Closing Bell Overtime: Markets End a Wild Week With AI Under Pressure 11/6/26

Anthropic

Across the shows: 108 speakers in other episodes, 134 bullish and 92 bearish calls, past 30 days

• Steven Wieting · CIO GroupBullish

  Anthropic is the AI trade; future AI services are a more interesting story than chips.

  Wieting says the Anthropic IPO matters for showing capital markets still believe in the long-term story. He argues the bigger question is what AI services will become and how they will be used, not whether fiber-optic-style overbuilding happens. He ties this to the wider AI build-out and sees AI services as a bigger opportunity than chips alone.

  “it's so much more the interesting story ... So anthropic is the AI trade.”at 6:17

Microsoft

Across the shows: 41 speakers in other episodes, 49 bullish and 8 bearish calls, past 30 days

• Steven Wieting · CIO GroupBullish

  Hyperscalers' existing compute gains value as financing limits the build-out; Microsoft's cheap debt favors it.

  Wieting says Microsoft's cost of debt is about 10 percentage points below CoreWeave's. Tighter monetary conditions will focus AI spending on work that can be financed rather than everything proposed. The compute already in place among hyperscalers should therefore be worth more if the build-out is limited. He says hyperscalers are performing better, helped by a valuation constraint the market has placed on them.

  “when you take a look at Microsoft's cost of capital, looks to be about... Debt capital is about 10 percentage points below CoreWeave.”at 8:41

Moderna

Across the shows: 5 speakers in other episodes, 3 bullish and 1 bearish calls, past 30 days

• Courtney Breen · BernsteinUncertain

  Moderna's valuation prices in more than the melanoma cancer vaccine's phase three data supports.

  Breen says the stock is driven by the intismeran cancer vaccine, and the willingness to pay reflects hope it works outside melanoma. That broader use has not been shown in data yet. The mRNA platform could also deliver new therapies, and the stock embeds these assumptions. The valuation is not purely a reflection of the melanoma opportunity shown in phase three data.

  “So I think what's baked into the stock is a lot of kind of those assumptions going forward, not necessarily purely just a representation of what the melanoma opportunity...”at 32:06

Eli Lilly and Company

Across the shows: 11 speakers in other episodes, 10 bullish and 2 bearish calls, past 30 days

• Courtney Breen · BernsteinBullish

  Eli Lilly holds a leadership position in obesity and diabetes; the December 7 Capital Markets Day is a catalyst.

  Breen says Lilly leads in obesity and diabetes, now and in the future. Pipeline drugs like retatrutide, orforglipron and amylin appear to cover the competitive angles. The main open question is growth beyond obesity. Lilly's Capital Markets Day on December 7 should clarify that pipeline. Lilly raised its 2026 guidance by about $10 billion, and 2027 still has upside.

  “Eli Lilly is sitting in a really strong position, leadership position when it comes to the obesity market as well as the diabetes market, not just for today, but also for the future.”at 34:39

US Treasuries & yields

• Steven Wieting · CIO Group

  Bonds are preferable to defensive stocks because they can offset losses when the real downturn comes.

  Wieting is more worried about defensive companies like Clorox, which investors buy for safety, because they may have run too far. He would rather hold bonds, which can offset losses when a real downturn arrives. Bonds should rally at that point, so he prefers them over bond-like stocks.

  “I would rather go into the bond market because there you can, in fact, offset, you know, when the real downturn comes. That's where the market's gonna rally.”at 9:48

• Bob Elliott · Unlimited Funds

  Bonds look safer than stocks as growth doubts unwind the high nominal growth pricing at the long end.

  Elliott says bonds looked attractive relative to stocks because growth expectations had become extraordinarily high. The recent bond rally largely reversed a September spike in pricing for strong nominal growth. Yields are still up roughly 60 to 100 basis points over the year, and the front end still prices substantial tightening. As growth becomes more of a question, he expects the tightening expectations and the high nominal growth pricing on the long end to back out, making bonds a safer asset than stocks in this environment.

  “bonds looked attractive at those levels relative to stocks, and that's largely what played out... as growth becomes more of a question in the market, we're likely to see a lot of that tightening expectation, that sort of high nominal growth pricing on the long end start to back out, and, you know, bonds are likely to be, certainly a safer asset than stocks in this sort of environment.”at 40:40

US growth & recession risk

• Mark Zandi · Moody's Analytics

  Economy likely softens next year as higher rates and a weaker stock market bite.

