Investing Shift: Big Tech Down, Pharma Up, Dollar Risks Ahead

Hello and welcome back to the Market Maker podcast. And we got lots to talk about from a macro perspective, all very much interlinked, even though we might go into about 5 or 6 different things. And these are going to be, for the headlines, the US dollar facing a December triple whammy according to Deutsche Bank. So what is this triple whammy? And I think Piers thinks it's a quadruple whammy actually. So we'll see what element number 4 is in that. That mix. And then we've had conflicting US labor signals. They continue to shape expectations around a Fed cut. However, that's roughly tracking at about 90% when I last checked, so things aren't changed a great deal. With that, equities are back to almost all-time highs, but an interesting breakdown on how, what's under the bonnet and driving those gains has shifted a little bit over the last few months. And then who's going to lead the Fed next? Bit of an update. Trump has been quite vocal this week. I think he's got his man, so to speak. So I don't think there's too many surprises there, but we can cover that. And then something that I was reading about and would like to— I know Piers, you're so good at making the complex super simple to understand— and the yen carry trade unwind. So that might be foreign to quite a few people. But I know you can break that down, make a bit more sense of that. And it comes at a time when Japan are giving some interesting signals about potentially shifting in policy to rate hikes. So yeah, let's, before I, well, actually before I dive in, quick shout out to Marcello Porter, who I saw posted on LinkedIn this morning because Spotify wrapped is out and we were his number one on his list for who he listens to, bumping Goldman Sachs and Morgan Stanley into second and third place. So you got a lot of time for Marcello there. And then also quick one to Siobhan O'Neill, who messaged me as well on LinkedIn. She said it really helped her on her commercial awareness and actually she's starting a training contract at Clifford Chance. So not even finance.

Interesting.

She said it really helps actually just to understand the practicalities of the economy and finance and so on. And then finally, Azza, who I met, lovely lady, came over from Oman on a bit of a tour of London. She was seeing lots of different clients and yeah, hopefully we get to work with her and her team in Oman. Little trip for you perhaps, Piers, in 2026.

Yeah, sign me up.

But look, let's dive in. Let's talk about, well, maybe we could talk about stocks first because we're back in like touching distance of all-time highs. But this time, big tech, which has been such a predominant feature of 2025, isn't leading the rebound. And seemingly it's been the last 2 months really where we've had a bit of a notable shift. In fact, it's actually some of the pharma names, your Eli Lillys, your Biogens. We're going to talk in our next M&A show about the biggest IPO of the year coming in a similar type of line of business as well next week. But big tech is down. The Information Technology Index as part of the S&P 500 is actually down about 4%. There's obviously some discrepancies amongst those big mega-cap tech stocks. But yeah, any thoughts on that sort of rotation what we're seeing?

Well, if we just talk the index first and we can look at those different sectors. Look, the S&P, you remember if you go back a few weeks, like November's, you look at the chart for November and we got a nice V shape and it's the same like on the NASDAQ and pretty much any index you look at. And so the first half of November was a real wobble. It was a real test of the resolve of the you know, the perma bulls that have been driving this unbelievable rebound.

Come on, guys.

