Halftime Report Podcast Summary (1/7/26)
Host: Scott Wapner | CNBC
Panel: Joe Terranova, Stephanie Link, Liz Thomas, Jason Snipe
Episode Overview
This episode dives deep into the major market moves and trends at the start of 2026 as the Dow and S&P edge towards record highs. Scott Wapner and the investment committee analyze sector rotations, earnings expectations, the health of the banking sector, the status of "Mega Cap" tech, AI-driven industrials, and shifting prospects for consumer stocks. Throughout, the panel debates valuation concerns, key stock picks, and the impact of recent headlines—including breaking news on potential US housing interventions.
Market Milestones & Sector Rotation
Record High Chasing and Breadth Signals
- Dow and S&P: Both move toward historic milestones (Dow approaching 50k, S&P nearing 7k), with market breadth improving as gains broaden beyond a handful of mega cap tech stocks.
- Joe Terranova [01:49]: “The message over the first four days is the market’s not running away from risk. It’s looking to actually accept risk, create some alpha where it can, very tactically.”
- Sector Strength: Financials, industrials, healthcare, and biotech highlighted for outperformance amid this rotation. Equal-weighted indices at record highs indicate broader participation.
Banks and Loan Growth Surge
- Stephanie Link [03:36]: “We’ve had 11 consecutive weeks of loan growth. We’re at record highs … activity in the economy is actually building.”
- Animal Spirits: Post-pandemic business activity described as “like the floodgates instantly opened” [Wapner quoting executive, 02:53].
- Liz Thomas [05:27]: Cyclicality signals firing on all cylinders; consumer discretionary stocks and commodities outperforming staples.
Earnings Outlook and Valuations
Valuation Debate
- Valuation Concerns: Elevated S&P multiples (~22x earnings), but panel sees this as justified given robust earnings momentum.
- Jason Snipe [07:29]: “The earnings picture looks very positive whether it’s 12, 13, 14, 15% somewhere in that neighborhood… this is a healthy market.”
- Stephanie Link [11:33]: “You’re going to see better than expected earnings growth, better profitability, capital returns to shareholders. What’s not to like at that [valuation]?”
Banks in Focus
Bank Rally and Deregulation
- Capital Markets Activity: Investment banking, M&A, and capital markets growth expected to drive profit. Deregulation flagged as a new tailwind.
- Stephanie Link [09:22]: “There are many ways to win with the banks... $192 billion of buyback announcements from the big six that is still yet to be deployed.”
- Who Leads? Goldman Sachs and Morgan Stanley identified as fastest growers and most profitable.
- Valuation vs. Fundamentals: Panel disputes whether bank stocks are overvalued at 13-14x earnings, emphasizing expected profitability and buybacks.
Mega Cap Tech & AI Cycle
Tech Sector Rotation & Stock Picks
- Amazon and Meta: Both seen as strong buys for 2026 after underperformance in 2025.
- Stephanie Link [14:18]: “Amazon and Meta are screaming buys for 2026 … fundamentals are extremely robust.”
- Amazon’s retail growth, advertising margins, and data center improvements highlighted.
- Meta’s AI investment and potential cost cuts discussed, despite skepticism from high-profile former investors.
- Nvidia: Innovations at CES and ongoing leadership in AI noted, trading at 25x earnings with 40% growth.
- Jason Snipe [18:08]: “You’re talking about a stock that is now trading at 25 times, experiencing 40% earnings growth. I think that’s a good buy right here.”
- Apple: Faces skepticism in 2026—needs to prove AI investments and product cycle resilience.
- Joe Terranova [20:20]: “Technically it’s pulling right back to the 100 day moving average… I do think they’re going to deliver in 26… north of $300.”
AI Cycle Broadens
- Liz Thomas [18:32]: “I absolutely agree with [the mega AI cycle]... but I don’t think the same winners will continue to win throughout the entire lifecycle. ... Productivity gains are starting to materialize; AI will bleed into sectors like healthcare, materials, and industrials in 2026.”
Industrials & AI-Driven Power
Data Center & Power Grid Plays
- Stephanie Link’s Rotation: Trims Eaton in favor of Rockwell Automation for robotics leverage.
- [21:48]: “I was taking money slowly out of Eaton and putting more... into Rockwell. Robotics is in the second inning.”
- Cooling & Data Chips: Possible secular headwind from Nvidia’s Reuben chips, which may reduce demand for industrial cooling.
- Joe Terranova [23:02]: "If these chips don't require the degree of cooling ... that's a little bit of a game changer."
