Michael Kantrowitz: The "K"antro Shaped Recovery

May 28, 2025

Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, shares his keen insights on today's bifurcated markets. He discusses the critical factors shaping market movements, including inflation, interest rates, and geopolitical events. Kantrowitz introduces his 'Hope' framework, key to cyclical analysis. The potential impact of AI on financial markets is examined, alongside small-cap stock selection strategies. He emphasizes the importance of quality in investments and weighs the economic implications of a K-shaped recovery.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ANECDOTE

Market Bottom Anecdote

Michael Kantrowitz shares how he learned from staying bearish too long in 2022 about markets bottoming when the main problem stops worsening.
He recounts the April 2024 markets shift when tariff pause and positive headlines triggered a market rebound.

INSIGHT

K-Shaped Market Recovery

The current economy and market are deeply bifurcated, benefiting some while others suffer significant pain.
This K-shaped recovery means large-cap companies and affluent consumers thrive, while lower-income groups and small caps struggle.

INSIGHT

Critical Interest Rate Threshold

Interest rates between about 4% and 5% act as a pivot, with markets and economy sensitive to rates above 4.75%.
Rates beyond this range hurt economic growth and stock market breadth, especially rate-sensitive sectors like housing and small caps.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, joins the On the Tape podcast to discuss his views on the current market landscape. The conversation touches on Kantrowitz's rankings, his new podcast 'What's Next for Markets,' and his thoughts on market myopia and reactivity. He delves deep into the primary factors driving market movements, focusing on inflation, interest rates, tariffs, and the impact of geopolitical events. Kantrowitz also shares insights from his 'Hope' framework—housing, orders, profits, and employment—and its application in cyclical market analysis. The discussion wraps up with Kantrowitz's perspective on the importance of quality over valuation in stock selection, particularly in the small-cap sector, and the potential economic impacts of AI and other macroeconomic factors.

Checkout Michael's Podcast: https://www.pipersandler.com/whatsnextformarkets

--
ABOUT THE SHOW
For decades, Danny has seen it all on Wall Street and has built his reputation on integrity, curiosity and skepticism that he will bring with him each week. Having traded through the Great Financial Crisis and being featured in "The Big Short" is only part of the experiences Danny wants to share with the listener. This weekly podcast cuts through market noise, offering entertaining and informative discussions with expert guests giving their views of the financial world and the human side of it. Whether you're a seasoned investor or just getting started, On The Tape provides something for all listeners.

Follow Danny on X: @dmoses34

The financial opinions expressed are for information purposes only. The opinions expressed by the hosts and participants are not an attempt to influence specific trading behavior, investments, or strategies. Past performance does not necessarily predict future outcomes. No specific results or profits are assured when relying on this content.

Before making any investment or trade, evaluate its suitability for your circumstances and consider consulting your own financial or investment advisor. The financial products discussed in 'On The Tape' carry a high level of risk and may not be appropriate for many investors. If you have uncertainties, it's advisable to seek professional advice. Remember that trading involves a risk to your capital, so only invest money that you can afford to lose.

Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This communication is not a recommendation or offer to buy, sell or retain any specific investment or service.