Bloomberg Surveillance TV: November 10th, 2026

0:00Dr. Amrita Sen: If you invest or lead a business, one-sided views aren't enough. Join me, Brad Rogoff, and my team at Barclays Research as we debate what's driving markets on the Flipside podcast. Find the Flipside wherever you get your podcasts. When you own your own business, you need to keep things moving. Need to book a last-minute flight? Earn a$300 travel credit to cover that. Need to take a meeting before takeoff? Do it from the comfort of the Chase Sapphire Lounge by the club. Need to catch your breath before you board? Done. Chase Sapphire Reserve for Business. The business card that gives back all you put in.

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0:47Cameron Dawson: Bloomberg Audio Studios. Podcasts. Radio. News.

0:56Dr. Amrita Sen: This is the Bloomberg Surveillance Podcast. I'm Jonathan Farrow, along with Lisa Abramowitz and Anne-Marie Hordern. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9 a.m. Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App.

1:20Cameron Dawson: We begin this hour with stocks treading water ahead of another round of tech earnings and a fresh CPI print. Cameron Dawson of New Edge Wealth writing, The market is poised for a rebound and likely still has room to recover thanks to valuations, positioning and seasonality. Cameron joins us now for more. Cameron, it seems like it's been kind of a whirlwind and it's not coming down. I just wonder how you see people getting ahead of the whirlwind to get confidence to really go back in in a significant way.

1:49Tiffany Wilding: I think the biggest support for this market is the fact that people have lost faith in the market. The fact that if you look at positioning, it's fallen now to the 20th percentile in something like the Deutsche Bank Consolidated Positioning Survey, which means that this volatility has been responded to with people exiting the market, not just rotating within. So if we see typical seasonality, which of course tends to be right now that we see it pull markets higher, you have people sitting on the sidelines that potentially have to chase in, and you've taken a lot of room out of valuations of this market.

2:22Tiffany Wilding: Valuations are down 30 % year over year. So it doesn't mean that we need to see valuations expand back up to prior highs. It just means that there's room for a little bit of relief rally if sentiment improves even just slightly.

2:34Cameron Dawson: How important is the Anthropic IPO to really signal just how amenable investors are to welcoming in some of these tech behemoths?

2:42Tiffany Wilding: I think we have to think about it in two parts, which is the first part is Anthropic is important for overall sentiment and the acceptance and the continuation of the AI trade. But then we have to think a bit from the perspective of its ability to continue to drive earnings for hyperscalers as well as the semiconductor trade. Because remember that Anthropic's revenue growth and the cost to serve that revenue growth is effectively driving the cloud revenues at the hyperscalers. hyperscalers. The cloud revenues at the hyperscalers are then driving the massive earnings growth at the semiconductor companies, which are up 120 % this year, expected to grow another 50 % next year.

3:19Tiffany Wilding: So if we start to ask questions about Anthropics revenue growth projections, that means that we ask questions about hyperscaler cloud revenue projections, which means that we have to ask questions about semiconductor earnings projections as we go into 27. How do you know if we're going to peak when it comes to earnings? Well, look, I think that if we look at the semiconductors, we've been really interested in the valuations there. You're trading at about 14 and a half times earnings. 14 times is where we peaked in earnings back in 2018 and 2022. So you put the lowest valuation on the highest earnings.

3:53Tiffany Wilding: And so effectively, the market is starting to say, hey, we think that there's a higher probability that 27 or early 28 is the peak for semiconductor earnings. The problem that you have is that if If you look at overall earnings estimates from the sell side, they have earnings growing in 27, 28. And by the time we get to 29, over$1 ,000 a share for SOX estimates, which is more than double where we sit today. So the sell side is saying no way, no how. There's no slowdown in sight coming to semiconductor earnings. But if you look at the valuations, semiconductors are effectively pricing in that 2027 or early 28s peak.

4:28Tiffany Wilding: Both of those cannot be right at the same time. To Lisa's point about Anthropic, when that first email was released, according to Reuters,

4:36Dr. Amrita Sen: actually the earnings per share or the IPO price was a wider, higher range. The top was$80. Now they're saying it's$78 per share.

4:45Tiffany Wilding: Is this a problem, how messy this has been? I saw it on X, somebody saying that maybe it was AI Slop that did the first release. Look, to have the biggest IPO in history, one of the biggest IPOs in history, have such communication problems isn't necessarily encouraging. But I think it is more about, you know, effectively the acceptance of that price range, if we're getting that. It's still a huge valuation for a company that generated$33 billion of revenue in the first nine months of this year. So clearly there still is this reach of a very high valuation of$1.1,$1.2 trillion, even if that's down from the$1.4, 1.6 trillion that was being floated earlier.

