Speaker · Updated
Eric Johnston: latest market views
Cantor Fitzgerald Asset Management
Summary
Eric Johnston is Head of Equities at O'Connor and Chief Market Strategist at Cantor Fitzgerald Asset Management, appointed in October 2026 after serving as chief equity and macro strategist at Cantor and earlier as Americas head of equity trading at Deutsche Bank.
Chorus has 7 views from Eric Johnston across 2 episodes on CNBC Closing Bell and CNBC Power Lunch since October 7, 2026.
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Semiconductors look attractive and should bounce in the next couple of weeks.
Johnson closed a bullish tech position after a big run, but after a sharp de-risking and very high fear, he sees semiconductors as the attractive part of tech. Near-term catalysts include hyperscaler earnings showing positive capex, possible news around Anthropic going public, and AI worries fading after the midterms. Semis also have strong balance sheets.
“I actually think that within tech, I think semis do look attractive, and I think they are going to get a bounce from here.”at 20:58
Long Treasury yields have a ceiling, and the 3%-plus term premium is attractive to buyers.
The 10-year yield is only about 80 basis points off its three-year average, which is not very meaningful for an economy driven by AI capex. Yields should level off because Treasury will act to control them. Inflation breakevens are contained at 5.35% over five years despite higher oil. The term premium is over 3% for the 10-year and 30-year above inflation, which attracts demand.
“But I think that yields do sort of level off here, and that's been our view that there is a ceiling to them. ... It's over 3% for the ten year, over 3% for the thirty year above inflation.”at 22:48
Heavy AI-trade concentration is a major market risk that will cap valuation multiples.
Market gains and the economy depend on one AI trade. Even retail is propped up by the wealth effect, since consumers have their highest-ever equity exposure after equities rose about 20% a year for four years. If the AI trade rolled over, the slowdown could cascade across the economy, so investors will keep a cap on the multiple. Johnson calls this the world investors will be in for a while.
“I think it's the world that we're gonna be in, and I think that remains a major risk for the market and for the economy, the fact that the concentration is so heavy.”at 24:40
Tech stocks are set to break out after a sharp outperformance; he turned bullish on tech in August.
Johnston says Cantor turned bullish on tech in August and tech has sharply outperformed as a flight to perceived safety, while other assets sold off on rates, oil and a slower IPO calendar. He says he is not selling stocks broadly, only some, and expects the next move up to be a breakout, with a more correlated move across stocks, despite a large wall of worry led by rates.
“Selling stocks? Yeah. No. Some stocks? I think we're going to break out and it's gonna be somewhat of a more correlated move. So we turned bullish in tech in August, and we've gotten a sharp outperformance. It's almost been a flight to almost perceived safety while everything else has been sold around related to interest rates, related to oil, and related to a slower IPO calendar. But I think that the next move up, I think we're actually going to break out.”at 2:51
CNBC Power Lunch: Tech’s Record Rally, Assessing Amazon’s Valuation, Global Energy Uncertainty 10/7/26 ·
Peak Fed hawkishness is already priced in, with markets pricing three hikes by June.
After the Fed minutes pointed to another hike by year-end, Johnston argues the peak in Fed hawkishness is now in market pricing, with markets pricing about three hikes between now and June. He points to inflation trends: four-month annualized core CPI at 2.1% and super core at about 1.6-1.8%, with wage growth under some pressure. He says the long end of the curve is doing some of the work needed to bring inflation down, so the rate path is probably close to peak.
“I think the peak Fed hawkishness is now priced in. So the market's pricing in, you know, three hikes basically between now and June. I think the long end of the curve is doing some of the work that was, you know, was necessary to try to bring down inflation.”at 7:25
CNBC Power Lunch: Tech’s Record Rally, Assessing Amazon’s Valuation, Global Energy Uncertainty 10/7/26 ·
S&P 500 is far less rate-sensitive than in 2022 because earnings now ride on AI capex.
Johnston argues the 2026 S&P 500 differs from 2022, which was before ChatGPT and the AI capex cycle. Most S&P 500 earnings contributions now come from companies selling into the AI capex build-out, which he expects to be largely unaffected by the long end of the curve. He concedes housing and the consumer will feel higher rates, and says a 100bp move above the three-year average of 4.3% on the 10-year is not very significant for spending. Overall, the index's sensitivity to the long end has fallen significantly, with wealth effects offsetting some pressure.
“the 2022 S&P 500 is very different than the 2026 S&P 500. ... the contributors to earnings are all coming from selling into this CapEx build [out] ... that's likely to be unaffected by the long end of the curve.”at 13:16
CNBC Power Lunch: Tech’s Record Rally, Assessing Amazon’s Valuation, Global Energy Uncertainty 10/7/26 ·
Midterms won't shock markets; no veto-proof majority, and post-midterm six-month returns historically strong.
Johnston says a Democratic House is widely expected and the Senate is up for grabs, but the market will not be shocked and there won't be a veto-proof majority, so legislation is limited. Republicans keep the White House, so noise and investigations will rise, but he doesn't see a broad impact. He cites 19 midterms since 1950, with the market up six months later and average and median returns of about 14% over that window. He expects the result to be a clearing event where AI-related noise also falls, and government shutdowns have only mattered for a few days.
“The market will not be shocked, and there won't be a veto proof majority. ... Since 1950, there's been 19 midterm elections. Six months later, the market's been green. Average and median performance has been about 14% over that six month period.”at 14:44
CNBC Power Lunch: Tech’s Record Rally, Assessing Amazon’s Valuation, Global Energy Uncertainty 10/7/26 ·
Shows
- CNBC Closing Bell · 1 episode
- CNBC Power Lunch · 1 episode
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