Introduces Tony Pasquariello, head of hedge fund client coverage at Goldman Sachs, and frames his consistent, 'responsibly bullish' market view.
Scott
Tony Pasquariello
Affirms bullish view. Key dynamics still favorable for risk. Expects Fed to provision more liquidity alongside a cyclical economic upswing. Sees S&P earnings up 12% next year, supporting a continuing bull market.
Asks if he's been tempted by the 'broadening story' away from mega-caps and questions if he expects small caps to outperform large caps in the new year.
Scott
Tony Pasquariello
Remains a believer in US mega-cap tech outperforming. Views recent shift of some leadership burden to large-cap cyclicals as a good, durable sign consistent with a pickup in economic speed (2.5% GDP). Prefers large cap over small cap.
Poses the idea that the real money in 2026 will be made in companies benefiting from implemented AI, not just the large-cap enablers.
Scott
Tony Pasquariello
Agrees that broader AI productivity gains are baked into their S&P earnings forecast (attributing ~1.5 percentage points of the 12% growth to it). This is the nature of their positive growth bet.
Notes Pasquariello sounds skeptical, interpreting his 'very tidy outcome' comment to suggest the reality might be messier.
Scott
Tony Pasquariello
Acknowledges the market narrative around tech is becoming more complex, with demanding questions on valuation, financing, and capex returns, unlike the prior simple 'funded from free cash flow' story. Remains a believer but open-minded.