Support for today's show comes from Atio, the AI CRM.
One of the last time your CRM actually helped you close a deal.
“Atio is the AI CRM built to do exactly that.”
Connect your emails, calls, and product data, and atio instantly builds a complete picture of every deal in customer. Then, ask Atio to plan your next move, run deep research on prospects, prep for any call in seconds.
Always know where to focus.
Over 8,000 businesses already run on Atio. Your should too, ask more from CRM, ask Atio. You can go to Atio.com/Profti, and you'll get 15% off your first year at that's ATTO.com/Profti. Support for the show comes from Odo. Running a business takes everything you've got,
and a lot of the tools out there that are supposed to make your life easier, just aren't great at talking to each other. That means you end up having to toggle between a dozen different apps and services just to keep the lights on, enough of that. Now, there is Odo.
The all-in-one fully integrated platform that might actually help you get it all done. Thousands of businesses have made the switch, so why not you try Odo for free at Odo.com/Odo.com/Odo.com/Odo.com/Profti. Support for the show comes from Odo. Running a business is hard enough, so why make it harder with it doesn't different apps that don't talk to each other.
Introducing Odo. It's the only business software you'll ever need. It's an all-in-one fully integrated platform that makes your work easier. CRM, accounting, inventory, e-commerce, and more. And the best part, Odo replaces multiple expensive platforms for a fraction of the cost.
“That's why over thousands of businesses have made the switch.”
So why not you? Try Odo for free at Odo.com/Odo.com/Odo.com/Odo.com/Odo Money is evil, then that building is hell. Welcome to Profti Markets. I'm Adelson, it is June 23rd. Let's check in on yesterday's market vitals. The S&B 500 and the Nasdaq fell as tech giants declined.
Google shares fell 5% after two top AI researchers left the company for rivals.
Meanwhile, SpaceX stock dropped 16% for its third straight day of losses,
dropping to its lowest price since its IPO day. Meanwhile, the Dow rose on hopes for negotiations with Iran. The Russell 2000s posed above 3,000 for the first time ever. Oil fell and finally, treasury yields declined. Okay, what else is happening? The UK is about to get a new Prime Minister,
Kier Starma announced he will step down after losing the confidence of his own party, and he burn him for the mayor of Manchester as emerged as his most likely successor, and could assume the post by mid July. Prime Minister Starma's resignation comes almost 10 years after Britain's vote to leave the EU, a decade on the promise of faster growth has yet to materialise,
and the UK economy continues to struggle with sluggish productivity and a cost of living crisis. So what exactly went wrong for the UK economy? And how is it that the country is on its seventh Prime Minister in the span of 10 years? Well, joining us to discuss this, we're speaking with Paul Johnson, economist and provost of the Queen's College at Oxford. Paul, thank you so much for joining us on property markets just to refresh our memories here. It was roughly two years ago that Kier Starma,
the leader of the Labour Party, won this election to become Prime Minister, and he won in a landslide. Against, of course, the backdrop of many, many years of conservative leadership. And now, he's stepping down. It feels like almost yesterday that we talked about him getting the position.
“So I guess the first question that I'd love to know the answer to, what has gone wrong?”
The Labour Party won an enormous majority having been out of office for 14 years, and actually in 2019, looking like they might be out of office for another 14 years.
It was an amazing turnaround. It was a big, big victory a couple of years ago,
but the Prime Minister lost Kier Starma, lost popularity very quickly, partly because the manifesto on which he ran didn't really reflect the decisions he was going to take as soon as he got into office. So he started doing what some of us would argue a quite sensible things like small reductions in some of the benefits that pensioners, people in the state pension age received, some very big tax rises that were introduced despite the fact his
Manifesto said that he wouldn't introduced the tax rises, and then there have...
missteps around personnel. These amandals and turn out to have unhealthily close connections
with Jeffrey Epstein. There have been a series of other issues with the Prime Minister's judgment, but he's becoming incredibly unpopular, probably more unpopular than it's easy to explain. He's a decent, hardworking, honorable man, but has really failed to connect with the electorate. Just looking at previous Prime Minister's, I mean, we saw that when Rishi Soonak was coming to the end of his time, he was pretty unpopular too, or at least the conservative party was very unpopular.
