RBC's Lori Calvasina Talks Markets for H2 2026

**Tom Keene** (0:00)
Lori Calvasina loves when I do foreign exchange here. SpaceX bid, I mean, nobody's talking, it's like old news.

**Paul Sweeney** (0:06)
Yeah, it is.

**Tom Keene** (0:07)
But there was 162 and after 163
Joining us from RBC after an incredible weekend, Lori Calvasina survived the weekend. Did you try to take one hour off this weekend?

**Lori Calvasina** (0:23)
I did, you know, I went to my in-laws yesterday. My husband took the kids to the pool and I fell asleep on the couch. Good, so I got my nap in.

**Tom Keene** (0:31)
Boy, does that sound like the surveillance nap, the Royal Bank of Canada nap on the 4th of July. How do you rewrite your June 30 essay of two weeks ago?

**Lori Calvasina** (0:45)
So look, there's nothing that's really changed since our mid-year outlook. You know, I think we still have this list of things that we think could present short-term tactical risks to the market, but we view those as things that might generate something like a five to 10% drawdown at worst.
You know, those are things like the mid-term elections later this year. I know, you know, there's a lot of stories starting to percolate there, and interest-run clients starting to percolate as well. At some point, we'll deal with 2027 earnings growth expectations. We're not there yet. We're still sort of sorting through 2026, but that's something to keep on your radar as well. And it feels like interest rate fears have eased back a little bit, but that's something also to keep on our radar. I know there's just a whole range of outcomes predicted around the street right now. Some people looking for cuts, some people looking for hikes, but we do sort of keep that hike risk on the radar.
But you know, Tom, we really, with the price target, we try to be longer term. We've recast it this year from a December 31st number to a 12 month forward number. We update it once a month. We did a little bit later last month than we probably should have, but we had a number of events to get through. And so we upped our target a little bit to 8150 Healthy, not heroic. We still think that the earnings strength, the earnings tailwind is offsetting pressures on the PE from the trickier rates and inflation environment. So no real change.

**Paul Sweeney** (2:00)
What is the AI theme in your work these days? I guess we all started our own AI investing by just buying the chips, which is still a way to go, no doubt. But is there other ways to play AI that you and your team are thinking about?

**Lori Calvasina** (2:13)
So, you know, I think it started out as sort of a mag seven type story, right? And then we saw in the earnings data that the AI trade was really sort of broadening out this year. And then the semis were front and center and we were kind of at peak revisions there on earnings. You've had expensive valuations, so people are looking around for other opportunities. And frankly, Paul, that's been a consistent conversation for the last two months, including last week. Okay. And I think that, you know, we've got to sort of look at the earnings growth trajectory over the course of the next year. I think the broadening we've been seeing recently could go farther. But at the same time, I still expect that earnings story to favor the AI centric names. So we think the market will come back to that after the valuation correction has been solved. But, you know, I'll give you one example. Our energy conference at RBC in early June, and we have a rock star line up of companies.
They all talked about AI.

**Tom Keene** (3:03)
Stop. You mean the Halima Croft moment.

**Lori Calvasina** (3:06)
Yeah. Well, Halima did our panel. I only went to the first day, but on the first day of the conference, Halima did a fantastic lunch panel.

**Tom Keene** (3:14)
Did her people let you speak to her?

**Lori Calvasina** (3:17)
We're very good friends. We talk all the time. But, you know, it was funny, outside of Halima's presentation, which was all about sort of the Iran War and the oil price dynamics, you know, I was listening to a bunch of energy companies talking about how they're helping power data centers.
So I guess my point, you know, going back to Paul's original question, is increasingly investors are going to be looking for how AI affects, you know, kind of the end users. And we're still in the early stages of that right now.

**Tom Keene** (3:44)