Bloomberg Surveillance TV: July 27th, 2026

Summary

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Bloomberg Surveillance TV: July 27th, 2026 — Detailed Episode Summary

Episode Overview

This episode, hosted by Jonathan Ferro, Lisa Abramowicz, and Annmarie Hordern, tackles the latest trends and challenges in financial markets, economics, and geopolitics. Key topics include the uncertain outlook for US tech stocks, inflation’s impact on policy and consumer behavior, the US-Iran conflict’s implications for markets and policy, and the Federal Reserve’s interest rate stance. Top guests include Savita Subramani (Bank of America), Tobin Marcus (Wolf Research), and Lindsay Piangsk (Staple).

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I. State of US Tech and Equity Markets

(Segment: 01:49 – 09:14)

Key Discussion Points

• The S&P 500 is entering a pivotal earnings week, especially for tech, but expectations are muted.
• Savita Subramani (Bank of America) holds a bearish “street low” S&P year-end target of 7100, citing a compromised outlook.
• Tech’s leadership is waning; while results have been strong, stocks are no longer rewarded for earnings beats.
• Consumer health is broadening, but high-income segments (especially tech) are softening. Lower-income consumers now see more benefit, shifting the market narrative.

Insights from Savita Subramani

• Tech’s Waning Outperformance:

  “The good news for tech seems to be priced in. The companies are no longer rallying…In fact, they’ve sold off on earnings and revenues…Tech is contributing the lion’s share of earnings, but they’re no longer rallying on good news.” (02:43 - 04:45)

• Earnings and Leadership Concentration:

  “We’re in an environment where the consumer has been chugging along, defying all expectations...But this year...is a little bit less bullish.” (03:40)

• Capex Returns Flattening:

  “You’re still in an environment where you’re getting positive returns on your capex if you’re a big tech company, but those returns are thinning.” (04:56)

• Investment Shifts:

  “Inflation-protected equity…like REITs and utilities…can actually grow with inflation and keep up, and return capital to retirees who need income. That’s an area of the market we’re bullish on.” (08:17)

Notable Quotes

• Jonathan Ferro:

  “Is your 7100 expectation just that tech has further to sell off? The rest of the market can keep outperforming…but it won’t be enough to offset those losses.” (04:45)

• Savita Subramani:

  “It’s positioning. When tech sells off, then you see a kind of comeback because investors are like, okay, these companies aren’t broken.” (06:30)

Memorable Moment

• Savita’s contrarian call that retirees and yield-seeking investors may shift away from cash toward income-generating, inflation-protected equities as cash delivers negative real returns. (08:17)

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II. US-Iran Conflict and Geopolitical Risks

(Segment: 12:00 – 19:06)

Key Discussion Points

• Ongoing US-Iran strikes and tactical pauses; speculation over whether the cause is depleted US munitions or broader diplomatic strategy.
• Market and political reactions focus on the risk of further escalation and its implications for oil, defense spending, and electoral politics.
• Persistent gridlock in finding a diplomatic off-ramp; distrust in negotiation processes due to personnel and substantive differences.

Insights from Tobin Marcus

• Munitions Shortages as a Driver:

  “We were flagging both spiking bond yields and the depleting stockpile of air defense munitions as two things that could essentially force some kind of a…durable diplomatic turn, a de-escalation, a deal.” (14:23)

• Diplomatic Stalemate:

  “It’s easy to just stop shooting, which is what both sides have done for now...I don’t see any indication that [Iran] will stop strikes on ships…It is challenging for me to see what a permanent solution could look like.” (15:16)

• Political and Budget Implications:

  “I don’t think…they have the votes to move a bigger number [for defense] through reconciliation. So, we can all see the problem now in terms of the defense industrial base, the adequacy of our munition stockpiles. But getting the funding to…structurally change that I think will be very challenging.” (18:17)

Notable Quotes

• Lisa Abramowicz:

  “No vessels are getting through the Strait of Hormuz and the discussions Iran is having right now…are just about control of the waterway.” (12:58)