He had Liz Trust, which was obviously something as close to a disaster as you could get,
“at least I think that is sort of how she has remembered at this point. You had a lot of”
resentment towards Boris Johnson, especially coming out of COVID and all of his antics there.
I mean, when I look at the UK and I live in the US now and I have done for some time, it seems as though every single leader is botching it in some way, and I start to wonder if this is because these leaders are actually unqualified or not doing the right job, or if it's something more systemic and coming off of the 10 year anniversary of Brexit, I wonder if these issues that are ailing the country maybe can't be solved in just one turn from a Prime Minister.
You're right, I mean, it's been a combination of the two, I think we've not had the world's greatest leaders, I think it would be fair to say that the last end is, but they've also inherited
a really, really difficult situation. The first couple trips up over Brexit and
towns are actually achieve that, then we have absolute chaos, as you say, with Liz Trass. Part of the problem here is that between elections, the leaders of the Prime Minister are effectively elected by a very small number of people in their own political party, and we got some slightly strange outcome, I think it's fair to say, with Liz Trass. But don't the overall story here is Prime Minister's are unpopular, because people are not feeling well off. We've had
now actually nearly two decades have really, really poor economic growth, average earnings today are pretty much the same as they were 20 years ago. Now, that is a really unparalleled in British
“history for probably 200 years, and that's why people now talk about a cost of living crisis,”
inflation, and the UK has been higher than it's been, and most other developed economies for quite a long time. And the result is, essentially, the election is really pretty far up. Now, with a fed up electorate, we're getting fairly chaotic politics, but of course, chaotic politics makes it difficult to produce the stable policies and the growth that might get you out of that spiral. So you get, I fed up electorate, you get chaotic politics, you get less growth, and you get a
little bit more fed up electorate. And I think that's the horrible spiral we're in at the moment. What would you say are the biggest problems dealing the UK's economy at this point? Well, one sense, it is that lack of growth. We've had very little in the way of productivity growth for a very long time. Now, the question is, why that? Well, partly, we were particularly badly affected by the financial crisis. It's got a very big financial sector, particularly
in London, a partly Brexit, and the uncertainty that happened after 2016, like there's a general
“acceptance of that. Cata, a few percentage points off growth. But I think it's combination of”
that with some pretty poor policy choices, of very difficult planning system. It's very hard to build stuff here. There are certainly elements of our education system that could be best with going incredibly complicated tax system, which is definitely creating problems for growth. I mean, it's worth saying, many European countries are struggling. We're just struggling more than most of the rest. Just looking ahead, it appears that the next Prime Minister, if he
isn't challenged, will be Andy Burnham, odds of him being appointed as Prime Minister before July 18th, there are up to 55% on Calshyb, and up to 84% before August. What do we know about this guy, Andy Burnham, and what are perhaps his plans, or what might he try to do in order to get the country out of what appears to be something of an economic mess? The straightforward answer is we don't know, and it's quite remarkable that it looks like, I mean, he's almost definitely going to
become Prime Minister very quickly, because Labour politicians are essentially it looks like they're all going to back in, but they're backing him off the back of a sort of a general sense, I think,
That he's a better politician than Keir Starmer, and a general sense that he ...
bit more left-wing, because the Labour party is probably a little bit the left of what Keir Starmer
“has been doing. What he would actually do, he said very little. There's a bit of a joke to be on”
this over here, which is that he's changed his views a lot over the last 30 years. He's been in politics for a long time, and he's sort of moved from sort of the Blairite, sort of new Labour, sort of quite moderate labour of the 2000s. He went quite a long way left in the 2010s. He's painted himself a picture as an independent mayor up in Manchester. He calls it a form of business friendly socialism. How that is likely to play out on the national stage, we don't know he's
toyed with greater public control of some industries, but we don't know what that means. I don't
like it's before scale, nationalisation. He's gone back and forwards on what he thinks he might want
to do to hire levels of taxes and so on. And also back and forwards a bit on whether he's going to borrow more. So the only honest answer I can give you is I don't know what his economic policy
“is going to be, except that I think his instincts are somewhere to the left of the current government.”
