January 1, 2026 • 16 mins
Every year, Wall Street’s top minds — strategists, economists and portfolio managers — pack their best ideas into dense market outlooks, often running a hundred or more pages apiece. And every year, Bloomberg senior markets editor Sam Potter distills those outlooks to capture the consensus and identify who’s breaking from the pack.
On today’s Big Take podcast, Sam joins host David Gura to discuss Wall Street’s year ahead: from AI’s continued dominance and the prospects for gold and bonds to Wall Street’s evolving appetite for risk and what analysts say to watch for in 2026.
Hosted by: David Gura Produced by: David Fox Reported By: Sam Potter Edited by: Jeff Grocott; Fact-checking by: Naomi Ng; Engineering by: Katie McMurran
Senior Producer: Naomi Shavin Senior Editor: Elisabeth Ponsot Deputy Executive Producer: Julia Weaver Executive Producer: Nicole Beemsterboer
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
This has been a busy stretch for Sam Potter, a
senior editor for Markets at Bloomberg, And it's like this
every year. Starting in mid November.
Speaker 1 (00:17):
That's when the very earliest outlooks for the next year
start to arrive on my desk, coming through email. I
generally let a little pile build up til I'm ready
to tackle them.
Speaker 2 (00:27):
Then Sam starts reading, looking for the big themes Wall
Street strategists and economists and portfolio managers expect will shape
the year ahead. It's a lot.
Speaker 1 (00:37):
I mean, there are dozens and dozens of these things,
and many of them run to hundreds of pages.
Speaker 2 (00:43):
For years now, Sam has boiled all that down, synthesizing
how some of the top names and finance are thinking
about the coming year. The end product is this amazing
tool you can find at Bloomberg dot com.
Speaker 1 (00:54):
What I try and do is take the top line
calls and then we piece them all together in the
feature and we make it searchable. You know, you can
filter buy the financial institution, or by the topic, or
buy the asset, and it allows you to compare and
contrust all the different calls.
Speaker 2 (01:12):
Sam identifies each firm's base case for the economy and
markets and what he's keeping an eye out for are
high conviction calls.
Speaker 1 (01:20):
Lots of them are very much they sit on the fence.
They say, well, this could happen all that conviction. We're optimistic,
but they're at risk. Or you get these ones that
try and be creative and thematic, and they will say,
here are the top five trends that we think will
shape humanity in the year's ahead. They are ultimately their
(01:42):
marketing tools, but some of them can be super interesting,
either super bullish or super bearish.
Speaker 2 (01:51):
It may not surprise you, given how twenty twenty five
shaped up, that the biggest theme for twenty twenty six
is artificial intelligence.
Speaker 1 (01:59):
The thing it sort of leapt out of me in
this year's outlet was this idea that everyone on Wall Street,
or seemingly everyone in Wall Street, is bullish about AI.
They talk of it as a game changing, revolutionary technology,
but at the same time, the biggest risk that most
of them see is that the AI investment cycle is overhyped,
(02:23):
that we could be in a bubble and that things
could turn ugly.
Speaker 2 (02:27):
And it wasn't lost on me as I talked to
Sam about all the work that went into this project,
that maybe AI, the technology that led markets to record highs,
could have made his job a lot easier.
Speaker 1 (02:39):
Actually, in the end, I made a point of not
using AI for this. I used the same method that
I was using seven years ago, which means possibly I'm
inserting my own bias and misfunctioning brain instead of AIS.
But at least it's consistent over the years.
Speaker 2 (02:58):
I'm David Gerat, and this is the take from Bloomberg
News today on the show, From AI to Geopolitical Risks
to Gold What Wall Street expects for twenty twenty six.
We're at this moment where more investors seem to be
questioning or thinking differently about AI's growth, in particular, how
(03:21):
much money is being poured into the infrastructure that power
is AI. How does Wall Street see that playing out
in twenty twenty six?
Speaker 1 (03:28):
On balance, they lean on optimism here. Most of them
see the transformative power of AI changing the way we work,
changing the way we innovate, boosting productivity. They also look
at the expenditure and say, well, who's paying for all this?
