Speaking to ET Now, market veteran Andrew Freris, CEO, Ecognosis Advisory commented on the current setup, pushing back against the popular framing of any downside as a mere “correction” or “rotation”.
“I love your expression correction and also, in the same way I love the expression rotation. People are absolutely reluctant to say prices are going to fall. There is nothing to rotate about, neither there is to correct. If it corrects, then presumably all the time they were previously wrong. So, if they correct, that is a very good thing to happen.”
Freris’ core concern lies with the timing and basis of the Federal Reserve’s decision. He pointed out that the rate cut was made using data only up to September, without clarity on inflation and labour market trends for October and November.
“Anyway, what concerns me is that the interest rate cut was taken on the basis of information as late as September. The Fed does not have numbers for October and November for inflation and labour markets. This is insane to cut interest rates on the basis of September figures.”
He questioned how policymakers could justify easing when inflation had been accelerating and labour market signals remained mixed.“So, the idea that we are going to see, we can look forward to further cuts in interest rates is completely unfounded on any information… it was done literally by flipping a coin and keeping your fingers crossed that things are going to be alright when we have the October and the November numbers.”Against this backdrop, Freris reiterated his negative stance on US equities, particularly technology and AI-driven stocks. He cited earnings disappointments and heavy capital expenditure with little visibility on future returns as red flags.
“So, I am sorry you say that I am negative on equities, on American equities particularly and on the technology and AI equities. Yes, I continue to stay so, and the cutting interest rates last week did not do anything to make me feel better.”
Asked about comments from Donald Trump advocating sharply lower interest rates despite limited data, Freris was dismissive.
“But he is famous for insisting of cutting interest rates because it suits him, not because the data point this. So, let us leave it aside because really it does not add anything.”
On the upcoming inflation readings, he warned that markets may be underestimating the persistence of price pressures.
“But remember, you have the important three numbers CPI, CPI core, and the PCE that the Fed likes and all of them have got the number three in front of them as opposed to the number two and falling. It is not good news. So, the Fed decided inflation does not matter.”
With a data-heavy week ahead — including payrolls, retail sales, CPI and a Bank of Japan policy meeting — Freris said market reactions could remain contradictory, regardless of outcomes.
“If the numbers of inflation are up, it is bad news for the Fed. If the numbers of inflation are down, it is good news from the Fed. So, I am afraid I am going to be right either way.”
He also cautioned against overinterpreting US labour data, describing non-farm payrolls as notoriously volatile and subject to large revisions.
Beyond the US, Freris drew attention to China, where falling property prices and weak consumption continue to weigh on sentiment despite steady GDP growth.
“They are having GDP growth that varies between 4.5% and 5%, that is great and they do not have inflation. Why are they complaining? Well, they are complaining, of course, not because they do not have inflation, because they are having effectively deflation.”
Looking ahead to the next year, Freris challenged the consensus expectation that the AI boom will eventually deflate — arguing that waiting for an obvious turning point may be the wrong strategy altogether.
“If they get it, they would have got it wrong. They have to get out now. So, I cannot possibly sit down here and tell you… when the AI would deflate. This is absurd.”
Instead, he pointed to alternative opportunities across defence, European markets and parts of Asia, noting that several regions have already outperformed the US.
He also flagged an emerging narrative around India as a relative safe haven — not because of direct AI exposure, but because of the lack of it.
“And since artificial intelligence is likely to go down, India is an excellent, if you want, kind of safety from hazard of artificial intelligence… you are buying India not because it is good but because it is unrelated to AI. We live in a very strange world are not we.”
