Phil Camporeale runs a dashboard of financial conditions rather than a single indicator, and he told Squawk on the Street that a 10-year Treasury note at 4.9% does not read the way it did the last time it was here.
Other guests on the show this week have said a 5% 10-year would end the AI trade. Camporeale said the economy is not that interest-rate sensitive, and that the last time yields were at this level the federal funds rate was 200 basis points higher and the S&P 500 was far lower.
"But we don't think 5% is an alarm bell for the AI trade for the funding trade."
Camporeale is chief investment strategist at J.P. Morgan Wealth Management, where he sets the asset-allocation view the firm's advisers give clients, and he publishes an S&P 500 target he updates as earnings come in.
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👤 Guest: Phil Camporeale, Chief Investment Strategist at J.P. Morgan Wealth Management
🎙️ Hosts: Carl Quintanilla and Sarah, co-anchors of Squawk on the Street on CNBC
📰 Published: 10 September 2026 on CNBC's Squawk on the Street
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 6 min
Key Takeaways
A 10-year Treasury at 4.9% is not the same signal it was in October 2023, because everything around it has changed
The federal funds rate was 200 basis points higher then, and the stock market is almost 90% higher now
The speed of the rise in yields, not the level, is what is making equity investors uncomfortable
The Mag 7 has not been this cheap against the other 493 S&P names in more than a decade
His S&P 500 target for the middle of next year is about 8400, roughly 10% above current levels
Oil is the biggest near-term risk he sees, and it works through financial conditions rather than the consumer
The top 20% of earners do 60% of US spending and put only about 2.5% of disposable income into gas, oil and electricity
Rate rises abroad could stabilize long-dated US yields rather than push them higher
1. Oil's Grip on Rates
Camporeale opened on energy as the dominant force in markets rather than a sector story. "It's like another day of oil prices having a stranglehold on capital markets." He said continued tightening of financial conditions is the biggest near-term risk he has, and that he does not want to underestimate it.
His method is to look at the whole conditions picture rather than the yield alone. "I think taking a dashboard of financial conditions, the ten year note is getting all the attention right. 4.9 this morning, a whisker away from the October 2023 high of 5%."
The hosts had come out of a segment on weak consumer data, with Sarah pointing to Procter & Gamble and to Nestle's guidance that morning as the soft spot. Camporeale said that made the consumer question the right one to ask.
2. Not 2023 All Over Again
The same yield sits on a different economy than it did three years ago. He said the federal funds rate was 200 basis points higher at the October 2023 high, investment-grade borrowing costs are tighter by about 60 or 70 basis points today, and the stock market is almost 90% higher than it was then.
On why a 5% handle is arithmetic rather than an alarm. "So if you have 2% growth, 3% inflation, two plus three is five." He added that the last time the 10-year was at 5%, "the buyers came rushing in," so he expects demand at those levels.
Asked directly about the view that 5% bursts the AI bubble, he declined it. Sarah put to him that Rockefeller's Richard Sharma had said on the show earlier in the week that a 5% 10-year would burst the AI bubble. "Yeah, I wouldn't go that far," Camporeale said, adding: "I don't think this economy is interest rate sensitive like that."
The global tightening cycle may help rather than hurt the long end. With the European Central Bank having raised rates that morning, the Bank of Japan expected to follow and two and a half hikes priced in at home, he said: "There's an irony here. If they do move rates that might stabilize the long end." He called it "bizarro world," and Carl Quintanilla noted the same argument from Joe LaVorgna.
On the Federal Reserve, Camporeale said the Jackson Hole testimony was "like the mulligan on the July FOMC press conference," and that Christopher Waller's line — that continued momentum in core disinflation would let the Fed be patient — was the telling one. He said a consensus core CPI print the next morning would bring the year-over-year rate back to 2.4%.
3. Mag 7 vs the 493
He is still overweight the AI complex, and defines it more broadly than technology. He named technology, industrials and utilities as overweights, specifying that the utilities exposure is the AI ecosystem rather than "the utilities of the defensive world" of years ago.
The valuation gap inside the index is his central equity argument. "And I think what this kind of comes down to Carl is the Mag 7 versus the 493. You're looking at the cheapest levels of the seven versus the 493 in over a decade."
His price target rests on earnings rather than on a re-rating. "We have a S&P 500 target into the middle of next year, up about 10% from here, about 8400. And that's all driven by earnings."
Falling multiples are the bullish part of the picture for him, not the bearish one. "We started this year on the S&P at 22 times. We're at 19 times now at a with a market that's up double digits. I think that's an incredibly healthy sign. It's like the opposite of euphoria." He said investors keep asking him why technology names are not higher, and pointed to Nvidia — which he said just doubled earnings — as the case where nobody is sure what multiple to pay.
4. The Consumer's 4.25%
The cohort that does the spending is largely insulated from the energy shock. "And one of the things we continue to go back to top 20% of earners in this country do 60% of the spending, and they only spend about 2.5% of their disposable income on gas, oil and electric."
The existing mortgage stock, not the new one, is what matters for household cash flow. Asked about small caps, he said the consumer is what decides it, and that households are "still sitting on a 4.25% mortgage rate" even with new mortgages at 7%, which he attributed to CNBC's Diana Olick's reporting that morning.
Small caps have not behaved the way the rate-cut thesis said they would. "So the Russell has kind of been an enigma all year." He said small caps are more interest-rate sensitive, but that the received wisdom that the Fed would have to ease before they worked has not played out.
Carl Quintanilla agreed that households are not the problem in this cycle, and asked where Brent crude was trading after its move back toward $104.
Bonus Insights
Aggregate US leverage has not grown the way the deficit debate implies. "Total debt in the U.S. is actually unchanged from where it was a decade ago." Camporeale said government debt has risen "for sure," while corporate and household debt are both lower, which he reads as a pristine balance-sheet story on both sides of the private economy.
Camporeale traced the summer's yield move to Fed communication rather than data: the June meeting was hawkish and rates stabilized, and it was only after the July meeting that yields took off.
Camporeale's bottom line is that the level of the 10-year is not the thing to watch — the pace of its rise is, and as long as earnings keep delivering he expects the S&P 500 about 10% higher by the middle of next year, led by a Mag 7 that has not been this cheap against the rest of the index in over a decade.
Products, Companies & Tools Mentioned
J.P. Morgan Wealth Management (Camporeale's firm, where he sets the asset-allocation view and the S&P 500 target he cited)
Nvidia (His example of a company that just doubled earnings while investors cut the multiple they will pay for it)
Procter & Gamble and Nestle (Named by the hosts as the morning's evidence of a weakening consumer, with Nestle's guidance the specific trigger)
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