Bloomberg Surveillance TV: October 9th, 2026

Delta Air Lines

Across the shows: 4 speakers in other episodes, 4 bullish and 0 bearish calls, past 30 days

• Sheila Kahyaoglu · JefferiesBullish

  Delta's EPS cut is already in consensus; demand and loyalty strength make it a buy.

  She says the EPS cut from about $6 billion of higher fuel expense is in line with expectations and already embedded in consensus and her own estimates. She likes the print, citing main cabin demand up 12%, premium demand up 18% and loyalty revenue up 18% despite higher oil prices. She notes that Delta's refinery gives it about a $1 billion benefit this year. Delta's strategy of focusing on high-end customers and premiumizing business class supports it. She maintains a buy rating.

  “The EPS reduction is in line with our expectations... it's fully embedded into consensus expectations and our expectations. So I actually really like the Delta print in terms of the numbers they printed.”at 10:44

American Airlines Group

• Sheila Kahyaoglu · JefferiesBearish

  American Airlines trails Delta and United on margins because its international network is smaller.

  She says American Airlines has about a 10-point margin gap to Delta and United. She attributes it to American's less extensive international routes. Without that international footprint and the lounges and scale that come with it, American struggles to catch up to the top two carriers. She puts it behind Delta and United, with only the top two carriers able to match each other's economics.

  “Even American Airlines has a 10 margin gap to Delta and United. That's because their international routes aren't as expansive.”at 16:05

AI infrastructure & data centers

• George Goncalves · MUFG

  AI capex is a growth driver showing up in GDP fixed investment, and will last a long time.

  He says AI spending is clearly a growth driver, visible in GDP data as capex feeds into fixed investment. He sees it as a macro factor that will be with the economy for a long time. The open question is valuations and profitability, which he expects to stay unresolved until investors know what these companies are worth and whether they can earn money.

  “it's clearly a growth driver. We see it in the GDP data, sort of the CapEx leading to fixed investment... there's a macro kind of factor that I think will be with us for a long time.”at 3:05

• Thierry Wizman · Macquarie Group

  Hyperscaler spending will continue; the bigger risk is state and local curbs on data centers.

  He is not worried about returns on AI infrastructure projects. Hyperscalers are making money, which is why they are investing, and their projections suggest they will keep investing. His bigger concern is political. He is watching whether state and local legislation will curtail the buildout of data centers, which could interrupt the investment cycle that supports US growth and the dollar.

  “I'm not concerned about things like internal rates of return for these projects. Right? The hyperscalers are making money. That's why they're investing... I'm much more concerned about the political cycles implications for AI at this point.”at 24:14

US rates & the Fed

• George Goncalves · MUFG

  Fed may not deliver priced-in hikes; the long end is tightening for it, and the selloff is technical.

  Long-term rates have moved well beyond Fed expectations, so the bond market is already tightening financial conditions on the Fed's behalf. He argues the Fed therefore doesn't have to deliver all of the hikes the market has priced in. He also sees the bond selloff as driven more by technical positioning and market unwinds than by fundamentals. He cites the sequence of rate moves after the war shock, the hawkish shift under Kevin Warsh, and September as one of the worst months for bonds. He calls these moves 'felt more like technical positioning.' He says the Fed's path depends on whether growth expectations change.

  “The bond market has tightened for the Fed, so let's just get that straight... the longer the rates stay higher, it's doing the job of the Fed... For the Fed. I think that, you know, the Fed probably won't be able to deliver as much of what's priced into the market”at 6:06

• Thierry Wizman · Macquarie Group

  Fed likely skips an October hike but keeps a tightening bias, hiking at the December projections meeting.

  He says some Fed officials have backed away from an October hike. The PCE price index has come in lower after revisions, and the job market is weaker, especially on wage growth. Officials now have reason to step back, watch the data, and hike only at meetings with a Summary of Economic Projections rather than at every meeting. December is the next such meeting, and the Fed is still inclined to hike, so its tightening bias remains, expressed by skipping meetings.

  “They've seen the PCE price index after the revisions be lower. They've seen a job market that's a bit weaker... So they now have reason to maybe just take a step back and watch things evolve... The next one, of course, would be December. But still, the Fed is still inclined to be hiking.”at 19:17

Europe's economy

• George Goncalves · MUFG

  Euro bond pressure reflects fiscal sustainability; the US has far more capacity than Europe.

