B (2:42)

Right place to start the conversation.

C (2:44)

Thank you.

B (2:44)

I think this is going to continue as we go into 2026. I think from a bigger picture perspective, thinking about the broadening out and the opportunity outside of just the Mag 7 and the adjacent technology names is real. I think you carry that into 20. There has been a meaningful rotation. It started with the momentum factor kind of rolling over and now it's really more isolated to technology and AI itself. I think in the near term there is going to be a little bit of a return to some of the Mag 7 names, some of the technology names. Just in terms of the performance differential between the 493 and the 7, it has gotten pretty wide. I think this morning we had a meaningful flush lower. I wouldn't be surprised to see a little bit this week. If you see the Mag 7 come back, if you see some of these technology names come back and narrow that price differential. But bigger picture, I like where you go with that. I think the rotation is real.

C (3:47)

You're, you're going to get always, you know, nibbling and dip buying in that group. But the so called run it hot trade, that's what remains in focus as People prep for 26. Is that something to run with for the foreseeable future?

E (4:04)

I think so and I think there's a couple of things here. Number one, you know, we still have this transmission of lower interest rates regardless of whether you think they're going to do one or three, depending on what happens in May of 26 with the Fed chair. I think that you get that as, as a tailwind. The other thing is, Scott, we saw the Fed increase their expectations for economic growth next year. And that run it hot trade is, is based on the fact that you are anticipating an inflection higher and a reacceleration in everything from manufact manufacturing and construction to consumer spending and this liquidity infusion that were due in April and May around tax time. All of these things really are supportive of the fact that if you're looking at just the fundamentals and why equities go up over time, it's earnings growth and earnings growth are expected, is expected to be strong up and down the US cap next year. And so from to Joe's point, we may see, you know, this, you know, this Delta between the Mag 7 and the rest of the 493 narrow at certain points. But I think in terms of where we are, we're seeing a channel where earnings growth is going up and to the right and the bottom part of that channel is continuing to rise as a result of the more attractive valuations and the anticipated earnings growth next year on economic tailwind.

C (5:18)

Some are wondering, Weiss, whether the casualty of all this, if you want to, if you want to say that, will be new highs for the S and P. Like you got your new high and then you had a Fed meeting and then the run it hot trade seems to be the, the outcome of, of what happened there. Wolf says so much for a return to new highs. Was starting to look like new highs before year end were inevitable. It's now becoming evident that euphoria is starting to fade into the end of the year. We think there's a good chance that Trend persists into Q1, which likely does not bode well for tech. We don't necessarily have to have a conversation about tech specifically here. But the other idea. Run it hot. Buy what's hot Shan hit it. Consumer. Consumer discretionary hits a new high today for the first time since September. Restaurants, retail, Marriott got an upgrade. Financials have hit a new record high. Those are the kind of stocks that are getting a lot of ink today.

F (6:14)

They are as market looks for laggards out. I've been embedded in this technology trade for so long and it's always served me well with this V shaped recovery off to new highs and that's not really happening. And when you take a look at what the Amazons and the metals have done in the year, they really lack. So new money is looking for places to go that's unlocked and that's consumer discretionary. I personally wouldn't stay in that trade too long because I don't think that, I don't think the consumer, the consumer spifurcated. Right. There's the real, you know, those that don't worry about the economy every day that keep spending. So that's probably good for luxury except on the margin some that reach for that class won't be reaching for it anymore. And then there's, you know, those that are really worrying about their jobs as you get more and more layoff announcements. So I do think that the bull market will continue. I think now, you know, we're just not. I'd be surprised if we saw a strong rally into year.

C (7:10)

I mean if you look at some, some like I said, the Marriott upgrade.

F (7:13)

Yeah.

C (7:14)

Today, now that's in part of thinking about the higher end.

F (7:17)

Yeah.

C (7:18)

Hilton's up today.

B (7:18)

Yep.

C (7:19)

Royal Caribbean is up today. Some of the restaurants today.

F (7:23)

Yeah.

C (7:24)

So like again, you know, the recurring theme of the demise of the consumer and it's it can't just. You can't just tell me that it's the high end that's supporting the Shake Shacks or the Brinkers.

F (7:37)

No, I don't think, I don't think it is. But, but I also believe that the cost of the supermarkets, which have gone up and you've got less of a spread now between eating out the Brinkers and buying your own, buying foods, make your own meals. And I don't think it's dead. Right. We've got a very resilient consumer that believes in the country as they should and believes that things will work out and they will ultimately. But I think next year you've got to be very careful where you go. And I do believe we're going to see more AI affecting more jobs, and that's going to drive the market, actually, because it's going to increase productivity while lowering labor costs. So I think we're okay. But it's picking your spots. I think there are plenty of spots to pick, aside from consumer. That trades good for now.

