In this week's Markets Happy Hour Podcast we cover the post-Davos week, which, as is now typical has been filled with newsflow, most recently chatter regarding the pending appointment of the next Fed Chair. As we go to print it seems likely to be Kevin Warsh - a current Fed Governor, one of the youngest, and considered to be an "orthodox" pick, given his existing reputation as a Fed Governor and expectation that he will not be necessarily a channel for political preferences. The recent Fed decision to leave rates flat was difficult to parse - as the message was essentially more of the same. There is clearly a mixed message in terms of jobs, the perception of jobs being plentiful and being hard to find are now roughly the same – so clearly no big gap as there was post Covid.

The employees in tech industries are flat to trending lower despite revenues and capacities soaring – this points to productivity gains and will continue to matter for jobs. Other equity market sectors have diverged, there are some indications of saturation points being met in certain areas of tech – there is a fall and stabilization of TikTok users, while Apple (which has had a mixed AI launch) has had a set of 8 consecutive weekly declines. Other sectors such as “gridTech” – a new sector coined by Bloomberg – which contains a basket of companies exposed to the pick-up in investment in the electricity grid. It is notable that this, as well as the utilities index more broadly have not generally performed as well as other equity sectors. This latency is interesting – as clearly the one broadly accepted truth is that more electricity will be needed going forward and that this will have to be met from all sources, including solar, which has accounted for 61% of the increase in electricity demand in the US.

The performance in precious metals has continued to define the risk off appetite from time to time – with gold moving to a record $5,500 per oz, and US markets considerably weaker compared to the gold. There is some indication that Chinese retail holders of gold have peaked considerably pointing to the potential for some speculative interest there and the potential for more volatility. Silver, similarly, has seen a stark ascent, as well as sharp intra-day volatility just in the past week.

The podcast ends with a comment on the use of precious metals in a portfolio and the role that they play.