  He says the common thread between European and US bond pressure is fiscal sustainability. The US has much more capacity than Europe because eurozone countries cannot print their own currency. They rely on the ECB to backstop them, while the Fed and Treasury can act directly. Europe and the US have traded together for the same reasons, mainly correlation risk and shared investors. Investors who must reduce risk sell the most liquid market, which is Treasuries.

  “So, I mean, the common thread still comes back to the idea of, like, fiscal sustainability. And when you start to really dig into it, US has much more capacity than Europe given the way that Europe is structured”at 4:55

US Treasuries & yields

• George Goncalves · MUFG

  Rates are near a topping process; Treasuries track oil, so the belly of the curve is favored.

  He says the higher-rate environment is in its final throes and this week could be the start of a topping process. He cites how Treasuries have been trading like a proxy for oil, so as long as oil stabilizes, rates should stabilize too. The strong 10-year and 30-year auctions, among the strongest on record, show value at higher yields. He also notes that breakevens are low despite oil prices, which he calls the biggest enigma. He notes that investors unload the most liquid market first, so Treasuries get sold when risk is reduced. He sees Treasuries as a way to hedge if risk markets wobble and favors the belly of the curve.

  “When you're in this kind of final throes of a higher rate environment, which I think we are, and I think this week could be the start of a topping process.”at 6:49

Airlines & aviation

• Sheila Kahyaoglu · Jefferies

  Airlines assume about 15% pricing expansion this year but only 2% in 2027, a headwind if oil stays high.

  Her team assumes about 15% pricing expansion for airlines this year and only 2% for 2027. If oil stays where it started in September, fully embedding those costs into 2027 would be a headwind for carriers that lack Delta's loyalty and premium strength. Higher fuel will eventually hurt consumer demand, and Thanksgiving fares are up about 30%. Oil is up roughly 100% since the start of the year, and the fare increase has not fully passed through yet.

  “For this year, we have 15% pricing expansion essentially, and for 2027, we're only assuming a 2% increase. So with oil where it started in September, if we were to fully embed that over into '27, it would be a headwind for certain carriers”at 11:24

US consumer

• Sheila Kahyaoglu · Jefferies

  The US consumer is resilient despite higher oil and fares, with strength broader than in Europe and Asia.

  She says US consumer strength is surprising across the board, including mortgage rates, auto prices and airfares. Her proprietary data on the oldest aircraft, those 21 years and older, shows engines are still used at about the same rate as in January and February outside the Middle East. US demand is especially strong, and she sees no real cracks in Europe or Asia-Pacific despite oil prices. Warnings have been that high fares would hit demand, but she argues airlines have cut capacity rationally, removing the lowest fares rather than tipping into a price war.

  “The US consumer strength is surprising across the board... The US consumer remains really resistant. We actually have this price proprietary data where we're looking at the oldest aircraft globally.”at 12:27

Central banks outside the US

• Thierry Wizman · Macquarie Group

  ECB unlikely to use bond-buying backstops for France before its April election.

  He says the ECB has stepped back from an October hike because of stress in France, and that pausing hikes is the first step. Reviving tools such as the SMP, PEPP or TPI is unlikely for now. French yields are not as high as those in Greece, Italy or Spain at the time of the earlier crisis. Recent programs also carry conditionality, which means fiscal austerity imposed from outside. That is hard to swallow before France's April election. France's deficit is near 5% of GDP against the 3% Maastricht limit. The ECB could act if things worsen before the vote, and the rules could be changed, but he doesn't see France at that stage.

  “So we're we're really actually in limbo here. I don't think that the ECB will be invoking any of these programs, certainly not until things get things get worse. They could do it if things get worse before the election”at 22:10

US dollar

• Thierry Wizman · Macquarie Group

  Dollar strength rests on high oil and AI-driven US growth; it weakens if either fades.

  He attributes the dollar's strength this year to two drivers. The first is high oil prices, which the US caused. The second is the surprise in US growth from the AI-driven infrastructure investment cycle. If both persist, the dollar stays robust. If the war ends early and oil falls, the dollar would weaken. If the AI investment cycle loses intensity, the dollar would also weaken again.

  “...for two reasons... one, high oil prices, admittedly something that The US caused. And the other thing is the surprise we've seen in US growth this year because of the AI driven, infrastructure investment cycle.”at 23:47