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Halftime Report
Halftime Report: 1/7/26
00:43:53
Listen to the Street’s top investors get to the heart of the action as it’s happening and help set the agenda for the rest of the day. Investment Committee Disclosures
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- [00:00]
Julia Boorstin
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger.
- [00:14]
Stephanie Link
Or three.
- [00:15]
Julia Boorstin
And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones Member SIPC not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
- [00:55]
Scott Wapner
AT&T business Wireless connecting changes everything. I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thanks. Welcome to the Halftime Report. I'm Scott Wagner. Front and center this hour, big number hunting with stocks heading towards some major milestones today. We'll trade the markets, of course, with the investment committee. And joining me for the hour today, Joe Terranova, Stephanie Link, Liz Thomas and Jason Snipe. We'll show you the markets here. Yes, the Dow is red and the S and P though, and the NASDAQ are green. All right, so we did open at record highs, Joe. We're chasing 50k.
- [01:41]
Joe Terranova
Yes.
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Scott Wapner
On the Dow, we're chasing 7k on the S and P. And the futures are outrunning. They are the markets today.
- [01:49]
Joe Terranova
Well, the March futures are now trading 7,000. They've done so here in the last 20 minutes. And that's the expectation that the market continues to move higher. I think the price action over the last four days is indicative of that. The markets seems to be going to different areas very tactically trying to find opportunity. Today it is about software. Finally, the long awaited mean reversion. It appears in 2026. You have names like Datadog, Synopsis, Cadence that are moving higher. IGV is higher on the day. I would also focus on Microsoft of the Mag 7. That's the software name that I think if we get a continuation of this mean reversion that you want to look at. But I think 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, alpha opportunities Rather where it can. Very tactically, we've talked about a variety of different places, financial sector, technology, health care, biotech. And I think you have to like that.
- [02:48]
Scott Wapner
This is a Stephanie Link market. That's the way I'm looking at it.
- [02:52]
Stephanie Link
It's been a good couple of days.
- [02:54]
Scott Wapner
It reflects your portfolio, a little bit of tech and a lot of everything else. And that's very much where we are because the S and P, as it does head towards 7k, it is doing it without some of the very biggest names taking it there. The equal weight is coming off a fresh record high of its own. And we know the areas in the market that have been off to the races to start the year. Banks, industrials and all the stuff that you've been talking about because of the economy. And as one business executive said to me today, he's surprised with all of the business activities going on post holidays, quote, like the floodgates instantly opened. That's kind of reflected in the market.
- [03:36]
Stephanie Link
We talk about loan growth as being very, very important from the banks. And I cite this really wonky statistic from the H8 data from the Federal Reserve. It's just loan growth data. It's activity from the banks. We've had 11 consecutive weeks of loan growth. We're at record highs. And why do we care? Because if they're lending, then activity in the economy is actually building. And that's exactly what we are seeing. We're at record highs in bank loan growth. 11 straight weeks. By the way, Scott is at the best consecutive weeks since the second quarter of 2022. So banks are lending, that's good. The consumer has been spending, they're consuming. We're looking at retail sales, a look at credit card data, a trillion in holiday spending this past year, this past season. You have the momentum. You not only have the growth from AI, you have the food chain that's benefiting and you have productivity that's happening. All of this leads to double digit earnings. Is it going to lead to 16, 17% like some strategists are thinking? I don't know. I'm, I'm going to, I'm going to point to you on that. I don't know, But I think 10 to 12% is very reasonable in a 2 and a half, 3% GDP world, given all the things that I'm talking.
- [04:49]
Scott Wapner
You get the feeling from, you know, both what you say and what I heard from the person that I was quoting there, it's like animal spirits were delayed, not denied. Coming into 25, everybody was like I remember late in 24 it was my conversation with Todd Boley of Eldridge out in Beverly Hills was talking about animal spirits. And you had the Trump election and taking office, but then you had the tariffs and it upset a lot of that. But now it feels like you may actually get what some thought was going to happen a year ago. And the market kind of reflects that. If you look at the equal weight, that's really doing great. What do you think, Liz?
- [05:27]
Liz Thomas
Yeah, I mean if we look at just cyclicality in general, we're almost hitting on all cylinders. All of the indicators that the market would give you for cyclicality, things like consumer discretionary, outperforming, staples. We had the value index hit a new high before the growth index. Some of the recovery that we had after that pullback in November, all of the cyclicality stuff is here. Even in commodities, right. Copper is doing well, gold obviously still doing well. But all of the stuff that would tell you economic activity not only is picking up but is expected to stay strong. To Steph's point about consumer spending, I think that's a really important thing for investors to realize is that despite the fact that we didn't have the year end rally or the Santa Claus rally that we all hoped for, the consumer kept spending. Retail stocks should benefit from that. The economy should benefit from that. And I think sentiment will start to recover after the soft patch that we saw in the fourth quarter of 2025. So I am still cyclically bullish. I like materials for the year very much. I like health care as a place for investors to rotate into looking for growth exposure and that continues to do well. And I just like how the market's shaping up, especially after a geopolitical shock coming into the year to kick it off with a bang.
