Market Jitters Amid Geopolitical and Tech Uncertainty | Bloomberg Surveillance

The host and guests framed the market around a strong U.S. earnings backdrop, a broadening AI trade, and persistent geopolitical risk. A guest from Federated Hermes argued that JPMorgan’s long run of outperformance is justified by rising nominal earnings, that the first-quarter bar was high but corporate America has been raising estimates into earnings season, and that a near-term pullback would not change a still-bullish three-year view on the S&P 500. He also said small caps are leading, large-cap growth is starting to look like value, and bonds and European equities remain the least attractive parts of the allocation view.

A guest from ING said Europe still lags the U.S. on earnings growth, with analysts looking for roughly 20% plus U.S. earnings growth versus about 10% to 15% in Europe. She said investors are increasingly seeking European exposure for diversification, but that software and the Magnificent 7 no longer work as a single trade; instead, AI is forcing stock-by-stock judgment over which companies benefit and which are threatened.

On energy, a guest from Hartree Partners argued that the Strait of Hormuz remains vulnerable but that Gulf producers are better prepared than in past crises, with the UAE, Saudi Arabia and Iraq all able to diversify exports and expand supply. A guest from Veda Partners said the November election is being shaped by a stalled Congress, weak odds for major new legislation, and durable Democratic polling momentum, while also lamenting the fading institutional comity once embodied by old-guard senators.