Markets are navigating geopolitical tensions in the Middle East alongside a strong earnings season that continues to support equities. While energy risks remain, investors are largely focused on corporate performance and AI-driven growth.
BNN Bloomberg spoke with Jack Janasiewicz, portfolio manager and lead portfolio strategist at Natixis, who said the earnings backdrop remains strong, with AI investment and resilient consumer activity continuing to underpin market gains.
Key Takeaways
- Earnings season points to a resilient consumer and stable economy, with banks signalling risks like private credit remain contained.
- AI investment remains a major growth driver, with spending continuing to rise rather than drop off as previously feared.
- Markets are prioritizing earnings strength over geopolitical risks, with volatility tied to oil seen as temporary for now.
- Investment opportunities remain concentrated in U.S. equities, tech, industrials and emerging markets, while Europe shows signs of slowing.
- Defensive sectors are lagging as growth and cyclical areas continue to lead market performance.
Read the full transcript below:
LINDSAY: Investors have their eyes on the latest developments in the Middle East. Meanwhile, oil prices and more earnings results as well. So, let’s get some perspective this morning from Jack Janasiewicz, portfolio manager and lead portfolio strategist at Natixis. Good morning. It’s great to have you join us.
JACK: Yeah, thanks for having me on.
LINDSAY: I guess first of all, just your thoughts on the direction of the markets that we’re seeing this morning — a bit of a flip from yesterday.
JACK: Yeah, I still think you’re going to have some ups and downs here. I think the bigger overarching tone really falls back on the earnings backdrop. So we certainly can get some geopolitical risks and headlines that are going to work their way through the market. But the bottom line here is the earnings backdrop is really what matters most. The underlying tone is still very strong.
LINDSAY: Let’s talk about earnings a little more then, because we’re kind of past the halfway mark in earnings season at this point. Most of the big tech companies especially have reported. What are your key takeaways that you’ve seen so far from this earnings season?
JACK: Sure, there’s a couple of things I think are worth highlighting. First — and the big one — is after hearing from all the hyperscalers so far, the AI trade is certainly alive and kicking, and that continues to be a key driver for the U.S. economy.
If we move away from the hyperscalers and look at what the financials told us, when we start to think about the health of the consumer, the banks basically told us that the consumer is in good shape. We continue to see spending. Maybe we’re hearing a little bit of concern around a K-shaped economy, but the bottom line is consumption continues to hold up fairly well, driven more by upper-income cohorts.
Then regarding concerns around private credit, banks told us they still see that as an idiosyncratic risk, and they don’t expect it to work its way through the broader economy right now. If you do get some waves hitting the banks, they’re well positioned to absorb that.
So all in all, the things that were concerns going into earnings — I think you should feel pretty good about the backdrop going forward.
LINDSAY: I wonder if there are any surprises for you. I want to go back to the hyperscalers in particular and ask if you were surprised with how well they performed this quarter, because there was talk at the beginning of the year that AI would be less about those companies and more about semiconductors and the tools behind AI.
JACK: Yeah, it’s been a story of the “picks and shovels,” so to speak. But when you start to look ahead at capex projections — not just for this year and next, but further out — there were concerns about a cliff effect, where spending would drop off.
What we’re seeing instead is that spending is rising and then plateauing, rather than falling sharply. So when you look at the broader AI story going forward, it’s still very much supported. And that’s a big workhorse for the U.S. stock market.
LINDSAY: When we’re looking at markets as a whole, do you think investors are getting swayed by certain headlines, like the impact of AI?
JACK: I think there’s a little bit of concern. A lot of the questions we get from clients are about whether AI will take jobs away. That remains to be seen. But what we tell clients is that while some jobs may be displaced, new segments of the economy will evolve and create jobs elsewhere.
There may be a timing mismatch, but broadly speaking, it’s still a net positive — whether through productivity gains, lower costs or overall capex spending that supports economic growth.
LINDSAY: What about what’s happening in the Middle East? Are you getting questions about that, or are people becoming more immune to it?
JACK: It’s certainly a concern that lingers in the back of people’s minds. When you look at how the market is thinking about it — whether through the forward curve for oil prices or inflation expectations — the market still views this as more of a one-time hit that should dissipate over the next few months.
We’ve been reminding clients that the longer it persists, the greater the potential impact. One place to watch is the distillates market rather than spot oil prices — that’s where you’ll see sharper moves.
If things like jet fuel prices start to spike, we could see more negative market reactions. But for now, markets are looking past that and focusing on earnings. Without that strong earnings backdrop, we might be in a different situation.
LINDSAY: So where are you finding opportunities right now?
JACK: The themes that were working before the Iran-related tensions are still working now. That means favouring U.S. equities, large-cap and tech.
From a sector perspective, we still like industrials and financials. Outside the U.S., we prefer emerging markets over European equities. These themes should continue to carry through the summer.
LINDSAY: Why European equities in particular?
JACK: We’re seeing some cracks in the armour. There’s evidence of slowing, and this ties back to tightening financial conditions. Energy pass-through is likely to have a bigger impact on Europe than elsewhere.
At the same time, expectations for further ECB rate hikes and softening sentiment surveys point to a less favourable backdrop. So we’re less optimistic on Europe and more constructive outside the eurozone.
LINDSAY: Lastly, are there areas you’re trying to avoid right now?
JACK: When we look at earnings growth, revisions and margins, the areas showing strength are the ones you want exposure to. The areas not showing that are the defensives.
So when investors look to rotate into defensive positions, we’re advising against that. The current backdrop doesn’t support a defensive posture. It’s really the cyclicals and growth areas that are driving markets higher.
LINDSAY: We’ll leave it there. Jack Janasiewicz, portfolio manager and lead portfolio strategist at Natixis. Appreciate your time. Thanks for joining us this morning.
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This BNN Bloomberg summary and transcript of the May 5, 2026 interview with Jack Janasiewicz are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.