Closing Bell 11/4/26

Apple

Across the shows: 48 speakers in other episodes, 55 bullish and 37 bearish calls, past 30 days

• Mackenzie Sigalos · CNBCBullish

  Apple is a safe bet because tougher data center rules don't affect iPhone sales or growth.

  After Democrats took the House and Senate, Sigalos argues Apple looks like the safe bet. It doesn't need massive data centers to sell iPhones, so tougher restrictions on new data center builds don't touch it. Its revenue is still growing double digits while its capex is falling.

  “It doesn't need massive data centers to sell iPhones, so tougher restrictions on new builds don't touch it, and revenue is still growing double digits while CapEx is falling.”at 1:52

Consumer Discretionary Select Sector SPDR Fund

• Jeff deGraaf · Renaissance Macro ResearchBearish

  Discretionary rally is more a fade than a buy despite lower energy prices and oversold levels.

  Discretionary names are the beneficiaries of lower energy prices and were very oversold, so they can rally hard to year end. A trend change is harder, especially with an election that was largely telegraphed. Rallies may not make an undercut low, but DeGraaf sees them as more of a fade than a buy given the trends.

  “So the discretionary names, because they were oversold, have the ability to rally pretty hard... But I do think it's more of a fade than it is a buy as we, you know, as we look at those and the trends that take place.”at 20:39

VanEck Semiconductor ETF

Across the shows: 8 speakers in other episodes, 2 bullish and 6 bearish calls, past 30 days

• Oliver Renick · CNBCBearish

  Options traders are heavily betting on a further selloff in the semiconductor ETF SMH.

  SMH fell more than 3% while the VIX still dropped about four points, which Renick says is a first on record. He points to bearish options activity: volume at twice average, twice as many puts as calls, and most of the premium in puts. The most popular trade is the $4.75 put expiring November 13. He reads this as traders expecting further downside in chip stocks, with the ETF already in bear-market territory, and as traders rotating into calls on airlines, housing and solar.

  “The options traders are piling on bearish into the chip ETF, which is now in bear market territory. Two times average volume, twice as many puts traded versus calls, and most of the premium tied to those puts.”at 40:25

Credit markets

• Mark Okada · Sycamore Tree Capital Partners

  Credit capacity for AI compute is nearly capped, so equity issuance will replace buybacks next.

  Massive credit issuance has funded compute, but the credit markets are largely capped out, and far more capacity is needed. Okada expects supply to shift to equities. He cites roughly $85 billion of buybacks last year against several hundred billion dollars of equity issuance expected next year, a sea change in stock supply.

  “I contend that we're not... We're kinda capped out in the credit markets per se for most of that. I would think that supply comes next from equities.”at 33:48

• Mark Okada · Sycamore Tree Capital Partners

  Won't buy unsecured AI data center debt at par; about $400B issued and trading down.

  Okada says he said back in September that he wouldn't buy this unsecured risk. About $400 billion has been issued and it is all trading down. He would rather own it at 83 than at par, and a 5% coupon bond trading down to 83 takes three or four years to recover back to par.

  “I said, we're not gonna buy this unsecured risk. They've issued 400,000,000,000 of it. It's all trading down. I mean, I'd rather own it at 83 than than par.”at 34:40

• Mark Okada · Sycamore Tree Capital Partners

  Fully amortized secured data center loans to investment-grade tenants are good risk, 200-300bp wide of loans.

  Sycamore has invested in data centers through secured, fully amortized loans with no residual risk, so they are great loans. Tenants are investment grade with plenty of cash flow that pays the loan down. These loans pay roughly 200 to 300 basis points wider than the loan market, so it is good risk, though selectivity is required.

  “We have. And we've been doing these secured, fully amortized data centers where there's no residual risk. So those are great loans.”at 34:55

• Mark Okada · Sycamore Tree Capital Partners

  Triple-C credits trade 30 points below single-B; he won't buy that part of the credit curve.

  The high yield index yields about 10%, but that is driven by triple-C credits trading down massively. Triple-Cs trade about 30 points below single-Bs. Okada says there is a big credit curve and he is not buying it. He still likes credit versus equities but says the risks under the surface must be considered.

  “You've got triple c's trading at 30 points below single b's. That's a big credit curve, and and we're not buying that.”at 35:55

• Mark Okada · Sycamore Tree Capital Partners

  After the equity market doubled, credit is a better place to rotate; floating-rate credit yields 6-9%.

  Okada says his firm is positioned in floating-rate credit and finds 'situations like that' with good risk and returns. He cites 8-9% in credit and 6% in AAA floating-rate paper as returns that let investors take chips off the table without taking stock market risk. He argues that after the equity market has doubled in four years, the credit market is probably a better place to rotate into, and that the shift will be durable.

