Introduces JPMorgan's head of global market strategy Dubravko Lakos and references previous Fed commentary from Bostic.
Scott
Asks about Lakos's bullish outlook suggesting S&P could go past 8000 next year if Fed eases further on improving inflation dynamics.
Scott
Dubravko Lakos
Clarifies 8000+ is an upside scenario contingent on Fed easing more than one time. Base case is 7500 driven by one more Fed cut then prolonged pause.
Questions belief in 'run it hot' trade where Fed cuts into strengthening economy, noting base case implies single-digit return.
Scott
Dubravko Lakos
Economy should be in good shape but K-shaped with some hot segments and other lackluster segments. Interest rates could help ease parts under stress.
Asks about market broadening beyond AI and whether it's temporary or persistent.
Scott
Dubravko Lakos
AI trade is digesting/pausing after being hot. Broadening out could continue but only tactically short-term into Q1 2026.
Dubravko Lakos
For medium term 2026, big story remains AI with big tech hyperscalers, utilities, big banks as AI beneficiaries, and certain healthcare/pharma.
Notes liking large market groups that may not deliver robust returns, asks about big risks to outlook.
Scott
Dubravko Lakos
Biggest risk is Fed closing door to future easing earlier rather than later, which markets would have hard time digesting.