Episode summary
It's A New World Order For Markets | Cameron Dawson
Thoughtful Money
· · 46 min · Guests: Cameron Dawson
Summary
Cameron Dawson argues that the 40-year downtrend in interest rates from 1982 to 2022 is over, and that a higher-cost-of-capital regime is now the defining macro backdrop for investors. She says the S&P 500’s resilience has been driven by extreme concentration in the MAG 7 and by very strong earnings from semiconductors and other AI-linked businesses, even as weaker parts of the market have already shown strain in credit, small caps, banks, and industrials. She expects some near-term consolidation in yields, but not a return to the old bond bull market.
Her bigger concern is 2027, when earnings growth is expected to slow materially. She says the market is currently leaning on an AI capex boom that has powered semiconductor revenues and margins, but that much of this growth is cyclical and capacity-driven rather than true end-user AI productivity gains. If AI spending slows, if frontier labs need more capital, or if margins at names like Micron compress, the knock-on effect could be much larger than many investors expect.
Even so, she does not think financial conditions are tight yet. Credit markets remain functional, liquidity is ample, and equity volatility is subdued, which helps explain why risk assets have stayed strong despite higher yields. Her preferred response is to stay in quality equities, consider municipals and cash yields carefully, and look for opportunities in private markets and secondaries where higher-for-longer rates create dislocations.
Key takeaways
- Cameron Dawson says the 1982-2022 downtrend in yields is over, so investors should assume a structurally higher cost of capital.
- She expects the S&P 500’s resilience to keep depending on the MAG 7 and AI-linked earnings concentration, which masks broader weakness.
- Dawson says consensus 2027 earnings growth of about 15% may be too optimistic after roughly 35% growth in 2026.
- She argues the AI boom has been driven mostly by capex and semiconductor operating leverage, not yet by broad productivity gains from AI adoption.
- Dawson says credit stress is emerging at the low end, but financial conditions are still easy enough that capital remains available.
- Her favored positioning is quality equities, attractive municipal-bond yields for high-tax clients, and selective private-market opportunities such as secondaries.
Notable quotes
“the downtrend in yields that persisted from for 40 years from 1982 to 2022 is over. It is dead. It is over”
“we're running at a pace of 35% growth for 2026. Really incredible. That's going to fall by more than half as we get into 27”
“one man's capex is another man's revenue”
“there isn't any immunity in totality to higher interest rates. There are just areas that are less immediately sensitive to higher interest rates”
How the episode opens
I think it's really really really vital to appreciate that the downtrend in yields that persisted from for 40 years from 1982 to 2022 is over. It is dead. It is over.
Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. Today we've got a very special discussion lined up with Cameron Dawson.
Uh Cameron is one of the best uh market researchers out there. Um she runs uh firm New Edge uh is it New Edge Financial?
New Edge Wealth.
New Edge Wealth. Thank you. Um and uh Cameron, it's been a while since you've been on the program.
A lot has happened in the world. Um cost of capital has been um rising quickly as these interest rates have been rising. Um, we're still seeing some stubborn stuff with inflation.
Um, we've got, uh, you know, kind of different, uh, crosswinds between the US Treasury and the Federal Reserve. Um, we're still at all-time highs pretty much uh, with the major indices. Yet, if you look under the hood, there's a lot of sectors that aren't performing very well in this world.
What are you telling clients, especially as you start to look to 2027? What are the themes you think are the ones that are most important to keep our eyes on and which one do you think are are going to drive the action the most next year?
Yeah, so much going on and yet there's times when you look at the market at least the equity market on a cap weighted basis and say why don't you care about any of it? — We've seen huge moves within interest rates of course oil prices being higher with geopolitical tensions. You've had shifts from expectations of a dovish Fed to start the year now to a hawkish Fed.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- bond yields
- ai earnings growth
- valuation compression
- credit stress
- ai capex vs productivity
Companies and tickers mentioned
- MU
- MSFT
- New Edge Wealth
- Micron Technology
- Microsoft
- OpenAI
Watch the episode
Watch “It's A New World Order For Markets | Cameron Dawson” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Thoughtful Money, this episode and its artwork belong to Adam Taggart | Thoughtful Money. Octagon is not affiliated with the show; this page is an independent summary.
