Bloomberg Surveillance 7/27/2026

Watch on YouTube ↗ | July 27, 2026 at 15:27 | 2:24:25 | Bloomberg Markets

Speakers

Seema Shah — Chief Global Strategist, Principal Asset Management

Blake Gwinn — RBC Capital Markets

Lisa Shalett — Chief Investment Officer, Morgan Stanley Wealth Management

Amanda Lynam — Chief Credit Strategist, Goldman Sachs

Savita Subramanian — Head of US Equity & Quantitative Strategy, Bank of America

Tyler Radke — Citi Senior Equity Research Analyst

Frank Lee — Analyst, HSBC

Summary

The episode previews a critical week with the Fed decision overshadowed by deep divisions and a potential hawkish hold, and mega-cap tech earnings (Microsoft, Meta, Amazon, Apple) where the market is no longer rewarding good news. Oil prices tumble as US-Iran strikes pause, but bond yields remain elevated. Guests recommend rotating from tech into financials and defensive sectors, express caution on credit and bonds, and single out Microsoft and large-cap value as favored positions.

Fed meeting is unusually live with a significant chance of dissent; base case is a hold but the door is open to future hikes.
Big tech earnings face an insurmountable bar; Intel and Alphabet sold off on good results, signaling a narrative shift away from AI capex euphoria.
Oil drops over 8% after a three-day pause in US strikes on Iran, yet bond yields barely budge, reflecting persistent inflation fears.
Seema Shah and Lisa Shalett advocate rotating into financials and defensive sectors (energy, utilities, REITs, consumer staples) while trimming semiconductor exposure.
Blake Gwinn argues the path to lower yields is extremely narrow, leaving bonds biased to the downside.
Savita Subramanian sees mega-cap tech as fully priced and recommends large-cap value for inflation-protected income.
Tyler Radke is bullish on Microsoft, citing Azure reacceleration, Copilot adoption, and free cash flow resilience.
Amanda Lynam warns that investment-grade credit spreads are at a tension point, with risks skewed wider amid heavy AI-related issuance.

Ideas

Seema Shah Chief Global Strategist, Principal Asset Management 5:53

Financials benefit from AI rotation trade.

Tech valuations are stretched and the market is now demanding more than strong earnings—it wants evidence of positive cash flow and AI monetization. This creates a rotation into other opportunities, with financials as a key beneficiary of AI productivity gains and a constructive economy.

Blake Gwinn RBC Capital Markets 46:20

Short Treasuries as yields stay elevated.

It is very difficult to find a path to lower yields without a severe correction or recession. Yields have risen in lockstep with oil but are not retracing on the way down, indicating an asymmetric bias higher. The risks to yields remain tilted to the upside.

Lisa Shalett Chief Investment Officer, Morgan Stanley Wealth Management 56:31

Rotate to defensive sectors, avoid semiconductors.

The market has stopped rewarding good news, signaling a narrative shift where more capex is no longer viewed as more. To manage this, we are moving into defensive, income-oriented sectors—energy, utilities, REITs, health care, consumer staples—and taking profits in semiconductors.

Lisa Shalett Chief Investment Officer, Morgan Stanley Wealth Management 56:31

Rotate to defensive sectors, avoid semiconductors.

The market has stopped rewarding good news, signaling a narrative shift where more capex is no longer viewed as more. To manage this, we are moving into defensive, income-oriented sectors—energy, utilities, REITs, health care, consumer staples—and taking profits in semiconductors.

Amanda Lynam Chief Credit Strategist, Goldman Sachs 85:34

Investment grade credit risks skewed wider.

The investment grade credit market is approaching a tension point where risks are skewed wider. While spreads remain tight, the persistent left tail of borrowers not improving, higher commodity inputs, and rising cost of capital are starting to pressure credit, especially AI-related issuance.

Savita Subramanian Head of US Equity & Quantitative Strategy, Bank of America 108:14

Prefer large-cap value over mega-cap tech.

Good news in tech is fully priced in; returns on invested capital are thinning and multiples are hard to justify. At the same time, retirees sitting on $7 trillion of cash will seek inflation-protected income, favoring large-cap value stocks, REITs, and MLPs over mega-cap growth.

Savita Subramanian Head of US Equity & Quantitative Strategy, Bank of America 108:14

Prefer large-cap value over mega-cap tech.

Good news in tech is fully priced in; returns on invested capital are thinning and multiples are hard to justify. At the same time, retirees sitting on $7 trillion of cash will seek inflation-protected income, favoring large-cap value stocks, REITs, and MLPs over mega-cap growth.

Tyler Radke Citi Senior Equity Research Analyst 116:24

Microsoft's AI monetization and Azure reacceleration.

Microsoft will remain free cash flow positive even with aggressive capex. Azure is re-accelerating and sold out for quarters, while Copilot is reaching mainstream adoption, adding a second leg to growth. The stock is trading near multi-year valuation lows, making it very attractive.

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