Speaker · Updated
Matt Cerminaro: latest market views
Ritholtz Wealth Management
Summary
Matt Cerminaro is a markets and data analyst at Ritholtz Wealth Management and the regular chart presenter ('Chart Kid Matt') on The Compound and Friends podcast.
Chorus has 19 views from Matt Cerminaro across 2 episodes on The Compound and Friends since September 29, 2026. Their latest calls: bullish on MSCI and NVIDIA; bearish on Apple and Builders FirstSource.
Where they stand
Their latest bullish or bearish call on each company.
What they talk about most
The latest views
Newest first. Every quote is checked against the episode's transcript.
Sector rotation is under way: six S&P sectors sit within 3% of all-time highs, which he finds encouraging.
After the two-day tech blowup, Matt notes that health care, materials and staples are near their highs, and that the negativity is concentrated in tech, especially semis. Six S&P 500 sectors are within 3% of all-time highs. He contrasts this with past sell-offs, where almost everything got crushed. He says there is 'some rotation going on under the surface, which I like to see.' Michael supports this with the Ned Davis data: insurance, pharma, staples and commercial services gained during the semi-led drawdown.
“there's six sectors within 3% of an all time high. So there is some rotation going on under the surface, which, you know, I think I I like to see.”at 10:17
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
Earnings growth is broadening: the other 493 S&P companies are now expected to outpace the Magnificent 7 this quarter.
Matt charts year-over-year earnings growth. The other 493 S&P 500 companies are expected to grow earnings 32.6% this quarter, versus 22.6% for the Magnificent 7. It is the first quarter in the past four where the 493 are expected to outpace the Mag 7. He also charts forward EPS for the 493 relative to the Mag 7, which bottomed on August 31 and is up about 6.5% since. The relative price ratio is up 7.3% since its October low, which he reads as the 493 outperforming because their estimates are being revised higher faster. He credits part of the gain to energy and to cost cutting at AI-build-out beneficiaries flowing into their earnings. Michael questions the size of the 32.6% figure, and Matt concedes he hasn't broken it down.
“32.6% year over year earnings growth expected for the four ninety three this quarter, and then the mag seven are expected to grow earnings by 22.6%.”at 15:03
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
Big Tech platforms & digital ads
Mag 7 stocks falling after earnings beats is a yellow flag, a bearish sign for these megacaps.
Matt tracks the average one-day move of Magnificent 7 stocks after they beat. Historically, since Q1 2018, they usually rally after beats. This quarter, four of six have beaten so far and on average fallen about 3% the next day. He treats that as the main thing that would make him cautious about the Mag 7: blowout earnings followed by falling stock prices. He says the beats are not small and still crush high estimates, which makes the reaction more concerning. Michael agrees the pattern is a bearish 'feather in the cap' and a 'yellow light', though he offers a charitable reading in which the wall of worry is growing.
“four of six have beat so far, and on average, they've fallen 3% the next day.”at 19:17
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
NVIDIABullish
Nvidia's rally is backed by earnings: forward estimates have grown about thirty-fold versus a roughly nine-fold stock gain since ChatGPT.
Matt compares Nvidia's forward earnings estimates with its stock price since ChatGPT's launch. Forward earnings are up about 3,246%, roughly 30x, while the stock is up about 944%, roughly 9x, so earnings growth is running well ahead of the price. He backs the estimates' reliability by checking his own spreadsheet: trailing twelve-month actual earnings have come in above the estimates made a year earlier in almost every quarter since 2024. He hedges that he has no foresight on whether the lines converge over the next twelve months, but the track record is what he cites in support of the earnings story.
“So the forward earnings are up 3246%, so they're up 30 x since the ChatGPT launch. And then the stock price is up nine x.”at 26:05
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
Value-over-growth breadth thrust may be meaningful, but a durable value rally would be hard to square with the AI trade.
Matt says the value-versus-growth ratio is breadth-thrusting, and 'there's something there.' Michael notes the ratio is at a three-year high, roughly flat since mid-2020, and that value just had its widest six-day outperformance versus growth since 2000. Matt hedges, saying Josh usually calls these moves a fake-out, and he has not seen enough years to know whether this is 'the one.' He does argue that a sustained rise in value over growth is hard to reconcile with the AI trade continuing, since both are unlikely to be true at the same time. His overall position is uncertain.