  “I just think that the credit market... at this point, after the equity market has doubled in the last four years, is probably a better place to rotate into.”at 37:31

US stock market outlook

• Liz Ann Sonders · Charles Schwab

  Sector rotation stays the market's momentum trade, with breadth improving even as the AI trade fades.

  Correlations are near record lows and dispersion near record highs, so stocks are moving on their own drivers. Health care has leapfrogged tech as a top performer, and each leading sector has a different macro story. Sonders' base case is continued rotation with enough breadth improvement that other segments can catch up even if the AI-driven trade winds down. She argues investors should stop analysing the market as a monolith.

  “rotation is the new momentum trade, and I think that's likely to persist. So there's more of a discerning eye on the market now”at 6:30

• Tom Lee · Fundstrat Global Advisors

  Hedge funds re-enter tech, driving a strong tech rally before year end.

  About half of hedge funds are in TMT, and technology had a huge correction. Lee doesn't think they will buy Coca-Cola and expects them to dive back into tech. He agrees with the Citadel note on rebuilding equity exposure into year end. He expects a very strong tech rally similar to the one after the situational awareness sell-off, with hyperscalers leading.

  “I think they're gonna dive back into the tech trade. So to me, I think I agree with the Citadel note, but I think a lot of this is gonna be a very, very strong tech rally that looks like the one we had after the situational awareness sell off.”at 15:49

• Jeff deGraaf · Renaissance Macro Research

  November is the most favourable month, with a 77% probability of upside.

  DeGraaf points to seasonality as very, very favorable for November, the most favourable month of the calendar with a 77% probability of upside. He expects a little bit of a wait but is more worried about overall trends than today's moves. The seasonal tailwind is a counter-trend factor he is watching.

  “very, very favorable for November. That's the most favorable month actually in the calendar 77% probability of upside.”at 20:02

• Mike Rode · FAS Wealth Partners

  Excluding AI and energy, earnings still grow 15% and non-AI valuations look attractive.

  Rhodes says that even after taking out AI and energy, earnings still grow 15% going into next year, which he calls a really healthy environment. He adds that valuations for non-AI stocks are pretty attractive. He backs this with the business-friendly policy backdrop, including the tax bill and deregulation, and lower inflation potential from falling oil prices. He sees a run into year-end as possible, though he calls it pretty short term.

  “If you take out AI and energy, still have 15% earnings growth going into next year. That's a really healthy environment, and valuations for the non AI stocks are pretty attractive.”at 43:12

AI infrastructure & data centers

• Liz Ann Sonders · Charles Schwab

  Data center opposition will persist; more plans canceled this year than in 2024 and 2025 combined.

  Leading into the election, more data center plans had been canceled this year than in 2024 and 2025 combined. Of 44 ballot amendments tied to data centers, only one, in North Dakota, favoured them. Sonders expects this to remain an issue and says developers may shift attention from Texas to North Dakota.

  “more data center plans have been canceled this year by far than even the combination of both 2025 and 2024. ... I think, 44 amendments that had data centers tied to them. Only one went in favor of data centers in North Dakota.”at 9:13

• Tom Lee · Fundstrat Global Advisors

  Compute will become scarce as token use grows, pushing prices up and reviving bottleneck trades.

  Lee says downstream AI applications will make compute scarce if everyone starts using tokens, pushing prices up. That brings back the bottleneck conversation. He sees the AI trade as very much alive, with frontier models solving health and agriculture problems and requiring more compute. The data center sell-off is a knee-jerk reaction.

  “compute's gonna get scarce if everyone starts using tokens, and then prices will go up. And then we're gonna talk about bottlenecks again.”at 13:20

• Tom Lee · Fundstrat Global Advisors

  States will need data center revenue for budgets, so the local policy conversation will turn favourable.

  Lee argues states will look at their budgets and realise the revenue they expect from data center investment is hard to replace. Other industries like hotels and car dealerships cannot bring in comparable dollars. He thinks the conversation will therefore turn, and calls the data center sell-off an overreaction.

  “every state's gonna look at their budgets and realize a lot of the revenues that would come in are for these huge investments coming from data centers.”at 14:48

• Mark Okada · Sycamore Tree Capital Partners

  Texas data center buildout will slow due to power bottlenecks and permitting, slowing the AI trade.

  Okada argues the AI trade is more than a trade and has dominated economic activity. He expects it to slow after the election. Texas is 41% of 2028 data center capacity, but there is a power bottleneck and permitting is coming, so the whole trade slows down. That changes the dialogue for equities versus credit, though AI is still happening.

