Episode summary
Finding Market Direction Amid Uncertainty | Bloomberg Surveillance
Bloomberg Surveillance
· · 28 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Michael Purves, Jill Carey Hall, Lindsey Piegza, Jay Pelosky
Summary
The conversation centers on a market that has kept climbing despite volatility, sticky inflation, and growing debate over whether policy will tighten again. Michael Purves argues the S&P 500’s earnings strength is extraordinary and says a 9,000 year-end target is not inconceivable if earnings keep rising and valuations hold. He also says inflation does not necessarily crush earnings and that the bigger issue is complacency around risk, with the VIX low and portfolio hedging harder in a tech-led bull market.
Jill Carey Hall makes the case that small caps have finally benefited from a manufacturing recovery, better earnings, higher oil, and renewed optimism in healthcare and biotech. Even so, she says midcaps may offer better second-half upside because they have similar profit momentum but less refinancing and rate risk than the Russell 2000.
Lindsey Piegza emphasizes that inflation remains the Fed’s main problem and expects the labor market to stay solid, with payrolls around 120,000 to 125,000 and unemployment near 4.3%. Jay Pelosky closes by arguing that the next big trade is global, not just U.S.-centric: he sees a spending super cycle, stronger non-U.S. earnings, a weaker dollar, and a broad opportunity in commodities and semiconductors.
Key takeaways
- Michael Purves says the S&P 500 could reach 9,000 this year if earnings continue to compound and valuations stay near current levels.
- Purves argues low VIX and shrinking volatility premia show complacency, but he thinks hedging broad tech-led rallies is still difficult.
- Jill Carey Hall says small caps have improved on manufacturing strength and earnings recovery, but she prefers midcaps in the second half because of lower rate and refinancing risk.
- Lindsey Piegza expects payrolls to rise about 120,000 to 125,000 and says inflation, not growth, remains the Fed’s biggest policy constraint.
- Jay Pelosky says investors should overweight equities and commodities, underweight bonds, and look outside the U.S. for valuation and currency convergence.
Notable quotes
“There's some levels of complacency here. I think the problem that I've always struggled through over the last couple of years here is is that in a strong techled bull market”
“small caps are the targets and you know a lot of the the larger companies are the the acquirers”
“It's an earnings growth driven market. It's not a multiple expansion bubble market”
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. in the studio. We are thrilled to have Michael Pervvis with us. Are you not up north in northern New England because this is like peak fly season,
Right? Not yet. Yeah, we'll give it a couple of weeks. — Give it a couple weeks. Let let it dry out and all that and then away you you go. I So I went to the we ice cream. Paul Sweeney taught me how the Vicks first of all, Paul, yesterday 16.27. Did we observe window dressing yesterday?
Maybe right at the end of the end of the first half. Absolutely. Michael Pervvis, what do you think — In terms of the — We're catching up.
Yeah. Well, it's been a pretty remarkable year. Obviously, earnings growth has been exceptional.
And what's even more distinctive about that exception exceptional earnings growth is that it came on the back not of an earnings trough, but of a very strong 2025 earnings u there. And you know, I a lot of strategists are upgrading their price targets. But just to throw out a couple of quick numbers here, forward earnings estimates per Bloomberg consensus on the S&P 500 are up nearly 20% year-to- date.
Now, some of that might be some ext, you know, sort of unusual things with how some of the big tech companies account for some of their investments. Even if we take a conservative approach, let's call it 12%. Now, let's say that second half of the year we're up the same amount, another 10%.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market volatility
- s&p target
- small cap outlook
- jobs report
- rate hike outlook
Companies and tickers mentioned
- BAC
- SF
- Tallbacken Capital Advisors
- Bank of America
- Stifel
- TPW Advisory
Watch the episode
Watch “Finding Market Direction Amid Uncertainty | 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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