RBC's Lori Calvasina and Amy Wu Silverman Talk Earnings Season

Summary

Bloomberg Talks: RBC's Lori Calvasina and Amy Wu Silverman Talk Earnings Season
Aired: July 28, 2026

---

Episode Overview

This episode brings RBC’s Lori Calvasina (Head of U.S. Equity Strategy) and Amy Wu Silverman (Head of Derivatives Strategy) together for a deep-dive into the latest U.S. earnings season, shifting market dynamics, and how investors (from institutional to retail) are positioning themselves. Moderated by Paul Sweeney and Tom Keene, the conversation is energetic, insightful, and laced with humor as both RBC strategists compare notes on equities, sector rotation, hedging activity, and upcoming risks—particularly around technology, financials, and political uncertainty.

---

Key Discussion Points & Insights

The Tech Trade and Market Valuations

• Current Focus on Tech & Semis:
  • Lori Calvasina notes the enduring dominance of tech in client conversations, especially semiconductors and the momentum trade.
  • “...what our work is showing on the semis is that you've hit average valuation levels...the momentum line was late innings, close to done. It's gone on a little bit longer frankly than I would have thought.” — Lori Calvasina [01:29]
• Earnings Anticipation and Options Signals:
  • Amy Wu Silverman observes muted hedging activity despite big tech earnings ahead; option markets are “sanguine.”
  • “You know, it's pretty flat, meaning people are not really deciding to hedge in front of any of these stocks...Metta, you know, its implied move...is about 7%. This thing moves plus or minus 10%...So the fact that it's an inexpensive move is pretty shocking.” — Amy Wu Silverman [02:19]

Institutional Positioning & Rotation Fatigue

• Client Mindset:
  • Lori notes clients are less fixated on market direction and more interested in uncovering opportunity outside tech/semis, though alternatives often seem unappealing. [03:04]
• Hedge Funds & Leverage:
  • Amy highlights “nervousness” due to leverage in ETFs and momentum factor drawdowns, but reiterates that options sentiment on big tech remains calm. [03:48]
  • “My favorite term, the paddling duck on the surface, but you've had these huge multi standard deviation drawdowns in momentum factor.” — Amy Wu Silverman

Earnings Strength & 2027 Risks

• Remarkable Earnings, But for How Long?:
  • Lori sees companies as having skillfully navigated recent challenges, but warns that buffers may run low as events such as wars or inventory gluts unwind.
  • “...one thing we've been highlighting...is...you may need to pull down 2027 earnings forecasts...the buffers, the inventories, the hedges, those things that are kind of getting you through...you're going to have to reset those...done at higher prices.” — Lori Calvasina [04:35]

Hedging Behavior & Market Signals

• Cheap Hedging, Cautious Traders:
  • Amy is surprised by continued reluctance to hedge, speculates that past events (like “Liberation Day”) have made retail investors adept at “buying the dip.” This changes traditional volatility relationships.
  • “Spot goes up and volatility goes up. You know, that's a little mind blowing for someone like me who's been in the market when that's not true, but there is that hesitancy.” — Amy Wu Silverman [06:08]

Sector Rotation and Financials Standing Out

• AI’s Reach & Financials:
  • Outside tech, Lori sees sustained opportunity in financials, pointing to strong revisions, innovation, and the evolving retail investor landscape.
  • “We've been overweight financials for quite some time...Earnings revisions are very strong...seeing companies talk about things like prediction markets...Retail brokerages...new retail and investor...who's participating has changed.” — Lori Calvasina [06:58]

Fixed Income Divergence and Caution

• Cross-Sector Signals:
  • Amy highlights mismatched signals: credit and rates markets aren’t echoing the exuberance seen in equities—CDS spreads are wider, implying deeper concerns.
  • “Both credit, both fixed income, both rates...haven't been flagging the same awesomeness that you've seen in equity. You really see that in CDS spreads...always makes me nervous as an ex fixed income person.” — Amy Wu Silverman [08:18]

IPO Activity, Retail Froth, and Market Foundation

• IPO Reception as Sentiment Indicator:
  • New issues like SpaceX and the potential anthropic IPO are discussed as measures of “market froth,” with Lori noting some retail exuberance but no widespread panic indicators.
  • “The retail investor has looked a little bit frothy...but...CFTC futures positioning, we're not seeing those same signals. So...not seeing reason to panic.” — Lori Calvasina [09:54]