From the April lows. So you got this V, the sell-off first half of November was about that wobble was about, oh, maybe the Fed aren't going to cut rates in December. And so maybe that kind of part of the catalyst for driving stocks higher had been like the Fed getting back onto the rate cutting kind of trajectory. And so We had a little wobble, maybe they're not going to cut, but as you just mentioned already, we're now back to a pretty much 90% chance of a Fed cut at their final meeting of the year, which am I right in saying, is that next week, their meeting? So, you know, it's pretty much a shoo-in, right? So that wobble has rebounded, but it is important to note the S&P hasn't made new highs. So the high of the year and the all-time high is still the October 28th high. So we have gone over a month here without making new highs, which is pretty much a first since you go back to the April low. It's the first time we've gone this long without having a new high. So yes, rebound, but not continuation of the bull trend yet. I'm not saying it won't happen, but so, and that's because, yeah, the, the kind of lead category driving that major rally from that April low was tech. And big tech has just had a little wobble. Like if you take over the last 1 month, Nvidia's down 13%. So that's your big reason why Nvidia was, is, even though it's down 13%, is still the biggest company in this index. So that's dropped quite sharply. Obviously that's the major story as to why tech hasn't been participating as much and certainly hasn't been leading this rebound. You've also got Microsoft down 7.6%. You've got Amazon down 8.5%. Counter that, well, Google's up nearly 13% and we're going to talk about it in our next episode. We'll talk a little bit about the GPU market dominance of NVIDIA's chip and how that's starting to get challenged by some other major tech, Google and Amazon coming to the market with their own silicon and perhaps rivaling Nvidia's market share in 2026, 2027, in the future, right? So look, you've had a pretty interesting— Apple's had a good month. They're up about 6%, right? So when you look into the tech space, there's mixed, but because Nvidia and Microsoft, the two biggest, are down, well then yes, you say, oh, well, tech hasn't been participating. But what is good is that we've got a broader set of sectors that are contributing to the upside, which has been one of the major sort of criticisms or worries, if you like, about the sustainability of the rally was that it was very narrow and it was just tech. Well, now it's not just tech and pharma, particularly looking at Eli Lilly's up 15% in the last one month. Johnson Johnson. So these are the big hitters, right? Johnson Johnson are up 10%. Merck, they're up 24%, right? You got Amgen up 16%. Pharma's the best performing sector, and partly it's because you've had some real, a lot of M&A activity that we've covered on our other show. But yeah, and what we're going to talk about in our show next week will be the biggest IPO. Well, it hasn't happened yet, but potentially I should say the biggest IPO of the whole year with Medline coming to market probably early 2026. So look, there's a lot of activity going on, right? And so, I think it's been a little bit of an underloved sector and it's just getting a bit of a revival. And because you've got some big, big guns in that sector, it's just really starting to actually chip in and contribute to the overall index moving up. So yeah, it's a healthy thing. The rally's not as narrow anymore, but I would say, can the rally take another leg higher? I don't think that can happen without tech contributing. So we'll see.

Yeah, true. I mean, just given the, what, the tech sector's probably still over a third of the entire index.

Yeah. It's like 33%, I think. Yeah. It's around a third. Yeah.

And the concentration in NVIDIA, as you said, is relatively large. So yeah. They're down 14%. So those are going to be people out there going down 14%. Yeah, I fancy that at the end of the year. And if they start to move in order of 5+%, well then yeah, maybe it gets, but we're going to talk about, you know, Amazon has been a challenger to NVIDIA. It was, I think when we spoke this time last week, it was Google who were coming out putting the cat amongst the pigeons on the AI race. Now it's Amazon, but we're going to save that for our next episode as a bit of a deep dive. But one thing you were talking about there was interest rates and how we've gone from not sure. I think it was only a few weeks ago we were saying it's 50/50 and it's all in the air. Now it's pretty much locked down, like you said. So what's happening in the underlying economy? So when we say like hard data, so things like the labor market, which is obviously a crucial cornerstone of the policy setter's decision-making process. What's the labor market looking like? Because we have had a few signals this week, right?

Yeah. And you remember that we've had a bit of a blackout period because of the government shutdown. So we've lacked a consistent set of kind of economic data flow in recent months. So it's been a bit difficult, but now obviously the government's reopened and you're starting to get catch up. But we had an ADP labor market report that was announced yesterday. We've got nonfarm payrolls tomorrow, right? Which is kind of the big one, if you like, for the labor market. But ADP is looking at the private sector job creation, and that surprised to the downside, and it came in at -32,000. So that's a decline. And actually said that, yeah, that was notably bad. And it's actually, I think, the sharpest drop since 2023. And just, it's a further data point. Like you look at these labor market charts, look at the ADP chart, look at the nonfarm payrolls chart, there's only one trend and it's only going in one direction that is down. And so, you know, you've got a 12-month downtrend in these data sets and that really is the the driving force I'd say behind the narrative that, look, the labor market's turned, it's softening, you know, we're going to have a kind of negative economic impact as a result of that. Therefore, you know, you're getting some commentators saying, right, we really should be cutting rates. And that's why the Fed rate cut expectation has climbed back to an almost certainty. However, as ever with economic data, there's a lot of it. And especially when it comes to the labor market, I mean, there's like, I don't know, 100 different readings about the US labor market from all the different angles you can possibly think of. So actually we had the US jobless claims last week. So this is a different, so that ADP employment report is measuring how net job creation each month in the private sector, and it was -32,000. Okay, so now you've got something else called initial jobless claims. This is a weekly data set where they're measuring the number of people that are claiming unemployment benefit essentially for the first time, right? That's actually dropping. So that's less people claiming unemployment benefit. That's a good thing. So that's an indicator that the labor market's strong. So that's dropped. And look, If you're worried about a recession, you just look at the jobless claims chart and that is nowhere near recessionary territory. That's actually territory— this labor market's solid. So we have got unusual circumstances with the whole switch up in the migration flows as a result of Trump coming into office has made trying to read the labor market next to impossible, and you do get conflicting signals. So no matter your view, there's a key data point you can use to back it up, right? If you're bullish or bearish. But at the moment, as I said, my main point is generally trends are weakening, which is why we're seeing that rate cut expectation.