• Jonathan Ferro:

  “This administration has seen a real loss in popularity as a result of the Iran war…what is the Democratic proposal on how to extract the US and create some sort of status quo in the region?” (16:50)

• Tobin Marcus:

  “I certainly would not say that there is a kind of a cohesive Democratic strategy at this point.” (17:11)

Memorable Moment

• Lighthearted grimness from Ferro on the possibility:

  "If we're talking about this in two and a half years, can you imagine two and a half years still talking about this?" (19:06)

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III. Fed Outlook, Interest Rates, and Inflation

(Segment: 22:02 – 26:35)

Key Discussion Points

• The episode examines expectations for the upcoming Fed meeting, especially amid persistent inflation and geopolitical risks.
• Disinflation data gives Fed doves hope, but core inflation remains above target, keeping the debate alive.
• The unusual dynamic of strong labor markets despite high energy prices is discussed as a puzzle for policymakers.

Insights from Lindsay Piangsk

• Policy Gridlock Likely:

  “Conflict often begets gridlock, as such rates are likely to remain on hold, at least for some time longer.” (22:02)

• Dovish/Hawkish Split:

  “With the risk of upside pressure, further rising tensions overseas…this puts the more hawkish members at an uneasy position that we should take this more aggressive action and reverse some of that policy easing…” (22:21)

• On Unexpected Labor Market Trends:

  “Typically…the fastest way to derail the US consumer is by sustained heightened energy prices…But…we’re continuing to see this pressure at the pump…yet the economy is still expanding…The latest pathway of higher energy prices has not yet derailed the consumer or the broader economy.” (24:33)

• On Dissent and Policy Direction:

  “If…we see the Fed come out and decide to make a policy move, absolutely I would expect to see some dissensions. However, if we see the Fed take the more steady pathway…dissents may be reined in.” (25:30)

Notable Quotes

• Jonathan Ferro:

  “If the Fed were to hike rates at this meeting, the market would price in three or four rate hikes immediately—they would shoot first and ask questions later.” (23:23)

• Lindsay Piangsk:

  “…If the Fed simply comes out, makes that aggressive move higher without any guidance…I think the market would anticipate that the Fed has shifted their line of thinking to the prospect that inflation is rising.” (23:39)

Memorable Moment

• Piangsk’s observation that Kevin Warsh, Fed governor, would prefer to ease policy but must wait for inflation to moderate. (26:07)

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IV. Notable Quotes & Highlights by Timestamp

• [02:43] Savita Subramani: “The good news for tech seems to be priced in...In fact, they've sold off on earnings and revenues.”
• [06:30] Savita Subramani: “It’s positioning. When tech sells off, then you see a kind of comeback...Liquidity has been a big driver of tech really holding up better than one might expect.”
• [14:23] Tobin Marcus: “We were flagging...spiking bond yields and the depleting stockpile of air defense munitions as two things that could...force some kind of a...diplomatic turn, a de-escalation, a deal.”
• [22:02] Lindsay Piangsk: “Conflict often begets gridlock...rates are likely to remain on hold, at least for some time longer.”
• [24:33] Lindsay Piangsk: “The latest pathway of higher energy prices has not yet derailed the consumer or the broader economy.”

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V. Additional Notes

• The hosts maintained their signature analytical and conversational tone, blending market analysis with current affairs.
• Advertisements, intros, and ending remarks were omitted from this summary for focus on core content.

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For more news and real-time updates, listen to Bloomberg Surveillance live, weekday mornings on Bloomberg TV, or subscribe to the podcast.

Transcript

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Bloomberg Audio Studios Podcasts Radio News.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. Jonathan I'm Jonathan Ferro along with Lisa Abramowicz and Annmarie Horden. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App. We begin this hour with stocks kicking off the week higher ahead of a massive slate of tech earnings. Savita Subramani with Bank of America has a street low 7100 year end price tiger on the S and P and writes the following Underlying earnings growth remains strong, but good results are no longer enough to move the needle in tech. Savita joins us now for more. Savita welcome to the program. I start with a large question and I imagine it involves a complex long answer and you'll have space for that. But why is the outlook for the index right now in your mind so compromised?