C (8:23)

I got you. The other thing, by the way, is obviously discretionary is being skewed somewhat today by Tesla's move, which is up near, near 4%. So any time you get a big move in either Tesla or Amazon, you're going to see it show up in the discretionary sector. Tesla's up a lot today on news that it's testing driverless robotaxis in Austin. It is a significant advancement for what they're trying to do. Not surprisingly, Uber and Lyft, you can show those because they're lower. You personally sold Uber last week, by the way. We have a special interview coming up. Ron Baron is going to be on ETF edge today along with his son Michael. That's a big deal. One can only presume that we'll ask him about what's happening with Tesla. So what about this? I mean, it's, you know, you see Tesla go up, you see Uber go down. This is the way it works. When you're talking about robotaxis and autonomous and the efforts that these companies are trying to compete in.

B (9:16)

Yeah, there's the conflict between trading and investing, maintaining two different perspectives on where you think something ultimately can go and reshaping your risk accordingly. Long term, I believe in the fundamental story for Uber. It is in the Jyoti etf, so I'm covered there near term. I do not like the way the stock continues to kind of bump its head against the ceiling somewhere between 90 and 95 and fall back, back and continually test this $80 level, I think of that $80 level which is a critical swing area, previous resistance, it breaks through there, you're going to see further deterioration. I think that's really more decision oriented about trading than anything else. And I also think right now where we are collectively in the market, I think trading decisions are kind of dominating more than investing decisions.

C (10:02)

Well, I don't know. I mean, you know, if you look at the areas that, that are working, I'm not sure if it's necessarily Shan, you know, trying to trade the market. I think financials are hitting a record high because for all the reasons I said that the run it hot economy yield curve, spend steepening.

B (10:18)

I think there's more to it. I'm sorry, I don't mean to interrupt your thoughts.

C (10:22)

I'm not saying there's not more to it.

B (10:24)

Well, there is more to it. From a portfolio manager standpoint. You're always looking strategically at various factors and, and looking at risk. I also think a lot of this story we're getting to the same place because we both are identifying that these are the places you want to be in the market right now. But there's something about low beta versus high beta. And at the beginning of the year everything was about high beta. Now the market seems like it wants to gravitate towards lower beta. Look at health care, Scott. Health care is the leading sector today. It's been the leading sector in the quarter. Why? Because it checks the box on beta, it checks the box on being defensive in a certain sense and it checks the box on valuation. And this market as we moved into the fall was concerned about valuation. So I think it's collectively all of it and I think portfolio managers are really driving right now in the near term this move towards the 493.

C (11:15)

So as I said, financials hit a new record high today. The best sector this month, Financials up three and a half percent. You had a lot of focus around some of the private equity, some of the private credit names. Apollo's the leader on the month, 12 and a half percent. PNC Financial 52 week high on Friday, Wells, Citi, Goldman, Morgan Stanley, American Express, JP Morgan either hitting 52 week highs or record highs within the last week or handful of days.

E (11:42)

I think there are two different stories there. I actually would say the valuation question around the private market slash alternatives, firms like that's, you know, that has been resolved. We saw some weakness in those names earlier this year and real concerns about a potential slow M and A market and the lack of distributions and so with that reacceleration in M and A, you see those distributions which allow for increased fundraises on the regional bank, super regional bank. Scott, you're seeing an opportunity again in this, to your point about the yield curve and being able to potentially have that reacceleration of loan growth next year into an environment where small businesses are perhaps more likely to want to put capex forth given the fact that they have some digestible tax news that they've been able to put through their businesses. The other thing is Scott, with the regional banks is there's this push and pull right now with private credit. And so looking at hey, I can get credit exposure to small companies, I can do it through a bank versus maybe going out in the private, private credit sphere. We may not agree with that, but I think you're seeing that in the market.

C (12:42)

Morgan Stanley Weiss talks about Bank M and a accelerating annual year to date deal activity already 33% higher than the 22 to 24 yearly average. With a clear business case in support of regulatory environment, we expect Bank M and A to continue in 2026. Global deal value jumps around 40% to four and a half trillion this year. That's the second highest on record. Thus the stocks that would play the biggest role within that orbit are the ones that are, are continuing to do well.

F (13:12)

Yeah, and I do think that the regulatory environment will, will foster greater, more combinations and they've got to do it to stay competitive. So you know, I still believe that there's a lot of juice in, in the Goldman's, in the Morgan Stanley's, which I'm looking at in Citi because of the IPO calendar and, and the secondary calendar. Keep in mind that private equity has been held at bay as has VC that they've, they've, you can only do so many continuation vehicles which are when a fund's due to expire you take the assets or one particular asset and put it in a new fund and that's sort of run out of juice. Investors have no appetite for that now. So they've not, they're now going to have an accommodative market. We've got some big IPOs coming so I think that's going to further drive this and then once they have that capital that'll drive more M and A. So to me I play the bankers that are the M and A bankers and the investment bank JPM.

C (14:11)

New record high today.

F (14:12)

Yes.

C (14:12)

Top picket TD cow and the target goes up by five bucks to 375 from 370 they reiterate the buy you got in the T. We do.