And in many cases, these multi multi billion dollar deals
(03:50):
that we see hit the headlines. The company behind them
is one of the tech megacaps, you know, heavily cash rich.
They can afford to make this expenditure until they see
returns on it. And these tech megacaps, their earnings are
still super solid. It's not like the dot com where
the firms that were throwing out these huge deals didn't
(04:13):
really have earnings potential, were very concentrated. You know. The
Magnificent Seven are highly diversifized companies with massive earnings potential.
So a lot of Wall streak takes comfort from that,
and it sort of backs them into thinking that this
AI expansion is going to be sustainable for the near
future at least.
Speaker 2 (04:33):
Are there any outliers of note, anyone who is calling
this a bubble?
Speaker 1 (04:38):
Definitively, there's not an awful lot this year. There's not
an awful lot of kind of outlier that firms Vanguard
springs to mind. They're very cautious on the valuations currently
being quoted for the Magnificent Seven. They're worried about it.
But even there they say, we think that market's over concentrated.
(05:01):
We think these companies are potentially overvalued, but we don't
recommend you get out of AI investing instead, look for
the second order, so the company is the ones who
will benefit from AI, or look for the infrastructure investments
that are tied in with it.
Speaker 2 (05:18):
Twenty twenty five was this year in which so much
focus was on in so many of the returns came
from just a handful of stocks. It's also true of
twenty twenty four. I should say, all the while, there's
been this conversation, this persistent conversation in the background about
whether this market is going to broaden out, the need
for it to broaden out. As these strategists look ahead
to twenty twenty six, is there any confidence that is
going to happen?
Speaker 1 (05:39):
They certainly think so. A lot of the recommendations are
AI is not a bubble, or it's not yet a bubble,
but given the valuations and the market concentration surrounding the megacaps,
it may be time to diversify and bind. Diversify they
mean look for the sectors that are going to really
(05:59):
benefit from implementing AI. Look at where this expenditure is going,
so in infrastructure and data centers. So these outlooks are
telling us get ready for this market to broaden out.
But would just point out, this isn't the first year
we've heard that, and probably not the second year we've
(06:20):
heard that. Either. I was interested to write the summary
section for AI, and as I wrote it, I was
actually in the on the back end in the system
we use. I was deleting the old one from last year,
and the old one from last year was talking about
we expect the gains of AI to broaden out into
more sectors, and you look for the winners from AI.
(06:42):
So it seems like we're still waiting for that broadening
out and for those sectors to really adopt and apply it.
So a good question is whether in a year's time
we're going to be having a very similar conversation to this,
I suppose.
Speaker 2 (06:57):
So what about other risk gas That's something stocks commodities.
Does Wallstreet expect they're going to continue to climb?
Speaker 1 (07:03):
Yeah, mostly again off the back of the AI boom
and the frenzy around that. Plus we have very fiscally
loose governments. Plus we have central banks leaning towards easier
policy in most major geographies. All of these things are
(07:24):
seen as a tailwind for risk assets. So while no
one's predicting huge double digit returns this year, everyone seems
pretty confident that you're better off being invested than not.
Speaker 2 (07:36):
Put in that way, I wanted to ask you about gold.
What do these outlooks say about the prospects for assets
that aren't risky, ones that are considered kind of more
haven or safer assets.
Speaker 1 (07:47):
Yeah, there's some advice to look for new hedges. I
think one thing noted that given the situation where we've
potentially got short term boring rates coming down, but very
fiscally expansive program in government, that means the long end
yields are going to stay high, so a steeper curve.
What that can mean is that maybe bonds bonds will
(08:09):
provide you income, they're not necessarily going to act as
that hedge against equity risk. So there's talk about where
you find your hedges. Gold is still up. There seems
like not many firms want to predict the end of
gold's upswing.
Speaker 2 (08:25):
We start twenty twenty six with the Federals are still
very much focused on inflation higher than it wants it
to be, also very clearly worried about future prospects of
the labor market. What did you learn say from these
outlooks about what Wall Street expects from the economy in
twenty twenty six.