  Zandi says the labor market and general economy will soften because of higher interest rates and a weaker stock market. The S&P 500 has gone nowhere for six months, which should take some steam out of wealth and consumer spending. He expects this to damp the economy and keep future Fed hikes in check. He is less confident about 2027 than about December.

  “My sense is that the labor market and general economy are gonna soften here given the higher interest rates that we're now experiencing in the weaker stock market.”at 12:09

• Bob Elliott · Unlimited Funds

  If AI investment stalls and stock prices fall, the real economy will face a real drag.

  Elliott says the economy is driven by two things: AI-related investment, which supports earnings, and consumers who are saving more in response to weak income growth. Both depend on strong asset prices. Households are highly levered and financialized, especially higher-income households, so a stock market decline could lead them to cut spending. He concludes that an AI investment boom cannot coexist with current asset price levels for long, so falling asset prices would drag on the real economy.

  “You can't have a situation where there's not an AI investment boom, and you still have asset prices at these levels. And if you don't have asset prices at these levels, you're gonna start to create a real drag on the real economy.”at 40:03

AI bubble & tech valuations

• Mark Zandi · Moody's Analytics

  AI market is getting ahead of itself; cooling now lowers the risk of a bigger shakeout.

  Zandi's firm forecasts AI investment, and he says the required assumptions are heroic: strong demand, compute, cost of capital and financing must all line up. Higher valuations combined with higher rates are weighing on AI stocks. He thinks the market is getting ahead of itself. A cooling-off now makes a bigger shakeout less likely, so it could be healthy for the economy and the AI industry in both the near and long run.

  “It still feels like to me the market... The AI market industry is getting ahead of itself. ... you got to make some pretty heroic assumptions about demand and compute and cost of capital”at 14:53

• Bob Elliott · Unlimited Funds

  AI trade valuations and expectations remain extraordinary; the mania is not fully unwound despite the selloff.

  Elliott argues that valuations and expectations built into the AI trade are still relatively extraordinary compared with nine months or a year ago, and that the recent reversal has not unwound the mania. He cites expectations that Nvidia will sell a trillion dollars of chips annually by 2029 and expected earnings growth above 20% year over year as far out as anyone can see. Because those expectations are so demanding, even a modest stall in the AI trade could disappoint.

  “we still have valuations and expectations built into the AI trade that are relatively extraordinary compared to where we were, nine months ago, a year ago. And while there's been some reversal, we have by no means unwound the mania in its entirety.”at 37:22

Pharma & biotech

• Courtney Breen · Bernstein

  Healthcare is a better defensive option than sectors AI could disrupt, backed by innovation.

  Breen says healthcare has re-rated from about 1.5 to 1.7 times forward P/E at the end of last year, then rallied to multiple highs this year. Investors favor it as a defensive option over sectors AI could disrupt. Scientific innovation adds to the appeal, and AI could be a long-run tailwind. Together these make the sector more than just a safe haven.

  “not only is the sector a better defensive option compared to some of your other considerations, kind of these other sectors that could get disrupted by AI”at 33:22

• Courtney Breen · Bernstein

  Drug pricing risk from Democrats is real but not imminent; several supports are policy-agnostic.

  Breen acknowledges a notion that Democrats mean bad outcomes on drug pricing. But the party is not yet in a blue trifecta, so the path to that outcome is not certain. Other dynamics supporting the industry do not depend on drug pricing policy, which is only part of the story.

  “there is a notion that democrats equal bad outcomes on drug pricing for the industry. First, we're not necessarily in a blue trifecta yet, so there's a path to get there.”at 33:55

AI infrastructure & data centers

• Steven Wieting · CIO Group

  Election won't cut tech hardware spending next year; semiconductor earnings growth should drive a recovery.

  Wieting argues that Tuesday's election will not reduce tech hardware spending next year. He cites 100% growth in construction orders and 48% growth next year for companies with reasonable cost of debt. Semiconductors are up about 2% over the past twelve months while earnings are up 135%. If semiconductor EPS grows in the sixties next year, he thinks it is ridiculous to expect them not to participate in some recovery. He sees the build-out as a once-in-a-generation investment that is still continuing and has not peaked, though he is less certain further out.

