Mark LaMonica: We’re back with another edition of Market Minute. There’s a lot of geopolitical news to unpack. I’m joined here with Matt. So Matt, catch us up — there’s been a lot of events over the last week. How should investors interpret this?

Matt Wacher: Yeah, so certainly everyone was waiting over the weekend for the resolution of the talks between the US and Iran. It seems not much came out of that — there was no real resolution. In fact, we now have a blockade in the Strait of Hormuz. What that means for markets is yet to be determined.

But what I think markets are seeing now — we’ve had a few good days in a row — is that they’re kind of looking through this war. There’s a sense that President Trump doesn’t really want to continue it. That could obviously change, but for now, investors seem to be looking through things and focusing on other issues. We’ve seen a few positive days in markets on the back of that.

Mark: Yeah, and it’s interesting looking at markets. There has been some volatility — things have been up in the past week. I’m hearing from a lot of investors, and they’re going with that old Ben Graham quote about being greedy when others are fearful. But the market really hasn’t fallen that much. So what are you seeing from a valuation perspective?

Matt: Yeah, you’re 100% right, Mark. Markets have fallen a little bit, but valuations are still quite high. This hasn’t been a really disorderly sell-off over the last few weeks. Similarly, with the bounce back — we’ve had a few good days — but we’re kind of much of a muchness overall.

If you think back to last year, around the tariff announcements, or even further back to COVID, markets saw some pretty savage, disorderly sell-offs. That created opportunities where things had been overdone. We haven’t really experienced that over the last month since the start of the war. Markets sold off a bit, but if you go back to January and February, markets were on a tear — in some cases at or near all-time highs — and valuations were very high.

So really, we’re just back to where we started, and caution is probably still warranted as we move forward.

Mark: So it doesn’t sound like there are a lot of opportunities yet, but we’re still waiting to see what the economic ramifications are — policy responses from central banks, inflation, economic growth. What are you and the team watching for to identify opportunities?

Matt: Yeah, look, we’ve taken some incremental risk over the last few weeks. But as you say, the economic picture — even before the war — was a bit fraught. Growth was slowing a little, while inflation was increasing.

The RBA has acted, and the Fed has probably put rate cuts on hold — if not started to consider rate rises. We saw some higher inflation numbers out of the US last week.

We’re trying to look through the noise and focus on the long term. We don’t ignore these data points, but we take the temperature in the room. If markets react negatively to some of this, then we may get opportunities to add growth assets or invest in areas we like.

Mark: Well, it sounds like there’s a lot keeping you busy. I’m sure we’ll continue to see that in upcoming Market Minute editions. Thanks for joining me, Matt.

Matt: Thanks a lot, Mark. Appreciate the chat.