Is there any consensus at this point on what the policy should be going forward? I mean, you mentioned that he is more left leaning maybe that would mean more government spending, although we know that the debt levels in the UK have gone kind of crazy in recent years. Or maybe there's a shift in the other direction. I mean, what is the economic path ahead for the UK? Does anyone agree? It depends on consensus among who. I think there's a little bit of a consensus among technocrats,
but we tend to have solutions that politicians find rather difficult to implement. So tax reform is quite difficult. When your people aren't getting better off because that means some people are left worse off by reforming the tax system. Making it much easier to build things is quite unpopular with people who live near the places that the roads are having you are going to get built. Spending more on investment, if that means spending less on welfare, for example,
is also unpopular in the short term. So I think there are, among technocrats, there are some
“pretty well-worn ideas about what you need to get growth. But politicians for a long time have”
shied away from doing those things because they appear to be electrically unpopular. All right, Paul Johnson is an economist and provost of the Queen's College at Oxford Paul. We really appreciate your time. Thank you. Thank you. After the break, the straight-of-haul moves remains under pressure. And for even more markets, insights you can subscribe to my weekly newsletter simply put at simply put.proftlymedia.com.
Support for the show comes from Gusto. Right now, everyone is trying to have tighter budgets with smaller teams while still keeping their high expectations. The last thing you should be wasting your time on is manual payroll or chasing down an HR form. Gusto is how small business owners get time back when every hour counts. Gusto is online payroll and benefits software built for small businesses. It's all in one remote friendly and incredibly
easy to use so you can pay higher on board and support your team from anywhere. If you've been stuck working on repetitive administrative tasks and thought to yourself, there has to be an easier way, that's the kind of thing Gusto was built to solve. They say they can provide automatic payroll tax filing, simple direct deposits, health benefits, commute benefits, workers come 401k, you name it. Gusto makes it simple and it has options for nearly every budget.
Save time with built-in automated tools, offer letters, onboarding dots, direct deposit and more, with Gusto you can direct access to certified HR experts to help support you through any tough HR situation. Try Gusto today at Gusto.com/markets and get three months free
when you run your first payroll. That's three months of free payroll at Gusto.com/markets 1 more time
Gusto.com/markets. So, for the show comes from LinkedIn ads. There's no worse feeling than making a major investment and something. Only to realize it didn't exactly live up to the hype, such as buying a nice piece of tech that ends up in storage collecting dust or taking a business workshop where your main takeaway was a little more than a few motivational words. If you work in marketing, this can
happen with ads. You optimize for the numbers that look great, impressions, reach and reactions,
When they don't show revenue, well that can turn into an unfun conversation w...
LinkedIn has a word for that. Both spend. Reach the right buyers when LinkedIn ads and invest in what
“looks good to your CFO. According to the 2026 DreamData benchmark report, LinkedIn ads generated”
the highest row as of all major ad networks. It's a 121% you can target by company industry job title and more. It's time to cut the bull spend. Advertise on LinkedIn, the network that works for you. Spend $250 in your first campaign on LinkedIn ads and get a $250 credit for the next one. Just go to linkedin.com/scot. That's linkedin.com/scot. Terms and conditions apply. Support for the show comes from fetch pet insurance. Do you have a pet? Every six seconds,
a pet owner in the U.S. gets hit with a vet bill of over a thousand dollars. And it's almost
always an unwelcome surprise. That's where fetch pet insurance comes in. fetch is the most complete
pet insurance. Get paid back up to 90% of that bills. You can use any vet in the U.S. and Canada. All that's our in network. Go to fetch pet.com/safe right now for your free quote. That's fetch pet.com/safe. We're back with property markets. It's now been six days since the U.S. and Iran signed a memorandum of understanding to end the war.
