Episode summary
Inflation Data and Market Bullishness | Bloomberg Surveillance
Bloomberg Surveillance
· · 30 min · Hosts: Tom Keene, Paul Sweeney · Guests: Jay Hatfield, Iain Stealey, Bailey Lipschultz, Julia Wilson
Summary
The conversation centered on a surprisingly bullish market backdrop despite hotter inflation data and rising geopolitical risk. The host and a guest argued that stronger earnings, not strong GDP, are the main engine for equities, with the guest defending a 9,000 target on the S&P 500 by saying the market is in an “earnings bubble” and that lower rates would be needed to get there. The guest also said higher oil prices and a tight money supply are feeding through to inflation, but still expects three rate cuts once the war ends.
On fixed income, an analyst from JPMorgan said the bond market has absorbed oil shocks, higher yields and rate-hike expectations better than feared. He argued that corporate balance sheets remain healthy, spreads look tight but justified absent recession, and demand for credit remains strong. He also saw opportunity in parts of Europe and the UK after a major repricing, while saying Asia looks more challenging because of energy and political pressures.
The show also focused on SpaceX’s proposed IPO and the implications for markets. A Bloomberg reporter said the deal is being pitched globally at a fixed $75 billion raise and could trade up on day one because Wall Street needs it to work. A consumer and retail strategist from KPMG said the U.S. consumer is still spending, especially on beauty, wellness and travel, even as gas prices squeeze budgets and firms focus on cost control and AI-led restructuring.
Key takeaways
- The guest argued the S&P 500 can reach 9,000 because earnings are rising fast and the market is “100% earnings driven.”
- The guest said PPI at 6.5% reflects higher oil prices and a tight money supply, but still expects three Fed cuts after the war ends.
- The JPMorgan analyst said corporate credit fundamentals remain strong and he sees no major spread widening unless recession arrives.
- The Bloomberg reporter said SpaceX is expected to keep its $75 billion IPO size and could go up on day one.
- The KPMG strategist said the U.S. consumer is still spending on beauty, travel and wellness, even as higher gas prices force trade-down decisions.
Notable quotes
“we actually view this more aggressive move is bullish. We think this trade's going to have to be reopened by force and it's going to require boots on the ground”
“we're in an earnings bubble”
“So we're still bullish. We're going to get three cuts that as soon as the war ends”
“the consumer is still out there spending”
How the episode opens
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We get lucky. Jay Hatfield joins us to get us the PPI here uh in a moment. I mean, you're making up moment to moment in in your note. You have an optimistic tone on the opening of the Gulf of Hormuz. You're beholden to whatever the headlines are like everyone else.
Mhm. Well, we've had a non-conensus view that the Iranians would not come to the table just using common sense. Uh I didn't study Iranian studies in at Wharton, but they've been um waring with the US for 47 years.
So why all of a sudden after we killed their top leaders are they going to capitulate? So we actually view this more aggressive move is bullish. We think this trade's going to have to be reopened by force and it's going to require boots on the ground.
Wow. Uh okay, maybe we're moving there today. You've also got a 9,000 target on the S&P uh 500. That's non-conensus. How do you get there? — Well, this is not an internet style, you know, AOL Time Warner is worth $2,000. All we did is just mark our um original forecast to market. So, we're in an earnings bubble.
And in fact, you have to be on SPX EO go index go every day because the 27 earnings are going up every day. So, they're up 12% since we started our 8,000. So we're using 23 * 27. To get to 23, you need lower rates. So you need the war to end.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ppi
- inflation outlook
- jpmorgan macro
- bond market
- spacex ipo
Companies and tickers mentioned
- JPM
- Infrastructure Capital Management
- JPMorgan
- Bloomberg News
- KPMG
- SpaceX
Watch the episode
Watch “Inflation Data and Market Bullishness | 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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