Closing Bell 10/28/26

Microsoft

Across the shows: 20 speakers in other episodes, 15 bullish and 1 bearish calls, past 30 days

• Dan IvesBullish

  Azure growth must accelerate with a 100-150bp beat; Microsoft stays clearly ahead of Google and Amazon.

  Ives says Microsoft's capex strikes the right balance, and he expects Azure growth to keep accelerating this quarter and next. Street Azure growth of about 44% is only a slight tick up, which he says is not good enough. He argues Azure needs a 100-150bp beat, with whisper numbers about another 100-150bp above consensus going into next quarter, to show growth acceleration toward 50% and calm fears about the tech trade. He also says Microsoft continues to be clearly in the lead on enterprise AI cloud, ahead of Google and Amazon.

  “Is a slight tick up good enough? Probably not. I think it probably needs to be about a one to a 100 to a 150 bp type of beat”at 48:08

• Bryn Talkington · Requisite Capital ManagementBullish

  Microsoft is in pole position: above its 200-day, FCF-positive inflection, and lagging the equal-weight index.

  Talkington says Microsoft is in pole position. Its stock is well above the 200-day moving average, and the inflection point came last quarter when CFO Amy Hood said the company would stay free cash flow positive. The stock is up only about 10% for the year against roughly 13.5% for the equal-weight S&P, so she argues it has a lot of room to run.

  “Microsoft is in pole position. First of all, Microsoft is way above the two hundred day moving average.”at 48:46

Alphabet

Across the shows: 20 speakers in other episodes, 19 bullish and 1 bearish calls, past 30 days

• Bryn Talkington · Requisite Capital ManagementBearish

  Alphabet trades about $20 below its 200-day; the market dislikes its $80B convertible financing.

  Talkington notes Google is well below its 200-day moving average, about $20 under. She sees this as the big divergence from Microsoft and reads it as the market signaling that it does not necessarily like Alphabet's $80 billion convertible issuance used to fund its AI build-out. She therefore thinks Microsoft is better positioned on both the company and the stock chart.

  “Meanwhile, Google is way below, like, $20 below the two hundred day. And to me, that's the big divergence there is the market is saying, we don't [necessarily] like your $80,000,000,000 convert that you did...”at 49:08

• Dan IvesBullish

  Alphabet has significant upside over six to twelve months as search advertising rebounds strongly.

  Ives argues the bearish concerns about AI disrupting search are overdone. He cites search advertising being on pace for its best year since 2021, and says he expects search to show an uptick. He describes the current run as a renaissance of growth for Alphabet and says it has significant upside over the next six to twelve months. He also notes Alphabet has had no buybacks for the prior two quarters because capex is too big, which he sees as a first since 2017.

  “Go back to the last year. I mean, this has been a renaissance of growth that we're seeing for alpha... I believe this is one that has significant upside as we go into the next six to twelve months.”at 50:32

Oracle

Across the shows: 17 speakers in other episodes, 1 bullish and 18 bearish calls, past 30 days

• Jeffrey Gundlach · DoubleLine CapitalBearish

  Oracle's triple-B-minus rating is not credible; its bonds trade like single-B-minus debt.

  Oracle came to market rated triple-B-minus, but the market prices its bonds at spreads typical of a single-B-minus company. Gundlach reads that as the market rejecting the rating, which fits his broader concern that AI-linked borrowers are being rated higher than their risk warrants.

  “Then Oracle came out at a triple b minus, which is clearly not being embraced by the market as the correct weighting because it's trading like a single b minus company.”at 10:00

US rates & the Fed

• Jeffrey Gundlach · DoubleLine Capital

  The Fed should hike rates, with a December hike as the base case, because it is behind the curve.

  Gundlach argues the Fed is behind the curve. Two-year Treasury yields near 4.75% sit above the 4% fed funds rate. Nominal GDP is running about 6% (3.4% real plus roughly 3% inflation), which he says supports higher long yields. Headline inflation is set to rise toward 4% and commodities are in a rising trend. He calls the Fed's reluctance to move puzzling and expects a hike at the December meeting, with the market also pricing one.

