Episode summary
The AI Trade, Rising Rates, and Why the Market Is Still Standing | The Real Eisman Playbook Ep 73
The Real Eisman Playbook
· · 45 min · Hosts: Steve Eisman · Guests: Jason Trennert, Chris Verrone
Summary
The discussion centered on a market that has stayed resilient despite war, rising rates, tariffs, and intense debate over AI spending. The guests argued that the biggest forces shaping 2026 are still the concentration of the market, the durability of earnings, and whether higher long-term rates eventually become competitive with equities. One guest said the tape remains highly rotational, with internals improving even after sharp corrections in semis and hyperscalers.
A major theme was that the economy is still expanding and that the market is shifting from a multiple-driven story to an earnings-driven one. The guests said the Fed is moving into a more old-fashioned regime with less forward guidance, which should mean more volatility and less help for speculative assets. They also argued that private equity has a monetization problem after years of ultra-low rates, while banks remain surprisingly strong and broad-based.
On AI, the guests were constructive on demand but wary of the capital intensity. They pointed to huge spending, negative or weakening free cash flow at some hyperscalers, and the risk that shareholder dilution and depreciation eventually pressure returns. Europe was described as cheap for structural reasons, while Japan was favored over Europe because of reflation, rising yields, and a shift toward return on equity.
Key takeaways
- The host said the economy is “quite strong” and the guests see the market as earnings-driven rather than multiple-driven in 2026.
- Jason Trennert argued that 10-year yields likely need to rise “significantly higher” than 4.5% before equities really break.
- Chris Verrone said the market is still “a very rotational tape,” with internals improving even after semis and hyperscalers corrected sharply.
- The guests said AI demand remains strong, but hyperscaler capex is becoming more capital intensive and may pressure shareholder returns.
- The guests were more constructive on Japan than Europe, citing reflation, higher yields, and a stronger shift toward ROE discipline.
Notable quotes
“the market is so concentrated”
“Money doesn't want to leave the asset class of equities”
“the economy is still expanding and actually pretty rapidly”
“I think there's a lot of hyperbole out there right now just given, you know, the administration, the war”
“It is the money and I I and I talked to one of my clients this morning”
How the episode opens
Hey, this is Steve Eisman. Welcome to another episode of the Real Eisman Playbook. So, lots been going on in this world this year.
It's been war, AI, private credit, private equity, you name it, it's happened this year already. The market's up nicely, but has been very, very volatile. And I have two guests today to help me sort of plow through all this stuff.
Jason Trennert, who is the founder of Strategas, and Chris Verrone, who is the market strategist at Strategas. These guys don't cover a particular sector. They kind of cover the entire market.
They have a nice overview. And we're going to talk about where things stand, and then afterwards I'll come back for some lessons learned.
Hi, it's Steve Eisman, and welcome to another episode of the Real Eisman Playbook. It's the beginning of August. This year has been I the only word I could say is tumultuous.
So much has gone on. War, AI, private credit, private equity, situational awareness hedge fund blowing up. If I thought for another 10 seconds, I'm sure I could come up with another 15 things.
So, I thought it'd be a great idea to kind of take a step back and talk it over with two old friends, Chris Verrone, market strategist of Strategas, and Jason Trennert, founder of Strategas. Guys, thank you for coming.
Great to be here, Steve. Thanks for having us. — Having us. So, I like I said, boring year. — Yeah. — Nothing much going on. But, um Jason, let's start with you. Let's let's each take just a couple of minutes, try and put things in perspective, and then we'll we'll try and dig deep.
Well, listen, I think it largely comes down to a couple of as far as the markets are concerned, I think there's a you know, a gathering storm a bit, uh which is the war, tariffs, which people forgot about, but they're but
Totally forgot about.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai capex debate
- rising rates and fed
- private equity monetization
- war in iran and oil
- market resilience
Companies and tickers mentioned
- META
- AMZN
- MSFT
- Strategas
- Meta
- Amazon
- Microsoft
- Oil & Gas companies in relation to Iran/China war and oil
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Real Eisman Playbook, this episode and its artwork belong to Steve Eisman. Octagon is not affiliated with the show; this page is an independent summary.
