Here in the US, of course, we're expecting also the CPI numbers to come
out next week on the first day of the Fed policy meeting in this environment,
how do you position? Well, I think we're expecting everything
been equally hawkish pose. We've seen some deceleration, mild
deceleration, as you know, of inflation. And I think we will see what the message
is for. For July.
But a hawkish pose would be warranted at this point in time for.
For the Fed. What does that mean for tech stocks?
We continue to see we have seen a little bit of a downturn for those big mega cap
technicians. But at the same time, of course, we see
this huge frenzy around a buy even in an environment of rising yields.
Yes, exactly. So I think, as you know, A.I.
has been a very long term theme for us. We've had it for many years, including
more generally technology and cyber security, which is even more important
in a world where I takes a larger share, if you want, of of technology.
I think given the rally that we've had, it would be normal to see a bit of a
pause, particularly in the context that we see where rates might plateau quite
soon, but they're higher for longer. In this environment, you'll have
opportunity. This is not an area where you buy an
ETF. This is an area where you really do a
lot of work from the bottom up stock picking and you really position the
portfolios for the long term because the trend will continue to stay with us for
the long term. Yeah, but I suppose it is there is a
split between pre regulatory crackdown and post regulatory crackdown when it
comes to A.I., though, because it does seem to be, you know, that reckoning
that will be coming in markets like the US but also in China.
Yes, absolutely. So I think, you know, A.I.
is not one thing. One element of it is what I call digital
Darwinism, which will actually play an enormous role in competitiveness between
countries, between companies, etc.. Another part of the AI is going to be
the automation, the productivity increase success era and will permeate a
lot of sectors. And of course, a third part will be the
part where humans become less involved. And I think the regulation aspect would
be very wary about that last part, particularly if you take the financial
industry and regulators will be very wary of decisions that are made by the
machine on its own and in an elusive way, which is what I will do.
So I think we have to distinguish it's not one size fits all if you want.
Certainly not one size fits all when it comes to investing in Chinese risk
assets more broadly, what are your views on how the recovery is going and what
opportunities there still are, and I guess what the next catalyst might be
for adding to positions as part of that China story?
Very interesting point. So 1 5 percent growth in a world that's
decelerating or is going to decelerate is actually quite attractive.
Number two, there are different factors at force after the initial, if you want,
reopening and the normal tendency to go to service.
So, you know, you're out of luck, down you go and get a haircut you go to to
the restaurant, etc. We now have that second phase and the
industrial side has not really picked up.
Two things are clearly the external pressure.
We've seen it with the export numbers that is putting pressure on domestic
industrial companies that are involved in the global supply chain if you want.
You also have a trending down factor in consumption with people perhaps
uncertain about job. What is the conclusion of all this?
Bad news is good news. What do I mean by that?
If they are pressure that are too negative in the domestic economy, I
really believe that the government will come in with support measures.
But in a much more, I would say, delicate way than what we saw in the way
to push the weight crisis. It's going to be much more targeted.
And of course, the long term build around a high technology in Protect
Innovation is a theme that we like very much in China that is still massively
underestimated.