  “But I think the Fed should be raising interest rates based upon the two year treasury being at four and three quarters percent, and now the yield curve in the wake of this news conference actually steepening again.”at 8:26

• Jeffrey Gundlach · DoubleLine Capital

  The Fed should move to six meetings a year, with policy changes made only after enough data.

  Gundlach thinks eight meetings are unnecessary because they come up quickly and give little new data. Six meetings would give the Fed a couple of months of data before it changes policy. He also suggests intermeeting moves could be useful when conditions change.

  “I would actually be very much in favor of six meetings starting immediately ... so at least you have a couple months worth of data to filter in.”at 28:37

US inflation

• Jeffrey Gundlach · DoubleLine Capital

  Headline CPI will print with a 4 handle for about five months as energy prices stay high.

  Gundlach's inflation model leans heavily on energy prices, which are up sharply this year. Based on that model, which he says has been very accurate, headline CPI will start with a 4 and stay there for months as long as energy prices hold. Relief only comes once base effects roll off in the April report, likely printed in May. The Bloomberg Commodity Index is also well above its 200-day moving average and rising.

  “The bad news is that based upon our inflation model, which has been very accurate over time and leans a lot on energy prices, which, of course, are up dramatically this year, we're gonna start seeing the headline CPI left of the decimal start with a four.”at 6:59

Commodities (broad)

• Jeffrey Gundlach · DoubleLine Capital

  Commodities are in a bull market; he holds 15% in broad commodities and 5% in gold.

  The Bloomberg Commodity Index is well above its 200-day moving average and trending up. DoubleLine's rules-based commodity strategy ETF (DCMT) is up about 48% year to date, driven by energy. Gundlach keeps 20% of the portfolio in commodities, 15% in the broad index and 5% in gold, and sees commodity strength as a key inflation signal.

  “So commodity prices are well above... The Bloomberg Commodity Index is well above its two hundred day moving average and in a rising trend.”at 7:38

Credit markets

• Jeffrey Gundlach · DoubleLine Capital

  The bond market is rejecting AI issuers' ratings, and credit spreads are widening as a lasting trend.

  Heavy bond issuance from AI and AI-adjacent companies has not been well received. SpaceX priced at triple-B and immediately widened to junk-like spreads. Oracle's triple-B-minus trades like a single-B-minus credit. Triple-B bank loans are down about 18% year to date. Gundlach compares this to the 2006-07 ABX triple-B subprime episode, sees growing doubt over agency ratings on private-credit-linked insurers, and says the spread widening is the start of a trend.

  “the huge issuance by AI and AI adjacent types of businesses have not been really well received by the bond market.”at 9:45

Private credit

• Jeffrey Gundlach · DoubleLine Capital

  Rating agencies' investment-grade ratings on private-credit-linked insurers are losing market credibility.

  Gundlach sees a growing crisis of confidence in rating agencies. Insurance companies owned by private credit and private equity firms lean on investment-grade ratings that the market does not seem to believe. He compares this to the ABX triple-B subprime episode and says the trend is picking up steam and is worth following.

  “We're starting to get a little bit of a crisis of confidence on how rating agencies in the private credit, particularly related areas where insurance companies owned by private credit, owned by private equity firms are leaning on these investment grade ratings that the market doesn't think are real.”at 10:41

US deficit & government debt

• Jeffrey Gundlach · DoubleLine Capital

  Deficits are running near 9% of GDP over two months, adding pressure on long-term rates.

  The national debt rose about $500 billion in two months, which he annualizes to a $3 trillion deficit pace, about 9% of GDP. He notes a 6% deficit has only occurred five times in US history (Civil War, WWI, WWII, the financial crisis and COVID), and fiscal 2026 is already running at 6%. Gundlach says that deficit pressure, plus AI borrowing demand, is pushing up interest rates, though he allows the two-month pace may be idiosyncratic.

