Scott Wapner (2:38)

Yeah. You'll get an outlook today, of course, to Liz's point. Joe, what is the line in the sand then for equities where people assume that stocks are going to rally into the end of the year because of fomo, Chase for Performance, Santa Claus rally, what have you. Is there a line of what's the, what's the number?

Joe Terranova (2:59)

I think the most important thing is if we see the return of elevated bond market volatility. If you think back to 2022, the challenge in a very punishing environment where we were raising rates was you had a 10 year trading range that year of 285 basis points. So far in 2025, the 10 year trading range is only 95 basis points. If we are going to make a return in 2026 into an environment where you have elevated bond market volatility, that is going to be a problem. That's going to be a headwind in. I do think we, you know, I've heard so much about the various types of disposition that the Federal Reserve is going to take today. Hawkish cut, Chairman Powell coming out maybe not giving strong guidance because ultimately he can't, he doesn't possess the data. I think it's priced into the market. I really believe that. I think what's important.

Scott Wapner (3:49)

Hold on, hold on. You think Hawkish cut.

Joe Terranova (3:51)

Yes.

Scott Wapner (3:52)

Is priced into the market?

Joe Terranova (3:53)

I do. I think it's, I think it's priced into the market. I think the bulls should be excited at this moment. And let me share with you. You have in front of you today the Fed announcement, you have the Oracle earnings announcement, you have Broadcom tomorrow and then next week you have the jobs report. For the better part of the last 10 trading days we have been sitting in a very tight trading range. After the pre Thanksgiving rebound that was working off all of the short covering that we saw in the month of November. So we're sitting kind of at the top of the range. I think a market has its eyes on the 6920. October 29th intraday high. And I will be over the next several days I will be here. Kevin, I'm out. I'll be in front of the screen trading and I'll be trading it from the long side because I think we're taking that high out.

Scott Wapner (4:45)

Okay, Kerry, tell us what's on your mind as we wait for this decision. We wait to hear from the chair, we wait to get the outlook and we wait to see how the market reacts.

Carrie Firestone (4:54)

I also agree that we expect there to be a cut and that the verbiage will be hawkish. We just hear and see endless commentary from various members of the committee that they're not sure whether there should be a cut or not. And the market believes that, understands that there's a mixed view on the fact.

Scott Wapner (5:17)

So you then, you also, then you would agree with Joe that you think it's in the market.

Carrie Firestone (5:21)

I think that's in the market. What isn't in the market, given that we're at a high, we're basically at.

Scott Wapner (5:26)

An all like 1%, right, or 1% or so on the S and P.

Carrie Firestone (5:29)

And on the Nasdaq less than 2%. So what we don't know is whether Oracle and Broadcom are going to give some type of guidance, which is very disappointing. I doubt that. But if that were to be the case, I don't think that the hyperscalers will take it well. I think they'll be nervous or their owners will be nervous and they'll be selling pressure over the next day. Remember that's happened before.

Scott Wapner (5:54)

Remember Jenny, the last time the Fed had the meeting we had mega cap earnings. So it was you need to listen to the chair, you need to see what they do, what they say. Now you need to do the same. And we don't have a mega cap earning, but we have one that feels, if not equally as important at this moment right now, feels pretty darn important in Oracle for this trade.

Jenny Harrington (6:19)

I agree. And I think it's interesting how everyone here, myself included, thinks that most of the verbiage is already priced into the market, thinks that a hawkish stance is priced in. And we're thinking about last year too where they cut 100 basis points and what happened, the 10 year went up and now they've cut a bunch this year and we're basically flat. Not exactly flat, but basically. So I think what Oracle says, what Broadcom says, I think that's going to be way more important as an influence in the market over the rest of the week than, than anything the Fed says. I. I'm getting ready to take a nap at 2:00'.

Carrie Firestone (6:49)

Clock.

Scott Wapner (6:49)

Okay, great. Thank you. You're welcome. Steve Liesman, our senior economics correspondent, is going to obviously make his way towards the room where it's going to happen. He's in our bureau in D.C. it looks like right now. All right, so we have two things that are front and center. Not only the meeting and the news conference, the outlook. But the interviews that we are learning all about are taking place with the President and the first one will be with Kevin Warsh. So maybe it's not such the done deal that some had expected it might be. Yeah, the Fed sweet sweepstakes continue Scott but just getting back, I think as usual you're asking the right question, which is whether or not this kind of hawkish cut is really built into the market. It is undeniable that that is the pricing out there. If you look at where the probabilities are indeed placed, the probability of that second rate cut or a follow on rate cut in January does drop pretty substantially down to just 23% right now. And really you don't have a another cut confidently built into the market until June. April now 53% but that's been wavering, you know, on that 50% line for quite a bit. Here it's June where you get the confidence of a rate cut and sometimes it's even though the market's expecting it, there is a reaction that is important and there's the inflation indicator suggesting that really what's happening in bond markets now is not an inflation story, it's a term premium story. As for the interview, Scott, my understanding is that the President will start today with Kevin Warsh and I believe Waller is on the list as well, Kevin Hassett too. And whether or not it's Bowman or Reader or both, we don't really know, can't tell at this point. And the President says he knows who he's going to pick but apparently going through this process here of interviewing the candidates so the President can be comfortable with him. What's important by the way about the prior chart we just put up, I should have mentioned it's June when we get the next Fed chair.

