FidelityConnects: Jurrien Timmer – The global macro view July 6, 2026
Jurrien Timmer, Fidelity’s Director of Global Macro, shares his thoughts on what’s moving the markets around the world, to help you be better prepared for what may be next.
Transcript
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<b>Subtitles are AI Generated</b>
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Hello, and welcome to Fidelity Connects.
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I'm Pamela Ritchie. As America rings in year 250
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the economy in the US is in the midst of a boom due to an industrial
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revolution led by artificial intelligence.
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Our next guest says trust the boom but verify it's a
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boom and not froth.
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His research helps us do just that today.
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We are delighted to be rejoined by Fidelity's Director of Global Macro
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Jurrien Timmer after his trip across Asia to visit investors.
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He sees a market waiting for earnings confirmation while sitting at
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valuation levels that clock in as quite reasonable and appropriate.
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Welcome, Jurrien. Great to see you again.
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Thank you for joining us.
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It's great to be back.
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We missed you.
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Three weeks Asia-Pacific. I missed you guys, too.
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It's actually funny, I mentioned to you before the show that
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clients and colleagues in the various offices there mentioned
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this webcast as something that they look for on YouTube.
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That shows you that your product here goes all the way around the world
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and gets viewed there, so it's very cool.
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That is completely fascinating.
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I mean, people depend on what you help us learn each week.
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It's that exciting to hear, that's great.
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I wonder, can you tell us just a little bit about your trip?
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I mean, how many cities did you go to?
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It was three weeks so you covered quite a lot of ground.
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So started in South Korea, in Seoul, and
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their sovereign wealth fund is in the southern part of the country so that was
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sort of a side trip in South Korea.
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Then six days in Tokyo, client meetings as well
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as our regional business review, so a Fidelity internal event.
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Then Beijing, then Shanghai, then Taipei,
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and then Hong Kong. For me, Korea and Taiwan were first
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time visits. I'll give you my little trivia.
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Korea has a really serious
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coffee culture. They don't drink tea, everyone drinks coffee.
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They take it to a real artisan level.
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The funny thing is if you ask for ice coffee they give you cold
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coffee, but no ice coffee.
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It just dilutes it anyway.
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You can ask for ice coffee — yes, it's actually quite good.
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Little things like that you learn.
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Of course, all these countries are different in many ways.
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In Tokyo very, very formal.
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You're sitting there across the room with clients and everything is translated
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so that's a more challenging format.
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Then you go to Beijing, I met all the official investors, the
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CIC, the Sovereign Wealth Fund, the Central Bank.
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There everyone speaks English, same in Shanghai.
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Shanghai is like the financial capital of China.
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It used to be Hong Kong but it really has been Shanghai for some time.
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My takeaway is Shanghai has this old part called the Bund, which is
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from the French colonial days, beautiful European-type
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buildings. On the other side is Pudong where you have all these massive
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skyscrapers with all the lights and everything.
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I've only stayed on the Pudong side because that's where the meetings are but
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I'm like, okay, I've got a weekend in there, I'm going to go on the Bund side.
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I thought it would be just this very quiet little sleepy thing where you can go
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for a walk. There were hundreds of thousands of Chinese
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tourists there.
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It's like the New York of China.
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If you're coming from Nebraska New York is on your bucket list.
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There were just countless people there roaming
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around on the Bund looking for that sunset and the skyline.
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It was very, very cool.
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Taiwan, really interesting.
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Actually, if we pull up slide 2, you've obviously
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heard of the building the Taipei 101 which used to be the tallest building
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in the world.
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Some climber called, I think Alex, he's called Spider
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Man, he climbed the whole building without any kind of safety gear.
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At the top of the building is this thing which is this giant
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yellow ball hanging on cables.
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That ball keeps the building from swaying.
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If the building sways because of wind the ball counteracts that.
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It's the coolest thing ever. I never in a million years would think that that
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could possibly be effective but apparently it works just
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fine. That actually became the concept
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for this week's report because it provides balance.