“We're breath thrusting in the value versus growth ratio. There's something there.”at 29:30
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
Nasdaq 100 historically catches up to equal-weight S&P after its new high, with about 21% gains over a year.
Matt's historical study: when the S&P 500 equal-weight index makes a new high while the Nasdaq 100 is about 10% off its high, the Nasdaq typically catches up rather than the equal weight falling back. Excluding the tech bubble, the Nasdaq 100 averaged about +8.1% three months after such signals and about +21.6% over twelve months. He therefore expects the playbook to produce roughly a 21% gain from that Wednesday over the following year, though the tech bubble skews the full sample.
“typically, what happens when the equal weight is leading... The Nasdaq historically catches up to the equal weight and subsequently makes a new all time high, and the forward returns are actually very strong.”at 44:27
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
Market reaction to CPI is a better guide than the data itself; stocks rising on hot CPI tend to gain.
Matt, following a lesson from Tom Lee, argues the real signal in economic releases is the market's reaction. He tested cases where CPI came in hot, above the Bloomberg median, but stocks still rose on the day. In those cases the S&P 500's average forward three-month return was about 6.3%, which suggests the market was looking past the print. Cold CPI with stocks falling, the opposite case, saw the S&P average around +5.5% over three months. He concludes that following the market's cue is more productive than dissecting the components of the report.
“I think it's just, like, taking your cue from what the market is telling you is just gonna be more productive when trying to figure out what's gonna happen.”at 49:10
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
MSCIBullish
MSCI is an AI winner as an LLM data supplier; could hit $1,000 on a breakout above $700.
Matt picks MSCI as an AI winner because it sits at the forefront of supplying the data that LLMs use. The stock has gone nowhere since 2021-2022, creating a long base. Fundamentals look strong: revenue has tripled since 2015, operating margin has stair-stepped higher to 56% over the trailing twelve months, and Q3 is already reported. Technically he sees an ascending wedge from the 2022 low; a breakout above about $700 could take it toward $1,000 quickly. He would sell if the stock were rejected by that trend line, and he would not set a traditional stop.
“if it breaks out, I think, above... Let's just use 700. This thing could go to, like, a thousand dollars really quick.”at 51:11
The Compound and Friends: Can the Stock Market Survive a Tech Meltdown? ·
NVIDIABullish
Nvidia's forward P/E sits at 2016 lows despite the huge rally, because the stock is backed by real earnings.
Nvidia's forward P/E is at 2016 lows even though the stock is up enormously from $10 in 2023. Forward earnings estimates have historically landed close to actuals, and trailing twelve-month operating earnings already exceed Apple's. The case rests on real earnings rather than speculation.
“If I charted the four p ratio on top of this, it would literally be making twenty sixteen lows.”at 8:30
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
NVIDIABullish
Nvidia's $150B buyback signals CEO confidence in AI demand and a preference for returning capital over speculative acquisitions.
The $150B buyback plus $85B already authorized gives $235B through Q1 2028, which would cut the share count ~4.3% at a flat price. Announcing it after Anthropic's CEO urged slowing the pace signals the CEO's confidence in AI demand and prefers returning capital over speculative acquisitions.
“The most important CEO in the world, at the most important company in the world, saying, screw slowing. Let's buy back a $150,000,000,000 of stock. I'm not gonna go speculate buying a company.”at 10:40
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
After rare long ten-year yield rising streaks, yields have usually been lower twelve months later, by about 90bp on average.
The ten-year yield rose on 18 of the last 24 trading days, a streak seen only about 11 times since 1965. After such streaks, yields were lower twelve months later about 80% of the time, by roughly 90bp on average, with a caveat about the long secular decline in yields. Inflation breakevens are anchored, so the move is not about inflation expectations. Possible driver is weak demand as foreign central banks stop buying and domestic investors need more compensation.
“This has happened 11 times since 1965... 80% of the time over the next twelve months, you see yields that are lower.”at 16:37
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
Multiples bottom only above 7% yields; at about 2.85% real yield, bonds are a legitimate alternative to stocks.