B (14:20)

And I also, I own it personally. It's actually not in the etf. If you remember a couple of weeks ago, I bought it personally because I wanted to have the exposure there. We defended it last week when the news from Marianne Lake came out about the concerns that she had with the consumer. And I think it was really more the expenses coming in at 1 of 5 billion versus 1 to 1 billion where the street got concerns. But there's plenty of room to build positioning in financials. Thinking about the fundamental tailwind of deregulation, thinking about the valuation perspective, the continued strong activity that we're seeing in trading itself. Trading activity is really strong. And as you go into a midterm election year, I think that ultimately is going to intensify even more. The one area that I would begin to express some concern would be regional banks in the energy regions of the country. That takes you into Texas. Oil is falling down to 56. It's a tremendous benefit right now for the consumer. But if energy falls into the 40s, remember you have that exposure in high yield credit. It's tied to a lot of those regional banks. I think we're going back to where we were in 2018, talking about that all the time.

C (15:28)

How about one of the most classic signs in a market of a run it hot economy transports right coming off the third week of gains, first time since August, by the way. Piper Sandler talks about that 82% of transportation sector stocks are trading above their 40 week moving averages. Ed Yardeni within the S and P industrials, transportation stocks have been strong. Dow theory indicates an upbeat economic outlook would continue with continued broadening of the market's leadership in 2026. Perfect segue to a trade alert from Stephanie Link joins us now with a new buy and it is Union Pacific unp. Tell me more.

G (16:10)

Yeah, and it's not been red hot, Scott. It's only up 5% on the year, which kind of makes it interesting to me. I'm looking for 20, 26 stories and I'm trying to position my portfolio over the next couple of weeks for that. And I think this story sets up really well from a fundamental basis. I think the strong economy will continue next year and that will lead to better volumes and that will lead to double digit earnings growth. And then you layer on cost efficiencies and service and productivity and again I think you can see double digit earnings with margin expansion. They're also using their free cash flow to reduce debt. So they their debt to EBITDA is now 2.6 times versus 2.8 times last quarter. I think that's going to continue to trend to two.

H (16:51)

That's good.

G (16:52)

But the real kicker is this acquisition that they announced with Norfolk Southern has yet to get approved. But all indications from the Surface Transportation Board indicates they're very supportive of this deal. They had 400 customers that wrote into the regulators that also are very supportive supportive of this transaction. And it's important because if it does go through its $2 billion synergistic to EBIT, a billion on the revenue side, a billion on the cost side, we probably don't hear about approval until the second half of the year. But I think the first half of the year fundamentals alone will continue to improve. And I mentioned volumes, but margins in the last two years are up 500 basis points. So outstanding management team that's done a really good job on execution. And so I think it will catch up to other transportation stocks.

C (17:39)

You want to run with this run it hot trade? Is this something that you're buying into?

G (17:45)

Well, I don't know if I want to know. I don't think I'm going to buy into run it hot. I want to focus on strong fundamentals. And you know, I have been underweight technology for a while. I do own some of the Mag 7, but I'm underweight overall. Mag 7. I have been overweight industrials. As you know, we talk about all kinds of industrials like the Boeing's and the ges of the world and of course course all of the data center plays and now the transports. I like the financials. You guys were just talking about it. That's my most overweight sector by percentage points. And so I still want to have that, that exposure.

C (18:17)

It is a fundamental question though. It is a fundamental question. I don't want to misrepresent what I'm asking you. It's the idea, fundamentally speaking, that the economy is going to run strong in 2026. The administration may want to run it hot, so to speak, in quotes, certainly into the midterms. But you get some, you know, policy air behind you. You have monetary policy behind you. The idea that the Fed is cutting into what appears to be in many respects a strengthening economic case, not necessarily a weakening one. That's the premise that I meant and maybe I wasn't clear enough about it, but that's what I'm talking about. That sounds like you're totally on board with that.

G (19:02)

No, 100%. I misunderstood you, Scott. I Thought you were talking about the stocks that have already kind of run what I know, momentum. So I totally understand what you're saying. And 100% are on board with that. You know, I've been talking about the cyclicals for a very long time, and that's why I just outlined the sectors that are most overweight. And oh, by the way, I just added an energy position two weeks ago as well. Talk about cyclical, I think that's where your best values are at this point in time. But, yeah, no, I am on 100% on board with what you're talking about.

C (19:34)

Yeah, I mean, it sounds like you were signing your name on the line of that whole idea.

G (19:38)

Stephen, thanks.

C (19:41)

All right, we'll see you back here on the desk soon. Steph, thank you. Our senior economics correspondent Steve Leeson, by the way, is here@post9 because I feel like his most recent All America Economic Survey kind of plays in this idea, optimism around just what's happening. Steve, I think one of the pullouts here, Americans are more enthusiastic than they have been since 2018 about investing in the stock market. Yeah, 48% say it's a good time to invest. What else do you learn here?