On that, on that labor point statistics you were just covering there, does that not create in itself somewhat of a Goldilocks scenario where rates are coming down, but the labor market is kind of the sweet spot where it's enough that enough of the indicators are insinuating we need to cut, but there's some underlying strength there that averts a recession. So it's kind of like within that band of panic and within sweet spot, we are kind of just within the sweet spot at the moment.

Yeah, I'd say, but I mean, like you look at things like the unemployment rate, right? And I mean, all right, it has, it is the highest it has been, I think for 4 years, right? So when that rises, obviously that's bad, the unemployment rate, but it's 4.4%, which, you know, over the longer term is a very healthy rate. That again, that's not recession territory, right? You need 5, 6, 7% unemployment when you're, you know, going into a recessionary cycle. But yeah, as I said, it's just a weird setup and I think that COVID might be a hangover of COVID One thing to note, right? In COVID, generally companies, basically they had a labor shortage. And when we were coming outta COVID, it was impossible to hire anyone, particularly in like the hospitality sector. And so what happened was we went into a mentality of companies not firing people, even though they perhaps ordinarily would've done in previous cycles, not firing them this time for fear there'll be a labor shortage again and they won't be able to hire. So it might be that we're getting this situation where yes, job openings, so is down. So companies hiring new people is perhaps down, but you're seeing less firing on the other side. Which maybe is creating this unusual setup in the labor market, which just makes it hard to read. So yeah.

And then the, see, the labor market is a crucial one, but inflation, because with tariffs, it seems to have gone just quiet. There doesn't seem to be a lot going on at the moment on the tariff. I know there's a Supreme Court hearing going on, stuff like that, but from where we were, if you think of 2025, yeah, it's tariffs that have been like the predominant story of the year. And yet that's not being spoken about. And from where we were in terms of like how that was going to impact inflation to now where we're at now.

There's two reasons.

Yeah.

Number one, The media, they kicked up an almighty kind of fearmongering storm ahead of Trump arriving in office and his tariff policy and then Liberation Day and oh my God, it's going to be inflationary. It's going to collapse the global economy. They really amped it up. It's just that they were wrong.

Hang about, are you, you going, are you, is Trump, Trump slipped you some, some back pocket here?

Well, is this, it's just my weekly media bashing segment of the pod. So why, why do you think it's all gone quiet? Because they're all sat there in their corners going, oops, we didn't, we didn't get that one right, did we? So look, it's just stopped being the column inches on it. It's just vanished because I think they were wrong. The other point is that obviously the big concern on that front was China and the US, and if there was some kind of disastrous fallout with 150% tariffs, well then fine, you know, it would've been a big thing. But that looks to have not, you know, the risk of that happening's obviously reduced significantly. So that's why the tariff thing. But look, I would say inflation, I'm looking at the US CPI chart right now for September, because again, we haven't had October data because the government was shut. I actually don't know. Do you know when are we supposed to— when are we getting October inflation data? Never mind November. I'm not quite sure. But if you go back, it'll be important when it lands because the September figure was 3%, which was off the back of a 6-month uptrend. That's back to the highest point of the year that we saw back in January at 3%. Right. And so, we don't want to see inflation go above 3% really, because again, that'll start feeding into the narrative of, well, tariffs are inflationary and it's going to prevent the Fed from cutting. So I really do want to see that October inflation print. Not sure when it's coming.

