Speaker · Updated
Scott Chronert: latest market views
Citi Research
Summary
Scott Chronert is a Managing Director at Citi Research and its Head of U.S. Equity Strategy, a role he has held since October 2021, and also leads Citi's ETF strategy and analysis.
Chorus has 5 views from Scott Chronert across 2 episodes on CNBC Closing Bell since October 12, 2026.
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AI infrastructure & data centers
Market reads capex cuts as constructive for AI compute supply-demand; data center build beyond 2027 remains uncertain.
Chronert said Citi expected an extreme Democratic Senate win to pressure the AI trade, and the semiconductor pullback was partly right. He argued the market is treating some scaling back of capex ambitions as constructive for the ongoing supply-demand setup for AI compute. The market had priced '26 and '27 earnings growth tied to the data center build-out but has lacked confidence in '28 to 2030. Moratoria could lead to project cancellations or only push-outs, which remains unresolved. The Texas gubernatorial race was mission-critical to the AI moratorium push-out. He expects the sentiment shift to help near term but says fundamentals will not change by year end.
“the market is also interpreting some scaling back of CapEx ambitions as actually quite constructive for the ongoing supply demand for AI compute setup.”at 9:34
CNBC Closing Bell: Closing Bell Overtime: Stocks Surge After Democrats Retake Both Chambers of Congress 11/4/26 ·
Sentiment shift on oil, inflation and rates can lift year-end S&P, but fundamentals must catch up.
Chronert said the triumvirate of oil prices, inflation concerns and interest rates has been the key to reaching higher year-end S&P prices. A roughly 10% drop in oil, and the market pricing out one of three expected Fed hikes, drove a sharp sentiment shift. Cautious positioning had become deeply embedded, so repositioning has room to run. The shift can run for a while and is probably good for the year-end trade. He cautioned that sentiment must eventually translate into fundamental change, which he does not see on the immediate horizon. Implementation of policy solutions is still needed.
“sentiment shift can run for a while, probably good for the year end trade. Be careful, though. Sentiment has to translate eventually into fundamental changes. We don't see that on the immediate horizon.”at 9:34
CNBC Closing Bell: Closing Bell Overtime: Stocks Surge After Democrats Retake Both Chambers of Congress 11/4/26 ·
S&P 500 reaching 8,100 requires the broadening trade to return and rate-sensitive stocks to recover.
Citi's path to 8,100 needs both halves of the market to perform. The AI component, just over half the index, keeps providing earnings tailwinds, while the other half needs a macro recovery. Scott needs the rate-sensitive, lagging parts of the market to mean-revert and the broadening trade to return, which depends on inflation and hawkish Fed concern fading as the data suggests over the next couple of weeks.
“I would say that we need this broadening trade to come back to get to my 8,100 target.”at 5:28
Ten-year Treasury yields are close to a short-term peak, pending incoming data.
Scott sees signs of a top in the two-year and to a degree in the ten-year when looking at the distribution along the curve. He expects the CPI report that week to show less concern in some components, which supports the view. He is explicit that the call depends on the data coming through, and he will be closely watching yields.
“we think we're pretty close in the short term to a ten year top for sure in terms of yields”at 10:56
AI-driven earnings growth should moderate into 2027 as AI tailwinds are priced in; fundamentals remain robust.
The market has had about four years of rapid earnings upside, and the AI tailwinds are increasingly priced in. Because of the law of large numbers, earnings growth rates should mitigate as the market moves into 2027. Scott says this is not bad: the pace of gains slows, making surging stock returns harder to achieve, while the underlying fundamental picture stays fairly robust and helped by rates.
“I think what we have to allow for that more and more about the AI tailwinds are being priced in, and law of numbers is such that we have to expect as we go into '27 that those growth rates probably begin to mitigate a little bit.”at 13:41
Shows
- CNBC Closing Bell · 2 episodes
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