Episode summary
S&P 500 Nears All-Time High
Bloomberg Surveillance
· · Guests: Barbara Reinhard
Summary
Barbara Reinhard said equities have stayed resilient all year despite geopolitical risk, and she added to stocks in April because she expected markets to power through uncertainty. She thinks the Fed is likely to keep cutting, with the labor market and consumers needing relief, and she said the market will likely react to whether the next move is a hawkish cut or a more dovish one. She also argued that investors should not overreact to who becomes the next Fed chair, though she expects volatility around that transition.
Her more important point was that the Fed matters globally, because its policy transmits through Treasury yields and the U.S. dollar. Reinhard said the market should not treat the next chair as a parlor game, since U.S. monetary policy influences risk assets worldwide and can affect international equities through currency moves. Even so, she does not base portfolios on that outcome.
On fundamentals, she said valuations are expensive, but earnings should still support the market in 2026. She expects about 10% earnings growth even if multiples do not expand, and she said margins appear to be bottoming after some early-year pressure. She also sees easier financial conditions in 2026, plus opportunities outside the U.S. in Europe, emerging markets, China, and smaller-cap U.S. stocks.
Key takeaways
- Barbara Reinhard expects the Fed to cut and says the market will focus on whether it is a hawkish or dovish cut.
- She does not think the next Fed chair is a portfolio-making event, but she warns it could create volatility.
- Reinhard says 2026 earnings growth of about 10% can support equities even without multiple expansion.
- She says margin pressure looks like it is bottoming, which helps the bull case for stocks.
- She sees diversification opportunities in emerging markets, Europe, China, and lower-cap U.S. stocks.
- Reinhard argues that easier financial conditions in 2026 should support equities after the tariff shock fades from comparisons.
Notable quotes
“We've been risk on for this entire year”
“I do think that the Fed's likely to cut. I think that you've got the labor market looks like it could probably use some relief”
“We don't necessarily position our portfolios on who the next Fed chairman is going to be”
“I think the earnings support for 2026 is likely to be strong enough that it would probably present a buying opportunity”
“But I would say that the earnings are going to support the overall equity market”
How the episode opens
We've been risk on for this entire year. We thought that equities we thought that equities were going to be able to to power through a lot of geopolitical risk. We added to equities back in April of this year.
So, you know, we've had the benefit of the wind at our back. I do think that the Fed's likely to cut. I think that you've got the labor market looks like it could probably use some relief.
I think consumers could use some relief as well. And I think there's enough in the enough in the pipeline from the data that we have that says that the Fed could cut it, maybe a hawkish cut where they say we're going to cut and this may be it for a while, or it may be more of a dovish cut where they say we're going to cut and we're going to be data dependent. I think that's what the market's going to indeed going to react to.
But remember, in 2026, you're only looking for maybe three cuts. So if you get another one or two, the market taking out one isn't necessarily going to cause a lot of damage. Well, the phrase data dependent was a drinking game for a 25.
What should the phrase be for next year? It's going to be who the next Fed chairman is. That's going to be the big flash point.
So how do you how do you handicap that? Because I guess there are some parlor parlor games out there about how who it's going to be. Mr.
Hassett. Mr. President, I don't know.
Right. You guys care about it that much? Of course we care about.
Right. The Federal Reserve is, you know, the central bank of the world. It's a big one for us.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- sp-500 all-time high
- fed rate cuts
- core pce inflation
- treasury yields
- crypto etf flows
Companies and tickers mentioned
- VOYA
- NVDA
- NFLX
- BLK
- Voya Investment Management
- Nvidia
- Hon Hai Precision Industry Co.
- Moore Threads Technology Co.
- Netflix
- Warner Bros. Discovery
- BlackRock
Watch the episode
Watch “S&P 500 Nears All-Time High” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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