Episode summary
Stocks Near All-Time High on Iran Peace Prospects | Bloomberg Surveillance
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Dean Curnutt, Patrick Murphy, Stephanie Roth, David Sowerby
Summary
The episode centers on how the Iran-related ceasefire and blockade fears rippled through volatility, crude oil, and equity positioning. Dean Curnutt says the VIX’s sharp drop reflects not just optimism, but also forced re-buying of risk as short positioning was covered and hedges were unwound. He argues the market has effectively round-tripped back toward pre-war levels, so investors need to separate genuine relief from mechanical flows.
Patrick Murphy focuses on the military and economic consequences of a Strait of Hormuz disruption, saying only so much can be achieved with air power and that diplomacy remains the only durable off-ramp. He warns that the war has already imposed large costs and that uncertainty is frustrating business and investors who want stable policy.
Stephanie Roth says the economy has not yet shown a clear hit to consumption, but expects energy costs to feed into inflation over the next couple of months, especially airfares. She keeps a 2.3% GDP growth view and argues the dollar’s reserve-currency role helps the U.S. absorb deficits and risk-off flows. David Sowerby stays constructive on equities, saying cash is unattractive, public stocks still offer the best place to compound wealth, and small caps look increasingly compelling.
Key takeaways
- Curnutt says the VIX’s collapse reflects both relief and forced repositioning, not just a clean ceasefire signal.
- Murphy argues a blockade or wider conflict would create major economic costs, but air power alone cannot deliver regime change.
- Roth expects higher energy costs to show up in inflation soon, especially through airfares, while still seeing 2.3% GDP growth.
- Sowerby says cash is not attractive and believes public equities remain the best long-term place to earn returns.
- Sowerby is constructive on small caps, citing attractive free cash flow yields and a broadening rotation away from the biggest growth names.
Notable quotes
“you have to appreciate the uniqueness of this specific risk event”
“I think there's some, but we've got to respect the positioning that got kind of um re-orchestrated as a result of of the ceasefire as well”
“you cannot have regime change with just air power”
“Cash is cash is trash compared to on an inflation-adjusted after-tax basis”
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. Dean Karnit with us now, founder CEO at MacroRisk Advisors. He is the surveillance Greek letter authority. Okay, so let's have some Can we do some math this early in the morning?
Let's give it a shot.
Let's go there. S equals VOT plus 1/2 GT squared. Okay, this is the way it is, folks.
It's physics envy. That's all this finance stuff of is. Dean Karnit, the rate of change is the delta.
The rate of change of the rate of change is the gamma. The gamma on the VIX is off the chart. How do you go from 31 to 18 in the VIX?
What does that signal? Well, you give the President of the United States a Twitter account and allow him to escalate and de-escalate through tweet. Um perhaps there's a new Greek called tweet gamma, which is you've just got to follow Truth Social.
Uh you have to appreciate the uniqueness of this specific risk event. Um Kevin Warsh once told me, "If you've seen one financial crisis, you've seen one financial crisis. There is commonality, but they're all unique.
Um a decade ago it was Brexit and we were following price pound wall. Right now it's crude and that's the epicenter of every single correlation out there. It drives the VIX.
It drives the MOVE Index, the S&P, credit spreads, and Trump drives crude.
Speak to global Wall Street right now listening across the nation and around the world. Dean Karnit, we've had a short cover.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- implied-realized volatility gap
- iran geopolitics
- strait of hormuz blockade
- monetary policy outlook
- 2026 earnings growth expectations
Companies and tickers mentioned
- Macro Risk Advisors
- Hilco Global
- Wolfe Research
- Ancora
Watch the episode
Watch “Stocks Near All-Time High on Iran Peace Prospects | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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