Bloomberg Surveillance TV: November 5th, 2026

Manish Kabra · Société Générale

S&P 500 de-rating is over; year-end target 8,000 as bond yields peaked on falling oil.

Kabra argues bond yields have reached a cyclical peak because oil fell about 15% and crack spreads about 35%, with product prices and refining margins now falling. He reads that as the end of the S&P 500 de-rating, which took the multiple from 24x to 18x, and he keeps his year-end target of 8,000. He says the bond market sets the pace of the bull market: a 4% ten-year yield would mark the escape velocity needed for his 10,000 bull case.

“so all of that I think in total gives me conviction we have seen cyclical peak in bond yields and if we have seen cyclical peak in bond yield, I can comfortably say we have seen end of the de rating phase of the S and P.”at 4:06

Manish Kabra · Société Générale

Prefers equal-weight S&P 500; expects it to outperform most global markets.

Kabra still likes the equal-weight S&P 500 as a way into the parts of US stocks that lagged this year: consumer-facing names, industrials that had little participation, and utilities, which he says are fully derated over the last six months. He says equal-weight is outperforming the majority of global markets.

“what I like is still equal weight S and P... If I have equal weight S and P to invest in, I'm still excited about that.”at 7:29

Manish Kabra · Société Générale

Peak Fed hawkishness and peak inflation signals should come in Q1.

Kabra looks at second-order inflation effects in wages and different parts of the economy to find signals that inflation has peaked. He expects those peak-inflation signals in Q1, which he calls the peak hawkishness signal for markets. He sees lower oil prices as a big relief for global stocks, not only the US.

“you find peak inflation signals would happen in q one, and that... That's where I would say peak hawkishness signal, you know, for the markets happens in q one.”at 4:46

Stephen Miran · Hudson Bay Capital Management

Fed shouldn't have hiked in September; temporary shocks inflate core PCE.

Miran says core PCE is elevated, but a Goldman report estimated that over a percentage point of that elevation comes from temporary effects such as Iran and energy, plus measurement error in information and software. He thinks measurement error is even larger. Monetary policy works with one-to-two-year lags, so hiking on this data is backward-looking. He forecasts inflation returning to 2% as those temporary effects fade, so he sees no need for the hike.

“I do. I still don't think I would have hiked rates in September.”at 25:18

Manish Kabra · Société Générale

Hyperscaler credit spreads are widening and some face negative outlook changes; too early to buy hyperscalers.

Kabra has for two years advised buying the S&P 500 excluding hyperscalers, because EPS has been a weak signal compared with CDS spreads. Hyperscaler CDS has accelerated, the companies still need to borrow, and a couple have seen negative changes to their credit-rating outlook. That keeps pressure on hyperscaler valuations, so he thinks it is still too early to get into the hyperscaler trade.

“EPS has not been a strong signal versus where the CDS spreads are... watching CDS of every hyperscaler, they have accelerated... I think it's still too early to get into hyperscalers trade.”at 6:01

George Pollack · Signum Global Advisors

Texas Democrats could move anti-data-center laws; data centers face a rough couple of years.

Pollack says Democrats now hold the Texas governorship, the state house and the lieutenant governor who controls the state senate, so they could move anti-data-center legislation. Only six Republican votes are needed to bring a bill to the Texas Senate floor and four to pass it, since data centers are a bipartisan issue. Across states, voters mobilize against data centers as soon as they hear of one, even on rumor, and tax benefits will not move them. He expects a rough couple of years for data centers.

“most states from Utah, Minnesota, Florida, New York, Pennsylvania, Maine, as soon as the voters hear about the very idea of a data center, they mobilize... I think we're in for a rough couple of years on data centers.”at 14:06

George Pollack · Signum Global Advisors

Vance's commentator-politician role makes a 2028 Republican nomination less likely.

Pollack says Vance cannot be both a commentator and a policymaker, and that the approach is not the best solution. Vance still has the vice presidency and some support in the administration, so a run is possible. But after the midterm performance and his approach to campaigning, policy and politics, Pollack expects the next Republican nominee to be someone not tied to the administration. He sees DeSantis able to distance himself, while Cruz still needs White House relationships.

“...after the midterm performance and... moreover, vice president Vance's approach to campaigning, policy, and politics... I would imagine the next nominee for Republicans will likely be someone not affiliated with the administration.”at 11:33

George Pollack · Signum Global Advisors

Hegseth is likely to be removed as defense secretary, following Bush's Rumsfeld precedent.

Pollack notes that after a poor 2006 midterm, President Bush removed Defense Secretary Rumsfeld as one of his first actions. He expects many in the administration want Hegseth to follow that precedent. Hegseth's talks with Marsha Blackburn about a possible Senate appointment suggest he is reading the tea leaves. Reports about his wife being paid by lobbyists tied to the defense industry are likely meant to pressure the president to move on.

“I imagine there are many in the administration who want secretary of defense or secretary of War Hegseth to follow the same precedent.”at 15:05

Stephen Miran · Hudson Bay Capital Management

Treasury should eventually phase out the 20-year bond; it's hard to fund and costs too much.