  “Now maybe there's something, you know, idiosyncratic about those two months, and it's not right to assume that that's the new trajectory that we're at. But if it is a new trajectory we're at, we're running a deficit right now for the last two months of 9% of GDP.”at 13:12

Oil & fuels

• Jeffrey Gundlach · DoubleLine Capital

  Oil is too high, with WTI above $100 and shipping surcharges pushing effective spot near $135.

  WTI is above $100 and Brent is also high. Shipping surcharges mean the effective cost is closer to $135 than the quoted commodity spot price, so oil is already very elevated. Gundlach sees this as the main reason the Fed has to hike in December unless oil cracks.

  “Absence a crack in the oil price, I think they have to hike in December. The oil price is just too high. I mean, WTI is over a 100.”at 17:01

US stock market outlook

• Jeffrey Gundlach · DoubleLine Capital

  Holds about 30% in equities and only equal-weight S&P, avoiding cap-weighted AI exposure.

  Gundlach keeps equities at about 30% of his portfolio because valuations are very high and bond spreads are starting to widen. Within equities he wants only equal-weight S&P 500 exposure, not cap-weighted, to avoid the AI names he sees as the epicenter of the blast radius of AI problems. Equal-weight has recently matched or slightly beaten cap-weighted, which supports the tilt.

  “And in my current state of mind, I only want the equities to be in equal weighted S and P. I don't like the cap weighted S and P. I don't want all this exposure to the epicenter of the blast radius of the AI problems or developing problems.”at 22:15

Emerging markets

• Jeffrey Gundlach · DoubleLine Capital

  Local-currency EM debt is a strong holding, offering a decent yield plus currency gains.

  Gundlach allocates half of his 30% bond allocation to local-currency emerging market debt. He calls it his strongest-performing bond exposure, with a decent yield. A weaker dollar adds currency translation gains, which is why he has been adding to it since last June. He notes it has been rockier at times.

  “I also still like half of the 30% bond allocation in local currency emerging market debt, where we continue to have the strongest performance, although it's been a little bit rockier at points during the year.”at 23:17

US dollar

• Jeffrey Gundlach · DoubleLine Capital

  The dollar still goes lower, which should keep boosting returns on his EM local-currency bonds.

  Gundlach expects the dollar to keep weakening. He holds local-currency emerging market debt, where the weaker dollar adds currency translation gains on top of the bond yield. He says that combination has driven returns since June of last year, even though the path has been bumpy.

  “But I think the dollar still goes lower. And because of that, I think you're gonna continue to make money on the currency translation.”at 23:22

Gold & precious metals

• Jeffrey Gundlach · DoubleLine Capital

  Gold should be added on dips, moving 1% from commodities into gold per $100 drop toward 10%.

  Gundlach's current mix holds 5% in gold within a 20% commodities sleeve. His rule is to shift 1% from the broad commodity index into gold each time gold falls $100. If spot gold reaches $3,500, the mix would be 10% broad commodities and 10% gold, so gold is a buy on weakness in his framework.

  “Right now, I would have 15% in simply the Bloomberg Commodity Index and 5% in gold. But at this point, what I would do is every time gold drops a $100, I would switch 1% from the broad commodity index into gold.”at 23:47

Europe's economy

• Jeffrey Gundlach · DoubleLine Capital

  France's debt problems pushed French yields sharply higher and pulled money out of Europe.

  Gundlach links the October bond rally to France. French yields were skyrocketing amid fiscal problems and protests, and money appeared to leave Europe for safer assets such as US Treasuries, which were paying over 5%. He also cites Marine Le Pen's lead in polls and her plan to lower the retirement age as adding to the fiscal strain.

  “I think foreign money started to come in out of Europe in particular because the situation in France does not look very good. And French yields were skyrocketing.”at 26:39