00:00In general, the future doesn't look bad for equity markets, right?
00:04So we have the world from an economic perspective where China or Europe are relatively resilient, picking up from low levels.
00:12Then, yes, you have the U.S. economy slowing down.
00:15Our view is it's just a slowdown.
00:17It's going to be soft or no landing.
00:20And all of that backdrop underpinned by the Fed cuts.
00:24In this type of environment, all the major indices go up together.
00:30And they especially go up when the Fed underpins the markets in the environment when a recession is avoided.
00:39So our view is don't think that much about the regions, but it's more about the sectors and themes.
00:45This is where the oil alpha is going to be.
00:47Well, let's talk about the sector and the theme that is AI.
00:50I'll leave the bubble talk to your U.S.-focused colleagues.
00:53But in Europe, how do you play it?
00:55Are you looking for other infrastructure names?
00:57There's a load of hype about Nokia.
01:00And then, of course, NVIDIA puts its investment in.
01:02Who would be the next Nokia that's going to get a massive gain that NVIDIA might have their eye on?
01:07So, of course, AI continues to be a very powerful theme.
01:10But it isn't the only theme.
01:12It is picking up on steam with the current reporting season, definitely.
01:18But there are other themes going on in Europe, right?
01:22So we have the fiscal that continues to deliver.
01:26It's just going to be gradually delivering, underpinning growth and EPS in Europe.
01:34That's helpful.
01:34This is why we like banks.
01:36This is one of our main overweights.
01:40In terms of tech and AI, of course, Europe has a very difficult job because from the market cap perspective composition, it's less than 10% of the market cap, right?
01:51So you can play it.
01:52So for us, the infrastructure plays in to do with tech, with the build out of data centers, that's something to look out.
02:02But, of course, it's a much smaller scale that it's not going to be the main driver of equity returns in Europe as it is in the U.S.
02:10So you need these other things and cyclicality to work for Europe to do well.
02:15Well, you mentioned the fiscal.
02:16You say you like the banks.
02:17Are you not worried about what the French lawmakers might do, what the U.K. lawmakers might do when it comes to the banks?
02:23Look, my positivity is through lots of worries.
02:26There are always worries, right?
02:28Now, more important is what is going to happen to growth and credit creation into the next year.
02:35Of course, worries from the U.K., worries from France, but broader banking sector could continue to do well into the next year for very different reasons that it has been doing this year.
02:49And when I look at what the analysts are doing with their earnings forecast, this is one sector that consistently has been and continues to be upgraded week after week.
03:01The earnings justify expectations and continue to move higher.
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