5:26Cameron Dawson: Originally, it was two, right? Yeah. I mean, well, we've been coming down, and it was supposed to be the world's biggest IPO. Now we're talking about SpaceX at a$1.8 trillion valuation when an IPO is potentially the biggest. How much is this all predicated on a friendly Fed and a Fed that doesn't hike rates by 50 basis points in December?

5:40Tiffany Wilding: That is a really important point, because does the Fed think that tightening financial conditions, tightening financial conditions implies higher equity volatility, lower equity valuations, wider credit spreads, all things that typically are not very amenable to a healthy IPO market. But if the Fed says we think financial conditions need to tighten in order to get inflation back to 2%, it means that we should expect this continued volatility and expect continue underperformance of recently IPO names, which we have certainly seen. Now, if the Fed says, look, we don't want financial conditions to tighten too much, it certainly sounded like there were some wobbles in the expectations for Fed tightening because of the tightening we saw back in September, October.

6:23Tiffany Wilding: If they don't want financial conditions to tighten too much, we think it's effectively the messaging that we really, really hope that an exogenous shock to prices will come with an exogenous solution, meaning that the war will end and oil prices will fall.

6:35Cameron Dawson: Yeah, I just wonder how offsides this market is to the potential that this Fed actually gets a lot more aggressive. Because after the last press conference, people were saying, OK, this Fed isn't going to hike that much. We saw hotter than expected data, and they remained on the sidelines for October. We priced out an entire rate hike. We priced out expectations longer term of just how aggressive they would be. Now we're hearing not only from Chris Waller, but also Tom Barkin, Austin Goolsbee yesterday, saying that there has been an inflation-side failure by the Federal Reserve that they need to come in and target.

7:06Cameron Dawson: And of course, Beth Hammock, the sort of representative hawk.

7:10Tiffany Wilding: I mean, how do you interpret this? I think the thing to watch is on the wages side of things, that's effectively given the Fed the ability to say, yes, we will look through every single successive supply shock that we have because it has not metastasized or been embedded into the rest of the economy because overall wage growth has effectively remained below the inflation rate. But if you look at the non-farm payrolls that we got last week, wages did come in a little bit hotter than expected at 3.1%. The street was expecting 2.9%. Remember, wages are lagging. So if we start to see an environment where the recent price increases start to filter into wages, it does suggest that the Fed has more work to do.

7:49Dr. Amrita Sen: Stay with us. More Bloomberg surveillance coming up after this.

7:57Dr. Amrita Sen: If you invest or lead a business, one-sided views aren't enough. Join me, Brad Rogoff, and my team at Barclays Research as we debate what's driving markets on the Flipside podcast. Find the Flipside wherever you get your podcasts.

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9:17Cameron Dawson: In the backdrop has been the price of oil, which has been potentially either a headwind or a tailwind, depending on the week. Right now, it's more of a tailwind, with crude dropping below$90 for the first time since August. As President Donald Trump signals Iran diplomacy is within reach.

9:31Tiffany Wilding: The military action doesn't seem to be a very necessary thing, but we're locked and loaded, ready to go for any reason that changes. We're seeing momentum toward the end of this conflict. I think it's going to be ending fairly soon.

9:45Cameron Dawson: Amrita Sun of Energy Aspects writing, it's unclear why Iran would offer new concessions given the political climate in Washington. Diplomatic impasse could persist for some time. Amrita joins us now for more. Amrita, thank you so much for being with us. What does the new normal look like in that scenario?

10:02Dr. Amrita Sen: I think you guys were talking about this already, right? Yes, we do think immediate chances of an attack or an escalation has definitely eased a little bit for sure. But that doesn't mean the status quo is changing. And I think that's the bit I do feel the market had started to price in a definitive deal. That hasn't shifted. And the impasse is really around there are demands that Iran has made, particularly around frozen funds, whether it's about the nuclear enrichment. And clearly, and you saw that from what President Trump said yesterday, those are not conditions the U.S. is willing to accept.

10:42Dr. Amrita Sen: And I think that's why the current status quo, where yes, oil is getting out, but at what cost? You know, freight still remains extremely high. You're still doing ship to ship. None of that changes. And by the way, attacks on ships also continue. And Rita, at this price, with WTI around$85 a barrel and Brent at$91, how much geopolitical risk is actually priced in? Or have we erased it all in the past 48 hours? I would say we have erased it all. I mean, probably not just the 48 hours, pretty much ever since the midterm elections came out. Obviously, the market had positioned itself and you saw it like in our quant data.

