Episode summary
S&P 500 Closes Near Record as Tech Keeps Rallying | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 35 min · Hosts: Carol Massar, Tim Stenovec · Guests: Stuart Kaiser, Madison Muller, Joyce Huang, Denise Paulonis
Summary
Tech’s rebound and a broader rotation in US stocks dominate the discussion. Stuart Kaiser says last week’s volatility was less about a broken market narrative than about portfolio repositioning after two years of heavy buying in tech and growth. He argues the “Mag 7 plus Broadcom” concentration means selling those names forces investors to find a home elsewhere, helping explain gains in cyclicals, small caps, and equal-weight indexes. He remains positive on US equities overall, citing solid earnings, a strong economic surprise index, and resilient growth.
The episode also frames rising scrutiny of the AI trade. Kaiser says Alphabet’s $20 billion bond deal and other large-cap tech capex plans show investors are now asking whether AI spending creates acceptable returns. He draws a line between the strongest balance sheets, which the market can still tolerate, and lower-rated names like Oracle, where the scrutiny is harsher. His view is that power generation and AI data-center buildout are one way to play the theme without simply owning the biggest spenders.
Later, Joyce Wong says Fed chair pick Kevin Walsh would likely leave yields higher for longer and steepen the curve. She sees inflation staying closer to 3 than 2, thinks the US economy is “shockingly okay,” and says fixed-income investors are staying opportunistic because spreads are tight across credit markets. A separate segment with Sally Beauty’s CEO shows consumers still spending, especially on hair color, while trading down in shampoo and conditioner.
Key takeaways
- Kaiser says the recent selloff and rebound in tech was a rotation, not a new bearish call on US equities.
- Kaiser says the market is now rewarding AI spending only when companies can show a credible ROI.
- Wong expects Kevin Walsh as Fed chair to keep yields higher for longer and likely steepen the curve.
- Wong says fixed-income investors are finding spreads too tight for a big credit event, so they are buying selectively.
- Sally Beauty’s CEO says customers are still spending, especially on hair color, while trading down on basics like shampoo and conditioner.
Notable quotes
“I don't know if there's any real alternative for a lot of these you know countries to invest their reserves”
“we're still pretty positive US equity risks in general. Um, we've been pretty bullish on the cyclical parts of the of the equity market since the beginning of the year”
“what you're really seeing is within the tech trade, the shift has moved kind of away from the spenders and to the beneficiaries of that spending”
“If it looks like it's going to be roe destructive, then right now you're getting punished for that a little bit”
“we do think that inflation while it's down, you know, there's a chance it could remain closer to three than two”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily. Reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenbec on Bloomberg Radio.
Officials urged banks to limit purchases of US government bonds and instructed those with high exposure to pair down their positions. The directive, though, does not apply to China state holdings of US treasuries. And this move, Carol, framed around diversifying market risk rather than anything to do with geopolitical maneuvering or a fundamental loss of confidence in US creditworthiness.
Yeah, it makes me think about this idea and this argument that the US is increasingly becoming uninvestable. But let's see what Stuart Kaiser has to say about all this. He's head of equity trading uh strategy over at City.
He joins us here in studio. Stuart, good to have you here. Welcome back.
Thank you. Good to be here.
Hey, we were just talking with our Stuart Paul about Kevin Walsh's past support of a new accord between the Treasury and the Fed. And this has to do with uh the balance sheet, which sounds like increased cooperation. We know in the past that Kevin Walsh has wanted the Fed to shrink its balance sheet.
So, we're trying to make sense of what it is. And then we just talked about the Chinese regulators advising their financial institutions to reign in the holding of US government bonds. Are treasuries undergoing a re a reboot uh in your view on the world stage when it comes to you know the United States being kind of a a sure thing if you will in the financial world and and if so what are the implications of that?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- s&p 500 rally
- ai investment and funding
- bond and debt issuance
- jobs report and inflation outlook
- tech and semiconductor stocks
Companies and tickers mentioned
- C
- GOOGL
- GOOG
- ORCL
- NVO
- HIMS
- SBH
- Citi
- Alphabet Inc.
- Oracle Corp.
- Novo Nordisk
- Hims and Hers Health
- American Century Investments
- Sally Beauty Holdings
Watch the episode
Watch “S&P 500 Closes Near Record as Tech Keeps Rallying | Bloomberg Businessweek” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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