Joining me now is Moritz Pott, founder and CEO of Tama
Etfs. Moritz. Thanks for joining.
Nice to meet you and thanks for having us on the show today.
All right.
So fractional losses across the board today,
the debt ceiling is still hanging in the backdrop.
What do investors need to know?
I mean, there's a lot of growing concerns around the US slowdown,
but look at the comments coming out of Asia
capri holdings today reported weakening us but strengthening Asian earnings
in China right now is interesting,
JP Morgan doing their first investor conference in the
country in the last three or four years,
Jamie Dimon commenting about how the world order has been upended
by what's happened in the last two or three years.
That's driving a number of structural changes while
us growth slows China's growth is coming back.
The question is how resilient is it, how long will it last?
And will it also translate into
broad growth across the overall economy?
So overall, I think it's a situation where
us job numbers pretty good,
which would potentially lead to another height.
But but at the same time,
you also see corporate earnings struggling and
that's reflected in share prices today.
Yeah, that was interesting.
Just even advanced auto parts, right, which I highlighted there,
that is kind of a head scratcher.
But earnings do technically in a regular market drive the stock market, right?
Obviously rates now very much in focus and the feds path
forward impacting that as well when it comes to inflation.
What sign are you seeing as to where inflation is headed from here?
And that's what it means for rates.
So in inflation in the US still seems like we're starting to get into this inflation.
It seems like there's increasing pressure on commodities.
You see that in raw material, commodity prices look at what
happened in the
last two weeks,
some of the other commodities
overall,
I think the downward pressure on inflation will delay a rate hike at the same time,
the strength in the job markets could
extend the rate hike cycle. We've seen,
I think in general you're starting to see signs of the US slowdown.
The big question is that a recession or is that just a slowdown?
And hopefully for companies operating globally, some of which we cover just now,
the return of Asia will have set any kind of slowdown in the US short term.
So overall, I think the market is still skeptical about,
do
we see a rate hike? Do we see a recession?
And how does that translate into the outlook for Q three? Yeah,
it is interesting because I know you follow the luxury market quite closely here.
What sort of signs is that sending?
So the luxury market is interesting as the
US slows down, Asia comes back very fast.
You saw Chanel last week commenting on that they
see their China business growing double digits this year.
Overall, the balance of power in luxury is shifting more to the Asian markets.
There was a Bloomberg report last week that suggests that over 50% of the of the
global luxury market will be driven by Asia in the next three or four years.
So overall, I think while growth in the US has been very strong,
it's clearly slowing.
But at the same time, the return and reopening of Asia is encouraging
and
luxury. You can
estimate that the second half of last year, a
lot of the Asian economies are still relatively closed,
the reopening happened late.
So the comps last year are pretty low,
which should factor in the second half of this year.
But I do want to point out that even though I mean here in America, right,
this is now obviously a post COVID era as we
saw the emergency due away in May this month,
in fact, by the White House.
But
I see here just a few days ago, a new way
of COVID spreading in China
and of course, their approach to COVID is much different than that of the US.
How does that factor into this so far,
we haven't seen mass lockdowns and the concern is
that this delays some of the latent luxury spend that
wasn't realized in the last 18 to 24 months.
I would say though that the growth cycle in Asia is not just focused on China.
If you look at the news coming out of what's happening in Southeast Asia, even in
India
held his first show in India this year, the your show last month
in Mumbai.
So I think what it shows that growth across Asia and the luxury sector
is spreading beyond what was just as soon to be a China driven market.
And while there will be short term
disruption from COVID reopening closing in China,
the generally where you see that the incremental
consumer and luxury is coming from the east
and that includes younger consumers, Gen Z consumers.
So I think we're pretty constructive on the outlook for
short term.
There could be some headwinds in the U SI think where
you see more headwinds is on the low end side.
So that's why capri holdings micro Kors holdings have been hurt.
But on the high end luxury frankly, there's
so far the man has been pretty
pretty. I want to ask you
one quick question.
I hope we have time here,
which is I had a guest joined me last week who said he thinks that in this economy
that we'll see recession after recession
after recession, it will just basically be rolling recessions, right.
Every time we kind of get ahead, then we'll fall down again. And
obviously,
the consensus on Wall Street is that growth will be slowing for years to come.
Do you agree or disagree with that?
I think we will see a slowdown in the coming year and I think
that's already reflected in corporate earnings and
also reflected in forward looking manufacturing cycles.
But do I think this will be like a decade long slowdown in economic activity? No.
Will markets be choppier and more difficult for sure.
And I think that's also why you being more careful and being more
selective where you position yourself and markets
becoming more important and more evident.
No, I think it's inevitable that slow down in growth,
but at least a recession yet to be seen.
I don't think we're in right now. We are
in a of prolonged recession.
Well, hopefully that's the case for people. People's 401 case.
I think that that's what they would be hoping for. Sure.
More pot founder and CEO of
Tama.
Thank you. Thank you.