Speaker 1 (08:41):
Yes, so it's interesting. The FED is definitely a big
question because they are very much seen caught between slowly
declining but still very sticky inflation that's way above target
and a labor market that is sort of feeling the
pressures of rising costs of tariffs and the political pressure,
(09:03):
let's face it, from the Trump administration for lower rates,
and we also have the FED chair set to be
replaced a number of votes surrounding other members of the
Federal Reserve. On balance, mostly people expect the FED to
ease a little bit, but the stickiness of inflation will
mean they can't go quite as far as perhaps Trump
(09:24):
and the politics want. Economy wise, the various tailwinds mean
moderating growth, most of them saying growth is going to
be pretty much in line with the long term trend.
Speaker 2 (09:35):
Another big theme in twenty twenty five was private markets,
private credit, and a couple of bankruptcies in that space
that really raised worries that an economic downturn could maybe
expose troubled companies. We had JP Morgan Chase CEO Jamie
Diamond now famously warning that when you see a cockroach,
there are probably more that could emerge in the space.
I'm curious how much ink was spilled about that in
(09:57):
these outlooks, kind of raising concerned raising quests, thinking about
sort of the way that private markets are going to
play a role, a continued role in the economy in
twenty twenty six.
Speaker 1 (10:07):
Yeah, a lot of them tackle that pretty much head on.
They see the various you know, the cockroaches. It's pretty
much contained, to be honest, there's a lot of positivity
around private market still, private equity and credit, various credit structures.
I think their argument is that it's a good diversifier,
(10:28):
that their returns are potentially good, that mostly companies corporations
are in pretty rude health. It does bear saying, though
that most of them say, private markets look good, but
what you need is expertise to guide you through it,
and we're the ones to give you that expertise. So
I'm always well aware that the more complicated or obscure
(10:51):
or hard to invest in the market, the more money
that Wall Street can make from helping you invest in it. So, yeah,
a lot of talk about private markets. They think that
bandwagon has got some distance to go.
Speaker 2 (11:04):
Yet coming up, How accurate were last year's calls and
what does that say about how we should look at
this year's Bloomberg. Sam Potter has done this analysis of
(11:25):
Wall Street outlooks for seven years in a row now,
and while he looks ahead, Sam also takes stock of
how accurate the preceding years outlooks were. So I asked
him how often Wall Street's predictions pan out?
Speaker 1 (11:38):
That's so hard to answer because so often they couch
everything and this could happen, this may happen. This is
what we're worried about. I think if you're in our business,
if you're in the financial business, what you're probably dealing
in as much as anything else's ideas, ideas and possibility,
(11:58):
and oftentimes the audience to these things are going to
be making their own mind up as well. They're going
to be experienced professionals, They're going to have their own expertise.
When I look through them, I'm looking for something, anything
that jumps out as unique or sticks out about a
year ahead. And also the common themes when we see
dozens of reports saying we don't think AI is a
(12:20):
bubble that lends you some maybe confidence, I don't know,
maybe we should be worried everyone thinks it's not a bubble.
Maybe that's the contrarian warning sign.
Speaker 2 (12:30):
Sam says. One of last year's most prescient calls also
involved breaking from the pack.
Speaker 1 (12:36):
We saw that actually in twenty twenty five. One that
stood out last year BCA were extremely bearish on tariffs,
and they basically in their outlook said, everyone's underestimating Trump
and what he wants to do with tariffs. It's going
to be ugly. This is what we think is going
to happen. And of course come April they were pretty
(12:59):
much spot on.
Speaker 2 (13:01):
Sam, You've been through this cycle a few times now,
and every year you start with a stack of calls
that may look totally reasonable. What sort of things tend
to upbend them? What are the X factors?
Speaker 1 (13:10):
Geopolitics is always the one that they worry most about
because it's the hardest to foresee, particularly with Trump administration,
and he's a fairly unpredictable guy. In fact, at one
point that was seen as a deliberate policy that he
would sort of surprise people. But the shocks, Yeah, I
think it's not so much shocks they're worried about this
(13:33):
year as any major shift in trend. So AI maybe
it's a bubble. Maybe it isn't a bubble. Even if
it's not a bubble, if confidence starts to weigh in AI,
then it would be it would be like the tanker turning,
you know, it'd be a big mega trend turning and
in credit and private credit and private markets. If they're
(13:56):
wrong and there are more cock croaches than they think,
it could bring to an end a sort of long
term trend. If Trump does do something unexpected and there
is more trade friction and inflation actually starts to increase,
a big inflation shock is actually probably that's one of
the biggest potential tail risks that people say. You know,
(14:18):
that's the fat tale. If inflation goes the wrong way,
then it throws so much other stuff, fiscal monetary out
of the window.
