Honored and humbled that our Portfolio Strategy team at @PiperSandler was recognized for a second consecutive year as #1 in Portfolio Strategy in the 2025 Extel (fka Institutional Investor) All-America Research survey. Grateful to our clients, colleagues, and everyone who supports our work to help investors navigate what’s next for markets. macro.pipersandler.com/strat… #WhatsNextForMarkets

This is how stocks can get cheaper (lower P/E) but less attractively valued at the same time.

RT @JC_ParetsX: "Inflation anxiety". I like that. Good luck with your 60/40 portfolio lol. Great chart @MichaelKantro

Great Markets Video this AM @MichaelKantro

“since 1982” … sigh

Answer = Index composition

If earnings were not booming stocks would be much lower today. Hard to see earnings pulling the market up at this point. in the last several months, rising earnings have been largely offset with lower PEs. The higher rates go the faster P/Es are likely to fall for each incremental BP. And at some point down the road that green line of earnings strength is going to see its slope flatten. Being bullish on earnings is no longer enough IMO.

The increase in rates is global, because it is driven by a surge in global energy prices. Markets across the world are pricing in increasingly steep hiking cycles. In the U.S. the market priced in another 25bps hike this past week. It will get worse until the war ends.

Markets are driven by behavioral tendencies like recency bias. Consumers saying mortgage rates are low is near the 3rd percentile back to 1978. Not because rates are historically high, but because they are higher than the average of the last few years. Happiness = outcome - expectations.

There's never been this much equity-market inflation anxiety (IA) in history (i.e., back to 1960). Correlation of the average stock w/ 10yr yields recently hit its most negative reading ever. In 2022, we entered a new regime where higher rates, not slower growth, became the #1, #2, #3 biggest risks to equities. In the next several months, stocks will likely struggle until 10yr finds a near-term peak. Welcome to the era of Inflation Anxiety (2022-???), last experienced between 1960s-1990s).

The latest Orange Book is out @theterminal! The major macro themes from the latest earning season: -Tariff refunds juicing earnings (may turn to headwinds next season) -Half of S&P 500 companies mentioned some form of shortages (we identified those). -Truck-driver shortages have raised freight rates, which in turn is driving up cost of moving physical goods -the AI super investment cycle has left almost no parts of the economy untouched. -US is going through a manufacturing boom. Read the details on NI ORANGEBOOK <GO>

This paper finds that 90% of the observed rise in the 10-year US Treasury since August 2020 has occurred in the three-day window around US payroll reports or speeches by top Fed officials (the chair, vice chair, or Waller), which accounts for just 24% of trading days The paper finds those days are responsible for 81% of the rise in markets' expected average short-term rate over the next 10 years, which means this isn't about investors getting nervous about holding long-term debt and is instead about markets revising their view of short-term rates.

Brent is an excellent economist but i think the central premise of this is wrong. We care about labor share because we care whether people are paid for their productivity. Depreciation is obsolecense, not income. Dont infer trend from gross, use net:

5% is no good, but maybe we capture those strong equity returns when the 10yr has a 10-handle. We need a tightening of analysis more than financial conditions.

The deficit and the Fed are along for the ride. They are in the trunk.

I keep hearing folks ask "when will equities care about higher interest rates?" They are already discounting today's levels - S&P 500 P/Es have compressed by over 3 points since Q4/25 as rates, oil and the Fed's hawkish tone have all increased. Multiples will likely continue to decline until rates & oil stop rising.

Great to have Stan Druckenmiller kick off our 12th annual Macro conference. Looking forward to a full day of great speakers!

Great to have Stan Druckenmiller kick off our 12th annual Macro conference. Looking forward to a full day of great speakers!

Interest rates have been one of the biggest market stories of 2026, but what is really driving them higher? Kurt Lewis of Piper Sandler joins the podcast to break down the outlook for the Fed, inflation, real rates and the term premium. podcasts.apple.com/us/podcas…

Seem to be on to something.