Politics, Election Risk, and the “AI Question”

• Unique Political Risk in 2026:
  • Amy anticipates the election cycle will focus more on “anti-AI” sentiment, not just inflation or gas prices, with potential to drive market correlation and volatility.
  • “What if anti AI sentiment becomes more than just an election story, it becomes a market story?...That’s something that can really reflate correlation in the market...” — Amy Wu Silverman [11:01]
• Famous “Four Tiers of Fear” Framework:
  • Amy and Lori reference Lori's risk framework, breaking market fear into “tiers”—from mild pullbacks to outright recession and “tier four" calamities.
  • “Tier one is 5 to 10% garden variety pullback, tier two growth scare, tier three recession, interest rate shock, tier four. We don't talk about those. We all know those are.” — Lori Calvasina [12:53]

Net Positioning: Long, Short, or Neutral?

• Hedge Fund & Long Only Positioning:
  • Amy: After a recent portfolio “clean out,” most hedge funds are back in, but with some caution heading into a concentrated week.
  • Lori: Long-only investors are always invested, but debate “up quality or down quality,” and whether to bet on rotation or growth (especially AI themes). [13:57–14:17]

---

Notable Quotes & Memorable Moments

• “It's my work wife.” — Amy Wu Silverman bantering about her frequent collaboration with Lori Calvasina [01:18]
• “You know, I try to talk my book and...how hedging is still relatively inexpensive. I think there's this element here of people still remember back to April 2nd. They still remember back to Liberation Day.” — Amy Wu Silverman [06:08]
• “The foundation is still America's nominal GDP over to inflation...” — Tom Keene [12:31]
• “We do kind of go to this tears of fear page...if you don't think recession is on the table, you're Sticking to tier one; if you think it's a recession, near miss...if you think it's a growth scare and we're going to fear recession, but not actually have...if you think it's actually a recession, you go to tier three.” — Lori Calvasina [12:53]

---

Important Timestamps and Segments

• 01:29 — Lori on tech sector focus and semis hitting average valuations
• 02:19 — Amy discusses options market’s calm ahead of major earnings
• 04:35 — Lori addresses risk to 2027 earnings due to buffer depletion
• 06:08 — Amy explains shifts in hedging behavior and volatility relationships
• 06:58 — Lori recommends financials and notes sector innovation
• 08:18 — Amy warns of divergence between fixed income and equities signals
• 09:54 — Lori interprets current IPO/retail sentiment
• 11:01 — Amy on election-year risks centering around anti-AI sentiment
• 12:53 — Lori details her “four tiers of fear” market risk framework
• 13:57–14:17 — Amy and Lori on current hedge fund and long-only positioning

---

Summary Takeaways

The episode offers a robust snapshot of Summer 2026’s market thinking:

• Despite record earnings, there’s rising caution about sustainability into 2027 due to unwinding market buffers.
• Tech and AI remain central, but both strategists urge attention to financials and cross-asset signals (especially warning signs from fixed income and credit spreads).
• Election year risks may take a new form: political outcomes around AI regulation could become a key market driver.
• Most active investors have pared back risk and rotated, but seem to be getting “all in" again—even as traditional hedging activity stays subdued for now.
• The market’s risk structure skews to optimism, with only mild concern about recession, but both strategists remain vigilant about signs of sentiment pivots and “tier two” growth scares as catalysts.

---

For listeners wanting both the big picture and tactical insights, this conversation showcases real-time thinking from two of Wall Street’s sharpest equity and derivatives minds as earnings, politics, and AI converge at a pivotal moment.

Transcript

[A]

The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM,

[B]

Bloomberg Audio Studios, Podcasts, Radio news,

[C]

Paul Sweeney and Tom Keene. What we love to do is particularly at a shop like the Royal bank of Canada, when we get too aligned and too highly competent to say the least, it's fun to get them both into the studio, just to get a window into the day to day grind. I mean, Paul, I mean, you look at Larry Covid, you look at Amy Wu, Silverman, they're talking to two different audiences.

[D]

They are. If I'm a salesman at RBC Capital, I'm making bank off.

[C]

It's a gift.

[D]

I can sell.