But not much has changed. Traffic in the straight is stalled and oil still hasn't left Iran.
“Representatives from both countries met in Switzerland yesterday to discuss a few key issues.”
There's included a ceasefire between Israel and Lebanon and ship traffic through the straight of Hormuz. In the meantime, the U.S. Treasury Department granted Iran a 60 day license
to sell oil in U.S. dollars for the first time in over a decade. In exchange, JD Vance says Iran
has agreed to allow UN nuclear inspectors back into the country. Despite these talks, investors still have a lot of questions that are yet to be answered. Namely, when will the straight truly be open? To tell us how the market really views this deal. We're speaking with Brian Kurzmank, portfolio manager at GQG partners. So Brian, thanks for joining us on the show. The U.S. and Iran signed this memorandum of understanding last week. We all kind of thought maybe
the war is over at this point. Maybe the straight of Hormuz will open. And then over the weekend, Iran says the straight is actually closed. And the U.S. doesn't really acknowledge that. Then it's in confusion. Now, I guess it's open again, but not really. I mean, from your seat, what is the status on the straight of Hormuz? Can we say it's open or closed? We're actually fairly constructive on energy even before any of this started. And one of our thoughts were that we came
into this year expecting that there would be a little bit of a supply and energy and crude oil specifically. It was our view that a lot of it consolidated base of the energy companies globally, especially the swing producers and the U.S. were actually slowing things down. In terms of the salt rig counts coming down, you saw people sort of adjusting for that over supply of those supposed to happen this year into next year. And you had some really high quality operators.
They're going to put up extremely strong earnings even at a $60 barrel sort of price tag. What you can definitively say is even if the straight magically opened tomorrow. And we did do everything logistically firing back and all cylinders, so to speak. You're seeing a situation where it's a probably an $80 or plus environment that God has gone. So even now when you kind of look back at the companies that you're talking about like an axon, for example, that even at the price
of oil stays at $65 a barrel, they're going to be able to do almost 20% total return, 13% in terms of EPS growth. In terms of a cake or in the next couple of years,
“that looks really attractive either way. Do you see your question more directly, Bell?”
In terms of the shaping open or not, I think one of the things that we have seen come out of this is that Iran can talk about the closure of the straight, and there's almost this asymmetric impact of having that information. Because just the talk about closing the straight back down, sends insurance prices through the roof. It talks about the shipping slowing down and folks not necessarily wanting to send freighters back into the straight regardless of
how many you're getting out at this point in time. So there's a lot of logistical challenges. And I think, you know, since we could talk about supply being constrained for a bit longer, how then we'll work, we'll work sort of expecting with the market as part of them. Yeah, the insurance point is an interesting one, and this to me is something that, I mean, markets a bit have been relatively optimistic about this entire situation, but it seems as though
There is now increased uncertainty whether or not the straight is is open or ...
that it might be closed in the future, or that it might be closed tomorrow, or the next week,
or that there might be a missile that is fired at a vessel nearby. I mean, the level of risk on the level of confusion and uncertainty around the straight seems to me to be now more elevated, which would make me think that the floor on the price of oil has just fundamentally been raised. I'd be interested to hear if that is your view. And if so, what does that mean for asset prices beyond oil? What does that mean potentially for inflation in the U.S. and how could that affect
the markets at large? Yeah, what I think is the case at this point is that you probably do have a higher floor. So, number one, you took out that supply, whether we're talking about, and then the price of that oil permanently should be a little bit higher. There should be some
“level of risk premium, so to speak, that you have to sort of compensate for getting that oil out of”
the Persian Gulf. A lot of the energy companies, for example, that we talk to when they go to contract ships. They're not necessarily sending ships in, and he's time soon they're going to wait several months to wait to see if there's more clarity in terms of that. Merisc, themselves, you talked about not necessarily changing airplanes and sending ships back in. So, there's a delay, there's a lag, and I think it'll be a long time before there's a true return to
normalcy. So, then the next question is, well, why is oil sitting at the price that it is right now? I think that's a really interesting one, because with everything that's going on, you would expect you're taking almost a fifth of the world's energy out of capacity, so to speak, and locked in the straight that energy prices should be substantially higher yet. Here we are, you know, sitting in the 70s, almost 80 dollars a barrel in terms of energy, and what I think you're seeing is two things.
