Bloomberg Surveillance Rotation Trade & Fed Expectations
Jan 23, 2026
Monica Guerra, Morgan Stanley policy head, outlines defense-focused fiscal shifts under a second term. Kay Herr, JPMorgan CIO for fixed income, breaks down bond resilience, credit preferences and gold demand. Joe Quinlan, Merrill market strategist, covers sector rotation, retail buying and the bull market’s potential to run longer. Short, punchy takes on markets, policy and where investors are moving next.
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Retail Buying Broadens Market Breadth
- Retail investors are actively buying dips and broadening allocations beyond mega-cap tech into small caps and international markets.
- Joe Quinlan says client demand reflects confidence in companies, technology, and a healthy real economy.
Rotate Into Shorter Duration Credit
- Shorten duration and favor corporate bonds given Bank of America's view of a tight 10-year yield range around 4.25%–4.75%.
- Monitor Fed cutting paths and international moves, especially Japan, which could change rate expectations.
Metals Demand Fuels Commodity Upside
- Demand for precious and base metals is rising from retail, institutions, and central banks as a dollar hedge and for industrial use.
- Joe Quinlan highlights continued upside driven by metal needs in grids and defense spending.