Speaker 2 (14:27):
We've talked about AI, We've talked about the megacaps, talked
about this narrow market. When you compare the outlooks for
twenty twenty six the outlooks for twenty twenty five, how
much do they have in common? How similar are they
this year to what we saw last year?
Speaker 1 (14:42):
Thematically? Yeah, last year, I remember leading the story part
of the feature with Trump because he had just been
re elected, he was set to take office, and that
that kind of overhung everything. Obviously, that's much more if
you can ever call Trump and I'm quantity, but it
is much more of a known quantity. Now the tariff
(15:03):
situation is seen as stable, if not settled, So we've
been able to move on from last year, move on
a little bit from Trump. I think people also look
ahead and see the midterms and think that that might
restrain Trump's excesses a little bit. But there remain some
big similarities.
Speaker 2 (15:25):
Before I let him go, I ask Sam how he
helps people in the industry. Readers and the generally curious
will use his tool.
Speaker 1 (15:32):
So I think that such as the volume of stuff
that Wall Street produces for the year ahead and so
sort of disparate, I don't think people have the time
or necessarily the easy access to read it or to
consume it, or I hope what I do, if nothing else,
(15:54):
is give them a tool that aggregates and allows them
to compare and control, and it allows them to sort
of fix their place in the Wall Street universe, their
firm standing alongside others. I'd also hope that if I
was in the industry, I'd want to be checking it
and make sure that I wasn't accidentally in a huge
(16:14):
outlier position with all my money on betting against AI
or something when everyone else on Wall Street feels differently.
Speaker 2 (16:27):
This is the Big Take from Bloomberg News. I'm David Gura.
The show is hosted by me Wanha and Sarah Holder.
The show is made by Aaron Edwards, David Fox, Eleanor
Harrison Dengate, Patty Hirsch, Rachel Lewis, Krisky, Naomi, Julia Press,
Tracy Samuelson, Naomi Shaven, Alex Cura, Julia Weaver, Young Young,
and Takei Yasuzawa. To get more from the Big Take
(16:47):
and unlimited access to all of Bloomberg dot Com, subscribe
today at Bloomberg dot com Slash Podcast Offer. Thanks for listening.
We'll be back on Monday.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
This has been a busy stretch for Sam Potter, a
senior editor for Markets at Bloomberg, And it's like this
every year. Starting in mid November.
Speaker 1 (00:17):
That's when the very earliest outlooks for the next year
start to arrive on my desk, coming through email. I
generally let a little pile build up til I'm ready
to tackle them.
Speaker 2 (00:27):
Then Sam starts reading, looking for the big themes Wall
Street strategists and economists and portfolio managers expect will shape
the year ahead. It's a lot.
Speaker 1 (00:37):
I mean, there are dozens and dozens of these things,
and many of them run to hundreds of pages.
Speaker 2 (00:43):
For years now, Sam has boiled all that down, synthesizing
how some of the top names and finance are thinking
about the coming year. The end product is this amazing
tool you can find at Bloomberg dot com.
Speaker 1 (00:54):
What I try and do is take the top line
calls and then we piece them all together in the
feature and we make it searchable. You know, you can
filter buy the financial institution, or by the topic, or
buy the asset, and it allows you to compare and
contrust all the different calls.
Speaker 2 (01:12):
Sam identifies each firm's base case for the economy and
markets and what he's keeping an eye out for are
high conviction calls.
Speaker 1 (01:20):
Lots of them are very much they sit on the fence.
They say, well, this could happen all that conviction. We're optimistic,
but they're at risk. Or you get these ones that
try and be creative and thematic, and they will say,
here are the top five trends that we think will
shape humanity in the year's ahead. They are ultimately their
(01:42):
marketing tools, but some of them can be super interesting,
either super bullish or super bearish.
