Podcast: Ex-Morgan Stanley Equity Strat, Jay Pelosky, On Equities Rallying into Year-End (and Beyond)
Take a listen of my latest podcast with Jay:
Summary: In this Macro Hive Conversations episode, Bilal interviews Jay Pelosky, founder of TPW Advisory and former head of asset allocation at Morgan Stanley, on his bullish global equity thesis. Pelosky argues the world is in a "tripolar" structure (Asia, Europe, Americas) driving a multi-year "spending super cycle" on AI, defense, and climate that supports a "global growth long cycle" through 2030. He believes this earnings boom, combined with cheap valuations, favors a shift in equity leadership away from the US toward Europe, Japan, and emerging markets. He also covers his portfolio positioning (banks, Spain, Poland, South Korea, China, Latin America, energy/clean energy), views on rates, oil, and US politics, and closes with a segment on Duke football and NIL spending.
Key facts:
- Pelosky expects the 2027 S&P 500 forward P/E at roughly 18x, calling it cheaper than the 5- and 10-year averages, with JPMorgan reportedly citing about 80% of companies expected to show positive earnings growth in 2026.
- He cites South Korea trading at around 5x forward earnings despite roughly 100%+ earnings growth in memory chips.
- TPW Advisory has not held Treasuries in its global multi-asset model for four years, favoring credit risk (e.g., an interest-rate-hedged high-yield ETF) instead.
- He expects Brazil's central bank to cut rates by 200-300 basis points over the next year, per Morgan Stanley.
- He calls for a ceasefire in the Russia-Ukraine war by year-end and expects Poland to benefit from eventual reconstruction spending.
- Q3 US earnings growth is forecast around 25% year-over-year, entering what he calls historically the best seasonal months (October-November in midterm years).
- Polymarket odds cited at about 60% for Democrats flipping the Senate, with the House flip already "priced in."
Bilal