- [06:39]
Scott Wapner
You know, especially Jason, when you had so much conversation last year about valuation of the market. Well, it's rich at 22 times. Yep, you're not going to get multiple expansion this year. So you have to have a really strong level of earnings growth to carry the market higher if it's going to go higher. I love a note from Barclays today which takes on the valuation question and comes back with the fact that they say they look reasonable to start off this new year. Quote, while 22 times not cheap by any stretch in our view, current levels have not historically impeded returns provided EPS growth remains positive. While we do think that current street estimates are overly optimistic, we still expect the S&P 500 to print double digit EPS growth this year. It better it has to.
- [07:25]
Jason Snipe
No, it has to.
- [07:26]
Scott Wapner
It has to. It has to justify that valuation which may in fact grow a little richer.
- [07:30]
Jason Snipe
And there's no doubt about it, Scott, that you know, the earnings picture looks very positive whether it's 12, 13, 14, 15% somewhere in that neighborhood. I think what we hear from strategists and I think, you know, the multiple on the market historically is not a great timing mechanism for markets. Right. That's what we do know. And what I guess my impression of the market and what's been going on the early part of this year from a positioning standpoint and just the breadth that we've all talked about is this is durable, this is a healthy market. We want to see to Steph's point the other 493, the other sectors starting to perform, whether it's the KRE regionals, financials, industrials, transports hit an all time high the other day. So these are all positive momentum factors for me and I think it spells to the durability of this market.
- [08:19]
Scott Wapner
Steph, take a look at the banks already year to date it's capital one's up 5%, we're trading for three, four days. Morgan Stanley's up four and a half, Goldman's up seven. You don't own it, but the other names, bank of America, Wells Fargo, maybe a little less than that but nonetheless the group is off to the races already. Will bank stocks B of A asks once again outperform the S and P? They say yes, they overweight the banks in a run it hot economy exactly what we've been talking about. They raised price targets across the board. Goldman to $1,000 and $1,050, Morgan Stanley to 210, JPM to 362, Wells to 107 I think is your largest position overall. It's not there. It's number two. And that deregulation which everybody's been talking about, again it goes kind of towards the animal spirits Umbrella is the name of the game in 2026. Finally a lot of things that just didn't happen in 25 are now you're going to tick off one by one and they're going to be good for various sectors of the market.
- [09:22]
Stephanie Link
Some of these stocks are up 20 to 40 to 52% over the past year. So a lot of good news is priced in. However, there's many ways to win with the banks and it is capital markets and investment banking fee growth in the double digits. It is M and A which grew globally 27% last year in the U.S. m&A was up 55% last year and we didn't even have deregulation last year. So just wait on that front loan growth, as I just mentioned, the data they're lending out, that's good. Net interest income is going to slowly recover. Scott. I do not expect a massive reprice in net interest income, but it's going to happen, especially if you look at the yield curve. And then again, as I mentioned, in terms of deregulation, it's M and A, but it's also excess capital. What is, what are these companies going to do with the excess capital that they have? There's $192 billion of buyback announcements from the big six that is still yet to be deployed and we haven't even seen Basel 3 endgame. The excess capital requirements ease. And so I own bank of America. I do not agree with the downgrade. There was a downgrade this morning because of expenses. He's laser focused on expenses. And it better be flat sequentially. I think it will be. But I think you're going to see ROTC in the upper teens at bank of America. I think you're going to see it at 17, 18, 18%. This is profitability. At Wells Fargo, I think Morgan Stanley has low 20s as a target, easily to be done. And Capital One as well. I just think it's a little bit, I hate to say it's different this time, but deregulation does open a lot of windows for this group.
- [10:49]
Scott Wapner
And yeah, Reagan deals, I mean capital markets activity, all that stuff.
- [10:54]
Stephanie Link
So the piece. So people, the pushback I get is, well, these stocks are expensive, all right, but we haven't had this kind of environment in banks since 2008. So to me, I think you continue to see the.
- [11:06]
Scott Wapner
On the valuation question, which is part of the reason why both. Well, JP Morgan got downgraded along with bank of America and it was Wolf that did the downgrade. They say valuations full at 14 times. I think I heard Kramer the other day was talking about these stocks are still cheap. Like JP Morgan at 13 times is cheap, not full at 14 times. Now that's where I guess the debate is going to rage.
- [11:34]
Stephanie Link
And my, my argument would be you're going to see better than expected earnings growth, you're going to see double digit earnings growth, you're going to see better profitability. At the same time, you're going to see capital returns to shareholders. What's not to like at that? At 14, 15 times, okay, the Morgan Staley and Goldman are trading much higher. They're a little more expensive, rightfully so, because they're going to grow much faster and their profitability is going to explode going forward. However, I still think there's value across the spectrum and I think you want to have exposure. I'm 10% overweight relative to my benchmark in financials.
- [12:05]
Scott Wapner
Jason, Best name in the group is is it Goldman Sachs for me you have at the top of the our stack, right? The top of the performance stack already this year?
- [12:13]
Stephanie Link
Yeah, yeah.
- [12:14]
Jason Snipe
Up 9% already year to date and up 50 plus last year. The major theme for me and Steph just kind of touched on it a little bit is banking FEES were up 42% last quarter, 18% revenue growth. And I think with the Fed in an accommodative space, the IB names are really going to run to Stephanie's point. I think just the acceleration there. And yes, they have run a lot already, but I think there's still room to grow there.