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The common theme with all of our meetings, and I probably had 30+ meetings,
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is how do we find balance in a world that is kind of
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extreme in many ways, how do participate
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in the AI boom while also protecting ourselves.
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Then, of course, questions about the Fed and
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interest rates.
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Interestingly enough, not so much in Korea and
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Japan but in the other four cities
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gold was at the top of the list for all the questions, or the
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conversation, mainly that it hasn't really provided a
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good diversifier this year, which we've talked about in the past.
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It's interesting how still gold-centric parts of
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that world is.
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One person asked the question, do you get a lot of gold questions in
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the States? I was like no.
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For people here, it's not in our DNA here in
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North America. Well, in Canada, I guess it is but not so much in North America.
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It has to do with, of course, that we have dollars which are a reserve
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currency. It's a little bit more straightforward for an American to
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not feel like he or she has to own
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gold to hedge or protect against something.
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That's fascinating. Is the question still for
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most investors large, small, I'm sure you're talking to some very large
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companies if they were in sovereign wealth funds if that's who you're talking
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to, are they too ...
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try to be more formal about this but are they wary of not being invested
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in the AI hyperscalers?
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I mean, is it just too hard not to be exposed there?
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Yeah, I think they're all invested.
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Of course, in Korea and Taiwan, those two stock
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exchanges are very heavy in the semiconductor.
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In those countries they're making money hand over fist because
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that's where they invest.
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The big sovereign wealth funds, of course, are gonna be in the US
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and they're gonna be in that space just the way the S&P 500 is
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constructed. It's like they all wanna know if it's a bubble.
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Inn Korea they have these triple levered, single name
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ETFs, which we have in the States as well, I call them weapons of
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self destruction.
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Not to sound stereotypical but the Asians
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sometimes, when things start to move they get excited and
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they want to play the game.
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The Korean investors that I saw look at the retail
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action in Korea.
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They're like is that the sign that we're in a bubble?
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My answer has been no.
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The froth happens, it always happens.
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Anything that moves is gonna attract speculators.
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They used to be in Bitcoin, then they went
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to gold and now they're in the semiconductors.
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That doesn't mean it's a bubble. A bubble is only a bubble if valuations are
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totally unsupported by earnings, that is not
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the case.
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We can look at slide 12, for instance, which are the semiconductors,
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the S&P Semiconductors Index.
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They trade at a 20 multiple which is very, very modest.
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Their earnings in the bottom have tripled in a year.
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I mean, that doesn't happen very often.
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In that lies the challenge as well.
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That was a point that I made, industries like semiconductors
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or airlines, what have you, generally are cyclical.
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A low P/E tells you nothing in a cyclical industry, it just tells you that
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earnings are high.
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A high P/E tells you nothing because it means earnings are low.
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It doesn't mean that there's froth.
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In cyclicals you actually have to buy and sell the opposite way of a
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more structural name. You could argue easily, and I think that's
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a fair argument, that semiconductors today are not cyclical, they are secular
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because they are building the bricks and mortars of
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the AI revolution.
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That, clearly, is not a cyclical episode.
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And if it's cyclical it's 10 years out, or
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20 years out.
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Exactly. The valuations are good but what
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I was really honing in on because they want to know how do I protect myself.
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Actually,
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let me see, if we go to slide 6, we
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have the S&P AI which is the purple line at the top, and
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we have the S&P ex-AI which is the line way at the bottom.
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What we're seeing is that on days that the S& P is down
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the ex-AI stocks go up.
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Not only do they outperform but they actually go up.
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For me, that's the barbell.
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You want the growth, you wanna experience this once in a lifetime
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technological boom but you don't wanna have all your eggs in one basket.
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What's ex-AI? It's boring stuff like financials and energy.
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Energy is not so boring lately, of course. Then I look at
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the second line from the top.
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That gave me sort of an aha moment because these stocks have been running for
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some time. Eurozone banks, right?
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I asked the clients if you went around the world looking for the most
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boring stocks to buy you would probably come across European
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banks.
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You can say that because your family is from Europe.
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You're Dutch, it's okay. I feel like we can't say that everywhere else.
