About Christopher Hyzy
Christopher Hyzy, chief investment officer for Merrill and Bank of America Private Bank, has stated that he expects 2026 to be a year of a "proud bull" market, characterized by profit growth rather than multiple expansion. He described the current market momentum as an "elf rally" on the way to a "Santa Claus rally," and said that tailwinds in the first quarter of 2026 could include tax refunds and fiscal relief. Hyzy has also said that the market does not need a Federal Reserve rate cut in December to continue its upward trajectory, as it has already priced in a strong profit cycle through 2026. He has expressed a bullish outlook, referring to the current environment as an "Owl market" where investors seek confirmation of profit acceleration.
Hyzy has emphasized that capital spending on AI and data infrastructure is accelerating, and that corporate earnings continue to surprise to the upside. He has advised investors to consider putting excess cash to workched and to stay invested for the long term, while also preparing for potential jolts and short-term volatility. Hyzy has noted that the market is seeing a broadening of participation beyond mega-cap tech, with sectors like energy and small caps showing strength. He has also stated that the Federal Reserve's recent liquidity announcement was a "risk on" move and that he expects markets to end the year on a high note.
Source: AI-verified profile updated from Christopher Hyzy's recent appearances.
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Transcript (10 segments)
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Host0:00
Day. We begin with our talk of the tape. Is the market right to position for a re-accelerating economy in the coming months? And how might next week's Fed meeting fit into the bull's storyline? Let's ask Chris Hyzy, Merrill and Bank of America Private Bank CIO. He's here. Got your 2020 outlook finished up. Ready to go. So what's your plan of attack that you're talking to investors about?
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Christopher Hyzy0:21
Well, right now the momentum, as you already stated, is this is an elf rally right now on the way to a Santa Claus type rally. So we're just beginning this right now. We had a lot of... So they're working on it. You know, you've got to finish it up right there in the workshop right now. And then ultimately delivery happens later. So why is that the case? Obviously tailwinds coming in the first quarter of next year, really between February and April, you might see some good tax refunds, fiscal bill relief. On the consumer side, consumers are very resilient. Boomers are spending. They're the biggest growth area, masking over some weakness in some other areas. But then you get the actual corporate tax relief as well. Tax probably not the right word, but just in terms of fiscal bill relief, you get a couple of tailwinds. CapEx still moving forward. But the critical point is, when have we seen the Federal Reserve cut rates into a growing momentum economy? It's been a long time. We know why. But at the end of the day, the third mandate, which is price stability, arguably speaking, asset price stability, is alive and well. And that gives us a very good comfort level for 26, being a proud bull Mike versus a stampeding bull.
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Host1:31
What does that translate into a proud bull in terms of, you know, if it's not stampeding, so what? It's not going to go up 20% or it's just going to hold its ground?
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Christopher Hyzy1:41
It's not going to go up 20%. We've seen that in 23 and 24. We're on track for that. In 25, a bull is more let's track earnings growth. Let's not expect multiple expansion. Multiples, we all know it, they're vulnerable. They're vulnerable to a negative growth shock, which we don't believe is our base case. When we look at profit growth being 14% or so, that could prove to be low if all stars align. But there's not a lot of downside in that profit growth number.
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Host2:09
It doesn't seem like it. There's a lot of confidence in margins holding up. And I guess just the momentum, at least in the biggest companies because of the CapEx trade. How do you think it breaks down, though, in terms of how much faith investors are going to place in everybody winning on the AI trade, and not because we've already seen the market try to sort things out. I mean, NVIDIA's forward multiple is down from 35 to 25. You know, Microsoft's down from 33 to 28 in 4 months because the earnings are going up. But we're not sure what we want to pay for them.
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Christopher Hyzy2:43
Yeah, I think that's well stated because you had significant speculation in a few pockets across the marketplace. Three or four of those pockets have basically declined into this, but yet the market held up. So what's happening is there actually is a broadening out happening with better growth. More people participate. So we expect better participation but still tech just hanging in there. Yeah, their multiples are now a little bit more attractive. But what people don't really look at too much anymore is seven. Five of them have underperformed the S&P. The terrific two are the ones that have outperformed. So really the rest of the market is starting to feed into this narrative of better economic health. But it doesn't mean we're off to the races.
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Host3:24
Yeah, I mean, it's I feel like people want to point to that only two Mag 7 stocks have outperformed, but the upside to those has been huge. And most of them are also up. It's not as if they've gotten left behind fully, but it shows you also how hard it's been to beat this index. I think only a quarter of all stocks are outperforming.
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Christopher Hyzy3:45
Yes. And when you get a November like what happened with health care being up 9% and tech being down 4%, that tells us dispersion is still out there because there's under-owned sectors. Energy is a great example of it today being one of the leading performers, under-owned, under-loved for a long time. We think that story is a good one for 26. And even in 27, as you said, when the separation between the big winners in the AI build-out and the big non-winners, we don't like to say losers, and that big portion in the middle we call the maybes. We'll know exactly a little bit more information as to which camp they go into.
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Host4:21
Are we, is it time to look for the macroeconomic effects of all this spending? In other words, are we in for a productivity boom or is it still wait and see?
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Christopher Hyzy4:33
I don't think it's wait and see. We hear from companies every day. We hear from clients that run companies every day. It is switched from, is this a good thing? Are the numbers going in going to produce bad numbers coming out, and am I going to be misinformed to all of a sudden...
