Speaker · Updated
Darrell Cronk: latest market views
Wells Fargo
Summary
Darrell Cronk is president of Wells Fargo Investment Institute and chief investment officer of Wells Fargo's Wealth & Investment Management division, with about 30 years at the bank.
Chorus has 6 views from Darrell Cronk across 2 episodes on Bloomberg Surveillance and CNBC Closing Bell since October 27, 2026.
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The Fed must keep hiking; inflation and a strong economy mean policy is not easy.
Core PCE is at 3.6% against 3.4% real GDP growth and unemployment at 4.2% with no jobless claims. He argues this is not a recipe for easy policy. The Fed's own press conference says it will deliver 2% inflation, but current prices are not delivering that, so he says it is time to move on with hikes.
“That's not a recipe for easy policy. Right? ... So I think the Fed needs to get on with it. We're... He keeps saying we're gonna deliver 2%.”at 3:59
Bloomberg Surveillance: Outlook for Inflation, Oil, and Tech ·
Credit investors should stay up in quality and keep duration short.
His firm has been short duration in credit for sixteen straight months. He argues that with long-end yields rising, investors should stay in higher-quality credit and avoid long duration.
“I still think on credit, you gotta be up in quality, and we have now been for sixteen straight months short duration.”at 4:48
Bloomberg Surveillance: Outlook for Inflation, Oil, and Tech ·
Ten-year Treasury yield to reach about 5.75% next year, possibly 6%.
After a short-covering rally pushed the 10-year down to about 5%, he expects the long end to move higher. He sees the 10-year north of 5.50% next year, more likely around 5.75%, and says 6% is possible. This is his firm's view, and it is tied to the Fed staying tight and to heavy issuance.
“We think next year, the tenure is north of five fifty, probably more like five seventy five. Yes. Okay. So six is possible.”at 4:58
Bloomberg Surveillance: Outlook for Inflation, Oil, and Tech ·
Stocks can still do well despite higher yields because earnings growth is strong.
Even with the ten-year at 5.50% to 5.75%, he thinks stocks can do well. The reason is earnings: this will be the third straight quarter of 25% earnings growth and the eighth straight quarter of double-digit growth. If that continues, stocks can do fine, and multiples would have to contract.
“We still think stocks can do well. Even if you got to a five fifty, five seventy five, ten year... because the earnings are so strong... third quarter in a row we'll have 25% earnings growth, and the eighth quarter in a row we'll have double digit earnings growth.”at 7:54
Bloomberg Surveillance: Outlook for Inflation, Oil, and Tech ·
Markets can glide through November and December, but credit, oil and rates risks threaten year-end turmoil.
Cronk calls the environment tough. The S&P 500 is back about 100 points below its September highs, and beneath the stable index there is heavy rotation between sectors, mainly out of tech, rather than capital leaving equities. He thinks the market can glide through November and December. He warns that widening high-yield spreads, oil prices, current interest rates, and overseas problems in France, Brazil and Asian equities could add turmoil into year-end.
“We still think you can kind of glide through in November and December, but, you know, high yield spreads widening, oil prices, interest rates where they are”at 12:15
CNBC Closing Bell: Markets Brace for the Fed as Earnings Roll In 10/27/26 ·
Valuation isn't the 2027 risk for tech; delivering compute, earnings and monetization is.
Cronk notes that the S&P forward multiple peaked at 23 times a year ago and is now about 19 times, so valuation is not the issue. Demand is also not the issue, given the backlogs across the complex. He argues the risk is expectations: whether the industry can deliver compute, deliver earnings, and monetize models quickly enough. If it cannot, he expects more volatility in 2027, even though earnings growth should still be robust.
“the tech side of things is really going to be the question we have to answer in 2027. I don't think it's going be a valuation issue. I don't think it's going to be a demand issue.”at 16:23
CNBC Closing Bell: Markets Brace for the Fed as Earnings Roll In 10/27/26 ·
Shows
- Bloomberg Surveillance · 1 episode
- CNBC Closing Bell · 1 episode
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