[C]

It's a gift anytime. Joining us now for the first time ever, Amy was Silverman Laurie Covid of the Royal bank of Canada. Let me just get this out of the way. Are the two of you on speaking terms?

[B]

Always.

[E]

We talk all the time.

[B]

It's my work wife.

[C]

When you talk about work, from the quant area of Amy Wu, over to your incredible PowerPoint showing the texture of the market, what's the number one talking point?

[E]

I think we've been talking a lot about tech lately. I mean it's, it's just the conversation you can't get away from. And by that I mean, you know, sort of the, you know, the hyperscalers are mostly in a different sector, to be honest. But the, you know, sort of semis and the momentum trade I think is what we've been largely talking about and what our work is showing on the semis is that you've hit average valuation levels. If you look at sort of a 5 or 35 year average. We had been hearing a lot of clients saying they thought the momentum wine was late innings, close to done. It's gone on a little bit longer frankly than I would have thought. But I would say that's really the genesis of a lot of the conversations of late.

[D]

Amy, when you, for your clients, are they, it's a big week for earnings, a big tech week for earnings. How are your clients in the futures and ops? Are they leaning into these earnings? Are they saying like as Laurie said, maybe the momentum thing is kind of coming to an end?

[B]

It's so interesting because ahead of this week, you know, big four reporting huge concentration. Tom's favorite word, skew. You know, it's pretty flat, meaning people are not really deciding to hedge in front of any of these stocks. It's actually fairly sanguine. Look, part of that is we already had a big move in sympathy with Alphabet last week, so some of that's taken it off the table. But to give you an example, Metta, you know, its implied move on earnings day is about 7%. This thing moves plus or minus 10% the last four quarters. So the fact that it's an inexpensive move is pretty shocking.

[C]

The magic of you to as your worker bees, I mean, you're out there hugely seeing clients. Do clients have a bet, Laurie, on the market right now? Are they placing a bet out into 2027?

[E]

You know what's really interesting, Tom, and this has gone back a couple of months now, is, you know, I go into the meeting and I have my price target and the methodology and the five models and yada yada, yada. And people do want to talk about the valuation and earnings model because that's fairly unique in our process. But by and large, some people don't want to talk about market direction. They want to talk about, let's look at all the sectors. Where's their opportunity? There's this view, I would say the last couple of months I've had plenty of, I've had plenty of tech, I've had plenty of semis. What else should I be looking at? And frankly, a lot of the choices haven't been that interesting to people. So you get kind of stuck in those.

[C]

So over in your world, and let's say it's more alternative, more hedge funds, more leveraged bets using mathematics, do they have the same feeling of let's go?

[B]

Yes. And now there's a little bit of nervousness. For instance, you know, last week what we talked about is this whole levered ETF sphere. There's a lot of, you know, what tail will wag the dog because we've had, you know, my favorite term the paddling duck on the surface, but you've had these huge multi standard deviation drawdowns in momentum factor. You have a lot of leverage piled onto these ETFs that are accumulating. And then if you get a burst of correl, what does that mean to the markets? A little bit of nervousness. But when you look at the hyperscaler specifically, option sentiment is pretty sanguine.

[D]

Laurie, these earnings we've been having over the last several quarters, including this quarter, have been just extraordinary. I mean, it's almost August here. I think I need to start thinking about 2027. Are comps going to be like really brutally tough?

[E]

Well, I think in terms of, you know, kind of 2Q versus 2Q, there's going to be some wonkiness. But I think the reality is that companies, you know, have done a beautiful job of managing through all challenges we've, you know, as a society have thrown at them so far that doesn't always last. And so one thing we've been highlighting to people is that sort of a risk we see in the coming months is at some point you may need to pull down 2027 earnings forecasts. And that's not so much about the comps, but it is the idea that if you look at the Iran war, for example, the buffers, the inventories, the hedges, those things that are kind of getting you through the next couple of quarters where you're going to have to reset those, you're going to have to replenish those. We even heard last week one rail talking about how plastics invent inventories were starting to be rebuilt. Those are going to be done at higher prices. So I think that, you know, kind of the idea of what you were able to manage through this year, if you have lingering impact next year might just not be so easy.

[C]

Across America this morning and in Canada as well, Amy was Silverman, Laurie Calvert together from RBC Capital Markets, Paul Sweeney with the ladies who they lunch, the dinner. They, they, they're in airplane terminals a lot.

