Let's get to the big story breakdown.
While US stock futures are hovering above flat and are in positive territory this morning.
This comes after global markets fell yesterday as investors question whether the tech rally has gone too far amid growing fears of an AI bubble and uncertainty over US interest rates.
Meanwhile, Fed officials struck a cautious tone after Chair Jay Powell said a third rate cut this year isn't guaranteed.
Joining me to weigh in this morning is Jonathan Corpina, senior managing partner at Meridian. partners.
Jonathan, good morning.
Happy Wednesday.
Ray, good morning.
Thanks for having me.
Well, here we are this morning.
We are looking at US stock futures higher, but this does come amid a lot of volatility across the market.
So what do you make of what we're seeing this morning and what do you make of AI valuations?
We've got to kind of keep everything in perspective, right?
Look at, look at what our market has done over the last 6 months, this incredible movement that we've had to the upside.
We've spoken about is there going to be a selloff.
When is there going to be a sell off?
What's that catalyst of the sell off?
Everything that we've spoken about before in the past has been the same, and there's really no significant change to that, right?
We've talked about interest rates and we still continue to debate what the Fed's going to do and how they're going to do it and when they're going to do it and how far they're going to go.
We talk about trade wars that continue to exist, right?
We haven't had any real massive major headlines coming out of there recently.
Our geopolitical risks that are out there.
The only difference in our conversations when Last time we spoke to now is the government shutdown, right?
And now we're in the what you say thirty-sixth day of that shutdown and it's a record and we're starting to see the implications of that, right, the ripple effects of that, we continue to talk about and see headlines about air traffic controllers and the situation there and on the unfortunate news last night with UPS and how that might have played into into some of it.
So we still have a lot of headwind that's in front of us.
We've seen some pressure on the market.
It takes a little bit off the top of what we've seen.
Some risks come off, but we haven't seen a reason why this might turn around just yet.
We do have a lot that's in front of us.
Yes, we're getting through earnings season.
Our economic data has been has been mixed as far as what we're actually getting and what we're not getting from the government due to this shutdown.
So there is certainly a lot of uncertainty as we're heading in towards the end of the year here. the AI conversation, the AI topic.
Continues to come up.
We talk about Nvidia and their implications on the whole sector and AMD.
We're going to continue to have these conversations.
It's going to continue to be the hot topic.
That headline is probably the only headline that can can buoy our markets at this time.
Yeah, and Jonathan, I'm so glad you answered so many questions that I have for you, but as you mentioned, the government shutdown does continue.
It's day 36, and there are a lot of concerns moving forward, but On top of that, we are experiencing a lack of economic data.
We got the ADP report today, but as you mentioned, we're still waiting earnings out from some key mag 7 names, including Nvidia.
But as we look towards the year end, we have to keep in mind that the equity markets are still seeing double digit percentage gains.
But as we look ahead to 2026, how do you think the big bill will affect the markets and what does it mean for winners and losers?
Yeah, I think there's a lot of, you know, push and pull here, right?
And we're seeing a lot of tension still in DC.
We're not sure how tariffs are actually going to play out.
Is it going to be a good thing or is it a bad thing?
We're waiting for a big beautiful bill and how that's going to play out.
I think this is a long game that that the government is playing.
Investors have to be paid.
To see exactly the implications of this.
I don't know how long investors want to be patient, right, because we're waiting for some results and the results aren't coming in as fast as as we wanted, but I think overall, like you said, double digit gains in the market so far.
If you keep it all in perspective, if we take 2%, 4%, 6% off the top, A measured period of time, not a massive sell off, but that might be healthy for our markets and that might give investors opportunities to come on in and start buying some some cheaper equities that are there.
We've seen it recently.
We see some of the, you know, meta who's that's been down significantly, right?
I mean, if you like meta 80 points higher, you're going to like it here.
So those are the opportunities that I think investors need to look for.
Yeah, and speaking of which, it was interesting to hear from the CEOs yesterday of Morgan Stanley as well as actually JPMorgan, as well as Goldman Sachs, and they were talking about potential drawdowns moving forward, given how lofty equity levels are.
So what price targets are you paying attention to as we headed to your end?
Yes, so if you're watching, you know, the VIX, you and I have spoken about that.
For we've seen a lot of volatility in the VIX as of recent. we've seen a big disconnect in the VIX as far as the market's reaction is concerned.
We need to get the VIX staying in that, you know, 15, you know, 12 to 15 category.
I don't think we're going to be there for a little time here.
We've got to keep it below below 20.
S&P, we're trading where 1750-ish now was kind of.
Reading up towards we were we were talking about that, you know, 7000, I'm sorry 6750 trading talk about that 7000 number.
I think kind of these lofty expectations that we have here in this market probably is not is not accurate.
I think, you know, we're probably, you know, I know we've had a little bit of a sell up but we're probably at the top of the range across the board and where we should be.
It's we're going to need a pretty strong market to get through the end of the year.
Well, Jonathan, great having you on the show as always.
Thank you so much for your insights and your perspective a great day.
