Episode summary
Bloomberg Surveillance TV: May 11th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 17 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Aaron Kennon, Rachel Ziemba, Roukaya Ibrahim
Summary
Stocks were holding near all-time highs as the conversation centered on why semiconductors have become the dominant driver of the rally. The host and Aaron Kennon argued that the move is broad in market impact but narrow in composition: semis have powered an outsized share of S&P 500 gains, and earnings growth has been strong enough to justify much of the enthusiasm. Kennon said the bigger risk is not immediate bubble conditions, but a future slowdown in hyperscaler capex if return-on-investment concerns force Microsoft, Alphabet, and peers to trim spending.
The discussion also returned to geopolitics and inflation. Kennon said the market is discounting the war in Iran for now because tech earnings matter more than headlines, while the host highlighted that energy and materials remain too small in the index to move broad market prices much. The Fed angle stayed cautious: the guest expected the central bank to hold for a while, even as yields and inflation stay elevated.
Rachel Ziemba said Trump’s China trip is meant to reset the narrative, but trade leverage is shifting as war-related costs mount and supply chains tighten. Roukaya Ibrahim argued that oil remains buffered by inventories for now, yet a prolonged Strait of Hormuz closure would eventually push crude, fertilizers, and agricultural prices higher.
Key takeaways
- Aaron Kennon said semiconductors are carrying the market, with seven names driving about 70% of the S&P 500’s return.
- Kennon argued that a slowdown in hyperscaler capex, not bubble talk, is the main risk to the semiconductor trade.
- The host and Kennon said the market is largely ignoring Iran because energy and materials are too small a share of the index to move broad equity pricing much.
- Kennon said the Fed is likely to stay on hold for a while, even with CPI near 4% and yields above the policy rate.
- Rachel Ziemba said China’s leverage is rising as war costs hit supply chains and critical minerals, even as Trump seeks a trade reset.
- Roukaya Ibrahim said oil inventories are still buffering the market, but a prolonged Strait of Hormuz closure would eventually lift crude and fertilizer prices.
Notable quotes
“This has been an exceptional period for risk assets, and yet the composition of that return should give investors pause”
“If you look at semiconductor exposure globally you take a look at emerging markets SKHEX Samsung and Taiwan semi the top three holdings in emerging markets are semiconductor companies”
“the return on investment question for the hyperscalers, for the Microsofts of the world, for the alphabets of the world may force”
“If the strait is not reopened, markets will grow desensitized to the positive headlines and prices will increase to reflect a tightening oil market”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Abramitz and Amarie Hordern.
Join us each day for insight from the best in markets, economics, and geopolitics. From our global headquarters in New York City, we are live on Bloombo television weekday mornings from 6:00 to 9:00 a.m. Eastern.
Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App, we begin this hour with stocks just about holding on to all-time highs. Aaron, Canada, Clear Harbor Asset Management writing, "This has been an exceptional period for risk assets, and yet the composition of that return should give investors pause.
Aaron joins us now for more. Aaron, good morning.
Good morning. What a move in semis. 5% Friday, 11% last week.
What are we 60% off the lows from the end of March? Maybe more than that at this point. Are we in bubble territory now?
It's a good question. You know, semiconductors like most cyclicals tend to look really cheap when uh you know they they tend to be uh expensive when PE multiples are are are low and they tend to to be quite cheap when P multiples are high. And you know right now if you take a look at some of the memory chip names like Micron and SK highix in Korea you know they're trading at mid to high singledigit multiples but that's because earnings have absolutely shot the moon.
If you look at semiconductor exposure globally you take a look at emerging markets SKHEX Samsung and Taiwan semi the top three holdings in emerging markets are semiconductor companies. 37% of the emerging market index is it. You look at semiconductors in the United States, 8 and a half% return on the S&P 500.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- world markets
- economy
- finance
- investment
- commodities and energy
Companies and tickers mentioned
- Clear Harbor Asset Management
- Center for A New American Security
- BCA Research
Watch the episode
Watch “Bloomberg Surveillance TV: May 11th, 2026 | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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