- [12:40]
Scott Wapner
For last comment on the banks to you with with jpm, which by the way today cut all ties with proxy advisors. It's the first in the industry to do just that. It's newsworthy. We bring it up. Stocks down a couple of percentage points. As I said, it was part of that downgrade today at Wolf, they only look for modest upside to the numbers. They think the valuation is full.
- [13:00]
Joe Terranova
Yeah, look, focusing on a multiple is not something that I'm going to do when making an investment decision. And 2025 taught you that lesson because the multiple on the S and P overall was basically the same coming into 25 as it was going out on 25. So it's about earnings growth. To Steph's point, it is the earnings growth that's being delivered from the money center banks. But I think there's derivatives off of that. Look at where the exchanges are. There's a tremendous opportunity to own those names like a Schwab and interactive brokers like a Nasdaq, some of the research firms. We have Moody's in the Jyoti ETF that's performing incredibly well. So. So I think it goes beyond just these money center banks as long as the trading environment is robust, and I think it clearly is.
- [13:42]
Scott Wapner
All right, now let's make our turn to the mega Caps, which we said have not been doing all that much to start the year other than Amazon, which was the biggest laggard of the group last year was a virtual nothing and now is up step five and a half percent. Nasdaq's leading today. It is not having a bad Year to date by any stretch. I said we're only a few days in. But when you see the outperformance of the equal weight versus the mega caps, the cap weighted S and P. What do you think about.
- [14:18]
Stephanie Link
I think that Amazon and Metta are screaming buys for 2026 and I own them both. So in full disclosure but I think it's a reversion to the mean trade and that's not the only reason. The fundamentals are extremely robust. I have no idea why Amazon is only up 10% in the past year because is accelerating and it probably could get to the mid 20% growth rates retail. No one has retail sales numbers like Amazon. 11 to 12% same store sales, they're recovering internationally. Advertising, advertising is growing double digits and that's their highest margin business. So I think you're going to see earnings revised higher at this company especially as capacity improves in there with in terms of data centers in US so that one doesn't make any sense to me at 14 times EBITDA when historically it's traded at 18 time. Metta on the other hand. I don't know if you want to go there Scott, but.
- [15:11]
Scott Wapner
Well now you went there. We'll go there because you know Brad Gerstner was on yesterday, I heard and. And he doesn't own it anymore. And you know his long history with it without reading the whole quote from him yesterday. In essence he thinks they're behind. They're behind a lot of the other players that matter and maybe it's too much ground to make up if they turn some things around. Would he be back in?
- [15:34]
Jason Snipe
Maybe.
- [15:35]
Scott Wapner
But he's not now. And that is telling for somebody who has a long and distinguished history in this name.
- [15:40]
Stephanie Link
For sure. For sure, Absolutely. I think this company has $30 to $8 of earnings power by 2027. And it's because. Because they are spending so aggressively and they may be behind but they're spending aggressively to lift that gap, if you will. And in the meantime the stock almost trades at a one peg at 22 times. It's growing earnings at 20% revenues are 26%. I think you're going to see an acceleration because of I help a lot of their businesses, namely messaging, some new tools as well, some new applications as well. And in the meantime you have impression growth growing double digit 14% time spent up 5% and the cost cuts, if they actually in fact come through with the reality lab cost cuts, that's $5 billion. That is a lot in terms of what they can do with It Sigi.
- [16:26]
Scott Wapner
Capital agrees with you. They see the pendulum swinging back to matter. That's the headline of their note today that they believe the market is underestimating or underappreciating the impact of the investment in AI that they're having. Joe, last on matter that is down.
- [16:39]
Joe Terranova
2% over the last early days. I think from a fundamental perspective I agree with what Stephanie saying. It's a longer term investment. I think you have to stay there. Quantitative models look at 30 day momentum. That is why is so important right now. Amazon has a significant lead on all the other Max 7 for the last 30 days. Amazon is up 7%. You can't find that type of performance anywhere else except maybe Alphabet or Nvidia which is going to give you 2% higher. Apple's down 5% over the last 30 days. Tesla, Microsoft, basically unchanged. So. So I think I agree with Stephanie on the fundamentals of matter. It's a little bit of a longer term investment. Right now the focus on the quant models is specifically on Amazon which I think continues to move higher.
- [17:20]
Scott Wapner
What about Nvidia J which would just can't get above 200 bucks.
- [17:25]
Jason Snipe
Yeah, yeah, yeah. And what I would say is I think CES did not disappoint. You know from my vantage point in terms of what was stated about the Rumen chips we're talking about five times compute from the last iteration of chips. The second story for me is inference cost down 10x. I mean these, these are significant developments for me. I think they just continue to innovate. And we always talk about the showman that he is, but he does deliver. He does deliver. And you know, I mean the news from China about the H200, we'll see. That's, that's been a mess.
- [17:59]
Scott Wapner
So that was the information reporting today that China has told old tech companies to halt H200 chip orders. We'll see, we'll see what develops from, from that.
- [18:08]
Jason Snipe
But, but I think that the other point for me you're talking about a stock that is now trading at 25 times which is experiencing 40% earnings growth. I think that's a good buy right here.
- [18:18]
Scott Wapner
All right Liz, so you get the comment about the group at large as HSBC questions where we are in the cycle and they believe that we are still in the initial stages of a mega cycle of AI.
