Bloomberg Surveillance Bloomberg Surveillance TV: September 23rd, 2025
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Sep 23, 2025 
Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, dives into market concentration and the implications for active investors. She highlights dispersion and the challenges of stock-picking. Kristen Bitterly from Citi discusses asset allocation strategies, urging a quality bias while navigating the landscape of potential rate cuts. Stephen Stanley, Chief Economist at Santander, analyzes labor market dynamics and risks of inflation, questioning if current Fed policies are appropriate. A lively discussion filled with valuable insights!
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Cap-Weighted Indexes Mask Market Dispersion
- Cap-weighted indexes hide wide dispersion: a few mega-caps drive index gains while many members suffer large drawdowns.
- That widens opportunities for active stock pickers relative to passive investors.
Don't Blindly Track The Cap-Weighted Index
- Individual investors need not accept index concentration and can pursue stock-picking strategies.
- Use indexes as idea sources rather than automatic allocations to avoid concentrated cap risk.
Small Caps Rally But Quality Varies Widely
- Small-cap rallies may be rate-driven but carry quality risks due to many non-profitable names.
- S&P 600 shows stronger earnings trajectory than the S&P 500, reflecting higher-quality small-cap choices.