Speaker 2 (01:51):
It may not surprise you, given how twenty twenty five
shaped up, that the biggest theme for twenty twenty six
is artificial intelligence.
Speaker 1 (01:59):
The thing it sort of leapt out of me in
this year's outlet was this idea that everyone on Wall Street,
or seemingly everyone in Wall Street, is bullish about AI.
They talk of it as a game changing, revolutionary technology,
but at the same time, the biggest risk that most
of them see is that the AI investment cycle is overhyped,
(02:23):
that we could be in a bubble and that things
could turn ugly.
Speaker 2 (02:27):
And it wasn't lost on me as I talked to
Sam about all the work that went into this project,
that maybe AI, the technology that led markets to record highs,
could have made his job a lot easier.
Speaker 1 (02:39):
Actually, in the end, I made a point of not
using AI for this. I used the same method that
I was using seven years ago, which means possibly I'm
inserting my own bias and misfunctioning brain instead of AIS.
But at least it's consistent over the years.
Speaker 2 (02:58):
I'm David Gerat, and this is the take from Bloomberg
News today on the show, From AI to Geopolitical Risks
to Gold What Wall Street expects for twenty twenty six.
We're at this moment where more investors seem to be
questioning or thinking differently about AI's growth, in particular, how
(03:21):
much money is being poured into the infrastructure that power
is AI. How does Wall Street see that playing out
in twenty twenty six?
Speaker 1 (03:28):
On balance, they lean on optimism here. Most of them
see the transformative power of AI changing the way we work,
changing the way we innovate, boosting productivity. They also look
at the expenditure and say, well, who's paying for all this?
And in many cases, these multi multi billion dollar deals
(03:50):
that we see hit the headlines. The company behind them
is one of the tech megacaps, you know, heavily cash rich.
They can afford to make this expenditure until they see
returns on it. And these tech megacaps, their earnings are
still super solid. It's not like the dot com where
the firms that were throwing out these huge deals didn't
(04:13):
really have earnings potential, were very concentrated. You know. The
Magnificent Seven are highly diversifized companies with massive earnings potential.
So a lot of Wall streak takes comfort from that,
and it sort of backs them into thinking that this
AI expansion is going to be sustainable for the near
future at least.
Speaker 2 (04:33):
Are there any outliers of note, anyone who is calling
this a bubble?
Speaker 1 (04:38):
Definitively, there's not an awful lot this year. There's not
an awful lot of kind of outlier that firms Vanguard
springs to mind. They're very cautious on the valuations currently
being quoted for the Magnificent Seven. They're worried about it.
But even there they say, we think that market's over concentrated.
(05:01):
We think these companies are potentially overvalued, but we don't
recommend you get out of AI investing instead, look for
the second order, so the company is the ones who
will benefit from AI, or look for the infrastructure investments
that are tied in with it.
Speaker 2 (05:18):
Twenty twenty five was this year in which so much
focus was on in so many of the returns came
from just a handful of stocks. It's also true of
twenty twenty four. I should say, all the while, there's
been this conversation, this persistent conversation in the background about
whether this market is going to broaden out, the need
for it to broaden out. As these strategists look ahead
to twenty twenty six, is there any confidence that is
going to happen?
Speaker 1 (05:39):
They certainly think so. A lot of the recommendations are
AI is not a bubble, or it's not yet a bubble,
but given the valuations and the market concentration surrounding the megacaps,
it may be time to diversify and bind. Diversify they
mean look for the sectors that are going to really
(05:59):
benefit from implementing AI. Look at where this expenditure is going,
so in infrastructure and data centers. So these outlooks are
telling us get ready for this market to broaden out.
But would just point out, this isn't the first year
we've heard that, and probably not the second year we've
(06:20):
heard that. Either. I was interested to write the summary
section for AI, and as I wrote it, I was
actually in the on the back end in the system
we use. I was deleting the old one from last year,
and the old one from last year was talking about
we expect the gains of AI to broaden out into
more sectors, and you look for the winners from AI.
(06:42):
So it seems like we're still waiting for that broadening
out and for those sectors to really adopt and apply it.
So a good question is whether in a year's time
we're going to be having a very similar conversation to this,
I suppose.
Speaker 2 (06:57):
So what about other risk gas That's something stocks commodities.