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It's interesting, if we go to slide 7, this is the Euro
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stocks banks, SX7E on Bloomberg.
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It's a great looking chart.
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The relative and absolute performance has been good.
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In the yellow I show the correlation between that index and the
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Mag-7 because it's meant to be a hedge against sort of that
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concentration risk. It's only 19%. To me, this is
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sort of a sweet spot.
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Why did it come down?
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I'm going to do more work on it.
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Sorry to interrupt, why did it come down from a 60% correlation down to ...
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what happened there?
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Because the Mag-7 is fragmenting.
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Actually, we can go to slide 8 and I can show you a different look on that.
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The Mag-7 has gone sideways. This is my little creeping chart where
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I show the 50-day correlations for the various diversifiers.
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You can see on the horizontal, the black
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line is the S&P and the vertical is the long term government and they
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either get more correlated or less correlated to each other.
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Then we have the other ones that we've discussed in the past, commodities,
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the dollar, market neutral. Look at the dotted black line, that's ex-AI,
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and look at that dotted blue line, those are the Eurozone banks.
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They are acting like total diversifiers right now.
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They're not even acting like stocks.
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The SPW, the green, which is the equal-weighted index is
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still up there where you would expect it to be but these banks
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and the non-AI stocks are not.
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To me, that is, at least for now, the holy grail of
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diversification, especially for the banks which are
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actually outperforming the index alongside with
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the AI names.
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I don't know how long it will last but that's a pretty good backdrop.
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That was the point I was trying to...
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That's the yellow ball.
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Yes. That's the point I was trying to get across.
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You don't have to have all your eggs in one basket.
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You don't have to be out of it because I think it's still a
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boom, but you can have some diversification that actually does
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not have to deter from your performance.
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These European banks are those.
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The reason they're working is because for the last several years
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these banks have gotten very smart about unlocking shareholder value, they're
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doing more share buybacks.
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They produce a good yield, a good dividend yield and they are rationalizing
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their balance sheet. It's the same that the Japanese have been doing which is
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why Japan has been strong, at least one of the reasons.
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That, to me, is the nice story that you actually can have your
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cake and eat it too right now.
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That's always nice because that doesn't happen very often.
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In Canada I guess it's discussed as the banks having certain
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parts of the regulatory
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infrastructure dismantled partly, for other reasons but partly so
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that it can land into the AI buildout.
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I'm sure the European banks are in a position to do just that
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as well. Is that another piece of it?
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They are, of course, highly regulated which is why
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they're so safe.
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They are regulated not only by the EU but by their own country.
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It's probably gonna be harder to do than in Canada
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or the US. The US has a more holistic vision of
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how to build this out.
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Actually, it's interesting, I was talking to a couple of our equity PMs
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here in the US and they were talking about how the financial
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sector actually is the next sector to really get leverage
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out of the AI boom.
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They're building a lot on these models.
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If you think about it these AI models, these LLMs or agents,
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they need massive amounts of data to train themselves.
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Who has more data than banks, right? They have millions and millions of
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customers with long, long records.
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Spending habits and all kinds of things.
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The industry, it's not the most efficient because
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it is highly regulated. You can really see the financial sector getting
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the next sort of downstream dividend, and maybe Europe
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is part of that. I think for Europe it's more that they're not sleepy banks.
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They're paying back shareholders through buybacks, and that's
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been a big engine. That's been an engine in the US until recently.
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Where's my chart, 9.
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It's interesting that this is happening in Europe and Japan while in the Mag-7
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the opposite is happening. These companies, the hyperscalers are
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burning through their cash because they're spending it all on CapEx and that
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leaves less money for buybacks.
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That's kind of the bright green there.
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It's a very subtle point. It doesn't have to be negative at all because if the
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money is spent well then that's fine, of course.
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But it's a subtle change because we've had this nonstop engine over the
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last 20 years of companies reducing the share count through
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buybacks and not increasing it because they had very few IPOs.
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Both of those things are now changing so a very, very subtle move.
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Back to the coffee not being diluted by ice, yeah.