Okay. And then the other part of this is sticking with Trump.

Yeah.

Is about what he's been saying about his nomination for the Fed chair. This week. So where do we stand with that? We had like a shortlist last time we spoke about this. Is that now done?

Well, so reminder is Powell rotates off, I think it's May 2026, and then that's his term done. And he's definitely not getting another term. Trump would've preferred to have got rid of him already. Anyway, so Powell's out, right? So who's coming in? And there's been some noises on this this week. And on Tuesday, Trump said that he planned to name his pick for the Fed chair early next year. Okay? And look, the media pushing him, you know, who's it going to be? Who's it going to be? And they were asking about Hassett, and Trump said, yeah, Hassett's definitely a potential contender. Bessant has been interviewing these lot. All right? He's been running a kind of multi-stage recruitment process, obviously, as you would. This is a highly critical role. That you can't get it wrong, right? That recruitment process. So Bessant's been kind of interviewing people over the last few months, and I think we had another round of these, and this is why it's kind of come back up in the media. And Trump said, right, we're going to make a call early next year. But because he mentioned Hassett and him being a potential contender, well then actually the dollar reacted to that. And we'll come onto the dollar in a bit more detail in a second, but the dollar dropped. Off the back of these comments. And that's because Hassett is in Trump's camp. He's like his senior economic advisor and he's very much a Trump, so in Trump's back pocket, so to speak. And he has been insisting that the Fed should be cutting rates sharply. He's called Powell a stubborn mule in inverted commas in the past. He's right out of the Trump playbook. So look, if he gets the job, well then, right, we should increase our dovish expectations about what the Fed are going to do with interest rates in 2026, in the second half of 2026. I should just point out, even if he did get the job, it's not just up to him, right? There's a committee at the FOMC, the Federal Open Market Committee, and those people, those officials democratically decide, they each get a vote, right? Hassett can't cut. He has to bring the committee with him, but obviously having a chair who's super dovish can certainly help to move things in that direction.

You say he can't cut. I kind of disagree with that because he can cut by just saying, not that he's going to cut, but he can. The difference is here is that he can turn to the mic at any point in time. As Fed Chair, the most senior person of the world's most influential central bank. And whatever he says, by definition of his role, would move markets regardless of the committee's agreement or deliberation.

Well, here's your problem though, because if he's on the one hand on the mic, you know, off the cuff going, we're going to cut, we're going to cut, we're going to cut, but then come FOMC day, They don't. Well, then this is where the Fed lose credibility. And this is one of the big concerns about the markets, is that the Fed will, their independence from the administration will be eroded. And basically the Fed will just end up doing whatever the president wants them to do rather than making decisions on pure economic assessment. They might be making decisions for political gain. That's the big concern, right? And so, you know, you've got people prefer, like the bond markets and players in the markets would prefer someone who's independent from Trump. Couple of names have cropped up like BlackRock's Rick Rieder has been, that name's been thrown in the mix. There's a Fed governor who's already part of the Fed, Christopher Waller, they would prefer those kind of guys. But look, Trump would want one of his men, right? One of his guys to lead that office. And so look, this is in the news, whether it happens or not, we're going to find out early next year. Look, Hassett, he's qualified for the job, right? He's not like just Trump's mate who wants rates to go down. He's a serious heavyweight from a kind of an economic perspective. He's been the economic senior advisor on presidential campaigns for John McCain, George W. Bush, Mitt Romney. You know, he's been around the block. So he's got the credentials. The issue is just people are worried he's too much in Camp Trump and therefore the Fed's independence might be threatened.

So maybe where this lands then is you have someone like Waller who's obviously of the existing Fed members, probably the most Trump-friendly. So you have someone like that, markets like it, has still a bit of independent thought, but a preference for just natural disposition of being more dovish than Powell is. And then you have like a triangle there and you've got Trump there, you've got the senior economic advisor in Hassett remains in his role, and then you have Waller. Yeah. And that's good enough for Trump to get rates lower faster than what they're going at the moment.

