Young Americans Living In 'Treat Economy': Kevin Gordon

Watch on YouTube ↗  |  August 21, 2026 at 21:28  |  9:05  |  Bloomberg Markets
Speakers
Kevin Gordon — Head of Macro Research and Strategy, Schwab

Summary

Kevin Gordon discusses how younger Americans no longer see housing as the main wealth builder and are instead shifting into stocks, while also blurring investing with gambling. He argues the bond backdrop is favorable at short-to-intermediate duration rather than the long end. He also sees the equity market in a healthy rotational phase favoring equal-weight and small caps over Mag 7 leadership.

  • Gen Z and young millennials view housing as unattainable and increasingly use the stock market as a wealth builder.
  • A 'treat economy' is emerging where young people favor small discretionary treats over saving for big down payments.
  • Gambling is being confused with investing, but long-term traditional asset classes have better empirical outcomes.
  • Schwab's bond view is favorable below duration, not necessarily the 10-year long end.
  • Market breadth is improving, with equal-weighted S&P and small caps leading while Mag 7 cedes leadership.
  • The rotation differs from late 2021 because breadth is not deteriorating, reducing bear-market signal risk.
  • Large US debt and deficits are becoming accepted as the new norm, especially among younger investors.
Ideas
Kevin Gordon Head of Macro Research and Strategy, Schwab 0:42
Young investors favor stocks over housing.
Gen Z and younger millennials increasingly do not view housing as a wealth generator because housing is frozen and out of reach; they are shifting money into the stock market instead of saving for large down payments. This creates a different, ongoing source of demand for equities.
SPY MED
Kevin Gordon Head of Macro Research and Strategy, Schwab 3:54
Favor short-to-intermediate bonds over long end.
Schwab's guidance is that the bond backdrop is favorable from a coupon and yield perspective, but not necessarily out to the long end or the 10-year; the preferred exposure is right below duration, meaning short-to-intermediate duration bonds.
Short-to-intermediate duration bonds HIGH
Kevin Gordon Head of Macro Research and Strategy, Schwab 3:54
Favor short-to-intermediate bonds over long end.
Schwab's guidance is that the bond backdrop is favorable from a coupon and yield perspective, but not necessarily out to the long end or the 10-year; the preferred exposure is right below duration, meaning short-to-intermediate duration bonds.
TLT HIGH
Kevin Gordon Head of Macro Research and Strategy, Schwab 4:54
Favor equal-weight S&P and small caps.
The market is in a multi-year rotation and breadth phase rather than narrow mega-cap leadership. The largest Mag 7 companies are no longer automatically the best performers; leadership is broadening across the S&P 500, with more than 70% of companies above their 200-day moving average, and small caps are the poster child. Unlike late 2021, breadth is improving, so this rotation is not signaling a bear market.
MAGS HIGH
Kevin Gordon Head of Macro Research and Strategy, Schwab 4:54
Favor equal-weight S&P and small caps.
The market is in a multi-year rotation and breadth phase rather than narrow mega-cap leadership. The largest Mag 7 companies are no longer automatically the best performers; leadership is broadening across the S&P 500, with more than 70% of companies above their 200-day moving average, and small caps are the poster child. Unlike late 2021, breadth is improving, so this rotation is not signaling a bear market.
RSP IWM HIGH
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This Bloomberg Markets video, published August 21, 2026, features Kevin Gordon discussing SPY, Short-to-intermediate duration bonds, TLT, MAGS, RSP, IWM. 5 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Kevin Gordon  · Tickers: SPY, Short-to-intermediate duration bonds, TLT, MAGS, RSP, IWM