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Exactly
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Tell us a little bit about ... we were on European banks and the discussion
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there in Europe this week, well, actually, in Turkey which is not
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quite Europe, it's a lot of things, it's a bridge.
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They are having the NATO summit and this seems to be the moment, or it's being
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couched as the moment where there is a physical defence spending decoupling
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of the United States and Europe and, we think, Canada
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sort of take that on more.
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Is there an investor story to this?
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I mean it means more fiscal spending. Of course, Europe
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has been fiscally fairly austere for some time since the
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Eurozone crisis. Of course, the US is spending like drunken
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sailors but that's that's not a new story.
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This goes back to the story, was it a year ago when
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Trump went to Germany or NATO and said you got to pull your own weight, which
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is totally fair, they should be pulling their own weight.
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Then kind of the German defence spend
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as well as infrastructure spend became part of the story for European
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equities.
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This latest news, I think, only seals that
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as something that is going to have some legs.
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It's good for investors because it means you can buy European defence stocks or
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Canadian defence stocks or other infrastructure types of buildout
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that support that.
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Fiscal spending is not good for sustainable fiscal health but it
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does get the wheels turning for spending and
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therefore for earnings.
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When we go to the leaderboard, which is in some of your notes today, it's
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interesting what's on top. You mentioned, certainly, Japan earlier.
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Slide one.
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This is slide 1, yes.
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You take a look at the international trade which is also there.
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Small-caps are a little bit part of the everything else trade.
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I mean, there's a lot of things in the everything else trade but they're one of
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them. Take us to what you're seeing right there at the top and why it's
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there right now.
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Yeah, and actually that's really surprising to me.
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SG is small growth, SC is small-caps, SV is small value.
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EM at the top, we know that. It's Korea, Taiwan, semiconductors.
18:06.919 --> 18:10.923
Small growth I can see because there are kind of cats and dogs in
18:10.923 --> 18:14.326
there that are a play on AI.
18:14.326 --> 18:18.063
A company will just say, hey, we're doing AI now and they get bid up because
18:18.063 --> 18:21.333
the GameStop crowd gets involved.
18:21.333 --> 18:25.404
I'm not surprised by that but small value I'm like, wait, where did that come
18:25.437 --> 18:28.807
from? It does show a nice broadening indeed.
18:28.807 --> 18:29.808
Then you've got...
18:30.075 --> 18:32.945
It's part of the breadth story.
18:32.945 --> 18:37.583
Large value is up there, and REITs which have done nothing for some time.
18:37.583 --> 18:42.521
It's actually a very nice picture and it brings me, actually, to slide 5.
18:42.521 --> 18:46.492
We had this conversation at the beginning of the year where we had
18:46.492 --> 18:50.028
that bullish broadening.
18:50.028 --> 18:53.665
By a bullish broadening I meant that it's a broadening that does not come at
18:53.665 --> 18:57.903
the expense of the market's beta, meaning the market doesn't
18:57.903 --> 19:01.940
go down because the broadening doesn't involve the Mah-7
19:01.940 --> 19:04.176
going down a lot.
19:04.176 --> 19:06.245
We're having another wave of this right now.
19:06.245 --> 19:10.315
So 68% of stocks are above their moving average, which is nice to
19:10.315 --> 19:14.486
see, and the equal-weighted index in blue is completely caught
19:14.486 --> 19:17.523
up to the cap-weighted index.
19:17.523 --> 19:21.560
If you look at, where am I, slide 4
19:21.560 --> 19:25.497
you can see the Mag-7 has now been going sideways
19:25.497 --> 19:29.067
for, what, nine months or so.
19:29.067 --> 19:33.071
That's actually a really great thing to see because they could
19:33.071 --> 19:37.176
be going down, and if they go down a lot S&P is going to go
19:37.176 --> 19:41.246
down and then you have a broadening that is a bearish
19:41.246 --> 19:43.048
broadening. We don't like those.
19:43.048 --> 19:45.050
We like bullish broadenings.