Joe Terranova (8:44)

So that's when the market becomes confident.

Scott Wapner (8:46)

That there's another cut coming. Sure. Yeah. That's very interesting that you point that out and we need to pay attention to that as well and take all of that into consideration when you get the outlook today to sort of game out how 26 looks with somebody new in the chair. Steve, I'll look for forward to seeing Scott. Scott, before you go, let me make two quick points. One is that the Fed making the forecasts today and the policy without the data. We get a lot of data next week so that for the economy and the Fed could change dramatically next week. And one other point which is I don't need to do this, but I want to tease your interview with Gundlach that happens after the meeting. A very important interview coming up, I want to say, for two reasons. One is we need to know why Jeff thinks that rates are higher. What is behind that, in his opinion. And second, what he thinks of this Fed race that's out there right now in terms of who he feels comfortable as a guy that puts a lot of money into this market, who he feels comfortable at the helm of the Fed. All right, you've got two of the many questions on my list, so thank you very much for teeing that up. I'll see you when you come out of the room and we'll all discuss a little bit later. That's Steve Liesman, obviously, down in D.C. ahead of that big decision. We have a trade alert, by the way, as we move to the markets and things that are moving today and things that are certainly of interest to us on the desk and I know will be to you. You sold Uber.

Joe Terranova (10:05)

Personally, I sold Uber.

Scott Wapner (10:06)

Why?

Joe Terranova (10:07)

Clarity. I wanted the clarity of not having to worry about it in both places, the ETF and personally. Now, I said the other day I wasn't going to sell Netflix because that stock is on the decline. Uber looks a lot different. I've done very well with it, personally. Uber right now is trading in a range between $80 and $100. The reason that I sold it this morning is because it appears to me once again it bumped up against the ceiling in the low 90s and it retreated back down again. So I don't. Over the next couple of days where I think there's so many other opportunities and important things to be paying attention to in the market, need to be looking at Uber and seeing if it breaks down below 80. I own it in the ETF. I have enough of it there. I don't have to wait for the break below 80. I just got out of it.

Scott Wapner (10:53)

Personally, you use the word, I don't have to worry about it.

Joe Terranova (10:56)

Yeah.

Scott Wapner (10:56)

Personally, you're worried about it. Yeah.

Joe Terranova (10:59)

Well, I think that last move up to 92 and the Swift reaction to where that was resistance, and now we're pushing back towards 80. There's only so many times you could press against what is apparent support before it pierces through. And I'm concerned that this potentially could be a moment where that occurs. And I've said that's where I wanted to get really.

Scott Wapner (11:20)

You know, this, this was a great, great stock story, as you see on your chart through the, you know, the. The beginning of the year. And then put it back to what you just had. Guys, please. And then you had that Sort of level off where it did nothing and then you've had this retreat which 10% down in one month. What is still a 40% up for year to date.

Joe Terranova (11:47)

Yeah. And it's, and it's really reshaping the risk. I've owned this stock for the better part of the last two years. I still believe in it. We still have it in the etf. It has strong momentum on a one year basis. It meets all the characteristics that we identify for quality. But having it in both places, when I, when I could see technically what I see in front of me to your point where it's had this very fast retreat, I'm concerned about that support level at $80 and breaking through.

Scott Wapner (12:12)

Jenny, you own it.

Jenny Harrington (12:13)

Yeah. So we are worried about long term competition from Waymo, but they just had Q3 bookings that were up 21% free cash flow yield, still 6%. And I don't look at that 10% pullback as unique to Uber. I think that's the bigger picture. We saw it in video, we saw a bunch of, we saw it in Palantir, we saw a bunch of these big tech stocks pull back. So I don't look at that as unique. I'm letting our position ride quite a bit longer.

Scott Wapner (12:36)

You want to come back on that idea? We have different because this feels like it's, it's its own story. It's not. Oh, it's just pulled back because some of these other names have pulled back too. So no big whoop. I mean there are some questions that have been asked about the competition aspect, whether it's Waymo so long you have, you know, the Tesla questions that are, that are out there too.

Jenny Harrington (13:01)

I just think those questions are really long term, you know, and so for us, where we really set our lens that if I buy this, I want to own it three to five years. That competition is still far out there, you know, in a dip. And it's really the, the fundamental difference between your strategy and mine.

Joe Terranova (13:14)

It's a fundamental difference.

Jenny Harrington (13:15)

You can be reactionary and we just muddle through.

Scott Wapner (13:18)

I'll tell you what I mean. Deirdre Bosa is joining us now because talk about timing. She has new numbers just crossing from Waymo, which would suggest to me that whatever you're going to tell us would be for the reason that the stock Uber has been sliding consistently throughout the morning. Let's show Uber. I'm going to put that up intraday again as you, as you talk to us.

