{"text":[[{"start":5.9,"text":"Can anyone smell burning? There’s certainly a whiff of something in the air around financial markets, where the mood is shifting from cautious relief to outright red-hot exuberance. The greybeards who have seen a few market shocks in their time know this is not necessarily a good sign."}],[{"start":22.1,"text":"On financial TV channels, on conference stages and in certain corners of financial-market research and commentary, a clear message is emerging: it’s time to go all in. “The biggest risk in markets today is that you are not taking enough risk” is a phrase I’ve heard several times in the wild. The message is: You’re going to miss out, and you’ll regret it. Every dip is a buying opportunity, every dislocation is a chance to snap something up on the cheap. More, more, more, and now."}],[{"start":51.5,"text":"Without question, this is working, at least in the short term. What started as a nervy relief rally at the end of March, when the wisdom of crowds decided the war in Iran would eventually get better rather than worse, has turned into a powerful force. The benchmark S&P 500 index of US stocks has pushed some 18 per cent higher since that point — a truly astonishing turnaround that owes much more to robust corporate earnings than to runaway vibes. The index now stands at around 7,500 and the bulled-up optimists are setting their sights on 8,000 and beyond."}],[{"start":86.6,"text":"New listings for tech-flavoured stocks are flying off the shelves. Shares in one, chipmaker Cerebras Systems, more than doubled at their market debut this week. Meanwhile, a fundraising agreed by AI giant Anthropic now values it at $900bn. Three months ago, the same company was valued at $350bn."}],[{"start":null,"text":"
"}],[{"start":107.05,"text":"Corporate bonds are also partying hard. Investors are demanding only the slimmest extra return from corporate debt over government debt, and they are feasting on an enormous pile of new bonds issued across a wide range of currencies by the big tech powerhouses, which are churning those billions into data centres and AI wizardry. "}],[{"start":126.5,"text":"Alphabet’s recent monster €9bn bond was one of the largest ever issued in euros. The biggest ever, at €14.5bn, came from Amazon in March, smashing a record that has stood for a decade. Those two companies have issued the equivalent of $55bn or so each just so far this year. Even bankers working on some of these deals are surprised at the sheer scale of this and the willingness of investors to keep on absorbing it. "}],[{"start":154.4,"text":"Can all of this really continue? Sure. “It’s impossible to pick the top,” said Anton Eser, chief investment officer at Dutch asset manager Robeco. “We could have another six to 12 months of this.” It is perfectly rational for highly risk-tolerant investors working on relatively short time horizons to keep on filling their boots."}],[{"start":175.8,"text":"But in my experience, more conservative investors, policymakers, bankers, finance professionals whose job is not to chase the next shiny thing, all have a gnawing sense that something here is not right."}],[{"start":null,"text":""}],[{"start":189.70000000000002,"text":"For Eser, one thing that could flip the mood is the planned stock market listings for SpaceX and OpenAI, both of which are likely to be massive, audacious, and on a fast track to an index fund near you. The intense reliance on chips and AI as a source of high returns, and not just in the US, is also alarming even to those who believe the transformative potential of the technology itself is real."}],[{"start":213.35000000000002,"text":"But the most likely possible source of stress is the global energy crisis, which has not gone away, and could very easily get much worse very quickly. Right now, the world is somewhat insulated from the worst effects of constrained energy supplies around Iran because it is running down reserves of oil and gas. That’s fine, it’s what those reserves are for. But it cannot continue for ever. Some form of energy rationing, even in developed economies, is not beyond the realms of possibility in the coming months. "}],[{"start":243.50000000000003,"text":"As European Central Bank chief economist Philip Lane pointed out in a speech this week, this energy shock is not like the 2022 energy shock sparked by the constraints on Russian supplies. It’s global. Alternative sources do not exist."}],[{"start":256.85,"text":"That means a rapid surge in oil prices still cannot be ruled out, whatever the energy market is telling us today. Weaker government bond markets all over the world are already a sign that this threat is real, that inflation could accelerate and that governments might need to borrow and spend their way out of trouble — a tough ask given already elevated levels of debt. It is not at all difficult to imagine this leading to some kind of financial-market reset."}],[{"start":283.1,"text":"If that were to happen, central banks would be in a bind. Higher inflation would tell them to raise interest rates. A markets shock would tell them to cut. They don’t respond to stock market weakness in itself, but they do know it feeds uncertainty and fear, which in turn hurts economic activity."}],[{"start":300.5,"text":"All in all, a lot of investors, bankers and analysts are wondering not whether a markets reset is coming, but what the trigger will be. “The biggest fear is missing out” is one phrase I’ve heard a lot in the wild lately. Another is that the party on the Titanic felt pretty good."}],[{"start":322.05,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1778979274_3884.mp3"}