19:45.050 --> 19:49.121
The fact that the Mag-7 is just sort of treading water, I guess it's
19:49.121 --> 19:52.224
not good if you're in the Mag-7, you want more, but, actually, I think it's
19:52.257 --> 19:57.129
very, very good because it does allow the market to have more participation
19:57.129 --> 20:01.166
without it costing you beta, if you will.
20:01.166 --> 20:05.237
It's fascinating. You go into detail on what's healthy at,
20:05.237 --> 20:09.308
I think, 68% the Mag-7 taking a
20:09.308 --> 20:11.376
break going sideways.
20:11.376 --> 20:15.247
All of this is where we are today and it's the moment and it's sort of the end
20:15.247 --> 20:17.883
of the first half.
20:17.883 --> 20:21.587
Now we have second quarter earnings which are around the corner.
20:21.587 --> 20:25.624
It does seem with every release of earnings there's reason for
20:25.624 --> 20:29.995
people to feel more risk-averse and concerned that
20:29.995 --> 20:31.697
the punch bowl gets taken away.
20:31.697 --> 20:36.335
I don't know if second quarter earnings is more so than first quarter earnings
20:36.335 --> 20:38.971
but what's your take?
20:38.971 --> 20:41.506
So let's go to slide 10.
20:41.506 --> 20:45.677
The earnings numbers are still very, very strong.
20:45.677 --> 20:50.215
They're growing 30% year-over-year which is very unusual,
20:50.215 --> 20:52.184
at least not ...
20:52.184 --> 20:55.988
it's very unusual coming in the middle of a cycle.
20:55.988 --> 21:00.092
Inevitably the growth rate is going to decelerate and that's
21:00.092 --> 21:04.363
not necessarily a bad thing because these things mean revert at
21:04.363 --> 21:08.433
some point. To me, that'll be a good test for the market because that will
21:08.433 --> 21:12.771
tell us how much fast
21:12.771 --> 21:14.573
money is in the market.
21:14.573 --> 21:17.909
Right now I don't think we need to worry about it because the numbers are still
21:17.909 --> 21:22.047
improving. These are the various yearly estimates
21:22.047 --> 21:26.051
for the S&P. Like you said, earnings season will start next
21:26.051 --> 21:29.988
week and the incoming growth rate is very high and all
21:29.988 --> 21:33.992
the other seasons that are behind it are very high.
21:33.992 --> 21:36.595
The earnings story is clearly a boom.
21:36.595 --> 21:40.098
That, of course, is keeping valuations down.
21:40.098 --> 21:44.336
If we go to slide 13 you can see
21:44.336 --> 21:48.940
that for the S&P the 2-year forward earnings
21:48.940 --> 21:51.610
is now at $422.
21:51.610 --> 21:55.714
It was at $247 when the bull market began so not
21:55.714 --> 21:58.050
quite a double but pretty close.
21:58.050 --> 22:02.921
That's keeping the S&P P/E at around 22 times.
22:02.921 --> 22:06.858
It's keeping valuations in check which, of course, is a good thing.
22:06.858 --> 22:10.896
You want an earnings-driven bull market and that's
22:10.896 --> 22:14.266
what we're still getting. It'll be interesting to see with earnings season what
22:14.266 --> 22:18.737
companies will say, especially non-AI companies,
22:18.737 --> 22:22.741
in terms of what they're doing on their AI budget, how much are
22:22.741 --> 22:27.112
they spending. The thinking is that if the hyperscalers
22:27.112 --> 22:31.083
have saturated their buildout, which there is
22:31.083 --> 22:35.420
no sign of that yet but let's say that happens, then the semiconductors
22:35.420 --> 22:38.724
start to fade and then you have a very important momentum part of the market
22:38.724 --> 22:43.261
that starts to fade. Then you could argue that the whole thing starts to
22:43.261 --> 22:46.665
trade a lot less bullish than it has.
22:46.665 --> 22:50.602
If there are other sectors behind these hyperscalers, like the
22:50.602 --> 22:54.639
financials, who are going to build out their own AI
22:54.639 --> 22:58.176
they're going to need semiconductors.
