Bloomberg Surveillance TV: September 17th, 2026

Lisa Abramowitz (0:02)

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Jonathan Ferro (0:11)

This is the Bloomberg Surveillance podcast. I'm Jonathan Ferro along with Lisa Abramowitz 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 9 AM 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 and bonds finding their footing following the first Fed rate increase in some three years. Julian Emanuel of Evercore writing, once the Fed starts hiking, even if it was known to be coming, stocks remain volatile. Julian joins us now for more. Julian, good morning.

Julian Emanuel (0:49)

Good morning.

Jonathan Ferro (0:50)

Volatile up market into year end. Is that how you see it?

Julian Emanuel (0:53)

We do. We do. We think, you know, there isn't runaway upside into year end. Our price target is modestly higher than here. But I think when you look at yesterday and today, what you've done is eliminate sort of the left and right tail fantasies of fixed income traders. So coming into yesterday, there was a very solid one and done crowd.

And that was completely taken off the table by Chair Warsh. And then this morning, you know, what we realize is yes, in fact, all the rhetoric of the last several months, about 2% being the goal is firm and it is real. And by doing that and establishing that, you've taken the other side of the equation off where we were getting I think the clients talking about 6% and 7% in the 10-year yield, not happening.

Jonathan Ferro (1:46)

You stand us down with now, the long end of the curve. We've down with that.

Julian Emanuel (1:51)

Some people that I know, and obviously you had one on the show yesterday, really see value here. And I think the fact that you are being true to trying to fight inflation here, buy the hike, buy the message that there's likely more to come, it provides a value opportunity in the long end.

Lisa Abramowitz (2:14)

Are you part of those people? Are you backing up the truck a little bit when it comes to long end bonds?

Julian Emanuel (2:19)

Well, and I think again, if you look at, if you're in global asset allocator and you look at stocks versus bonds this year, you probably should be rebalancing a little bit.

Jonathan Ferro (2:30)

Is the stock guy saying buy bonds? That's terrifying. Is that what just happened here?

Lisa Abramowitz (2:34)

Yes, but he doesn't want to say it, which is saying people, some people have seen value and people have a logical argument.

Julian Emanuel (2:40)

No, but think about it.

This call is more important than it's been in years because the fact is the bond market is more important for the global capital cycle than it's been in years because if you're taking pressure off the long end in treasuries, you are taking pressure off the long end in sovereigns. And ultimately, what you're doing is you're making issuance for the hyperscalers incrementally more easy.

Jonathan Ferro (3:05)

OK, so it's a good thing for the equity market, absolutely, stocks and bonds.

Julian Emanuel (3:08)

Absolutely.

Jonathan Ferro (3:09)

What do you think is the threat to this equity market? Because it has shown remarkable resilience in either direction in fixed income, yields up, yields down. Stocks have been OK. Stocks again this morning up by eight tenths of 1 percent. What are the developments on the horizon that might give you pause?

Julian Emanuel (3:22)

Well, so again, in our mind, it's this transmission mechanism from $100 oil to yields to hyperscaler debt issuance. The fact is, to your point, is that credit markets, which in our mind are the things to really focus on, have been very, very placid. You've had a little bit of volatility around some of these issuance announcement, but overall, very, very placid and very, very liquid. That's the biggest one.

Again, for us, is this idea that even though this last quarter's results were peak rates of growth in terms of earnings, we're still on track for a very strong rest of the year and 2027 That ultimately, if that story stays, is positive. And frankly, the sort of the AI safety story weaves into that significantly as well.

Lisa Abramowitz (4:26)

Potentially, the real talent into the end of the year is going to be the banks. And John was noting yesterday that the banks were falling out of bed in response to this decision. There are a couple of reasons why.