Episode summary
Stocks and Oil Climb Amid Iran Uncertainty | Bloomberg Surveillance
Bloomberg Surveillance
· · 33 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Lindsay Rosner, Aaron Kennon, Audrey Childe-Freeman, Ed Mills
Summary
The discussion centered on how markets are pricing through the Iran war, strong U.S. data, and a still-resilient earnings backdrop. One guest argued that investors should “stay invested” and favor U.S. assets over Europe because the U.S. is expected to grow 2.3% this year versus 0.7% for the euro area. Another guest said the market is not ignoring the war so much as trading the current data, with oil already expected to come down by year-end and geopolitical conditions slowly de-escalating.
Across equities, the guests said the rally remains narrow but still has breadth beneath the surface, with small caps, developed international stocks, and emerging markets outperforming in different ways. They also pointed to AI as a lingering source of volatility, especially as parts of the market tied to AI disruption have swung sharply. On policy, the expectation was that the Fed remains on hold for now, with the market pricing only about 10 basis points of cuts, though some room may still exist if inflation measures stay benign.
Alternatives came up as a portfolio construction issue more than a headline trade. The guests emphasized sizing, liquidity, and manager selection in private credit, private equity, real estate, and less conventional strategies. In currencies, the dollar was seen as fading after an initial war-driven rebound, while the Norwegian krone was highlighted as a relative winner in a higher oil, stagflationary environment. The segment on Washington added that Kevin Warsh’s path to the Fed chairmanship may be slowed by partisan resistance, but the Fed is still expected to remain independent.
Key takeaways
- A guest at Goldman Sachs Asset Management said investors should “stay invested” and favor U.S. assets over Europe because U.S. growth is expected to be 2.3% versus 0.7% in the euro area.
- The market is being supported by strong earnings and de-escalating war headlines, with one guest saying oil is priced to come down by year-end.
- The Fed is expected to stay on hold near term, with the market pricing only about 10 basis points of cuts and the guests seeing at most two cuts.
- Private credit risk was framed as a structure and manager-selection issue, not a systemwide contagion threat, though liquidity and sizing matter.
- The Norwegian krone was singled out as a favored currency because it benefits from higher oil prices and still has policy room to maneuver.
- AI remains a key latent risk, with one guest saying it has gone “real quiet” but still represents the biggest thing lurking for markets.
Notable quotes
“the big value for us I think is a theme which is just stay invested. The idea that you play these ping pong headlines”
“We think the US is going to grow at 2.3% this year. We think the Euro area grows at 0.7%”
“I don't think they're ignoring what's happening with the war but they are working with the data that we have”
“We still have the belief that there could be up to two cuts. Our confidence around those two cuts has diminished”
“the Norwegian krone right now is doing really well and will probably continue to do well for the time being”
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 car play or Android auto with the Bloomberg business app.
Listen on demand wherever you get your podcasts or watch us live on YouTube. Our next guest in studio Lindsey Rozer head of multi-sector investing at Goldman Sachs Asset Management. I have no idea what that means other than I think she can invest in anything anywhere anytime.
Lindsey, thank you for joining us in studio.
Thank you. Thank you. Where do you guys given all the crosswinds out there geopolitical issues economic issues, where do you guys see value these days?
So the big value for us I think is a theme which is just stay invested. The idea that you play these ping pong headlines. That doesn't work for anyone.
So what we found value in since the beginning we continue to find value in. That specifically is favoring US over Europe. Um just take the macro backdrop.
We think the US is going to grow at 2.3% this year. We think the Euro area grows at 0.7%.
Okay.
When you have that difference of outcomes uh that will lead to a different support for the different instruments whether that be rates products or spread products. Um within spreads we still think that there's a lot of interesting things in structured product. Uh specifically one area that got beat up a little bit in January and February on the back of the AI disruption with CLOs.
The idea was single Bs within bank loans have a lot of software. There's 15% software in bank loans versus the 5% that's in high yield. Um as a result loans are the underlying of a CLO.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- iran uncertainty
- oil prices
- equities
- us economy resilience
- fed chair nomination
Companies and tickers mentioned
- GS
- RJF
- Goldman Sachs Asset Management
- Clear Harbor Asset Management
- Bloomberg Intelligence
- Bloomberg
- Bank of Nassau
- Raymond James
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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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