Huge Shift: Biggest Movers This Decade To Awaken | Thomas Hayes
Speakers
Thomas Hayes
— Co-founder, Crypto Is Macro
Summary
Thomas Hayes of Great Hill Capital discusses the pending Trump fiscal bill, Fed policy, and his multi-year market framework. He argues lower 10-year Treasury yields and mortgage rates will unlock housing, that beaten-down consumer discretionary and autos should benefit from fiscal stimulus, and that small caps, value, and international equities should lead large-cap tech for the rest of the decade.
- Thomas Hayes sees the Trump tax/spending bill as a growth stimulus, with benefits for housing, autos, consumers, and Main Street over time.
- He criticizes Powell for being too restrictive and expects rate cuts or a dovish successor to push 10-year Treasury yields down to 3.5-3.7%.
- He favors housing-recovery ancillaries like building suppliers and QXO over homebuilders, citing margin risk for builders.
- He predicts the Unmagnificent 493 will outperform the Magnificent 7 as Mag 7 earnings growth decelerates and managers chase laggards.
- He recommends small/mid caps, value, and international equities over US mega-cap growth for the second half of the decade.
- He likes beaten-down consumer discretionary names tied to China recovery, including VF Corp, Estée Lauder, and Nike as a would-own name.
- He expects the S&P 500 to grind higher, consolidate into autumn, and finish the year stronger, but sees better alpha under the surface.
Ideas
Small caps lead for decade.
Hayes expects the Russell 2000 and small/mid-cap stocks to outperform large-cap technology not just in H2 2025 but for the second half of the decade, analogous to the 2001-2006 cycle when small caps, value, and international markets led after a stretched mega-cap/ZIRP period. He says the shift is driven by the end of the ZIRP era and by investors needing to buy laggards after being underpositioned.
Auto loan deduction boosts US autos.
The $10,000 interest deduction for new-car loans on vehicles built in America should accelerate auto sales, which have not recovered to pre-COVID levels even though the average US car is 13.5 years old. Hayes expects this to benefit US OEMs like Ford and General Motors and left-for-dead auto parts suppliers, while creating manufacturing jobs.
10-year yield falls to 3.5%.
The 10-year Treasury yield should fall to 3.50-3.70% because Treasury Secretary Bessent's SLR/bank-capital changes will increase bank demand for Treasuries, stablecoin GENIUS Act demand adds another buyer, and Treasury can issue short and buy long in an operation-twist-like move. Hayes expects a 30-70 bp reduction once implemented in late summer; 30-year mortgage rates below 6% follow.
10-year yield falls to 3.5%.
The 10-year Treasury yield should fall to 3.50-3.70% because Treasury Secretary Bessent's SLR/bank-capital changes will increase bank demand for Treasuries, stablecoin GENIUS Act demand adds another buyer, and Treasury can issue short and buy long in an operation-twist-like move. Hayes expects a 30-70 bp reduction once implemented in late summer; 30-year mortgage rates below 6% follow.
Housing recovery via building suppliers.
Mortgage rates below 6% should unlock massive housing demand, including boomers willing to trade 3% mortgages for 5.5% to extract equity. Hayes avoids homebuilders because of a coming margin race to the bottom and instead plays the recovery through building-supplier 'arms dealers'.
Housing recovery via building suppliers.
Mortgage rates below 6% should unlock massive housing demand, including boomers willing to trade 3% mortgages for 5.5% to extract equity. Hayes avoids homebuilders because of a coming margin race to the bottom and instead plays the recovery through building-supplier 'arms dealers'.
Brad Jacobs roll-up QXO wins.
QXO is a housing-recovery ancillary and building-products roll-up led by Brad Jacobs, already a big winner for Hayes; it acquired Beacon Roofing and is pursuing more tuck-in deals, giving it company-specific M&A upside.
493 outperforms Mag 7.
The S&P 493 ex-Magnificent 7 should outperform the Magnificent 7 because Mag 7 earnings growth is decelerating from over 30% to about 10.2% by Q1 2026 as heavy AI capex has uncertain ROI, while the 493's earnings growth is accelerating from negative to about 10.3%. Mag 7 multiples have not compressed to reflect this deceleration, and underweight institutional managers are being forced to buy laggards.
493 outperforms Mag 7.
The S&P 493 ex-Magnificent 7 should outperform the Magnificent 7 because Mag 7 earnings growth is decelerating from over 30% to about 10.2% by Q1 2026 as heavy AI capex has uncertain ROI, while the 493's earnings growth is accelerating from negative to about 10.3%. Mag 7 multiples have not compressed to reflect this deceleration, and underweight institutional managers are being forced to buy laggards.
Beaten-down consumer discretionary recovers.
Hayes likes beaten-down consumer discretionary as the tax bill, lower rates, rising real wages at the lower end, improving sentiment, and China's recovery support the US consumer. He says Main Street/regular Americans should do exceptionally well and discretionary stocks have been left for dead but are showing turnarounds.
China recovery supports consumer.
China is starting to recover with more stimulus and a consumption-focused policy shift, which supports China-exposed consumer discretionary names.
Would own Nike on recovery.
Nike is a beaten-down consumer discretionary name with a China-linked turnaround; Hayes says they do not own it but would own it.
Play VF Corp turnaround.
VF Corp is a consumer-discretionary turnaround Hayes is going to play with new management Brack and Daryl, tied to China recovery and an improving consumer, though he wants limited exposure.
Estée Lauder rebounds with China.
Estée Lauder is the global leader in premium skincare/cosmetics, was smashed by China weakness but maintained share across all regions including 99% in China; as global consumers recover, Hayes expects it to gain share from weaker competitors, supported by its family-controlled multi-brand portfolio.
Luxury spending recovers first.
High-end/luxury spending declines are 100% lagging, not leading; wealthy consumers cut back after a temporary 20-25% asset decline but will be first to recover as sentiment returns, and restaurant demand already shows resilience.
Value stocks outperform in cycle.
Value should outperform as part of the same 2001-2006-style cycle reversal, with small caps, value, and international leadership replacing the ZIRP-era mega-cap growth regime.
International stocks beat US equities.
International equities should outperform US equities over the next three to five years and through the second half of the decade, similar to 2001-2006. Hayes argues the cycle has shifted after the ZIRP era, and he expects a continued weaker dollar to support non-US relative performance; he says he has been pounding the table on international versus US.
US dollar continues weakening.
Hayes expects a continued weaker US dollar as part of the post-ZIRP multi-year cycle, which he sees supporting international equities and non-US relative performance.
S&P grinds higher this year.
Hayes expects the S&P 500 to push higher into earnings, consolidate from August through October, and finish the year stronger. He does not expect another 20% index move in three months and sees the index up roughly 9-11% over 9-12 months while better opportunities exist under the surface.
Up Next
This The David Lin Report video, published July 02, 2025, features Thomas Hayes discussing IWM, F, GM, Auto parts suppliers, 10-Year Treasury Yield, TLT, Building suppliers, XHB, QXO, Unmagnificent 493, MAGS, XLY, FXI, NKE, VFC, EL, LUXU, Value stocks, ACWX, USD, SPY. 19 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Thomas Hayes · Tickers: IWM, F, GM, Auto parts suppliers, 10-Year Treasury Yield, TLT, Building suppliers, XHB, QXO, Unmagnificent 493, MAGS, XLY, FXI, NKE, VFC, EL, LUXU, Value stocks, ACWX, USD, SPY