Jan van Eck: Q4 Macro & Market Outlook

**Jan van Eck** (0:00)
So, what am I going to talk about today? Number, basically three things, and then some extra goodies at the end. Number one, what is really going on in the AI market? Number two, gold is performed like crazy, all time highs, $4,000 an ounce this year, did I miss it? And then thirdly, what's going on in the credit markets? We've had some headlines recently, and have some ideas on what investors should be looking at as that plays out.

**Adam Taggart** (0:38)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. When market uncertainty is as high as it is now, I often emphasize that the most useful people to interview are asset managers. Because they don't have the luxury of merely having an opinion on the road ahead, they have to commit capital to their convictions and be judged upon the results. Today, we've got the great fortune of having the return appearance of one of the most respected capital allocators in the business, Jan van Eck. Jan is CEO of van Eck, an asset management firm with over $100 billion in assets under management, invested across its wide family of ETFs and funds, spending equity, bond, commodity, digital, and regional asset classes. As we've done the past several quarters now, Jan and I will spend the next hour discussing his Q4 macro and market outlooks, as well as where he sees the biggest opportunities for investors right now. Jan, thanks so much for joining us today.

**Jan van Eck** (1:33)
It's good to see you again, Adam.

**Adam Taggart** (1:35)
It is too. I got to tell you Jan, it is just such a pleasure and a privilege to have you come on for these quarterly outlooks. I very much look forward to them. The audience does as well. I've been having people ping me a lot recently saying, okay, isn't it time for Jan's outlook? So here we go, folks. We're going to scratch that itch for you. So Jan, I will stop talking really quickly because I know you've provided a chart deck as you have done in the past for these. So we'll get to that as quickly as possible. I guess right before we do, if you had to pick a word or a phrase to sort of describe the macro situation right now, what comes to mind?

**Jan van Eck** (2:11)
Happy.

**Adam Taggart** (2:13)
Okay, you only give me one word. A healthy kind of happy or like a manic kind of happy?

**Jan van Eck** (2:19)
I would say happy with eyes wide open. There's so many things that are changing so fast. So that's the eyes wide open part.

**Adam Taggart** (2:27)
Okay. All right. Well, I could ask you a lot of questions about the why of that, but I think your slides are going to answer that better than any question I could ask. So why don't we jump in your material?

**Jan van Eck** (2:37)
All right. Yeah, thanks for doing this. And my friends and clients look forward to us doing this together as well. So thank you for the opportunity, Adam. Okay. Just a little bit by way of background.
In case people haven't heard me before, just a little quick reminder of the perspective that van Eck brings, and I bring to looking at the markets. We look at the same big drivers that other people do, government spending, monetary policy, Fed policy, and technology trends. I think what differentiates us is a little bit what I'd call our historical perspective, which is that change can be more dramatic and rapid than people might expect. And an odder range of things can happen because they've really happened before in history. So that's number one. And secondly, we try not to focus too much on daily, monthly, or weekly trends, but focus more on multi-year trends and see how they're playing out today. And then I would say that if we think the puck is headed a particular direction over a multi-year period, that gives us higher conviction. Meaning sometimes you can have a stronger belief in something is going to happen in the next five or ten years rather than it's going to happen tomorrow, because tomorrow is a little bit uncertain. So and also just by way of background, there are four big crazy things happening in the world, but I'm not going to focus on all of these today. One is just that we are just getting through the worst ever peacetime fiscal deficit in US history, meaning low unemployment but high government spending. I think that AI is the second biggest technology that's hit America. The first being railroads, I'll refer to them very briefly. Third, that India is headed the direction of being a major consumer economy in the next 10 years to the scale, maybe not quite of China, but close. And lastly, that we've had a dramatic deregulatory act in the United States payments markets this year, but not going to talk to it, but as big as what FDR did with the banking system in the 1930s. So I will now say, if you have no more time to listen to me very quickly, I haven't done this before, Adam, but in a nutshell, what do we think is happening? Number one, quickly, that the fiscal deficit is probably getting better than people think, estimating 4.5% to 5.5% for next year. That AI, and we'll talk a bit about this, is supporting the mega cap profitability, the fact that the S&P continues to rise on a market cap basis, and that the bigger continue to take share, market cap share. So we said this a quarter ago, that we wouldn't be surprised if they had a good quarter and that continued, and indeed it happened. If there's a cloud to worry about, it's probably some kind of growth scare that would come out of the employment markets, because we have so many things going on there, including tariffs and AI displacement.