Does Wallstreet expect they're going to continue to climb?
Speaker 1 (07:03):
Yeah, mostly again off the back of the AI boom
and the frenzy around that. Plus we have very fiscally
loose governments. Plus we have central banks leaning towards easier
policy in most major geographies. All of these things are
(07:24):
seen as a tailwind for risk assets. So while no
one's predicting huge double digit returns this year, everyone seems
pretty confident that you're better off being invested than not.
Speaker 2 (07:36):
Put in that way, I wanted to ask you about gold.
What do these outlooks say about the prospects for assets
that aren't risky, ones that are considered kind of more
haven or safer assets.
Speaker 1 (07:47):
Yeah, there's some advice to look for new hedges. I
think one thing noted that given the situation where we've
potentially got short term boring rates coming down, but very
fiscally expansive program in government, that means the long end
yields are going to stay high, so a steeper curve.
What that can mean is that maybe bonds bonds will
(08:09):
provide you income, they're not necessarily going to act as
that hedge against equity risk. So there's talk about where
you find your hedges. Gold is still up. There seems
like not many firms want to predict the end of
gold's upswing.
Speaker 2 (08:25):
We start twenty twenty six with the Federals are still
very much focused on inflation higher than it wants it
to be, also very clearly worried about future prospects of
the labor market. What did you learn say from these
outlooks about what Wall Street expects from the economy in
twenty twenty six.
Speaker 1 (08:41):
Yes, so it's interesting. The FED is definitely a big
question because they are very much seen caught between slowly
declining but still very sticky inflation that's way above target
and a labor market that is sort of feeling the
pressures of rising costs of tariffs and the political pressure,
(09:03):
let's face it, from the Trump administration for lower rates,
and we also have the FED chair set to be
replaced a number of votes surrounding other members of the
Federal Reserve. On balance, mostly people expect the FED to
ease a little bit, but the stickiness of inflation will
mean they can't go quite as far as perhaps Trump
(09:24):
and the politics want. Economy wise, the various tailwinds mean
moderating growth, most of them saying growth is going to
be pretty much in line with the long term trend.
Speaker 2 (09:35):
Another big theme in twenty twenty five was private markets,
private credit, and a couple of bankruptcies in that space
that really raised worries that an economic downturn could maybe
expose troubled companies. We had JP Morgan Chase CEO Jamie
Diamond now famously warning that when you see a cockroach,
there are probably more that could emerge in the space.
I'm curious how much ink was spilled about that in
(09:57):
these outlooks, kind of raising concerned raising quests, thinking about
sort of the way that private markets are going to
play a role, a continued role in the economy in
twenty twenty six.
Speaker 1 (10:07):
Yeah, a lot of them tackle that pretty much head on.
They see the various you know, the cockroaches. It's pretty
much contained, to be honest, there's a lot of positivity
around private market still, private equity and credit, various credit structures.
I think their argument is that it's a good diversifier,
(10:28):
that their returns are potentially good, that mostly companies corporations
are in pretty rude health. It does bear saying, though
that most of them say, private markets look good, but
what you need is expertise to guide you through it,
and we're the ones to give you that expertise. So
I'm always well aware that the more complicated or obscure
(10:51):
or hard to invest in the market, the more money
that Wall Street can make from helping you invest in it. So, yeah,
a lot of talk about private markets. They think that
bandwagon has got some distance to go.
Speaker 2 (11:04):
Yet coming up, How accurate were last year's calls and
what does that say about how we should look at
this year's Bloomberg. Sam Potter has done this analysis of
(11:25):
Wall Street outlooks for seven years in a row now,
and while he looks ahead, Sam also takes stock of
how accurate the preceding years outlooks were. So I asked
him how often Wall Street's predictions pan out?
Speaker 1 (11:38):
That's so hard to answer because so often they couch
everything and this could happen, this may happen. This is
what we're worried about. I think if you're in our business,
if you're in the financial business, what you're probably dealing
in as much as anything else's ideas, ideas and possibility,
(11:58):
and oftentimes the audience to these things are going to
be making their own mind up as well. They're going
to be experienced professionals, They're going to have their own expertise.
