The Stock Market Is Already Pricing In A Democratic Sweep

Markets Price In A Democratic Sweep

Funding and deals

• Meta. Raised $95bn in equity to fund its AI buildout, a deal investors read as a sign the company will keep needing outside money.
• Microsoft. Sold $25bn in bonds to help fund its AI data centers, the only hyperscaler still generating positive free cash flow.

News

• Markets already price in a Democratic sweep. Kalshi puts a blue wave at 82% and a Democratic tsunami at 65-67%. Rents rose 9% in Republican-held battlegrounds against 4% in Democratic ones, and Scott Galloway calls a sweep the base case.
• Microsoft beats as Azure growth hits 48%. Revenue rose 19% and shares jumped 5%. Azure's first disclosure showed 48% growth. Ed Elson says Microsoft is the only hyperscaler with positive free cash flow, though it fell 27%.
• Alphabet sheds $500bn on weak search. Revenue grew 25% but weaker search and advertising plus negative free cash flow sent shares down more than 13%. Scott Galloway calls the 14.6 P/E a buying opportunity, while Ed Elson says Anthropic markups flatter it.
• Hyperscaler AI spending leaves $1.5tn gap. Capital expenditure across five hyperscalers runs near $700bn over twelve months, up 90%, with more than $2tn planned against roughly $1.5tn of cash. Every hyperscaler now has negative free cash flow.
• September inflation hits 3.6% as wages fall. Headline PCE inflation reached 3.6% year over year, the highest since May, with diesel up 77%. Real wages fell 0.7%, a sixth straight monthly decline. The Fed held rates with two dissents.
• Meta pushes 90-minute Instagram video. Instagram brings long-form video and Reels to Apple TV without sharing ad revenue with creators. Ed Elson sees a real threat to YouTube and an indictment of Netflix's $20bn content budget.
• Netflix faces an identity crisis. Average viewing time per member fell 26% over three years and the stock is down 44%. Scott Galloway says the $20bn content budget must be cut and Netflix can never be a niche premium provider.
• NVIDIA backs Meta's debt offering. Scott Galloway calls it the mother of all circular deals, since NVIDIA would sell the chips and help finance the buyer, with some proceeds returning to NVIDIA.
• Microsoft offers buyouts to 60,000 staff. Scott Galloway calls it the buried headline, saying he has never seen a board combine buyouts at that scale with revenue up nearly 20%.
• Apple wins by skipping the AI arms race. Scott Galloway says Apple spent $1bn on VR against Meta's $60bn and killed its car, and will license AI at a 98% gross margin. Ed Elson disagrees and cites the iPhone Duo.