Bloomberg Surveillance 9/18/2026
Speakers
Max Kettner
— Chief Multi-Asset Strategist, HSBC
Steve Englander
— Global Head of G10 FX Research, Standard Chartered
Jack Caffrey
— Portfolio Manager, J.P. Morgan Asset Management
Erica Najarian
— UBS Financials Analyst
Aditya Bhave
— Economist, BofA Securities
Nadia Lovell
— UBS Global Wealth Management
Jim Bianco
— President, Bianco Research
Jeanne Sun
— Citi Wealth
Tobin Marcus
— Wolfe Research
Roland Lescure
— Minister of Economy, France
Sriram Krishnan
— former senior White House policy adviser on AI
Matt Witheiler
— Wellington Management
Cristina Aquino
— Anchor, Bloomberg
Summary
Bloomberg Surveillance covers a global hawkish rate backdrop after the Fed hike, the BOJ's split hike and a sticky inflation debate, while oil retreats from recent highs. Guests debate whether equities can keep climbing on earnings strength and how to position in banks, currencies, Europe, bonds and AI-related themes. The program also discusses the Trump-Xi summit, France's fiscal spread and the limits of developed-market fiscal space.
- Fed hike and hawkish commentary dominate rates discussion; BofA sees more hikes in October and December.
- The BOJ raised rates to a 31-year high, but the split decision weakened the yen.
- Oil retreats, yet Saudi supply cuts to European refiners and high diesel prices remain concerns.
- Max Kettner favors Nasdaq over small caps, semis, gold, Japan and euro-zone banks.
- Earnings strength is seen by several strategists as the main support for equities.
- Erika Najarian prefers large banks and Morgan Stanley on the capital-markets cycle.
- France's budget and the wider French-German spread are highlighted as a fiscal vulnerability.
- Strategists debate bond duration and the impact of higher yields, with AI and cybersecurity also in focus.
Ideas
Earnings strength lets equities absorb higher rates.
The equity market has already absorbed the prospect of higher rates: multiples have compressed sharply within the S&P 500, while global earnings keep beating and are strong outside tech across the U.S., Europe, Japan and EM. As long as earnings continue, stocks can chop higher, and bears or shorts risk a squeeze on any less-negative geopolitical catalyst.
Prefer Nasdaq over Russell 2000.
Tactically favors Nasdaq over Russell and small caps because hawkish front-end rate pricing is anchored; if long-end yields consolidate and oil retreats, that supports tech and growth and non-U.S. markets, while small caps remain less favored.
Prefer Nasdaq over Russell 2000.
Tactically favors Nasdaq over Russell and small caps because hawkish front-end rate pricing is anchored; if long-end yields consolidate and oil retreats, that supports tech and growth and non-U.S. markets, while small caps remain less favored.
Oil and yield relief support Nikkei.
If long-end yields consolidate and oil comes off, it supports non-U.S. equities like Japan; he sees a bit of exposure in the Nikkei.
Euro-zone banks profitability remains on a tear.
Even with concern about peak U.S. investment-banking earnings, that has little to do with euro-zone banks, whose profitability is still on a tear.
Gold is a good fiscal/real-rate hedge.
Gold remains a good hedge whether real rates come off or markets get renewed concerns about fiscal sustainability and debt.
Semiconductors still attractive, especially memory names.
Semis still look attractive, with memory names technically as beaten up as in July; for investors wanting deeper tech exposure than Nasdaq, semiconductors are the preferred area.
Buy dollars on growth and rate differentials.
Short-term he sees broad U.S. dollar strength because U.S. growth and tech are strong, rates are high, and Warsh removed the fiscal-dominance risk premium that had weakened the dollar; rate differentials and the ability of the U.S. to pay back debt support buying dollars.
Short yen on BOJ vagueness, dollar strength.
Short-term bet against the yen: the BOJ's split 7-2 hike with two dissents and vague hiking commitments made the bank look less hawkish than markets hoped, while broad U.S. dollar strength persists.
Earnings growth keeps equities attractive.
