CNBC Halftime Report Podcast Summary

Episode: Final Full Trading Week of 12/15/25
Host: Scott Wapner
Date: December 15, 2025
Investors/Panel: Joe Terranova, Shannon Saccocia, Steve Weiss, Stephanie Link, and special guests Ron and Michael Baron

Episode Overview

This episode kicks off the final full trading week of 2025, focusing on the rapidly shifting dynamics across U.S. equity markets as investors digest new economic data and major sector rotations. The team discusses where leadership is emerging as the “run it hot” trade takes hold, with special attention to the outperformance of cyclicals, banks, industrials, and the evolving outlook for AI, tech behemoths, and China. Key highlights include discussion of Federal Reserve expectations, sector rotation, the wealth effect from a booming market, and a special interview with legendary investor Ron Baron.

Key Discussion Points & Insights

1. Market Rotation and ‘Run It Hot’ Trade

(01:00 - 06:14)

• Sector Rotation: There’s a notable shift away from tech/AI leaders ("Mag 7") into cyclicals—materials (+4% WTD), financials (+3%), and industrials (+1.5%). Tech and communication services lag.

  • Joe Terranova: "I think this is going to continue as we go into 2026... the opportunity outside of just the Mag 7 is real." (02:44)
  • Shannon Saccocia: "There has been a meaningful rotation... earnings growth is expected to be strong up and down the US cap next year." (04:04)

• Fed Policy & Economic Growth: The team explores the Fed’s revised stronger growth forecast and its implications.

  • “The run it hot trade is based on anticipating an inflection higher... manufacturing, construction, consumer spending—all are getting a boost.” (04:04, Saccocia)

• Tech Outlook: Brief discussion of outflows from technology and the potential for short-term rebounds in the Mag 7 as valuations between them and the S&P 493 diverge.

2. Consumer, Discretionary, and Sector Standouts

(05:18 - 07:37)

• Record Moves: The consumer discretionary sector hits new highs, propelled by luxury spending, restaurant, retail (Marriott, Hilton, Royal Caribbean), and a significant Tesla move on robotaxi news.

  • Steve Weiss: "The market looks for laggards out... New money is looking for places to go, that's unlocked, and that's consumer discretionary." (06:14)

• Caveats: Weiss warns that consumer strength is bifurcated and susceptible to labor market stress and AI-driven disruption. “Next year you’ve got to be careful where you go...[AI] is going to increase productivity while lowering labor costs.” (07:37)

• Tesla and Robotaxis: Tesla jumps 4% on autonomous vehicle developments; Uber and Lyft trade down in response. Joe pinpoints the dichotomy between trading and investing perspectives.

3. Financials and Bank M&A Surge

(11:15 - 14:20)

• Record Highs for Financials: Financials are the top sector for December, with key banks (JPM, Wells, Goldman, MS, Amex, Citi) at or near record highs. Private equity and credit names are also strong.

  • Saccocia: Notes dichotomy between regional banks and alternative asset managers, with M&A and loan growth driving different parts of the story. (11:42)

• Dealmaking Themes:

  • “Bank M&A...annual YTD deal activity is already 33% higher than the 2022-24 avg... we expect Bank M&A to continue in 2026. Global deal value up 40% this year.” (12:42)

• Regional Risks: Concerns persist about high-yield credit exposure and regional banks in energy-heavy locations, especially if oil drops further.

4. Industrials & Transportation: Barometer of a “Hot” Economy

(15:28 - 19:34)

• Transports Lead Broadening: 82% of transportation stocks trade above long-term averages; Piper Sandler and Yardeni signal broadening market leadership.

• Stephanie Link adds Union Pacific (UNP):

  • "I'm looking for 2026 stories ... strong economy leads to better volumes and double-digit earnings growth. Layer on cost efficiencies, they're reducing debt; if the Norfolk Southern deal goes through, it's $2B synergistic to EBIT." (16:10)

• Cyclical and Value Focus: Link reiterates overweight in industrials, cyclicals, and financials, recently adding energy.

5. Wealth Effect & Market Optimism

(19:41 - 25:28)

• Steve Liesman, All America Economic Survey:

  • 48% of Americans say it’s a good time to invest—the highest since 2018.
  • Crowd wisdom: "If you put $1,000 into Apple, Amazon, Google, Walmart in 2016, you’d have $9,000 now—25% annual return." (20:11)
  • Big divergence: Those with $50,000+ in investments are far more optimistic about both stocks and the economy (38% vs 26%).