22:58.176 --> 23:02.381
That's kind of the next phase and it'll be interesting to see what
23:02.381 --> 23:05.016
companies say and how committed they are to it.
23:05.016 --> 23:09.121
It becomes less circular financing in that way and broadens out
23:09.121 --> 23:10.789
which, again, is healthy.
23:10.789 --> 23:11.623
It goes downstream.
23:11.623 --> 23:16.094
It goes downstream. It also sort of speaks to the idea of
23:16.128 --> 23:20.732
AI in said large companies, banks being one but any company really,
23:20.732 --> 23:24.503
being accretive, which it isn't yet as far as we know.
23:24.503 --> 23:25.303
Correct.
23:25.303 --> 23:27.272
Which will come eventually.
23:27.272 --> 23:31.343
Since we have not seen you in a few weeks I don't
23:31.343 --> 23:34.212
think we've had an opportunity to ask you about Kevin Warsh's first meeting,
23:34.212 --> 23:38.150
how he led, the idea that he appeared
23:38.150 --> 23:42.254
to help markets with we will hike if we need to,
23:42.254 --> 23:45.524
which appears to be what markets needed to hear, whether he will or won't we
23:45.524 --> 23:50.395
don't know, but they apparently needed to here that seemed to be the reaction.
23:50.395 --> 23:54.566
What are your thoughts? There's all kinds of tasks force, maybe
23:54.566 --> 23:59.971
less forward guidance, that sounds true, I'm dying to know what you think.
23:59.971 --> 24:04.075
The three topics that were discussed at every meeting in Asia was
24:04.075 --> 24:06.745
what we just discussed about the AI boom.
24:06.745 --> 24:11.516
The second one was the Warsh Fed and how is it going to do that?
24:11.516 --> 24:15.454
Not surprisingly, the Chinese central bank was very interested about whether
24:15.454 --> 24:17.656
Warsh was actually going to raise rates or not.
24:17.656 --> 24:21.626
Just hold for a minute. You were sitting with the Chinese central bank
24:21.626 --> 24:23.528
while we were missing you.
24:23.528 --> 24:27.666
That's amazing.
24:27.666 --> 24:29.734
I don't think he wants to tighten.
24:29.768 --> 24:34.239
He's talking very hawkish which is what he should be doing.
24:34.239 --> 24:38.310
I think he's trying to have the markets do the tightening for him
24:38.310 --> 24:40.278
which is not a bad play.
24:40.278 --> 24:42.013
He wants it to be less transparent.
24:42.013 --> 24:47.085
I think he wants to go back to the Greenspan days.
24:47.085 --> 24:51.189
I think that's not necessarily bad. All the things we know like
24:51.189 --> 24:56.094
forward guidance, the dot plot, QE, are
24:56.127 --> 25:00.065
all byproducts of the zero interest rate days following the financial
25:00.065 --> 25:04.336
crisis. They were not used before then and
25:04.336 --> 25:08.573
you could argue they're not appropriate or needed to use when
25:08.573 --> 25:10.308
rates are normal, which they are.
25:10.308 --> 25:14.346
We're in a normal interest rate environment meaning they're repressed
25:14.346 --> 25:16.014
by central banks.
25:16.047 --> 25:20.385
He makes a good point that the Fed shouldn't be as big as
25:20.385 --> 25:23.788
it is. These tasks force, I think, will address those.
25:23.788 --> 25:27.926
He can direct all of that and
25:27.926 --> 25:29.895
shape it the way he wants to.
25:29.895 --> 25:33.865
What he can't do is direct monetary policy if it's not supported by
25:33.865 --> 25:37.235
markets or his fellow FOMC members.
25:37.235 --> 25:39.504
That's why he's talking a hawkish game.
25:39.504 --> 25:43.642
I don't think he wants to have to raise rates as the
25:43.642 --> 25:47.846
first action he does under his new boss
25:47.846 --> 25:51.950
because his predecessor was also a boss appointee and we all
25:51.950 --> 25:53.785
see how that happened.
