Bloomberg Surveillance TV: October 28th, 2026

Meta Platforms

Across the shows: 54 speakers in other episodes, 47 bullish and 28 bearish calls, past 30 days

• Lisa Shalett · Morgan Stanley Wealth ManagementNeutral

  Meta's equity issuance was absorbed, showing capex can be funded through equity and debt markets.

  Shalett cites Meta's decision to do an equity issuance as the fire on debt heated up. The deal got eaten up, which shows the market is testing and there is liquidity. She expects big tech to fund the buildout through a two-step between equity and debt markets. Her point is that companies are re-levering their balance sheets to fund AI spending.

  “you saw Meta decide, hey, I'm going to do an equity issuance and it got eaten up, right? And so they're testing markets and there again, there's liquidity there.”at 30:04

AI infrastructure & data centers

• Gita Gopinath · Harvard University

  AI infrastructure spending is a large demand shock pushing up interest rates, bigger than US borrowing needs.

  Gopinath argues the current driver is an AI-driven demand shock. Over the next two to three years the AI infrastructure build-out is huge. She compares it with US government borrowing of about $2T a year, while the expected build-out over the next year is over $1T. These two very large numbers are why rates are moving up. If the build-out continues, she sees a large demand effect coming. Supply relief from it is not yet visible and is expected to arrive over time.

  “It certainly is the case that what we're seeing right now is a demand shock from AI.”at 6:56

• Lisa Shalett · Morgan Stanley Wealth Management

  Big Tech is in a mid-cycle capex boom, with capex up over 100% this year and guided up over 50% next year.

  Shalett expects blowout earnings from the big tech players, which she describes as a mid-cycle capex boom. Capex is set to finish this year up over 100% year over year, and guidance points to another increase of over 50% next year. She expects this narrative to continue to hold, and sees circular financing where the firms own pieces of each other's stories. No one is yet willing to be the first to break from the story or cut guidance.

  “these guys are going to complete this year where capex year over year is up over 100%.”at 25:41

• Lisa Shalett · Morgan Stanley Wealth Management

  Neocloud financing stress would hit only about 10% of capex, too small to change the AI narrative.

  Shalett says a few players are starting to look shaky after re-levering. Her firm's estimate is that if neoclouds suddenly could not get more financing, that would cover only about 10% of capex spent. She says that is not big enough to change the narrative. Good balance sheets still have access to lending, and liquidity remains in the system.

  “if the neo cloud suddenly couldn't get any more financing, it's maybe 10% of the capex spent. It's just not big enough to kind of change the narrative.”at 28:31

AI bubble & tech valuations

• Gita Gopinath · Harvard University

  A burst AI bubble would wipe out a rising amount of global wealth, now estimated at $41T versus her earlier $35T.

  Gopinath says her earlier estimate, written about a year ago, was that a dot-com-style correction would cost global wealth about $35T. That estimate is now $41T and rising, while enthusiasm for US equities continues despite some caution. She treats the AI bubble as a real risk to global wealth.

  “my estimate was that the hit would be about 35,000,000,000,000 to global wealth if there was a .com/correction. Right now, that number is 41,000,000,000,000, so it's it's going up.”at 5:50

• Lisa Shalett · Morgan Stanley Wealth Management

  AI is in a bubble; the open question is how close it is to popping, and she sees room left to run.

  Asked whether this is a bubble, Shalett says of course it is. The debate is over how close it is to popping. She thinks there is still a way to run because there is money still to be spent. The big players are expected to put it in the ground regardless. Companies are re-levering and testing equity and debt markets to fund the buildout.

  “everyone says, are we in the bubble? My answer is always, of course we are. And the question is just how close are we to it popping?”at 28:58

US rates & the Fed

• Gita Gopinath · Harvard University

  The Fed can skip today's meeting; a delayed December hike barely changes tightening conditions.

  Gopinath argues the Fed can skip a move at this meeting because there is still large uncertainty and market expectations are set for a December 25bp hike. Delaying that hike by a couple of months does not make much difference to financing conditions or to how tight monetary conditions are.

  “One twenty five bips delay for a couple of months doesn't make that big a difference to financing conditions or to tightening monetary conditions.”at 3:49

US inflation

• Gita Gopinath · Harvard University

  Inflation around 3% is not drifting higher, so the Fed can take its time returning to 2%.

  Gopinath says inflation is hovering around 3% and is not drifting further up, which should give some confidence. She does not think aggressive tightening to reach 2% quickly is right, since that would require a much tighter hiking stance. The return to 2% will be slow, and she is comfortable if inflation settles around 2.5%.

  “So inflation is hovering around 3%. It's not drifting further up. That's important, and that should give some confidence.”at 8:33

US Treasuries & yields

• Gita Gopinath · Harvard University

  Long-term US yields will fall, though by less than in the past due to demand for capital and inflation risk.

  Gopinath expects long yields to come down. The fall will likely be smaller than in past episodes because of many sources of demand for capital, including government borrowing and the large fiscal position, along with inflation risk that is more salient now. The monetary transmission to long yields is more impaired than before because of the fiscal environment. The Fed can cut short rates quickly, but the long end is the open question.

