Wilmington Trust's Meghan Shue: In the short-term, some volatility & pullback is healthy development

explicit

Oil

Metals

USD

Wilmington Trust 7.0
Commercial Bank
Meghan Shue 8.0

Wilmington Trust's Meghan Shue: In the short-term, some volatility & pullback is healthy development

ndx

in the short term a little bit more volatility maybe a little bit more of a pullback actually is a healthy development for the market High momentum, low quality, higher beta parts of market rolling over after remarkable six-month run

1 calls

no reliable edge (random outcomes)

yields

we do think that the Fed will cut into some more. And then again, another three times in 2026 to get to a neutral rate of about 3% by the middle of the year

2 calls

-7

slightly worse than random

Should we treat market rebound as buying opportunity and what needs to happen for stability?

Carl
Megan Shue

Short-term more volatility and pullback is healthy development given remarkable six-month market run

The further up we go without normal pullback, the further potential fall when eventually rolling over; high momentum, low quality, higher beta parts of market rolling over
Megan Shue

Need reassurance about Fed cutting rates - expect cut in December and three more in 2026 to reach 3% neutral rate by mid-year

This supports lagging parts of market; also need jobs market stabilization with small business job cuts in five of last six months
How will rate cuts arrest AI-driven job weakness if corporates continue laying off workers due to technological innovation?

Carl
Megan Shue

Current job cuts may have some AI component but premature to attribute entirely to AI; more likely lagged effects of tariffs and weaker consumer

AI will aid some jobs and displace others as with any technological development; Fed can't address supply side labor shortages; looking for stabilization at low level, not resurgence

SignalTube

markets at a glance