Carrie Firestone (13:40)

Yeah, please do. Because I mean one of the biggest existential questions for Uber and Lyft is what do Robotaxis do to the business? And you are correct. This news is regarding Waymo, the Alphabet subsidiary just out with its 2020 five year end numbers. And the numbers are just really astounding. Tell you the scale at which Waymo is growing. So here it is. 14 million paid rides have been served in 2025 so far. On track for 20 million lifetime rides by year end. Like I said, it's scaling like crazy. Here's another metric, a million rides a month. Now that's a tripling year over year. And they're targeting a million rides per week by the end of 2026. That is going to take share from the rideshares like Uber. There's also, I just want to mention a safety claim. Tenfold reduction in serious injury or worse crashes versus human drivers. 20 plus new cities planned for 2026, including Tokyo and London. And Scott, we just recently got freeway robo taxi rides here in the Bay Area. So they're planning that expansion across more cities in 2026. And I think that that is an incredibly important point because then we stop going from city to city basis. You're actually connecting this national network network of Robotaxis in the future if you're able to unlock highways which they have here.

Scott Wapner (15:01)

The stock Uber is down almost 6%. Talk to us about through, through the lens that you have which is unique to the area in which you work, in which you live. I don't necessarily think people in other parts of the country understand how it feels ubiquitous almost that Waymo has become in that area. So when you report these kind of numbers that you know they've served these trips more than tripling 2024 numbers, I gather you're not surprised based on what you see with your own eyes there.

Carrie Firestone (15:31)

And what I've experienced and what my kids have experienced. And pretty much anyone who lives in San Francisco who has taken a ride share has likely taken a Waymo as well. They are everywhere. And I think the most important thing to note about, you know, having it as an option in your city is that it goes very quickly from novelty to just normalcy. You get in one the first time. I still remember, I remember the name of it, I remember where I took that trip. And you know, you're sitting there saying, wow, I can't believe this is new technology, this is a new world. Very quickly you're looking at your phone and you're kind of bored because it's just so normal. And every subsequent time you get in it feels just as safe and in many cases, personally it feels safer than having a driver in an Uber or a Lyft. You don't know how long they've been driving, what time of the day it is. And that I think is the major thing which you guys in the future will know in New York because they're testing on the New York streets.

Scott Wapner (16:22)

Good luck with that. D. Thank you very much. We appreciate you. And the timing couldn't be better. Just consistent with the conversation we were having around Uber, which plays right into the story whether it had anything to do. It sounds like it did not with your timing. But the stocks at the lows of the day down 6%.

Joe Terranova (16:41)

You also have to pay attention to sentiment and positioning as well on this company. The analyst community. Right now 80% of the analyst community has a buy on it. The 12 month price target is 133. If it does break down further, I think you're going to see maybe some of those analysts go from a buy to a hold and see the price cuts lower.

Jenny Harrington (17:00)

The irony. Right?

Joe Terranova (17:01)

That's generally what happens as price moves.

Scott Wapner (17:04)

Well, we'll watch that one. It's a popular stock, we know that at and it is at the lows of the session. Let's get back to the AI story for a moment because Kerry, I think it's pretty interesting when you look at how much more bifurcated these names have become the performance of the stocks. If you look at one month, Broadcom and Alphabet have, they've really continued to surge. Microsoft and Nvidia have become more flattened. We could show you a one month real time and gives you a pretty good perspective of that bifurcation in the names again the Broadcom and the Google versus or Alphabet versus the Microsoft and the Nvidia.

Carrie Firestone (17:46)

Well part of that is news cycle. So we've had a lack of news and then Nvidia got some good news the other day and maybe they'll have further good news over the next couple of weeks. Alphabet was in the doghouse for six months and then the cycle began to recognize that Gemini 3 was an advance that leapfrogged over the competitors. So Google made the move that made sense. Microsoft had shown some very strong numbers on the scale of their data centers and cloud. Then that sort of wore off. So I think that it's just a rapid cycle of news and that's what's propelled the move to Broadcom and Google lately. And that can change. So it doesn't worry me about these names. You know, if in video Nvidia has the potential to earn 750 per share from selling chips to China, which is a number I've seen. That's what the stock would earn in 2026.

Scott Wapner (18:47)

How about this? For all, all the hoopla around this whole trade, which has dominated every conversation that we've had for the most part since the beginning of the year, Google and Alphabet and Nvidia are the only two MAG7 stocks that are outperforming the S and P this year.

Joe Terranova (19:05)

Yes.

Scott Wapner (19:06)

Surprising.

Joe Terranova (19:07)

It is a little bit surprising. I think there is a dramatic bifurcation in terms of performance. They are dramatically outperforming their MAG7 peers. So you're talking about somewhere around 10 to 15% when you look at names like Microsoft and Apple and Meta and Tesla. So it's clear that the marketplace has identified, quote unquote, the winner in the hyperscaler spending and the AI halo trade. Early in the year it was absolutely Nvidia. Maybe that's waned slightly to the benefit of Broadcom more recently. Without a question. It is about Alphabet. Let's remember Apple's had a heck of a run off of that August low. It's up about 40% and it really began the year struggling. So I think that's the playbook for 2026. I don't think you're going to see a universal move in either direction for the totality of these max, it looks.

Scott Wapner (20:03)

Like, you know, Liz, if you look at the equity client flows from, let's say, bank of America.

Scott Wapner (20:10)

It'S not as though money continues to pour into this area. Clients sold stocks, they say, across nine of 11 sectors, led by Discretionary, the biggest outflow since March of 2022. Financials the fourth straight week of outflows. Energy had big outflows. Comm services saw inflows, but not technology as a broad group. Seventh week of outflows, I think that just said in the past eight.

