Halftime Report – The Committee’s 2026 Outlook (Jan 5, 2026)

Episode Overview

Main Theme:
This episode kicks off CNBC’s Halftime Report for 2026, with host Scott Wapner and the Investment Committee (Joe Terranova, Steve Weiss, Jim Lebenthal) dissecting a historic day for the markets—Dow at fresh record highs—and debating sector leadership for the year. The panel also reacts live to breaking geopolitical developments, notably the U.S. arraignment of deposed Venezuelan president Nicolás Maduro. Other focal points include the rotation into financials, the lag in software and select mega-cap tech, evolving risks for energy, and realignment of sector plays as the influence of artificial intelligence broadens.

Key Topics & Insights

1. Markets Rally: Record Highs & Sector Leaders

Timestamp: 03:06–08:11

• Market Context:
  • Dow sets new high, up 750+ points (+1.5%).
  • Bitcoin and precious metals rally ("an interesting blend").
  • Financials surge—highlighted by big moves in JPMorgan, Goldman Sachs, Bank of America (BofA), Morgan Stanley, and Wells Fargo.
  • The theme: optimism about Fed policy, earnings growth, and a broadening stock market.

“This is an extension of sentiment from Q4... optimism surrounding Fed policy, earnings growth, and the ability for the market to broaden... The financial sector really benefits from tailwinds that didn't exist prior to 2025.”
—Steve Weiss (03:41)

• Financials in Focus:
  • Financials seen as undervalued even after recent gains.
  • Potential for more M&A activity and greater balance sheet strength than since the 2008 crisis.
  • Jamie Dimon’s JPMorgan mentioned as “cheap at 16x earnings.”
  • Positive analyst notes, e.g., Mike Mayo’s bullish preview on bank earnings.

2. Broader Rotation: Beyond Mag 7 Tech

Timestamp: 07:02–08:32

• Benefit Spreads Out:
  • Growth is expected to broaden beyond mega-cap tech (“Mag 7”—Microsoft, Apple, Nvidia, Amazon, Alphabet, Meta, Tesla).
  • Committee agrees: favor equal-weight S&P and emphasize financials, healthcare, industrials, and (carefully) energy.

“We see earnings growth in the other 493 stocks besides the Mag 7 actually picking up and growing more than the Mag 7 by the second half of the year... The equity rally will broaden.”
—Jim Lebenthal (07:02)

• Caveats: Some debate on whether tailwinds are already priced in and whether markets harbor irrational exuberance, especially within energy and certain tech segments.

3. Energy Sector Debate: Venezuela Unrest & Oil Dynamics

Timestamp: 09:21–13:22

• Venezuela Headline’s Impact:
  • U.S. arrest/arraignment of Maduro triggers market speculation on Venezuelan oil supply return.
  • Committee skeptical of any immediate flood: infrastructure takes years to restore.
  • Discussion on differentiated opportunities: Refiners like Valero best positioned, not all energy stocks are equal.

“It’s not hyperbole to say the energy sector has actually been a fantastic place to invest for many years... XLE is up about twice what the S&P 500 is up over the last five years.”
—Jim Lebenthal (12:36)

• Long-Term View:
  • ExxonMobil's long-term outperformance highlighted (250% vs. S&P’s 98% over 25 years).
  • Short-term, more supply may pressure oil prices, but refiners and companies with heavy crude capabilities (Schlumberger, Halliburton) may benefit.

4. Tech Dislocations: Semiconductors vs. Software

Timestamp: 14:49–20:36

• Semis Surge, Software Slumps:
  • Semiconductor stocks (SMH ETF) dramatically outperformed software (IGV ETF) in 2025: SMH up 49%, IGV up 5.5%.

“The narrative is software stocks just don’t stop going down. RBC with a note today that AI is the death of software.”
—Scott Wapner (15:28)

• Lack of clear catalysts for rebound; software downgraded (e.g., Adobe cut to Hold by Jefferies).
• Microsoft stuck in a "utility" role: premium, slow-growing; not outperforming.
• Discussion of "mean reversion" fails between these segments.
• Salesforce flagged as relatively resilient among software but still faces headwinds.