I (20:11)

Can we have some fun with this first? Go ahead, because we ask people, if you were going to give a stock as a gift, what stock would you gift? If you were gifting stocks, take a look at the, at the results here. And then I'm going to give you some history on this question here, which is pretty interesting. Here are the results. What's topping it? What are your best stocking stuffers? Apple. Amazon leading with 14%, Apple next with 8 and then Nvidia with 7 coming in third. Other notable mentions, Tesla, Alphabet, Berkshire and Walt. Now, when we last asked this question in 2016, we had, we, we gave them the answers last time I said, which one do you think these were? Volunteered answers this time around. Amazon, Apple, Google and Walmart, a nearly identical listed today. And good suggestions. Back then I asked perplexity, If I put $1,000 into those stocks back in 2016, what would they be worth now? $9,000 for an annual return of 25%. So a little bit of wisdom in the crowds, wouldn't you say, Scott? Meanwhile, Americans, as you say, they're down on the economy, they're concerned about inflation. One thing they're upbeat about, the stock market, as Scott told you, 48% say it's a good time to invest. Best number since 2018, 41% a bad time. The Met +7 marks an improvement from the -15. Remember, in the wake of the reciprocal tariffs in April, optimism has improved along with the sharp recovery and gains in the market. Meanwhile, the survey showed it is a good idea to have a friend or a loved one who has a lot of money in the stock market and is going to put a gift under your tree. Take a look. Average plan spending among all Americans, 1016, you have investments below 50,000. Just 724 investments above 50,000. You might get a gift around 1500. They're going to spend around $1500 this year. The serious side of this thing, if you if I will for a second, we might see a pronounced wealth effect from the buoyant stock market, at least among those with a lot of money in the market. It feeds into the psych. It actually gives you real money, but also feeds into psychology.

C (22:09)

I mean, I think there's almost a guaranteed angle from that. I mean, I feel like.

I (22:15)

Do you have a lot of friends.

C (22:15)

Who are I feel like the All America Economic Survey points to a bit of a disconnect that exists if you're reading the language here, and it says, well, Americans are down on the economy and they're down on inflation and all that. I don't think stock market investors, the tried and true ones, are down on the economy at all. In fact, they're happy with the fact that the stock market is doing well. They only see rate cuts as coming into a strengthening economy and making the case as to why the stock market should continue to go up. I think there was a Fidelity thing that came out the other day that said the number of 401k millionaires is way up.

F (22:57)

Yep.

C (22:57)

Retail investors have done better than arguably they've ever done before and they've been leading the charge. So I feel like it's, you know, be careful what answers you you get, Steve, and then try and make a story out of because you're talking about the economy and the stock market, one not necessarily being the same as the other.

I (23:15)

Scott, There is a, there is data for that. I just not ready to give it to you because I have a spreadsheet with 400 different cross tabs on it. But I don't know that in fact people with more money in the market are more optimistic. And I can tell you that I'll send you a text on that, but that may well be the case.

C (23:31)

Well, otherwise, what would a wealth effect be? If there's if you're not more optimistic.

I (23:37)

About a bigger stock, you could be down on the economy and look at your portfolio and say, there's a lot of money in there, I'm going to spend some of it. In fact, some people who are down on the economy may spend for just that reason.

B (23:50)

I also believe that the value of homes, if you own one, is a considerable tailwind right now. Availability of credit is there. The cost of capital has moved lower by, what is it, 175 basis points over the last year. And there's a real wealth effect from the value of your home increasing. I also would be interested to know, and I don't know if you'd have this, Steve, is what is the holding period? Because obviously the holding periods have declined significantly for investors over the last several decades. But I think this is becoming a more active marketplace. And I would be surprised if the answer to that was that the holding period has not gotten even shorter.

I (24:30)

I don't know the answer to that, but we can ask. But I will. I want to answer Scott's question, and he is accurate. And I only have the outlook.

C (24:38)

Thank you.

B (24:38)

Good job.

I (24:39)

I only have the outlook here, but I'll give you the actual data. If you think the economy, if you have more than $50,000 in the stock market, 38% believe the economy will get better in the next year. If you have under 50,000, only 26%. So it definitely colors your outlook about optimism. I can't maybe. Ask me another question.

C (25:00)

You have another answer even in here that you could surmise plays right into that confidence among, I'm reading right from your thing. Confidence among financial elites is even stronger. Yes, at 69% in terms of those who are enthusiastic about the stock market.

I (25:14)

But I'm talking about the overall economy.

C (25:17)

I just think there's, you know, the stock market is not the economy until you make a lot of money and you feel good about the stock market and then you go into the economy and feel better about spending because what you just did in the stock market. Right. There is a wealth effect.

F (25:28)

There is a virtual economy. It's actually.

I (25:33)

It'S actually very small. By the way, the wealth effect, they believe it's 5 cents on the dollar. That is the general number used by economists. So every dollar of gain you have, you might spend an extra nickel, but.

E (25:43)

That'S highly correlated with whether you own a home as well. And then that compounds the wealth effect. You see the two in confluence over the last number of years, and it's been market.

I (25:51)

I think of the home, by the way, as a security blanket, not a spending piggy bank. I think, I think that when, when, if the home. If the, if your home price is buoyant and secure, it sort of makes it easier to step forward. I don't think of people have spending because my home value is higher. I think I might spend if my.