Miran says the 20-year bond has always been difficult to fund because there is no natural clientele for it, so it has always been cheap and costs Treasury more than it should. He does not think the issuance plans needed aggressive change at the latest refunding, and he treats the bond as a priority only among many. He still sees an argument for phasing it out eventually.

“...there's difficulty finding a natural clientele for it... So I do think there's an argument for phasing it out eventually.”at 24:37

Stephen Miran · Hudson Bay Capital Management

Cutting Fed forward guidance would lift term premium and steepen the yield curve.

Miran is enthusiastic about cutting back Fed forward guidance and calls it good policy. Forward guidance keeps term premium low by telling markets the next few meetings, so less of it injects uncertainty that must be priced as higher risk premium. That is a tightening of financial conditions, which lowers the neutral rate and leaves a steeper curve. He thinks the yield curve has not fully grappled with this yet, though term premium is already seeping into the front end.

“Now I think that less communications has really interesting effects on the term premium too.”at 28:05

Manish Kabra · Société Générale

Oil price is the sole driver of Treasury yields, with sensitivity at record highs.

Kabra argues oil is the single driver of two-year and ten-year bond yields, and their sensitivity to oil prices is at all-time highs. Oil fell about 15% and crack spreads about 35%, and product prices and refining margins are now coming down. He links this drop in oil and refining margins to the cyclical peak in yields.

“Alan, the one sole driver is the oil price, and you watch the sensitivity of two year bonds, ten year bonds to oil prices, all time high, record highs.”at 3:36

Manish Kabra · Société Générale

Semis are a buy only after the Fed's last hike signal, expected in March.

Kabra says data-center buildout has become a bottom-up decision for each company, choosing states and areas site by site, which makes the AI build-out very micro. He does not think broad buying of semis is warranted yet. His timing signal is the last Fed hike signal, which he expects in March, so he frames the question as one of timing rather than the end of the AI trade.

“data centers have become for every company a bottom up approach... So then when would I go out and say we should absolutely buy every semis? I would say that would be your last Fed hike signal, which for us is in March.”at 6:41

Manish Kabra · Société Générale

Experienced investors avoiding US stocks over AI financing needs and circular financing.

Kabra says the more experienced investors are, the more they stay away from US stocks. This has held since the idea of Nvidia creating circular financing emerged, which pushed various investors to pull back. He cites the fear of financing needs across the AI ecosystem as the reason, and says conviction on international allocation to the US is split.

“the more experienced someone has in this market, they're trying to stay away from US stocks... ever since we got the idea of Nvidia creating circular financing that created various investors to pull back from U.S... It's the fear, the financing need”at 8:10

Manish Kabra · Société Générale

AI trade lacks escape velocity: build, sell and use AI are not rising together.

Kabra splits the AI ecosystem into three buckets: build AI, sell AI (monetizers) and use AI (productivity gains). The market is buying only one bucket at a time and has not seen all three perform together, which he says is the escape velocity needed. He ties that to the bond market: a 4% ten-year yield would signal that the AI-driven bull case can proceed.

“there are three big buckets... there's a build AI phase, there's a sell AI phase and then there's the use AI phase, so at the moment we have not seen the escape velocity where all three buckets perform together”at 8:32

Stephen Miran · Hudson Bay Capital Management

Labor market hiring remains low; recent improvement mostly reflects foreign-born workers leaving the labor force.

Miran draws little signal from low layoffs, since large layoffs only appear late in a recession. The key feature is the low hiring rate, still near post-financial-crisis levels, which is not a strong labor market that merits rate hikes. Segmenting by citizenship, much of the recent improvement is among foreign-born workers dropping out of the labor force after immigration policy changes. He calls the market precarious and in need of support.

“all of the improvement that we've seen or a lot of the improvement that we've seen has actually been in the foreign born component dropping from the labor force because of changes to immigration policy.”at 18:24

Stephen Miran · Hudson Bay Capital Management

Economy is strong, with private domestic demand near 5%, yet hiring hasn't followed.

Miran says the economy is quite strong, with private domestic final demand growing near 5% for two quarters in a row. That strength has not translated into a hot labor market of the kind that would justify aggressive rate hikes. He suggests the break in that link may relate to AI and new technologies, though he offers this as a possibility rather than a settled conclusion.

“you've got underlying demand growth, private domestic final demand, growing near 5% for two quarters in a row.”at 19:24

Stephen Miran · Hudson Bay Capital Management

Tariffs had little inflation effect; removing them would open a $400B annual deficit hole.

Miran argues tariffs did not meaningfully lift US goods inflation relative to international goods inflation. Even economists who blame tariffs estimate about 80 basis points, against a price level up about 25% since the pandemic. Imports are 11-12% of GDP, so macro effects are limited, though micro price effects are real. Rolling back tariffs would leave a $400B annual revenue hole that must be filled by borrowing, which would hurt bonds, or by higher income taxes; tariff revenue also helped prevent expiration of the Tax Cuts and Jobs Act cuts.

“Look. I'm still of the view that tariffs didn't have a meaningful impact on inflation because you would have expected goods inflation in The US to somehow sit... Stand out from goods inflation internationally, and that just wasn't the case.”at 21:08