What happened in Q2?

Speaker 1 Welcome everyone, Thank you so much for joining us today. It is the 3rd of July, the day before America's Independence Day, the 250th anniversary. And it is actually incredible to think of the years halfway through. So on this podcast, we will discuss the first half of 2026 market movements and themes, as well as the last quite momentous quarter, the second quarter of 26, particularly momentous in terms of geopolitics, but also of course of UK politics. As you know, that is always something to talk about. I am Natasha Briginski Monnier, I'm a trustee again. I'm delighted to have two guests with us today, Alina and Shreya. So I will pass it over to Alina to introduce herself and then to Shree. And then we're going to dive in to the key topics that we want the game community to be thinking about and to know more about. Speaker 2 Perfect. Thank you so much. I'm delighted to be here. My name's Alina Gregory. I'm an investment director at Kasnov Capital, which is the wealth management arm of Schroeders. I've been working here for about 13 years and my particular specialisms are on equities within the investment team, but a little bit of a generalist. Speaker 1 Fantastic. Thank you, Alina. Thanks for joining us, Shriya. Speaker 3 Hi, I'm Shreya. I'm the EMEA head of rates at Stone X, which is a global broker dealer that's NASDAQ listed. I've been trading fixed income for over a decade and I'm really passionate about demystifying jargon and having fun conversations about the markets. Speaker 1 Excellent. Well, thank you so much for being here. And I love the fact that you're young professionals. You're exactly the kind of aspirational role models that the game community thrives on. Alina We'll start with equities first because I think most people are really surprised when they see how strong the markets have been despite all the negative headlines. And I must say the headlines from the UK perspective sometimes look even more negative. But the fact that in the last quarter the S&P was up 10% and it's up like 14% year to date, you know, that is generally still just in line with the 10 year average. And the US markets have been so strong. It's been I think a 13% annual average return. So why is American exceptionalism still still so strong? Why are equities globally still so strong despite all the bad news we hear? Speaker 2 Yeah, it's a great place. It's a great place to start. And as you say, it's it's really tricky sometimes to disentangle what's going on in the real world, what you're reading about in terms of headlines and then making sense of numbers that you might see if you are following the markets. And if you are following the markets and you see positive numbers, obviously that's generally what you what you like to see. But it doesn't always mean that equity markets will continue going up in a kind of in a steady fashion. Equities in their most simplest sense are are risky assets and you should be expecting volatility peaks and troughs. But over the long term they do deliver history tells you good positive returns. I think what's really interesting about of the markets that we've seen so far is that share prices are sort of determined by, you know, supply, demand, sentiment. There's a lot of things that can that can affect whether the markets are going up or down, but the fundamentals. Speaker 1 Are. Speaker 2 Different. So if you look at companies generating profits, generating earnings, that is not going to be swayed so much by the sentiment and the short term headlines that you might be reading about. So I think the really encouraging thing that we've seen from equity markets so far this year is that the fundamentals have been really strong and that's grounded in an economic picture that's also looking pretty resilient too. But the interesting kind of super story, if you like, of the quarter just gone has been technology. And the technology sector has been pulling its weight and then some in terms of driving which sector it is that's contributing to those solid positive numbers that we've seen. Speaker 1 And we can maybe dissect that even a bit more and say within technology, it's no longer just the Magnificent 7. In fact, I think they've been the laggards among technology firms has become much broader of a rally. So perhaps you can just touch on that as well. Speaker 2 Yeah, of course. So technology, we always used to think of it as sort of this one homogeneous group of of disruptive companies. But actually this year has really shown a spotlight on winners and losers. At the beginning of the year, you had all of the software stocks taking a massive hit because of the advancements that were being made in AI and this state of affairs where there was fear that you could use AI and vibe code your way to software solutions. That meant big established companies like Salesforce, for example, or other other names that are really tapped into the software space, sort of questioning whether you needed their businesses. So you saw these massive sell offs in really good quality businesses that were still maintaining quite strong, fundamental, strong profitability. But at the same time, you can look at other pockets of technology, so semiconductors in particular, and they've seen phenomenal growth. They've seen phenomenal growth powered by earnings. And that's because of the enormous demand that is out there, real world demand for AI and the technological shifts that it promises to companies who are adopting it are hoping to see better efficiency, better productivity in their businesses, lowering their costs, getting more