25:53.785 --> 25:57.322
I think he's just trying to thread the needle here and I think it'll probably
25:57.322 --> 25:58.323
work.
25:58.857 --> 26:03.295
A question coming in about the fiscal side of things in
26:03.295 --> 26:07.399
the US and the discussion of earnings stories, what you're
26:07.399 --> 26:11.703
looking for on corporate tax breaks from the One Big Beautiful Bill,
26:11.703 --> 26:15.106
which is hard to believe that was a year ago, just about, when that got
26:15.106 --> 26:20.145
through, that filtering through and sort of where the current administration's
26:20.145 --> 26:26.718
role in the earnings story comes in there, if at all.
26:26.718 --> 26:29.955
The mantra is run it hot and it certainly is doing that.
26:29.955 --> 26:33.992
The AI story has obviously a lot to do with that but so
26:33.992 --> 26:36.795
does the fiscal, the One Big Beautiful Bill.
26:36.795 --> 26:40.732
Capital flows are still
26:40.732 --> 26:44.869
strong, earnings are booming, interest rates
26:44.869 --> 26:47.872
are relatively well behaved, so is the dollar.
26:47.906 --> 26:51.876
It's a pretty good spot
26:51.876 --> 26:52.877
to be in actually.
26:53.812 --> 26:57.782
Got a stable currency, interest rates, I do see interest rate risk up to
26:57.782 --> 27:02.153
5%. That is still a risk that I foresee.
27:02.153 --> 27:05.924
It wouldn't be the end of the world for a 50 basis points rise.
27:05.924 --> 27:09.961
If it knocks down the PE on the S&P per the Fed model it would
27:09.961 --> 27:14.799
take the S&P down 3 or 4 points as the P/E ratio,
27:14.799 --> 27:18.903
which would be like a 15% correction but if earnings are growing 30% then
27:18.903 --> 27:21.640
it fully offsets that.
27:21.640 --> 27:25.910
I think most of the risks are in check for now
27:25.910 --> 27:29.681
but there are relatively easy ways to mitigate them.
27:29.681 --> 27:34.252
Like we said, the banks, especially the European banks, and
27:34.252 --> 27:36.921
other diversifiers.
27:36.921 --> 27:42.560
I don't know if we have time to talk about gold.
27:42.560 --> 27:46.765
One of the questions I got very often was why hasn't gold been a
27:46.765 --> 27:50.068
diversifier? Why is it not working anymore?
27:50.068 --> 27:54.105
On page 15 I can show that gold used
27:54.105 --> 27:58.309
to be a play on real rates, then it became a play on global liquidity.
27:58.309 --> 28:02.380
That's the red line. That's just a regression of global liquidity and the price
28:02.380 --> 28:06.551
of gold. You can see that the price went way higher than it
28:06.551 --> 28:09.587
should have and is now way lower than it should have.
28:09.587 --> 28:13.525
That's for two reasons. One is the growth rate in global liquidity peaked at
28:13.525 --> 28:18.496
12% right as gold peaked and is now down to 6% and falling.
28:18.496 --> 28:22.534
That probably has to do with central banks sounding more hawkish.
28:22.534 --> 28:26.771
The other part, if we go to 16, you can see that the speculators
28:26.771 --> 28:30.809
used to be in Bitcoin, then they went over to gold
28:30.809 --> 28:34.546
because gold was running because central banks were buying.
28:34.546 --> 28:36.848
Speculators are not loyal to anything.
28:36.848 --> 28:41.052
They'll play in any space where there's price action.
28:41.052 --> 28:45.123
You can see that right as gold peaked they started moving elsewhere, and that
28:45.123 --> 28:48.226
elsewhere, of course, is semiconductors and AI.
28:48.226 --> 28:52.163
What you have is a combination of slowing global money
28:52.163 --> 28:56.468
supply growth and an exodus of the fast money.
28:56.468 --> 28:58.603
That's creating an oversold condition.
28:58.603 --> 29:03.041
The blue bars at the bottom shows you that gold is 13% oversold
29:03.041 --> 29:06.044
relative to the money supply.
