Three developments stand out in today’s economic and financial news.
First, Jensen Huang has resigned as CEO of Nvidia, ending more than three decades of leadership at one of the world’s most important technology companies. Chief Financial Officer Colette Kress has been appointed interim CEO.
The departure creates uncertainty at a company central to America’s AI industry and technological competition with China.
Second, Nebius reported extraordinary third-quarter revenue growth of 571%, but its shares plunged nearly 17%. The company lowered its near-term revenue expectations because of data center capacity delays while outlining plans for $40 billion to $45 billion in capital expenditure during 2027.
Third, the US housing market weakened substantially. Existing-home sales declined to their lowest level since 2010, providing further evidence that high borrowing costs are restraining interest-sensitive economic activity.
Meanwhile, Cisco reported record profits and strong demand for AI networking equipment, oil prices rebounded amid renewed tensions involving Iran, and Treasury yields remained above 5%.
The emerging economic picture is increasingly uneven: AI-related investment continues expanding rapidly while higher interest rates weigh on housing and other credit-sensitive sectors.
Table of Contents
- Nvidia Confirms Jensen Huang’s Resignation
- Wall Street Declines as Treasury Yields Rise
- Nebius Revenue Surges but Shares Plunge
- Cisco Reports Exceptional Earnings Growth
- US Existing-Home Sales Reach a 16-Year Low
- US Jobless Claims Remain Historically Low
- Today’s Producer Price Index Report
- Oil Prices Rebound as Iran Tensions Increase
- China, Taiwan, and Semiconductor Security
- Defense Spending and the War in Ukraine
- UK Economic Growth Accelerates
- US Credit and Liquidity
- S&P 500 Consensus Earnings Growth
- What to Watch Next
- Macro Watch Bottom Line
1. Nvidia Confirms Jensen Huang’s Resignation
Nvidia announced on November 12 that Jensen Huang had resigned as president, chief executive officer, and a member of its board.
Chief Financial Officer Colette Kress has been appointed interim CEO while the company searches for a permanent successor.
Kress will also retain her position as CFO during the transition.
Harvey C. Jones has become chairman of the board.
Why This Matters
Huang co-founded Nvidia in 1993 and led its transformation from a graphics processor manufacturer into the dominant supplier of advanced processors used in artificial intelligence.
His leadership has been exceptionally important to Nvidia’s technology strategy, customer relationships, product development, and interactions with the US government.
A sudden departure raises questions about management succession, strategic continuity, and customer confidence.
However, Nvidia retains substantial technological advantages.
Its CUDA software ecosystem, engineering capabilities, advanced processors, and extensive customer relationships are not dependent entirely on one individual.
Kress has also played an important role in Nvidia’s financial management for more than a decade.
The Market Reaction
Nvidia shares declined approximately 4.3% on Thursday.
Investors are assessing whether the leadership transition could disrupt product development, commercial relationships, or strategic partnerships.
The company’s upcoming earnings announcement will be an important opportunity for management to address those concerns.
Nvidia and US-China Relations
The leadership change follows controversy involving Huang’s personal relationships and allegations concerning possible Chinese intelligence activity.
Those allegations should be distinguished from established wrongdoing. Nvidia’s announcement did not establish that Huang had committed espionage or violated semiconductor export restrictions.
Nevertheless, the controversy has intensified political interest in Nvidia’s relationships with Chinese customers.
Congressional scrutiny of advanced semiconductor exports could increase.
The principal risk is that Nvidia’s leadership transition coincides with a period of increasing regulatory and geopolitical uncertainty surrounding the global AI semiconductor industry.
Official announcement: https://nvidianews.nvidia.com/news/nvidia-announces-ceo-transition/
2. Wall Street Declines as Treasury Yields Rise
US financial markets declined Thursday following Wednesday’s recovery.
US Stock Market — November 12
| Index | Closing Level | Daily Change |
|---|---|---|
| S&P 500 | 7,592.40 | −0.35% |
| Nasdaq Composite | 25,366.09 | −0.39% |
| Dow Jones Industrial Average | 52,297.09 | −0.36% |
| Russell 2000 | 2,799.06 | −1.7% |
The Russell 2000’s particularly weak performance suggests that smaller companies may be more vulnerable to tighter financial conditions.
