Episode summary
S&P Eyes Third Week of 3% Gain | Bloomberg Surveillance
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Darrell Cronk, Amy Wu Silverman, Mark Luschini, Yael Selfin
Summary
The discussion centered on a market that is rallying even as volatility stays unusually elevated and geopolitical risks persist. Amy Wu Silverman argued that investors are beginning the chase in options and that the market may still be early in a gamma-driven squeeze, while the cost of downside hedges has fallen sharply from a few weeks ago. She said clients are increasingly using protection longer term because of uncertainty around ceasefire talks and the inflation path after an energy shock.
Darrell Cronk said the earnings backdrop remains strong enough to support equities, with first-quarter earnings expected to be up 13% and forward 12-month earnings up 17% to 18%. He favored tech over energy after Wells Fargo Investment Institute upgraded tech on April 6 and funded that move by trimming energy. He also argued that tech balance sheets are strong, that shareholder yield matters, and that the S&P 500’s valuation is reasonable given tech’s growth advantage.
Mark Luschini said markets have already priced in peak escalation from the Iran conflict and that investors are rotating back into tech, semis, industrials, materials and defense. Yael Selfin said Europe is facing a renewed energy-price shock, tighter financial conditions and higher inflation, while the stronger euro is less concerning than the damage from a stronger Swiss franc.
Key takeaways
- Amy Wu Silverman said downside hedges are cheaper now, making longer-dated protection more attractive after weeks of investor FOMO.
- Amy Wu Silverman said the market may be entering a gamma-driven chase, with “spot up vol up” behavior still supporting momentum.
- Darrell Cronk said Wells Fargo expects Q1 earnings up 13% and forward 12-month earnings up 17% to 18%, which supports equities.
- Darrell Cronk said tech still looks attractive versus the market because it offers about 35% earnings growth against a 20 to 21 times multiple.
- Mark Luschini said investors are rotating back into tech and semis because the market likely already saw peak escalation in the Iran conflict.
- Yael Selfin said Europe is facing an energy shock similar to 2022, with inflation and financial conditions both worsening.
Notable quotes
“I think we're actually even earlier in terms of the positioning. So, it's been this spot up volatility up market”
“The quarter's going to be up 13% on Q1. Forward 12-month earnings are going to be up 17 to 18%”
How the episode opens
Bloomberg Audio Studios podcasts, radio, news.
This is the Bloomberg Surveillance podcast. Catch us live weekdays at 7:00 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. For those of you out there, this is the most important conversation of the day on the history of the moment. I want to do a major shout out to the coalescing that Zerohedge does, including publishing Bloomberg's Simon White in London and publishing Michael Ball, who's with us often here.
Amy Wu Silverman joins us here for the key conversation for global Wall Street. I'm short. Gloom.
Oops, I'm wrong. There's a short squeeze and I think people get that. That you're wrong, you cover the short and the market goes up.
And then it shifts to option animals like you. And you're going to go, I want to go long. And the firm you're dealing with must buy the stock.
Are firms now forced to buy the stock because of a gamma bid and that's why we're going up? I think we're actually, Tom, starting to anticipate it. But right now what we're seeing happening is the beginning of the chase and often times when we get that beginning of the chase, that is a secondary effect of it.
I think we're actually even earlier in terms of the positioning. So, it's been this spot up volatility up market, you know, which is kind of the opposite of what we would expect. Really big bid to call options and then I think even down the line we might get the mechanics of of the gamma squeeze, not the short squeeze, which is why I think there is still some continuation to this momentum.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- earnings expectations
- portfolio positioning
- falling volatility
- hedging
- eurozone inflation outlook
Companies and tickers mentioned
- WFC
- RY
- Wells Fargo
- Royal Bank of Canada
- KPMG UK
- Janney Montgomery Scott
Watch the episode
Watch “S&P Eyes Third Week of 3% Gain | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Surveillance
-
Stocks Rise as Inflation Data Ease Fed-Hike Worry | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 13th, 2026 | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 12th, 2026 | Bloomberg Surveillance -
Jensen Huang Ousted by Nvidia Board as CEO | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 11th, 2026 | Bloomberg Surveillance -
AI Stocks Rebound as Fed Hike Bets Return | Bloomberg Surveillance
Bloomberg Surveillance, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
