Bloomberg Surveillance TV: September 1st, 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 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 slower as global bond yields climb near 20 year highs. Cameron Dawson of Newedge Wealth writing, we see potential for higher equity and bond volatility, wider credit spreads and a continued climb in rates. Cameron joins us now for more. Cam, good morning.

**Cameron Dawson** (0:49)
Good morning.

**Jonathan Ferro** (0:50)
It's good to see you. Look, risk assets have stood up really well in the face of this repricing and rates. I sense from the way you're thinking, you think that's about to change.

**Cameron Dawson** (0:57)
Well, I think that the reason why equities have been able to tolerate the rise in rates is because earnings have been so strong. If you look at the stats, the equity market says in P500 was up about 12 percent on a year to date basis as of yesterday. You looked at valuations, they're down about 12 percent and that gap between the two is because earnings have been so powerful. Earnings revisions have been really powerful. 26 and 27 earnings estimates are up 17 percent year to date. So you can tolerate a lot of rise in yields. If you look at the 10-year yield, it's up about 80 basis points year to date. That can be digested. But if you stop being able to increase earnings estimates, then it creates a challenge where you have less buffer to be able to tolerate a rise in yields and thus multiple compression.

**Jonathan Ferro** (1:40)
Do you think that's where we are now?

**Cameron Dawson** (1:41)
Well, I do think that 2Q is likely the peak in earnings growth rate. On the headline basis, certainly at 50 percent, but even if we remove some of those one-time gains at 30 percent, that looks to be the peak, we think, in earnings growth. I think it also is interesting in the context of ISM data that we get today. We're in an environment where you've had this big acceleration in ISM data, and I think it's important to remember, you typically sell good news and things like that, because it's mean reverting, you don't buy good news. It speaks to, we can't drive with the rear view mirror. It suggests that the big question is, how does it get much better from here? That also brings us back to this idea of financial conditions. Financial conditions are at their easiest level since 2021
We struggle to think at this point, how they get more easy, more stimulative, more loose from this point.

**SPEAKER_4** (2:29)
So what do you do in the meantime? Is this just a moment to get close to the ground?

**Cameron Dawson** (2:32)
Well, I think that waiting for some volatility to come certainly suggests that as we move through September, normal seasonality, we might get better buying opportunities. We're about 3% above our 100-day moving average, 7% above our 200-day moving average. We think that that weakness is ultimately buyable. We don't think that we're on the precipice of some kind of big earnings recession, meaning that would be something that you'd have a much deeper and more protracted type of correction. So we would be looking to be able to take advantage of this volatility as we see things like positioning and valuation reset.

**SPEAKER_4** (3:03)
If you do see evaluation reset, are there potential risks for the entirety of the AI ecosystem? Because a lot of these hyperscalers, their spending has been aided by the ability of one issuing stock and being able to issue bonds too to a market that widely resets it. What happens if there's more pushback?

**Cameron Dawson** (3:20)
I think that's the fascinating question, is most people will say, well, hyperscalers spending doesn't really care about where rates are. But if rates tighten financial conditions, which implies a compression in valuations, higher equity volatility, lower equity prices, does that challenge these companies in their ability to continue to spend because we know in 2027 that their free cash flow generation will go even more negative, which implies more reliance on capital markets to fill that gap. So you need strong equity markets. You need strong credit markets in order to continue to fund this spending. And if financial conditions tighten, it suggests that maybe that spending gets more challenged. And then you have a negative feedback loop because the weaker spending suggests weaker earnings and thus weaker stock prices. And I think that that would be the risk as we go into 2027