Treasury Yields
| Treasury Security | Thursday Yield |
|---|---|
| Two-year Treasury | 4.862% |
| Ten-year Treasury | 5.102% |
The ten-year yield remained above 5%, an important threshold for mortgage rates, corporate borrowing costs, and equity valuations.
Markets continued expecting another Federal Reserve interest-rate increase in December.
The precise probabilities are changing as investors reassess inflation and economic growth.
Implications for Financial Markets
Higher Treasury yields increase borrowing costs throughout the economy.
They also raise the returns investors can earn on relatively low-risk government securities.
That can reduce the attractiveness of riskier corporate bonds and equities.
The consequences are particularly important for highly leveraged companies undertaking capital-intensive investment programs.
The combination of higher Treasury yields and enormous AI infrastructure financing requirements could become an increasingly important factor shaping financial markets in 2027.
3. Nebius Revenue Surges but Shares Plunge
Nebius reported extraordinary third-quarter revenue growth.
The company provides specialized cloud computing infrastructure for AI developers and major technology customers.
Its results demonstrate both the strength of demand for AI computing and the difficulty of expanding infrastructure quickly enough to meet that demand.
Nebius — Third-Quarter Results
| Indicator | Q3 2025 | Q3 2026 | YoY Change |
|---|---|---|---|
| Revenue | $146.1 million | $980.8 million | +571% |
| Net income/loss from continuing operations | −$119.6 million | −$37.5 million | Loss narrowed approximately 69% |
| Adjusted EBITDA | −$5.2 million | $465.8 million | Turned positive |
Revenue increased almost sevenfold.
The company also substantially reduced its net loss from continuing operations.
Nevertheless, its shares declined approximately 16.8%.
Why Did the Stock Fall?
The principal concern was not weak demand.
Nebius reduced its near-term revenue outlook because of delays in obtaining third-party data center capacity.
Some computing facilities expected to become operational during 2026 will instead begin generating revenue during 2027.
Management says demand continues to exceed available capacity.
However, the delays demonstrate how difficult it can be to convert customer contracts and infrastructure plans into actual revenue.
Nebius’s Capital Expenditure Plans
| Indicator | Management Outlook |
|---|---|
| 2026 revenue | Approximately $3.0 billion, at the low end of its previous $3.0–$3.4 billion guidance |
| 2027 revenue | $12–$13 billion |
| 2027 capital expenditure | $40–$45 billion |
| Expected share of 2027 capex covered by customer prepayments and investment-grade asset-backed financing | 75%–85% |
These are extraordinary capital expenditure requirements relative to Nebius’s current revenue.
The company expects to finance much of this investment through customer prepayments and asset-backed financing.
However, even when financing is available, infrastructure must still be constructed, equipped, connected to electricity supplies, and brought into operation.
Why This Matters for the Economy
Nebius’s planned expenditures support demand for data center construction, advanced semiconductors, electrical equipment, and power infrastructure.
But a delay in bringing facilities online can shift capital expenditure and revenue from one period to another.
That can affect the timing of business fixed investment and GDP growth.
Nebius demonstrates that financing availability and physical execution are separate constraints on the AI infrastructure boom.
Strong customer demand does not automatically eliminate construction delays, electricity limitations, or the financial risks associated with enormous investment commitments.
4. Cisco Reports Exceptional Earnings Growth
Cisco reported exceptionally strong results for its first quarter of fiscal 2027.
The company manufactures networking equipment used in corporate communications, data centers, and AI computing infrastructure.
Cisco — Fiscal First-Quarter Results
| Indicator | Q1 FY2026 | Q1 FY2027 | YoY Change |
|---|---|---|---|
| Revenue | $14.9 billion | $18.5 billion | +24% |
| GAAP net income | $2.9 billion | $4.6 billion | +59% |
| GAAP earnings per share | $0.72 | $1.14 | +58% |
| Operating cash flow | $3.2 billion | $4.4 billion | +36% |
Revenue and profits both reached records.
Networking revenue increased 43%.
Cisco also raised its expected fiscal 2027 revenue to between $74.8 billion and $75.8 billion.
Management now expects approximately $9 billion in AI infrastructure revenue from hyperscaler customers during fiscal 2027, more than double the previous year’s total.