- [18:33]
Liz Thomas
I absolutely agree with that. But I don't think the same winners that have won by double digit percents will continue to win throughout the entire lifecycle. That's not usually how it works. So I think we're at the stage now where you've got other sectors that can come in and start to benefit from this. And we're already seeing that in some places there are productivity gains that are actually starting to materialize. They're anecdotal at this point point, but they're starting to materialize. And that's what investors have been begging for all the way through 2025, even back in 2024. All of this capex spending on AI needed to result in revenue, needed to result in productivity, needed to continue producing earnings. Now that's actually happening. And I think in 2026 the phase is that AI starts to bleed into other sectors. Productivity gains are seen in other sectors, particularly some of the ones I've already mentioned, health care, materials. I think industrials is in that camp as well. And that's where you see the broadening out and the durability of the economic growth story that can result from AI. But will all of these make seven names be the darlings forever? No, and I don't think they should be. I think we have to share some of the love.
- [19:39]
Scott Wapner
Is there a bigger show me story in the market for 2026 than Apple? The stock, everybody knows the, the anthology of where their, their AI is and they've had the executive reshufflings and departures and what have you. The market started to give Apple the benefit of the doubt halfway through 2025. They're going to get it right. They're going to get it right. They're going to get it right. They're going to get it right. Keeps going up into the right. Now it's been down for six straight down days. It's the longest slide since August. You have some firms out there defending it today. But how about that notion that it got a lot to show this year?
- [20:21]
Joe Terranova
Well, first of all, technically it's pulling right back to the 100 day moving average. It's the first time it's doing that since August. I believe from a market cap perspective, the first time in many years. Alphabet is now valued higher than Apple. Looking forward for Apple, I do think they're going to deliver in 26. I think that Apple is going to be north of $300 for a variety of reasons.
- [20:42]
Julia Boorstin
Presence.
- [20:42]
Joe Terranova
I think you're going to see the resiliency in terms of the actual phones. I think you're going to see a resurgence in the growth in China which is going to be remarkably important. I think it's going to be remarkably important not just for Apple, but other names that are affected there as well, and that ultimately I think you get some form of a partnership on artificial intelligence. Maybe it's with Gemini 3. I'm not sure who it is, but I think that partnership's coming in 2020.
- [21:05]
Scott Wapner
Okay. Now the other big part of the AI story, obviously last year was around the industrial complex. The power producers and anything almost related to that had a tremendous run. Industrials are coming off a record close. Caterpillar is one of the best performers in the entire market last year, in part because of that story. You do have other names. I'm really interested to hear the reasoning behind a sale of yours. Stephanie Link, one of the names that you frequently mentioned throughout 2025 that you had owned and loved and now have sold, and it is Eaton. What gives?
- [21:48]
Stephanie Link
I still like Eaton. They're doing a very good job. I am up to my eyeballs in the industrials playing on the AI data center, grid and power themes. We've about talked, talked about this for two and a half years and I've done quite well with Eaton. I've done quite well with Quanta Services, ge, Vernova, Vertif, Rockwell. I'm looking at these names and I'm thinking, what do I like the best? And the one I like the best, the one I've been adding to, we talked to about it in December, was Rockwell Automation, because I think it's very underappreciated and I think robotics is in the second inning. And so I was taking money slowly out of Eaton and putting more, more into Rockwell. Rockwell proved themselves that they were able to expand the organic growth last quarter from 3% in the second quarter to 13% in the third. And I think it's going to continue to expand. And you have a new CFO who's focused on margins. So I think there's more operating leverage. I think there's better earnings growth. I think it's a little less discovered and a little cheaper. Eaton is wonderful. It's a great company. So if I owned it, if I only owned it on this theme, I would hold it. But I just prefer all of these other names. And some of these other names have gotten hit in the last couple of weeks. And so I want to add to them as well. So fundamentals are still fine. I just prefer the others.
- [23:02]
Joe Terranova
I don't know. I think there was an earthquake with the talk from Jensen Huang surrounding the Reuben chips and the effect that it has on data cooling. There's five stocks that got punished yesterday. Trane Technologies, we own it in the etf, Johnson Controls, Emerson, Eaton and Virtus.
- [23:18]
Scott Wapner
You own it.
- [23:18]
Joe Terranova
They're down again today. I own Eaton as well. So we bought Eaton in July at 380. It's now a losing trade. Nothing we could do about it till the end of January. But I think what happened yesterday there was a dramatic effect and I think it's going to be a continued effect and I think it's real. If these Reuben chips don't require the degree of cooling that these industrial names have been benefiting from, the expectation that their revenue would be growing on that contribution, that's a little bit of a game changer.
- [23:46]
Stephanie Link
I think it's overdone. I think it's way overdone. When you look at the backlogs of all the companies that we're talking about. Even Eaton, right, Even Eaton. Their backlog, their North American electrical backlog, up 20% last quarter. That's real dollars in hand. That's not orders.
- [24:00]
Joe Terranova
We're thinking sell off is overdone, or you think?
- [24:03]
Stephanie Link
I think the sell off is overdone. I think certainly maybe these new chips require less, but they're still going to need cooling overall and the backlog so are very supportive of continued growth. Same with Vertiv, with their backlog up 30%. Same with Nova, their backlogs up 33% across the board. So to me, if these are huge numbers, Joe, you know that and that's better visibility. So let them sell off. That's going to be your opportunity to add to them.
