Jpmorgan’s Playbook For A 10-15% Correction (or Worse) — Ft. Michael Cembalest | Prof G Markets

This week on Prof G Markets, Ed Elson and Scott Galloway are joined by Michael Cembalest, the Chairman of Market and Investment Strategy for J.P. Morgan Asset & Wealth Management, to discuss how J.P. Morgan is approaching the AI bubble. He weighs in on how violent the correction will likely be, shares how he’s preparing for a “profit taking spark,” and unpacks his top risks for 2026.

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Timestamps:
00:00 - Today’s number
00:55 - Today’s episode
04:40 - Interview with Michael Cembalest
04:54 - What are your reactions to what Aswath said on the podcast?
09:06 - What do you think about the fears of an AI bubble and how are you at JP Morgan thinking about it?
12:28 - What do you think of the idea that markets are now fragile and overly reliant on about ten companies?
16:45 - Is it wrong that the other hyperscalers are beginning to raise record amounts of debt?
19:33 - Do you agree that there’s a bubble but disagree with the extent and scale of the damage we’re going to see?
21:35 - Ad Break
22:55 - What do you make of the idea that the government might step in to support the Magnificent 10’s capex?
26:59 - What is your recommended asset reallocation other than just going into cash?
29:05 - What does a balanced or more defensive portfolio look like?
30:14 - How is tech valued at a large, in terms of paying you for the risk?
32:02 - How do we put this in the context of all of history and what does this look like compared to previous cycles?
38:19 - Do you see this as a turning point where we either get labor-market chaos or lower tech valuations?
43:00 - Ad Break
44:26 - What else should we know in terms of risks?
50:13 - Could you describe global fragmentation and inflation for us?
52:38 - What are you thinking about in terms of the Supreme Court ruling on tariffs right now?
53:28 - Do you think there might be a ruling where they have to pay back the tariffs to the companies the tariffs were imposed on?
55:37 - For someone who has a regular portfolio, what is your general advice going into 2026?
58:02 - Can you make the bull case for 2026?
01:00:29 - Break
01:00:38 - FInal thoughts
01:05:11 - Credits

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