Squawk on the Street Squawk on the Street 2ND Hour: 12/26/25
Dec 26, 2025
Torsten Slock, Chief Economist at Apollo Global Management, dives into the surprising economic tailwinds boosting growth into 2026, thanks to lower oil prices and easing trade tensions. He highlights the risks of AI concentration in markets and discusses Japan's unique currency dynamics and capital flows from U.S. Treasuries. Slock also examines the Fed's cautious approach to rate cuts amid persistent inflation. The conversation is packed with insights on market movers and the potential impact on investors.
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Growing Economic Tailwinds Support 2026 Growth
- Torsten Slock argues the economy has growing tailwinds from tax changes, lower oil, a weakening dollar, and easing trade tensions.
- Those factors could support stronger growth into 2026 even without large Fed cuts.
AI Concentration Raises Market Fragility
- Slock warns AI concentration creates market fragility because the top 10 stocks are ~40% of the S&P and hyperscaler debt rises.
- If the AI story disappoints, both equities and IG credit spreads could suffer despite decent growth.
Japan's Currency Moves Could Rock Global Rates
- Slock highlights unusual Japan dynamics: rising rates but a weakening yen, which could prompt Japanese investors to repatriate assets.
- That repatriation could pressure U.S. Treasury demand and create risks for global rates in 2026.