  “My personal view is that it's still the case that we will see long term yields go down, maybe not as much as has happened in the past because of all these sources of demand for capital, including from the government.”at 9:22

US deficit & government debt

• Gita Gopinath · Harvard University

  US debt near 100% of GDP, up from 60% pre-GFC, leaves fiscal policy with little room to act.

  Gopinath says global debts are very high. The US is still in a privileged position in how markets treat it. Still, US debt has risen from about 60% of GDP before the global financial crisis to about 100% now. Fiscal policy has little or no space left, and the economy's ability to fix problems is more impaired than in the past.

  “we're not in a situation where if you remember pre GFC [debt to GDP] in the US was 60%, and now we're at 100%.”at 10:23

AI & jobs

• Gita Gopinath · Harvard University

  AI agents can do much economic analysis, but AI translates poorly where human judgment is needed.

  Gopinath agrees that a lot of analysis can be done from a desktop with AI agents pulling information. However, she says you still need judgment about which indicators matter and who says what. As a test, she used AI to translate an IMF report and found it did a pretty bad job, because so much meaning sits between the lines. She thinks there is still a lot of need for humans.

  “I've used AI to translate an IMF report. It does a pretty bad job because there's so much between the lines, and you need to know what, you know, what actually is being said.”at 11:20

US elections & politics

• Brian Gardner · Stifel Financial

  Democrats' Senate odds are 40-45%, below the prediction markets' 60-65%; Republicans likely retain control.

  Gardner thinks Democrats can win the Senate but is less bullish than the prediction markets, which put them at 60-65%. He puts it at 40-45%. He sees a pathway but notes Texas, Kansas and other states Trump won by double digits in 2024 are a very high hurdle. Democrats also need Maine, which he sees as hard to win. Losing Michigan would make the pathway very difficult. Republicans retain the Senate in his view.

  “I do think they can win. I'm just not as optimistic or as bullish is a better word on Democratic chances than some others are. If you look at the prediction markets, they're in the 60, 65% range. I'm at the 40 to 45.”at 16:41

Banks

• Brian Gardner · Stifel Financial

  Warren at Senate Banking would mean contentious hearings, but regulators will not change course because of Congress.

  If Democrats win the Senate and Elizabeth Warren takes over Banking, the industry will not like it and hearings will be very contentious, with bank CEOs at the witness table. Gardner expects letters to regulators, but the Comptroller, the FDIC chair and the Fed vice chair for supervision will take them under consideration and move on. Administrations do not care what Congress says unless Congress can act to block the regulators, and Democrats would not have that leverage even in a sweep.

  “there'll be a lot of angry letters and the Comptroller and the FDIC chair and the vice chair of supervision for the Fed will say thank you very much. We'll take your letter under consideration. And they will go on their way.”at 18:18

AI regulation & safety

• Brian Gardner · Stifel Financial

  Washington will pass only light-touch AI and data center rules, with states and administrations filling the gap.

  Gardner expects AI data center issues to be punted in Congress, which faces must-do items like the budget, a debt ceiling deal, the NDAA and nominations. The House has already passed a bill, and a deal would likely be light-touch. Even in a Democratic sweep, he sees no heavy-handed regulation of AI and data centers. Regulation will be left to administrations and states, as already seen on data centers.

  “I think what we're going to see coming out of Washington is even in sweep environment is not heavy handed regulation of AI and data centers. It's a very light touch, very symbolic in a lot of ways.”at 19:55

Power demand & the grid

• Lisa Shalett · Morgan Stanley Wealth Management

  AI capex bottlenecks are moving to power and electricity generation, and to politics that could slow buildout.

  Shalett says that while capex dollars keep being spent, the bottlenecks are shifting from chips to power and electricity generation. Political bottlenecks are also a concern, both for whether planned capex can be built and turned on. She says the next 24 months will show how much of this actually lights up. If buildout is slower than expected, that could reinforce scarcity and pricing power across the supply chain.

  “you absolutely are gonna have the picks and shovels. But the bottlenecks are moving to power, right, to electricity generation, and that's really where we're gonna have some real questions.”at 26:42

AI chips & semiconductors

• Lisa Shalett · Morgan Stanley Wealth Management

  Chipmakers will keep supplying picks and shovels while capex spending continues, with pricing power that could intensify.

  Shalett says that as long as capex dollars are being spent, chipmakers will be the picks and shovels. The bottleneck is moving to power, but semiconductor makers have shown pricing power. If capex slows, scarcity could keep that pricing power going through the supply chain and possibly intensify it.

  “as long as you have a capex dollar being spent, you absolutely are gonna have the picks and shovels.”at 26:42

Market sentiment, positioning & volatility

• Lisa Shalett · Morgan Stanley Wealth Management

  Markets are complacent, and these episodes usually end in pain once the white flag is flown.

  Shalett says there is a huge amount of complacency in markets. She saw the recent profit-taking as healthy because it built some skepticism into valuations. She does not see any single player raising its hand to say game over. Her view is that these things usually end in pain, with the white flag flown only after the battle is already lost. She thinks this time is not so different.

  “there's a huge amount of complacence, right? Complacency in markets.”at 30:37