C (26:09)

Stock market But I can almost bet you that we if we were in the middle of a big nasty bear market, the results showing well how many people are enthusiastic about investing in the stock market? Those numbers would be depressed. That's it.

I (26:23)

I agree.

C (26:24)

We'll see.

I (26:24)

This is like one of the conversations we have offline all the time. But you said this. No, you said that I said this. There we go.

C (26:30)

Thanks Steve.

I (26:31)

Thanks.

C (26:31)

Alright, Steve Liesman. Coming up, big upgrade and one rare sell call for two of Joe's consumer plays. The names, the debate and our calls of the day. We're back in two. The heaviest metal credit card of all.

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And wielded.

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C (27:09)

It's a classic corporate power move.

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C (28:18)

Calls of the daytime. We start with LBs today that's Las Vegas Sands upgraded to a buy from neutral at Goldman the target to 80 from 64. So it already got past 64. Now they bump it up to 80. Joe to you own this name.

B (28:31)

I think it's the right casino name to own because of its balance sheet. A little bit better. Sorry Jimmy Labenthal if you're out there watching that when also consistent on their buyback strategy. Strong exposure to Macao, strong exposure to Singapore Macao. Only that growth to intensify in 20.

C (28:47)

What's went up year to date, what's went up year to date.

F (28:50)

We got to pull that.

C (28:51)

Let's see. Pull it, pull it.

J (28:53)

All right, here we go.

C (28:54)

While you're telling, sorry, Jim Labenthal, 42%. Oh, it's 42%. Oh, oh. So sorry, Jim Leventhal that his stock's up 42%. Yours is up 29. But yours has a better balance sheet.

F (29:04)

Ooh, yeah. How's that working out?

C (29:08)

I got a better balance.

F (29:09)

Go, Jimmy.

C (29:11)

Costco downgraded to a sell from neutral. I was looking out for you, Jim. Costco downgraded to sell from neutral at Roth, the target to 769 from 906. You want that too?

B (29:23)

Sure, let's do it. Costco does not look good. There has been a very clear breakdown in the momentum. This is a name that we have owned for the better part of the last four years. We have significant profit on it, but it doesn't matter given what we're seeing down 12% so far over a one year basis. The stock has broken down. Fundamentally, they have not been able to capture the degree of traffic that Walmart has. They've also struggled with the tariffs where Walmart has done far better with it and now they have the litigation surrounding the tariffs with the Trump administration. So the stock is near a 52 week low. I was recommending it into the summer when it was near its all time high, which obviously was the wrong move. Remember, we've owned it for four years. We'll see what we do with the next couple quarterly rebalance. But from a price perspective, it doesn't look so good.

C (30:12)

So maybe Jimmy should say something about you and Costco next time.

B (30:15)

Wow, you're like Team Jimmy today.

C (30:17)

Team Jimmy. I mean it's got to go winners, right? Calls the guy out on national television for owning the stock. That's.

B (30:24)

Don't try and drive a wedge.

C (30:26)

40 something percent versus the 20.

B (30:28)

Jimmy and I, our relationship is unbreakable. You can't go.

C (30:31)

You can't go. I mean otherwise I would have just hung out there like, oh, sorry Jim. As if, as if win was a Dutch.

B (30:38)

No, I didn't say win is a dud.

C (30:40)

You said sorry Jimmy as if his stock.

B (30:42)

I said sorry Jimmy because Jimmy wants me to say win. Jimmy wants his own win. Yes, he does.

C (30:47)

Jimmy doesn't care about like Joe team metrics and well, the quality aspect and this nonsense. He looks at the bottom of the Scott got the stock up 40 something at least.

B (30:58)

Now you're one for two.

C (30:58)

Shan, you got something to say about Costco?

E (31:00)

Yeah, I think Joe didn't mention one of the other overhangs on Costco is the renewal rates have come down and, but they have done essentially zero advertising and really haven't been able to target their digital consumers. So I think that there's opportunity there.

F (31:13)

The problem with Costco is, and why I've never owned it is because the valuation is just lunacy for retail.

B (31:20)

The valuation for Wal Mart is, is also. But Wal Mart has been able to leverage technology to a certain extent better than Costco.

F (31:28)

The new dimension there, the, the, the.

B (31:30)

Reversal in the story for Costco is new. It's over the last four months. Four months ago, myself included, we were all talking about this stock glowingly as being one of the leaders in consumer staples.

F (31:42)

I don't think the story's over, though.

E (31:43)

I don't either. All right.

C (31:45)

Trane Technologies upgraded today to overweight 500 bucks is the price target at Keybanc. They say the pullback in shares offers a rare entry point into one of the highest quality operators on their list. It is. That's another Jyoti name.

B (31:58)

I believe this is. And this is H Vac. We do not know yet the degree of penetration that this company will have as it relates to data centers. We know they will be there. It's just a matter of how much market share they will actually capture. I like this upgrade.

C (32:12)

All right, let's get the headlines now with Bertha Coombs. Hi, Bertha.

G (32:15)

Hey, Scott.

E (32:15)

The FBI announced four arrests today in.

C (32:18)

The thwarter plot to allegedly coordinate bombing.