[Savita Subramani]

Yeah, lots of different reasons. But one is what we've been talking about, what I've been listening to on the show. So far the good news for tech seems to be priced in. The companies are no longer rallying and outperforming on beats on earnings and revenues. In fact, they've sold off on earnings and revenues. We've had an environment where the rest of the market is actually pretty healthy. But I think it's all been obscured by the elephant in the room which is mega cap tech. And the idea that these stocks are going to continue to lead us to new highs, I think is, is, is no longer. Look, I like tech, I think tech is the future. But I think right now we're in an air pocket and we've been talking about this all year. You know, the idea that we're in an environment where we know that, you know, we know I, we are bullish on AI, we know that companies are spending a ton of money. ISM is above 50, well above 50. You know, capex is strong, the economy is strong, inflation is pretty healthy, maybe even overheating a little bit. But the idea that we're going to see that same leadership from the ballast of the market I just think is very hard to paint. On top of that you've got an environment where the consumer has been chugging along, defying all expectations and maybe that continues. But this year I think what we've seen so far is a little bit less bullish. So for example, if you look at layoffs in January, they were primarily in high paying jobs, in tech jobs. It's been an environment where the highest, the higher income cohort of the S and P, sorry of the, of the U.S. economy is not necessarily feeling as healthy as they were a couple of years ago, whereas lower income is now getting a boost. So I think that's healthy in terms of broadening, but it's not necessarily, you know, kind of the same story we've seen for the last three years.

[Jonathan Ferro]

I'm just curious, is your 7100 expectation just that tech has further to sell off? The rest of the market can keep outperforming or chugging along here, but it won't be enough to offset those losses.

[Savita Subramani]

Yeah, exactly. And I think we've kind of seen that in, you know, in certain weeks where you have really negative tech moves, you haven't necessarily seen the market hold up as well. Ideally we get to the end of the year and you know, we're at a point where the, the concentration risk in tech is lesser and you can kind of set yourself up for a healthy 2027 in terms of broadening, in terms of, you know, kind of cyclicals just outperforming. But I think this year we're still in an environment where tech is contributing the lion's share of earnings they're no longer rallying on. Good News. We're seeing CapEx penalized. And we talked about this earlier in the year as well. You're, you're still in an environment where the pot, where you're getting positive returns on your capex if you're a big tech company, but those returns are thinning. And the idea that we're going to pay such a high multiple for mega cap tech today, say is, is hard to sell if your returns on invested capital are actually starting to get depressed.

[Jonathan Ferro]

So that I just wonder the sort of counter argument to this is what happened with Metta and Alphabet late last year when they announced a lot of capex and they were punished severely for it and then they delivered these incredible earnings on an ongoing basis and once again their stocks outperformed. Why are we not set up in the same way if people are just getting nervous and they still, you see some, still still see companies delivering well beyond any expectations?

[Savita Subramani]

Yeah, I think that it's partly positioning, right? I mean, you look at when tech sells off, then you see a kind of comeback because investors are like, okay, these companies aren't broken. I still want them as core holdings in my portfolio. Maybe I'm going to add a little exposure. So I think liquidity has been a big driver of tech really holding up the better than, than, than one might expect. Liquidity has been amazing. I mean, if you think about it, last year, this year we've had pretty low, pretty low levels of volatility in the market. We've had, you know, a shock or two in terms of geopolitics, but the market has held up quite well. And I think that starts to change today because if you think about inflows into equity markets, we're at a point where asset allocations are pretty, pretty healthy in equities, maybe not as healthy as they were in the tech bubble, but we've got, you know, less cash sitting outside of equities, except for in retiree balance sheets. And I think the idea that you're going to continue to see that machine of cash risking up and going after tech stocks, that, that narrative to me just seems like it's, it's less less likely in the years to come. I do think there is one pocket of the market that is going to catch a very strong bid and that is inflation protected equity. And here's the idea. If I'm a retiree and I've got you know like 7 trillion in cash just sitting there, it's been sitting there since the Fed started hiking interest rates. That cash right now has a negative real return. Cash is the worst place to be during periods of higher inflation. So retirees I think are going to start to look for inflation protected income. Are they going to get it in tech? Not necessarily. I think they go back to things they used to own like REITs and, and utilities, MLPs, you know, kind of the yield year cyclical areas of the market that can actually grow with inflation and keep up and return capital to retirees who need income, basically. So I think that's one area of the market that hasn't moved as much as it should and that's where we would really be very bullish. So I guess just to put a point on it, if you had to pick an index, it would be large cap value yield year kind of cheaper stocks that, that offer some inflation protection.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

