Episode summary
Tech Stocks Fall Before CPI as Bonds Edge Higher
Bloomberg Surveillance
· · Guests: Anna Wong, Ian Lyngen, Benjamin Wiltshire
Summary
Brian Belski argues that the market is moving from a multiple- and momentum-driven phase into a more earnings-driven one, and that investors are struggling to adjust. He says the broadening out is real, with smaller and mid-cap companies showing strong earnings, better operating performance, and improving free cash flow and cash generation. That, in his view, supports a longer-term rotation away from concentrated mega-cap leadership toward a wider set of stocks.
He also says the rotation into cyclical sectors and small caps is not just a short-term trade. Belsky ties it to fundamentals such as return on equity, return on invested capital, and attractive valuations, and says investors may later regret not owning more small-cap companies. He expects earnings growth to keep coming from financials, industrials, consumer discretionary, and communications services, not just technology.
On portfolio construction, Belsky defends concentrated but disciplined stock selection, saying his firm typically runs 50-stock portfolios rather than owning hundreds of names. He says they own some, but not all, of the “magic seven,” and he sees the recent pullback in software as part of a broader market checklist rather than a sign that technology is finished. He also dismisses the need for 24-hour equity trading, saying he wants time to sleep.
Key takeaways
- Belsky says the market is shifting from momentum and valuation expansion to an earnings-driven regime, which he thinks is less favorable but still constructive.
- He calls the move from mega-cap growth into small caps and cyclicals a longer-term rotation, not just a tactical trade.
- Belsky says smaller companies are showing better earnings than large caps and that free cash flow and cash balances are improving.
- He expects earnings growth to broaden into financials, industrials, consumer discretionary, and communications services.
- Belsky prefers concentrated portfolios of about 50 stocks and says owning every big tech winner is not necessary.
- He thinks 24-hour equity trading is unlikely, saying he would like to sleep a little.
Notable quotes
“we're transitioning, we're transitioning to more of an earnings driven market”
“the broadening out is real and it's showing up in the in the fundamental numbers”
“we think air is here to stay. We think it's going to be more of a diversified thing”
How the episode opens
We've never seen the margins of some of these companies, Tom. But I think more importantly, we haven't seen the consistency in earnings that I think people are missing. I think at the end of the day, this fourth year, the bull market that started in October of 2022, part of our big secular bull market call that we've had in place since 2009, 2010, we're transitioning, we're transitioning to more of an earnings driven market and traditionally and historically an earnings driven market, still positive, but not as positive as a multiple driven market, momentum driven market, which we've clearly been in since 20 since early 2023.
So I think investors are having a hard time understanding that. But I think the biggest thing too, is that the broadening out is real and it's showing up in the in the fundamental numbers where you're seeing smaller areas in the market, not just the S&P 500, but smaller cap companies are actually showing great earnings and better earnings than the large cap. But more importantly, something that you and I and Paul's been involved in conversation, too, is we talk about price of free cash flow and cash on these companies continue to grow.
And that's something to us that is very, very, very positive in terms of how we talk about our small cap portfolio that we offer clients. Brian One of the things we have seen over the last three months, let's call it is a little bit of a rotation out of some of that growth parts of the market into some more cyclical sectors of the market, maybe even small and mid-cap. Is that a short term trade?
Is that a longer term rotation? How do you think about that? I think it's a longer term rotation.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- cpi
- treasury yields
- tech to value rotation
- inflation expectations
- ai memory cycle
Companies and tickers mentioned
- CSCO
- APP
- FSLY
- LNVGY
- SFTBY
- BABA
- SSNLF
- NVDA
- BMO
- C
- Humilis Investment Strategies
- Cisco Systems
- AppLovin
- Fastly
- Anthropic PBC
- Public First
- Lenovo Group
- SoftBank Group
- OpenAI
- ByteDance
- Alibaba Group
- Samsung Electronics
- Nvidia
- BMO Capital Markets
- Citigroup
- Bloomberg Economics
- William Blair
Watch the episode
Watch “Tech Stocks Fall Before CPI as Bonds Edge Higher” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from 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 TV: November 10th, 2026 | Bloomberg Surveillance -
Stocks, Bonds Fall as CPI Data Fuel Fed-Hike Bets | 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.