out of their workforce. So you can see why there's a sort of a meaningful step change there. And maybe just to think about again, bringing that to the broader that that fundamental earnings picture that we've spoken about the earnings season that we've just had. Typically you see analysts set an expectation of what they expect earnings to be. And then over the course of the quarter, they'll revise those estimates downwards. Whereas this quarter where we started, we ended up revising the estimates upwards. So I think we went into Q2 earnings season expecting about 12% earnings growth year on year, which is pretty healthy, pretty robust anyway and ended up kind of 2324% powered by technology. So it really is amazing stuff that we're seeing at the moment. Speaker 1 Yeah, you're absolutely right. And I just saw today the Goldman Sachs has issued again above consensus guidance for Q3 also at 24%. So the enthusiasm is not getting damped, Shreya, the enthusiasm in the UK has dampened, but it's not that bad. You know, considering all that's happened, equity markets have lagged, that's not unusual. I think it would be kind of in that trend for some time, but the pound has actually strengthened and it looks like guilts have survived the change in, you know, expectations of who lives on 10 Downing St. Walk us through that and sort of how you understand these market moves. Speaker 3 Yeah, sure. So guilts have certainly had an interesting time as you say. I will add that alongside U.S. Treasuries, they did sell off. And by that I mean yields got higher quite significantly when the US Iran crisis broke out, as did U.S. Treasury yields and that was because of a fear of inflation. Inflation really directly effects bond markets because they cause a higher rate environment. Inflation can be sticky, it can affect everything, especially when its oil prices is oil still makes the world go around despite some advances that we've made an alternative investment. So inflation struck the bond market and gilt yields did rise pretty significantly this past quarter. That being said, they have seen a little bit of a relief rally recently with the new UK leadership change and just some general optimism in the fixed income markets regarding the leadership change. I think it's actually a little bit too soon to tell if the gilt markets are going to be truly happy about this. And that's just because guilts trade off of UK government borrowing costs. Guilts are effectively the UK government raising money to pay for infrastructure projects like perhaps building another runway at Heathrow or new housing. So that's the yield reflects what the government has to give to investors in order to convince them to invest in the UK government. So when yields are really high, investors might think, oh, I'm going to get a great return. But the government's thinking, oh, that could be really expensive. It adds to the government's borrowing costs. When borrowing costs trickle upward, which they have been doing, you know, April and May prints have been significant and have added to concerns about whether the existing government is going to stick to their own fiscal rules. When borrowing costs rise like that, they naturally necessitate higher yields because the government now has to pay more money to get investors to buy into this dream. But recently, with this UK government change and Andy Burnham looking to be the next PM, we don't yet know what borrowing costs are going to be. But he's already admitted that he doesn't want to shake things up too much. You know, initially he said, I don't want to be a hawk to the bond markets. But he realized ultimately, look, we all are, Bond markets affect everything. They affect our mortgage rates. They affect the savings rate that we get on money in our bank account. So he realized that and then agreed to stick to existing fiscal rules. The bond markets are pretty happy with that. The guilts haven't had any dramatic movements since. Speaker 1 It's really interesting what you just mentioned also with how politicians influence market sentiment when he first said that phrase, I don't want to be a hawk. You know, it can be interpreted by Americans as a hawk as in hawkish, meaning that I want higher interest rate, which is not at all what he meant. You know, some sometimes language also matters. And clearly there is an expectation of a fairly smooth transition and and actually UK rates don't differ that much anymore from US rates, which means that. Speaker 3 Rates of deposit. Speaker 1 Rate deposits have increased, yes, yes. So can you actually say that cash has become an asset class again that people can actually get enough yield in their cash accounts to consider that being sort of a an alternative to investing in more risky assets? Speaker 3 I think when we think about cash, we have to 1st think about interest rates as a whole and not just the deposit rate, but what it represents. The deposit rate is effectively the cost of cash. So when the deposit rate is high, the central banks are going to be lending it out at a high rate. People are going to be borrowing at a high rate, which means that when you put money into a bank account, you're getting more out of it. When the deposit rate is low, it's the opposite. So when managing cash and our cash investments, it's really important to think about the opportunity cost of cash. When interest rates are high, the opportunity cost is a little bit higher because you could take 100 lbs and you could put it in a bank account and if the deposit rate is 5%, then you're getting £5 back. Or you could take 100 lbs and you can