11AM Hour: Stocks Rally After Midterm Elections, Circle CEO on Earnings & CVS to Split Up 11/4/26

Breaking news correspondent Megan Casella reported that Vice President J.D. Vance said Republicans lost because of the Iran war, arguing that losing the Senate for six years would be the price of continuing it. President Trump instead told Fox News that voters objected mainly to higher gasoline prices, not the war itself. Vance said Republican turnout was strong but that some 2024 Trump-Vance voters switched to Democrats, and he identified ending the war, addressing inflation, putting America first and changing the U.S.-Israel relationship as ways to win them back. The hosts and Casella noted exit polls also cited corruption, tariffs and immigration enforcement.

Mackenzie Sigalos reported that Democrats’ wins create a tougher Washington environment for technology companies. Progressive Caucus Chair Greg Casar said he would put AI CEOs under oath, while the likely House oversight chair posted “lawyer up.” Elon Musk spent nearly $500 million on the midterms and lost both major Texas races, challenging the assumption that Texas remains a uniformly friendly destination for tech. Voters considered 41 data-center measures in 10 states; 39 passed restrictions, including an Ohio vote blocking a facility already under construction. Democrats who campaigned against new projects won in Ohio, Texas, Wisconsin, Michigan and Georgia.

Sigalos said smaller “neocloud” companies that borrowed against GPUs are most exposed if data-center projects are delayed, while hyperscalers have held up better because the AI trade had already sold off. Amazon and Google have decades of local relationships, permitted capacity and grid connections, and many projects are locked in through 2028. Texas’s separate ERCOT grid still faces a December decision about who can continue connecting, while Google’s power chief said new zoning decisions matter more two or three years out. BMO analyst Harsh Kumar later agreed that projects planned for 2027 and much of 2028 are effectively committed, with companies able to place inference capacity abroad if U.S. regulation tightens.

Leslie Picker said bank stocks were rallying because decisive election results removed some political uncertainty, though Citi described the outlook as “mixed but manageable.” Existing regulators are expected to remain, so capital requirements, supervision and stress-testing plans should continue, perhaps more slowly. TD Cowen said losing Republican control changes the direction of travel by reducing bank-friendly policies and increasing uncertainty. Potential issues include more congressional testimony for bank CEOs, a cap on credit-card rates, limits on buybacks and scrutiny of banks financing AI infrastructure. Private-credit and nonbank lenders may avoid immediate regulatory disruption, but rates, yields, financing costs and credit quality remain important risks.

Lazard CIO Eric von Nostrand argued that markets have shifted from demand management toward supply-side constraints, including tariffs, energy policy, sanctions, geopolitical risk and the AI productivity shock. The election reduces the risk of contested results, but most supply-side tools remain in the White House, so short-term market themes change little. He said investors should no longer dismiss supply shocks as isolated events: recurring energy and food disruptions make future shocks more likely. Von Nostrand expects the Federal Reserve to lean tighter because oil inflation may persist beyond what markets price, with food-price pass-through an especially salient risk. Higher rates would slow growth as a second-order effect.

Circle CEO Jeremy Allaire said the company’s digital-dollar business is global and has worked with political leaders for nearly 14 years, so “Circle is purple.” He cited the Genius Act, which he called the only major bipartisan legislation passed by the Congress, with near-supermajority Senate support and overwhelming House support. Allaire said both parties care about stablecoin infrastructure and Circle will keep working with policymakers. He acknowledged Republicans have generally emphasized industry-compatible regulation, but argued that banks, payments companies, technology firms and capital markets now have reasons to support the technology regardless of party.

Allaire said Circle’s expanded five-year Binance partnership reaches customers in emerging markets, where digital-dollar demand is high, and that deposits were returning to Binance. He distinguished the situation from the FTX collapse, but warned that AI-driven cyberattacks are accelerating across all infrastructure. Circle’s ability to freeze and seize assets gives USDC tools unavailable in correspondent banking, he said. Circle’s new institutional blockchain, Arc, had about $1.5 billion of assets, $30 billion in USDC volume and roughly 500,000 daily transactions weeks after launch. Circle reported 85% year-over-year adjusted-EBITDA growth, a 70% margin, $208 billion in USDC minting and redemptions, and $58 billion in annualized Circle Payment Network volume.

BMO analyst Harsh Kumar called the chip selloff a “head-scratcher,” saying data-center regulation could create delays but the facilities generate jobs, investment and productivity benefits for states. He expects the next one or two years of construction to remain largely fixed because projects take years to plan. If AI slowed, high-bandwidth memory supply would improve and regular memory prices could fall, helping PCs, but he sees no slowdown: Broadcom, Marvell, AMD and Nvidia have all described demand extending into 2027 or later. Kumar preferred AMD to memory-chip makers, citing Lisa Su’s forecast of roughly 100% server growth, more than 100% GPU growth and about 80% company growth.

J.P. Morgan analyst Lisa Gill said Democrats could pursue more legislation affecting Medicare Advantage, while Medicaid and exchange-related companies hope for restored subsidies or reversed work requirements. She said the Senate majority lacks a veto-proof supermajority, making major changes difficult. Drug-policy questions include expanding or codifying Inflation Reduction Act pricing, which could lower costs for patients but hurt physician practices reimbursed under the current average-sale-price-plus-6 model. Humana and UnitedHealth fell on Medicare Advantage concerns, while Centene, Molina and Elevance rose because of Medicaid exposure. Gill also warned that even unsuccessful “Medicare for all” rhetoric could pressure insurers’ stocks.

Gill defended CVS’s plan to split into two companies, saying the move comes from strength rather than distress. She argued that CVS’s pharmacy-benefit-management business, with more than 28% market share, could operate more independently and compete on a more equal footing with independent pharmacies amid legislation driven by those pharmacies. She compared CVS’s valuation—below 10 times earnings in the discussion—with UnitedHealth at 17 times and Elevance at 14 times, calling the separation a potential long-term opportunity. The transcript does not include a detailed management presentation of the split, only Gill’s explanation of why investors may ultimately view the restructuring favorably.

Contessa Brewer reported that Flutter, parent of FanDuel, missed estimates for earnings, revenue and EBITDA but traded higher as investors focused on new leadership, possible restrictions on sports prediction markets and Democratic gains at the state level. CEO Dan Taylor said half of the United States still lacks regulated sports betting and 90% lacks regulated online gaming, leaving a large expansion opportunity. FanDuel’s average monthly U.S. players rose 12% year over year, while prediction-platform trading volume tripled from July. The company increased promotions, paused buybacks and cut its full-year outlook, with Taylor prioritizing debt reduction over the next two years.