And what are the implications of the dollar peaking for Asia equity markets at this point.
Good morning Sherry. Obviously the dollar has been a headwind both to US earnings and thinking about the outlook for Asian
markets. What of the risk factors. We look at what's happening around Asia and relatively positive light and we're very much
focus. As you had those financial conditions tighten. Historically that has been something that's weighed on the
outlook. However we do balance that off. We're thinking about the Asian recovery that is still going through the domestic
demand. It's coming through to some ASEAN countries. And the fact that China is going through that sort of staggered
reopening even if there are some again risk there that should be quite supportive for the region more broadly. So I think that in
this scenario we see that the dollar headwind being a little bit more tempered in terms of what it means for Asian equity
performance as we see the Fed. I think that more of the applause on the surplus we see the Fed seek more around that policy
tradeoff between growth and inflation. We may see the market start to think about exactly where rates are hitting and maybe.
But we've already sort of priced in the peak for interest rates. That's it. Yeah. I was going to say how much of the Fed's moves
have Asian markets already priced there. Not to mention perhaps this week as important those huge attack earnings. And what he
tells us about the broader global economy as well as the earnings season in the US has been a case of not terrible
but not great. It's been quite a mixed bag. And I think that the clear message is coming through again that dollar headwind being
very much there. Given those offshore revenues for some of those tech companies but also the fact you've seen that on the
consumer side clear messages around the slowing demand coming through from some of those big retail names and also the more
consistent demand they see some of those secular trends around cloud computing in the tech stocks. I think it feeds back into
this narrative around that rotation that's been persistently trying to move into value that may start to move back towards
most growth sectors. For us it is about the valuations when it comes to the US market. Those valuations have come down but not
nearly as much as other parts of the world. So you are still paying a little bit more than you perhaps should for those
earnings. And so we do watch that closely in terms of thinking about is there more of a D rating to come in the US market
before we actually see something more sustained in terms of an upward move in the equity market.
Gary talking about this kind of reset when it comes to take take a look at this chart which looks at the New York Five plus
cohort. And in fact we've seen coming down from that 20 21 peak they've actually erased most of that group's overall
outperformance on a total return basis. So is there a little bit of a psychological reset in terms of how we frame
the way that tech stocks trade. Because there is a sense that they're going to have to really outperform to be able to
convince the consumer and the investor that they're indispensible in such a challenging environment.
Yeah I mean you just look at that chart that just shows you at the start of the year these things that so highly valued play
prized in the world where there was so much liquidity that know the valuations had gone up such an extreme that of course when
that narrative started changing these you know we felt the greatest pressure from that D rating. And again it comes back to
that point around can those valuations fall further from here. I mean for us it's a bit of a tradeoff between thinking about the
near-term pressures and those longer term secular trends that we do see in some technology stocks. Again I would start to sort of
think of breaking that apart in terms of the hardware versus software for some of those company names. What you're seeing in
terms of profitable companies this is no non profitable companies. And really I think the market will start looking at
the earnings potential for these companies over the next not just this year over the next three four or five years and
thinking about where they're more attractively priced in this environment. The here and now though I think is really around a
general risk sentiment and where the market is trying to find their bottom. And again I think it's a bit early to say that
we've reached the bottom in equities just because it had a small but bear market rally. And there's not any more downward
pressure from the sort of negative sentiment towards a recession and a negative sentiment that comes from just thinking about
move back into fixed income away from equities. What's your assessment when it comes to Chinese equities.
Because we have the big news obviously of Alibaba pursuing that primary listing in Hong Kong kind of re shifting its focus back
to this part of the world and the mainland market. Does that give a bit more impetus for market sentiment or does it really
the macro factors still create a lot of uncertainty. Yeah there's a few uncertain factors when it comes to China
obviously is still trying to deal with the re-opening from Covid. It's not exactly clear how lenient they'll be or how much
flexibility they will have to see the restrictions. I think that's a very important signal in terms of the business
investment or consumption from consumers or whether they'll actually starts to retrench a little bit if they think there's
going to be further lockdowns for us. The signs are that 630 coming through the fact that you still have very much a strong
investment lead in infrastructure led growth story in the second half of the year and you are seeing that rebound come through.
And again a government is trying to address some of those issues in the property sector does set up quite a positive case. Thing
about growth out of China is. For the rest of this year and also some of those regulatory changes that we've seen come through.
Last year was a bit of a shock when it happens that this year you're getting more clear idea about implementation and clarity
of what that actually means. I think that's what's being reflected in some of the earnings outlook for tech companies
there as well as thinking about that shift in de-listing. I think it's a case of trying to figure out how to operate in the
jurisdiction that you're actually based in and thinking about the fact that you want to have access to global capital and
what's the best way to do that. So you might actually move into a world where you see a dual listing scenario companies making
sure they have access to all that capital and at CAC cost of capital isn't rising too significantly.