- [24:28]
Joe Terranova
They are. But when Jensen Huang speaks, he usually is pretty confident, pretty accurate in what he believes. So those Reuben chips, they do have some powerful effect on.
- [24:37]
Scott Wapner
So we'll follow all of that. We, we've been documenting for all of you the strength in health care to end 2025, which was the best performing sector for a period of big period of time. It's up 16 and a half percent in six months. It brings me to another purchase of yours, another move of a stock that you've liked and you have consistently added to. And you are again. And it's Zoetis.
- [25:01]
Stephanie Link
Yeah, it was a horrible stock last year. It was down 23% in the past year. Very surprising for a company that's in an industry with three players and they have a 20% market share. And I think the total addressable market, if you include retail and services across the board of animal health, it's a $200 billion total addressable market by 2035 this year. This CEO needs to execute. If not, I would not be surprised if she's gone because they do have the greatest products out there. They have five blockbuster drugs coming out in the next five years and yet the competition continues to eat at them slowly. Elanco is an example. It was up 85% last year. I own that one too. So to me, 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. But they've got, it's a show me story, Scott, so it could get a little messy.
- [25:50]
Scott Wapner
What about Natera, which you bought more of as well, which is coming off a huge run of its own.
- [25:54]
Stephanie Link
I know, I know. I added to that one as well because I'm a big believer of women's health. And I think they own the MRD market. They're growing double digit earnings. I think their gross margins only maybe 10 years ago was something like 40%. There are 60% today. I think they're going to get to 70% as their goal. I think there's a lot of operating leverage and a ton of growth. Talk about total addressable market in the spaces that they're in. This is one of the best diagnostic companies out there.
- [26:20]
Scott Wapner
All right, last point we make in what I think is good, a pretty, pretty comprehensive look at why the markets are where they are and where our group thinks that they can go from here. And that is this report from our own Brian Sullivan. Today it was an exclusive that oil sales from Venezuela will continue indefinitely. Sanctions will be reduced. It's a big scoop and a market moving one at that because names like Valero, and if you think about refinery type names and the ones that had already moved the most on the backside of the initial actions related to Venezuela, it is the one that you own. It's Valero. And it is up again on this.
- [26:56]
Joe Terranova
Sullivan report because they have proven to be able to efficiently produce heavy oil and deliver it to where they are profitable on that. Remember, it trades at a discount, heavy oil to light oil. So Valero's well positioned marathon is positioned, positioned. Phillips is positioned as well. But to me, Valero is the one that you want to focus on specifically. There was also a little bit of a resolution with Governor Newsom in Northern California. Valero's presence will remain to a certain extent in Northern California, which is good as well.
- [27:29]
Scott Wapner
We bounce for a couple, we come back calls of the day and we do have more moves ahead. We'll see in a bit.
- [27:38]
Liz Thomas
New year, new gear, thousands of fresh active styles are at Nordstrom Rack stores now. Save on top brands like Nike, Puma and free people starting at just $35.
- [27:50]
Pippa Stevens
How did I not know Rack has Adidas?
- [27:52]
Scott Wapner
Because there's always something new.
- [27:53]
Liz Thomas
Plus, join the Nordy Club to shop new arrivals first, unlock exclusive discounts and more.
- [27:59]
Scott Wapner
Great brands, great prices.
- [28:02]
Joe Terranova
That's why you Rack.
- [28:04]
Scott Wapner
What made you confident that you could.
- [28:06]
Liz Thomas
Do something that hadn't been done before? I have no fear of failure.
- [28:10]
Julia Boorstin
Trailblazing women, changing the game.
- [28:13]
Liz Thomas
One of my favorite pieces of advice, think about what your boss's boss needs.
- [28:17]
Stephanie Link
Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [28:22]
Liz Thomas
Life is short and you just gotta think big to accomplish big things.
- [28:26]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.
- [28:46]
Scott Wapner
We're back. Calls of the day. We begin today with Disney reiterated by Moffitt Nathanson. They asked the question, who's the biggest winner from the ongoing Netflix, Paramount, Warner Brothers Discovery bidding war? Well, after Warner Brothers Discovery shareholders, next up to us would be Disney. Joe, what do you think?
- [29:03]
Joe Terranova
I'm not, I'm not sure about that. Look, we put a position on here at the end of October at around $112. And we did not put it on based on revenue growth, which is important to us. Revenue growth for this company has been low single digits for the last several years. So that's troubling. It barely squeezed in. If you think about holding 125 stocks and you were to rank them almost like college football rankings. This was literally right at the bottom. And it was there because it had a surge in the second quarter, a significant momentum move. And that's why we bought it where it is right now. It's kind of flatlining the end of January. We'll take a look at it. But I'm not going to speak with confidence about it because I really don't feel confident about this position.
- [29:44]
Scott Wapner
Do you wish it pulled in Notre Dame and refused to go into your index?
- [29:48]
Joe Terranova
That's a good analogy. I don't know if my compliance department will have a problem.
- [29:54]
Scott Wapner
Yeah, maybe the writings on the wall. It was in a better conference. Maybe.
- [30:00]
Jason Snipe
Yeah.
- [30:01]
Scott Wapner
I don't know.
- [30:01]
Joe Terranova
Exactly.
- [30:01]
Jason Snipe
All right.
- [30:02]
Scott Wapner
Colgate.
