Bull Market Intact, Rotation Underway, Liquidity Decelerating (with Lisa Abramowicz, Annmarie Hordern)

Mike Wilson argues the bull market is intact and earnings-driven. He expects a rotation from semiconductors into pro-cyclical areas like regional banks and consumer goods, inspired by lower oil prices. He notes liquidity is decelerating, which could lead to a summer correction, but doesn't see it killing the bull market.

Yields

NDX volatile , short term, interviewee implicit

implicit

RUT up

Oil cautious down , medium term, interviewee explicit

explicit

Metals

USD

Morgan Stanley 9.0
Investment Bank $1600.00B
Mike Wilson 9.0

Bull Market Intact, Rotation Underway, Liquidity Decelerating (with Lisa Abramowicz, Annmarie Hordern)

ndx

He expects a rotation out of tech/semiconductors into other areas, implying near-term volatility for the NDX.

rut

The next rotation is into some of the areas you mentioned like regional banks and consumer goods, which are asymmetrically positively inspired by oil prices coming down.

2 calls

+11

slightly better than random

5/27/2026 1:06:05 AM	medium term cautious up	20 days later	-0.63%	-0.32%
11/22/2025 1:57:04 AM	medium term up	21 days later	+4.82%	+4.82%

wti

The fact that oil could only get to $125 is a strong signal that the world is resilient in finding energy supply. That is a very bearish view for oil going forward.

6 calls

-20

consistently off direction or weak follow-through

5/27/2026 1:06:05 AM	medium term up	20 days later	-13.62%	-13.62%
5/12/2026 6:55:36 PM	short term up	5 days later	+7.56%	+7.56%
5/7/2026 7:48:56 PM	medium term cautious up	20 days later	-6.83%	-3.42%
3/28/2026 12:19:11 AM	medium term up	21 days later	-12.90%	-12.90%
3/12/2026 10:06:31 AM	short term up	5 days later	-2.42%	-2.42%
1/5/2026 1:42:32 PM	short term cautious down	6 days later	+4.15%	-2.07%

Show all 6 wti results

Mike Wilson

It's an earnings-driven bull market. Multiples are coming down, but earnings have been so good that the market can still go up. The next phase is a rotation into areas where earnings growth is underappreciated, like regional banks and consumer goods, which are inspired by lower oil prices.
Lisa Abramowicz

How much does the SpaceX rally torpedo the thesis that the rally is driven by fundamentals?
Mike Wilson

Markets are driven by fundamentals and animal spirits simultaneously. It's a little frothy in some areas, like semiconductors, but that's a healthy development as long as there is someplace else to go. We think this is a normal transition.
Annmarie Hordern

What if we get a hawkish Kevin Warsh? Could that hurt the rotation?
Mike Wilson

We already know what's happening. Liquidity is decelerating. The RMP has gone from 40 billion to 10 billion a month. That deceleration is already in place. That's where you can have a summer correction. But the rotation in a down tape is a signal of a leadership change.
Annmarie Hordern

What is the next risk on the horizon? Could the president restarting strikes be disruptive?
Mike Wilson

The market has moved past the war. What we learned is how much supply is out there. The fact that oil could only get to $125 is a strong signal that the world is resilient in finding energy supply. That is a very bearish view for oil going forward.
Lisa Abramowicz

Do you think the bullish trade on commodities is ending?
Mike Wilson

Commodities have done well because of the robust liquidity picture. That is now decelerating. Multiples have come down because we are later in the earnings cycle. The combination of peak rate of change on earnings revisions and decelerating liquidity tells me we are in a corrective mode.
Lisa Abramowicz

Do you expect Fed Chair Kevin Warsh to pull back some of this liquidity?
Mike Wilson

It's already happening. The path has been set. The question is what he will do going forward. I think the Fed and Treasury will provide more liquidity if they need to, but right now they don't need to because funding markets are good. We kind of need the markets to pressure them to provide more liquidity.
Lisa Abramowicz

Do you think the market could still hit your 8000 target on the S&P by year-end if you see a rotation away from hyperscalers and semiconductors?
Mike Wilson

Yes, because I don't expect these stocks to correct more than 5-10%. They will correct and come back. I don't anticipate this is the end of the AI cycle. I am just saying the relative outperformance doesn't make sense given the relative earnings revisions in other areas. The rotation doesn't kill the bull market.

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