1. BofA says 'old-economy' cyclicals are the better bet now.

Take profits in secular growth stocks and buy into cyclical, value-oriented sectors said BofA strategists, heading into the second half of 2026.
BofA is sticking with its year-end S&P 500 target of 7,100 — and hasn't budged. At roughly 5% below where the index trades today, that makes BofA one of the most bearish voices on Wall Street right now.
The reason isn't that stocks are simply too expensive. According to BofA, the bigger problem is that the easy-money conditions that powered markets through 2025 — cheap central bank liquidity, surging buybacks, and heavy investor inflows — are all fading at the same time.
Making things trickier, BofA expects the Federal Reserve to raise interest rates three times this year, driven by sticky inflation and a tight job market.
That's a tougher backdrop for growth-heavy tech companies, which are already trapped by massive AI spending commitments they can't walk back without falling behind competitors.

2. “Reopening of the Strait of Hormuz will overheat the economy.”

Driven by the strong April CPI, hot May non-farm payrolls and a hawkish Fed, the market narrative now suggests that the reopening of the Strait of Hormuz will further overheat the economy, forcing the Fed to raise interest rates soon.
This breakdown in the correlation between rates and oil prices can be seen in the chart.
Source: Apollo Chief Economist

3. Signs of excessive US bullishness.

Flows into US equities have been exceptionally strong so far but are also proof of levered “US exceptionalism” positioning.

4. No, satellites are not going to replace fiber or mobile towers.

The telecom sector sold off following a Bloomberg report that a major satellite broadband player held executive-level talks about partnering on a consumer mobile phone offering that could increase competition for wireless providers.
But satellite internet is not going to replace terrestrial networks in densely urban areas for a variety of reasons.
The closest LEO satellites still operate ~200 miles above the earth compared to terrestrial towers which typically serve users within the radius of a few miles in urban/suburban
areas to ~25 miles in rural areas. The result is much higher latency and therefore not compatible with edge AI technology.
Also, regardless of how many satellites you have there is simply not enough spectrum / bandwidth to compete with fibre.
LEO is an access technology that is great to cover where fixed line is not realistic cost-wise.
In short, while LEO satellites will steal market share in rural broadband and emergency backup, macro towers remain the core infrastructure for everyday wireless communication networks.

5. We are buyers of Deutsche Telecom.

DT is cheap (2027E PE < 10) and extremely oversold after the satellite panic.
Looking further ahead, while 6G is likely a 2029/30+ event, T-Mobile/ Deutsche Telecom is positioning to extend its 5G leadership through AI-RAN-ready infrastructure. This could enable inference at the edge and physical AI use cases.

Notably, T-Mobile’s partnership with NVIDIA underscores this opportunity, with Jensen Huang highlighting telecom networks as the “nervous system” for physical AI—potentially creating new monetization vectors for the telecom sector.

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