State Street's Macro Outlook (with Annmarie Hordern, David Gura)

explicit

implicit

RUT

Oil

Metals

USD

State Street Corporation 7.0
Commercial Bank $4000.00B
Marvin Loh 7.5

State Street's Macro Outlook (with Annmarie Hordern, David Gura)

ndx

The overall thesis is supportive for risk assets due to lower Fed rates and ongoing capital spend, particularly in tech/AI, which benefits NDX. The rationalization of capital in AI implies a healthy, selective bull market.

yields

that uncertainty pulls up U.S. yields, pulls up global yields. Rising Japanese yields due to BOJ policy uncertainty create upward pressure on U.S. and global yields, though not yet at concerning levels.

8 calls

no reliable edge (random outcomes)

9/30/2025 9:58:10 PM	short term cautious up	5 days later	+1.36%	+0.68%
8/22/2025 8:05:01 PM	short term cautious down	8 days later	+0.05%	-0.02%

Asks about the 'vegetation' on the tree that continues to support risk-taking, referencing Loh's prior comments.

Annmarie Hordern
Marvin Loh

Investors are willing to look through geopolitical noise. The environment is positive because we are talking about lower rates from the Fed, which is incredibly supportive. The capital spend associated with equity value drivers is still out there.

Asset values incorporate uncertainty quite quickly. I don't see anything on the horizon that really changes that positive ultimate environment.
Asks if rising Japanese yields are a risk to the U.S. story.

Annmarie Hordern
Marvin Loh

It is a risk. The Bank of Japan has the ability to cap that if they provide substance on how high they'll go to control inflation. Until then, that uncertainty pulls up U.S. yields, pulls up global yields.

Lower long yields are important for economic development. We're not at levels that create massive concern yet.
Asks where we are in the AI/capital spending narrative looking to 2026.

David Gura
Marvin Loh

We are still in early innings with AI integration. From an investment perspective, there are winners and losers people are picking now, which is healthy. The fact that we are starting to rationalize our capital is a good part of the process.

Just to say I will buy anything at whatever cost is where you wind up in trouble in financial markets.
Asks what gives him the most pause regarding capital rationalization.

David Gura
Marvin Loh

It is the capital side of things. The amount of debt out there and the fact that capital and debt is not unlimited. It shows a maturation of where we are in the cycle.

If large deals cost more, it's probably coming from somewhere else. Think about what parts of the market might be more affected. If capital is all going to one place (like AI), it means there is rationalization somewhere else.
Asks if money markets pricing in two Fed cuts next year is too much.

Annmarie Hordern
Marvin Loh

It is too much, but by one cut. One rate cut here or there doesn't make much difference. The reaction function is still to lower yields, which is ultimately supportive for risk assets.

The fact we haven't seen much movement in yields around this one versus two type of discussion means it is somewhat irrelevant. We are not talking about higher yields. That asymmetry is supportive.

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