Closing Bell Closing Bell: One-And-Done Dip? 10/15/25
Oct 15, 2025
Drew Mattis from MetLife Investments shares his insights on the current economic climate, emphasizing the potential pitfalls of consumer retrenchment and its ripple effects on growth. He discusses the contrasting performances of AI-driven large-cap stocks versus speculative small-caps and highlights the Fed's acceptance of above-target inflation amid growing deficit concerns. Additionally, he provides a glimpse into the challenges facing labor and the macroeconomic landscape as we approach the year’s end.
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Leverage Alone Drove Friday's Shock
- Friday's pullback exposed heavy leverage in pockets like Bitcoin and speculative high-beta names.
- Abundant liquidity and rising forward earnings still support a drift higher, but not a straight line.
Earnings Revisions Drive Index Direction
- S&P new highs likely follow 12-month forward EPS making new highs, per NewEdge's rule.
- But those gains are concentrated in a few AI names and banks, not broad-based fundamentals.
Market Is K-Shaped, Not Broad-Based
- There's a K-shaped market where a handful of AI leaders and banks lift consensus estimates.
- Small-cap rallies lack supportive estimate revisions and look more positioning-driven than fundamental.