What Goes Up

Daniel Yergin was at the St. Petersburg International Economic Forum in 2013 when he got a daunting request: Could he pose the first question from the audience to Vladimir Putin?

“I started to ask a question, I mentioned the word ‘shale,’” he recalls, referring to a once-unconventional source of oil and natural gas that by then was flowing freely in the US “And he started shouting at me, saying shale’s barbaric.”

Yergin, the vice chairman of S&P Global, discussed the incident on the latest episode of “What Goes Up,” along with other insights from his book “The New Map: Energy, Climate, and the Clash of Nations.” American shale oil and gas has had a much bigger impact on geopolitics than people recognize, Yergin said. Even in 2013, it posed a threat to Putin in two ways: “One, because it meant that US natural gas would compete with his natural gas in Europe, and that’s what we’re seeing today. And secondly, this would really augment America’s position in the world and give it a kind of flexibility it didn’t have when it was importing 60% of its oil.”

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As the Federal Reserve’s efforts to tame inflation roil both stocks and bonds, investors everywhere are struggling to figure out the best way to play defense in markets amid concerns that a recession is on the horizon. One of the top executives at Goldman Sachs Asset Management has a surprising idea: Beyoncé.

Katie Koch, the chief investment officer for public equities at GSAM, quips that “Beyoncé is ultimately recession-resistant” and so are other popular artists. That’s why the portfolios she helps oversee own shares of live-concert companies in the U.S. and Europe. While Live Nation Entertainment Inc. got hit hard during last year’s Covid-19 lockdowns, she points out that the company actually weathered the previous recession well and managed to grow revenue in both 2008 and 2009.

“So the consumer will spend in a recession,” she says, but “they'll be quite selective in terms what they spend on.” Another example is beauty products, she adds. And Koch doesn’t buy the notion that China is uninvestable: “You can buy assets here in the US as well as assets in China that are overly discounted for something that we know is eventually going to work out, which is that the economy will reopen”

Koch joined this this week’s episode of the “What Goes Up” podcast to discuss the state of play in markets and why -- despite share prices that have crashed over the past year -- investing in innovative companies is still a good idea for the long term.
 

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The U.S. Federal Reserve’s effort to tame inflation with aggressive interest-rate hikes has some investors worried that a recession is inevitable, leading to a plunge in stock prices this year. Not so fast, says Jeremy Zirin, senior portfolio manager and head of private client U.S. equities at UBS Asset Management.

Zirin joined the latest episode of What Goes Up to discuss his outlook for markets and the economy, and why he thinks the probability of a soft landing and longer expansion is higher than many believe. 

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Former Federal Reserve Chairman Alan Greenspan famously used the phrase “irrational exuberance” to describe the euphoric investor sentiment that sent tech stocks soaring in the late 1990s. And everyone knows what happened next, when that exuberance wore off. Now, history is repeating itself when it comes to some of the disruptive and innovative companies that were market darlings during the lockdown phase of the pandemic, but have since been clobbered by a “dose of realism,” according to Aoifinn Devitt, chief investment officer at Moneta Group Investment Advisors.

Devitt joined this week’s “What Goes Up” podcast to discuss this and other hot topics in markets, such as inflation, rates and the outlook for consumer spending. It’s not all bad news for the disrupters of the corporate world, however. They’re still darlings of venture capital markets and, she adds, “I don't think that our fascination and our obsession with innovation is likely to go away anytime soon.”

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Investors have a lot to worry about: Russia’s war on Ukraine, inflation, Covid-19 and China’s lockdowns reigniting supply-chain woes— the list goes on. As a result, many money managers have ratcheted down their expectations for stock returns this year.

But what if fears of a possible U.S. recession are overblown, and the second half turns out better than expected? Given still-strong earnings from corporate America, things may not end up as bad as some are predicting. Sylvia Jablonski, chief executive and co-founder of Defiance ETFs, joins this week’s episode of What Goes Up to talk about a potentially rosier future. 

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It’s been difficult for even the most-seasoned veterans to discern a market message right now. Oil’s up one day and stocks fall. The next day, crude prices rise and so do stocks. Or bonds rally, and so do equities, and then the reverse happens just a few days later. Peter van Dooijeweert, managing director of multi-asset solutions at Man Group, joined this week's "What Goes Up" podcast to talk about that and the right asset classes to be in as the Federal Reserve continues its fight against inflation.

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Adam Posen, president of the Peterson Institute for International Economics, joined this week’s “What Goes Up” podcast to discuss how Russia’s invasion of Ukraine threatens to further separate the world’s economies, and how a 20-year-long backlash to globalization is causing the U.S. to fall behind. 

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David Bianco, chief investment officer of the Americas for fund manager DWS Group, joined the “What Goes Up” podcast to discuss his cautious near-term outlook for the stock market: “We're quite concerned about the longevity of this cycle. I feel as if this cycle has aged quickly. It's aged mostly from very high inflation, much earlier than you typically see in the first couple of years of a new economic expansion.”

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Dave Olsen, president and chief investment officer of Jump Trading Group, joined this week’s “What Goes Up” podcast to discuss his firm’s investment in cryptocurrency markets, and why it spent $320 million to rescue a project called Wormhole after hackers made off with 120,000 tokens known as “wrapped Ether.” 

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The Federal Reserve raised interest rates by a quarter percentage point and signaled that six more such increases are likely this year—essentially fulfilling what markets were already pricing in. Bloomberg’s Edward Harrison and Ben Emons of Medley Global Advisors join this week’s “What Goes Up” podcast to discuss the ramifications of the expected Fed move for financial markets.

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