go and invest it in the stock market. And you know, if you're investing that in the US stock market, you might be seeing double digit returns annually. It's a decision that has to be made. So I think with cash, it's always a balancing act. You know, do I risk it all and spend it on something that's going to return higher than the very safe deposit rate that I could get if I put that cash in a bank account? And I think that's what cash investors are debating right now because even though we've got a higher rate environment, you know, the UK deposit rate is not going to be, you know, below 3%. They're not going to get as low as they wanted to be when the US Iran crisis started. They're still having to make the decision. Do I want to risk it all in the equity market? So it really brings out a deeper question about risk appetite and fixed income and particularly government bonds can really fit into that. You know, there's no saying that you can't invest your cash partially in equities, partially in government and bonds to balance that risk reward portfolio. You could do both. It's just important to understand what that cash represents. Speaker 1 That's a great answer. Thank you very much. I think it helps students think about both the risk and reward opportunity set and also how the whole financial system feeds through rates. And we are at a different point now than we were a couple of years ago. So this is this is a really good thing to keep in mind. Alina, back to you. Another really surprising effect this year so far has been the sell off in gold and concurrently the sell off in Bitcoin. So if you want to start with that and then Shreya, I would love to go to you as well and, and, and see what what your thoughts are in this. But given the geopolitical uncertainty, given the fact that oil prices were so volatile, we haven't even talked about the oil price coming down too back to where it was, you know, sort of early in the year. But even just the kind of risk off mindset was quite what, quite striking. Speaker 2 Totally. And I love that we've, I love that we've grouped gold and crypto into, into one question here, because actually in a kind of just theoretical sense, gold traditionally should be your safe haven asset. It's it's supposed to be one of the least risky bits of a, of a multi asset portfolio. Bitcoin, on the other hand, is very different, very sort of risk on and a, and a riskier kind of almost untested asset class. But I know that there are, there are many sort of Bitcoin balls and crypto balls balls out there. But as you say, it's, it's been a really interesting dynamic because typically when you're experiencing elevated periods of geopolitical risk, you know, we've still got Middle East uncertainties that have been lingering on. Yes, there have been developments changing seemingly day by day. And importantly, when it comes to gold, one of the major kind of structural forces for it is that central banks are buying gold that is a support, that's a long term, that's a, that's a quality buyer of, of an asset which is supporting prices. And yet we see that gold has has really taken a meaningful kind of kind of step back in recent weeks. So that's interesting. But it sort of relates back to the conversations that Shreya has just answered in terms of cash and thinking about risk return, because obviously the one drawback of gold is that it doesn't pay you an income. So that's the bit that is I think affecting sort of the dynamics at the moment. I would do wonder to a certain extent as well whether there's a little bit of just rotation happening in terms of, you know, there has to be be a funding source for some of that, for some of the kind of retail investment that we've seen in the tech sector or equities for example. The one thing that maybe gold and Bitcoin do have in common is that they are non income paying assets. And historically you would expect as equities rise, bonds may fall. Gold can be your uncorrelated assets as well that can protect when times are, when times are tough, when equity markets fall. But it has been interesting to see that Gold's role as a diversifier in a portfolio has maybe been a little bit tested more recently. Speaker 1 Shreya, what are your thoughts? Speaker 3 I think that's a beautiful explanation that gold is not income generating. And that's really important to note because when you compare gold as a hedge against inflation instead of using, say, government bonds as a hedge against your portfolio risk, government bonds do pay an income that coupon and that coupon is linked to the central bank's deposit rate, which gold obviously doesn't have. So the opportunity cost of holding gold becomes higher in a higher interest rate environment. Going back to that cash example, if you had £100 to invest and you put that in a bank account and got 5%, you have 5 lbs at the end of the year. But if you put that in gold, you still only have £100 worth of gold unless gold went up in value. But it can also go down in value as we've seen in the fluctuations this past quarter. So the opportunity cost debate comes into play very heavily when we're in a higher for longer interest rate environment and you're comparing those investments against non income generating assets. Speaker 1 I completely agree with you it it is interesting though to observe just how they've tended to be tandem diversification tools. Essentially, I think when cash deposit rates were super low, so cash was not yielding anything. And if investors wanted to diversify their basic sort of equity or foreign exchange exposure, those were considered to be kind