E (32:21)

Attacks on New Year's Eve to according across Southern California. They also are accused of plotting to target Immigration and Customs Enforcement agents and vehicles. Authorities say the suspects are part of an extremist group that is an offshoot of the pro Palestinian anti government Turtle Island Liberation Front.

G (32:41)

A US official said today Russia has.

E (32:43)

Indicated a willingness for Ukraine to join the European Union as part of a US brokered peace deal to end the war with Kiev. The official also suggested 90% of issues between Russia and Ukraine in the negotiations. Negotiations have been resolved, but there are still ongoing discussions about territory. And the Trump administration unveiled a new.

C (33:07)

National competition today similar to the spelling bee.

E (33:11)

According to the Education Department, the Presidential.

C (33:14)

1776 Award will quiz high schoolers on.

E (33:18)

Their civics knowledge and will award three winners scholarships totaling $250,000. The national finals will be held in June 2026 in Washington D.C. that's a lot of mine. Back to you.

C (33:34)

All right, Bertha. Thank you, Bertha Coombs. Up next, more portfolio moves from the investment Committee, Steve Weiss. This is just sold a name down more than 10% in the past week. We'll tell you what it is next.

B (33:48)

Hi there, it's Andy Richter, and I'm here to tell you about my podcast, the three Questions with Andy Richter. Each week I invite friends, comedians, actors and musicians to discuss these three where.

C (34:01)

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B (34:06)

Guests like Julie Bowe and Ted Dance and Tig Notaro, We Will Arnett, Phoebe Bridgers and more. You can also tune in for my weekly Andy Richter call in show episodes.

C (34:15)

Where me and a special guest invite.

B (34:17)

Callers to weigh in on topics like dating, disasters, bad teachers, and lots more. Listen to the three questions with Andy Richter. Wherever you get your podcasts.

D (34:31)

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's 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.

C (34:59)

Let's be completely honest.

B (35:01)

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People can't say yes to that. Too many of us are stuck in.

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C (35:48)

That's Strawberry Me Coaching. At least take a shot at the guy when he's sitting right here. Right? It's gratuitous.

B (35:56)

What a commercial break.

C (35:57)

That was gratuitous.

B (35:58)

That was some commercial break.

C (35:59)

All right. Weiss. It's great for us.

F (36:03)

Steve Weiss.

C (36:04)

So you have a sale. You have a sale.

F (36:06)

Yes.

C (36:07)

Vertiv. You like this name for a long time?

F (36:11)

I do. And I've been in and out of it over the last few years.

C (36:14)

What are you doing? Why are you selling it?

F (36:16)

I'm trying to lessen my exposure to the AI infrastructure. So this was just natural cash of it, I think. Look, the valuation tie. I don't think the valuation is attractive when there's momentum I'm willing to ride through.

C (36:32)

Isn't there momentum in this?

F (36:34)

I'm going to defer to.

C (36:36)

No, seriously, all jokes aside, I mean there is there from March or from April, from the April, I mean.

F (36:42)

And the stock will recover. This is really more of a portfolio call, but also a market call on AI where I think the bloom is off the rose in terms of rising all ships. This will be a ship that rises. But again I'm valuation focused and the valuation here is aggressive. So I'm trying.

C (36:58)

Well, what's the valuation of G.E. vernova?

F (37:00)

Well, that. That's a small position and that's. I made money in it.

C (37:05)

That's gonna be next, I would say. What's the value? What's the valuation of it? You thought, what did you think this was just exclusive between. Joe was gonna take the fight.

F (37:14)

Let me tell you why I didn't sell GE Venova instead of this and I will sell GE even over because this one seemed to be weakening a little bit and it was right at the data center play as is GE Venova and I'd rather play the cloud stock. So I was going to sell a Microsoft, I was going to sell Metta, I was going to sell Amazon or Google. But I want to lower my exposure and they're somewhat all the same trade except I view Vertiv and G Venova as on steroids and I just didn't want to be in ste. Steroids going to New Year.

C (37:44)

Did you want to. You said you wanted to play cloud stock. Cloud stocks.

F (37:48)

I am cloud stocks, which to me are the ones the hyperscalers and Amazon.

C (37:53)

You saw the hype. The hyperscalers are the stocks. Okay, okay.

F (37:57)

So that's why you just can't own them all. And at some point it's about risk management.

C (38:02)

All right, all right. Straight ahead.

F (38:05)

And I love, I love Jim's Google pick here.

C (38:08)

Straight ahead. You weren't anticipating that. I was ready for you on that. You talked about valuation avertive. I had G Vernova right up my sleeve. I mean make it too easy.

F (38:17)

That was.

C (38:17)

You make it too easy. That was a good play.

F (38:19)

I'll be extremely obvious. All right.

C (38:21)

Billionaire investor Ron Baron, he is launching a new suite of active ETFs today. We talked to him about it. Get his thoughts as well on the recent rebound in Tesla shares. All that ahead in today's ETF Edge. All right, welcome back. Barron Capital launching five new actively managed ETFs today. Let's get right to Dom Chu with today's ETF Edge and a couple of special guests. Dom.

