Recession concerns 'almost entirely off the table': Jack Manley

追加: 2026-05-24

[00:00:00]Let's go right to the floor show for some guidance from JP Morgan Asset Management Global Market Strategist Jack Manley. Okay, inflation, we know that we have it.

[00:00:08]>> Yep. We also do not have a clarity on coming to an end with the war. So, what does this all go come to? Nvidia's earnings? I think all ultimately this is going to come down to earnings, Liz. I mean, and that's that's the thing that over the long run is ultimately going to drive stock prices. But, you know, my my struggle right now is I think the inflation narrative isn't quite being told the way that it should be told. We have to consider that coming into this conflict, we were in a very strong position from an inflationary perspective. Inflation in the United States in in the low twos. So, we're talking about inflationary pressure.

[00:00:41]We're seeing inflationary pressure, but we're not looking at those dog days of 2022 when inflation had an eight, nine handle on it. CPI is ultimately going to cap out somewhere in the low to mid fours. That's my assumption. And ultimately drift lower.

[00:00:56]When I think about how that translates into monetary policy, and that is ultimately like the most important thing to have a view on. The Fed's got a dual mandate. Yes, it is looking at prices.

[00:01:05]It is also looking at the labor market.

[00:01:07]And while the unemployment rate is very low, the labor market's very tight, it isn't as healthy as it's been. There are some signs of weakness. Is the Fed willing to tighten the screws on a consumer that's already under pressure just to push gasoline prices down by 20, 30 cents a gallon? I frankly don't think so. And if you don't think so either, then that upends this whole narrative around higher interest rates, the yield curve shifting in a in a in a in a positive direction, downward pressure on stock prices, and frankly allows us to come back to that earning story.

[00:01:37]>> Okay, so when we look at it through the prism of the markets, >> Mhm. what do you see as an opportunity when it comes to filling out people's portfolios? So, you are right now witnessing a bit of an unwind in the momentum trade. And that started last Friday. It's rolling through through where we are right now.

[00:01:53]>> Chips, AI. Exactly right. A lot of money's been made in these names really over the past month or so, and I think some of that unwinding has to do with the upward pressure we've seen on the yield curve. Some of that unwinding has to do with what you were you were just speaking about earlier, which is that we've been hearing a lot about the off-ramp, but the off-ramp hasn't exactly presented itself. Markets are shrugging that off a little bit. We're giving up a bit of what we what what we took. But ultimately, we are still very confident. I'm still very confident that this conflict will end sooner rather than later. We don't know exactly when, but it will. And when it does, oil prices move lower. And when that happens, we can go back to focusing in on the fundamentals, which is a broadening out in earnings. It's not just the Mag 7, it's tech more broadly, it's the chip makers, it's memories, it's CPUs, not just GPUs. It's all the picks and shovels that go into the building these data centers. It's still an AI-oriented market, but it's a market where there are a lot more opportunities.

[00:02:43]>> Okay, but the 30-year yield, as I said, making gurgling noises. Not only is it higher than when it spiked during the tariffs of a year and a half ago or a little over a year ago, but it is now at 19-year highs.

[00:02:58]>> Yeah. That is a message. You don't seem to be too concerned about that.

[00:03:02]>> I'm not particularly concerned. I mean, when when I think about where we were with tariffs, as an example, last year, the narrative, as far as I can tell, was that yes, tariffs were likely going to be inflationary, but they were also likely going to be recessionary.

[00:03:14]Remember, that was one of the biggest comments out there on the street in the first half of last year. It's like, "Any second now, we're heading into a recession." But this economy has proven itself to be awfully resilient. That recession never materialized. And you know, if you're assuming that a recession's on the horizon, that the Fed's going to be cutting, not raising rates, then it stands to reason that long yields aren't going to move up in the way that they have right now.

[00:03:34]Recession concerns are almost entirely off the table. The US economy can live with a hundred bucks a barrel of oil as far as the eye can see. And I think that's where you're seeing the pressure.

[00:03:42]>> Let me just make one comment about Nvidia, because we were joking that it all rests on Nvidia's earnings, which come out tomorrow after the bell. We remember what happened February 25th when they last reported earnings even though they posted a double beat which was a just a crazy huge number that they came out with. I mean it was bigger than most GDPs of small to mid-size countries. The stock fell and it took quite a while to reach a fresh record.

[00:04:08]It fell from February 25th onward to May 17th. It took that long to to hit a new record. So, people should not really depend on Nvidia even if they post blowout numbers. Yeah, let's say that the earnings report we'll get tomorrow might move markets but it is not something that we should depend on when it comes to long-term allocation decisions. That's there's so much more than just a couple of companies in the index and we're finally starting to see a broadening out of participation.

[00:04:34]>> Yeah, I can see Jensen Huang shaking his head saying, "Why why why is the whole market resting on my shoulders?" Great to see you, Jack. Thanks, Liz.