• Wealth Effect Dynamics: “The stock market is not the economy—until you make a lot of money and feel good, then you go out and spend more.” (25:17, Wapner)

  • Home appreciation and credit availability also boost confidence and spending.

Notable Quotes & Memorable Moments

• On Sector Rotation:
  • Joe Terranova: "The opportunity outside of just the Mag 7 and adjacent tech names is real...[rotation] is real." (02:44)
• On “Run it Hot” Trade:
  • Shannon Saccocia: “You are anticipating an inflection higher and a reacceleration in everything from manufacturing and construction to consumer spending... earnings growth is expected to be strong.” (04:04)
• On the Consumer:
  • Steve Weiss: "The consumer is bifurcated... I don't think the consumer is dead. We've got a very resilient consumer that believes in the country, as they should." (07:37)
• On Financials:
  • Joe Terranova: "There is plenty of room to build positioning in financials... Think about fundamental tailwind of deregulation... trading activity is really strong." (14:20)
• All America Economic Survey:
  • Steve Liesman: "48% say it's a good time to invest, the best since 2018... If you have more than $50,000 in the stock market, 38% think the economy will get better, under $50,000, only 26%." (24:38)
• On Wealth Effect:
  • Scott Wapner: "The stock market is not the economy—until you make a lot of money and... feel better about spending." (25:17)

ETF Edge: Ron & Michael Baron Interview

(38:21 - 46:02)

• Baron Capital Launches Active ETFs:
  • Michael Baron: "We've been in business for over 43 years doing one thing extraordinarily well—long-term growth equity investing. Now we're extending it to ETFs for access, tax, and liquidity reasons." (39:09)
  • Ron Baron: "We’ve made people more than they trusted us to manage... We define our research by First Principles—boiling companies down to their essence, rebuilding them, and investing for the long term in great people." (40:25)
  • Tesla & SpaceX: SpaceX is now the largest holding ($10B), Tesla the second largest ($5B); "They became the largest holdings because they've been so successful—not because we invested a great deal—but because we haven't sold." (42:09)
  • On mission: "Not just about making money fast, but changing lives—clients, employees, and helping businesses do better if we had not been investors." (44:16)

Stock Calls, Upgrades & Trades

(28:18 - 49:05)

• Las Vegas Sands (LVS) upgraded at Goldman; seen as best casino operator due to balance sheet and Asian growth (28:31).
• Costco (COST) downgraded by Roth. Panel agrees valuation is tough to justify given slowing momentum and renewal rate declines.
  • "Costco does not look good. There has been a very clear breakdown in the momentum." (29:23, Terranova)
• Trane Technologies (TT) upgraded at Keybanc. Seen as a rare entry point into high-quality HVAC and data center exposure (31:45).
• Vertiv Holdings (VRT): Steve Weiss sells due to high valuation and increased risk in AI infrastructure segment.
  • "I'm trying to lessen my exposure to the AI infrastructure... the bloom is off the rose in terms of rising all ships." (36:16)
• Union Pacific (UNP) buy: Stephanie Link, due to cost efficiencies, potential M&A, and industrial strength (16:10).
• China Stocks/AI: Alibaba seen as beneficiary of government AI spending, but cautious on economic backdrop. Yum China (YUMC) cited for resilience, up 8% since October.
• ServiceNow (NOW): Down 11.5% on M&A talks for Armis and a downgrade; momentum and software lag semis.

Noteworthy Final Trades

(49:54 - 50:20)

• Joe Terranova: Citi—"I like Citi."
• Steve Weiss: Leidos—"Hired a new CTO, really getting into AI, great story in industrials."
• Shannon Saccocia: Industrial electrification—the infrastructure play has run, but other opportunities exist.

Key Timestamps for Reference

• Market Open & Rotation: 01:00 – 06:14
• Consumer & Discretionary: 05:18 – 08:23
• Financials & Private Equity: 11:15 – 15:28
• Transports & Industrials: 15:28 – 19:34
• Wealth Effect Discussion & Survey: 19:41 – 25:28
• ETF Edge w/ Ron & Michael Baron: 38:21 – 46:02
• China Stocks Review: 46:02 – 48:28
• Final Trades & Wrap: 49:54 – End

Tone & Language

Lively, conversational, and occasionally playful with competitive banter (especially between panelists Joe Terranova and Steve Weiss). The team speaks candidly about both the risks and opportunities, giving nuanced views on current sector rotations and the sometimes-messy relationship between economic data and market behavior.

This summary captures the Halftime Report’s core conversations, expert insights, and actionable highlights for investors navigating the year’s end and 2026’s opening moves.