Episode summary
Bloomberg Surveillance TV: October 16th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 22 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Keith Lerner, Dominique Toublan, Rick Wurster
Summary
Stocks were described as stabilizing after a tech-led pullback, with the guest arguing that the broader market has undergone a healthy rotation rather than a broken trend. Tech remains the main long-term driver, but he said the sector likely needs a further rest after a strong run, while healthcare, small caps and equal-weight stocks could bounce over the next few weeks or month or two. He also said the market’s recent move lower in rates has helped non-tech areas that were previously beaten up.
The discussion tied that rotation to higher rates, Fed policy and earnings. The guest said the market is pricing in a December move rather than October, and he expects the real test to come from late-month results, especially from the large hyperscalers. He argued that the biggest tech companies still look supported by strong forward estimates and that investors should favor higher-quality names with big balance sheets over more levered marginal players.
On credit, the other guest said the week’s stress around CoreWeave reflected a sentiment shift more than hard news, with bonds and CDS moving sharply before recovering. He said valuation remains tight overall, but higher-beta and more levered issuers are more exposed as rates stay high. In contrast, the Schwab CEO said clients remain heavily invested in equities even as interest in fixed income has surged, and that younger investors are arriving through social media and AI-enabled tools, but still want a human in the loop.
Key takeaways
- The first guest said tech is still the market’s primary long-term driver, but it likely needs a further rest after outperforming by a wide margin.
- He expected healthcare, small caps and the equal-weight index to bounce first as the market rotates away from tech.
- The credit guest said CoreWeave-like stress is exposing differences between cash-rich hyperscalers and more levered AI issuers.
- He said investment-grade spreads are still historically tight at 83 basis points, even after recent widening.
- The Schwab CEO said clients remain fully invested in equities, but fixed-income interest is at record levels because yields are attractive.
- He said only tens to 20 blocked-agent attempts per week suggest investors like AI, but do not yet trust it with their money.
Notable quotes
“We remain long-term bulls, but this tech reset likely has further to go”
“I think tech is still the primary driver of this market over time”
“the market's pricing that in as you mentioned before Amarie we've had some of the big hitters on the Fed basically coming to the market and providing their forward guidance”
“Still elevated rate volatility and concerns about AI related funding needs could continue to pressure spreads in the near term”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Bramitz 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 Bloomberg 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 finding their footing.
Keith Lerner of Truist writing, "Inves investors lovehate relationship with tech continues. We remain long-term bulls, but this tech reset likely has further to go. Keith joins us now for more.
Keith, welcome. Where the equity market do you see further downside from here?
Yeah, well, great to be with you. Um I guess it depends on when we talk about the equity market as you mentioned which equity market because you know right now we're seeing the average stock move up and uh you know we're seeing this rotation from tech. Just an interesting uh stat for for you all.
Um you know last month uh there were only two sectors up in the S&P tech and communication services. When the S&P made a new all-time high there was only one sector that was up that made a new high which was tech. So what are we seeing this month?
10 out of 11 sectors are up and one sector is down. that one sector is tech. So that's kind of going back to this lovehate relationship during this bull market that started in 2022, late 2022.
You know, tech has more than doubled the S&P, but has had five double-digit pullbacks during that time as these kind of concerns come in and go.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us credit strategy
- investment outlook
- market surveillance
- economy outlook
- banking and brokerage
Companies and tickers mentioned
- SCHW
- Truist
- Barclays
- Charles Schwab
Watch the episode
Watch “Bloomberg Surveillance TV: October 16th, 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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