Equities have a goldilocks environment this year, says 3Fourteen's Warren Pies

Watch on YouTube ↗  |  January 16, 2026 at 21:20  |  4:07  |  CNBC
Speakers
Warren Pies — Founder, 3Fourteen Research

Summary

Warren Pies of 3Fourteen Research says the macro backdrop for 2026 is goldilocks for equities, supported by cyclical disinflation, fiscal expansion, and Fed rate cuts. He expects tech leadership to reassert after Mag-7 underperformance and the rally to broaden into non-tech AI beneficiaries and cyclicals. The main risk he flags is later overheating that could end Fed cuts and steepen the 2s10s curve.

  • Pies characterizes 2026 as a goldilocks environment for equities.
  • He cites cyclical disinflation, a weakening labor market, fiscal expansion, and Fed cuts as tailwinds.
  • He expects tech and Mag-7 leadership to reassert after early underperformance.
  • He sees non-tech AI beneficiaries and some cyclicals joining a broader rally.
  • He warns later overheating could end the Fed cut cycle and spark 2s10s curve steepening.
  • He views the main market risk as a late-2026 reheating scenario, not the current backdrop.
Ideas
Warren Pies Founder, 3Fourteen Research 0:31
Goldilocks macro backdrop favors equities this year
Pies argues the 2026 backdrop is goldilocks for equities: cyclical disinflation from shelter and cooperating oil, a weakening labor market that eases Fed inflation worries, roughly 1 percentage point of fiscal expansion from the One Big Beautiful Bill via tax rebates and bonus depreciation, and Fed rate cuts alongside steady growth and unemployment. He says this is a very good/great backdrop for equities.
Equities HIGH
Warren Pies Founder, 3Fourteen Research 2:44
Curve steepens late as Fed cuts end
Pies sees the main risk later in 2026 as overheating that ends the Fed's cutting cycle and drives a true 2s10s curve steepening, with the spread well over 100 basis points as the market starts to think the next move could be a hike rather than a cut. He calls this the catalyst for risk.
2s10s curve steepener MED
Warren Pies Founder, 3Fourteen Research 3:44
Tech leadership should reassert; Mag-7 weakness unsustainable
Pies says the last three years were unusually narrow and early 2026 breadth with 311 stocks beating the index is unusually high. He does not think Mag-7 underperformance is sustainable and expects tech to reassert market leadership.
XLK MAGS MED
Warren Pies Founder, 3Fourteen Research 3:53
Non-tech AI and cyclicals should participate
Pies expects the rally to broaden beyond tech, with non-tech AI beneficiaries and some cyclicality participating. He still expects 2026 to be broader than the last three years, though not as broad as January's extreme breadth.
AI-SECTOR XLY MED
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This CNBC video, published January 16, 2026, features Warren Pies discussing Equities, 2s10s curve steepener, XLK, MAGS, AI-SECTOR, XLY. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Warren Pies  · Tickers: Equities, 2s10s curve steepener, XLK, MAGS, AI-SECTOR, XLY