Carrie Firestone (20:39)

So I think investors are again looking ahead to 2026. There are a few things at play here and I'm going to go back to the beginning of the conversation about the yield curve. There are, I think, two different environments that we might see in 26 and it means different things for what sectors can outperform right now. Consensus believes we're going to see an economic reacceleration which generally is coupled with grappled with a steepening yield curve. That's what's been happening over the past couple months. If that continues into 2026, you tend to see value sectors do well, you tend to See, tech still do okay, but value sectors really shine. So this rotation that we've seen in the market, I think takes hold and continues on to 26. The risk is that the yield curve flattens. Okay, if the yield curve flattens, then you've got defensives coming in. But the caveat here is that tech still does well. So my whole point to this is that you still have to own tech. And I'm not somebody that does single stock, so I have to own it broadly. I think it still participates. This whole AI theme has to drive economic activity, productivity advancements, the optimism. But there will be, I believe, some really big winners that are newer to the conversation in 26 because of that environment.

Scott Wapner (21:52)

Maybe discretionary is. Is one that will have a better year. Discretionary is up 5%. Jefferies upgrades it today to a market weight. Sentiment's poor. They admit as much. We don't need to tell you, you know, I mean, look at what the sector's done. A lot of these stocks have been disappointments. It's. That's been bifurcated. There's been real winners and real losers. Let's talk about Ulta. I have it on my list because the Target got raised, Joe, to 675 from 615. It's a top pick at Oppy today. The target also from Loop Capital to 600. Thank you.

Joe Terranova (22:26)

So this company has done a absolutely phenomenal job in going out and marketing to the younger generation. And Gen Z is spending money on beauty and health care to the degree to which my generation never did at that age. They've done college tours around the United States. They've embraced the younger generation. The spending is there. It's real. It's an idiosyncratic story like TJX and Ross store. I agree with your comment. It's so right now difficult to identify winners and losers in consumer discretionary. But when you find winners and you have a story like Ulta Beauty has, like tjx, that's why people are paying the premium for it. And Ross, how about that one?

Scott Wapner (23:12)

How about tjx record high?

Joe Terranova (23:13)

It's tjx, it's Ross store. It's alter where we're seeing the opportunity right now. And there's a fundamental thesis behind it. It's off price and then on the other side, it's capturing the younger generation as it relates to spending.

Scott Wapner (23:27)

Ross Ross record high, tjx, record high price targets going up on. On both.

Carrie Firestone (23:34)

You want to say, I think that there's a new market that Ulta has created, which is not just Gen Z, it's girls under the age of 12. I mean, it's, it's really, it's rampant. If you go into one of those stores, everybody is there with their mother because they're not allowed to go anywhere on their own.

Joe Terranova (23:51)

You know, when we talk about the various sectors. One quick comment. 21s and P, new 52 week highs today. Not one of those names is a technology name. It's gm, its Citi, it's Bank of New York, it's those State street, it's all the other places in the real economy that have been unappealing over the last several years.

Scott Wapner (24:11)

So we'll take a quick break. We'll come back. We have several calls of the day to get to. We have a top pick in the defense space, one in travel, healthcare and more. We're back in two.

Carrie Firestone (24:22)

At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at Capella. Edu.

Scott Wapner (24:37)

Let's be completely honest.

Joe Terranova (24:39)

Are you happy with your job? The fact is, a huge number of.

Scott Wapner (24:42)

People can't say yes to that. Too many of us are stuck in a job we've outgrown or one we never wanted. But we stick it out and we give reasons, like what if the next move is worse?

Joe Terranova (24:53)

I put years into this place and maybe the most common one. Isn't everyone miserable at work? But there's a difference between reasons for.

Scott Wapner (25:01)

Staying and excuses for not leaving. It's time to get unstuck. It's time for Strawberry Me.

Joe Terranova (25:09)

They match you with a certified career coach who helps you go from where you are to where you want to be. Your coach helps you clarify your goals, creates a plan and keeps you accountable along the way. Go to Strawberry Me Coaching and get 50% off your first coaching session.

Scott Wapner (25:25)

That's Strawberry Me coaching.

Carrie Firestone (25:28)

What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game. One of my favorite pieces of advice. Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and power players. New episodes every Tuesday. Wherever you get your podcasts.

Carrie Firestone (25:59)

We'Re back calls the day.

Scott Wapner (26:01)

We start today with Regeneron top pick for 2026. 800 bucks is the price target at Wolf. Jenny, you own the stock?

Jenny Harrington (26:09)

We sure do. We've owned it for a long time. And it's interesting that this is their top pick because it really, like follows on what Joe was saying about what's outperforming today. It follows on what Liz was saying about what? About value doing well into 2026. So here you've got a company that trades at 16 and a half times earnings, has a 5% free cash flow yield. They've got 20% earnings growth. Shares are down 1% this year. And they have one of the biggest drug pipelines in the whole pharma biotech space. They have Dupixent, which continues to. Sorry, that's the one that grows at 20%. Earnings aren't growing at 20%, but earnings have decent growth ahead. So you've got a reasonably cheap stock, great earnings growth. Their main drug, growing well, doing nothing. And I think, you know, if these two are right, that's where. That's where the. The momentum goes into the next year.

