Markets Happy Hour Podcast - October 9, 2025 - Alarms or False Alarms?

In this week’s Markets Happy Hour Podcast we discuss alarm bells - where we see them, whether we are finding them where none exist and what we can do about it, if anything. We are joined by former CIO of Royal Mail, Ian McKnight. A few weeks ago, in a podcast with John Normand of Australian Super, we asked if the US economy was actually stronger than we thought, in that US GDP growth figures looked to be revised upwards and the consumer as well as the stock market proved to be stubbornly resilient. Of course, the stock market does not equal the economy - we are reminded of that over and over again, but when the stock markets rises to fresh highs (over 29 in the S&P alone in 2025 year to date) and Main Street increasingly participates, the two do start to march in step (at least at times). This week we discuss how optimism around the US economy is presenting strangely - on the one hand inflation expectations are subdued - as expressed by US breakevens and swap rates, which are hovering below 3%, so well out of the danger zone and on the other hand the strong equity markets are being supported by strong corporate cash flow and corporate margins - which presuppose pricing power and ongoing inflation. Given Ian's location in the UK we do a bit of deep dive into the current malaise in the UK around low growth, high debt to GDP and high inflation and look at some of the dependencies that lead to that. We look at potential cracks in the bond market, ask whether the rise in demand of gold is actually an alarm signal, or just a sign of all of the return seeking capital out there. Finally, given the breaking news today on the Israel/Hamas peace deal we ask what this may mean for geopolitics and the market impact beside the massive human relief.