Are We in a Bear Market? - The Compound and Friends Recap

Podcast: The Compound and Friends

Published: 2026-03-20

Duration: 5226

Guests: Jim Lebenthal, Nick Colas, James Labenthal

What Happened

Jim Lebenthal, Chief Market Strategist at Cerity Partners, joined Michael Batnick and Downtown Josh Brown to discuss the current stock market conditions. They noted that while the S&P 500 is down by 5%, a significant number of individual stocks are experiencing bear market levels, indicating internal market corrections. Lebenthal highlighted that 61% of tech stocks and 57% of discretionary stocks are in a bear market, suggesting a divergence between index performance and individual stock performance.

Josh Brown emphasized the unusual nature of the current market, noting that despite corrections, there isn't a widespread panic sell-off. He attributed this to investors' previous experiences, suggesting that modern investors are less likely to panic sell. The discussion also touched on the perception of increased violence on the New York City subway, drawing a metaphor to the cautiousness required in investing.

Artificial Intelligence (AI) was another focal point, with insights into the ongoing race among tech giants. Lebenthal mentioned that companies like Microsoft and Alphabet are heavily investing in AI, with Microsoft ending the year with a net cash position. Insider claims from Satya Nadella and Sundar Pichai suggest a high demand for AI services, contrasting with the 1990s fiber optics boom where most capacity went unused.

The episode also covered the challenges and opportunities in the private credit market. Lebenthal pointed out that private credit funds have grown significantly, with some new, unsophisticated money entering the space. He highlighted the importance of due diligence and risk management, noting that Cerity Partners invests in senior secured loans, which are less risky than equity investments.

Oil prices and their impact on consumer sentiment were discussed, with the hosts speculating on potential shifts in market sentiment with positive news. Lebenthal noted that while Jay Powell mentioned zero job creation this year, earnings revisions remain net positive for the NASDAQ 100 and S&P 500, with the U.S. outperforming globally.

The conversation also touched on significant movements in tech stocks like Microsoft and Meta, discussing the impact of their spending strategies. Microsoft, despite underperforming over five years, is seen as a potential buy given its forward earnings multiple. The current downturn in Microsoft stock was attributed to broader market trends rather than company-specific issues.

Key Insights