Why These Results Matter
AI data centers require high-speed networking equipment to connect processors, memory, and storage systems.
As AI computing infrastructure expands, demand for this equipment is rising rapidly.
Cisco is benefiting from that investment while generating substantial cash flow.
This makes its financial position different from that of specialized AI infrastructure providers such as Nebius and CoreWeave.
Cisco can finance much of its expansion internally.
By contrast, infrastructure providers undertaking enormous construction programs often require substantial external financing.
Cisco’s results illustrate how established technology suppliers can benefit from the AI investment cycle without taking on the same financial risks as companies constructing the underlying infrastructure.
Official earnings release: https://investor.cisco.com/news/news-details/2026/CISCO-REPORTS-FIRST-QUARTER-EARNINGS/default.aspx
5. US Existing-Home Sales Reach a 16-Year Low
The National Association of Realtors reported that existing-home sales declined 5.5% in October, reaching a seasonally adjusted annual rate of 3.75 million.
That was the lowest level since August 2010.
October Housing Market Data
| Indicator | Latest Reading |
|---|---|
| Existing-home sales, annualized | 3.75 million |
| Monthly change | −5.5% |
| Year-over-year change | −8.8% |
| Median existing-home price | $416,700 |
| Median price change, YoY | +0.4% |
| Unsold inventory | 1.59 million homes |
| Months of supply | 5.1 |
Why Housing Is Weak
Mortgage rates have remained elevated.
Higher borrowing costs have reduced affordability, particularly for first-time buyers.
House prices have also remained high relative to household incomes.
Many homeowners who obtained low-rate mortgages several years ago are reluctant to sell and take on substantially higher borrowing costs.
The result has been a sharp decline in housing transactions.
Implications for GDP
Sales of existing homes do not directly count as new residential construction in GDP.
However, real estate commissions and certain transaction-related services contribute to economic output.
Home purchases also generate demand for furniture, appliances, renovation services, and other goods.
More importantly, the weakness in existing-home sales reflects difficult financing conditions that can also suppress new residential construction.
New residential construction directly contributes to GDP.
The housing market is providing clear evidence that high interest rates are restraining economic activity, even while AI-related investment remains strong.
6. US Jobless Claims Remain Historically Low
The Labor Department reported that initial unemployment claims increased by 9,000 to 200,000 during the week ended November 7.
That exceeded the consensus forecast of approximately 195,000.
However, claims remain historically low.
Weekly Unemployment Claims
| Indicator | Latest Reading |
|---|---|
| Initial unemployment claims | 200,000 |
| Weekly change | +9,000 |
| Four-week moving average | 195,250 |
| Continuing claims | Approximately 1.697 million |
| Insured unemployment rate | 1.1% |
These figures suggest that layoffs remain limited.
Implications for Consumer Spending
A relatively strong labor market supports household income and consumption.
Consumer spending accounts for approximately two-thirds of US GDP.
Consequently, continued employment growth could help sustain economic expansion despite high interest rates.
However, the combination of resilient employment and persistent inflation may also strengthen the Federal Reserve’s willingness to raise rates.
The economy is showing resilience in employment even as higher borrowing costs weaken housing and other interest-sensitive sectors.
7. Today’s Producer Price Index Report
The Bureau of Labor Statistics is scheduled to release October’s Producer Price Index today, November 13, at 8:30 a.m. New York time.
That is 8:30 p.m. in Thailand.
The report has not yet been released as of this morning’s briefing.
Why the Report Matters
The PPI measures prices received by domestic producers for goods and services.
It provides information about inflationary pressures at different stages of production.
Certain PPI components also contribute to the Federal Reserve’s preferred Personal Consumption Expenditures price index.
A stronger-than-expected reading could reinforce expectations of additional Federal Reserve tightening.
A weaker report could provide some relief to the Treasury market.
The report will be particularly important because October’s consumer inflation figures exceeded expectations earlier this week.
8. Oil Prices Rebound as Iran Tensions Increase
Oil prices increased Thursday amid renewed concerns about the conflict involving Iran and disruptions to energy supplies.
November 12 Oil Prices
| Benchmark | Price | Daily Change |
|---|---|---|
| Brent crude | $95.82/barrel | +3.3% |
| WTI crude | $88.74/barrel | +2.6% |
President Trump indicated that the United States did not need to reach an agreement with Iran.