  “[Texas is] 41% of the twenty twenty eight capacity for data centers, and there's no way it's going to be as prolific as it's been.”at 32:23

US Treasuries & yields

• Liz Ann Sonders · Charles Schwab

  Treasuries near 5.3% are not a screaming buy but good for income investors to lock in yields.

  Schwab had said at around 5.3% that Treasuries were not necessarily a screaming buy. For income-oriented investors, though, it is probably a pretty good place to lock in decent yields. Sonders adds that fixed income allocation needs a tailored approach based on income needs and time horizon.

  “at five three, we did say this is not necessarily a screaming buy, but for income oriented investors, it's probably a pretty good place to lock in some pretty decent yields.”at 11:31

• Jeff deGraaf · Renaissance Macro Research

  Real rates have been the chokehold on stocks, favouring defensives and value over growth.

  Real rates have been the chokehold on the market over the last three to four months. When real rates drive the market, the focus shifts toward defensives and away from cyclicals, and toward value and away from growth. The key question is what happens to real rates going forward.

  “the real issue here, Scott, is what happens to real rates as we go forward. Real rates have been really the the chokehold on what's been happening for the market over the last three to four months”at 19:08

• Mark Okada · Sycamore Tree Capital Partners

  Bipartisan spending means more Treasury supply; interest costs now absorb 13% of the budget.

  Okada says coming down rates today is good, but both Democrats and Republicans want to spend. Relief from the policy will mean more Treasuries. About $25 trillion of Treasuries have been issued this year, up 10%, and interest costs are 13% of the budget. Supply is the key thing to watch for Treasuries.

  “Both of these sides are gonna spend. ... That just means more treasuries. I mean, we've had 25,000,000,000,000 of treasuries issued this year. That's up 10%.”at 36:15

• Mark Okada · Sycamore Tree Capital Partners

  Heavy Treasury issuance could push the 10-year yield toward 6%, a risk the market hasn't priced in.

  Treasury issuance is up 10% this year, and interest costs already take 13% of the budget. Marking the coupons the government pays to today's rates would push that share to 18%. Okada argues the upward pressure on the 10-year from issuance is something the market hasn't priced in. He says that if the 10-year reaches 6% from about 4%, 'all bets are off for the stock market', so he sees it as a bigger risk than the equity market appreciates.

  “I think the bigger risk for the ten year is six versus four... the upper pressure from just issuance is something that the market hasn't really priced in.”at 36:49

US rates & the Fed

• Liz Ann Sonders · Charles Schwab

  A couple of Fed hikes in the coming months are already priced in and would not surprise.

  Sonders says a couple of Fed hikes in the next few months are built into expectations, so it wouldn't be a big surprise. A bigger risk would be inflation accelerating and forcing a more aggressive Fed. Yields have been falling, and even when they rose they moved in an orderly way consistent with inflation expectations and the expected Fed path.

  “Fed hikes, at least a couple in the next few months, I think, are built into expectations. That wouldn't be a big surprise.”at 10:33

• Tom Lee · Fundstrat Global Advisors

  Divided government takes political pressure off the Fed, letting it act more independently.

  Lee argues the blue wave will force Washington to negotiate, which is healthy. He also argues it may take pressure off the Fed. With less political heat, the Fed can work more independently and FOMC members don't need to worry about credibility hikes. He sees that as part of why markets can rally strongly.

  “this might also take pressure off the Fed. I think the Fed now can work more independently. We don't have to worry about FOMC members doing credibility hikes.”at 12:37

• Tom Lee · Fundstrat Global Advisors

  Energy-driven inflation may let the Fed pause rather than hike in December as oil falls.

  Hike odds are declining. A Bloomberg index shows only a narrow set of items driving CPI and PCE, with energy the main shock rather than broad price spreading. If oil and yields fall, the Fed may not feel the need to hike in December and could wait to the new year. Falling energy gives the Fed room to treat the shock as transitory.

  “maybe they don't feel so necessary in December, and they wait until the New Year to see what happens. ... the Fed now has a lot of wiggle room to say, it's an energy shock. We can just let that pass.”at 17:24

Enterprise AI adoption & AI software

• Liz Ann Sonders · Charles Schwab

  Health care is an AI adopter story, with inefficiency and diagnostics gains, not a defensive play.

  Health care's rally reflects AI beneficiaries rather than defensiveness. The sector has low-hanging fruit in inefficiency, and AI is expected to bring diagnostics, testing and disease prevention gains. Sonders argues this is a sector-specific AI story. It shows the AI trade broadening from creators like hyperscalers and frontier models to adopters.

  “that is not really a defensive story. That is a sector specific story that has an AI bent to it.”at 8:12

• Mike Rode · FAS Wealth Partners

  Companies adopting AI and expanding profits will win, starting a multiyear next leg for AI.

