00:00Stephen Parker of JPMorgan with an S&P bull case of 8,200 by year-end, writing AI remains the
00:06defining force in markets. The momentum is broadening beyond hyperscalers and semiconductors
00:11into utility software and infrastructure. Stephen joins us now for more. Stephen, good morning.
00:16Morning. Good to be here.
00:16We've certainly seen this rally broaden now. Equal weight, record highs, small caps. We've
00:20talked about that run repeatedly throughout this morning. Is that just an early year rotation that
00:25loses steam or something you want to get behind for the year ahead?
00:28No, we actually think that it has legs in the year ahead. Last year, as we talked about,
00:32was all about AI and technology, whether it was the economic growth, the capital spending,
00:37the earnings growth. This year, we think it's a story about broadening. We think that there
00:42is a cyclical recovery in the cards. We see that because we think labor markets will continue
00:47to stabilize and improve. You have easy monetary policy and tailwinds from fiscal policy. And I
00:53think that sets you up for a broadening of the growth story.
00:56Is it a story that demands rate cuts or is it the fact that we don't get rate hikes and
01:00good growth and that's good enough?
01:01Yeah, it's more the latter. I mean, our base case is we think that we get one additional
01:05cut in the course of this year, which is a little bit lower than what markets are pricing
01:10right now. And that's based on the idea that we think that growth is going to improve.
01:15Remains a little bit sticky, but moves in the right direction. And so it's not predicated
01:19on rate cuts.
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