CNBC’s Halftime Report: December 26, 2025

Host: Dominic Chu (in for Scott Wapner)
Guests/Committee: Jim Lebenthal, Bryn Talkington, Kevin Simpson
Featured Guest: Steve Liesman (Senior Economics Reporter)

Overview: Episode Theme & Purpose

The episode focuses on the market setup heading into the close of 2025 and strategizing into 2026. The panel discusses the drivers of recent equity market gains (Fed policy, AI, and earnings), potential risks on the horizon (including midterms, Supreme Court rulings, and inflation), and sector-specific trades, including tech, financials, commodities, crypto, retail, and healthcare. Concrete trade ideas and broader macroeconomic forces are interwoven throughout.

Key Discussion Points & Insights

1. Market Drivers: Fed, AI, and Earnings

[00:56–07:58]

• Earnings vs. Fed Policy:

  • Jim Lebenthal highlights earnings growth as the central market driver:

    "More than anything, Dom, I think it’s earnings and earnings growth... To me next year is not about the Fed, it’s about earnings growth." (02:23)

  • Bryn Talkington sees a constructive market setup, noting coordinated monetary and fiscal policy, strong GDP prints, and the political imperative of a healthy economy ahead of midterms.

    "...midterms are next year, the White House is going to want to have a really good economy..." (04:16)

  • Kevin Simpson cautions that optimism must remain measured, with inflation risk looming if the Fed is forced to reverse course on rates:

    "...if inflation does spark back up, then it’s not a rate cutting story, but instead a rate hiking story." (05:36)

• Broader Risks:

  • Geopolitical and regulatory risks are flagged, particularly stemming from upcoming Supreme Court decisions on tariffs and Fed governance (Lisa Cook case):

    "If, as is expected, the Supreme Court rules against the use of [IEEPA] to institute tariffs, that’s going to throw the markets and the economy into a little bit of a tizzy..." (06:45)

2. Macro Outlook & The Fed in 2026

[07:58–13:27]

• Fed Rate Trajectory & Transition:

  • Steve Liesman sees “a tale of two halves” for the Fed, with markets pricing in a couple of cuts (not a full cutting cycle), and possible restraint with a new Fed chair coming mid-2026:

    "...there’s a couple cuts built in, but not a whole lot. So there’s some restraint built in." (08:34)

  • Fed’s ability to dramatically shift rates is limited by its committee structure—even a dovish chair can’t act unilaterally:

    "A Fed Chair who’s going to take rates... off the reservation is not going to have the committee with them." (10:56)

• Inflation Uncertainty Remains:

  • Data distortion in recent prints makes inflation the biggest wildcard:

    "Let me answer it from the position of perfect ignorance... we don’t know what the inflation numbers are." (12:08)

  • Tariffs and cross-currents (goods versus services) add further uncertainty.

3. Sector Spotlights & Trades

Tech/AI: Nvidia & Deal-Making

[18:43–24:41]

• Nvidia’s $20B Groq (with Q) Asset Acquisition

  • Jim Lebenthal: Sees it as a savvy capital allocation, investing into the AI ecosystem, with earnings/multiple dynamic making NVDA attractive:

    "I think this is wise and I think it continues what they’ve been doing... investing back into the ecosystem..." (19:52)

  • Bryn Talkington: Notes the push for talent and technological verticals (exposure to non-DRAM designs), with the trade offering both fundamental and technical tailwinds:

    "We are game on with a hunt for talent... I just think this continues to be a company that fundamentals, technicals, momentum, etc." (21:25)

• Broadening Trade: Financials

  • Deal-making is surging, with big banks (Goldman Sachs and JPMorgan) outperforming.

    "Goldman’s up 61% this year, JP Morgan’s up 40% on the year..." (Kevin Simpson, 23:40)

  • Private equity sponsors (KKR, Apollo) have lagged but could benefit from increased M&A in a lower-rate environment:

    "I think both Apollo and KKR... are going to continue to have double digit fee-related earnings..." (Bryn, 24:53)

Retail: Nike & On Holdings

[27:30–31:36]

• Nike:

  • Bryn moves in, citing new management focus, potential China recovery, and headline risk around tariffs:

    "I think Elliot Hill... is on track to turning the company around... they just need to get incrementally better." (27:42)

  • Jim: “These retail turnaround stories, they can work, they can take time and they can be difficult." (29:59)

• On Holdings:

  • Multiple compression and robust holiday demand make ON a buy for Bryn; committee mixed on timing.

