“I am getting worried about this AI tech trade. Not in terms of the absolute level of spend. We know next year the capex is going to be greater than this year. But… if instead of 1.2 trillion of capex next year it's only one, which is still greater than this year, it's the rate of change that becomes really problematic for stock prices. Don't look at the absolute level. Look at that rate of change.”
CNBC's "Fast Money" · October 2026
Asked by Melissa Lee whether he's starting to worry about a recession, the strategist says you can't separate the economy from the stock market, and the AI trade is the piece he's watching. His point: AI capex can keep growing and still hurt stocks if it grows more slowly than expected.
Transcript
…down 53% mark to market, you've already blown up. So I think in the short term, rates have topped out. But I would not be surprised if 5.5% to 6% tenure in the coming years is what we're going to see. But maybe we go to 4.3 quarters before we end up going there because of the concerns about growth.
So put this all together. Are you worried about the economy? I mean, are you going to start using the R word in your forecast? Like,
you can't throw out the R word unless you have an opinion on the SP 500, because as we talked about, they're intertwined. I am getting worried about this AI tech trade. Not in terms of the absolute level of spend. We know next year the capex is going to be greater than this year. But if projects aren't Going to get green lit. If instead of 1.2 trillion of CapEx next year is only one, which is still greater than this year, it's the rate of change that becomes really problematic for stock prices. Don't look at the absolute level. Look at that rate of change.
All right. Peter, we're going to leave it there. Always great to see you. Thank you. Peter Bookvar. I don't know, kind of bleakly. It's like anything.
Look, rates notwithstanding, which I still think are probably headed higher in the longer term. What's going to unlock the housing market, unfortunately, is a downturn in the economy where people are then forced
to do things they might not have to be forced to do right now. And that will be, I think, predicated on an unemployment rate, which I think could surprise people to the upside. Coming up, a beatdown in the banks, more on the post-earnings hangover for financial stocks and how our traders are…