CNBC's "Fast Money" The Next Great Rotation… And Wall Street Sours on Coreweave 7/8/25
Jul 8, 2025
Chris McGrady, Head of U.S. Bank Research at KBW, discusses the shifting dynamics of the stock market as investors pivot towards small caps, healthcare, and airlines. He analyzes the recent decline in big banks and what this could mean for earnings season. The conversation also highlights CoreWeave's struggles post-acquisition, with concerns from analysts about stock valuation and upcoming IPO challenges. McGrady provides insights into the broader implications for the AI and semiconductor sectors amidst these market rotations.
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Big Banks Face Profit Taking
- Big banks have reached high valuations possibly justified by deregulation and market optimism.
- Profit taking before earnings is causing rotation into beaten down sectors like small caps and healthcare.
Selective Bank Exposure Advice
- Despite high valuations, owning large banks with solid fundamentals remains attractive.
- Investors should consider selective exposure, for example to Citigroup, which trades below book value.
Broadening Semiconductor Trade
- AI and infrastructure demand is creating enthusiasm for semiconductor companies beyond just the leading AI chipmakers.
- Market attempts to broaden the semiconductor trade beyond narrow winners have happened before but may not stick yet.