of the safe ways. Even though, as Alina said, that Bitcoin is highly still unproven because of its recent tenure as a recognizable asset class and gold has been around forever, but it's still kind of a theoretical investment in the sense that you're not actually going to use it or you're not actually going to get any income for it. So maybe it is linked to the fact that cash is yielding something, you know, slightly higher than inflation. And that perhaps also both the geopolitical risks and the risks around the AI boom are becoming kind of less nerve wracking for investors, which which is kind of an interesting thing to consider relative to the beginning of the year. As Alina pointed out, when the software stocks were selling off, where the AI boom was going to be like AI doom, you know, and that the markets have really sort of digested that. So where are we now, Alina? What are you looking forward to in Q3 and looking ahead for the rest of the year? Speaker 2 Yeah, there's, there's a, there's a lot to come for the rest of the year. And I think it would be naive not to assume that AI will continue to be a topic that we will be thinking about for not only the rest of the year, but also going into the years ahead. So clearly there has been a lot of talk, a lot of focus on AI, CAPEC capital expenditure spending being done by huge companies that are spending hundreds of billions of dollars in the AI infrastructure build out. That figure is going to reach in 2027, it's going to go over a trillion dollars. That's that's enormous. And I think the CEO of NVIDIA, Jensen Palm was talking about by the time we get to 2030, just that year's worth of spending will probably be 4 trillion. He's probably got a very overly optimistic picture of what that what that represents and how much spending is going on there. But those are huge numbers that will have some meaningful consequences not only for the companies involved directly, but also just wider, you know, across the AI ecosystem. So I'll certainly be looking at the Mag 7. As we said, we, we saw them pull back in a little bit of softness over Q2. But actually you think about looking further ahead, consensus forecasts are for the sort of going out to 20282029 to a little bit further than this kind of step up in the spending that they're doing. Consensus forecasts show you that they should return back to a really strong cash flow positive state. Whether that will happen or not, I don't know, but consensus certainly expects that to be the case. So I think that's one big, big topic, big in every sense of the word that is important for us, for us to look at and also keep looking for tangible examples of companies, not just in the tech sector, but across other sectors where we're getting evidence of that return on the investment that has been made in in AI. You know, those little Nuggets that you'll get. Copilot is enhancing. This is shortening the time that you can do quick, easy tasks by 20 to 30% or other anecdotes coming from other sectors, You know, billions of revenue for JP Morgan because of how they're adopting AI. Those little Nuggets, I think that are sort of proving whether or not the the the AI right race has has has further to go. Speaker 1 That's excellent. Thank you, Oliva and Shreya. Speaker 3 I think the big question in the bond markets and the interest rate markets is, are yields going to remain elevated? Because as you mentioned earlier, the price of oil has gone back down to below $75 a barrel, which is where it was when the US Iran crisis started. So why are government bond yields still way higher than they were when all this began? And I think we are dealing with central bank conflict here before this crisis began. So going back even to Q1 months ago, central banks like the Fed and the Bank of England, we're going to cut rates. But they can no longer do that because they're worried about inflation being a little bit sticky, even if the latest data coming out of the US has been pretty resilient. You know, they've had CPI that was looking like inflation was a high headline figure, but digging down energy was a huge driver of that. And energy costs have just come down. So this could be transitory, even though inflation didn't seem like an immediate persistent worry. It's still there. It's still the elephant in the room. It's still going to be haunting the place and the discussion and the narrative. So therefore, yields are remaining elevated to proactively combat that. They're also remaining elevated because the Strait of Hormuz isn't fully open yet. I mean, it opens one week and then it shots partially the next week. And we don't really know what this deal is going to be. We don't know the details. We don't know if Iran's going to have a lot of control and what that means, but ultimately that storm cloud kind of looming over the uncertainty of it all you know, is this trade reform is going to open up again because it's responsible for more than 1/5 of the world's oil. That means rates have to be elevated to combat that uncertainty. Anytime there's uncertainty, interest rates or rather government bond yields tend to rise to reflect that. We see that most in the guilt markets. So I think that's the underlying question. And of course, that blends in quite nicely with what's going on with AI because you're thinking the risk free rate is a lot higher than used to be. The risk free rate is the 10 year return on any government bond. So with the US Treasury, it would be about 4.5% the 10 year U.S. Treasury yield. But if you're comparing that to the return on equities, you're now thinking equities are