- [30:02]
Joe Terranova
Paul. Mollie.
- [30:03]
Scott Wapner
Resist. Upgraded to overweight at Piper Sandler. Jason, you own the name. What do you think?
- [30:07]
Jason Snipe
Yeah, so, I mean, you know, obviously the price, price action has been great over the last year is down almost 12% and there's been earnings and revenue softness over the past year. But I mean, for me, this is a Call on emerging markets resurgence, which I think will be positive for the stock. It's a multinational name, so I think that will be a catalyst. So let's, let's, let's see how it plays out. A lot of the staples haven't done well, but I think this year will be better.
- [30:29]
Scott Wapner
All right, what do you think about First Solar, Joe?
- [30:31]
Joe Terranova
I think this is an interesting one.
- [30:32]
Scott Wapner
Downgraded today.
- [30:33]
Joe Terranova
Yeah, 22% over the last 52 weeks. And that's, that's surprising in the face of the big, big beautiful bill. And you know, the stock is now pulled back. Look, you've had margin compression. They've lowered guidance consistently through 2025. But why has it worked? Why is it up 22%? They're shifting production from Southeast Asia back to the U.S. they have a new plant that's opened up in Louisiana. They're also beginning to talk about accelerating the buyback program. So I think this is one of the reasons why you've had resiliency here. Want you to rely on the technical formation because it hasn't broken below your 100 day moving average here since the early part of 2025. It's right there at the 100 day now. So if you have a long position, utilize that as an important point of reference, but otherwise maintain a bull bias.
- [31:20]
Scott Wapner
All right, let's go. Toll Brothers and Dr. Horton as we think about the housing trade. So Toll gets initiated, market outperform citizens. 175 is a price target. So it's nice upside. From here. Dr. Horton gets downgraded, same firm to market perform. What do you think, Steph? This is. These are both yours.
- [31:39]
Stephanie Link
I mean, everybody hates Dr. Horton now. Everybody hates housing. And that makes me more interested in wanting to buy.
- [31:44]
Scott Wapner
Jason doesn't hate housing.
- [31:45]
Stephanie Link
I know he's with me. We're in the pain, unfortunately.
- [31:48]
Jason Snipe
Yes, we are.
- [31:49]
Stephanie Link
Look, these stocks are very, very cheap. The way I look at it is like they're running as best they can in a very challenging environment. Not much has to go right. And what I've decided to do is barbell between in housing high end, which is Toll Brothers. Best in class, best margins and probably positioned better than a Dr. Horton, which is more first time buying buyer. But I do think first time buyer there's pent up demand. We've talked about it. Is it going to be all of the 4 to 5 million out there millennials that are looking for a home? Probably not. But I think you just need interest rates to come down just a little bit. And if they do I think both these stocks will move a lot higher.
- [32:21]
Jason Snipe
Yeah, no, I get that strategy. I think it makes a lot of sense. And I think for me, as it relates to Dr. Horton, it's been about the incentives. That's what's hurting margins, the new purchasing incentives. And you know, the Fed is accommodative. So if rates do come down, I think this could really lift this stock. It's kind of the way I look at KRE and regional banks in the financial sector.
- [32:41]
Scott Wapner
All right, so take one of the three A's for me, Joe. Okay. Amphenol. Buy it B of A Allstate. Top pick at JPM Ametek. Target raised at Rothschild.
- [32:51]
Joe Terranova
Very easy. Amphenol. We've owned this. Steph's going to love this. Since inception for over five years. It's up to 345% technology company, communications oriented, diversified in terms of where they're delivering their products, delivers that double digit revenue growth on a consistent basis. It's the one name that we've held for the entirety of the etf.
- [33:11]
Scott Wapner
Okay, Pippa Stevens has the headlines for us today. Hi, Pippa.
- [33:15]
Pippa Stevens
Hey, Scott. Nick Reiner, the son of Rob and Michelle Reiner, is in court right now for an arraignment on charges that he fatally stopped his parents in their Southern California home last month. He faces two counts of first degree murder in connection with the deaths of the beloved filmmaker and his wife. Authorities have not disclosed a possible motive. Reiner has been held in jail without bail. Secretary of State Marco Rubio says he will meet with Denmark about Greenland next week amid the President's renewed interest in taking over the the territory. It comes after Rubio reportedly told lawmakers Monday the administration intended to buy Greenland rather than take it through military force. An idea GOP Senator John Kennedy called, quote, weapons grade stupid. And House Speaker Mike Johnson says he will address the United Kingdom's Parliament later this month in honor of America's 250th birthday. He will be the first U.S. speaker to give a speech to the legislative body. His address is part of a number of festivities that are scheduled to to commemorate the anniversary. Scott, back to you.
- [34:17]
Scott Wapner
All right, Pips, thank you. That's Pippa Stevens. Still ahead, more committee moves. Steph just added to one of her consumer plays. We'll tell you what it is and exactly why she did that. Next, what made you confident that you.
- [34:31]
Liz Thomas
Could do something that hadn't been done before? I have no fear of failure.
- [34:35]
Julia Boorstin
Trailblazing women, changing the game.
- [34:38]
Stephanie Link
One of my favorite pieces of Advice.
- [34:40]
Liz Thomas
Think about what your boss's boss needs.
- [34:43]
Stephanie Link
Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [34:48]
Liz Thomas
Life is short and you just gotta think big to accomplish big things.
