerves around the potential, budget tax hikes potentially weighing on growth and weighing on investor sentiment Sure. Importantly.
Speaker 4:Yeah. Couple of stats for you. Investors have pulled a net 700,000,000 out of UK stock funds in September. That's according to the fund tracker Calliston. Whilst they've added money to all other geographically focused fund sectors, particularly favoring US focused vehicles.
Speaker 4:And so we're looking ahead to that October 30th budget. UK business optimism hits slump to 9 month lows, having surged in the summer, and markets are bracing for higher capital gains, tax, and bank levies. So, look, all of these are sentiment weakening measures. But as Isobel's flagged, the real economy, the tangible stuff is actually carrying on for now. What is meant for the market?
Speaker 4:You know, Britain's FTSE FTSE 100, it's trading at a wide valuation discount to Wall Street's S and P 500, one of the widest on record. Yeah. The UK focused FTSE 250 index, that's a slightly more domestic orientated index, has gained about 16% from mid January to late July, a strong catch up trade, but it is on track for a small fall this week. I think investors seem to be watching and waiting, take the measure of labor, and see if they've got the feasible and thought through plan for the next few years. But UK stocks and unemployment government bonds should recover if the Bank of England cuts interest rates faster than expected.
Speaker 4:Okay.
Speaker 2:Brilliant. Thank you very much. Now, Isabelle, the, always difficult topic of, the conflict ongoing conflict in the Middle East, as I say, always a very difficult con con subject to to discuss. As we've noticed before, all else really pales into insignificance when set against the humanitarian, disaster, which continues to unfold as we pass the the anniversary of the attacks of October 7th last year, which triggered this, this flare up in intentions. Nevertheless, there has been a bit of an escalation, in the conflict recently, and we do have to consider how that might impact, the global economy and and markets.
Speaker 2:So, obviously, Israel, which has been fighting Hamas in in Gaza for for a year now, has sent troops into Southern Lebanon Mhmm. After a couple of weeks of air strikes on the area. And Iran has also launched ballistic missile attacks on Israel at the end of September, which is the first touch intervention by the Iranians since since April. So what impact have we seen thus far from this most recent escalation? Is it is it something to be really concerned about from a a global growth perspective?
Speaker 3:What's been notable is actually how sanguine the market response has been. Because I think for this recent escalation is that you described, it does make it harder to reach a negotiated agreement because I think, certainly, the Israeli government, are in they're in a slightly weaker position, and they it having an external threat, some extent, could be politically expedient for them
Speaker 2:Yeah.
Speaker 3:In terms of maintaining control of government. In terms of the impact more broadly, I think for investors, the 2 key channels remain the dollar, so we've seen a bit of dollar strength and commodity prices. And, you know, as you mentioned at the top, recent months haven't been particularly constructive for oil. We have seen a bit more strength just in the sort of last week or so, but oil prices remain well below where they were before. Mhmm.
Speaker 3:I think a key thing that, could move the needle there is if we see a pathway to Iranian output being meaningfully disrupted.
Speaker 4:Mhmm.
Speaker 3:But we're in an environment where OPEC countries are looking to increase their output, and the US could probably increase output as well. So in that context, even a complete sort of Iranian disruption probably would not be as market moving on the oil price as it would have been at another time. So, yeah, with that in mind, I think that is why we have seen this sanguine response.
Speaker 2:Okay. Alright. We shall see how things how things progress. Now on the final subject, of the the US election, Giles, as I say, again, it's a topic we've discussed a number of times before, on the podcast as, election campaigning continues apace, and we've also other communications pieces planned for when the outcome of the election hopefully becomes clear in the day or 2 after the after the vote. But, again, interesting, to get your take here.
Speaker 2:How are you and the team sort of thinking about the the outcome of the election, positioning ahead of the election? We've heard a lot about the so called Trump trade. We've discussed that on the podcast before as as well. But is there really a sort of binary market friendly, market unfriendly outcome outcome here?
Speaker 4:So that's not something that we've picked up on so far, James, just in terms of these polls, at least looking at the presidential side, have been so closely matched in terms of the 2, candidates, roughly 5050. But when either one has got a slight advantage over the other, either at the market level or under the surface in terms of some of the individual stocks, we've not noticed a particular Trump trade or, sort of coming through and then washing out as Trump dips again in the polls and in those betting markets and so on. Stepping back, our framework, for these sorts of situations is, 1, is it important? And second, is it knowable? And it's really only when the answer to both of those questions is yes that we feel that it's something that we can then go and invest around.
Speaker 4:So on the is it important side, so far, the market hasn't been treating any particular stocks pushing them around as those polls have fluctuated. So we think it will matter, but the immediate consequences aren't immediately apparent to us. So maybe it's not quite as important as maybe some other past elections have been. On the latter point, is it knowable? We haven't got much to to to add there.
Speaker 4:So, therefore, it's not something that we've really built positions around. Okay. Sure. And then a question really for for for both of you.
Speaker 2:You know, one area where the the 2 candidates are pledging policies which would lead to the same outcome, although to varying degrees, is with regards to the US National Debt. So both candidates would add 1,000,000,000,000 of dollars to the national debt if their campaign pledges were, were enacted. I think it's estimated that that Trump would add something like 7 and a half trillion to to the debt, Powell and and Harris about 3 and a half trillion. And and neither Republicans or Democrats, are seemingly particularly willing to, at this point, at least address the US' growing debt pile. Now tax cut pledges are usually pretty market friendly proposals, but how much of a problem could be being stored up, further down the line here?
Speaker 2:And do we think investors are paying enough attention to the threats from, from spiraling borrowing?
Speaker 3:Well, to sort of echo Giles' comments earlier, I think something that is different here is that there is perhaps a bit less clear water between the two possible outcomes.
Speaker 2:Do
Speaker 3:And that's because if you are going to do a big fiscal increase, firstly, you need to get your own party to vote for it. And while, you know, we we may have sort of, support vocally for, a borrowing increase, the fact of the matter is the US is in a very different fiscal position to what it was in last time. The second is you if unless you can, win both the senate and congress, you're gonna need the other party's favorites as well. And it looks increasingly likely that we could see a split between the senate and congress. Okay.
Speaker 3:So I think with that in mind, for for me, I think, you know, this issue is probably slightly less pressing than it could have been if it was gonna be a clear sweep or if people were a bit less concerned about the fiscal situation more generally. Mhmm.
Speaker 4:I think that's probably why markets haven't been responding
Speaker 3:Yeah.
Speaker 4:Violently to changes in poll leadership. It's quite easy in some ways, to reduce, a US election to the presidential side of things. But, really, in terms of how how the mechanism of government plays itself out there, you really do do need control in in those other chambers in order to effect big change. Okay. Wonderful.
Speaker 4:Thank
Speaker 2:you very much both. Wonderful, as ever to get to get your thoughts. And thank you very much to everyone for listening. I do hope you found the podcast, interesting and informative, and we very much look forward to speaking to you again shortly. But for now, goodbye.
Speaker 3:Bye bye.
Speaker 4:Goodbye.