Bloomberg Talks: Mike Wilson Talks Earnings and Government Shutdown

Episode Date: November 13, 2025
Host: Bloomberg (Nathan Hager and Karen Moscow)
Guest: Mike Wilson (Chief US Equity Strategist, Morgan Stanley)

Overview

In this episode, Bloomberg hosts Nathan Hager and Karen Moscow speak with Mike Wilson about the immediate and broader market impacts of the recently averted US government shutdown. The discussion spans key topics: the reliability of economic data post-shutdown, the Federal Reserve's trajectory on interest rates, the evolving earnings story, and shifts in market performance. Wilson emphasizes that while a major crisis was avoided, underlying issues persist, particularly regarding policy and the need for rate cuts to fuel private sector growth.

Key Discussion Points and Insights

1. Immediate Impact of the Government Shutdown

• The shutdown's end brings relief but not resolution to deeper issues.

• Most people, especially government employees, are just getting back to normal, but the risk could resurface as early as January.

  "I don't think they've really solved some of the main issues. So this is one that could pop up again as early as January... But I think we averted the worst of it."
  — Mike Wilson, 00:58 - 01:43

2. Reliability of Government Data

• Potential delays or gaps in key reports (like CPI and jobs numbers) might hurt market functioning.

• Wilson notes the persistent issues in economic data accuracy, especially since COVID-19, complicating the Fed’s task.

  "These data are somewhat... they're very lagging and they're not as accurate as they had been, you know, pre-Covid."
  — Mike Wilson, 01:55 - 02:52

3. Fed Policy and Rate Cut Expectations

• Wilson updates his forecast to 5-6 interest rate cuts over the year—more aggressive than market consensus (currently 3-3.5).

• The market’s narrow performance reflects anticipation for rate cuts to spark robust economic activity, particularly in the private sector.

  "We do need kind of that base rate a bit lower and that's why we've kind of stayed at the quality curve and why the market performance has been quite narrow."
  — Mike Wilson, 03:02 - 03:54

• The Fed is intentionally moving slower post-pandemic, and Wilson believes this is a reasonable, if imperfect, approach.

4. Market and Earnings Landscape

• Unusual divergence: while the broader market slipped, the Dow hit new highs through the shutdown.

• Wilson sees the beginnings of a broadening market story, helped by improving private sector earnings, pent-up demand, and policy changes.

  "In the third quarter so far... we are now seeing double-digit earnings growth on a year over year basis for the median stock. And that's the first time we've seen that kind of growth in four years."
  — Mike Wilson, 04:09 - 05:10

• He points to the end of the so-called "rolling recession" and the potential start of a new bull market.

5. Earnings Projections for 2026

• Wilson considers low double-digit earnings growth "very achievable" for next year, aligning with current Wall Street consensus.

  "The consensus right now is low double digits, and we think that's very achievable."
  — Mike Wilson, 05:15 - 05:26

6. Fed Cuts: A Prerequisite for Broader Rally?

• While the market may not falter if the Fed underdelivers, real broadening needs the Fed "ahead of the curve."

• Wilson uses the two-year Treasury yield as a Fed policy gauge: the Fed is still a bit tight, and rates must ease for full market participation.

  "The broadening story requires the Fed to get ahead of the curve... I would like to see the Fed get below that level and then you'll see that broadening out."
  — Mike Wilson, 05:42 - 06:47

Notable Quotes & Memorable Moments

• On Ongoing Risks:

  "I don't think they've really solved some of the main issues. So this is one that could pop up again as early as January... But I think we averted the worst of it."
  — Mike Wilson, 01:24 - 01:43

• Data Quality and Challenges:

  "Since COVID some of these data... the collection of themselves has been a little bit erratic and a little less reliable in that regard... this is making the Fed's job harder."
  — Mike Wilson, 02:16 - 02:52

• Market Performance:

  "A good chunk of the private economy has been in a recession for many years and we think that's now emerging from that... early signs that we're seeing a broadening of the earnings story."
  — Mike Wilson, 04:22 - 05:10

• Fed-Market Tensions:

  "Markets like to challenge authorities, you know, monetary policy, et cetera. And, you know, they're not happy, they'll... they'll make that, they'll make them. No, and then they'll get what they want."
  — Mike Wilson, 06:28 - 06:47

Timestamps for Important Segments

• 00:35 — Show opens with government shutdown aftermath; Mike Wilson joins
• 01:00-01:43 — Wilson on shutdown relief but lingering risks
• 01:43-02:52 — Uncertainty around government data and its effect on markets/Fed
• 03:02-03:54 — Wilson discusses Fed rate cuts, market expectations
• 04:09-05:10 — Market and earnings trends; signs of economic broadening
• 05:15-05:26 — Earnings projections for 2026
• 05:42-06:47 — Broader rally tied to Fed policy; balancing act in play

Conclusion & Episode Significance

Mike Wilson provides a nuanced outlook on markets post-shutdown, warning that fundamental risks persist. He calls for cautious optimism rooted in improving earnings and stressed the still-critical role of timely rate cuts. For market watchers, investors, and policymakers, Wilson offers both reassurance and a call to heed underlying tensions—especially between market hopes and monetary policy realities.