Scott Wapner (26:56)

All right, speaking upgrade, speaking of top picks, booking holdings is called 1. @btig. 6250 bucks is the new price target. We see the makings, they say, of what should be a good year for fundamentally. What do you think, Kerry?

Carrie Firestone (27:10)

Yeah, I like it. I think maybe two or three weeks ago we talked about it because it was really down sharply. And I said I thought that that would recover because consumer spending is still strong enough to carry the travel industry. And you've seen the Stock is up 14%. So we like it here.

Scott Wapner (27:27)

All right, General Dynamics, top defense pick, 400 bucks. You get the theme. A lot of firms are making top picks in various sectors. Sectors. Top defense pick is GD General Dynamics. 400 bucks is the target. Wolf, the firm Jyoti, the owner has.

Joe Terranova (27:42)

Has had a very nice rally from the April lows, and it's kind of been trading above its critical support of moving averages pulling slightly back into the hundred day right now. So technically, if you look at that stuff, it's a great place to buy it. From a fundamental perspective, I think General Dynamics sets up really well when you look at U.S. defense spending, which has a priority on naval assets, in particular in the South China Sea, where we have literally a third of all global trade. So wanting a strong presence there, building up naval assets, that's exactly where General Dynamics can leverage the opportunity with the Department of Defense.

Scott Wapner (28:21)

Okay, fiserv is having its worst year ever. The Stock is down 68% year to date. Mizuho says outperform. They reiterate that they still love it. 110 is the target. Jenny owns the name. Make Fiserv great again is what they say. Can you.

Jenny Harrington (28:43)

I think the price target's really interesting. The stock's at 66. So if they're right, it's almost a double from here. It gets it back to where it was before it took that huge hit a few weeks ago. And we think that they're probably at least directionally correct. Here's another one. Eight. Okay. So you know, in their note they said management. Management is laser focused on getting it right and getting it back on track with growth. If they're right and they're back to double digit earnings growth, you've got a stock that's got an 8 times earnings and 11% free cash flow yield. It's a good company. They actually produce lots of revenues. They have Clover. So when you go check out, you know, at a lot of small businesses, it's Clover that you use. That's a real product.

Scott Wapner (29:22)

So why is it down 68% year to date?

Jenny Harrington (29:24)

Oh, they had like this huge issue with, with like their sales to Argentina and going back and they brought in a new management team a few months ago who came in maybe it was about a year ago actually who came in and said like, hey, the Argentina business really has been the primary driver of growth. Everyone just kind of freaked out. So now there's a credibility problem. So you need to get credibility back. You need to get it back to this double digit earnings growth which I had for years. But that growth needs to be seen as more broad and not focused because of currency issues. Currency, what did I say? Like drivers coming from Argentina for years. So there is a real, there is like a real issue there.

Scott Wapner (30:00)

Okay. Well, yeah, but they still market likes to call.

Jenny Harrington (30:03)

Yeah.

Scott Wapner (30:04)

You're looking at me like you want to say something.

Joe Terranova (30:06)

No, I just, I'm not being, I'm not being critical of your position. I'm actually questioning.

Jenny Harrington (30:10)

Yeah.

Joe Terranova (30:10)

You as a shareholder, do you feel as though management has done a good job in navigating the challenges? Because it's not just been one earnings report, it's been several earnings reports where.

Scott Wapner (30:21)

She'S already said that they have a. It's a credibility problem.

Jenny Harrington (30:25)

Well, it's tough. And so, so this is the thing. So you have a relatively new management team and they came in and we're kind of like, whoa. Right. So it's a couple quarters where they're trying to figure it out. I think they kitchen sinked at this point. Time to really say, let's clear the decks. So you definitely need one or two more to see what this team's doing and how, you know, how they're going to get it back and will they really be able to. We're in a weird spot with it where we've owned it for so long that we actually still have a slight gain on it. But we think it's really undervalued that $110 price target. I'm not so sure. So we may take some off the table next year. You know, I said, when, when it traded down the first time and I was on, I said, look, we will use it as a tax loss. Right? We might buy it.

Scott Wapner (31:04)

$110 would have looked good at the beginning of the year. Oh, yeah, whatever.

Jenny Harrington (31:10)

So, so it's a tricky one. So we have like some people with gains, some people with big losses. We have a tax loss that we could use. Do we need to use that this year? It's tricky.

Joe Terranova (31:18)

Pretty bad streak, though, of four consecutive quarters where you see significant declines post earnings.

Scott Wapner (31:23)

That's why.

Jenny Harrington (31:24)

Correct.

Scott Wapner (31:24)

Somebody says that. Credibility issue.

Jenny Harrington (31:27)

Yeah, but it's not the same old management. Right. It's a new one. So you got to give them a chance to get it back.

Scott Wapner (31:33)

All right, let's get the headlines with Contessa Brewer. Hi, Contessa.