When I look through them, I'm looking for something, anything
that jumps out as unique or sticks out about a
year ahead. And also the common themes when we see
dozens of reports saying we don't think AI is a
(12:20):
bubble that lends you some maybe confidence, I don't know,
maybe we should be worried everyone thinks it's not a bubble.
Maybe that's the contrarian warning sign.
Speaker 2 (12:30):
Sam says. One of last year's most prescient calls also
involved breaking from the pack.
Speaker 1 (12:36):
We saw that actually in twenty twenty five. One that
stood out last year BCA were extremely bearish on tariffs,
and they basically in their outlook said, everyone's underestimating Trump
and what he wants to do with tariffs. It's going
to be ugly. This is what we think is going
to happen. And of course come April they were pretty
(12:59):
much spot on.
Speaker 2 (13:01):
Sam, You've been through this cycle a few times now,
and every year you start with a stack of calls
that may look totally reasonable. What sort of things tend
to upbend them? What are the X factors?
Speaker 1 (13:10):
Geopolitics is always the one that they worry most about
because it's the hardest to foresee, particularly with Trump administration,
and he's a fairly unpredictable guy. In fact, at one
point that was seen as a deliberate policy that he
would sort of surprise people. But the shocks, Yeah, I
think it's not so much shocks they're worried about this
(13:33):
year as any major shift in trend. So AI maybe
it's a bubble. Maybe it isn't a bubble. Even if
it's not a bubble, if confidence starts to weigh in AI,
then it would be it would be like the tanker turning,
you know, it'd be a big mega trend turning and
in credit and private credit and private markets. If they're
(13:56):
wrong and there are more cock croaches than they think,
it could bring to an end a sort of long
term trend. If Trump does do something unexpected and there
is more trade friction and inflation actually starts to increase,
a big inflation shock is actually probably that's one of
the biggest potential tail risks that people say. You know,
(14:18):
that's the fat tale. If inflation goes the wrong way,
then it throws so much other stuff, fiscal monetary out
of the window.
Speaker 2 (14:27):
We've talked about AI, We've talked about the megacaps, talked
about this narrow market. When you compare the outlooks for
twenty twenty six the outlooks for twenty twenty five, how
much do they have in common? How similar are they
this year to what we saw last year?
Speaker 1 (14:42):
Thematically? Yeah, last year, I remember leading the story part
of the feature with Trump because he had just been
re elected, he was set to take office, and that
that kind of overhung everything. Obviously, that's much more if
you can ever call Trump and I'm quantity, but it
is much more of a known quantity. Now the tariff
(15:03):
situation is seen as stable, if not settled, So we've
been able to move on from last year, move on
a little bit from Trump. I think people also look
ahead and see the midterms and think that that might
restrain Trump's excesses a little bit. But there remain some
big similarities.
Speaker 2 (15:25):
Before I let him go, I ask Sam how he
helps people in the industry. Readers and the generally curious
will use his tool.
Speaker 1 (15:32):
So I think that such as the volume of stuff
that Wall Street produces for the year ahead and so
sort of disparate, I don't think people have the time
or necessarily the easy access to read it or to
consume it, or I hope what I do, if nothing else,
(15:54):
is give them a tool that aggregates and allows them
to compare and control, and it allows them to sort
of fix their place in the Wall Street universe, their
firm standing alongside others. I'd also hope that if I
was in the industry, I'd want to be checking it
and make sure that I wasn't accidentally in a huge
(16:14):
outlier position with all my money on betting against AI
or something when everyone else on Wall Street feels differently.
Speaker 2 (16:27):
This is the Big Take from Bloomberg News. I'm David Gura.
The show is hosted by me Wanha and Sarah Holder.
The show is made by Aaron Edwards, David Fox, Eleanor
Harrison Dengate, Patty Hirsch, Rachel Lewis, Krisky, Naomi, Julia Press,
Tracy Samuelson, Naomi Shaven, Alex Cura, Julia Weaver, Young Young,
and Takei Yasuzawa. To get more from the Big Take
(16:47):
and unlimited access to all of Bloomberg dot Com, subscribe
today at Bloomberg dot com Slash Podcast Offer. Thanks for listening.
We'll be back on Monday.
Hosts And Creators
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