Meanwhile, reports of attacks on Saudi energy infrastructure and disruptions around the Strait of Hormuz increased concerns about oil supplies.
Why This Matters
Higher oil prices can increase transportation, manufacturing, and agricultural costs.
They also reduce household purchasing power.
The resulting inflationary pressures can complicate monetary policy.
Higher interest rates can reduce domestic demand, but they cannot directly resolve disruptions to international energy supplies.
The combination of higher oil prices and elevated Treasury yields is particularly challenging for interest-sensitive sectors and energy-importing economies.
9. China, Taiwan, and Semiconductor Security
G7 foreign ministers expressed concern about increasingly assertive Chinese maritime activities near Taiwan.
The ministers emphasized regional stability, freedom of navigation, and international shipping.
Taiwan occupies a central position in the global semiconductor supply chain.
TSMC manufactures many of the world’s most advanced processors, including chips used by Nvidia and other major AI technology companies.
Why Taiwan Matters
A significant disruption to Taiwan’s manufacturing facilities or maritime transportation routes could have enormous consequences for global technology production.
The risk is not limited to an outright military conflict.
A prolonged maritime disruption, higher insurance costs, or restrictions on shipping could affect international supply chains.
Semiconductor Export Controls
The Nvidia leadership controversy has also intensified congressional scrutiny of advanced semiconductor exports to China.
American policymakers must balance commercial interests with national security considerations.
Restrictions could reduce sales opportunities for American semiconductor companies.
However, they could also encourage China to accelerate development of domestic alternatives.
The global AI industry is increasingly exposed to geopolitical decisions affecting both the production and international distribution of advanced semiconductors.
10. Defense Spending and the War in Ukraine
Russia launched additional attacks against Ukraine’s military and civilian infrastructure.
Ukrainian officials reported casualties and damage to energy facilities.
The attacks occurred as diplomatic efforts to address the conflict continued.
European Security
European governments are increasingly concerned about protecting electricity infrastructure, maritime transportation, and strategic supply chains.
These concerns are supporting demand for air defense, drones, surveillance systems, and other advanced military technologies.
US Defense Spending
The Trump administration has proposed approximately $1.5 trillion in defense spending for fiscal 2027.
That is a proposed budget, not enacted appropriations.
The eventual level and composition of defense spending will depend on congressional decisions.
Implications for Defense Manufacturers
Higher proposed military spending can support expectations for future orders.
However, proposed budgets, authorized procurement, funded contracts, and actual production are distinct stages.
For evaluating defense contractors, the most important question is how government spending commitments translate into funded orders, manufacturing activity, revenue, and net profits.
11. UK Economic Growth Accelerates
The United Kingdom reported encouraging third-quarter GDP results.
Real GDP increased 0.7% quarter over quarter, compared with 0.5% in the second quarter.
The economy was approximately 1.9% larger than a year earlier.
UK GDP
| Indicator | Growth |
|---|---|
| Q2 2026, quarter over quarter | +0.5% |
| Q3 2026, quarter over quarter | +0.7% |
| Q3 2026, year over year | +1.9% |
The information and communications sector was an important contributor.
Computer programming, consultancy, and AI-related services helped support activity.
However, construction remained weak.
Business investment increased only approximately 0.4% during the quarter.
Global Implications
The UK’s performance provides further evidence that AI-related services and investment are contributing to growth outside the United States.
However, stronger economic activity and persistent inflation could also influence Bank of England interest-rate decisions.
If several major central banks tighten monetary policy simultaneously, the effects on global liquidity and financial markets could become significant.
12. US Credit and Liquidity
The Federal Reserve’s next H.8 banking report is scheduled for release later today.
Consequently, there are no new H.8 bank-credit figures available for this morning’s briefing.
However, the latest corporate earnings provide useful information about financing conditions outside traditional banking.
Two Very Different AI Business Models
Cisco generated $4.4 billion in operating cash flow during its latest quarter.
Nebius expects capital expenditure of $40 billion to $45 billion during 2027.
The difference is important.
Cisco has substantial internally generated cash flow that can support investment.
Nebius expects to rely heavily on customer prepayments and asset-backed financing.
