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‘Pretty Neutral' on Stocks to Year's End: Calvasina

‘Pretty Neutral' on Stocks to Year's End: Calvasina

Bloomberga day ago
00:00
I've got to say, just looking through your note, you do seem a lot more measured than some of your Southside peers who start to dust off their bull case Upside scenario playbook. What has you remaining a little bit more conservative right now? So, look, I mean, markets have run up tremendously and we actually have done this work where we looked back at the market rebound nine months down the road off of things like the 2010 2011 growth scares, 2018, kind of all the big 10% plus drops except for the COVID recession of 2020 that we've seen since the GFC. And we are recovering faster than any of them and we're about where we deserve to be. If you look at the average of those in nine months time in December. So we think markets have already pulled forward a tremendous amount of good news. And that's not to say, you know, that we're feel super bearish from here. We feel pretty neutral, you know, looking at stocks through the end of the year. What do you make of the fact we have recovered so quickly? Is it a change in investor behavior? Is something different this time around from previous rebounds? So I think that what is really unusual is that perhaps far earlier than any point in time that I can remember in my career, people are already looking to next year. And if you go back to June, all I was hearing was 20, 26, 20, 26, 2026. We're done with 2025, you know, and as we're getting all these headlines, you know, on the trade deals, I'm sort of, you know, kind of laughing to myself in my head, like who was worried about the is certainly not any of the people I was talking to in June where there was an assumption that, you know, we didn't really know quite what all the details were, but that things, you know, we were going to get deals done right. There were just not a lot of concerns about tariffs in the meetings, frankly, that I had at the end of the second quarter. What about what you've heard from companies and how much concern they're expressing in this earnings season? I don't think that the corporate sentiment level matches what we've seen from investors and what we've seen priced into markets. And, you know, if you want to just sort of take my opinion out of it, look back at the Duke CFO survey, which came out right before reporting season, and we didn't see the same kind of inflection in sentiment that we had seen in things like the NFIB survey, things like the Eye Survey or even the consumer sentiment surveys. If you look at what we've sort of qualitatively been gathering the last couple of weeks, you know, we kind of just finished week to week one was all about financials and they sounded pretty good. You know, our tagline at the end of that was fine, but not fabulous. Maybe even they were a little bit more guarded than what we've been hearing from investors. Last week, though, we finally got both volume and breadth in terms of, you know, different industries and sectors participating. And it frankly did sound a bit more mixed. You know, we have had, you know, even as of last week, obviously not the news of the weekend, but we did have more clarity. And I was still seeing one company after another talking about fluidity was kind of the big word uncertainty. And certainly, you know, companies were saying things were better than the initial assumptions, but there was still some guarded ness.
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