And you know how it works, right, with markets and their reaction and their behavior. If you start throwing out the Hassett card now, but then you end up choosing Waller, then the markets will be, ah, phew, that's a good result because he hasn't chosen Hassett.

So we rally, and then if we do have a wobble, then you say, well, I'm going to swap him with Hassett, and then we go again and rally because rates are going to go down. So you keep Hassett as your like, your trump card for later, basically.

But look, this is one of the reasons why the dollar, like why Deutsche Bank are coming out and saying, look, 2026, dollar's going down.

Yeah. Triple whammy.

The triple whammy. One of the cornerstones of that thesis is that the Fed are going to be dovish and cut rates in 2026. And obviously this Hassett news and all the rest of it feeds into that. Narrative. And look, the dollar is going to weaken. What, what you got to understand about exchange rates though, the dollar exchange rate with other currencies, it's obviously there's two things, right? And if we talk about the yen, 'cause this is the best example, right? If the dollar weakens, the dollar has to be getting less valuable than the yen. The yen needs to be appreciating in value. But what's happening in Japan? Just because the Fed are cutting doesn't on its own mean the dollar will weaken. It's a relative game. So are the Fed going to be more dovish than other central banks in 2026? And if you get that monetary policy divergence, then yes, the best place to see that is in the exchange rate FX markets.

And Lagarde said what, just a week ago? That they're probably in the right place now.

Right. So you've got Europe saying, let's take the UK out of that. Okay. This is the Eurozone are saying that we're probably done on rate cuts. The UK, I mean, well, I don't know. We'll touch on the UK in a minute, but there's probably more to go on the rate cutting side in the UK perhaps. But in Europe, rates probably not going down in 2026. In Japan, Well, by the way, in Japan, they're in a rate hiking cycle, right? So literally going in the opposite direction. Now they have paused that. So Japan hiked rates off, so pre this hiking cycle, it was at -0.1%, their interest rates, right? They hiked in March of 2024. They hiked in July of 2024. They hiked in January of 2025. And then they haven't done anything since, but at their last meeting it was a 7-2 split. So you're starting to get some of the committee now saying, look, it's time to hike again. So Japan are in a hiking cycle. We're expecting maybe another one to come at the start of next year. So that's your divergence, literally where interest rates are going in opposite directions. So we anticipate that the dollar will possibly weaken, I mean, 2026, if the policy divergence is sustained.

Right. And then the other legs of the triple whammy. So you've mentioned Japan sending signals of a potential hike. You've got the dovishness with potential Hassett, and then you've got a potential Supreme Court ruling against tariffs. Which is the way it's gone in the lower courts.

Yeah.

And does that, the idea there being what, it just softens the tail risk of inflation emerging from tariffs?

Yeah. Yeah. But that's negative for the dollar. Yeah. So that's right. I mean, that could work, but my hesitation there is the whole narrative at the end of 2024 was that Trump's going to come in, he's going to implement tariffs, and the dollar's going to go up because it's inflationary. None of that happened. In fact, the dollar weakened in 2025. So I don't quite buy the story that if now tariffs are not going to happen, the dollar's going to weaken because tariffs did happen and the dollar weakened. So why would it weaken when it doesn't happen? So I'm a little bit, I'm on the fence on that third element there.

One other thing that Deutsche Bank, who came up with this triple whammy idea, said was about the seasonally weak December. So this is when you look back through and compare average performance of a currency in the different months of the year, year on year. And one of the things I was just having a quick look, that the dollar index has seen its worst average monthly returns in December, largely in the second part of December. What AI is telling me, not my research, Asap, is that the pattern's often attributed to corporate tax flows and portfolio rebalancing towards the end of the year.

Yeah.

Which can include shifting cash abroad.