booming, but the US Treasury yield is also higher. How do I balance that risk calculus? And that's going to be a question that I think all investors are going to ask that risk reward balance in a world where yields are a little bit higher for potentially a little bit longer. Speaker 1 Absolutely right. And you know, going to the states regularly, which I do, I really see how that whole pricing environment has resulted in slow but certain price moves up in almost every category of goods and services. So inflation expectations are always a very sort of human psychology aspect of finance, which personally I find super interesting. And, and you can see why central banks really hesitate to do anything but hold this ship steady. And I must say one of the most humbling aspects for me the last quarter has been getting the oil price completely wrong because I used to cover energy in my previous life. And I would have thought that what we just that have witnessed would cause far greater angst in this location in the oil markets. And perhaps the reason I was wrong about that. And I'm at least a good company. The economy has got it wrong too. And they even have like a male culpa piece about it in this week's issue. But it is a testament to how much more efficient energy utilization has become broadly in our developed economies, not not as much in developing markets, but still, you know, even emerging markets are catching up fast in terms of renewables and alternative energy sources and also just energy efficiency. So that I think is great news. I'm very happy to be wrong, you know, for that reason, and the world becoming sort of a more stable place from an energy point of view because it's so fundamental to everything we do. Alina, what was the one thing you really learned in the last quarter or six months that surprised you in these markets? Speaker 2 Yeah. I think again, you're not alone in the with the oil price that was definitely a surprise. But I think maybe the the theme is that it speaks to broader resilience and learnings. Maybe if I think about things through a company lens, why was there such fundamental strength? And I do wonder maybe companies have been had been already tested pretty recently in a pretty severe way through COVID. So we had through that the kind of whole experience and then the fallout of it in terms of the inflation that followed. Companies really had to understand how they could navigate those challenges. They had to understand what what are their supply chains looking like? What can they control? What can they bring closer to home? How much of the price increases can they pass on to their customers without losing their customer loyalty. There was a lot of learnings I think from a previous shock that helped hopefully will continue to help businesses in just being a little bit more resilient because energy is a great case study of that for the moment. But I think it does trickle into all types of sectors, particularly kind of good quality, well run businesses that are thinking about the bits that they really can't control. Speaker 1 Great advice. Thank you. Anita Shreya, what about you? Speaker 3 I'm really surprised at the proactivity of our central bankers and our government leaders. That sounds really negative, like I have no faith in the system, but hear me out. I thought this was going to be another panic mode situation, a bit like the pandemic where we're, you know, having to panic react to rates. Maybe there's going to be sudden rate hikes, 50 basis point rate hikes instead of smaller 25 basis point ones. We didn't enter that era at all. We entered controlled leadership, like, for example, the European Central Bank hiked their deposit rate at last month's meeting. They did that with a lot of guidance, with a lot of thought, a lot of caution and said, look, we don't think inflation is going to be a permanent problem here, but the EU does import about 95% of its crude oil. So therefore, this obviously did have an impact and we're going to hike rates before the impact gets a lot worse. That was really proactive. The European Central Bank has been caught out before, not just after the pandemic, but also going back as far as the European sovereign debt crisis. So it was really impressive to see them sort of take the forward foot here and act quickly. I also think we're seeing the same with the US central bank, the Federal Reserve, where we have a new Chairman Warsh. And he said, I'm not going to get caught up in language and words and forward guidance. I need you to just trust me, if I need to hike rates to combat inflation, I will do it. And that's a really strong, powerful message to be sending. The markets seem to like it. The fact that all these leaders are stepping up and acting before the markets tell them they need to act means they've learned a lot of lessons from the bond markets. And it's actually giving us a little bit of a buffer to massive sell offs of central bankers are going to behave this way. Speaker 1 That's good. So both of you are pointing to the fact that markets are probably more resilient because both government institutions and companies have learned their painful lessons of the past of the pandemic and some of the other crises of recent years. So that that's very encouraging. You know, it even though I'm not really a football fan, but I was in the US when Germany lost so massively, you know, to park wine. All the German fans were just so depressed because they feel like they're losing their economic edge and now they're losing a football. So, you know, France was there to save the day the next day. But