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00:00Max what do you make of the Nike numbers and kind of what conclusions can you draw that might kind of set the stage for some of the other earnings announcements that are going to come in the next few days. Well the key here is really the guidance because in terms of numbers of the plus four is actually not that but what investors are worried about is the future is the guidance and guidance here as being fairly bleak which has led to the correction in this market that we are experiencing now. And the fear is that you might get quite a bit of that in the upcoming earnings season. So we're basically entering the slowdown in terms of growth and in terms of companies numbers as well. And part of it is left is still not reflected in terms of the earnings expectations. So there needs to be a further correction in terms of that with the potential negative outcome with respect to the share prices before the market can really rebound on a sustainable level. Max good morning to you. This goes to the heart of what Michael Burry has been saying which is this slowdown at the retail and Wal Mart Target Nike and Nike's about China. But he talks about a bullwhip effect. In other words when you've got stuff backing up at the retail level it causes an outside impact on the wholesale level and a deflationary impulse. And that he says could cause a reversal by the Fed. Do you think the Fed in any way are prepared to reverse. Are we under assuming the slow dying potential slowdown in inflation. The Fed currently cannot be seen as changing its mind once again. It's already lost quite a bit of image over the past year. The point does not it cannot allow itself to change its mind again. So the messaging is going to continue with this bank too. They are completely focused on bringing down inflation and consequently continue hiking rates. But the key here is with respect to additional additional hawkishness because if what they've been saying so far that's as far as it's going to go. So that's no additional hawkishness can be seen as a little bit of damage. And therefore from an inflation point of view everything that you have just pointed out then at the same time some the commodity is declining. That's likely as in line with the base case scenario that we are going to be seeing peak inflation. Therefore there's not going to be as much a requirement for the Fed to hike as aggressively. So all of that could potentially in a best case scenario support the market going forward. Back So let's talk about the investment strategy here. Does that mean you're holding on to a little bit more cash than usual and might actually deploy it quite soon if there is another meaningful correction in equity valuations later in July. Correct. So we're holding on to what we define as being the core of the portfolio. That's less trading oriented that's more a long term perspective in terms of secular growth of the things that we like. But definitely we are more cautious now while we've been over the past few years holding on for gain entry in 25 to 40 percent in cash depending on the profiles. And we're looking to deploy that bid more tactically. So we deploy that about two or three weeks ago. We're now taking out some of the investments and upon negative moves from some of the names that we like on earnings which could happen then we'll gonna be very happy to buy that because obviously we think we're closer to the bottom than than we were a few months back. We're probably not at the bottom yet but it's getting more interesting to start deploying liquidity. Well it certainly feels less volatile perhaps than in 2008 when it was just a straight vintages line on the way. Diane this is a slow continental drift of pain and to the commodity space you look non energy non energy commodities. And we were looking at this yesterday. Copper down 16 percent 10 down 21 percent. Last week the West since the 1980s. You think that there is more pain to come on the commodity side. Yeah. Absolutely because the move we have seen over the last few months in terms of the move up has been incredibly brutal. So it's actually been extremely positive for commodities but that has to undo itself. So it's gone ahead of itself. And a lot of that was also due to some speculative positions and not so much as the geopolitical tensions and situations only. And we're seeing that unravel and the further unraveling is yet to happen. And a game that is going to have the consequences with respect to inflation which could potentially bring it down. And the more important part here in addition to call rather than everything you've mentioned is to keep a lookout on the food commodities because that's the one that can really spell trouble from a social point of view. If they remain elevated and that's the one that's likely to be more sticky.

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SGMC's Bondurri: Fed Can't Change Its Mind

SGMC Capital Chief Executive Officer and founder Massimiliano Bondurri discusses the Fed's strategy on bringing down inflation and creating market growth. He speaks with Bloomberg's Yousef Gamal El-Din and Manus Cranny on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

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