Right. And so that last point, obviously the US is the biggest market. So if you've got international asset managers running portfolios, they're going to have a big portion of US stocks or bonds like in their portfolios, right? And if those assets have performed well, and generally equities and particularly US equities in the last decade have just been on fire, right? So at the end of the year, you rebalance, it just means you trim you book a bit of profit. Let's simplify it by just saying, look, you book in a bit of profit, but if you sell your Nvidia stock and you are a fund manager in the UK, well, you sell your Nvidia shares, which are dollar-denominated, so you get dollars and then you convert those dollars back to pounds. So you're selling dollars and buying pounds. So that puts a little downward pressure on the dollar's currency. So that does make sense. Yep.

Okay, well look, two more things then, just to kind of wrap up this part of the conversation. Unwind of a carry trade. So you were talking there about this divergence of rates and where they are and where they're expected to head in 2026. And one of the things that we were seeing this week was that cryptocurrencies have been up and down, but at the beginning of the week they fell quite aggressively on Monday. I think Bitcoin fell under $85,000. Ether was down over 7% at one point. So a couple things there, regulatory warnings from China and so forth, but fears that Bank of Japan rate hike would force an unwind of the yen carry trade.

Yeah.

And so, A, this kind of carry trade concept, and then why the unwinding of it now? What are the repercussions and ramifications?

Yeah, this is a big potential risk, but it's not something new. As I said, Japan have been on a hiking cycle for a year more, right? So, but it hasn't really gone too far yet. Japan are hiking at 0.1% at a time, right? So it's slow, but the fear is it speeds up and then I think we do have a problem. So what is the carry trade? It's essentially this clever trick where you borrow money to then invest, right? So it's leveraged investment, but you are— so if you just want to borrow money, great. Well, obviously you want to borrow at the cheapest rate you can find, right? And if you're a clever player and looking internationally, you're going to look around the world and write, who's got low interest rates? Well, it's always Japan. Japan have had low interest rates for 40 years. Okay. Or 30 years, I should say. Cause they had a financial crisis in the '90s and basically deflation, and they've had zero interest rates since. So they've always been considered the go-to for the carry trade, meaning that's where you borrow your money.

So I got a good example of this from earlier in my career. I think it was March 2008. So pre-really the financial crisis kicking off when it was at its most prevalent, like '07. The carry trade. Japanese interest rates were at 0.5%.

Yeah.

Australian interest rates. What do you remember them being back in 2000 and sort of early? Well, I know late '07, early '08.

Well, I know off the top of my head, I know that like US was clocking around 5, 6% at that time. So I'm going to guess the Aussies are a bit more. I'm going to say 7.5%.

Good memory. So Japan was 0.5, Australia 7.25. How's that for a carry trade?

Yeah, that's good. That's a lot of sauce there. So look, the point is you borrow cheap, so you, that means you need some yen, right? So you, you bought, well, sorry, you receive yen 'cause you are borrowing in Japan. So you're going to get yen. All right. Then you take your yen. You sell it and convert it to another currency like the dollar. Okay. And then you buy Bitcoin, like in an extreme example. And look, Bitcoin, if you look at the kind of market participants in the crypto space, there's a higher proportion of risky leveraged traders operating in that space, right? So that's why you might say Bitcoin and crypto generally is more vulnerable to this carry trade unwind than normal markets like the S&P 500, where you've got, you know, just vanilla participants like big asset managers who aren't leveraged right now. Here's the problem. That whole setup makes sense. Borrow in Japan, low rates, buy Bitcoin to lever up my position. Okay? That, that's all, it's all fine unless, well, what happens if it starts to get less cheap to borrow in Japan because interest rates are going up, right? And there's an exchange rate issue as well because your loan is in yen. So you might have a double whammy where if interest rates in Japan go up, well then your interest rate on your loan is going to be increasing. But interest rates going up in Japan might lead the yen to appreciate. Okay. But if you are in US, yen appreciating means actually the overall value of your loans going up as well. So it's like a double whammy. Now, at some point, people are worried that it's enough of a thing for people to start to unwind their carry trade. They're no longer happy with the funding source of their leverage because conditions have changed, so they need to unwind it. How do you unwind it? Well, I need to sell my Bitcoin. I get dollars back for that. Okay? So Bitcoin goes down. I then need to sell my dollars to buy yen. So the dollar goes down, and then with that yen cash, I pay back my yen loan. So you kind of get that unwind risk that people are really quite concerned about, especially if the Fed accelerate their cutting cycle next year, and if, if, if, who knows, Japan accelerate their hiking cycle, you really need to look at the dollar-yen for a guide as to whether that's really going to become a big issue. And that unwind hasn't happened yet. I mean, maybe tiny, tiny here and there, but you'll know if it does because that'll be That will trigger a really, really major market episode, but at the moment it's small.

