Bloomberg Surveillance TV: November 4th, 2026

Julian Emanuel · Evercore ISI

Democratic sweep reflects an affordability mandate and reduces tail risk, so it is bullish for equities.

Emanuel argues the midterm result is not a blue sweep but a sweep for affordability, with voters demanding accountability on the cost of living. He says the options market shows tail risks decreasing after a brutal campaign, and that a centrist Democratic majority will push both sides toward the middle. He concludes this is bullish for equities, and that the political season is over so investors can refocus on business.

“This is not a blue sweep. This is a sweep for affordability... That's accountability for the affordability crisis... full stop, that's bullish for equities.”at 3:09

Libby Cantrill · PIMCO

The result looks like 1974: a more moderate Democratic Congress that could constrain the president by 2029.

Cantrill says the blowout is a massive referendum on the party in power, covering affordability, gas, groceries, health care and housing, and that it looks more like 1974 than 2006. She argues the incoming class will be more moderate because Democrats won in places Trump also won. Drawing on the post-Watergate and post-Nixon precedent, she says Congress could pass constraints on the president, perhaps not in the next two years but certainly by 2029.

“This looks much more like 1974... A bigger Democratic majority means a more moderate majority because they won by definition in places that, of course, that Trump has won.”at 10:47

Libby Cantrill · PIMCO

Permitting reform could pass in the lame duck given bipartisan support, a key sector issue.

Cantrill calls permitting reform the one big issue for markets in specific sectors. She notes it has long been a unicorn on Capitol Hill but has bipartisan support in both the House and the Senate, so she thinks Republicans will push it and Democrats will be fine clearing it in the lame duck session.

“The one big issue I think for the markets for specific sectors is permitting reform... I think you could actually see permitting reform pass in the lame duck.”at 12:47

Daleep Singh · PGIM

Markets are pricing a reduced risk premium because voters chose moderation, a checks-and-balances signal.

Singh argues markets price more than cash flows: they can price a country's capacity to check itself and course-correct. He says voters seem to have chosen moderation, so markets are pricing a reduction in risk premium. He calls this maybe a stretch and says the election data still needs parsing.

“Markets aren't just pricing cash flows... Maybe it's a stretch, but I would say markets right now at this moment, they're pricing in a reduction of risk premium.”at 19:09

Julian Emanuel · Evercore ISI

Data center build-out restrictions would ease inflation pressure, and builders will relocate to flexible jurisdictions.

Emanuel says the glass-half-full reading of a possible slowdown in data center build-out is that it would relieve some inflation pressures tied to that build-out. He argues jurisdictions that restrict business will still find new places to build data centers and create jobs, because capital is flexible and adapts.

“The glass half full interpretation of this idea that data center build out could slow down is in fact you will relieve some of the inflation pressures associated with that build out.”at 3:54

Daleep Singh · PGIM

Local restrictions will slow and raise the cost of data center build-out, cutting AI capex next year.

Singh says data centers lost on the ballot, with over 40 local measures across about 10 states mostly adding restrictions. He expects the build-out to continue but more slowly and expensively, as data centers must sweeten deals with communities, pay for water and power, share upside, and remove tax breaks. That reduces the AI capex supporting growth next year, which should support the long end of the curve.

“Data centers lost... the build out is still going to happen. It's going to be slower. It's going to be more expensive.”at 24:00

Julian Emanuel · Evercore ISI

Evercore's base case is a Fed hike in December and likely another in Q1, contingent on data.

Emanuel says Evercore expected Fed hikes all along, with a December hike and likely another in the first quarter. He ties this to inflation being the Fed's job one, with the AI revolution expected to help inflation only in the medium and long term. He hedges that if the data moderates, the hikes might not happen, and notes markets price expectations.

“We thought they would all along. We also think there's likely one in the first quarter. But again, if the data actually moderates, then perhaps it won't be.”at 6:51

Daleep Singh · PGIM

Expects roughly 100bp more hikes over the next year, reaching a 5% policy rate, in 25bp-per-quarter steps.

Singh argues voters made cost of living the number one issue, and the Fed is uniquely positioned to address it, so the Fed will do its job of fulfilling the dual mandate. He expects another 100 basis points of hikes over the next year, to 5%, with the Fed on a gradual path of 25bp per quarter. He notes the gradual path assumes waiting costs are low and information value is high.