  “I think the shorter term story is Tuesday's election isn't gonna mean that tech hardware spending falls next year.”at 5:08

Cybersecurity

• Steven Wieting · CIO Group

  Wieting's firm is in love with cybersecurity and favors software over semiconductors.

  Wieting says his firm has been more focused on software for a long time and is in love with cybersecurity, given what AI means for it for good or bad. He is a little worried about semiconductors. He positions the firm toward software and cybersecurity rather than chips, and says technology still offers opportunities for investors.

  “So we've been for a long time really more focused on software. We're in love with cybersecurity ... and what AI means for that, for good or bad”at 7:07

Consumer & retail

• Steven Wieting · CIO Group

  Consumer staples rallied too far, with 20% returns on 5% EPS growth; defensive trades may be overdone.

  Wieting says staples returned about 20% on about 5% EPS growth, so defensive trades have moved too far. He is more worried about companies like Clorox, which investors go to for safety. Their rally looks stretched relative to earnings growth, so he would rather hold bonds than these stocks.

  “we just had Staples have a 20% return on 5% EPS growth. So some of the defensive trades that we naturally look at, you know, again, they've also moved in the other direction, maybe a little too much.”at 7:39

US jobs & labor market

• Mark Zandi · Moody's Analytics

  October jobs report was solid, with enough hiring to hold unemployment low, though noisy.

  Zandi calls the October jobs report surprisingly solid and says it makes a strong case that the labor market is in good shape. Job creation is at least enough to hold unemployment low and labor force participation steady, which is close to full employment. He warns the report is noisy and overstates strength. Last month's numbers were very weak and this month's very strong, so the truth is somewhere in between.

  “Well, Mike, it was a really solid report. ... it's making a pretty strong case that the labor market's in pretty good shape.”at 10:48

US rates & the Fed

• Mark Zandi · Moody's Analytics

  Fed very likely hikes in December; one or two more hikes possible in 2027.

  Zandi says Fed members are still nervous about elevated inflation. The strong jobs report and a likely soft core CPI print give the Fed room to raise rates. He sees a very high probability of a December hike. He is less sure about 2027: higher rates and a weaker stock market should soften the economy. If the Iran situation helps inflation fall, this could be the last hike, otherwise one or two more in 2027.

  “I think there's very high probability they hike in December.”at 11:47

US housing

• Mark Zandi · Moody's Analytics

  Mortgage rates above 7% have frozen the housing market; rate-sensitive sectors are hit hard.

  Zandi says fixed mortgage rates above 7% have done a number on housing. The market was in a deep freeze before that and is now frozen solid. Commercial real estate and anything else sensitive to interest rates is taking a hit. This is one way the market has tightened financial conditions in response to Fed policy.

  “fixed mortgage rates over 7% has really done a number on the housing market. ... Commercial real estate, anything interest rate sensitive is really taking it on the chin.”at 13:08

US inflation

• Mark Zandi · Moody's Analytics

  AI boom is adding about 0.3 points to consumer inflation via electricity and chips.

  Zandi cites the consumer expenditure deflator, which is up about 0.3 percentage points year over year because of AI. The AI boom has boosted growth through capex and wealth effects from higher stock prices. That spending pushes up electricity prices, chip prices and consumer electronics costs. If AI cools, inflation pressure eases and the Fed needs fewer rate hikes.

  “if you look at consumer expenditure deflator inflation, it's up about a quarter point three tenths of a percent above a year ago because of AI. That goes to electricity, that goes to chips”at 14:29

Power demand & the grid

• Pippa Stevens · CNBC

  Data center power queues are inflated, but data centers will still be built out, including in Texas.

  Stevens explains that developers join several utility queues for the same project, so 'phantom load' overstates demand. Utilities report a 1,040 GW data center backlog, but Wood Mackenzie finds fewer than 30% of those projects are high confidence. Texas's 474 GW queue, 90% data centers, is more than five times the state's all-time peak. Utilities are tightening criteria as a result. She still expects many more data centers to be built, with the risk being community backlash over speed and benefits.

  “There's no question that we are going to see many more built out, including in Texas.”at 26:37