Janus Henderson macro head says markets nearing peak but cannot predict timing

A top macro strategist at a major asset manager warns that equity markets are approaching a peak, though he cannot pinpoint when the downturn will arrive. The tension between resilient economic data and elevated valuations is sharpening choices for institutional investors navigating the final stages of the current cycle.

• Michael Contopoulos, head of multi-asset macro at Janus Henderson, believes markets are nearing their top but cannot specify the timing.
• Jobless claims fell to 197,000 in the week ended September 19, among the lowest readings since 1969, signaling labor market strength.
• The Federal Reserve raised rates by 25 basis points on September 16, lifting the target range to 3.75% to 4%.

• 3.75%-4% Federal funds rate target range after September 16 increase
• 197,000 Jobless claims in week ended September 19, versus lows since 1969
• 71% Probability traders assigned to October rate hike as of September 24
• 5.22% Ten-year Treasury yield reached last week versus 4.94% on two-year

According to reporting by BeInCrypto, Michael Contopoulos, head of multi-asset macro investing at Janus Henderson Investors, told CNBC’s Fast Money that he believes the stock market is drawing closer to a cycle peak. Speaking on the program, Contopoulos acknowledged the strength in corporate earnings, broadening market participation, and historically tight labor markets, yet he remained cautious about the runway ahead. The Federal Reserve’s policy committee voted 12-0 on September 16 to increase the federal funds rate by 25 basis points, lifting the target range to 3.75% to 4%. That move came as yields climbed amid inflation concerns tied to higher energy prices.

Contopoulos identifies the timing gap as the core unknown

I think we are closer to the top of the market and closer to the end of this cycle.

Michael Contopoulos, Janus Henderson, speaking on CNBC

Contopoulos offered a wide range for when that transition might occur: three, six, or 12 months away.

He is monitoring four specific signals for deterioration: margin compression that would squeeze corporate profitability, a slowdown in earnings growth, widening credit spreads that reflect rising company default risk, and an inverted yield curve. The curve already shows pressure, with the 10-year Treasury yield reaching 5.22% last week while the two-year hit 4.94%. Contopoulos also flagged that artificial intelligence debt issued over the prior six to 12 months has largely traded below its original offering price, suggesting investor caution toward that sector despite its broad market prominence.

Global rate rises keep Treasury yields elevated despite domestic concerns

Contopoulos attributes part of the upward pressure on US yields to synchronized rate increases across developed economies. When global yields rise, investors can shift capital abroad to capture higher returns on sovereign bonds, constraining demand for US Treasuries and pushing their yields higher. Japan’s 30-year bond yield reached 4.2% last week, a record level that underscores the global nature of the tightening cycle.

Not all strategists share Contopoulos’s end-of-cycle view.

David Spika, a strategist at Turtle Creek, argues that equities could still gain 5% to 10% by year-end if oil prices continue to decline, which would ease inflation pressures and support valuations. Jobless claims fell to 197,000 in the week ended September 19, near the lowest level since 1969 and well below the typical 250,000 threshold that signals labor market weakness. That resilience, combined with robust corporate earnings and strong productivity growth cited in the Federal Reserve’s statement, provides a structural floor for risk assets even if valuations have extended.

Incoming economic data will test both scenarios this week

Key releases on inflation, growth, and employment are due over the coming days.

These figures will determine whether the economy continues to support equity multiples or whether cracks in breadth, credit conditions, or earnings momentum begin to appear. Traders have priced in approximately a 71% probability of another rate increase in October as of September 24, reflecting expectations that the Fed will maintain its pace of tightening despite the strength already evident in labor metrics and consumer spending.

The BlockWest read. Contopoulos’s agnosticism on timing reflects a real institutional dilemma: acknowledging the late-cycle character of this market while lacking the precision tools to time exits. For allocators, this argues for tactical defensiveness around margin-dependent and credit-sensitive exposures, even as headline economic data remains resilient. The vulnerability is conditional, not imminent.

The focus narrows to this week’s inflation and payroll data. If those reports show cooling momentum, Contopoulos’s concerns about margin compression and credit spreads widening will gain urgency among portfolio managers. Conversely, if growth and employment remain robust while inflation ticks higher, Spika’s bull case for a year-end rally gains credibility, and the two strategists’ divergent market calls will hinge on whether oil prices cooperate.

BlockWest is a news publication. Nothing here is investment advice. Read our disclaimer and editorial policy.