it was still kind of poignant. And we we hope that Europe does start to find its feet a little more in terms of both the AI investment cycle, the defense plans that keep getting sort of tweaked and sometimes in the wrong direction, and a bit more political stability. Because if there's one thing that's consistent across European headlines is pretty sharp negativity about the US. But everything you hear from companies and everything you observe in the markets actually points to a much more positive picture. And so that that's something we can all keep in mind now because it is soon. Summer holidays for both of you, I hope. I'd love to know what's on your reading list or what are you going to be listening to? And I'll tell you mine. I, I absolutely love the Economist podcast about the Tocqueville's road trip in America. They did a six part podcast revisiting all the places that Alexis de Tocqueville went to couple 100 years ago and how pertinent those lessons still are today. And I highly recommend that. In fact, I think it's free access. But if not, anyone who's a subscriber can give you the freebies and it's really insightful. What are you reading Shriya going to be listening to? Speaker 3 Yeah, so I actually love reading memoirs and writings from people that have recently left us or have left a mark. So I'm going to be picking up some Alan Greenspan, learning some lessons from the man who really shaped the Fed and still impacts a lot of economic policy today. I also just last year, a little bit dated, but I read JD Vance's book ahead of his inauguration as vice president, not in a political sense, but because I was curious about him as a business leader. And that was some useful insight because he's been super involved in the US Iran negotiation. So it's interesting to get behind find the psychology of how that person forms their worldview, what their principles might be and how that might come into play in the in the world arena, especially when geopolitics is forefront of every newspaper these days. Speaker 1 Did you read his first book, The Hillbilly Elegy, or his recent book? Speaker 3 I read Hillbilly Elegy. I will be reading his recent book and then comparing the two because my my personal take on Hillbilly Elegy is that he was very young and easily formed. His opinions were very influenced by the world that he couldn't live in because it was about what he didn't have growing up. And then he, you know, went and studied law and had all this information and knowledge ahead of him. It's interesting to see how people react to sudden influx of education. It's very different than growing up in a society where you're heavily educated. Every day your parents are doing your homework with you. He didn't grow up that way, but then he went to Yale and had all this information. What do you pick up? What world views do you form? I think that's really fascinating, especially when they become world leaders. You think, are you going to react like how your past taught you or how your formal education taught you? And those can be very different things. Speaker 1 Very different things. I had read that book and it was before he became obviously a very significant politician and I would have expected him, based on his book to be somewhere left of Bernie Sanders. So he did. Of all his thinking, he. Speaker 3 Really did. Speaker 1 More dramatically, and I look forward to reading his new book, although I know it's quite controversial as well, The Netflix movie The Hillbilly Elegy is very good. Very much worth watching for those guys who read the book. Alina, what about you? Speaker 2 Yeah, maybe I'll, maybe I'll explore fiction. So sometimes I flip flop between having periods of non fiction and then and then fiction. But I seem to be my fiction era at the moment. And since I've just come back from holiday a week before last, I'll tell you what I did read and would recommend, particularly given the theme of of the audience. So I read I Who Have Never Known Men by Jacquin Hartman, and it's a really, it's one of those books actually that I'm still thinking about a couple of weeks after finishing it. So I don't want to give too much away, but in terms of sort of womanhood, resilience, you know, dignity, solitude, there are so many themes I think that come from that book that are written beautifully. So I'm not sure it's the most sort of upbeat holiday read, but it's definitely a profound book that I very much enjoyed. And then in terms of listening, because again, I'm not much of A podcast listener, but someone recently introduced me to the podcast in good company. So just this week I've been listening to a couple of a couple of episodes. It's great because they do full length ones and then shorter kind of 10 minute versions sitting down, getting to hear from management of top companies. So that's, I think that's a great one that I will continue to to explore on my commutes into the office. Speaker 1 It is fantastic. He really has a talent for interviewing people. He recently interviewed one of my classmates from Harvard Business School, Malagonkar, who now runs the biggest hedge fund that's founded by a woman. So great. We need to, we need to get her The Game podcast too. Yeah, definitely. Thank you both so much for sharing your knowledge and insights and coming on this podcast on this beautiful sunny Friday in London. Wishing you an excellent weekend. Hope to see you soon live in person at one of our game events. And thank you for your support and thanks to everyone for listening. Hope you found this useful. Send us any feedback and we'll see you next quarter. Bye.