Earnings season is getting underway as major tech companies prepare to report, with investors watching closely for signs that artificial intelligence spending is translating into sustainable returns. At the same time, currency volatility, geopolitical risks and central bank guidance are shaping market sentiment.
BNN Bloomberg spoke with Theresa Shutt, chief investment officer at Harbourfront Wealth Management, about expectations for tech earnings, signals from the Federal Reserve, the weakening U.S. dollar and whether global investors are rotating away from U.S. assets.
Key Takeaways
- Early earnings results have been strong, but tech stocks face heightened scrutiny as investors focus on AI monetization rather than top-line growth alone.
- Concentration risk in mega-cap tech remains a concern, even as leadership broadens to smaller-cap stocks, commodities and international markets.
- The Federal Reserve is expected to hold rates, shifting investor attention to guidance on inflation, labour markets and the timing of future cuts.
- Currency volatility is increasing as the U.S. dollar weakens, supporting demand for gold and reinforcing diversification away from U.S. assets.
- Ongoing geopolitical tensions and tariff threats are creating noise, though markets appear increasingly desensitized to policy rhetoric.
Read the full transcript below:
ROGER: We are slowly working our way into earnings season as tech companies prepare to report their latest results. Let’s get more on that from Theresa Shutt, chief investment officer at Harbourfront Wealth Management. Theresa, thanks, as always, for joining us.
THERESA: Pleasure to be here. Good morning.
ROGER: What will you be watching this earnings season?
THERESA: This week will feature plenty of corporate and macroeconomic news for investors to focus on. More than 90 S&P 500 companies are reporting quarterly earnings this week, and earnings season has generally been strong so far. About 75 per cent of S&P 500 companies have beaten expectations.
On the AI front, it appears that most of the negatives have been priced in. This week we have the major tech names reporting — Tesla, Microsoft and Meta on Wednesday, followed by Apple on Thursday. What’s interesting is that the Magnificent Seven has started to fracture after underperforming for about four months. These companies are now on their own trajectories and are trading well below their highs, which suggests that bears are more focused on negative headlines than long-term structural fundamentals.
We’ve also seen more flows into the Russell 2000 and Russell 3000, which looks like a more defensive shift away from large-cap concentration. Investors are watching AI adoption and monetization closely, especially after recent announcements involving CoreWeave and CGI. Earnings season also coincides with heightened focus on Federal Reserve messaging. Any indication that rates could stay elevated for longer could amplify negative earnings surprises in tech. There are still bulls out there, but the tone around tech stocks has become more pragmatic.
ROGER: Is that kind of rebalancing actually healthier for the market?
THERESA: Yes, absolutely. Some people are calling it the “sell America” trade, and we’re seeing more flows into emerging markets, which is interesting. Asian tech companies are getting a lift, and it’s a reminder that investors should look beyond the U.S.
We’ve also seen strong earnings from industrials and consumer companies, which supports a broader market rally. This broadening of leadership is important, but concentration risk remains and that does make me nervous. It’s a good time to look outside of AI. Commodities and gold have performed well, and silver’s rise has been almost parabolic. There are clearly more places for capital to go, and we’re starting to see that rotation.
ROGER: The Fed is expected to stand pat tomorrow. What will you be listening for?
THERESA: There’s about a 97 per cent consensus that the Fed will hold rates. Investors will be focused on the messaging. I expect Chair Powell to emphasize data dependency, particularly around inflation and economic growth.
I also think he’ll remain very tight-lipped about definitive plans in order to preserve flexibility for both the committee and his successor. I don’t expect clear guidance on whether we’ll see two or three rate cuts later this year.
ROGER: How do you expect markets to react?
THERESA: The decision itself is largely priced in, so the focus will remain on earnings. That said, investors will watch Powell’s tone closely, especially his comments on the labour market and inflation.
All of this is happening against a backdrop of heightened geopolitical tension. We’ve seen tariff threats, including talk of 100 per cent tariffs on Canada and 25 per cent on South Korea. The market seems increasingly desensitized to these announcements, which raises the question of whether that’s complacency or simply “TACO.” These are interesting times.
ROGER: The U.S. dollar has been weakening, including against the pound and the Japanese yen. How much does currency volatility matter right now?
THERESA: The U.S. dollar has been under pressure for a number of reasons, including geopolitical tensions and tariffs. The narrative around the “sell America” trade is building, with more portfolio reallocation away from the U.S.
As the dollar weakens, gold has surged to around US$5,100 an ounce. You can even buy gold bars at Costco now, which says a lot about safe-haven demand. That dynamic continues to weigh on the dollar. A weaker currency does increase U.S. export competitiveness, which may be part of the policy intent. As long as these trends remain in place, it’s hard to see the dollar rebounding meaningfully.
ROGER: We’ll have to leave it there. Theresa, thanks, as always, for joining us.
THERESA: Pleasure to be here. Thanks, Roger.
ROGER: Theresa Shutt, chief investment officer at Harbourfront Wealth Management.
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This BNN Bloomberg summary and transcript of the Jan. 27, 2026 interview with Theresa Shutt are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