Carrie Firestone (31:36)

Hi there, Scott. Homeland Security has reportedly signed a deal to create a fleet of six Boeing 737 to use for deportation. The agency will spend nearly $140 million to fund that effort, according to the Washington Post. Now, that money reportedly comes from the massive budget increase in the one big beautiful bill passed earlier this year by Congress, which added $170 billion for immigration enforcement. Twelve Senate Democrats wrote a letter to the Secretary of the Navy expressing concerns about a review he's conducting into Senator Mark Kelly. They call the probe baseless and political. Defense Secretary Pete Hexseth ordered the review last month after Senator Kelly participated in a video urging military and intelligence officers officers to refuse illegal orders. And an inquiry into the French government finds thieves that got away with $100 million in crown jewels at the Louvre escaped with 30 seconds to spare. The probe in the French Senate also detailed security failures that enabled this brazen daylight heist. It found only one of two cameras that were covering the break in point was functioning, and the jewels, of course, still have not been recovered. Scott.

Scott Wapner (32:52)

All right, contested. Thanks, Contessa Brewer. Coming up next, betting on the banks. We'll Find out how the committee is playing the financials into the new year. The stocks have done incredibly well. Yesterday JP Morgan had a big sell off, one of its worst days in a while. We're following that. Plus Leslie Picker is standing by for an exclusive with Goldman's top banking analyst. A rare interview at that next.

Scott Wapner (33:21)

Before.

Joe Terranova (33:21)

The trophy and bragging rights are rightfully yours, before your sleeper turns in a season no one saw coming, before stats and projections turn into points on the board and your lineup falls perfectly into place, you flip the lid on a can of on nicotine pouches. And as you make your first pick, you know this is the season where fantasies going to surpass reality. It's on products for tobacco consumers 21 years of age or older. Warning. This product contains nicotine. Nicotine is an addictive chemical.

Carrie Firestone (33:50)

Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella. Edu. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game. One of my favorite pieces of advice, Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.

Scott Wapner (34:51)

Welcome back. Let's show shares of JP Morgan. We are looking at them. Take a look at the last 24 hours. The stock's coming off its worst day since the week of the tariff tantrum. Liberation Day, April 2.

Scott Wapner (35:05)

Comments made yesterday at the conference where Leslie Picker is yet again. Today she has a rare interview with the top bank analyst for Goldman Sachs. There's the headline from J.P. morgan, Leslie Picker. Take it away.

Carrie Firestone (35:23)

Scott. Thank you. And this is Richard Ramsden. He basically runs this conference. It's been going on for 36 years. I know there's record attendance. And you had that conversation yesterday with Marianne Lake, the CEO of Consumer Community Banking, which saw JP Morgan stock drop as a result of the surprising guidance she gave on expenses. She of course, said the biggest Drivers were kind of growth related, activity levels were higher, they were making strategic investments. What signal was the market sending here in its response and what's your takeaway from the conversation?

Fidelity Trader Plus Announcer (35:57)

You know, look, I was a little bit surprised by the market response, but I think it just speaks to the fact that it just wasn't expected. You know, most banks wait until January to give an update. And most banks talk about outlook for expenses in context with, you know, what they're expecting on the revenue side. You know, and I think the second thing was just the magnitude of the increase in expenses that they're talking about. I mean, markets expecting close to, let's call it $96 billion of expenses this year, she guided to $105 billion next year. It's a very significant increase. You know, and I think it generated a lot of questions around why are they doing this? You know, is this offensive because they see an opportunity to grow or is this part defense? Because we are seeing some of their peers starting to lean into growth and that is, you know, they feel that they need to increase investment spend to defend some of the market leading market shares that they have.

Carrie Firestone (36:54)

So what's your take? Because I've heard several people here say that this is one of the most competitive environments they've ever seen in the industry, particularly after the financial crisis. So if you were JP Morgan and if you were one of its competitors, how would you be thinking about exposure expenses vis a vis, kind of gaining that share in this environment?

Fidelity Trader Plus Announcer (37:14)

There's no question. I mean, the competitive environment is getting more intense, you know, and I think, look, there's a number of factors that's driving that. Wells Fargo was released from the asset cap earlier this year. After six plus years of being in the asset cap, they clearly want to grow. Bank of America had an investor day a month ago, you know, and they talked about a lot of their growth initiatives. Citigroup is also looking to grow across a range of businesses, but both in card and in wealth, which are very important businesses to JP Morgan. So look, there clearly is this increase in terms of competition. Look, having said that, JP Morgan has a fantastic track record of investing in their business to drive growth. And I think part of this is also just a reflection of the fact that there is a lot of optimism around the outlook for the US Economy next year. I think one of the reassuring messages coming out of this confidence is just the resilience of the U.S. economy and the resilience of the U.S. consumer. I think even the banks themselves have been surprised at just how well, consumer spending has held up in the fourth quarter in the light of the government shutdown or the uncertainty around tariffs, higher short term interest rates. And I think as a result that is informing their view about what the opportunity set is next year. And they, I think they do see very good risk adjusted returns in a number of businesses.

Carrie Firestone (38:37)

Yeah, and of course speaking of rates, we do have that rate decision and press conference later this afternoon from the Fed. The market is expecting a cut today, the outlook a bit more uncertain for 2026. Most bank executives have reiterated their net interest income guidance. That's the profitability metric for loan making. What's your expectation for 2026, especially given the opacity of kind of the rate picture from here?

