It's A Tricky Market Right Now | Lance Roberts

Anthropic

Across the shows: 18 speakers in other episodes, 12 bullish and 34 bearish calls, past 30 days

• Lance Roberts · RIA AdvisorsBullish

  Anthropic's IPO valuation may dip temporarily, but it remains a robust, growing business.

  After Anthropic's IPO filings suggested slower growth than investors expected and a lower valuation, Lance argues the reaction is overdone. He notes that Anthropic is a dark, mostly unpublished business, so capital raises and investor events often bring a reality check. He still says that if you look at its numbers, the valuation may come down temporarily but the business is still robust and growing. He cites no specific figures.

  “But again, if you take a look at their numbers, yes, their valuations may come down here a bit temporarily. ... But I mean, it's still a pretty robust business that they're growing.”at 7:25

CoreWeave

Across the shows: 10 speakers in other episodes, 3 bullish and 8 bearish calls, past 30 days

• Lance Roberts · RIA AdvisorsBearish

  CoreWeave is under pressure and has gone nowhere for a year; avoid speculating on neoclouds.

  CoreWeave has been beaten up this week. Lance says it trades at the same level as last December, so anyone who bought then is flat after a volatile year. He presents it as an example of a neocloud, the category he says he would not speculate on, and expects many neoclouds to disappear.

  “But mind you, this is a stock that's trading at the same level today as it was last December. It's just gone nowhere for a year.”at 11:53

US stock market outlook

• Lance Roberts · RIA Advisors

  Growth-to-value rotation is already largely priced in; much of the repricing has already happened.

  Lance says RIA moved from growth to value early in the week, selling mega-cap tech and technology names and buying financials and healthcare. Semiconductors fell hard, and the equal-weight index has outperformed the cap-weighted S&P 500. He argues that the repricing has been happening all week, so by the time it becomes a headline most of it is already done. The market is in the middle of a rotation, not at its start.

  “So markets already in the process of repricing ... It's been being repriced all week long. So by the time that you start talking about it, most of the repricing is already done.”at 8:20

• Lance Roberts · RIA Advisors

  Market likely keeps consolidating near term, but should work higher into December on earnings and buybacks.

  Technically, the market is close to a short-term sell signal, which Lance says means little beyond continued consolidation. The market has gone sideways since May and June after the overbought post-Iran-crisis rally, with rotation between sectors. Fundamentally, buybacks are returning, forward earnings estimates have started ticking up again after flattening, and liquidity and buyback support should carry the market higher at least through December.

  “We're currently ... getting close to flipping onto a short term sell signal, which doesn't mean anything. It just means that ... the market's likely to continue to consolidate here.”at 28:00

• Lance Roberts · RIA Advisors

  US stocks should work higher through December, supported by rising earnings estimates and buybacks.

  Roberts argues that a split Congress after the midterms has historically been good for markets, and that earnings are good. Buybacks are returning, and forward earnings estimates, which had flattened for a couple of weeks, are ticking up again going into the year. He adds that this gives the market a lot of liquidity, buyback and earnings support through year-end, so he expects it to resolve higher at least through December before 2027 is considered.

  “forward earnings estimates are getting ratcheted up again... So, this market should kind of resolve itself and try to work its way higher at least through December.”at 35:35

AI infrastructure & data centers

• Lance Roberts · RIA Advisors

  Hyperscalers are a much safer AI bet than neoclouds, and many neoclouds will cease to exist.

  Lance says his firm owns the companies driving the AI trade, such as Google, Microsoft and Amazon, and holds a much larger safety position there than in speculative neocloud names. He says he would not speculate on neoclouds. He argues that many will fail, as companies did after the dotcom bust, and that the few winners will make a lot of money. The risk comes from new technology, so the diversified hyperscaler exposure is the safer position.

  “We're in a much larger safety position within this trade than speculating on the Neo Clouds. I wouldn't speculate on the Neo Clouds. ... there's going be quite a few of Neo Clouds that will go away.”at 9:54

US Treasuries & yields

• Lance Roberts · RIA Advisors

  The 10-year Treasury yield should be about 5.1% on fundamentals; current levels are about right.

  RIA previously wrote that the 10-year target rate, based on fundamentals, economics and wage growth, should be about 5.1%. Lance says yields are now right where they should be. The recent move down from about 5.3% followed an oil-driven spike that pushed rates to an overbought level. Two strong 10-year and 30-year auctions drew record participation, and investors have been accumulating fixed income at around 5%. Yields are retracing as the overcrowded trade unwinds.

  “We wrote probably some months ago now that kind of the target rate based on fundamentals and economics and what's happening with wage growth, etcetera, that the target rate for the ten year treasury should be about 5.1%. So we're sitting right where we're supposed to right now.”at 33:22

US elections & politics

• Lance Roberts · RIA Advisors

  A split Congress after the November midterms would be good for markets, which average about 13% after one.

  Lance expects Congress to split after the November 3 midterms. He says a Republican House and Democratic Senate would be good for stocks, citing historical returns of about 13% on average following a split-Congress midterm. He pairs this with strong earnings, buybacks and rising estimates as support for the market through year-end, and treats the outcome as a positive for stocks. He also warns that polls are often wrong.

  “But it looks like that Congress is going to be split and which is really good for the market. So, if we get a Republican House and Democratic Senate, that's really good for the markets. Markets typically tend to return about 13% on average following a split Congress midterm election.”at 35:12