Episode summary
Tech Rises as Iran War Looms Over NATO Summit | Bloomberg Surveillance
Bloomberg Surveillance
· · 30 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Joe Davis, Kelsey Berro, Andrew Slimmon, Becca Wasser
Summary
The discussion opened with a broadly constructive macro view: the labor market still looks close to full employment, policy is roughly neutral, and inflation should keep easing even if globalization stalls and re-shoring nudges prices higher over time. A guest from Vanguard argued that 2027 U.S. GDP could run near 3% because AI investment remains a powerful growth engine, even as oil’s retreat helps relieve some inflation pressure.
The bond conversation was similarly supportive. A guest from JPMorgan Asset Management said demand remains strong in investment grade and high yield because company fundamentals have held up through tariffs and the energy shock. She pointed to opportunities in the extended parts of investment-grade credit, including energy and utility hybrids, bank capital, and selected data-center financing, while also seeing value in foreign rates where central-bank tightening may be overpriced.
The equity segment centered on earnings revision strength and AI. A guest from Morgan Stanley said the market is underpricing the 2027 earnings boom and argued that AI will keep driving the bull market as long as scarcity in memory and computing power persists. The program closed with defense and NATO, where an analyst said the U.S. is badly behind in drone warfare, Europe wants more American commitment, and Poland stands out as a model ally that is being rewarded with renewed U.S. attention.
Key takeaways
- A guest from Vanguard said the U.S. labor market is roughly in balance and not as weak as some argue, with policy near neutral.
- The Vanguard guest expects 2027 U.S. growth around 3%, driven mainly by AI-related capital spending.
- A guest from JPMorgan Asset Management said investment-grade and high-yield credit still have strong demand because corporate fundamentals have held up well.
- The JPMorgan guest sees yield opportunities in extended investment-grade sectors such as energy, utility hybrids, bank capital, and some data-center deals.
- A guest from Morgan Stanley said earnings revisions are rising faster than prices, which supports the bull market more than multiple expansion does.
- An analyst on defense said the United States is massively behind in drone warfare and needs a faster, cheaper production model.
Notable quotes
“I think it's close to it, Tom. And again, what a wonderful way to start the week, uh, being on the show”
“we are pushing to 3% GDP growth next year for the United States that that's materially above expectations”
“the tech sector of the investment grade market has moved from you know 10% moving to 14 15%”
“AI is in a bubble. And again I go back to well if I look at the memory names right what's a bubble”
How the episode opens
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What a wonderful way to start the week. Joe Davis joins from Vanguard right now. I can't say enough about the clarity of his note. Joe, the thing that I notice in your note as we migrate, I mean, rounded up 5% and being inflammatory, 4.6% unemployment rate. Is that still a fully employed America?
Well, I think it's close to it, Tom. And again, what a wonderful way to start the week, uh, being on the show. Um again I the the labor the unemployment rate you know typically economists will say it's a lagging indicator.
I couldn't think of a more important one right now just because of these crossurrens, right? We have a labor supply in the United States that for some time was going to be muted or low number of people entering the workforce. At the same time, we've had the demand come down the past two years for a number of reasons.
I'd say it's roughly in balance. There are pockets of softness clearly versus the heady days of COVID 3, four, five years ago. But uh it is not as weak as some say that I would that that is clear to us.
Are we still under the guise of stimulus? I mean there was this stimulus that many people describe a third co stimulus as a Biden stimulus and then other stimuli from there on. Are we still gooseing the economy? — Uh I I' I'd say that's tough argument to push too hard, Tom.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai bull market
- global inflation
- fixed income opportunities
- nato summit
- iran war risk
Companies and tickers mentioned
- JPM
- MS
- JPMorgan Asset Management
- Morgan Stanley Investment Management
- Vanguard
- Bloomberg Economics
Watch the episode
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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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