  Rhodes says the market has moved past the chapter of semis and memory stocks. He argues the most important factor now is companies that are embracing and adopting AI and can expand their profitability, and that these will be the winners. He says this could be a multiyear next leg for AI. He sees money leaving hyperscalers and semis and moving into these adopters, because investors look for accelerating earnings.

  “Most important is where the companies that are embracing AI, adopting AI, and are able to expand their profitability, those will be the winners. And this could be a multiyear type next leg for the AI.”at 44:02

Power demand & the grid

• Pippa Stevens · CNBC

  Texas data center policy uncertainty pressures AI power producers; ERCOT large-load report on December 10 is key.

  Power producers tied to the AI buildout in Texas fell sharply after the election, with Vistra and NRG down double digits. Texas holds 27% of planned US data center capacity and a large backlog of projects waiting to connect. The governor-elect has said moratoriums are needed until clearer guardrails exist. The Republican legislature and long-term utility commissioners add uncertainty, and the ERCOT large-loads report due December 10 should clarify state data center policy.

  “Texas represents 27% of planned data center capacity in The US and has an enormous backlog of projects waiting to connect.”at 2:33

Stablecoins & crypto policy

• Tom Lee · Fundstrat Global Advisors

  Crypto is rallying as Democrats now push crypto legislation they opposed before the midterms.

  Lee attributes crypto's rally to Democrats now pushing crypto legislation, which they opposed just before the midterms. The shift in political support for legislation is the driver he cites.

  “crypto's rallying because, as you know, the Democrats are now pushing crypto legislation, which they opposed just before the midterms.”at 13:37

Manufacturing & industrial policy

• Tom Lee · Fundstrat Global Advisors

  Lower energy prices and ISM above 50 give industrials strong earnings visibility.

  Falling energy prices help industrials and consumers. The ISM is above 50, which Lee reads as a sign of expansion and good earnings visibility. He thinks industrials should be doing a lot better.

  “this drop in energy prices is quite good for industrials because... And consumers... the ISM's above 50. There's really good earnings visibility. The industrials should be doing a lot better.”at 16:38

Banks

• Tom Lee · Fundstrat Global Advisors

  Financials are really attractive as rates calm and bond and capital markets reopen.

  Financials are a clear beneficiary of what looks like a calming rate market. The bond market and broader capital markets are opening again, which is good for financial firms. Lee therefore sees financials as the attractive sector outside tech.

  “financials are a clear beneficiary of, I think, what looks like a calming rate market and a market that actually is opening the bond market again and capital markets open. So I think the financials are really attractive.”at 16:38

Oil & fuels

• Jeff deGraaf · Renaissance Macro Research

  Oil's drop looks like a knee-jerk move; energy trends remain intact and prices may retrend.

  Energy trends are still very much in place. Today's drop looks like a knee-jerk reaction that will need to prove durable. DeGraaf suspects energy will get oversold and start to retrend again. He says the trend should be watched for durability and sustainability.

  “let's just keep in mind the energy trends are still very, very much in place. We'll see how durable this is. ... I suspect they get oversold, and they'll start to to retrend again.”at 18:26

AI bubble & tech valuations

• Jeff deGraaf · Renaissance Macro Research

  Semis and the AI complex are a bubble; rallies should be sold as momentum washout runs about six months.

  Renaissance called the semis and AI complex a bubble back in May. Some momentum gains are unwinding in a momentum crash that continues to work through the system. Year-over-year momentum has about six months to go before a complete washout. DeGraaf expects bounces that roll over and says these names will stay under pressure for a long period.

  “the semis and the AI complex, we called it a bubble back in May. ... momentum... has about six months to go before the calendar ends up being more favorable to get complete washout.”at 21:38

US inflation

• Mike Rode · FAS Wealth Partners

  Lower oil prices and slower AI spending could both help US inflation ease.

  Rhodes cites the potential for lower inflation as oil prices fall, which he presents as part of the backdrop supporting stocks. He also says that if AI spending slows a bit, that will help inflation ease. The argument is hedged as a potential, not a forecast.

  “Add on the potential for lower inflation with oil prices down. If AI spending slows a bit, that will also help inflation ease.”at 43:03

AI: overall outlook

• Mike Rode · FAS Wealth Partners

  AI-related stock earnings growth should decelerate sharply next year, from 70% to 25%.

  Rhodes expects massive deceleration in AI-related stock earnings next year, with growth falling from 70% to 25%. He says investors look for accelerating earnings, so the slowdown is why money is rotating out of hyperscalers and semiconductors. He also links slower AI spending to easing inflation, so this is a slowdown he sees as part of the market's next phase.

  “Investors look for accelerating earnings, and you're gonna see pretty massive deceleration in AI related stock earnings next year from 70% to 25.”at 44:25