Bloomberg Surveillance TV: October 6th, 2026

SPEAKER_1 (0:02)

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Jonathan Ferro (0:11)

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro, along with Lisa Abramowicz and Annmarie Hordern. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9am Eastern.

Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always on the Bloomberg Terminal and the Bloomberg Business app. We begin this out with stocks adding to gains as the tech-heavy Nasdaq sits at fresh records. Greg Boutle of BNP writing, there is no sign of a slowdown. More visibility on guidance and capex into 27 could create a fat right tail into year end. Greg joins us now for more. Greg, good morning. Good morning. I don't hear that discussed much at all. I imagine you don't either. A lot of people are talking about the risk to the downside into year end. Do you see it differently?

Greg Boutle (0:59)

There are a lot of risks out there, which is one of the reasons why we think we should respect the right tail, because people that we speak to have taken down risk because they are worried about the midterms, they are worried about deficits, they are worried about bond yields, they are worried about AI issuance. There is a whole kind of wall of worries, some of which are very tangible and real. But we also are in a very fierce earnings bull market.

Jonathan Ferro (1:19)

People might find it difficult to reconcile all time highs with you saying people are down in bank risk. It makes sense to that for people.

Greg Boutle (1:25)

I think you have to look a little bit under the hood. So there's two things. One, all time highs is quite a kind of dramatic statement. But the market is not that much higher from where it peaked in May.

And we are in a very strong environment for earnings. Also depends which market you're looking at. Because you could go further down the market cap spectrum to things like the small and mid caps. Things look far less rosy there.

SPEAKER_5 (1:45)

And when you talk to people, a lot of people are concerned about everything bad that can happen. Although sometimes when I bring it up, they roll their eyes at me. I'm curious whether you think that ultimately it is gas prices coming down that could be the catalyst for that broadening out, maybe an outperformance of some of the laggards and maybe a stabilization in some of the tech names.

Greg Boutle (2:03)

It's one of the things that could help.

It's probably necessary but not a sufficient condition. I think there are a long list of reasons why we've seen long end yields higher. Gas prices are definitely a part of that. But I think when we look at the earnings backdrop, it's very strong and the epicenter of that is still large cap tech. When we think about having long end rates at highs, rate volatility at highs, it's not obvious that's a good environment for some of the more old economy cyclicals and smaller cap companies.

SPEAKER_5 (2:31)

What part of this right tail risk comes from the idea of the United States being increasingly a haven amid turmoil elsewhere?

Greg Boutle (2:38)

That's always naturally something that provides a bit of a bid to US assets. But I think when we think really about right tail risk in US equities, it's really an earning story rather than a risk story.

SPEAKER_6 (2:49)

You mentioned the midterms as being something that continues to come up with clients as you're on the road. What exactly about the midterms are clients so worried about?

Greg Boutle (2:56)

I don't think people are that worried about the midterms, but it's more when you look out to the calendar at the end of October and the end of November, there are just an awful lot of catalysts. So we have the busiest week for earnings last week in October. That's also the week when we get the FOMC. The week after that, we have the midterms. So people are struggling to navigate those confluence of catalysts. We don't think the midterms is going to be a big risk event for equities, but it's just another thing to worry about against this backdrop of higher rates and essentially a long list of things.

SPEAKER_6 (3:24)

Looking down, though, to 2028, do you think potentially the midterms will offer up a little bit more insight on where policy is going when it comes to AI? Do you expect your clients worried about things like moratoriums and the slowing down of data centers and things like that?