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[Jonathan Ferro]

So here's the latest this morning. The U.S. and Iran causing strikes for a third straight night. The Trump administration denying reports the break in attacks is due to falling stockpiles of air defense missiles.

[Lisa Abramowicz]

That's right. When it comes to what's going on, when it comes to Iran, we have seen this before. The President has taken pauses. We've had seen actual diplomatic discussions right now the reporting is really lending hand to the fact that we we've just have depleted too many of our munitions and they're concerned especially when it comes to the Patriot missile system. At the same time we also have the fact that this president potentially is a little bit nervous as well as where oil prices were near $100 a barrel is when we decided to take this tactical pause. So there's a lot of potential issues going into this decision. But one thing is for sure, there is still a conflict right now when it comes to to the Strait of Hormuz in the Middle East. No vessels are getting through the Strait of Hormuz and the discussions Iran is having right now they say with Amman is just about of control of the waterway.

[Jonathan Ferro]

So which one is it right now you've got markets, you've got midterms. I think they're one or two of the same thing right now. One informs the other to some extent and then you've got stockpiles and stockpiles have lingered as a reason, an issue shaping how we approach this particular conflict. It's lingered for the last five months,

and it's not exactly a question of whether that they have enough munitions to actually keep going. There was a Wall Street Journal article that I thought was really telling about General Kaine, General Dan Kaine going to the White House and saying, look, longer term, there are low inventories in particular of air defense interceptors, and that longer term this could present a problem for the United States, even the medium term, should there be a conflagration in the region or anywhere else at a certain point, that is a risk that is weighing on the side of maybe not taking action, especially if there isn't a clear outcome that can be accomplish.

Toby Marcus of Wolf Research writes in the following. He says a durable diplomatic off ramp is even harder to envision this time. We wouldn't fault anyone who prefers to tune this all out. They're not alone. But we do suspect it'll get worse before it gets better. They're not alone is my words, not Tobin's, Though I'm sure he agrees to have been welcome to the program. It's important for us in financial markets to try and get an understanding of what this President is sensitive to and what might shape outcomes in the Middle East. This is the reporting from the New York Times. Among the worries is that expanded hostilities could dangerously drain the diminished stockpile of air defense munitions in the Middle East. Tobin, how much waste should we put on that reporting over the weekend?

[Tobin Marcus]

I think it's a very significant consideration and one that we've been talking about since May, if not before, is a factor that could cause a de escalation. In mid May, before we got what I think was the sort of final turn towards the negotiation of the MoU, we were flagging both spiking bond yields, which then topped out around 4.67 on the 10 year levels that we've breached and are still near even after the rally yesterday. And the depleting stockpile of air defense munitions is two things that could essentially force some kind of a, you know, durable diplomatic turn, a de escalation, a deal. And I think those two factors are still very, very live and are driving a lot of what we saw at the end of last week.

[Lisa Abramowicz]

But alive for how long, Tobit? Until the President decides that it's time to escalate, or do you actually see a diplomatic off ramp at this moment?

