Mike Wilson

Wilson states the US is in a "new earnings and economic cycle" following the end of a rolling recession. Crucially, the median stock is now seeing double-digit earnings growth year-over-year, a shift from when growth was concentrated solely in Big Tech. When earnings growth broadens beyond the "Mag 7," valuation spreads typically narrow. This favors the "Average Stock" (Equal Weight S&P 500) and cyclical sectors (Financials, Industrials) over the heavy-weight tech plays that have dominated recent years. LONG the "Broadening Trade" via Equal Weight ETFs and cyclical sectors. A deterioration in earnings revisions or an exogenous shock (e.g., aggressive Fed hiking).

Wilson states the US is in a "new earnings and economic cycle" following the end of a rolling recession. Crucially, the median stock is now seeing double-digit earnings growth year-over-year, a shift from when growth was concentrated solely in Big Tech. When earnings growth broadens beyond the "Mag 7," valuation spreads typically narrow. This favors the "Average Stock" (Equal Weight S&P 500) and cyclical sectors (Financials, Industrials) over the heavy-weight tech plays that have dominated recent years. LONG the "Broadening Trade" via Equal Weight ETFs and cyclical sectors. A deterioration in earnings revisions or an exogenous shock (e.g., aggressive Fed hiking).

Wilson states the US is in a "new earnings and economic cycle" following the end of a rolling recession. Crucially, the median stock is now seeing double-digit earnings growth year-over-year, a shift from when growth was concentrated solely in Big Tech. When earnings growth broadens beyond the "Mag 7," valuation spreads typically narrow. This favors the "Average Stock" (Equal Weight S&P 500) and cyclical sectors (Financials, Industrials) over the heavy-weight tech plays that have dominated recent years. LONG the "Broadening Trade" via Equal Weight ETFs and cyclical sectors. A deterioration in earnings revisions or an exogenous shock (e.g., aggressive Fed hiking).

Wilson states the US is in a "new earnings and economic cycle" following the end of a rolling recession. Crucially, the median stock is now seeing double-digit earnings growth year-over-year, a shift from when growth was concentrated solely in Big Tech. When earnings growth broadens beyond the "Mag 7," valuation spreads typically narrow. This favors the "Average Stock" (Equal Weight S&P 500) and cyclical sectors (Financials, Industrials) over the heavy-weight tech plays that have dominated recent years. LONG the "Broadening Trade" via Equal Weight ETFs and cyclical sectors. A deterioration in earnings revisions or an exogenous shock (e.g., aggressive Fed hiking).

Consumer goods, industrial stocks, and financials were pummeled when oil prices rose, but with earnings broadening, these areas are attractive. Morgan Stanley doubled down on them three weeks ago.

Speaker advocates for a portfolio shift from traditional 60/40 to a 60/20/20 model, with the 20% alternatives allocation including gold as a defensive asset. In a fiscal-dominant, inflationary regime, gold protects against currency debasement and serves as a hedge when the defensive function of long-duration bonds is compromised. Long gold as a strategic, non-yielding asset for portfolio diversification and inflation hedging. A return to a Volcker-like Fed prioritizing inflation fighting above all else, driving real rates sharply higher.

Speaker states he was "much more bullish on the metals and some of the materials than we were on energy" and currently thinks "the better trade now" is to fade energy and go back to materials/metals. Metals and materials are leveraged to global industrial recovery and infrastructure capex (e.g., Big Beautiful Bill), without the geopolitical supply shock dynamics currently plaguing oil. Long non-energy minerals (metals, materials) as a preferred cyclical exposure within commodities. A global recession halting the industrial recovery and commodity demand.

Wilson argues it is "premature to kind of throw a cold blanket on the AI cycle" and explicitly states, "It's just getting going." The market is currently worried about AI CapEx ROI and labor disruption, causing volatility. Wilson identifies this as a temporary "testing period" rather than a structural end to the trend. If the cycle is "just getting going," current dips represent entry points before the next leg up. LONG AI and Tech exposure, looking past short-term noise. Disappointing earnings from hyperscalers or regulatory crackdowns on AI development.

Wilson argues it is "premature to kind of throw a cold blanket on the AI cycle" and explicitly states, "It's just getting going." The market is currently worried about AI CapEx ROI and labor disruption, causing volatility. Wilson identifies this as a temporary "testing period" rather than a structural end to the trend. If the cycle is "just getting going," current dips represent entry points before the next leg up. LONG AI and Tech exposure, looking past short-term noise. Disappointing earnings from hyperscalers or regulatory crackdowns on AI development.

Wilson states the US is in a "new earnings and economic cycle" following the end of a rolling recession. Crucially, the median stock is now seeing double-digit earnings growth year-over-year, a shift from when growth was concentrated solely in Big Tech. When earnings growth broadens beyond the "Mag 7," valuation spreads typically narrow. This favors the "Average Stock" (Equal Weight S&P 500) and cyclical sectors (Financials, Industrials) over the heavy-weight tech plays that have dominated recent years. LONG the "Broadening Trade" via Equal Weight ETFs and cyclical sectors. A deterioration in earnings revisions or an exogenous shock (e.g., aggressive Fed hiking).

Wilson states the US is in a "new earnings and economic cycle" following the end of a rolling recession. Crucially, the median stock is now seeing double-digit earnings growth year-over-year, a shift from when growth was concentrated solely in Big Tech. When earnings growth broadens beyond the "Mag 7," valuation spreads typically narrow. This favors the "Average Stock" (Equal Weight S&P 500) and cyclical sectors (Financials, Industrials) over the heavy-weight tech plays that have dominated recent years. LONG the "Broadening Trade" via Equal Weight ETFs and cyclical sectors. A deterioration in earnings revisions or an exogenous shock (e.g., aggressive Fed hiking).