29:06.044 --> 29:10.014
I don't see a catalyst yet for a reversal but I do see that
29:10.048 --> 29:13.485
it's attractive here as an accumulation strategy.
29:13.485 --> 29:15.987
The same applies to Bitcoin.
29:15.987 --> 29:17.789
It is terrific to have you back.
29:17.789 --> 29:21.793
Thank you for your perspective today and for summing up where we are and
29:21.793 --> 29:23.895
where we're going. Glad to have you back.
29:23.895 --> 29:26.531
Thanks for watching or listening to the Fidelity Connects
29:26.531 --> 29:30.835
podcast. Now if you haven't done so already, please subscribe to Fidelity
29:30.835 --> 29:34.205
Connects on your podcast platform of choice.
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And if you like what you're hearing, please leave a review or a five-star
29:37.041 --> 29:41.012
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29:41.012 --> 29:44.382
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29:44.382 --> 29:48.086
Visit fidelity.ca/howtobuy for more information.
29:48.086 --> 29:51.923
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29:51.923 --> 29:56.060
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29:57.362 --> 30:00.231
We'll end today's show with a short disclaimer.
30:00.231 --> 30:04.068
The views and opinions expressed on this podcast are those of the participants,
30:04.068 --> 30:08.006
and do not necessarily reflect those of Fidelity Investments Canada ULC or
30:08.006 --> 30:12.010
its affiliates. This podcast is for informational purposes only, and should not
30:12.010 --> 30:14.546
be construed as investment, tax, or legal advice.
30:14.546 --> 30:16.848
It is not an offer to sell or buy.
30:16.848 --> 30:21.186
Or an endorsement, recommendation, or sponsorship of any entity or securities
30:21.186 --> 30:25.990
cited. Read a fund's prospectus before investing, funds are not guaranteed.
30:25.990 --> 30:29.561
Their values change frequently, and past performance may not be repeated.
30:29.561 --> 30:31.896
Fees, expenses, and commissions are all associated
30:31.896 --> 30:33.698
with fund investments.
30:33.698 --> 30:36.301
Thanks again. We'll see you next time.
44:29.867 --> 44:32.503
Thanks for watching or listening to the Fidelity Connects
44:32.503 --> 44:36.807
podcast. Now if you haven't done so already, please subscribe to Fidelity
44:36.807 --> 44:40.177
Connects on your podcast platform of choice.
44:40.177 --> 44:43.013
And if you like what you're hearing, please leave a review or a five-star
44:43.013 --> 44:46.984
rating. Fidelity Mutual Funds and ETFs are available by working with
44:46.984 --> 44:50.354
a financial advisor or through an online brokerage account.
44:50.354 --> 44:54.058
Visit fidelity.ca/howtobuy for more information.
44:54.058 --> 44:57.895
While on Fidelity.ca, you can also find more information on future live
44:57.895 --> 45:02.032
webcasts. And don't forget to follow Fidelity Canada on YouTube, LinkedIn,
45:02.032 --> 45:03.333
and Instagram.
45:03.333 --> 45:06.203
We'll end today's show with a short disclaimer.
45:06.203 --> 45:10.040
The views and opinions expressed on this podcast are those of the participants,
45:10.040 --> 45:13.977
and do not necessarily reflect those of Fidelity Investments Canada ULC or
45:13.977 --> 45:17.981
its affiliates. This podcast is for informational purposes only, and should not
45:17.981 --> 45:20.517
be construed as investment, tax, or legal advice.
45:20.517 --> 45:22.820
It is not an offer to sell or buy.
45:22.820 --> 45:27.157
Or an endorsement, recommendation, or sponsorship of any entity or securities
45:27.157 --> 45:31.962
cited. Read a fund's prospectus before investing, funds are not guaranteed.
45:31.962 --> 45:35.532
Their values change frequently, and past performance may not be repeated.
45:35.532 --> 45:37.868
Fees, expenses, and commissions are all associated
45:37.868 --> 45:39.670
with fund investments.
45:39.670 --> 45:42.272
Thanks again. We'll see you next time.
