Speaker · Updated
Kevin Gordon: latest market views
Charles Schwab (Schwab Center for Financial Research)
Summary
Kevin Gordon is Head of Macro Research and Strategy at the Schwab Center for Financial Research, where he oversees macroeconomic research and analysis of the economy and markets.
Chorus has 10 views from Kevin Gordon across 2 episodes on CNBC Closing Bell and CNBC Power Lunch since October 21, 2026.
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Newest first. Every quote is checked against the episode's transcript.
Markets are safer than people think; the selloff was concentrated in levered tech, and a broadening rally is likely.
Gordon says last week's washout sets up a bottom, though he cautions against extrapolating single days because the cap-weighted index is distorted by mega-caps. Evidence: the equal-weight S&P 500 kept outperforming the cap-weighted index, about 60% of members stayed above their 200-day moving averages, and the stress was concentrated in levered tech bets that predated the election. The economy is relatively strong, as Friday's jobs report showed. He sees a real possibility of broadening by year-end, supported by that day's advance-decline breadth being the best of the year and heavy retail selling having pushed some indicators to washout levels.
“definitely had a big washout last week, but I think that's setting us up for the bottom. So I think markets are a lot safer than people think.”at 3:09
A sudden pullback in AI-related business investment would tip US GDP into recessionary territory.
Gordon notes that business investment in the US, which is not all AI-related, still accounts for a very large share of GDP growth this year. That makes the economy highly sensitive to AI and data center spending. If that spending suddenly stopped, GDP would mechanically fall into recessionary territory. This is why investors are so hypersensitive to the AI trade. He frames it as a conditional risk rather than a base case.
“You're about to see just a sudden slowdown to nothing. If that was the case, then, yeah, mechanically, you would tip GDP into what would I think would be considered recessionary territory.”at 7:28
AI infrastructure & data centers
Data center investment curbs will not arrive overnight; both parties are still unsettled on the policy.
Gordon agrees the social pushback against data centers is bipartisan and visible in the midterm results. But he argues there is no clear single policy direction, because both parties are still working out their stance. That uncertainty will likely stretch out any pressure on build-outs. He does not expect a policy restricting data center investment to arrive just as Congress changes leadership.
“So I don't think that it's going to be this moment in time... that you're gonna get some sort of policy that comes out of the gate restricting that investment overnight.”at 8:00
Consumers are not pulling back yet, but treating high energy prices as permanent would be a bigger economic risk.
The latest retail sales report may show early effects of high energy prices, but spending is not decisively falling. Labor market strength is still supporting spending. The risk grows as holiday season approaches and households start to view energy prices as permanent.
“Not decisively pulling back, in terms of not spending, but I think the strength of the labor market, is still a support there... people start to treat some of these energy prices, you know, as permanent. That to me, I think, is a much bigger story for the economy.”at 2:54
CNBC Power Lunch: Tech Earnings Season, SpaceX Targeting Telecoms, CME Group CEO Interview 10/21/26 ·
Oil remains the market's main driver, with its negative correlation to stocks near a three-decade extreme.
Rolling 60- and 90-day correlations between oil prices and the stock market have grown more negative and are near their worst in about three decades, with bonds also trading tightly with oil. He concludes that energy prices still drive markets.
“you still have a really sharply negative correlation between oil prices and the stock market. And that's actually continued to get worse depending on the time frame you're using... So oil is still very much in the driver's seat.”at 2:54
CNBC Power Lunch: Tech Earnings Season, SpaceX Targeting Telecoms, CME Group CEO Interview 10/21/26 ·
A sustained return of Brent crude to its pre-February average looks hard because of supply constraints.
He says a drop in oil would mechanically help equities by lowering yields, but the size and level of any decline is the trouble. He thinks it is still hard to bring Brent back to its pre-February average on a sustained basis because of supply factors.
“I think it's still hard to get to... that thesis of us going back to what... the pre February average was. There's just a lot that's sort of standing in the way from a supply standpoint to get at least Brent crude back to that level, at least on a sustained basis.”at 4:21
CNBC Power Lunch: Tech Earnings Season, SpaceX Targeting Telecoms, CME Group CEO Interview 10/21/26 ·
Market breadth is healing under the surface, a more important story than index moves.
The Russell 2000 fell into correction, and its drawdown gap versus the S&P 500 was the widest since late 2024 and late 2021. Small caps and banks have recently been recovering, and falling volatility in rates (the MOVE index compressing) is the bigger market story.
“Russell two thousand went into correction territory. You haven't seen that kind of split since late twenty twenty four... So that to me, I think, is the more important market story where under the surface of the indexes, seeing a lot of these wounds sort of heal.”at 5:16
CNBC Power Lunch: Tech Earnings Season, SpaceX Targeting Telecoms, CME Group CEO Interview 10/21/26 ·
The 10-year yield may keep rising, since yields have historically peaked near the end of hiking cycles.
Looking at past Fed hiking cycles, the [ten-year] yield has tended to peak near the end of the cycle rather than at its start, which suggests room to move a bit higher. Nominal US growth also supports yields at elevated levels. He does not see current levels as horrible but says the adjustment has been large.
“at least for the [ten-year], it has tended to peak closer to the end of a hiking cycle as opposed to right at the beginning. Maybe that gives you some more room to move a little bit higher, at least stay around these levels.”at 6:06
CNBC Power Lunch: Tech Earnings Season, SpaceX Targeting Telecoms, CME Group CEO Interview 10/21/26 ·
US budget dynamics resemble France's, so fiscal strain will eventually push up yields as well.
Without a reserve currency, resisting fiscal reform while running a large budget hole does not work over time, and France shows this. He argues the US and the developed world face similar budget and yield dynamics, so the same pressure applies.
“that just won't work at some point to the extent that you're in that kind of a budget hole... we have similar dynamics in The US and across the developed world when it comes to budgets and when it comes to yields.”at 7:15
CNBC Power Lunch: Tech Earnings Season, SpaceX Targeting Telecoms, CME Group CEO Interview 10/21/26 ·
Forward earnings growth near 30% is unprecedented outside a crisis, so a wobble is likely once growth crests.
Forward twelve-month earnings growth is close to 30% this year, and the base effect is not negative. Growth at this level without a crisis has not been seen in about 30 years of forward data. Once it crests, a wobble is likely, though he doesn't see a bear market. He notes the Nasdaq's flat five-month performance is consistent with a top-decile growth phase, and the market has priced in much of the good news.
“your base effect in year over year terms is not negative... Those kinds of estimates outside of a crisis is really something you've never seen at least in the past thirty years of earnings data.”at 11:40
CNBC Power Lunch: Tech Earnings Season, SpaceX Targeting Telecoms, CME Group CEO Interview 10/21/26 ·
Shows
- CNBC Closing Bell · 1 episode
- CNBC Power Lunch · 1 episode
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