11:16Dr. Amrita Sen: We saw it heavily in the options market. People were positioning for an imminent strike. When that didn't happen, you definitely started to see the sell off. I think what's been interesting to note is because of the way the midterm elections played out, the market is now sanguine that the war will end no matter what. from the U.S. side because it's not just the Democrats, but also the Republicans don't want the war to continue. And I think that's where the little bit of a mismatch is that not saying there's escalation, but that doesn't also mean there is a deal. I think the current status quo of what I would call a stalemate can continue for longer.

11:51Dr. Amrita Sen: We've heard time and time again that the tightness in this market is really under the hood when it comes to jet fuel, diesel, gasoline. But this morning, a welcome depreciation when it comes to gasoline across the United States, a little bit of pressure coming off at the pump in terms of lower than$4 a gallon. How is that happening? Gasoline of all the products, particularly the clean products, I would say, is the weakest because it's also winter. Remember, we have summer winter gasoline spec, so we always do get that seasonal correction. I wouldn't put too much into it in terms of the price that's fallen.

12:28Dr. Amrita Sen: Winter gasoline requires very different spec to summer gasoline. you should still look at the year-on-year increases or changes. So I do think that's worth considering. Having said that, gasoline stocks are building. They do build this time of the year. And the thing what's happened is the diesel tightness has meant that every refinery, wherever possible, is running as hard as possible. And most of the refineries that are running tend to produce more gasoline. And that's why we are building in stocks. Our winter outlook is pretty bearish for gasoline. The problem we have is we're storing up potentially a very tight summer next year because, you know, we're not storing enough of the summer material.

13:05Dr. Amrita Sen: Diesel tightness, as you just showed on the prices, hasn't really eased off and we're not expecting that to ease off. Stay with us. More Bloomberg Surveillance coming up after this.

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14:52Cameron Dawson: Earlier this morning, Governor Chris Waller said that if core inflation, core CPI inflation came in around 0.3 percent or even higher, that a strong policy move might be needed, including a 50 basis point rate hike. Core CPI month over month AMH, 0.3 percent.

15:11Dr. Amrita Sen: It's hitting the threshold that Governor Chris Waller just laid out hours ago when it comes to why you would have to think about potentially opening that door to 50 basis points in December, not even just relying on the regular 25 basis point hike when you have both core and regular CPI coming in once again hotter than expected.

15:31Cameron Dawson: Yeah, and as you would expect, you are seeing dollar strength, the euro falling versus the dollar 112 on that euro dollar cross. Tiffany Wilding of PIMCO joins us now as we get these figures. Tiffany, what's your sense of just how realistic it is for this Federal Reserve to hike rates by 50 basis points following a hotter than expected CPI print? Well, clearly the discussion from Chris Waller that came out this morning puts that squarely on the table. They will be discussing it. You know, I think after they paused at the October meeting, you know, I think his concern might be after this report that, you know, that maybe they need to pick up the pace here a little bit.

16:15Cameron Dawson: You know, but nevertheless, you know, I think if you look at, you know, the Fed's own Taylor rules and things like that, they don't look, you know, obviously behind the curve like they did in 2022, you know, obviously when they needed to, you know, embark on a more prolonged hiking cycle. You know, so we, you know, we want to look at the details of today's report, of course, like everyone else, you know, but we still think that, you know, some recalibration here makes a lot of sense. You know, certainly taking the, excuse me, the cuts that they did last year, taking those back, hiking, you know, maybe a total of three times here, see what happens, see how how financial conditions are reacting and tightening more broadly.

16:58Cameron Dawson: We think they still have room to kind of look and see how the data is coming in. But again, nevertheless, clearly, the 50 basis points is now on the table for discussion as a result of Chris Waller. Do you think that a 50 basis point rate hike, given that inflation is sticky around that 0.3 figure for core CPI month over month, same as last month, do you think that that would actually cut off economic momentum in a serious way? Or do you think that it could be accepted within markets as just removing some of the accommodation given last year? Well, I mean, I think you have to think about it relative to what's priced in.

17:38Cameron Dawson: So the markets right now, they are pricing in a couple of more interest rate hikes. I think at a minimum, the Fed wants to deliver that so they don't have an unintended easing of financial conditions. The Fed needs to keep financial conditions tight here so you don't get what should be one-off adjustments in inflation that are broadening out and becoming more persistent. So I think they have a tricky job. They want to keep financial conditions from moderating, from easing. But nevertheless, I think they want to kind of gradually go here to see how their policy is impacting broader markets.