Equity markets remain an outstanding earnings-growth story: he and other managers look for 20%+ earnings gains next year, tied to AI and broader capex, supported by willing lenders and tight credit spreads. The expansion is on borrowed time, but the virtuous cycle can continue while money keeps flowing.
Prefer big banks over regional banks.
Prefers big banks over regionals: higher-for-longer rates pressure regional deposit costs and earnings, while large banks are more asset-sensitive, benefit from the short end going out, and are brokers to the capital-markets frenzy.
Prefer big banks over regional banks.
Prefers big banks over regionals: higher-for-longer rates pressure regional deposit costs and earnings, while large banks are more asset-sensitive, benefit from the short end going out, and are brokers to the capital-markets frenzy.
Morgan Stanley top pick on capital-markets/wealth.
Morgan Stanley is her top pick into earnings: it has produced leading returns and grows excess capital, is workplace administrator for nine of the ten largest private unicorns and 70% of the top 100 private companies by market cap, and its wealth franchise should benefit from the ECM pipeline.
More Fed hikes mean higher Treasury yields.
BofA expects two more Fed hikes, in October and December, because policy is not yet restrictive, core PCE is in the mid-to-high 2s or 3s, nominal consumer spending is running 6.3%, and unemployment is falling. The sooner the Fed does 75bp, the more likely it can stop; if unemployment falls below 4%, rates could go back to 5%.
Buy equity pullbacks; earnings drive market.
Earnings, not the Fed, drive the market. Recent earnings growth near 30% and expected 25% EPS growth this year should let stocks anchor to fundamentals; valuation pressure from higher rates is largely priced, and any pullback is likely shallow, so buy pullbacks.
Add Europe on manufacturing and diversification.
Likes Europe at current levels and advises adding some exposure because the manufacturing cycle is improving, AI and automation and industrials offer select opportunities, and Europe helps diversify.
Long-term Treasuries risky if Fed stops hiking.
The Fed's mistake was two years of cutting and holding rates down, not hiking. If the Fed keeps hiking, the bond market should settle with only marginally higher long yields; if it slows or stops, bond vigilantes could push long-term yields much higher, so long-duration Treasuries are unattractive.
Rates likely higher; stay conservative on bonds.
Rates are likely heading higher, not lower, across the front and long end because inflation remains sticky and CPI breadth is hot; bonds can play a balance or risk-off role but should be positioned conservatively.
Five percent rates don't justify de-risking equities.
The 5% yield level is not a reason to de-risk equities: in the 1990s, when rates were above 5%, equities still delivered strong forward returns, and current strong fundamentals and earnings growth support owning U.S. equities. The U.S. is the most sustainable and predictable risk exposure.
Europe vulnerable; prefer U.S. over Europe.
Europe is vulnerable because it is more exposed to high oil and energy prices and stretched consumers, while the U.S. economy is less energy-intensive and offers more predictable earnings; she prefers the U.S. over Europe.
Like tech supply-chain beneficiaries over hyperscalers.
She likes tech but focuses more on supply-chain bottlenecks than hyperscalers; hyperscaler capex is someone else's revenue, positioning in areas like semis has been washed out, and she wants exposure to the next AI implications.
Cyber investment accelerates with AI adoption.
Cyber is a theme she expects to get more headlines and more enterprise investment as AI adoption broadens; it complements all the other AI impulses and is one of the next implications for clients to have exposure to.
Up Next
This Bloomberg Markets video, published September 18, 2026, features Max Kettner, Steve Englander, Jack Caffrey, Erica Najarian, Aditya Bhave, Nadia Lovell, Jim Bianco, Jeanne Sun discussing SPY, QQQ, IWM, N225, EUFN, GLD, SMH, UUP, FXY, VT, KBE, KRE, MS, TLT, VGK, long-term U.S. Treasuries, XLK, CIBR. 22 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Max Kettner, Steve Englander, Jack Caffrey, Erica Najarian, Aditya Bhave, Nadia Lovell, Jim Bianco, Jeanne Sun · Tickers: SPY, QQQ, IWM, N225, EUFN, GLD, SMH, UUP, FXY, VT, KBE, KRE, MS, TLT, VGK, long-term U.S. Treasuries, XLK, CIBR