Episode summary
Equity and Bond Signals | Bloomberg Surveillance
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Brian Belski, Lindsay Rosner, Josh Zegen, Dan Boulud
Summary
The discussion centered on a market that the guest described as shifting from a momentum-driven tape to an earnings-driven one, with the implication that returns may stay positive but become less explosive and more volatile. He argued that the next opportunity is likely to come in a pullback, and that the best place to put new money to work is in broadening areas such as small caps, small/midcaps, and financially oriented value names rather than only the largest stocks.
He also argued that the big-cap leaders may lose some relative footing as earnings revisions fade into the rest of the S&P 500, which he said should support a wider advance. Internationally, he said emerging markets have had an “amazing run,” but he was cautious about chasing them solely on currency strength and urged investors to focus on what companies actually make and sell.
The credit segment was more constructive: the guest said investment-grade and high-yield spreads are very tight, but still justified by earnings, balance sheets, and technical demand. In real estate, the guest said office-to-residential conversions in New York can work because of housing shortages and a 35-year tax abatement structure, while branded residences and luxury mixed-use projects remain attractive where buyers want hotel-style amenities.
Key takeaways
- The guest said the market has shifted from momentum to earnings, which should keep returns positive but reduce upside and increase volatility.
- He expects a pullback and said extra cash should be deployed only after that correction, not by trying to time the market.
- He favors small cap and small/midcap stocks over the largest names, arguing that broadening should come from the other 493 stocks in the S&P 500.
- On credit, the guest said spreads are at or near 20-year tights but still look justified by earnings, balance sheets, and strong demand.
- In real estate, he said New York office-to-residential conversions are viable because of housing shortages and a new 35-year tax abatement.
- He said branded luxury residences can command a premium because buyers are paying for hotel-like amenities and service.
Notable quotes
“we've transitioned to an earnings driven market”
“we still think we're going to see some sort of a pullback”
“small cap small midcap is going to be a very exciting place the next 10 years”
“we think the play on SpaceX is Tesla”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m.
Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. So 2009 I think we got to 6,600 and you know a couple Vikings wins after that.
Brian Bellski went long at the market. He writes these beautiful short paragraph by paragraph Ed Heymanlike notes on having the courage to be in the market. There's five or six people that can do his act of just shut up and stay in the market.
update the after 2009 view at Dow 7,000 like it's an eight banger you've done to 50,000. Give me the enthusiasm this morning.
Well, it was hard to be bullish uh in 2009. It really was with lots of fear, but we've seen the secular bull market that we've been in print on uh since the 2009 2010 period see several different fits and starts with respect to cyclical bulls and cyclical bears. We're right now in the fourth year of of the most recent cyclical bull market, which the majority of the bull Tom has been about momentum.
Uh this year when we wrote our year- ahead piece, uh which we were had the great opportunity to talk about in January here on air, we've transitioned to an earnings driven market. And you talked about Dell coming into before this hit. And you talk about Micron and you talk about all these companies being rewarded for earnings.
That's actually quite good. But what is not so good relative to momentum markets is that even though the market performance can will and should be still positive, it's usually about half the rate of a momentum market on an annual basis and there's more volatility.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- s&p bull case
- bond market moves
- investor rebound
- real estate opportunities
- food inflation
Companies and tickers mentioned
- GS
- Humilis Investment Strategies
- Goldman Sachs Asset Management
- Madison Realty Capital
- Dinex Group
- Bloomberg
Watch the episode
Watch “Equity and Bond Signals | 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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