H (38:47)

All right, so Scott, Joining me now fresh off the ringing of the NYSE is Ron Barron. Michael Barron from Barron Capital. Thank you guys both very much for being here. Right now, let's talk first of all, Michael, for you about why this particular move in ETFs is in the cards and the future for Barron Capital.

F (39:08)

Sure.

A (39:09)

I don't know if it's the future for Baron Capital, but it's very important milestone for us. We've been in business for over 43 years doing one thing extraordinary, extraordinarily well, and that's long term growth equity investing. And we have a mission at Baron Capital and that's to change the lives of our clients. We can't change as many lives if we, we're singularly focused on only mutual funds. And we spent a lot of time over the past year and a half, maybe even two years, studying ETFs, trying to understand if we can bring our investment strategies to this structure. And today we're happy to announce that we not only feel like we can, but we just did. And we've had a lot of clients come to us over the past year, two years, saying they want to invest with us, they want to utilize us, they understand what we do, they understand a repeatable process, but they didn't have the access point they were certain things were trying to achieve, whether it be operational efficiencies, tax efficiencies, intraday liquidity. And we are now giving that to them in this ETF format. And we're super excited to do that.

H (40:10)

Now, Ron, an interesting part about this ETF format. Some people are thinking maybe this is a different kind of strategy, different types of products. But in the end, these ETFs are just another way to take what your views already are in your existing portfolios, right?

J (40:25)

That's right. So we started off in business in 1982 with 10 million under management. 92 we had 100 million. And now we have over 50 billion, 49 and a half billion fee paying 52 and a half billion total, a whim. And we've made our clients are 57 billion in profits, 57 billion in profits, $52 billion managed money. So we've made people More than they trusted us to manage. And they have managed, we managed for them. But we're very excited about our new products that are going to be very similar to what we have already. The one that Michael, Dave and I manage is called Barron First Principles Fund. It's named after Elon Musk theory about First Principles. You know, taking the businesses in which you're investing, boiling them down to their essence, just ripping them apart in your head and seeing if things are being done properly or things where there could be problems and then building them back up again and being a long term investor in great people running great businesses. So the essence of the companies that's across the board of Baron Capital and First Principles is, is where we define how we do this research.

H (41:42)

Now, Ron, speaking of Elon Musk, Tesla and now Space X have become very closely associated with the business at Baron Capital. Tesla is going back towards its record highs all over again. Space X is now the biggest component of your portfolios at Baron Capital. Just how much do you believe in the Tesla and SpaceX stories going forward here given the fact that we have maybe an anticipated IPO for Space X coming up soon as we.

J (42:09)

Well, so, so of the investments that we have, we have about 400 investments and the top 25 represent about 50% of our assets. And Space X is our largest holding, represents about 10 billion of the $52 billion that we manage and tested represents about 5 billion. So, so our two largest holdings, they became the largest holdings because they've been so successful, not because we have invested a great deal of money in them and we haven't sold. That's the idea. We haven't sold. So the idea of these new portfolios that we have built are all about building around the concepts that we've always looked at for the future. Huge opportunities, great people and staying for the long term.

H (43:01)

Michael, when you take a look at the way that these investments have evolved for Barron Capital, you and your brother David co presidents of the firm, what exactly can we expect to see at Barron Capital in terms of the similarities and maybe even some differences as you guys kind of take the helmet of the future?

A (43:17)

Sure. So as I speak about earlier, you know, we've done one thing extraordinarily well for the past 43 years. That's the essence. That's our DNA. We're not going to change what makes a Baron Capital type investment, what makes a Baron Capital type portfolio. What we can expect to be changing is how we deliver that to clients and if we can meet them where they are if we can meet them in the structures that make most sense to them, we will do it with not just ETFs, it's going into more cites or use its internationally doing more sub managed accounts, sub advising model delivery. We're really expensive expanding the portfolio lineup to be all encompassing at Barron Capital.

H (43:56)

And Ron, you've done so much in terms of garnering headlines over your investment management career. Did you ever feel as though there would be a time that you'd be ringing the opening bell at the New York Stock Exchange for a listing at a company that you had founded, that you had ushered in and that you are now putting out there for investors?

J (44:16)

I never thought about that. All we thought about is that our mission in life is not to try to make as much money as we can as fast as we can, but we've defined it as changing lives, changing the lives of our clients, change lives of our employees by making everyone financially successful and helping businesses in which we're investing whenever we can to do better than they would have done if we had not been their investors. And the information, you know, I was talking to you before about how my wife gets upset regularly because I work, you know, I'm in the office at 8 in the morning and I'm often there till I don't get home till 6 or 7 o' clock at night and she understand then. And then like a couple of days ago I'm at home and it's after dinner and we're talking a little bit and then I was on the phone for half an hour with space. With Space X happens all the time. How can you not turn it off, Turn it off. But it's so interesting. Our business about learning about businesses all the time, it's about learning. That's what we do, we learn. And that's how come I keep doing this. It's, it's entertaining for me. It keeps you young, as young as I can be. And I'm about round young people like Michael and David and all these other people who work with us as well who've learned the system, about the process, about how we invest.

