Summary of a television interview · Based on the recording of the conversation
In brief
In a conversation about capital markets on Bloomberg TV Bulgaria, Kliment Robev discusses the market reaction to the Hungarian election, the war with Iran and the upcoming earnings season. He describes a recurring four-phase pattern under Donald Trump – chaos, panic, reversal and rally – but believes this time may be different, because a war cannot be ended with a social media post and inflation leaves the Fed’s hands tied.
Key points
- Kliment Robev sees the markets’ response to Péter Magyar’s election win in Hungary – falling bond yields, a stronger forint and record highs for the stock index – as a strong vote of confidence driven by hopes of more predictable governance and the release of around €18bn in EU funds, though he cautions that this hope has yet to be borne out.
- He outlines a pattern observed under Trump: chaos (a provocative post, an ultimatum or tariffs), panic (the VIX jumps and stocks fall), reversal (Trump backs down) and a rally to new records – as seen during the Covid crisis and after the tariffs on the whole world announced on 2 April last year.
- This time he is more pessimistic: a war with an opponent such as Iran is unlikely to end with a single post, and with the Strait of Hormuz closed and oil above $100 a barrel, inflation – 3.3% in the US for March, so far driven mainly by fuel – is likely to spread to other goods and services, which is why the Fed, which has always come to Trump’s rescue, is now talking about holding or even raising rates, while the risk of recession grows.
- He does not expect double-digit growth in the S&P 500 in 2026 and argues that in the first-quarter earnings season management guidance will matter more than the results themselves – on the fallout from the Iran war, on the return from huge AI spending, on whether revenue growth comes from prices or volumes, and on whether inventories are growing faster than revenue, which he calls a red flag.
- In technology he sees long-term pressure from AI on software-as-a-service companies, citing Adobe, whose shares fell by almost 60% within a few months, and within the “Magnificent Seven” a divergence between companies already earning from their AI investments, such as Nvidia, Alphabet, Microsoft and Meta, and those that are not yet, such as Tesla and Apple.
- He notes a sector rotation from growth to value and from cyclical to non-cyclical companies, and considers Tesla’s premium valuation, built on expectations for robotaxis and humanoid robots, unjustified given a 15% fall in its sales in the first quarter (while the European electric-car market grew by 15%), the “toxicity” of the brand linked to Elon Musk’s political activity and strong price competition from Chinese manufacturers.
Context
The conversation took place after the Hungarian election, against the backdrop of the war with Iran, the closure of the Strait of Hormuz and oil above $100 a barrel, the US inflation data for March and the start of the first-quarter earnings season.
Views reflect his position at the date of publication and are not investment advice. Regulatory information