18:17Dr. Amrita Sen: So do you think that potentially the Fed didn't make a mistake in terms of letting October be a pause if they want to move gradually and collect more of the information? Because as Lisa just said, this is the third straight month in a row that you have core coming in at three tenths of a percent. And now it's meeting this threshold that Waller mapped out to potentially have a 50 basis point cut hike in December. They could have just had 25 and 25 October and December together.

18:45Cameron Dawson: Yeah, yeah. I mean, I think that's right. I mean, they clearly are, you know, they are taking the data in as it comes. They are assessing how things are evolving in the economy, and then they're reacting. And that's exactly what they said they were going to do. You know, I think if they did do 50, you know, they would do it because they saw reasonable risk that you could get some broadening out in inflation. You know, now, keep in mind, I mean, I think some pass-through of the higher energy prices that we've seen this year into a broader range of core goods prices, you know, is something that, you know, we've all been expecting.

19:21Cameron Dawson: You know, I think that is very much likely to be putting some upward pressure on inflation here. That should be a one-off adjustment. But again, you know, I think the Fed is wanting to make sure that that one-off adjustment, you know, doesn't become more broad-based. And we are seeing demand in the U.S. economy that is quite strong. I mean, if you look at third quarter, final domestic demand growth, United States above 3 percent, again, quite strong. We think that probably cools coming into the fourth quarter and early next year. But nevertheless, with inflation, that is sticky and demand that's strong in the economy, and the Fed is going to want to react to that.

20:01Cameron Dawson: Michael McKee is still with us as we get this data, 0.4 percent headline on CPI month over months, 0.3 % on core. Mike, you've been looking through the details. What else stands out to you?

20:13Dr. Amrita Sen: Well, a lot of these numbers are not very good, Lisa, because we've seen a lot of categories go up and they went up by a significant amount. The food numbers up a half a percent for food and four tenths for the food at home category. Gasoline prices, not as much as they had been going up, but they're still going up a solid 1%. And other motor fuels, 2.7%, that's diesel. And we know that's been a problem. That's still up. Now, we see this hitting electricity prices up 9 tenths of a percent during the month, a significant gain over the prior month. We're looking at toys up 1.8%. That's a gain over the prior month.

20:54Dr. Amrita Sen: That's tariff related. And then looking at housing, rent, and owner's equivalent rent up three-tenths on the month, lodging away from home up three-tenths on the month, and that's an increase. Medical care services were up six-tenths. Motor vehicle insurance up seven-tenths. So a lot of these areas where the Fed has been watching to see what is happening are showing some significant increases. And I'll point to intercity transportation. These are buses and subways up 6.6%. So we are seeing second round effects from the rise in energy prices starting to diffuse through the economy. Delivery services, your UPS and your FedEx up 1.8 percent.

21:36Dr. Amrita Sen: So that's something for the Fed to worry about. And then the Supercore, which Chris Waller mentioned specifically, which is services ex-housing, that was up a high five tenths percent on the month. So a lot of things also that feed into the PCE were up during this month. And we'll see Friday when we get the PPI numbers. But it doesn't look like PCE at the end of the month is going to provide the Fed any good news.

22:02Cameron Dawson: Michael McKee, great work as always. Thank you very much for that. Tiffany Wilding of PIMCO is still with us. What do you make of the second round effects that Mike just went through, the fact that higher oil prices working their way through the broader economy? Yeah, I mean, we absolutely think that is right. And the longer you have energy prices that are remaining elevated, it's just the more that companies actually have to pass through. It's no longer a temporary energy shock that they can absorb within margins. They are starting to pass that through. And clearly, we saw that first with airfare prices.

22:38Cameron Dawson: They are very flexible, the fastest to adjust. And now, as Mike suggested, maybe we're seeing that broaden out within inner city transport and stuff like that. But I think the bigger news is just the broadening strength across core goods categories. They all look firmer than expected. We also have to remember that Amazon had a prime day discounting promotions in October, which tends to put some downward pressure on these kinds of prices. And we just didn't see that in today's data. And I think what that tells us, given how broad it was across core goods, that you are seeing companies that are passing through higher energy prices and diesel, higher shipping costs and things like that onto the consumer across a wide range of core goods.

23:27Cameron Dawson: You know, and of course, I don't think that's unreasonable or surprising. But again, what the Federal Reserve wants to do is they want to make sure that this doesn't broaden out and create more persistent inflation across the economy. So they want to get a handle on this. You know, they don't like what they're seeing clearly from today's report.

23:45Dr. Amrita Sen: This is the Bloomberg Surveillance Podcast, bringing you the best in markets, economics and geopolitics. You can watch the show live on Bloomberg TV weekday mornings from 6 a.m. to 9 a.m. Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always on the Bloomberg Terminal and the Bloomberg Business App.

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