At ten-year yields above 7%, the median forward P/E bottoms out (13.6x S&P 500, 12.6x Nasdaq 100). The real yield of about 2.85% is the highest since 2008 and offers retirees a legitimate alternative to stocks. Mid-range yields of 3-7% bring investor discipline and can justify higher multiples than a zero-rate regime.
“You can get a legitimate 2.85% real yield after inflation. That's an alternative.”at 23:39
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
Hyperscaler credit default swaps are flat or lower, suggesting bondholders aren't pricing stress from AI capex borrowing.
Credit default swaps on hyperscaler bonds are not blowing out. They are flat, in some cases trading lower, with Meta's briefly rising and then stabilizing. This suggests debt holders are not pricing stress from the AI capex borrowing wave.
“If you look at the credit default swaps on the different bonds for these hyperscalers, they are not blowing out. They are flat. In some cases, they are actually trading below.”at 33:15
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
The S&P 500's breadth washout is more likely a buying opportunity than a signal of a catch-down.
Breadth has clearly fallen, but he is looking for nuance in the numbers. He relays Michael Batnick's view that breadth washouts are loved and that almost every similar episode in the last decade proved a great buying opportunity, rejecting the bearish catch-down narrative.
“The bearish case for an S and P catchdown is obvious and intuitive. But almost every time we've seen something like this in the last decade, it's been a great buying opportunity.”at 36:19
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
Weak US equity breadth is concentrated in defensive sectors while tech and financials are strong, so the rotation reads bullish.
The negative breadth is concentrated in defensive, rate-sensitive sectors (utilities, staples), while offensive sectors like tech and financials show almost no new 52-week lows. Investors are rotating by choice, which he reads as bullish. In a bearish setup you'd expect defensives to catch a bid, but they're getting hammered. He acknowledges the new-lows spike can't be dismissed, but argues the data is nuanced.
“if you wanted to get bearish on the market, you would probably wanna see the stocks in these sectors actually catching some sort of a bid right now, and they're getting hammered. And so I'm not like... Investors are choosing what they want right now, and that's rotation, which is bullish.”at 44:49
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
This is a Teflon US equity market, repeatedly shrugging off poor breadth; he'd have expected a 15-20% drawdown.
He calls this a 'Teflon market' that keeps shrugging off bad breadth, with about 90% of the S&P 500 rally since June coming from the Mag Seven. Given negative breadth and the flip in the rate narrative, he would have guessed a 15-20% drawdown. Josh agrees the right move is to take the signal from the market's resilience rather than extrapolate the negative stories.
“We are also living through a period where this is the Teflon market. Truly, what is gonna bring stocks down?”at 49:52
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
Builders FirstSourceBearish
Builders FirstSource is down 45% year to date, showing pain in rate-sensitive housing names after the rate narrative flipped.
He points to Builders FirstSource being down 45% year to date as evidence of pain in rate-sensitive housing names, tied to the narrative flipping from rate cuts to rate pressure after Warsh. He notes that if people had known the rate picture would flip, they'd have expected a much bigger market drawdown.
“I'm looking at Builder First Source right now. Home builder down 45% year to date.”at 51:31
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
AppleBearish
Apple could wipe out standalone wearable startups by building a competing product if one gained traction.
On standalone wearable startups like Aura, he argues big platform companies like Apple could simply build a competing product, so if a standalone wearable gained traction Apple would probably wipe it out. Josh echoes this while discussing Life360 as a similar risk. The view is bearish on small wearable companies rather than on Apple itself.
“what's stopping Apple from doing this? ... let's say that Peloton started having some success, Apple would probably wipe them out.”at 56:28
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
With forward earnings up 36.7% against 17.9% market return, earnings growth supports higher US equity prices.
Forward 12-month earnings are up 36.7% year over year versus an S&P 500 return of 17.9%, so earnings growth is more than double the market's return. Stocks historically follow earnings, and forward earnings estimates tend to land within about 1% of actuals, so the earnings backdrop supports higher prices. Josh summarizes it as the bet that prices will rise because earnings rise.
“forward earnings have grown 36.7 year over year, and the S and P 500 is up 17.9% year over year. So forward earnings are more than doubling the actual stock market return over the past year, which is incredible.”at 1:04:01
The Compound and Friends: Bad feeling, weak internals, confidence collapse, Nvidia breaking out | WAYT? ·
Shows
- The Compound and Friends · 2 episodes
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