Asks if the 5% index decline masks more significant repricing beneath the surface.
John
Liz Ann Sonders
Confirms masking effect: average S&P 500 member drawdown is 16% vs index 6%; Nasdaq average member drawdown is -29%. Distribution tails are larger with many stocks moving >20%.
Asks if now is the moment to step into discretionary names, citing American Airlines guidance.
John
Liz Ann Sonders
Rejects monolithic sector calls; emphasizes profitability angle and individual stock selection, noting profitable Russell 2000 stocks outperform.
Asks about shifting view for rest of 2026 given reversal of broadening-out trade.
Speaker3
Liz Ann Sonders
View hasn't shifted much; current moves are about positioning. Positioning has changed with de-risking by systematic funds, hedge funds, and CTAs since war outset.
Cites BofA survey showing record cash build; asks if she's getting more constructive.
Speaker3
Liz Ann Sonders
Cash levels relative to market cap are historically low (~12-13%), limiting its potential as market fuel.
Liz Ann Sonders
Cannot ignore Washington but impossible to gauge next triggers; must focus on positioning. Unprecedented connectivity between Washington decisions and short-term volatility.