Piper Sandler's Kantrowitz Maintains Constructive Equity Outlook Amid Earnings Broadening and Value Rotation

Michael Kantrowitz’s February 9, 2026 appearance on CNBC’s “Money Movers” program occurred against a backdrop of significant market dynamics and sector rotation. The S&P 500 was trading around 6,970 with weekly volatility spanning approximately 6,780 to 7,002, while the NASDAQ Composite hovered around 23,264 after experiencing substantial swings including a 1.74% decline on February 3 followed by a 1.79% recovery on February 6 [0]. Notably, the Dow Jones Industrial Average surpassed the historic 50,000 milestone, closing at 50,107 on February 9, representing a psychological breakthrough for the index [0].

The Russell 2000, often considered a barometer for value and smaller-cap stocks, traded around 2,689, benefiting from the ongoing rotation away from momentum and growth-oriented investments [0]. This market environment has created what analysts describe as a “low hire, low fire” conditions in the labor market—suggesting a slowdown without an imminent collapse—while corporate earnings continue to demonstrate improved dispersion across sectors rather than concentration in a narrow group of technology leaders [6].

Kantrowitz’s maintainance of a “constructive” outlook on U.S. equities represents a significant data point from one of Wall Street’s most influential investment strategists. His No. 1 ranking among investment strategists adds considerable weight to his perspective, particularly as the market navigates competing narratives around AI-driven valuations, Federal Reserve policy direction, and decelerating but resilient economic growth [1][2].

The foundation of Kantrowitz’s constructive thesis rests primarily on his observation that corporate earnings growth is “broadening out” across the market. This phenomenon—where profitability improvements extend beyond the dominant mega-cap technology companies to a wider range of sectors and market capitalizations—is viewed by many analysts as a healthier, more sustainable form of market advancement compared to concentration-driven rallies [2]. When earnings growth becomes more dispersed, it typically signals underlying economic resilience and reduces vulnerability to disappointments within any single industry group.

The broadening of earnings growth represents a critical inflection point for market structure. Throughout 2024 and early 2025, equity market advances were heavily dependent on a narrow cohort of AI-related technology companies, creating concentration risks that concerned many institutional investors. Kantrowitz’s observation that this dynamic is shifting carries important implications for sector allocation and style positioning.

Historical analysis of market cycles suggests that when earnings leadership expands from growth-oriented sectors to value and cyclical segments, it often coincides with later-stage economic expansions where breadth indicators become increasingly important. The current environment shows defensive sectors like utilities (+1.73% on February 9) leading while consumer defensive stocks lag, suggesting a nuanced rotation pattern that differs from traditional defensive rotations during market stress [0].

Kantrowitz has been consistently advocating for rotation from growth to value stocks, a positioning strategy he reinforced in his February 4 comments on CNBC’s “The Exchange” where he stated that “momentum factor is increasingly driven by value stocks” and that the outperformance in cyclical stocks had “just begun” [3]. This tactical shift represents a meaningful departure from the momentum-dominated market conditions that prevailed throughout much of the previous year.

The sectors receiving Kantrowitz’s endorsement reflect his value-oriented and cyclical positioning thesis:

represents defensive positioning with quality characteristics, offering stability amid economic uncertainty while maintaining reasonable valuations relative to growth alternatives. This sector historically performs well during periods of labor market deceleration as investors seek companies with predictable cash flows and pricing power.

benefit from steeper yield curves and normalized lending conditions following the post-pandemic interest rate normalization. As the Federal Reserve maintains its policy stance, regional and money center banks have seen improved net interest margins while credit quality remains generally healthy.

leverage infrastructure spending initiatives and reshoring trends that have gained momentum regardless of administration policy. The secular push toward domestic manufacturing has created sustained demand for industrial capital goods and services.

Simultaneously, Kantrowitz has noted that growth-heavy sectors like technology are becoming “less attractive at the moment” given concentration risks within the AI beneficiary cohort and stretched valuations following extended periods of outperformance [3]. This does not necessarily indicate bearishness on technology broadly, but rather a tactical reduction in overweight positions that accumulated during the momentum factor’s dominance.

The employment backdrop presented in the analysis reveals a labor market experiencing measured deceleration rather than sharp contraction. The ADP National Employment Report for January 2026 showed private sector payrolls increasing by only 22,000 jobs—significantly below consensus expectations and suggesting a meaningful slowdown from the prior year’s trend [4]. The Indeed Job Posting Index indicated that job postings began 2026 approximately 11.5% above pre-pandemic levels, though the trajectory had clearly cooled from earlier periods of strength [5].