[Tobin Marcus]

Well, yeah, I mean, it's easy to just stop shooting, which is what both sides have done for now, I think, you know, Iran, tellingly, is saying they're going to stop strikes on US Bases as long as the US Strikes stop, but I don't see any indication that they're going to stop strikes on ships, if necessary, to try and force them to accept their leadership in this strait. So, you know, I mean, we already saw the best attempt to finesse the differences between the US And Iran on control of the Strait of Hormuz in the MoU, and it immediately fell apart. So it's. It is challenging for me to see what a permanent solution could look like unless the US Just becomes willing to accept Iran's assertion of control over the strait. And thus far, we really have not been doing that.

[Lisa Abramowicz]

There's other reports out, especially about late Senator Lindsey Graham and this footage that's now starting to come out from a documentary he was filming. And he allegedly told Jake Sullivan they not believe Trump's envoys, Jared Kushner and Steve Wyckoff, could manage the negotiations because of we what he considered conflict of interest. Do we have the right personnel at the table?

[Tobin Marcus]

Well, it's been a very kind of multifactorial process. All through the diplomatic track, we have these multiple third countries mediating. The messages coming into the White House seem to be going not just through Wyckoff and Kushner, but also through Rubio, through Vance, who's been, you know, very frontally involved at various stages. So I don't really see any of the diplomatic challenges as being, you know, just down to the composition of the negotiating team. I think basically the challenge is how far apart the two sides are substantively and whether or not they can come together absent more pain for one side or the other.

[Jonathan Ferro]

Tobin, this administration has seen a real loss in popularity as a result of the Iran war. At the same time, Democrats don't have a significant popularity when it comes to the view of how they would handle the situation of Iran. Or what is the Democratic proposal on how to extract the United States and create some sort of status quo in the region?

[Tobin Marcus]

Oh, I certainly would not say that there is a kind of a cohesive Democratic strategy at this point. You know, I think the position from most Democratic leaders is the problem is that we're in this situation already. You know, we starting this war was the mistake at this point. There's no kind of clean or easy way out of it, which I think is true. You know, if they have the luxury, as the opposition party, of just being able to point to the president, say, look at how badly he's managing this conflict. And I think that message is working just fine with voters. But you know, if, you know, God forbid, we're still in the middle of this, you know, two and a half years from now and a Democratic president comes in and has to try and uncrack the egg, I think that'll be really challenging.

[Jonathan Ferro]

How does this really factor into congressional support for increases in budgets, for creating some sort of backstop to support the military? And this really raises some real questions. Operationally it's one thing, and this happens every single cycle, whether it's Republicans or Democrats. If they don't like the policy, they won't vote for it. But at a certain point, how do you end up with some sort of cohesive policy that can gracefully extract the United States while also having the resources to restart, restock the, the ammunition stockpiles?

[Tobin Marcus]

Yeah. On the defense funding front, I think we're in for a relatively unexciting outcome. I mean, we've seen these very large numbers thrown around. The President proposing a total budget of $1.5 trillion. We're not going to come anywhere close to that. I think the base defense budget, we're going to get a basically status quo outcome, low single digit growth that's out of the bipartisan negotiations that will eventually kind of pick up in the Senate. Then they're using reconciliation to get through a really quite modest slug of money in the 60, $65 billion range. And I think that's all that they're going to get. You know, I don't think that they're also going to get a bipartisan supplemental in addition to that reconciliation bill. I don't think they have the votes to move a bigger number through reconciliation. So, you know, we can all see the problem now in terms of the defense industrial base, the adequacy of our, our munition stockpiles. But getting the funding to like really structurally change that I think will be very challenging.

[Jonathan Ferro]

Those of serial just been thrown across trading floors the world over. When Tobin Marcus said, if we're talking about this in two and a half years, can you imagine two and a half years still talking about this? Stay with us. More Bloomberg surveillance coming up after this.

[4imprint Advertiser / Nathan Hager]

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[Public.com Advertiser]

certain support for this show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on Public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public

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[Jonathan Ferro]

Lindsay Piangsk has been busy. She writes the following over a staple for policy Just as in politics, conflict often begets gridlock, as such rates are likely to remain on hold, at least for some time longer. Lindsay joins us now for more. Lindsey, welcome to the program on hold then, but just describe what the debate might sound like. The starts tomorrow and concludes on Wednesday.