Aerospace & Defense

[35:18–37:30]

• Boeing (Kevin) & Lockheed Martin (Jim):
  • Kevin sees a long-term turnaround for Boeing, with a focus on defense and improved operations:

    "...they’re in a position now to really take advantage of what’s a defense story and aerospace story." (35:18)

  • Jim expects LMT to rebound after a tough 2025, driven by global demand for fighter jets and missile systems.

Commodities: Oil, Gas, and Metals

[38:09–41:38]

• Oil & Gas:

  • Bryn: Sees $50 oil as White House policy, lean E&P environment, and favors high-yield energy names for income.
  • Jim: Likes diversified supermajors (ExxonMobil, Chevron) as first stops; sees potential for upside if oil reverses.

• Precious Metals:

  • Kevin: Defends owning miners (Agnico Eagle), noting they outperform in bull runs for gold and benefit from cheap oil and rising cash flow.

Crypto

[42:12–44:44]

• Caution in Crypto:
  • Mackenzie Sigalos reports structural buyers stepping back as major holders (Strategy) stockpile cash, potential for forced selling if index providers expel crypto-heavy firms.
  • Bryn: Advocates for long-term holding, sees strategy changes as prudent, and highlights ongoing real-world asset tokenization on Ethereum.

Healthcare

[45:21–46:36]

• Renewed Focus on Big Pharma/Biotech:
  • Kevin: Sees growth driven by demographics (aging population), with sector rotation benefiting stocks like Eli Lilly and Merck.
  • Jim: Likes pharma and biopharma (AbbVie, AstraZeneca, Vertex), avoids managed care.

Notable Quotes & Memorable Moments

• On Market Cycles & Optimism:
  Kevin Simpson:

  "Investing is easy. It just goes up all the time. Why would there be anything cautionary?" (05:25)

• On Supreme Court and Tariffs:
  Jim Lebenthal:

  "...that trade policy uncertainty, Dom, is going to ramp up again. So that will probably cause some consternation." (06:51)

• On Fed Leadership Change:
  Steve Liesman:

  "...a Fed Chair who’s going to take rates so-called off the reservation is not going to have the committee with them." (10:56)

• On Nvidia’s Capital Allocation:
  Jim Lebenthal:

  "I mean, I don’t want them to start giving a dividend or buying back shares. I think this is wise and I think it continues what they’ve been doing..." (19:52)

• On Retail Turnarounds:
  Jim Lebenthal:

  "These retail turnaround stories, they can work, they can take time and they can be difficult." (29:59)

• On Precious Metals:
  Kevin Simpson:

  "...if you believe in the gold play... owning the miners gives you exposure there, but with a little bit of diversification away from just the pure commodity play." (40:38)

• On Crypto Volatility:
  Bryn Talkington:

  "With crypto currencies, they are not for the faint of heart. You have to hold your nose, buy low. There’s always going to be volatility." (43:38)

Timestamps for Key Segments

• Market Setup and Fed Discussion: 00:56–07:58
• Fed 2026 Outlook & Inflation: 08:19–13:27
• Sector Rotations and Macro Uncertainty: 13:34–18:43
• Nvidia’s Groq Deal and AI Trade: 18:43–24:41
• Financials & Private Equity: 24:41–25:39
• Retail (Nike and On Holdings): 27:30–31:36
• Aerospace/Defense (Boeing, Lockheed): 35:18–37:30
• Commodities (Oil, Gas, Metals): 38:09–41:38
• Crypto Caution: 42:12–44:44
• Health Care Rally: 45:21–46:36
• Final Trades: 46:47–47:22

Final Trades

[46:47–47:22]

• Kevin Simpson: Visa – “Amazing holiday spend, record free cash flow and a clean balance sheet.”
• Bryn Talkington: GPI Q – “One of our favorite growth covered call ETFs ... 10.5% distribution yield.”
• Jim Lebenthal: CRH – “Just been added to the S&P 500 ... high performer.”

Summary/Takeaway

This episode outlines a cautiously optimistic outlook for 2026, with a strong emphasis on earnings as a market driver but a clear recognition of looming risks—most notably, policy/political uncertainty and inflation. Stock-picking is increasingly focused on quality and fundamentals across sectors. The committee remains constructive but stresses vigilance as cross-currents and exogenous shocks could reshape the narrative quickly, especially as the US heads into a politically sensitive midterm year and the Fed leadership transition unfolds.