Bloomberg Surveillance
Bloomberg Surveillance TV: May 16, 2025
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.
28:37
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Quick takeaways
- Andrew Hollenhorst emphasizes the uncertain outlook for the US economy and labor market amidst tariff policy and tax negotiations.
- Maya MacGuineas warns that increasing the SALT deduction may exacerbate the deficit, complicating fiscal responsibility and new legislation efforts.
Deep dives
Market Sentiment and Growth Concerns
Current market sentiment is focused on resolving uncertainties surrounding tariffs and anticipating Federal Reserve policy changes. Investors are feeling weary and eager to move past previous peaks, particularly the Nasdaq highs at the end of 2022. A noticeable deceleration in top-line growth among major tech companies, referred to as the 'MAG-7', is concerning to growth investors, who typically prefer accelerating growth. Additionally, a significant reduction in free cash flow yields for these companies contributes to a cautious outlook, suggesting that market valuations may not be justifiable given the current earnings situation.
