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Hello everyone. Today, March 16. I'm going to try to quickly review a quarter during which a lot has happened, and a lot is still happening as we speak.

Without further ado, I think the best way to summarize the last few weeks is just to point out that we've essentially witnessed a substantial and rapid increase in the pace of change across multiple fronts. Specifically on the geopolitical front with what's going on in Iran as we speak, but also under the technological front with ongoing advances in AI, which have been raising a lot of questions for a lot of businesses. From a high-level point of view, the consequence of all of this is to raise uncertainty at a new scale. And we should probably get used to that because we used to be talking about uncertainty from a cyclical point of view. But nowadays, we believe that uncertainty has become structural. And again, this raises a lot of questions. But for today, I think we should just take some time to look at what the market has been telling us over the last year in terms of consequences. And the market has been telling us essentially three things, one of which being that we should expect bouts of volatility as we have seen last year during the tariff tantrum, but as we're seeing more recently. But beyond this volatility, we are still witnessing a pretty good resilience on the part of markets, which goes to show that beyond these shocks, economic activity is still somewhat moving forward, although this is only true if you're adequately diversified because within the equity investment universe, we are seeing substantial divergence across sectors, but also across geographies. For instance, U.S. equities are still lagging, essentially flat since last October, whereas you're seeing better gains elsewhere, although this gap has narrowed recently, which again goes to show that volatility is also being felt within the equity investment universe. And the reason why U.S. equities have been doing a little better recently is that they're less sensitive to rising energy prices, as we are witnessing. And for good reasons, because there's just no more important choke point for energy markets than the infamous Strait of Hormuz, which is practically closed as we speak. Nevertheless, oil prices have not increased as much as what we saw during the Russian invasion of Ukraine in early 2022. And most importantly, you're seeing that markets are treating this situation as being partly temporary, in the sense that futures prices—so the price for a barrel of oil 12 months from now—have increased. There are long-term consequences here, but just not as much as you're seeing for more short-term prices, which is reasonable in the sense that the current situation is just unsustainable for all parties involved. We'll have to monitor this because unfortunately the range of scenarios here is still pretty wide. But for today, what I would emphasize is that there are reasons to believe that we're not going to be repeating what we saw in 2022, which many of you will remember as a pretty challenging year for both equities and bonds. Because back then, you have to remember that just before the Russian invasion of Ukraine, we were already seeing leading economic indicators pointing towards a deceleration in economic activity. Whereas today, it's rather the opposite, in the sense that leading indicators are pointing to a cyclical upturn, which we were starting to see recently, but which is arguably, and most definitely, more at risk here. Let's be clear, given that we're going to be seeing inflation be much higher than we hoped before this Iran situation emerged.

Three takeaways for today. From a high-level point of view, it's not complicated here. We are undergoing a period of profound and vast changes, which creates a lot of uncertainty, which makes markets quite volatile, especially within the equity market universe. If you're adequately diversified here, the damage is pretty limited. And when you look at it, there are reasons to believe that this combination—volatility, resilience, and divergence—will remain the story over the next few months. Although the resilience part will be put to the test here, because risks around the scenario have undeniably increased given the rise in energy prices and global commodity prices, and the consequences for inflation. 

That's it for today. Thank you for listening and we will talk again in June. Have a great spring everyone.