Fidelity Trader Plus Announcer (39:03)

We think that net interest income next year for the large banks is going to grow mid single digit. And if anything, the banks have reiterated it but said there could be an upside case next year. And I think the reason is that the banks are seeing a pickup in loan growth, especially on the commercial side, you know, so they are seeing a pickup in terms of corporate loan demand. And I think the second thing is, look, increased consumer spend is leading to increased consumer land. The other thing I think that's driving that is the banks are going to benefit from deregulation from a capital standpoint. There's a lot of excess capital in the banking industry today that is probably going to grow next year as a result of deregulation. And I do think the banks are now at the margin looking at areas where perhaps they've been a little bit more risk averse from a lending standpoint and looking at whether or not there's an opportunity. I mean, one of the areas that has come up is commercial real estate lending with a lot of banks saying, look, this has been shrinking for the last two or three years, we are now starting to see it plateau. But we are expecting that commercial real estate loan growth could actually grow next year. You know, so I think the loan growth picture I think is actually pretty good. And also keep in mind, look, lower short term interest rates does allow banks to reprice down expensive deposits, which is also going to help. Yeah, you know, so I think look from a net interest income perspective, which is obviously a really important driver to top line revenue growth for these banks. The banks at the margin I think are feeling better about that metric.

Carrie Firestone (40:32)

Yeah, it's certainly a good setup heading into 2026. We appreciate all of your perspective, the great work you're doing here at the conference. Thank you very much, Richard.

Fidelity Trader Plus Announcer (40:41)

It's great to be here.

Carrie Firestone (40:42)

Thank you, Scott. I'll send it back to you.

Scott Wapner (40:44)

All right, Leslie, thank you so much. What a great time to hear from Richard on the back. Joe, of the comments yesterday. Yes, you have without question, one of the most popular bank stocks has one of its worst days in eight months. And even the man who did the interview on the stage, the conversation that that generated that comment said just now is surprised. What do you do with that as a shareholder?

Joe Terranova (41:10)

Surprised as well. And I think it now comes down to JP Morgan ability to increase revenue growth consistent with the expense growth because otherwise you have negative operating leverage if you don't in 2026 deliver a 9% revenue growth. And by the way, the street doesn't expect they're going to deliver 9% revenue growth in 2026. They had a very good year, 12%. The year prior was 22%. So they've been delivering on that revenue growth. Expenses in the first nine months of this year only grew 4%. So it is surprising and I will be proven wrong in buying JP Morgan last week where I did up around this price level, if in fact they don't deliver on revenue growth. The other element of it is that what does it do for the industry itself? Does it now create an environment where it's almost like an arms race where everyone's spending? And again, that's a challenge for the certainly the money center bank.

Scott Wapner (42:08)

You know, what it means is that pay attention in January when you get earnings and now you now there's going to be even more anticipation for the other names in the group, not to mention jpm, to hear from Jamie directly, obviously in the analyst community on what they deliver and what this issue.

Scott Wapner (42:25)

Ends up being. We'll pay attention to that. Mike Santoli, we pay attention to him, always do his midday words next.

Scott Wapner (42:32)

All right, welcome back. Let's go to Capitol Hill. Emily Wilkins joins us now. All right, so one minute you find Jensen Huang wandering around down there and you get the microphone in his face. And today, somebody equally as interesting.

Carrie Firestone (42:47)

Apple's Tim Cook. He was on the Hill today. We did ask him a couple of questions. Now, we did not hear directly from Tim Cook himself. Decided to be a bit of a man of mystery today. But we did know that he has met with lawmakers about a package of bills that are going to get their initial votes in a congressional panel tomorrow. And these deal with kids safety online. And they include a number of things that could have some very big impacts on the tech sector, not just for Apple, but social media companies as well. I spoke with Congressman Gus. Bill Rock is he's going to be chairing that oversight tomorrow. And he said he didn't go into too many details with what they discussed, but he did note that some of the things included the App Store. There is this ongoing battle between social media networks about age verification for kids and the App Store. A lot of the social media say it should be on the App Store to figure out how old the users are and share that information. Apple has previously pushed back against that. And Bill Rock has told me that he will continue to work with Apple in the industry, but said that regardless, Congress is going to be pushing forward on this series of bills. You might remember this is a hot topic here in Congress. Just last year, a bill addressing kids online safety got very high support among the Senate. Lawmakers are hoping for something similar this year. But of course, you're going to see Tim Cook and a lot of others weigh in between now and any sort of passage.

Scott Wapner (44:05)

SCOTT all right, the intrepid Emily Wilkins on the Hill for us. Nice work. We'll see you soon. Senior markets commentator Mike Santoli joins us now with his midday word. I suppose it's all about the Fed and rates.

Joe Terranova (44:18)

Yeah, it's all about that. All about what's implicitly priced in in terms of expectations. It does feel as if the market is, you know, a little bit hedged up going into it. The leaking higher in the Vix. The past couple of days it's up around 17. We got that. Plus the Oracle earnings after the after the close, probably keeping it a little bit higher than it otherwise would be. It feels like the market should be fine with another cut and then a hold period after that. Remember, we basically went nine months between rate cuts from December of last year to September of this year. And the market did fine because in general, policy was considered helpful on the fiscal side and, and the economy held in there. So if everybody's right about expecting a pickup in growth into next year, we should theoretically be able to deal with a data dependent Fed. We'll see if the market sees it that way.