- [34:51]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [35:01]
Scott Wapner
All right, we have another move to tell you about. Stephanie Link has been busy. You bought more Estee Lauder.
- [35:06]
Joe Terranova
Yeah.
- [35:07]
Stephanie Link
And it's now a full position.
- [35:08]
Scott Wapner
Scott, this was a recent buy.
- [35:11]
Stephanie Link
Yeah.
- [35:11]
Scott Wapner
And then you added more quickly after the initial one, if I recall correctly. And now hear more.
- [35:15]
Stephanie Link
Yeah. Because it's a volatile stock, so you get looks every once in a while. So now it's a full position. I really do like the turnaround that we're hearing from the new CEO. Fairly new CEO. It's called beauty reimagined strategy. And they're trying to focus on their products and increasing, getting their market share back to where it was. I don't think we're there, but we did get some data points that over Black Friday and Cyber Monday that the U.S. sales grew 9%. And in China last quarter, we know their sales grew 9%, way better than the last couple of years. And the Stock is still down 70% by the way, from 2022 level. So it's not really discounting an improvement in my opinion. And those two regions are about 48% of total sales. So we need those to recover. And I think we're getting little baby signs from this whole new strategy from the management.
- [36:02]
Eamon Javers
Yeah.
- [36:02]
Scott Wapner
Goldman reiterates the buy on it today. Target goes to 128 from 122. So they're behind you. They like it as well. Liz, on the consumer look, the consumer.
- [36:12]
Liz Thomas
Had consumer stocks had a really rough 2025 and staples and Discretionary ended the year as laggards. The consumer kept spending, however, and I talked about this, towards the end of the year, they kept spending begrudgingly. There was a big stop in consumer sentiment. Everybody sort of felt bad about how things were going. I think in 2026 the consumer can come back and consumer stocks will benefit. I'm going to put Staples into that camp, too. And something we haven't talked about is midterm elections that's coming this year. And Staples is usually a sector that does really well during midterm election years. So I think consumer stocks are a good place to be in 2026. Both discretionary and Staples. We mentioned, as I mentioned earlier in the show, consumer spending over the holiday season very Strong. I think that benefits retail earnings in Q4 and Q1.
- [36:58]
Scott Wapner
By the way, the XRT is already up 4 and a half percent this year. As we said, we're just getting started. You own the Gap. That bodes well for that.
- [37:06]
Stephanie Link
Yeah, and it was up 7% yesterday.
- [37:08]
Scott Wapner
Another reasonably new position of yours, if I recall.
- [37:11]
Stephanie Link
Yeah, I mean, I've been in it. I made 20%, I got out of it, which is stupid of me. And then I just got back into it because I think Richard dipped and is a rock star and he's getting it done. And I think their comp store sales have been above plan, their inventories have continued to shrink, margins continue to expand, and they're gaining market share. So people are going back to the Gap and they're going back to Old Navy. And the Old Navy in particular is a value offering for consumers that are looking to trade down.
- [37:35]
Scott Wapner
You were talking so much in the break about Costco, for what reason? Other than, I mean, the stock. We can show the chart of last year. Not good. Well, show at 2025 if you could.
- [37:45]
Joe Terranova
For Costco, not good at all. And I did a horrible job advising the viewers on what to do with the stock because I was.
- [37:52]
Scott Wapner
I think it surprised a lot of.
- [37:54]
Joe Terranova
People that, look, I was advocating for.
- [37:56]
Scott Wapner
It as a result here. I mean, it is what it is. Can you guys pull out the 2025 for me, please?
- [38:00]
Joe Terranova
So why is Costco so important to me when we have names in the ETF that are there for an extended period of time? You know, either you grow almost close to them and you really observe them and see how they're trading. And Costco entered the ETF in July of 24 at around $429. And it delivered. And it delivered not just in price appreciation. It delivered in the earnings growth, the market share capture. It participated with Wal Mart. I understand the valuation got rich, but we really ran into a ceiling here in the second quarter of 2025. And you saw this bifurcation in terms of what Wal Mart was delivering and what Costco was delivering, and Costco has not reversed that at all. And I just wonder if how they absorbed the tariffs relative to how Wal Mart absorbed the tariff was distinctly different. But it's in a perilous position as we go into the next rebalance, for sure.
- [38:52]
Scott Wapner
What do you say?
- [38:53]
Jason Snipe
Definitely, I mean, you know, so costs were obviously a problem. You know, I mean, just. Just managing calls, I think. For me, I think the multiple obviously was also a little bit of a story. But, you know, some of the things that I was, that I extracted in the last call, which I think was, was really interesting is their travel sales were record on Cyber Monday. I mean we've been talking about travel, Marriott and other names. Travel was really good. We forget about all that Costco does and all the places that they, they spend time. 12% income, operating income growth. So. So I think this year is going to be better. They're the best to breed in my opinion on the retail side.
- [39:30]
Scott Wapner
Well, the valuation's cheaper now.
- [39:32]
Joe Terranova
Sure is.
- [39:33]
Jason Snipe
Sure is.
- [39:33]
Stephanie Link
Still not cheap.
- [39:35]
Jason Snipe
It's not.
- [39:35]
Scott Wapner
All right, coming up, Santoli, he has his midday word next, Senior markets commentator Michael Santoli with his midday word. All right, but three and a half days in, we have had obviously a great start and maybe now we just need a breath.