H (45:47)

All right, well we're going to this fascinating conversation, guys. Ron, Michael, thank you so much. We're going to continue this with Ron and Michael over at ETF edge.cnbc.com we'll talk a lot more about the ETFs about Space X and Tesla. Come on, join us over there. Scott, I'll send things back over to you.

C (46:02)

All right, coming up, the headline that has China stocks under some Pressure today. Find out how the committee is playing that. We'll do it next. Welcome back. Let's talk China because their slowdown has deepened in November. Consumption, investment and industrial output all missing expectations. Why she have Alibaba? Let's talk about this. I mean, there is investing into AI and then there is the reminder of where you're investing into AI.

A (46:32)

Yeah.

F (46:33)

And I still think I'm okay in Baba despite the economy slowing down. There are really two economies as we sort of see in the US One is the economy and the other is the general economy. I'm investing the economy in in Baba.

C (46:47)

Is there really, is there really a difference in the two? Especially there.

F (46:52)

Well, what I mean by different, they both actually feed the other, but China's government is so focused on being the leader in AI that they will just continue to push it, push it. And Baba is a primary beneficiary of that. So that's why I'm Baba, you're in Yum China.

C (47:10)

Right.

B (47:10)

We are up 8% on the position since the end of October. Since we put it on, it looks to us like it possibly bottomed. You're beginning to see the momentum build there. They aggressively buy back their shares. I don't think it has a strong correlation with a contraction in the economy there unless it's a very intense contraction. And I don't think we've reached that point just yet.

C (47:32)

Are you giving specific return information as now a running thing as a retort to the conversation we were having earlier?

B (47:40)

The potential is there. Yes.

C (47:43)

Shan. Shan looked right when you said that. She looked at too. I saw her.

F (47:48)

She did.

C (47:48)

She's like, oh, that interesting that he would mention that.

E (47:52)

I think we have, I think we could potentially underestimate the amount of money that China is willing to spend on AI. But admittedly in this short term time period, relative valuation is a little bit stretched in China. So I could see some profit taking.

C (48:04)

Well, I mean, it just shows you. Yes, you are buying into. Most people who are buying these stocks now are buying into the story. Not Yum China's obviously, obviously a different story altogether. But whether it's Baba or Baidu or some of these other, you know, related.

E (48:18)

Names, we don't exactly have the same capex transparency Scott that we have from like Alphabet and Amazon. Like, we don't have any of that. So you don't really know how much money they're going to spend.

C (48:28)

All right, we'll take another point you want to make.

B (48:30)

I was just going to say the other area of the world that's not working right now is India. And that was a very popular trade. It's basically unchanged.

C (48:36)

Okay. We will take a break. We'll come back with your finals next. We're going to do finals in a minute. But I do want to show you shares of service now before we wrap up today. Down 11.5% reportedly in talks to buy the cyber firm Armis. $7 billion is the number that's being talked about. The stock also did get downgraded today, so it's hard to know how much that is weighing on this activity as well. You have this stock? Yeah, I do now.

B (49:05)

Yep.

C (49:05)

About this.

B (49:06)

Well, first of all, the momentum does not look so good. I actually think this would be a good deal for them. Cybersecurity, a $7 billion deal. Ultimately, it's a place that they want to be. It's a good startup company as well.

C (49:16)

Pull it back a little bit further. Talking about the momentum longer than. Longer than obviously what this chart is showing. Can we pull it back Year to date? There you go. Right. Is that does not look good.

B (49:27)

Year to date, one year basis.

F (49:29)

All.

B (49:30)

Also, the stock has clearly run into some difficulties as has software overall relative to semiconductors.

C (49:37)

Yeah. Salesforce ServiceNow charts don't look that indifferent. Correct.

B (49:42)

No, I mean the place to be right now for technology is the semis clearly over software.

C (49:47)

Okay.

J (49:47)

Yeah.

F (49:47)

We've been there before, though.

B (49:48)

We have. There was a period of outperformance of software oversemis for sure.

C (49:52)

You have a final trade.

I (49:54)

City.

B (49:54)

Sorry, you were talking to Steve. I was looking.

C (49:57)

Now. You stole Jim's bank.

F (49:58)

City. Yeah, City.

B (50:00)

I like Citi.

C (50:01)

You got into.

B (50:01)

We don't own it.

C (50:02)

You should. He bought it. He made a lot of money.

J (50:04)

Yeah.

C (50:05)

Yeah, he did.

B (50:05)

Jimmy Buffett.

C (50:06)

He did. He did make a lot of money in it.

F (50:09)

Leidos. They. They hired a new cto. They are really getting into AI. They've been doing it great story industrials.

E (50:17)

At anything besides electrification, which is already run pretty hard.

C (50:20)

All right, good stuff. I'll see you on the closing bell. The exchanges now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

G (50:36)

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 halftime reportdisclaimer.

F (51:17)

Before the.

D (51:17)

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's 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.