Introduces guest standing by year-end S&P price target of 7800, asks how market will experience upcoming earnings season.
speaker1
speaker2
Optimism has to hold given recent rally. Weakness in Q4 earnings will be overlooked because everyone knows earnings will decelerate. 8% YoY growth is above the usual 6% trend.
Asks how much a strategist would discount expected sequential deceleration in earnings growth, framing it as a transition before fiscal and monetary tailwinds.
speaker3
speaker2
You could discount some Q4 weakness. The key for the market is AI capex holding. It's too early to call a peak in AI capex; hyperscalers are unlikely to cut it as this is an AI arms race.
Asks for early read on the market for the year, noting metals and memory stocks are soaring while parts of AI trade are choppy.
speaker1
speaker2
Still likes the reflation side given fiscal tailwinds. We might be entering a restocking cycle, with first positive inventory reading in December after three years.
Confirms inventory levels have normalized after years of being high, allowing manufacturing to restart, and references a high Atlanta Fed tracking number.
speaker1
speaker2
Inventory levels are now normalized after three years of destocking. Companies are in wait-and-see mode regarding tariffs, but may restart stocking after the ruling, kickstarting manufacturing.