[D]

Yep, yep, exactly right. I remember those, those days. Amy, are you surprised that we're not seeing more hedging in your world? I would think on margin we hear about the wall of War, I would think we have had a pretty good year here. Earnings can't get any better than this, can they? Really? Are you surprised? Maybe you're not seeing more hedging at all in your world?

[B]

You know, I try to talk my book and the talk about how hedging is still relatively inexpensive. I think think there's this element here of people still remember back to April 2nd. They still remember back to Liberation Day. They, they know there's this kind of cohort of retail who likes to step in, they like to buy the dip. It's changed a lot of the relationships in our market. This idea of spot goes up and volatility goes up. You know, that's a little mind blowing for someone like me who's been in the market when that's not true, but there is that hesitancy. I do think as we kind of cross out of earnings, maybe into midterms, you start getting more overall correlation pickup risk, maybe some more geopolitics. That does start to change.

[D]

So I don't know. I mean, I'm thinking about this, Laurie, are there sectors here? I got to get away from the trade at some point. Where do I go? I mean, do I buy financials, health care?

[E]

Well, look, increasingly right, AI is penetrating everything. You know, back at our energy conference in June, I went to one day of it and heard a lot about how the energy companies are powering data centers. I mean, but look, I do think that if you look outside of tech, we've been overweight financials for quite some time. We've been sticking with that, reiterating that the valuations still look reasonable. I wouldn't say they're cheap. Earnings revisions are very strong. And look, last week, you know, I was sort of responsible on the team for reading the financials companies and I was just really struck by all the innovation that's coming out of certain companies. Not necessarily just the big banks, you know, but seeing companies talk about things like prediction markets and how that appeals to their client bases, seeing the retail brokerages talk about this new retail and investor and how we've really changed who's participating in the market. There's a lot of really interesting stuff going on in financials besides AI right now.

[C]

The people that you talk to like they're all. The difference here is they all drive Maseratis.

[D]

Yeah.

[C]

You know, and fancy cars like that. Lori's talking to people, they got, you know, they get the Range Rover. There's a difference here in terms of cars. The fancy people you talk to like Coop, you know, who's on your Friends and Neighbors on tv, Are they in the market now? Are they cruising through the summer? What's the intensity right now?

[B]

I would say, you know, prior to maybe two weeks ago, there was kind of a positioning clean out and a lot of people felt like that shakeout was good coming into earnings because it gave people clean slate. Now I would say when you look at the flows, people are fairly involved. And I guess one warning signal for, for me is that both credit, both fixed income, both rates, you know, they haven't been flagging the same awesomeness that you've seen in equity. You really see that in CDS spreads against equity.

[D]

Exactly.

[B]

You know, and that always makes me nervous as an ex fixed income person. I don't know Tom, you decide who's smarter but the signals in the market, they're currently not telling you the same things but people are fairly all in on it.

[C]

No, I totally take that. So there's leverage pulled back because they're starting to see whispers in the fixed income market.

[B]

Yeah, I mean I would say they're not even whispers. They've been fairly loud for quite a long time. You know people on fixed them are not happy about the debt issuance. You see that in the widening CDS spreads, you see that in the change in rates, volatility and obviously Wednesday we, we got a big one in terms of what Warsh will say even if nothing occurs. So I think that might reprice a few things.

[D]

Tom, your SpaceX has got a 110 bid pre market. Tom, so you're not happy about that.

[C]

To me, she called me up, she said don't take the 8,000 shares.

[D]

Laurie, what's the market? Just generally speaking when you see a big monster deal like SpaceX come out, trade up initially but boy it's been really heavy since then. I mean we got anthropic presumably going to come public in the fall. As a strategist what's that tell you about just the new issue market, what that tells you about that.

[E]

So look, I would say for me, you know I sort of relate this question to market froth and when I think about, you know, and unfortunately I just can't really get into the IPO dynamics but if you go and look at like a lot of different gauges, we see some evidence that the retail investor has looked a little bit frothy. If you look at the conference board data point on stock market optimism but if you look at things like aai, if you look at things like CFTC futures positioning, we're not seeing those same signals. So I understand the concerns people have but I'm not seeing reason to panic across a wide variety of indicators.