Number one, you've offset a decent amount of that supplier that lack of supply through inventory
draw. It's been well publicized, but what's interesting is, even last week, we have a 17 million
barrel draw off of both US inventors and the SPR. So, you're getting sort of subsidized barrels,
“sort of speak that are working their way through the system. I was on top of, I believe,”
it was 16 million barrels a week before, maybe 15, the week before that. So, you're seeing this consistently coming through this level of magnitude that's offsetting whatever you would have gotten out of the straight in that sense. You've also seen China tap the brakes a little bit. They have massive oil reserves on their side, so they've slowed down in very imports. They've drawn down their own finished products inventory. So, I think that's causing that price to
be a little bit lower. That combined in the fact that the shipping costs of going out there and sending this self through is so expensive that it really is just kind of sitting on their hands. They're saying, okay, everybody keeps telling me this thing is going to be over in the next six weeks, next eight weeks, another month or two. So, I'm going to wait for the price to be a little bit lower, so I can go and refill those inventors, and I'm just going to wait and draw them
down the mean time. It's kind of like that transitory argument and/or if you know they have the variable mortgage rate argument that people use down the day were, I'm going to take the mortgage at the lower price now even though it's variable because I believe that where it's going to go down later. Well, that works unless it happens. So, what if the straight actually is prolonged in terms of being closed or being constrained, then you have to start buying these barrels at a higher price,
and that's when you start seeing the physical prices coming back up when that inventory sort of hits those bottoms. And I think that thing that concerns us a little bit is when you start looking at those data, cushing, for example, cushing off the home when you're at essentially effective
tank bottoms there, about 20 million barrels to get any lower, you're still getting lost and like
the sludge and stuff in the bottom of the barrel coming through. So, it's not really that usable below that level. I think about US gasoline inventors, I think we're at 214 million barrels right now from what we've heard and seen, that's about 195 to 215 that you start hitting that operational minimum, meaning you get any less fuel in the tanks, then you start having those gas pumps with a plastic over them, and any sort of disruption causes that to happen. So, we're at pretty low levels
right now and Trump even said, he said we'd be out of energy, be in a really bad situation,
“the next four weeks if things didn't clarify themselves. So, I think that's why you're seeing”
the negotiations as hard as you're seeing happening in the concessions that are being made happening within the Iranian situation. Yeah. In other words, the price that we're seeing, which is to be clear, elevated, but not as elevated as you might think, is largely because there are expectations among investors that soon enough they'll come down. So, why would I pay a high price right now? Because the expectation is that this will be over, which is, you know, optimistic.
That's a level of expectation, that's a level of optimism that may or may not last depending on what happens in these negotiations of the next few weeks. Just, I mean, to play this out, let's say the optimism fades. Let's say people decide, you know what, we haven't made real progress on this deal. We keep on hearing about a deal. This one was supposed to be like the real one
Then for whatever reason it turns out to not be the real one.
that it isn't. But if whatever reason that happens, then suddenly we're dealing with another issue
where the price could go up even higher. I'd be curious to get your your reviews on inflation and as a result, interest rates. Because this seems to be the thing that most investors are divided on will interest rates rise within the year or will they not? It seems to be a coin flip
“at this point. Yes. I think one of the things that you can you see already in terms of the higher”
you'll fuel and put across energy costs. So, we've seen up into this point as it is starting to have an impact out things. Now, it may be somewhat muted because we've only gone through one earnings cycle and you only had a partial impact to this stuff up into this point. But you look at some of the retailers that have come out on the Walmart's to Costco's even that, you know,
the dollar stores and things like that. They've all talked about the fact that consumers are facing
your sharper sort of pricing and they're having to try to absorb some of that pricing on their behalf. Now, they particularly get it, you know, benefit because consumers trade down to quote unquote inferior goods. They're going away from the more expensive place to shop and it and going there instead. So, that's helping them. But it's been the grand scheme of things that is sort of hurting, you know, that purchasing power. So, to speak, you hear this with some of the industrial players.