This labor market characterization as “low hire, low fire” conditions carries important implications for the equity market outlook. Companies appear hesitant to accelerate hiring in response to moderate demand, while maintaining existing workforces rather than implementing significant workforce reductions. This equilibrium state suggests continued consumer spending resilience—built on accumulated household savings and wage growth—without the inflationary pressures that would accelerate interest rate expectations.

The critical question for equity markets centers on whether this labor market deceleration represents a “soft landing” scenario that supports continued corporate earnings growth, or whether it will cascade into reduced consumer spending and ultimately lower corporate profitability. Kantrowitz’s constructive stance implicitly suggests confidence in the former outcome, though his specific views on Federal Reserve policy timing were not detailed in available sources.

The February 3-4 period represented one of the worst days for momentum versus value since 1999, triggering concerns about momentum unwinds occurring at economic turning points [7]. Such rotations can trigger significant short-term volatility as algorithmic and trend-following strategies adjust positions, potentially creating opportunities for disciplined long-term investors while punishing those positioned incorrectly.

Persistent concerns about the capital intensity required to build out AI infrastructure and whether returns will ultimately justify current valuations continue to rattle bulls in the S&P 500 [8]. The concentration of market gains in a narrow group of AI-related stocks creates vulnerability to disappointments, whether from execution challenges, slower-than-expected adoption curves, or margin pressures from infrastructure investments.

A sharper-than-expected slowdown in employment could cascade into reduced consumer spending and corporate earnings, potentially triggering a more significant market correction. Investors should monitor the upcoming BLS jobs report closely for signals of acceleration or deceleration in labor market conditions [10].

The Trump administration’s policy direction, including recent interactions with Treasury Secretary Bessent, may introduce market volatility through uncertainty around trade policy, fiscal spending priorities, and regulatory approaches [9].

The analysis reveals several cross-domain insights that connect market technicals, fundamental corporate performance, and macroeconomics:

The maintainance of a constructive equity stance by one of Wall Street’s top-ranked strategists suggests that professional money managers remain committed to equities despite near-term volatility. This alignment between technical market dynamics and institutional positioning provides a foundation for continued market support, though the value rotation theme indicates tactical repositioning rather than simple continuation of existing positions.

The clear preference for value over growth, as evidenced by Kantrowitz’s advocacy and the Russell 2000’s relative strength, represents a meaningful tactical shift that has implications for portfolio construction and risk management. Investors who remain concentrated in growth-oriented positions may underperform broad market benchmarks even if equity markets advance generally.

The emphasis on earnings growth breadth rather than concentration suggests belief in underlying economic resilience beyond the AI-driven technology sector. If earnings dispersion continues to improve, it would provide a fundamental foundation for sustainable market advances that do not depend entirely on a narrow cohort of mega-cap stocks.

The elevated volatility levels—with NASDAQ daily swings exceeding 1%—create both risks and opportunities for tactical investors. Historical analysis suggests that rotations of this magnitude often create entry points for disciplined investors willing to look beyond short-term market noise.

1. Momentum Unwind Acceleration:
   The Feb 3-4 momentum value rotation represented one of the most significant such events in decades, suggesting potential for continued volatility as systematic strategies adjust [7].

2. Concentration Vulnerability:
   The AI sector’s valuation remains dependent on assumptions about future returns that cannot yet be verified, creating execution risk if infrastructure investments fail to generate expected productivity improvements [8].

3. Labor Market Uncertainty:
   While current conditions suggest a soft landing, the labor market trajectory remains uncertain and could deteriorate more rapidly than expected [4][5].

4. Policy-Driven Volatility:
   Upcoming policy decisions and communications from the new administration may introduce unexpected market volatility [9].

1. Value Sector Attractiveness:
   The rotation into value sectors has created opportunities in reasonably-valued companies within consumer staples, financials, and industrials that have lagged growth counterparts.

2. Earnings Breadth Improvement:
   If corporate earnings growth continues to broaden, it would represent a fundamental shift that supports more sustainable market advances.

3. International Diversification Opportunities:
   While not explicitly addressed in Kantrowitz’s comments, relative valuation opportunities may exist in non-U.S. equities that have lagged domestic markets.

This analysis synthesizes market perspectives from Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, based on his February 9, 2026 appearance on CNBC’s “Money Movers” program [1][2]. The top-ranked Wall Street investment strategist maintains a constructive outlook on equities, emphasizing earnings growth broadening and advocating rotation from growth to value sectors. Current market indicators show the S&P 500 around 6,970, the NASDAQ near 23,264, and the Dow Jones above the historic 50,000 level [0]. Labor market data indicates measured deceleration with January ADP payrolls showing only 22,000 private sector jobs added [4]. Sector rotation patterns favor utilities, financials, and industrials while growth-oriented sectors face headwinds from valuation concerns and concentration risks. Investors should monitor upcoming labor market data releases and Federal Reserve communications for signals about the durability of current economic trends.