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Why the Bull Market Still Has Legs If the Fed Holds

October 27, 2026

Video Transcript

JD Durkin: Eddie Ghabour here in person. Come on in, Eddie, co-founder and CEO of Key Advisors. Good to see you, man.

Eddie Ghabour: Thanks. Thanks for having me today.

JD Durkin: I want your take on tech. Tech was one of the outperformers today, but we know we’re coming off these CoreWeave questions, these neocloud questions. How are you thinking about XLK and other similar tech components the last few weeks, Eddie?

Eddie Ghabour: So we’ve been buying the dip in technology. We just think that, in the short term, it was very oversold. The news with CoreWeave is a warning sign, but that’s not a reason to get completely out of tech. We think the setup going into November is a market that’s like a coiled spring, especially in tech that’s been oversold. And then what will happen, just like what happened in August after the big July sell-off, in our opinion, is that folks that got too bearish are going to be forced to chase, and we should see tech go back to new highs.

JD Durkin: So, speaking of tech, we’ve got a few really big Mag Seven earnings coming up. That includes Microsoft. Tell me your thinking on MSFT and other cybersecurity names, CrowdStrike, the BUG ETF. How are you thinking about that space?

Eddie Ghabour: So cybersecurity stocks are our favorite stocks right now, because we look at that as an area that is not going to be so much challenged by any type of data center reduction in spending for next year. We think that’s the biggest challenge for technology. The one thing that’s keeping CEOs up at night is cyberattacks. And with the adoption of AI at the speed at which it is happening, it’s a real threat. So regardless of what happens in CapEx, this is an area where investments will continue to increase across the board. So we really like the cyber names. BUG is the way we’re playing it. And Microsoft tomorrow, we like Microsoft. I think that’s been a great, great name, and a great name to hold right now.

JD Durkin: You mentioned threat. Speaking of threats, how are you thinking about Kevin Warsh and the Fed? We kind of have a reasonable expectation of what we’ll get tomorrow at 2:00, and in the press conference at 2:30. But how are you viewing monetary policy relative to the bull market that we’ve had?

Eddie Ghabour: They are the biggest threat to the bull market, in our opinion. We need to respect the signals we’re getting in high-yield bonds, as well as some of the early indications with CoreWeave and Oracle and how their bonds are trading, as well as the pressure on the consumer with some of the diesel prices. You cannot tighten monetary policy in that type of scenario. So if they do not tighten for the rest of this year, this bull market still has legs. If they tighten again in December, after tightening in September, we’re going to put on a full defensive position going into January, because we think that they’ll break something in the market by doing that.

JD Durkin: Yeah, Eddie, you’re going to have a lot of people out there, perhaps, who are going to say, well, what about PCE, which we get Thursday, by the way? What about CPI, PPI, choose your inflation acronym of choice? We’re still running hotter than the Fed’s goal of 2%. We haven’t had 2% inflation in over five years. What is the Fed supposed to do with that part of its mandate?

Eddie Ghabour: The biggest reason why inflation is staying stubbornly high is because of energy prices, oil and diesel. Nothing in monetary policy is going to fix that. What’s going to fix that is an end to the war. So unless they can figure out a way to end the war, nothing they’re going to do is going to bring that down. So they have to let the market play itself out, in our opinion, because they’re going to do more harm than good by trying to fix a problem they cannot fix.

JD Durkin: Interest rates don’t pump oil. They don’t move tankers through the Strait of Hormuz, to your point. Before I let you go, Eli Lilly: how is AI creating opportunities in healthcare? What makes Lilly the standout? Shares up almost 20% on the year.

Eddie Ghabour: It’s been a great name to have for our clients. And when you look at healthcare, that is a sector that has two roles. It’s a defensive sector, so it generally holds up well in volatile time periods. And there’s not another area that AI is going to be more extremely impactful on than healthcare. Talk to anyone in the medical profession. And Eli Lilly, with the GLP-1 drugs, they are the leader in that space. They’re investing globally. So it’s just a best-of-breed name, in a sector we like for the rest of this year and heading into the first half of next year.

JD Durkin: Shares of Lilly up fractionally on the day at the big board. Please come back. I’ve interviewed you for so many years remotely. This is the first time Eddie and I get to meet in person. Really grateful for you being on the broadcast.

Eddie Ghabour: It’s my pleasure.

JD Durkin: Come back and see us again, and we’ll do it again.

Tech stocks are bouncing back as investors weigh concerns around CoreWeave and neocloud providers ahead of major earnings and a Federal Reserve decision. On Taking Stock, JD Durkin speaks with Eddie Ghabour, co-founder and CEO of Key Advisors, about buying the dip in tech, his favorite corner of the market, and why he sees the Fed as the biggest threat to the bull market.

Ghabour says Key Advisors has been buying the dip in technology, calling the sector oversold in the short term and describing the news around CoreWeave as a warning sign but not a reason to exit tech entirely. He sees the market heading into November like a coiled spring, expecting investors who turned too bearish to be forced to chase, much like the rebound in August after the July selloff, and says tech could return to new highs. Cybersecurity stocks are his favorite, since he believes demand will keep rising regardless of any slowdown in data center spending as rapid AI adoption increases the threat of cyberattacks. He is playing the theme through the BUG ETF and says he likes Microsoft heading into earnings.

Ghabour calls Fed Chair Kevin Warsh and the Fed the biggest threat to the bull market, pointing to signals in high-yield bonds, the way CoreWeave and Oracle bonds are trading, and pressure on consumers from diesel prices. He says the bull market still has legs if the Fed does not tighten again this year, but if it hikes in December after raising rates in September, Key Advisors would move to a full defensive position going into January. He argues that inflation is being driven by energy prices that monetary policy cannot fix, and that only an end to the war will bring it down. He also highlights Eli Lilly as a best-of-breed name in healthcare, a defensive sector where he expects AI to have an especially large impact.

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