“Our view is yes. We're expecting another 100 basis points of rate hikes over the next year to 5%.”at 20:57

Libby Cantrill · PIMCO

Yield moves reflect pricing of slower growth from a potential AI slowdown, alongside the midterm fiscal effect.

Cantrill says some of the action in yields has been pricing in slower growth tied to a potential AI slowdown. She sees the move as a combination of that growth worry and less of a fiscal referendum from the midterms, with traders active ahead of the election.

“Some of the action in the yields has been maybe a little bit pricing, little bit slower growth with this potentially slow down in the AI.”at 15:51

Daleep Singh · PGIM

Shrinking the 20-year Treasury issuance would raise term premium and rollover risk; debt management is no fiscal cure.

Singh opposes shrinking duration issuance such as the 20-year bond at the start of a Fed tightening cycle, when interest expense already sits at 20% of federal revenues. He argues it would raise rollover risk and increase the term premium if Treasury becomes a less regular and less predictable issuer. His bottom line is that debt management is not a cure for the fiscal problem.

“I'm not a fan of shrinking our duration footprint and raising our rollover risk at the start of a Fed tightening cycle... I think it would only increase our term premium.”at 26:47

Libby Cantrill · PIMCO

No debt-ceiling increase in the lame duck, pushing the issue to a Democratic Congress with more leverage.

Cantrill doesn't expect a reconciliation bill to raise the debt ceiling in the lame duck. Some Republicans want it, but there isn't unanimity or floor time. If it is punted, the debt ceiling falls to a Democratic Congress, giving both chambers much more leverage in negotiating with the president.

“I don't think we're gonna see a reconciliation bill that raises the debt ceiling... There's probably not floor time and what have you.”at 15:07

Libby Cantrill · PIMCO

Federal spending will rise regardless of who won, with Democrats pushing health care and defense.

Cantrill says PIMCO has told clients spending will likely go up regardless of who won. Republicans would have allocated more to defense, while Democrats want to spend on defense and health care, reinstating Obamacare subsidies and reversing some Medicaid cuts. She doubts the increase will be much larger in degree terms than under Republican control.

“Yes, spending is probably gonna go up regardless of who won... Democrats are going to want to spend on both defense and on health care.”at 15:21

Daleep Singh · PGIM

Escalation of the Iran war would push Brent and refined product prices higher, complicating the Fed.

Singh expects the president will not let his legacy be an endless war in Iran, so he will escalate. He argues that escalation will push Brent and refined product prices higher, which makes the Fed's job harder because it adds to the inflation pressure the Fed must fight.

“I don't think he can allow his legacy to be an endless war in Iran. Therefore, I think he will escalate. That is gonna push Brent prices, refined product prices higher, make the Fed's job harder.”at 21:51

Daleep Singh · PGIM

If Trump keeps remaking trade, the effective tariff rate rises to the mid-teens, adding inflation pressure.

Singh says that if the president wants to keep remaking the global trade system, the average effective tariff rate will likely rise from the low single digits back toward the mid-teens. He argues both this and an Iran escalation are inflationary pressures that should prompt the Fed to act more aggressively, not less. The forecast is conditional on the president's choices.

“And similarly on tariffs... we're probably gonna see the average effective tariff rate rise back towards the mid teens from the low single digits.”at 22:03

Daleep Singh · PGIM

A slower but longer AI capex cycle would be credit-positive for hyperscalers, easing their bond issuance.

Singh argues a slower but longer AI capex cycle, with the public sector pacing the frontier, lets the credit market absorb hyperscaler issuance with less difficulty. That may not help equities, but he thinks it would benefit and tighten the credit spreads of those hyperscalers.

“It could be credit positive for hyperscaler credit because if you have a slower but longer AI CapEx cycle... that allows the credit market to absorb the amount of issuance with less difficulty.”at 25:23

Daleep Singh · PGIM

Frontier labs won't self-regulate under a prisoner's dilemma, so a moderated AI race is healthy.

Singh argues the growth and productivity story in the US drew capital that pushed yields and the dollar higher. He weighs that against an uncontrolled race to the frontier, a prisoner's dilemma in which frontier labs lack the incentive to self-regulate, raising catastrophe risk. He sees the current moderation as healthy and says a slower but longer AI capex cycle is positive for dollar assets.

“Those positives need to be weighed against the risks of an uncontrolled race to the frontier... the frontier labs don't have the incentive to self regulate in the best interest of humanity.”at 25:59