[Bloomberg Host / Karen Moscow]

Well, I think Mike really laid out a lot of the factors. When you look at the latest inflation data, the disinflation data, I think that clearly swings the pendulum into the dovish camp, giving them credence for the fact that price pressures may abate into the end of the year if we do see the impact of tariffs fall off, and if we can see some sort of normalization in the energy market. On the flip side, even with this recent cooling from peak levels, inflation is still double the Fed's intended target. And with the risk of upside pressure, further rising tensions overseas, resulting in additional upside side pressure and energy costs, this puts the Fed, the more hawkish members, at an uneasy position that we should take this more aggressive action and reverse some of that policy easing that we saw into the end of last year. So as I suggested, this, this ongoing conflict, this clear divide between the hawkish and more dovish members, is likely to result in policy simply remaining steady on hold for the next several meetings.

[Jonathan Ferro]

Lindsey, what do you make of the point that Krishna Guha was making earlier, which is that the Fed were to hike rates at this meeting, that the market would price in three or four rate hikes immediately, that they would shoot first and ask questions later? Do you think that that's the likely path of travel should they move this week?

[Bloomberg Host / Karen Moscow]

Well, I think it depends on the communication that accompanies that decision. But if there is a lack of communication and the Fed simply comes out, makes that aggressive move higher without any guidance, any further forward guidance for what we can expect going forward, I think the market would anticipate that the Fed has shifted their line of thinking to the prospect that inflation is rising. It's not under control. And if that's the case, it would be unlikely that one rate hike would quell that concern and convince the committee that inflation was back on a pathway to that 2% target.

[Jonathan Ferro]

Lindsey, it's incredibly unusual, and you know the this very well, that when you see an increase in energy prices to this degree in the face of a shock, that you get a sudden real expansion in the labor market, that you see a real acceleration in terms of job creation. How do you understand that? Because that is exactly what's happened this year. And it's incredibly unusual.

[Bloomberg Host / Karen Moscow]

It is because typically when we think about the economy, the fastest way to derail the US Consumer is by sustained heightened energy prices. And as they continue, consumer based economy, if the consumer isn't happy and healthy out in the marketplace spending, we can't expect much expansion or much growth then from the broader economy. But you're right, we're not necessarily seeing that. We're continuing to see this pressure at the pump, higher energy prices, but the economy is still expanding now, certainly not at an overly robust pace by any means, but we maintain this decent pace and as we look out to the second quarter we're likely to continue around this 2ish percent with still stable conditions in the labor market. Again, we have lost some momentum, but the average pace around 10000 per month does suggest that the latest pathway of higher energy prices has not yet derailed the consumer or the broader economy.

[Lisa Abramowicz]

Lindsey, do you expect dissenters this week?

[Bloomberg Host / Karen Moscow]

I think it depends again on that rate decision. If for some reason we see the Fed come out and destroy decide to make a policy move, absolutely I would expect to see some dissensions. However, if we see the Fed take the more steady pathway, maintain the current level of policy as I expect, the dissents may be reined in if there is a very ample conversation around a potential move in one direction or the other down the line.

[Lisa Abramowicz]

We've been having this conversation all morning and Blake Gwynne of RBC was talking about it that he actually thinks the dissenters, if they hold, could help Kevin Warsh. Do you think that gives them him cover?

[Bloomberg Host / Karen Moscow]

I think right now Kevin Warsh very much would like to steer the monetary policy ship to a lower interest rate environment, but I think right now he recognizes that that's a more medium to longer term outcome given the level of inflation, given still the upside risks. I think at best Warsh can expect to hold policy steady and along the way simply downplay any prospects expect for interest rate hikes, even if the conversation begins to move in that direction.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast bringing you the best in markets, economics and geopolitics. You can watch the show live on Bloomberg TV weekday mornings from 6am to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen and as always, on the Bloomberg Terminal and the Bloomberg Business. Applause.

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