Have markets finally found the 'right level' of interest rates?

Horizon CIO Scott Ladner discusses whether markets (^DJI, ^IXIC, ^GSPC) have settled into the "right level" of interest rates, especially as Federal Reserve officials anticipate another rate hike to come in 2026.

if we have kind of found the right level of rates. I mean if if if, you know, 6% 10 year is like sort of off the table and and you know, we kind of have this this sort of cap on on rates. Um is a similar sort of story as as we saw like in the fourth quarter of 2022. Like once we realized like where the top of the rates was, now stocks can rally. Like now like now we can kind of get going.

And if you think about this year so far, it's it's kind of incredible. We've had a macro backdrop that's been incredibly unfriendly. I mean I mean, you know, we have rates up 100 basis points, we have oil up 75%, we have a dollar that's stronger. I mean, this is not a classic stocks pop 10% sort of backdrop that we've had.

If we get some of those things started to ease, um and you still have the earnings power that that that we've got, like we are we are really excited for the for the fourth quarter to become in here. And we do think that like kind of getting into the sort of the the second leg of like a sort of a CAPEX uh like an AI CAPEX trickle-down effect. Uh sort of think like infrastructure types of names. Like those we think those names are going to have a really, really nice fourth quarter.

Well, I'm curious about that because isn't that thesis pretty well understood by now, right? Isn't everybody already in those names? Well they I mean, we've seen some sell off, but

They they they were for a bit and then and then and then like we just sort of forgot about it and everybody bought semis again. So so like the the the sort of the CAPEX trade went from like was, you know, it was it was like the G you know, the Genovas and and you know, those types of names for a bit. And then we just sort of forgot about those and everybody went to go buy SMH again uh and and and just go buy semis.

Those, you know, the sort of the the the kind of the classic infrastructure names have been have been left uh left for dead a little bit over the last like six months. We just think that that sort of, you know, that sort of attention kind of comes back in as people understand the flywheel effect that can really start taking taking uh taking hold um as the sort of the trickle down of CAPEX goes goes through the system.