Bloomberg Surveillance TV: November 2, 2026

Ed Yardeni · Yardeni Research

Analysts have not cut earnings estimates and remain bullish, using $500 per share for 2028 S&P 500 earnings.

Yardeni checked weekly analyst consensus. Despite some disappointing and some better-than-expected reports, estimates for last week were roughly flat, with no meaningful downgrades. Analysts remain very bullish on 2027 and 2028. The 2028 figure in use is $500 per share, the same level Yardeni has projected for 2029. He treats this as evidence that the earnings support for the market has not weakened.

“we looked at the weekly analyst consensus expectations for last week and they were kind of flat... they're still very bullish about 2027 and 2028. The 2028 number they're using is $500 a share.”at 4:24

Robert Doll · Crossmark Global Investments

The tech selloff is rotation, not a broad exit from stocks; six of 11 sectors rose on the sell-off day.

Doll describes Friday as a capitulation-style day in tech, but six of the 11 sectors were up on the day. From that he concludes that investors are not leaving stocks. They are leaving a tech stock and moving into other areas, which he describes as rotation. He treats this as an important distinction from a general market exit.

“Friday was a capitulation sort of day... six of the 11 [sectors] were up on the day. People aren't leaving stocks. They're just leaving a tech stock and going into...”at 21:16

Robert Doll · Crossmark Global Investments

Stock downside looks limited after technical breaks; the P/E of 19 is not cheap but is far from dot-com levels.

Doll does not see a lot of downside from here. Technically, the market has broken through many resistance lines and floors, so repairing that damage will take time, but he does not expect a large further decline. On valuation, the P/E ratio has fallen from about 23 a year ago to about 19 today. He says 19 is not cheap, but it is nothing like the dot-com bubble.

“I don't know that we see a whole lot of downside... PE ratios have come down a bunch from twenty three year ago to 19 today. And 19 is not cheap, but it's nothing like we saw in the dot com bubble.”at 22:12

Ed Yardeni · Yardeni Research

A Democratic sweep would likely bring worse partisanship and longer shutdowns, which would be negative for markets.

Yardeni describes this midterm as a radical change in the Democratic party. If Democrats win the House and possibly the Senate, he expects partisanship to be worse than it has been so far. That would make future government shutdowns last longer and hurt the government and the economy, which he calls obviously market negative. He thinks the market is not fully pricing a Democratic sweep and has a contrarian bent. He also says the market usually likes gridlock, but this situation may require bipartisan cooperation on serious deficit reduction, so gridlock could be a 'cold shower' for stocks.

“I think the stock market has to consider the possibility that partisanship will be much worse than it's been so far.”at 6:53

Jessica Taylor · The Cook Political Report with Amy Walter

Voters want change, so Democrats are favoured in the midterms, but a Republican White House would limit their power.

Taylor says both parties need to do some soul searching, but the Republicans hold power, so voters want change. In a two-party system, that change means Democrats. Democrats should not read a Tuesday win as an endorsement of everything they stand for, and they should focus on affordability. Even if they take the House and possibly the Senate, Trump still holds the White House, so Democrats would mainly be able to limit his agenda. She expects Republicans, if they take a heavy defeat, to face pressure to reassess, which could affect the succession race around JD Vance.

“Republicans are the ones in power. So voters want change. And for that... in the two party system, change means Democrats. ... they still have a Republican White House, so what they can do is limit it.”at 16:46

Ed Yardeni · Yardeni Research

AI genuinely works for customers, but customers may not yet generate enough revenue for AI companies.

Yardeni argues AI is 'the real deal' because the technology performs: 'the result is AI does work.' He qualifies this by noting that the benefit accrues to customers, and it is unclear whether those customers are generating enough revenue to pay the companies themselves for the heavy spending. He reads the resulting slowdown in AI enthusiasm as a healthy correction, not the end of the trade.

“AI is the real deal... the result is AI does work. It's just it works for the customers. It's not clear that customers are generating enough revenues for the companies themselves.”at 3:22

Ed Yardeni · Yardeni Research

Bond markets are tightening AI data-center financing; neocloud borrowing gets pricier and more regulated, which Yardeni sees as healthy.

Yardeni says the bond vigilantes are regulating credit and allocating it properly. Hyperscalers have large data-center backlogs that they can rely on, but neoclouds have been borrowing 'willy nilly' and that will now be more expensive and more regulated. He cites OpenAI's attempt to raise more money than the market would supply as evidence the market is imposing discipline. He thinks this is good. He also says bonds are the better place to be than AI company stocks, because slower bond issuance by AI companies eases pressure on bonds already issued, while stock investors still face uncertainty about when the spending will produce earnings.

“it's been kind of the Wild West and I think the sheriffs are coming in to cool things off. The neo clouds have been borrowing willy nilly and now that's going to be more expensive and more regulated.”at 5:49

Robert Doll · Crossmark Global Investments

An AI and tech bubble has partly burst; fundamentals may hold, but earnings estimates and capex financing are open questions.

Doll points to many double-digit percentage declines across industries and individual stocks, which for him means a bit of a bubble has burst. He says this does not mean the fundamentals are finished, but it is a pause in which the market has to work out three things. First, whether earnings estimates are too high, which he links to recent disappointing last-90-day results from Magnificent Seven companies such as Google and Amazon. Second, how the heavy capex will be financed. Third, and most important long term, how that spending will convert into free cash flow.

“When you look over your shoulder, do you see so many double digit percentage declines in industries and individual stocks? How can you not say a bit of a bubble has burst?”at 20:25

Robert Doll · Crossmark Global Investments

A 5.35% 10-year Treasury yield makes bonds competitive with stocks, so investors should own bonds.

Doll sees the stock-versus-bond debate as much more open than it was when everyone said to own stocks. Credit spreads are widening, though only a little, and the stock story is still good long term, but in the meantime the risk-reward is less compelling. When the 10-year Treasury is near 5.35%, as it was a few weeks ago, the comparison between the earnings yield and the bond yield favours bonds.

“Now we have question marks... And when you have the ten year treasury getting to $5.35 where it was just a few weeks ago... So you better own a couple of bonds in your portfolio.”at 23:07

Robert Doll · Crossmark Global Investments

Inflation is still a problem, with headline PCE above 3% (3.6%), nowhere near the Fed's 2% target.

Doll cites the Fed's preferred PCE measure from last week, where the headline inflation deflator was 3.6%, above 3%. That is nowhere close to the 2% target. He links the oil price situation to the inflation rate, and says inflation is still a problem that haunts the market.

“the fed's favorite PCE number last week, the inflation deflator was over 3%, 3.6, on the headline. Nowhere close to two. Inflation's still a problem, and that haunts the market.”at 24:01

Robert Doll · Crossmark Global Investments

Oil above $100 a barrel is a front-burner issue, so investors should own some energy stocks.

Doll calls oil a wild, whipsawed trade that has become a background issue but remains a front-burner one, with oil comfortably above $100 a barrel. The two sides in the geopolitical situation seem far apart, and he cannot predict the outcome. That uncertainty feeds into the inflation rate, so he says you have to own some energy. When asked, he says he means energy equities such as Chevron and Exxon rather than the commodity, which he has no view on.

“it is still a front burner issue with oil comfortably over a $100 a barrel. You gotta own some energy in your portfolio.”at 24:01