Oct 23, 2026 · 23 min
CIO sees equity moderation, not a severe downturn
Top of the Morning: CIO Equity Pulse - Monthly performance update & outlook
The outlook weighs whether higher rates, housing weakness, geopolitical risk, and AI concentration will disrupt U.S. equities through year-end and the election.
- 1Higher rates and leverage are pressuring AI stocks, especially companies whose investments may not earn adequate returns.
- 2Early third-quarter earnings remain relatively solid despite weak market performance, with meaningful breadth and magnitude among reported beats.
- 3The CIO expects moderation rather than severe deterioration, favoring quality and diversification over concentrated technology exposure.
Don't miss
David Leibowitz distills the outlook into a three-legged stool—economic and corporate-profit growth, the Federal Reserve, and AI—then argues for moderation without severe deterioration.
The brief
Host Dan Cassidy and David Leibowitz open the monthly CIO Equity Pulse by testing whether U.S. equity momentum can withstand pressure from AI, rates, oil, earnings, and the election.
AI stocks are under pressure as higher rates and leverage expose weaker companies, shifting the debate from bubble comparisons toward whether investments can generate adequate returns.
Higher mortgage rates are weakening housing demand, while oil and Middle East tensions could reinforce inflation and a more hawkish Federal Reserve stance.
Early third-quarter earnings offer a counterpoint to weak market performance: about a quarter of S&P 500 market capitalization has reported, with results relatively solid.
Leibowitz expects limited election-driven market impact because divided government and Senate constraints would make major new legislation unlikely.
His positioning message is measured rather than defensive: expect moderation, avoid excessive concentration in technology leaders, and emphasize quality and diversification.
What was said on this episode
4 statements · 2 positive · 2 negative
Investors should avoid excessive concentration in technology winners.
“Don't be overly concentrated, especially in some of the winners that we've seen over the last few years that are in tech.”
Listen at 21:08
Investors should emphasize quality as markets enter a mid-cycle environment.
“And I do think having a bit of a focus on quality makes sense as we go into this more what I characterize kind of a mid-cycle environment.”
Listen at 21:27
Broad equity exposure is the best portfolio approach in the current environment.
“And so it is sort of a broad exposure is I think the best way to describe it.”
Listen at 21:36
Investors should monitor undue concentration risk in their portfolios.
“And just be aware of – any undue concentration risk that might be in your portfolio.”
Listen at 21:43
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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