They're saying that they're going to have to start incorporating some of these higher transportation costs, diesel costs and things like that, a longer term basis over the next couple of quarters. If this doesn't rectify itself, you even talk to like the shipping companies. Mariffs, for example,
said that shipping spot rates are a 40% since the start of the shorter hormone's closing. I mean,
that literally filters into everything that we look at in terms of a global economy. So, I would argue that that does have upward pressure on inflation. You saw that the PPI did, which was incredibly strong from a may standpoint. You're talking almost double digits from that standpoint.
“That was a good and services. So, it's not just isolated to one spot. So, I think this is actually”
starting to come through. And I think what you're hearing from the markets is, generally, people are getting out of this mode of, okay, we need Fed cuts because the economy is maybe struggling. The economy seems to be doing okay. Despite all of this, boy, you are hearing, is that, okay, there we've missed inflation for so long now. And here was Worsh had said more recently that they very singular focus now on price stability. He made it very clear in terms of the
comments that he had there. So, if that's becoming more of a focus, how is that going to impact things? And I think that has large implications, especially on a market that is so one-sided and lopsided on tech right now. And tech is generally extremely sensitive to interest rates in terms of the longer term valuation trends, but also they're going through massive debt raising at this point of time too. So, that's going to be much more expensive for all this capital build up.
“Yeah, really, really interesting stuff. It seems like that's going to be sort of the”
deciding to 2026. What happens with interest rates? And we'll see Brian Kuzmak is portfolio manager at GQG partners Brian. We really appreciate your time. Thank you. Thanks for having me. Let's wrap up this episode where we began. Another year, another prime minister for the UK. Britain will soon have its seventh prime minister in 10 years. One of the highest turnover rates
in the world and the highest for the nation in nearly 200 years. And it's fitting that it should happen now. On the 10 year anniversary of that fateful vote that led the UK to where it is today. I'm talking, of course, about Brexit. 10 years ago today, the people of Britain were faced with a choice. Either stay in the EU and maintain the free trade relationships that incentivize commerce and productivity or leave making trade more expensive and growth more difficult.
In the name of Britannia, the UK voted to leave. Sure, it would be complicated. But in the eyes of the voters, they were better off on their own. How wrong they turned out to be. Ten years on, almost 60% of Britain say they shouldn't have left the EU. Meanwhile, GDP per capita is as much as 8% lower than it would have been without Brexit and business investment is as much as 18% lower. Now, why am I talking about all of this? Well, for one, I grew up in the UK. So, I care about
their issues, but more importantly, the same decision that ruined the UK economy that destroyed the nation's politics for possibly decades to come. That same dilemma is now playing out in America. More specifically, the dilemma of tariffs or no tariffs. And while the technical details are different from Brexit, the thrust of that policy is the same. Put up the barriers, reduce international trade and do it all in the name of national pride. I've said it before, and I'll say it again,
tariffs or America's Brexit. The preconditions were the same. The arguments are the same. And now,
We will see what the outcome will be.
to the rest of the world. It's a case study in how not to run a modern economy. We don't need
“think tanks. And we don't need white papers. We know how this goes. We know how it ends. All we have to”
do is look. Okay, that's it for today. This episode was produced by Claire Miller and Alison
Weiss and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is
“Dan Challan. It's about a pencil, Cristina Donahue, and Mia Salvario, and our social producer”
is Jake McPherson. Thanks for listening to Proftly Markets from Proftly Media. If you liked
what you heard, give us a follow. I'm Ed Alson. I will see you tomorrow.
