Strategic Alternatives

The markets’ wild ride continues, with valuations defying high volatility. How long can the ‘up crash’ last, and what factors might bring about a correction? At RBC’s Global Energy, Power and Infrastructure Conference, Callie Simpkins, Managing Director, Cross-Asset Hedge Fund Sales, discusses the potential scenarios with Lori Calvasina, Head of U.S. Equity Strategy, and Amy Wu Silverman, Managing Director and Head of Derivatives Strategy.

A deal to end the U.S.-Iran war is constantly talked up, but has yet to materialize. Meanwhile, market reaction doesn’t seem to match “the biggest physical energy disruption in history”, as Helima Croft, Global Head of Commodity Strategy, describes it. At RBC’s Global Energy, Power and Infrastructure Conference, Helima considers the prospects for a deal and what it would take to restore global oil flows once the Strait of Hormuz reopens.
Key Points
• Strong inventories and stockpile releases have so far contained oil prices despite the ongoing Iran conflict.
• The market continues to respond to repeated signals of an imminent end to the war.
• Restoring normal levels of oil flow after the Strait of Hormuz is reopened may take months.
• Issues over Iran’s nuclear program and sanctions relief will be obstacles to a lasting deal.

Introductions [00:05]

John Soughan, Assistant Vice President of Global Commodity Strategy and MENA Research, introduces Helima Croft, Global Head of Commodity Strategy, in a session at RBC’s Energy, Power, and Infrastructure Conference.
Stockpiles limit disruption impact [00:25]

The U.S.-Iran war has created history’s biggest physical energy supply disruption. So far, robust inventories and stockpile releases have provided a buffer, but shortages will become more evident in coming weeks.
Peace agreement fails to emerge [03:41]

The White House has repeatedly suggested a resolution is imminent. Each time the market responds with a sell-off. But a deal has yet to materialize. The IRGC controls shipping in the Strait of Hormuz and is not anxious to reach an agreement.
Nuclear issues will impede deal [05:56]

Nuclear capabilities and sanctions relief will be obstacles to any lasting deal. Even when the Strait of Hormuz is reopened, oil flows will be significantly lower than before the war began, because shippers and insurers will be reluctant to use it.
Oil flows will take months to restore [09:41]

The CEO of ADNOC has indicated it would take four months after reopening to return to 80% of pre-war oil flows.

Psychedelics are poised for a breakthrough in mainstream psychiatry, with high interest among physicians and patients alike. But does the infrastructure exist to deliver these treatments, given the clinical supervision required for administration? RBC’s researchers have been out in the field to find the answer. Brian Abrahams, Head of Global Healthcare Research, and Leonid Timashev, Biotechnology Analyst, reveal their findings on the practicalities of a psychedelics roll-out.
Key Points
Patient and physician interest and favorable regulation signal an imminent breakthrough for psychedelics to treat mental ill-health.
April’s Presidential order on accelerated research and access for veterans with PTSD is also supportive.
Psychedelics raise challenges for clinical trials, but companies are finding ways to handle these.
RBC’s research indicates existing clinic infrastructure is equipped to deliver psychedelics with the required clinical supervision.
Introductions [00:06]

Host Joe Coletti introduces the podcast and guests: Brian Abrahams, Head of Global Healthcare Research, and Leonid Timashev, Biotechnology Analyst. The springboard for discussion is the case made in the recent RBC Imagine report that a transformation in mental health treatment is imminent.
Pivotal moment for psychedelics [01:06]

Psychedelic drugs have the potential to deliver effective treatment for huge unmet patient need. Expert opinion at an RBC symposium indicates high physician interest, favorable pricing and reimbursement dynamics, limited generic risk, and an increasingly clear regulatory path.
Executive order on PTSD [05:06]

The recent Presidential executive order, sanctioning accelerated research and access in this field specifically for veterans with PTSD, is another tailwind.
Risks and challenges [06:22]

Psychedelic drugs raise specific challenges in clinical trials, but these are surmountable. The biggest concern for investors is the capacity to commercialize psychedelic treatments at scale, given the need for clinical supervision.
Infrastructure for delivery [07:48]

RBC’s research, based on clinics already delivering Spravato, suggests psychedelic treatments could be launched within existing infrastructure. Patients are enthusiastic; clinicians are already preparing for delivery.
Listen and subscribe to Strategic Alternatives on Apple, Spotify, or wherever you get your podcasts. If you enjoyed this episode, please leave us a review and share the podcast with others.

Sterling markets have had a rough ride over the last few weeks. In part this is against the backdrop of the oil price shock, but it is also due to the domestic political uncertainty that has once again come to the fore. Peter Schaffrik, Head of UK/European Rates & Economics, and Cathal Kennedy, Senior UK Economist, unpick the difficult situation, provide a view on the outcome of the recent turmoil along with an outlook on what the political landscape in the UK might look like in the months and years to come.

Once defined by low-cost index exposure, ETFs are increasingly used to deliver active strategies, structured outcomes and targeted portfolio solutions across global markets. In this episode, Bryan Johanson, Head of North American Client ETF Markets, and Valerie Grimba, Global ETF Strategist, examine how innovation, market structure and investor demand are redefining what ETFs can do – and what comes next.