Both companies benefit from the same broad expansion in AI computing, but their financing structures are very different.
The Creditism Perspective
In a credit-driven economy, the availability and cost of financing can strongly influence investment and economic growth.
The AI infrastructure boom is increasing demand for construction, semiconductors, electrical equipment, and power-generation infrastructure.
Some investment is funded from corporate profits.
Other investment depends on borrowing, equity issuance, and advance customer payments.
If borrowing costs remain elevated, projects dependent on external financing may face greater pressure.
The critical issue is whether the financial system can continue providing sufficient capital to support the extraordinary AI infrastructure investments planned for 2027.
13. S&P 500 Consensus Earnings Growth
A new comprehensive FactSet Earnings Insight report is expected today, November 13.
The latest confirmed weekly estimates available as of this morning remain those published November 6.
Latest Available Consensus Estimates
| Indicator | Estimate |
|---|---|
| Q3 2026 blended earnings growth, YoY | +31.4% |
| Q3 2026 blended revenue growth, YoY | +14.3% |
| Q4 2026 expected earnings growth, YoY | +28.4% |
| Calendar 2026 expected earnings growth, YoY | +33.3% |
| Forward twelve-month P/E | 17.7 |
These are reference figures, not new November 13 estimates.
Why Earnings Matter
Strong earnings growth can support equity valuations.
However, higher Treasury yields increase the returns investors may demand from stocks.
The contrast between Cisco and Nebius is also revealing.
Both companies are experiencing rapid revenue growth, but their profitability, capital expenditure requirements, and financing structures are very different.
Aggregate S&P 500 earnings growth can conceal substantial differences in the financial performance and risk profiles of individual companies.
14. What to Watch Next
| Date | Event | Why It Matters |
|---|---|---|
| November 13 | October Producer Price Index | Inflation and Federal Reserve policy |
| November 13 | Federal Reserve H.8 | Bank credit and liquidity |
| November 13 | FactSet earnings update | New S&P 500 consensus estimates |
| November 17 | Nvidia earnings | Semiconductor demand and leadership transition |
| November 17 | Import and Export Price Indexes | Trade costs and inflation |
| November 25 | Updated Q3 GDP | Investment and economic growth |
| December 8–9 | FOMC meeting | US monetary policy |
| December 17–18 | Bank of Japan meeting | Japanese interest rates and global capital flows |
15. Macro Watch Bottom Line
The global economy is becoming increasingly divided between sectors benefiting from extraordinary AI-related investment and sectors suffering from elevated interest rates.
Nvidia’s leadership transition introduces substantial uncertainty at one of America’s most strategically important technology companies.
The company retains considerable technological advantages, but its new leadership must maintain customer confidence, execute its product roadmap, and navigate increasingly difficult relations between Washington and Beijing.
Nebius provides another important example of the challenges associated with the AI investment boom.
Revenue increased 571%, yet the company’s shares fell sharply because of infrastructure delays and concerns about its enormous capital expenditure plans.
Cisco’s results provide a contrasting picture.
The company reported strong revenue and profit growth while generating substantial operating cash flow.
These differences demonstrate that companies positioned within the same technological investment cycle can have very different financial characteristics.
Meanwhile, US existing-home sales have fallen to their lowest level since 2010.
That is an important indication that higher borrowing costs are restraining economic activity.
Nevertheless, unemployment claims remain historically low, suggesting that the labor market continues supporting consumer spending.
The result is an uneven economy.
AI-related investment is supporting growth while interest-sensitive sectors face increasing pressure.
Geopolitical developments are also becoming more important.
Nvidia’s leadership transition has intensified scrutiny of semiconductor exports to China.
Tensions surrounding Taiwan create risks for the global semiconductor supply chain.
And renewed concerns about Iran have pushed oil prices higher, potentially adding to inflationary pressures.
For 2027, three relationships deserve particularly close attention.
First, the relationship between announced AI investment commitments and actual capital expenditure.
Second, the relationship between interest rates, credit availability, and the financial viability of capital-intensive projects.
Third, the relationship between technological leadership and geopolitical risk.
The important question is how much of the extraordinary investment being planned today can be financed, constructed, operated profitably, and sustained if borrowing costs remain elevated.
The answers will have significant implications for credit creation, corporate earnings, financial markets, and global economic growth.