Market and FX Moves | Bloomberg Surveillance

The discussion centered on a market still being powered by earnings, capex, and valuation dispersion rather than broad-based economic weakness. Cam Dawson argued that reported S&P 500 earnings growth looks extraordinary, but a meaningful share comes from paper gains at Amazon and Google, while the rest of the market is still being lifted by revenue growth tied to nominal GDP and by margin expansion, especially in semiconductors. He said the current setup looks more like a “weeble market” than a clean bull or bear market because rotation has offset weakness in major groups.

Stephanie Roth said the labor market still looks broadly normal, with payrolls likely solid and unemployment only drifting modestly higher, but she expects inflation to remain the bigger issue. She put underlying inflation a little north of 2.5%, with tariffs adding about 60 to 70 basis points and AI-related software and accessories adding about 30 basis points. She also said consumer spending has held up partly because of strong equity gains and fiscal support, though AI capex growth is not sustainable indefinitely.

The currency segment focused on Japan, where Stephen Englander said the yen, Japanese yields, and U.S. Treasury borrowing costs are now tightly linked. He framed U.S. support for the yen as a short-term effort to flush out carry trades and stabilize yields, but he cautioned that intervention only works if underlying capital flows change. Sergei Guriev said Russia’s war economy is doing deep damage through casualties, emigration, labor shortages, and refinery attacks, which he said are reshaping both the battlefield and Russia’s future.