Bloomberg Surveillance Bloomberg Surveillance TV: May 16, 2025
9 snips
May 16, 2025 
Lisa Shalett, CIO of Wealth Management at Morgan Stanley, shares insights on asset allocation strategies as the S&P 500 hits a strong week, emphasizing adaptability amid market volatility. Meanwhile, Rep. Mike Lawler discusses the contentious tax bill negotiations in Congress, shedding light on the tug of war between tax cuts and fiscal responsibility. Their conversations explore the current economic landscape, touching on the Federal Reserve's policies, labor market dynamics, and the implications of proposed budget changes.
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Tech Growth and AI Uncertainty
- Growth among MAG-7 tech companies is slowing, and free cash flow yields are shrinking.
- Investors face uncertainty about AI's impact and data center demands, limiting enthusiasm for tech.
Rotate to Value Amid Risks
- Investors should take profits in new tech leaders and rotate into financials, energy, and healthcare.
- Value stocks are preferred now for risk premiums amidst policy and inflation uncertainties.
Fragile Labor Market Signals
- The labor market is stable but fragile due to low hiring and layoff rates.
- Factors like government job cuts could soon make unemployment rise, influencing Fed decisions.