- Stephanie Link [24:02]: “I think the sell-off is overdone... backlogs are very supportive of continued growth.”
Health Care & Stock Moves
Defensive Exposure with Upside
- Zoetis: Down 23% in '25, but seen as comeback play with new blockbuster drugs.
- Stephanie Link [25:01]: "I want to own the best in class, down and out, where I think the operational growth is going to be above the peer average."
- Natera: Added for growth and gross margin expansion in diagnostic and women's health [25:54].
Consumer Stocks & Retail Playbook
2026 Set for Rebound
- Estee Lauder: Added to make a full position; signs of turnaround and sales recovery in the US and China.
- Stephanie Link [35:15]: “It’s a volatile stock... getting their market share back... not really discounting an improvement in my opinion.”
- Gap: Recent re-entry, confidence in management and store-level improvements [37:10].
- Costco: Review of disappointing 2025, but optimism for '26 given normalized valuation and underlying business strengths.
- Jason Snipe [38:52]: “Costs were obviously a problem... but travel sales were record on Cyber Monday... operating income growth 12%.”
Calls of the Day & Notable Tickers
- Disney: Unconvincing momentum despite MoffettNathanson bullishness—potential candidate for removal from Joe's portfolio.
- Joe Terranova [29:03]: “I’m not going to speak with confidence about it because I really don’t feel confident about this position.”
- Colgate (CL): Upgraded, with recovery in emerging markets as a driver [30:07].
- First Solar: Downgraded, but strong technical support and benefits from domestic production.
- Toll Brothers & D.R. Horton: Mixed analyst actions, but panel sees value, especially if rates decline.
- Stephanie Link [31:39]: “These stocks are very, very cheap… I think you just need interest rates to come down just a little bit... both these stocks will move a lot higher.”
- Amphenol (APH): Long-term outperformer in Joe's ETF, up 345% over five years [32:50].
Breaking News: President Announces Action on Institutional Home Buying [42:05]
- Presidential Post: Immediate regulatory steps and call for Congressional action to ban large institutional investors from purchasing single-family homes.
- Implications: Sharp drop in stocks such as Blackstone and Invitation Homes.
- Panel Analysis: Skepticism over scope and enforceability; housing stocks already weak [44:22].
- Stephanie Link: “I think there’s a lot of reform coming… and I think Eamon was alluding to that, that we’re going to get more information…”
- Political Angle: Notes Stephen Schwarzman (Blackstone) is a prominent supporter of Trump.
Memorable Quotes
- Joe Terranova [01:49]: “The market’s not running away from risk. It’s looking to accept risk, create alpha where it can, very tactically.”
- Stephanie Link [03:36]: “We’re at record highs in bank loan growth. 11 straight weeks—the best consecutive weeks since Q2 of 2022.”
- Liz Thomas [18:32]: “AI’s productivity gains are starting to materialize… In 2026, AI will bleed into sectors like healthcare, materials, and industrials.”
- Stephanie Link [14:18]: “Amazon and Meta are screaming buys for 2026 … fundamentals are extremely robust.”
- Jason Snipe [18:08]: “You’re talking about a stock that is now trading at 25 times, experiencing 40% earnings growth. I think that’s a good buy right here.”
- Scott Wapner [04:48]: “Animal spirits were delayed, not denied.”
Important Timestamps
- [01:40–05:27]: Market milestones, sector rotation, and economic activity discussion.
- [06:39–12:59]: Bank earnings, valuation, and deregulation debate.
- [13:42–18:32]: Mega cap tech, Amazon/Meta bullishness, Nvidia and Apple outlooks.
- [21:48–24:36]: Industrials: data center cooling & Eaton trade, Rockwell Automation pick.
- [25:01–26:19]: Healthcare stock moves: Zoetis & Natera.
- [35:00–37:10]: Estee Lauder, Gap, and consumer stocks 2026 outlook.
- [42:05–44:52]: Breaking news: White House targeting institutional home buying.
Conclusion
The Halftime crew remains optimistic as 2026 kicks off, citing broadening gains, strong corporate earnings momentum, and secular trends in AI and industrials. While elevated valuations and some lagging mega cap names warrant scrutiny, banks and select consumer, industrial, and healthcare stocks are highlighted for continued outperformance. Rapid policy developments—like the housing intervention—remain wild cards for volatility.
Note:
- This summary covers substantive market content and omits ads, show intros, and outros.
- For more, listen to the full episode or catch Halftime Report live weekdays at 12PM ET on CNBC.