What if It's Still Early? | TCAF 244

Watch on YouTube ↗  |  May 29, 2026 at 13:00  |  1:07:23  |  The Compound News
Speakers
Denise Chisholm — Director of Quantitative Market Strategy, Fidelity Investments
Josh Brown — CEO, Ritholtz Wealth Management
Michael Batnick — Managing Partner, Ritholtz Wealth Management

Summary

Denise Chisholm of Fidelity discusses the broadening earnings recovery beyond the Magnificent Seven, arguing that semiconductors' rally is supported by earnings and that multiple compression is a bullish setup. She also addresses inflation, Fed policy, and the IPO wave, concluding that the market remains sober and that small-cap earnings are at the early stage of a recovery.

  • Earnings growth for the S&P 493 (ex-Mag7) is just beginning after a three-year contraction.
  • Semiconductors have rallied sharply but are backed by unprecedented earnings growth and are not in a bubble.
  • Multiple compression amid strong earnings creates a favorable risk/reward for the S&P 500.
  • Small-cap earnings (Russell 2000) recovery is in its early stages, driven by a manufacturing rebound.
  • Higher oil prices historically make the Fed less likely to hike, reducing rate risk.
  • The upcoming IPO wave (SpaceX, OpenAI, Anthropic) is large but not anomalous relative to market size.
  • High-beta tech stocks are rallying but this is a normal cyclical pattern, not a mania.
  • Investor fear remains elevated, supporting further equity gains.
Trade Ideas
Denise Chisholm Director of Quantitative Market Strategy, Fidelity Investments 18:03
Multiple compression with earnings growth bullish
The S&P 500 is experiencing rare multiple compression while earnings grow strongly, creating a favorable setup. Investor fear remains elevated (low VIX relative to history, high put/call ratio), and valuations are not a reliable timing signal. The market is sober and can continue to climb the wall of worry as long as earnings hold up.
SPY MED
Denise Chisholm Director of Quantitative Market Strategy, Fidelity Investments 28:01
Semis supported by earnings, not bubble
Semiconductors have rallied 70-100% but this is backed by unprecedented earnings growth, not speculation. The price move is exactly in line with earnings, and valuation is in the bottom quartile historically, historically leading to 70% odds of further outperformance over the next 12 months. The business cycle may have lengthened, making the current run more sustainable.
SOXX HIGH
Denise Chisholm Director of Quantitative Market Strategy, Fidelity Investments 40:12
S&P 493 earnings recovery is just starting
Earnings growth for the S&P 493 (stocks outside the Magnificent Seven) is just beginning after a three-year contraction, with only four months into the recovery. This broadening is underappreciated and suggests sustained upside for non-Mag7 equities as margin expansion and earnings recovery continue symmetrically.
S&P 493 HIGH
Denise Chisholm Director of Quantitative Market Strategy, Fidelity Investments 44:58
Russell 2000 earnings recovery just beginning
Small-cap earnings (Russell 2000) are at the very beginning of a recovery after a three-year manufacturing recession. ISM new orders have inflected higher, and earnings for non-earners are flipping positive. This cycle has just started and could persist for years, supported by a broader manufacturing recovery.
IWM MED
Up Next
6:46
NYC approves pied-à-terre tax: The Corcoran Group’s Noble Black on the impact on wealthy homeowners
CNBC · May 29
0:43
Bessent Defends Putting Trump's Face on Special $250 Bill
Bloomberg Markets · May 29
49:44
How To Trade The AI Productivity Boom | Weekly Roundup
Forward Guidance · May 29
4:50
How ETF investors are getting in on SpaceX IPO and boom in space investing
CNBC · May 29
1:02:16
Why’s Everyone So Bearish, Robinhood's AI Agent and SoFi's Stablecoin Launch
Empire · May 29

This The Compound News video, published May 29, 2026, features Denise Chisholm discussing SPY, SOXX, S&P 493, IWM. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Denise Chisholm  · Tickers: SPY, SOXX, S&P 493, IWM