What is happening in the world, one side there is this interplay between weakness in dollar index and pronounced uptick in equity, on the other side you have got uptick in bond yields and inflation concerns. So, who will get it right, the bond bears or the equity bulls?
Seth R Freeman: Well, it is certainly inconsistent. We would expect to see one direction or the other and we are just seeing this. It is indicative of the lack of consensus on both the economy in general and inflation.
What should one do because the most crowded trade in the world which is the long dollar index or long live dollar now seems to be reversing. What could be the impact of this adjustment?
Seth R Freeman: It is very sentiment driven at this point that the long-dated debt is looking so weak and globally and big investors are looking at the increase in the deficit that we are going to have as a result of the so-called big beautiful bill.
What is your view on emerging market equities considering that the weakness in the dollar index could clearly have an impact on long EM trade?
Seth R Freeman: Well, again, investors look at growth rates and stocks are supposed to be indicators of expectations for the future and a weakening dollar and continued growth in emerging markets is very positive for emerging markets.
And one is wondering where would India lie in the pie when you talk about emerging markets, clearly Brazil seems to be the favourite right now looking at how their equity markets have performed. But how do you think money is going to manoeuvre itself within the EM pool?
Seth R Freeman: It is going to really depend on geopolitical issues with China frankly. The general sense of affinity from the US for investing in China does not change.
India is going to be a longer-term beneficiary. And we have other things going on with Mexico and certainly with Canada. And so, we are looking at some very complex issues just here in North America. The other aspects we are seeing today the Korean economy high inflation, but still the overall long-term growth rate in India is positive.
So, if you have to choose an asset class for rest of the year, which asset class you would like to choose?
Seth R Freeman: I am more oriented right now towards fixed income. At this moment in time that is a safer place to put money. We still don’t really know the outcome of the Trump tariff activity. We have got July 9th in the wings. He is having problems negotiating with Japan. There is just too much uncertainty. At the same time, of course, in the last two weeks, the US indices are reaching all-time highs. So, I may not be the best guy.