[C]

Laurie, Kelvin and Amy was Silverman with us a special treat in the studio together. I mean you know they have to, you know I think, I think, I think President Mr. Carney of Ottawa is involved as well. They can't be in the same room together. This is a treat, pretty cool treat.

[D]

Amy, we've got a lot of people that have been telling me for a long time that election years dicey, you got to be careful here. Are you seeing people maybe do you think you're going to see on your desk people trying to buy some hedging going into these elections? Is that typically what you see or not so much?

[B]

I would Say yes. This year I'll tell you we have. Laurie and I have been doing quite a few marketing sessions together and one thing that has been coming up in terms of sentiment change is essentially this worry that midterms isn't going to be about gas prices. It's not necessarily going to be about inflation. It's going to be about anti. I, I remember in one meeting we step in and the first thing the client asks is, you know, what do you think of this data center moratorium? What does that mean? And so the point I'm trying to make is look, what if anti air sentiment becomes more than just an election story, it becomes a market story. That's something to me that can really reflate correlation in the market because it touches all aspects of the markets. The surge protector plugged into itself. Right. Like we know a lot of these, these things have tentacles and that's something that we're watching quite closely.

[C]

So talk to Laurie now and our audience worldwide, Amy was Silverman. What do the left and right tell tales tell you right now that redound over to Lori's world of long term investment.

[B]

So one of my favorite Laurie charts in the whole world is her four tiers of fear. And I can tell you that the left tail.

[C]

Let's just have the children to go to bed.

[B]

Yeah, yeah, yeah, that too. But, but you know we're, we're not pricing in tears of fear on that left tail and we're still pricing in kind of exuberance on the right tail. In particular when you look at some of the, not semi specifically but when you look at the hyperscalers haven't changed that much. And to me it's interesting when you see that start to flag then I think that sentiment.

[C]

So Laurie, the fund is, Barry Eichengrad would call it the, the financialization of the system, the Amy Will Silverman slice and dice tranches and all that, the foundation is still America's nominal GDP over to inflation and that when you talk to the derivative crews.

[E]

Yeah.

[C]

What do you tell them about the foundation?

[E]

So, so we do kind of go to this tears of fear page and it's basically tier one is 5 to 10% garden variety pullback, tier two growth scare, tier three recession, interest rate shock, tier four. We don't talk about those. We all know those are. And you know, we saw this back in March. We did a round of marketing together and we kept putting that table in front of people and I said look, if you don't think recession is on the table, you're Sticking to tier one, if you think it's a recession, near miss. This was, you know, when the Iran war was, was still escalating and markets were still falling as well. Look, if you think it's a growth scare and we're going to fear recession, but not actually have, when you go to tier two, if you think it's actually a recession, you go to tier three. And the hedge funds kept pointing to tier two and saying, I think at worst it's going to get to this, but we're probably in tier one. And that was probably the most valuable thing we learned in March was that people were nervous, they were watching the market fall, but the fast money was not looking to bake in recession. And that helped us, you know, sort of really understand when the pivot happened, that it was really the pivot.

[D]

I don't know either of you two or both. Are hedge funds net long today or are they net short, do you think so?

[B]

I would say there, there was this clean out prior maybe like a week and a half, two weeks ago. And then I think in terms of flows, most folks have gotten back in and there's a little bit of tentativeness right now because we have a big concentration week. But there was sort of a clean out, I would say a week and a half ago where people had taken a lot of risk off the books really.

[E]

I think in my world, right. You know, the long only space, you're always invested, right. It's a question of whether you're up quality or down quality. I think it's very funny because I do think, you know, as I've been out on the road talking to the long onlys, everybody's kind of talking their books. So the people who need rotation to work are in the pro rotation argument. And the growth funds who are really more all in on the AI trade, you know, are more sort of talking about that's going to bottom out pretty soon. Sound a little bit more like the hedge funds. But I do think, you know, kind of going back to the midterm conversation earlier, it's just coming up in more and more meetings and I'm not getting a sense of what trades people want to do yet, but they are starting to want to talk about it. After a year of not wanting to talk about stuff like that, I hope

[C]

we can do this again. I'm seeing like post Labor Day. This would be fabulous. Laurie Covid, Amy was Silverman together from the Royal bank of Canada and really appreciate that RBC Capital Markets, when you're

[D]

running a business the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering and claims experience. Learn [e-mail] Riskmitigation policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut.