Episode summary
US Stocks and Treasuries Fall as Oil Pushes Higher; Iran Refuses to Soften Demands | Bloomberg...
Bloomberg Surveillance
· · 30 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr, Jess Menton · Guests: Lori Calvasina, Nimrit Kang, Henrietta Treyz, Rich Steinmeier
Summary
Rising bond yields, higher oil prices, and a still-stretchy equity market set the tone for a cautious discussion about what could happen into year-end. Lori Calvasina of RBC said the risk of a 5% to 10% S&P 500 drawdown has increased, pointing to the historical turbulence around Fed lift-offs and arguing that higher yields are adding a new layer of pressure. She framed market risk in tiers, with a garden-variety pullback near 5%, a growth-scare decline of 14% to 20%, and recession pricing taking much more out of the market.
Nimrit Kang of North Star Asset Management said the move in the 10-year Treasury toward 5.22% reflects a new regime of higher deficits, deglobalization, and recurring supply shocks. She argued that pain is already showing up in rate-sensitive and consumer-facing sectors, while AI-related stocks are masking broader weakness. Her view is that AI will only justify its massive capital spending if it shifts from infrastructure and builders toward broad-based monetization and earnings gains across users.
Henrietta Treyz focused on election and policy risk, saying investors should not assume the market has already seen peak stress. Rich Steinmeier of LPL Financial said wealth management clients are still favoring long-term positioning, while alternatives are taking a larger share of portfolios and AI is increasingly being used to improve advice delivery and efficiency.
Key takeaways
- Lori Calvasina of RBC said the market risk of a 5% to 10% S&P 500 drawdown has risen as bond yields climb.
- Calvasina said her base case is still a 5% to 10% pullback, with a 12-month S&P target of 8,150 and a conservative 10% haircut to earnings forecasts.
- Nimrit Kang said the 10-year Treasury at 5.22% reflects a lasting higher-rate regime driven by deficits, deglobalization, and supply shocks.
- Kang said AI leadership is masking weakness underneath the market, with equal-weight stocks lagging and rate-sensitive sectors already under pressure.
- Henrietta Treyz said investors should expect continued political and policy volatility into the election and the post-midterm period.
- Rich Steinmeier said LPL sees AI lifting advisor productivity, while the firm expects more portfolio demand for alternatives and less near-term profit taking.
Notable quotes
“we have said that we think risk of a 5 to 10% drawdown has risen”
“High deficits, you know, in in a time when we have booming economy, high debt”
“What's hiding it all is the resilience of the AI trade”
“we have not hit peak Trump. We have not hit the peak stress points of this election”
“our call is that we're at where our full year target is”
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.
Lori Calvasina, she covers this stuff for RBC Capital Markets. She's head of US Equity Strategy. Um It's been a good year so far, Lori, for stock market indexes. How do you think about the fourth quarter setup?
So, you know, we're we're not trying to make a call, you know, on December 31st per se, but we have said that we think risk of a 5 to 10% drawdown has risen. Um and in our weekly today we also said, you know, that's still our base case 5 to 10%, but every little bit you add here on the bond yield is pulling up a tier two risk. Um and I forget if it was last week or the week before, but we put out a piece.
Uh you know, we've had various things we're worried about, but we kind of homed in on uh the hiking cycle last week and it was really fascinating because we went back and we looked at all the lift-offs since the mid-1990s. We kicked out 2022 because that one was just longer and deeper and very different than the others. And otherwise, the median drawdown that you saw sort of at the beginning of the hiking cycles was about 9.6% and they ranged from about eight eight percent to about 14%.
So, you do tend to see some turbulence around lift-off and we haven't really gotten that yet. We had a sideways summer for the most part. Um but we think the risks are piling on.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us stocks
- treasury yields
- oil prices
- iran demands
- equity strategy
Companies and tickers mentioned
- LPL
- RBC
- North Star Asset Management
- Veda Partners
- LPL Financial
- Bloomberg
Watch the episode
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.
