Hello, this is Jeremy Richardson for the RBC Global Equity Team. I just wanted to share a few thoughts about elections. For many of us, we might think about elections as being a moment of change. And that creates uncertainty when thinking about investing. But I think when we come to look at our investment journey over the years, very few of us will look back at the moments of elections and see that reflected in our valuation statements.

Although some of the longer-term charts, instead will think of the milestone, important milestones of the investment journey in terms of those big sort of market events. Things like the dotcom bubble or the global financial crisis, rather than that sort of the regular cadence of 4 or 5 year, 4 or 5 year, regular set of elections.

And that part of the reason for that is because, you know, elections actually tend to work quite well for investors. Let's not forget that incumbent governments want to create good economic conditions so they can get re-elected and challengers want to come up with a set of policy that they think are better. And of course, immediately after an election, in theory at least, you will probably have no greater period of, greater visibility into the political outlook, or at least the, the policy agenda.

So in many respects, actually, elections shouldn't, in theory be things to be, feared. However, and we have had the news of an unexpected election in that president Macron of France has responded to, poor results from the European elections, and laid down a challenge to other political parties. And they've responded, and now it looks as though, instead of having a set of more sort of centrist policies, being discussed as a possibility, that we have more peripheral types of policies now, being enacted.

For investors, this is, does create a degree of uncertainty, and you'll be seeing that reflected in European bond markets. So the premium, the spread of a French  ten year sovereign bonds above, the German equivalent is now about 75 basis points higher than what it was before the news of the unexpected election.

Now, we need to put this into context, because 75 basis points is only half of the premium that Italy is charged by international bond investors above, above Germany. Nevertheless, you know that this is causing some degree of anxiety. And it does challenge, I think, that improving European narrative that we've been discussing on previous calls.

The second thing I wanted to, mention is how in the last month or so, we've seen a sort of a reversion to the previous, sort of market dynamic of market concentration. A very narrow market led by a small number of predominantly large technology companies. It had been the case that the rest of the market had been keeping up with the Italian technology companies. But over the last month or so, that's been less of the case. Why? well, I think the catalyst for that has been growing concerns over the health of the US consumer, in particular lower income demographics. And if there is concern about the sustainability of US consumer spending, then maybe it draws into question, the sustainability of US economic growth, too.

And if you're looking at a weaker economic environment, maybe it makes some sense to have a little bit of insurance. With some large technology companies with strong balance sheets are less dependent upon the economic cycle to deliver the growth that investors are looking for. So, you know, a move towards a more of a defensive posture, you would argue, as the market becomes more concerned about the scarcity, of US economic growth. Of course, the other thing that's been sort of contributing to this is still quite a lot of confidence and dare I say even enthusiasm for artificial intelligence supported by high levels of capital expenditure, expenditure of companies as, looking to sort of build out activities in this area, most of those gains going to a relatively small number of winners within those industries. Now the artificial intelligence industry remains very dynamic. And we had an important moment, I think, this month when Apple introduced its plans, to the market of what it would like to do in artificial intelligence and coming up with the collaboration between itself and ChatGPT.

There's much of the detail that as investors, we are looking to fully, more fully understand. And of course, yeah, these plans have not yet been introduced to actual users and Apple customers as yet. Nevertheless, it is perhaps an important juncture in the continued development of the industry because up to the moment, artificial intelligence has really been a tool which has been used by enterprises and you know research institutions, is not really so much been put into their day to day hands of individual users.

And it's when that happens that that sort of hive mind gets to work and starts using these tools in new ways. And out of that, I'm sure will flow new business models and new potentially opportunities for investors too. So that's actually, I think, quite a positive longer-term dynamic in terms of what we're facing, though, in the sort of more shorter to medium term.

I would say that the market characteristics that we've been discussing before, really since the end of last year, that fundamentals are once again driving share prices, continues to be very much at play, which we are finding somewhat reassuring despite all the talk about French elections, European bond rates and suchlike. These still, for the moment at least remain somewhat peripheral considerations.

And actually it's the fundamentals of these businesses which seem to be driving share prices. And with the upcoming Q2 earnings season, hopefully that will give us further justification for thinking that fundamentals will once again rule the day. I hope that's been of interest, and I look forward to catching up with you again soon.