Bloomberg Television7 min
Stocks Climb as Buyers Step In Despite Nvidia Woes
Interview, Fireside Chat
- The market is expected to undergo a repricing to reflect the election sweep and Texas flip, with this process anticipated to align with election cycles and persist through the end of the week as investors reposition rather than panic.
- The firm maintains a 12-month forward view without adjusting year-end targets in the final months, anticipating that the equity market will likely establish a bottom soon rather than later despite current uncertainty regarding the recovery pace.
- Valuation stability at levels comparable to major drawdowns, including 2025 tariff lows, suggests a potential stand for the equity market, with S&P 500 and NASDAQ 100 data showing resilience while the Russell 2000 PE remains slightly below Iran war lows.
- A base case scenario excluding an AI CapEx slowdown or economic issues from midterms is favored, as these risks are not currently priced into the market, though major discussions on the situation are expected during the outlook season in January and February.
- Investor sentiment regarding AI has shifted with earnings focus moving from 2027 to 2028, accompanied by concerns that the CapEx cycle may be slowed or elongated rather than ended due to a lack of confidence in federal government support.
- Regional banks with indirect AI exposure anticipate potential impacts from an AI slowdown or rising interest rates, while market commentators warn that further rate increases could become problematic for capital expenditures.