Scott Wapner (45:05)

Yeah, maybe a hawkish cut makes no difference. I mean, if you if you don't get into a danger zone of whatever that might be for, for interest rates, then we'll see. Mike, I'll see you. Thank you. That's Mike Santoli. Up next, a trade alert. Another one halftime committee member Seurat Sethi has a new buy. He's going to join us next. Tell us exactly what it is.

Scott Wapner (45:26)

We are back with the said trade alert from that man right there, Surat seti, waiting patiently to tell us that he Bough, what Waste Connections got? Waste Connections is one of the leaders.

Joe Terranova (45:37)

In the waste management world.

Scott Wapner (45:39)

If you look at the waste management.

Joe Terranova (45:41)

Area, there are really three companies and this is one of the ones we.

Scott Wapner (45:44)

Think is the leader. If you look at the market, $120 billion there, about 7%, 40% of their business is what they have independently owned to 60% is what they compete with. And I think what you're looking at is a big addressable market, a stock that's flat for the year, that over.

Joe Terranova (46:02)

The last 10 years has beaten the.

Scott Wapner (46:04)

S&P trading at 15 times earnings.

Joe Terranova (46:06)

And if you look at kind of historically, it's traded between 14 and 20 times.

Scott Wapner (46:10)

They had a couple of things that went wrong last year. One of their landfills was closed and.

Joe Terranova (46:15)

Then they also got rid of a.

Scott Wapner (46:17)

Bunch of bad customers. So I think going forward, you look at next quarter, things are going to.

Joe Terranova (46:22)

Start turning and look at an area.

Scott Wapner (46:24)

Where stocks can be, you know, we.

Joe Terranova (46:25)

Think are potentially overvalued. This is a great defensive supply.

Scott Wapner (46:28)

You, you bought it when and about around the price, bought a little bit.

Joe Terranova (46:33)

Higher and we'll be keep on adding.

Scott Wapner (46:35)

To it as well because I think.

Joe Terranova (46:37)

It'S a good, good core position in the portfolio.

Scott Wapner (46:40)

Okay. Hey, thanks for joining us. I appreciate you doing that. We'll keep an eye on that wcn, of course, which, you know, you may know. Kerry, you own it, right?

Carrie Firestone (46:48)

Yes.

Scott Wapner (46:48)

What do you think here?

Carrie Firestone (46:50)

I think, sir, I just. Very smart. Always have it. This is a long term, 8 to 10% grower. They've had a difficult year. The stock's down 15% from its high and definitely I think it's an attractive stock price here.

Scott Wapner (47:02)

Yeah, I mean, he bought it a little bit higher. He obviously said, can we pull it back year to date? Let me, let me just look at that one more time as well.

Scott Wapner (47:12)

So the stock obviously has done nothing year to date in total, but it's. What's wrong with that?

Carrie Firestone (47:19)

Yeah, it's fine. It's showing some signs of life. It's not in an area that's been very exciting this year. It has not done anything in terms of its quarterly reporting that has ignited interest, but it's a steady grower. It's in the trash business. You know, there's no reason that they can't continue to grow over time, which they have.

Scott Wapner (47:40)

All right, we'll take a break. We'll come back. We'll do finals next.

Scott Wapner (47:45)

All right, you've got the Fed decision. You've got the Fed chair meeting the media and then you have, like we always do, Jeffrey Gundloch, double line CEO, CIO and founder meeting. You tell you exactly what he thinks of the decision, what the best investment moves are in the wake of it. Can't wait for that. Three o' clock Eastern time, Right? When the Fed chair is done talking, Jeffrey will start. Let's do final trades. Jenny Harrington, what do you have?

Jenny Harrington (48:10)

I'll give you a new one. Sabra Health care. It's a 6.3% dividend yield. They're in the skilled nursing and senior housing space. There's no threat from AI and they've got the demographic wind at their back.

Scott Wapner (48:20)

Thank you.

Jenny Harrington (48:21)

You're welcome.

Carrie Firestone (48:21)

Carrie Firestone, Apollo So Apollo and its peers have really been suffering lately. We think they're turning a corner. Interest rates going down will be a positive.

Scott Wapner (48:31)

Those stocks were all up big yesterday. You notice that, right? Okay.

Carrie Firestone (48:36)

Liz Thomas, Value I think Value starts to win in 2026. It's time for the rotation to actually take its grip.

Jenny Harrington (48:45)

I agree. I agree.

Joe Terranova (48:49)

Jyoti Spotify is in the Jyoti etf. I'm going to buy it on the close today, though. Personally, we know the fundamental good story about podcasts and pricing power, but the correlation with Netflix has now broken down. It's been having that correlation since back in June. It's a reason to go into the stock.

Scott Wapner (49:06)

All right, see you on the bell.

Scott Wapner (49:10)

You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.

Carrie Firestone (49:21)

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer.

Joe Terranova (50:03)

Before the trophy and bragging rights are rightfully yours, before your sleeper turns in a season no one saw coming, before stats and projections turn into points on the board and your lineup falls perfectly into place, you flip the lid on a can of on nicotine pouches. And as you make your first pick, you know this is the season where fantasy is going to surpass reality.

Scott Wapner (50:24)

It's on.

Joe Terranova (50:25)

Products for tobacco consumers 21 years of age or older. Warning. This product contains nicotine. Nicotine is an addictive chemical.