Okay. To finish then, as we always like to do, a bit of a flying the UK flag here. We've always been quite downbeat through 2025, the prospects for the UK, but we've had some interesting news this week. So what was that?

Yeah, well, the pound, I'll just preface this by saying the pound is on fire here. The pound against the dollar. If you go back to 2 weeks, it was trading at 1.30. We're now at 1.3350.

This is when the Labour government needs to take a page out of the Trump playbook.

Yeah.

If this was Trump and he was getting beasted like the Chancellor Rachel Reeves has over the budget, he'd be out there banging his drum talking about what you've just said.

Yeah.

Every 5 minutes. I don't know why they don't do that.

Yeah.

Even though you and I know that economically there's lots of reasons why pound other than this data is gone up. Yeah.

Basically the UK budget was last week and we were really worried that they were going to massively increase tax. They were going to spend more money, i.e., borrow more money to spend more. And we thought it was, and we've always got this Liz Truss episode in the back of our minds and oh my God, it's going to be a disaster. Well, it wasn't from a market's point of view. It was a markets-friendly budget. So the outcome was all the risks we were worried about didn't happen. So they are going to raise taxes, but it's kind of all kind of back-ended, you know, into like 2029, 2028, 2029. So they're not coming now. So they're just going to spend more without raising taxes. So I think it's a market-friendly thing now. Will it work from an economic perspective? I think we're just in the same old death spiral that every government has to spend more and borrow more and cut taxes because that's what people want to hear and that's how you win votes. So you're kind of in that kind of death loop where ultimately borrowing debt piles are kind of only going one way and that's up. So economically, long term, I don't know if it's a great thing, but short term for the markets, it was like all those worst case scenarios didn't happen. So the pound has rebounded. And so yeah, from that point of view, and maybe this feeds in, we did actually get some data from the UK. So that was the budget. We got some data, which is more hard evidence. I'm maybe, well, it's not necessarily hard. A lot of it's survey based, but we had some PMI data come in that was much better than expected. So actually on the manufacturing PMI side, that came in at 50.2, which is notable because it's gone back above 50 for the first time for 12 months. So that's expansionary territory. And so look, we had, we just had some good economic data for once out of the UK, which coincided with this budget, you know, avoiding the banana skins situation. And so yeah, the pound has had a really nice week.

Well, we'll park for the moment what you think about the pound's prospects for 2026, because I think we are going to record next week our outlook for next year where we can talk about maybe who's going to be the winners and losers in the different asset classes. Maybe that's a good way of going about it. Like what's going to be the outperforming metal or commodity. So we can talk oil and gold, maybe then we'll talk about US stocks or any other competing ones that might outperform or underperform in that case. So yeah, stay tuned for that.

Can we also, can we review, can we go back and what were our calls at the end of 2024 and did they actually, were they right? Or did we just really—

The only one I can think of is our stock call. We're both— Yeah, you were right. You were looking good in February.

Yeah, I was looking great in April.

Yeah. And I was looking good about 2 months ago and then it stopped. So I'm hoping for a little Santa's bump and then I'm all golden then. We'll see. But yeah, stay tuned for that. So don't forget to subscribe to the show. Also. As I said at the beginning of the conversation, we have had Spotify Wrapped statistics come out. So just want to say a huge thank you to everyone who listens. And, you know, one of the standout statistics is our total new audience, that's new people finding the show, was up over 600% in the last 12 months. And this podcast has been going for about 4 years. So quite a meaningful change up in gears. So I super appreciate everyone who listens and predominantly who's sharing it. I think WhatsApp is still the most common mechanism for people to share it with their peers. So please do. And yeah, their outlook for 2026 is going to drop before Christmas. So keep an eye out for that as well. Thanks, Piers.

Cool. See you later.