Episode summary
Market Choppiness Ahead of Fed and Earnings | Bloomberg Surveillance
Bloomberg Surveillance
· · 38 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Lori Calvasina, Amy Wu Silverman, Jay Hatfield, Laura Mayfield, Meredith Whitney
Summary
RBC’s Lori Calvasina and Amy Wu Silverman said the market’s main debate is still tech, especially semis and the momentum trade, but positioning ahead of a heavy earnings week looked surprisingly calm. They said hedge demand in options was relatively muted, even as names like Meta still imply only about a 7% move, and they noted that flows have been involved rather than panicked. At the same time, they warned that the market is not getting the same confirmation from credit, rates, and CDS that equities are showing, which leaves them cautious about how much the rally can extend.
Both also pointed to emerging pressure points for 2027, with one warning that earnings forecasts may need to come down as war-related buffers, inventories, and hedges get reset. They also said anti-AI politics could become a market issue, not just an election theme, because it could raise correlation across assets.
Jay Hatfield argued the Fed should not raise rates and called such a move “incredibly stupid,” saying inflation from interest-sensitive sectors is gone while energy remains the main problem. Laura Mayfield described a resilient but value-seeking consumer, with delinquencies, buy-now-pay-later, and careful bill prioritization all part of day-to-day cash flow management. Meredith Whitney said banks are still leaning on buybacks rather than true growth, though JPMorgan stands out as the likeliest to pursue a major deal and potentially use its balance-sheet strength more aggressively.
Key takeaways
- Lori Calvasina said tech, semis, and momentum remain the central market conversation, but she sees only limited signs of panic in current positioning.
- Amy Wu Silverman said options markets are not aggressively hedging into earnings, even though some large-cap tech names still have meaningful implied moves.
- The guests warned that 2027 earnings may need to be revised down as companies lose the benefit of temporary buffers from wars, inventories, and hedges.
- Jay Hatfield argued the Fed should not raise rates because inflation is coming mainly from energy, not from the interest-sensitive parts of the economy.
- Laura Mayfield said consumers are still spending, but they are scrapping for value, using BNPL, and managing cash flow very actively.
- Meredith Whitney said bank profits are still being driven more by buybacks than organic growth, with JPMorgan the clearest candidate to do something transformative.
Notable quotes
“ahead of this week, you know, big four reporting, huge concentration, Tom's favorite word, skew, you know, it's pretty flat. Meaning people are not really deciding to hedge in front of any of these stocks”
“at some point you may need to pull down 2027 earnings forecasts. And that's not so much about the comps, but it is the idea that if you look at the Iran war, for example”
“It would be incredibly stupid for the Fed to raise rates this year”
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. But what we love to do is, particularly at a shop like the Royal Bank of Canada, when we get too aligned and too highly competent to say the least, it's fun to get them both into the studio just to get a window into the dayto-day grind.
I mean, Paul, I mean, you look at Lori Kelcina, you look at Amy W Silverman, they're talking to two different audiences.
They are. And if I'm a salesman at RBC Capital, I'm making bank offers. I could sell anytime. Joining us now for the first time ever, Amy Woo Silverman, Lori Kelviscina of the Royal Bank of Canada. Let me just get this out of the way. Are the two of you on speaking terms?
Always. — We talk all the time. — It's my work wife. — When you talk about work from the quant area of Amy Woo over to your incredible powerpoints showing the texture of the market, what's the number one talking point?
I I think we've been talking a lot about tech lately. I mean, it's it's just the conversation you can't get away from. And by that I mean you know sort of the you know the hyperscalers are mostly in a different sector to be honest but the you know sort of semis and the momentum trade I think is what we've been largely talking about and what our work is showing on the semis is that you've hit average valuation levels if you look at sort of a five or 35 year average.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed rates
- earnings
- options market pricing
- consumer resilience
- labor market
Companies and tickers mentioned
- RY
- RBC Capital Markets
- Infrastructure Capital Management
- Port Washington Investment Advisors
- Meredith Whitney Advisory Group
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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