- [40:08]
Michael Santoli
Yeah, most of the market is exactly doing that, Scott. Getting a breather. S and P still up like 1.7% or something four days into the new year. Definitely see things like the most excitable parts of the market coming off the most, the high beta sector, the S and P down 1%. So that's pretty, pretty similar symmetrical action to what we saw getting launched into the year. Nothing really in the data this morning to really disturb the overall view that the economy is in a decent spot. Obviously a lot of expectations for reacceleration. I just will keep pointing out that the consensus expectation for this year is essentially predicting what the last two months have been, which is market up, cyclicals leading, Fed's going to cut rates, data holds together. It's sort of a broadening. But Mag7 still holds its value, so I don't think it's implausible, but I also do think it's getting crowded as, as a view.
- [41:01]
Scott Wapner
Yeah, I mean the other thing too is I get that the, you know, equal weight is at a record high and, and there's a lot of focus on everything else in the market besides its mega cap tech doing just fine. I mean it doesn't. I didn't have to start the year off to the races like a lot of other things either.
- [41:18]
Michael Santoli
It didn't. I mean, it's been interesting how it's selective within mega cap tech because if you just sort of own the whole thing, it's absolutely holding up. Okay. NASDAQ 100. I guess not back to its old highs and even the S and P, you want to see some confirmation of this breakout since we did first get to similar levels a couple of months ago. But yeah, there's not a lot there to be alarmed about.
- [41:39]
Stephanie Link
All Right.
- [41:39]
Scott Wapner
I'll see you at 3. Mike, thank you. On closing bell. That's, that's Mike's in totally. We'll take a quick break. We come back, a new note just dropped literally moments ago and it has a group of popular stocks on the move. We'll tell you exactly who said what and what stocks are moving as a result. Want to get down to Washington. We have some breaking news out of the White House. Amyn Javors has that for us. What do we know here, Eamon?
- [42:06]
Eamon Javers
Scott, we've got a new post here on social media from the president of the United States who says he is taking action to deal with inflation in home costs. The president taking to social media to say that I am immediately taking steps to ban large institutional investors from buying more single family homes and I will be calling on Congress to codify it. People live in homes, not corporations. I will discuss this topic, including further housing and affordability proposals and more at my speech in Davos in two weeks. So the president here is saying that the American dream of owning a home has gotten out of reach for too many Americans, particularly young Americans, and says he is going to take steps to block large institutional investors from buying homes. Not clear here from this post on its face, what specific regulatory steps he says he's going to take here, but he also says he's going to work with Congress to codify that into law. So obviously something for those large institutional investors to look at very carefully here.
- [43:02]
Scott Wapner
Now, I mean, the biggest question is what power does the president have to do anything about this at all, Eamon.
- [43:10]
Eamon Javers
Right. I mean, I can think of, you know, several regulatory bodies that might have something to say about this. You know, the sec, Federal Housing Administration, you know, there are a number of ways the president might be able to influence that, but the legality of that, which agency, which regulatory process, none of that addressed in this post, which just popped within the past couple seconds. So we'll try to get the White House to give us some more details on what the legal basis is for their decision to say the large institutional investors that they can't participate in this market.
- [43:41]
Scott Wapner
Right. I mean, we obviously show Blackstone is the top name that we first thought of. Eamon, thank you very much. Eamon Jabbers there at the the White House. As you see, Blackstone, the first name that we would think of because of a good part of their business. Certainly interesting too, though, in that Stephen Schwarzman is a very big supporter of and has been of President Trump.
- [44:07]
Joe Terranova
Yeah, I'm sure there'll be a conversation before Davos when apparently we're going to get more information on this. But to see Blackstone down 7%, I almost want to take the other seven of that. Not sure whether or not I will, but that's a big move for a company, a financial company that I think is going to do fine in 26.
- [44:23]
Scott Wapner
The other names, as we showed, too, it's not limited to a Blackstone, which is maybe the first one you think about, but the builders, too, Steph, that we were just speaking about.
- [44:32]
Stephanie Link
Yeah, but the builders have been weak all day and they've been weak for a while now. So I'm not really sure how much exposure they have on the institutional side, to be honest with you. I think it's a small portion of. For toll brothers, for sure.
- [44:42]
Scott Wapner
There's Josh's invitation homes, by the way. Throw it up again, guys, if you could, please, Just, just so we don't cycle past it so fast. I mean, that's one of the biggest losers on this news, too.
- [44:52]
Stephanie Link
I mean, you know. Well, I think there's a lot of reform coming, to be honest. I don't think it's just going to be just this. And I think that Eamon was alluding to that, that we're going to get more information because Trump did talk about that he wanted to help the housing market. He knows that that's a big piece of. That's missing in the economy. Economy. Right. We've been able to grow 3% in GDP without housing, without auto. So. And he knows that. And he knows it's tied to rates. So he's doing his part. Then you get a dovish Fed in and they'll do their part.
- [45:18]
Scott Wapner
All right, we will do finals next. Finals, Palo Alto Networks, Materials, Capital One, IDEX Labs. All right, I'll see you on closing bell with Tom Lee. Don't miss that. We'll see what these markets do. 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.
- [45:46]
Julia Boorstin
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its 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 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.
- [46:20]
Jason Snipe
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