Bloomberg Surveillance · Monday, September 28, 2026
Lori Cavacina, U.S. equity strategist at RBC Capital Markets, suggests the risk of a 5% to 10% drawdown in the stock market has increased. She notes that historical data since the mid-1990s shows median drawdowns of about 9.6% at the beginning of hiking cycles, and that the market has not yet experienced significant turbulence.
“So, you know, we're not trying to make a call, you know, on December 31st per se, but we have said that we think risk of a 5% to 10% drawdown has risen.”
“And in our weekly today, we also said, you know, that's still our base case, 5% to 10%, but every little bit you add here on the bond yield is pulling up a Tier 2 risk.”
“So you do tend to see some turbulence around liftoff, and we haven't really gotten that yet. We had a sideways summer for the most part, but we think the risks are piling on.”