Investors Could Be Missing The Next Big Market Risk

On the July 20, 2026, episode of The Morning Filter podcast, hosts Susan Dziubinski and Morningstar Chief US Market Strategist Dave Sekera discuss Blackstone’s BX upcoming earnings. Here’s an excerpt from the conversation.

What Blackstone’s Earnings Could Reveal About Private Credit

Susan Dziubinski: Now, we have alternative asset manager Blackstone BX reporting this week. Why is this one on your radar, Dave?

David Sekera: Well, a couple of different reasons. This is a stock that we recommended back, I think it was on the March 9 Morning Filter. I’ll admit, this is one where I think I got more lucky than I was smart on this one. Part of the investment thesis then is we just thought there was just too much negative sentiment in the private credit markets. Even with this negative, I am on what still needs to go on there. The stock just went down too far too fast at that point in time. Then, earnings came out. The stock had a nice pop afterward. It moved from 4 stars into 3 stars. We quickly recommended in April to take the money and run on that one.

In this case, I’d say it’s not that I’m interested in Blackstone in and of itself all that much. It’s really just trying to understand and listen for what’s going on with private credit in those parts of their portfolios. The questions here are: How’s the fundamental performance of those issuers in private credit doing? I also want to understand what’s going on with the pricing of those assets in those portfolios. Of course, being private credit, there’s no public market. I suspect that we could see a lot of write-downs in a number of those positions, or at least we should be seeing some write-downs in a number of those positions, especially because I’m hearing that the Securities and Exchange Commission is taking a much closer look at the pricing of those portfolios as well. I mean, net-net, in my opinion, I do think that private markets could be a systemic risk if we see them sell off too far too fast.

In this case, if you think about what’s gone on over the past 10 or 15 years, private credit has just become an increasingly larger portion of how a lot of highly leveraged companies fund themselves. If that funding were to dry up, it would be bad for those individual companies. I think it would be bad for the economy overall, and I do think it would end up being a big headwind to further growth in the stock market. It’s just one of these cases where I think there are a lot of losses there. Those losses will need to get recognized over time. It just becomes: How quickly do they need to take those losses here in the short term, or can they end up really taking these losses and pushing them out over the next couple of quarters and try and do it so they don’t have to take too much all at once?

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