Squawk on the Street SOTS 10AM: The Bull Case for Stocks Into Year-End, Why AI is Helping Avoid a Recession, Ares CEO on Alternatives 11/3/25
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Nov 3, 2025 
Mark Zandi, Chief Economist at Moody's Analytics, reveals how AI is a game-changer for the U.S. economy, suggesting we'd be in a recession without it. He discusses the profound effects of AI on hiring and investment patterns. Michael Arougheti, CEO of Ares Management, shares insights on strong fundraising results and the outlook for alternative investments. He offers a glimpse into how AI is transforming Ares' portfolio and discusses the benefits of expanding retail access to private investments. Together, they paint a picture of an evolving economic landscape.
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Earnings-Led Year-End Rally
- Eric Johnston argues stocks can rally into year-end driven by accelerating earnings and margin expansion, especially in MAG-7 names.
- He expects forward earnings estimates to keep rising and still targets S&P 500 ~7,000 by year-end.
Reassess December Cut Odds
- Eric Johnston advises investors to price in lower odds of a December Fed cut than futures imply.
- He suggests watching the changing Fed regime around May 2026 for bigger rate policy shifts.
Market Distorted Toward AI Leaders
- Johnston highlights AI benefits hitting corporate margins while broader consumer weakness persists.
- He notes the S&P correlation to consumer spending is falling as AI/data-center trade dominates returns.