“All AI plays... it's not going to be a bad place to invest—you’re just going to have to be more careful in where you invest.”
—Joe Terranova (17:24)

5. AI and The DisruptED (Not Just the Disruptors)

Timestamp: 20:36–21:20

• Turning Point Year?
  • 2026 could be the year markets focus more on companies being disrupted by AI than the disruptors.
  • Example: call center/web design companies like TTEC decimated (down 95%).

6. Live News – Nicolás Maduro’s Arraignment

Timestamp: 01:47–03:06, 21:31–23:51, 48:29–50:03

• Courtroom Chaos:
  • Maduro and his wife Celia plead not guilty to narco-terrorism and weapons charges.
  • Tense courtroom, allegations of mistreatment, medical requests for Celia (visible bruises, alleged injuries during capture); next hearing set for March 17th.
  • Political implications and crowd unrest outside—tempered but ongoing story with possible market/geopolitical ramifications.

“Maduro says, ‘I'm innocent. I'm a decent man. I am president.’ ... He considers himself a prisoner of war.”
—Contessa Brewer reporting from courthouse (21:31)

7. Mega-Cap Tech Check: Apple & Amazon’s Underperformance

Timestamp: 23:51–25:57

• Amazon Favored Over Apple:
  • Amazon seen as proving itself in AI (AWS). Apple still has “a lot to prove” and is overvalued.
  • Valuation not an action-trigger, but a portfolio-weighting factor.

8. Individual Stock Debates: Uber, Netflix, Disney

Timestamp: 28:39–35:36, 37:31–44:29 (duplicate discussions, condensed)

Uber (Downgraded to Sell at Melius, target $73)

• Struggling with technical resistance; sentiment turning negative; competition (Waymo, Tesla) erodes “scarcity value.”
• Panelists debating what kind of stock Uber is—transportation, consumer, or now an "AI/software" play? Most agree competition from robo-taxis triggers overhang.

“The market doesn’t seem to be patient at all with these kinds of stories. They go to what’s working and why.”
—Joe Terranova (30:08)

Netflix (Downgraded; CFRA target $130)

• Overhang from bid for Warner Brothers Discovery (WBD); six-month chart down 29%.
• No clear catalyst for upside, “bumping along the bottom.”

Disney (Buy, $140 at BofA)

• Succession (who replaces Bob Iger) is important but not the only issue; execution across theme parks/streaming/studios is crucial.
• Fatigue from lackluster stock performance—clients and panelists admit their patience is thin.

“Ultimately, I find that this stock ... is undervalued. But ... I’ve got fatigue on this. ... It's just been hanging out there doing nothing for the better part of a year.”
—Jim Lebenthal (35:36)

9. ETF Playbook for 2026

Timestamp: 45:42–48:02

• Top ETF Themes for 2026 (Jay Jacobs, BlackRock):
  1. Growth Opportunities: AI-focused ETFs, e.g., BAi.
  2. Income: Covered call strategies—income via options.
  3. Diversification: Alternatives, especially Bitcoin, gold, silver.
• Multi-strategy ETFs like iShares IALT highlighted as "one-ticker" solutions for alternatives.

10. Final Market Thoughts & Closing Remarks

Timestamp: 50:36–54:44

• Market Broadness:

  • Mike Santoli notes broad-based risk appetite and the value rotation, with cyclicals getting attention alongside still-strong mega-cap tech.
  • Jensen Huang’s (Nvidia CEO) keynote at CES is an anticipated catalyst for semis.

• Final Trades:

  • Jim Lebenthal: Lockheed Martin (defense, “hot war for a long time”).
  • Joe Terranova: QXO (acquisition potential after new funding).
  • Steve Weiss: Sold McKesson, looking to add more healthcare stocks.

Notable Quotes & Timestamps

• “Financial sector really benefits from the confluence of tailwinds that didn’t exist previous to 2025.”
  —Steve Weiss (03:41)

• “We see earnings growth in the other 493 stocks besides the Mag 7 actually picking up and growing more than the Mag 7 by the second half of the year.”
  —Jim Lebenthal (07:02)

• “It’s not hyperbole to say the energy sector has actually been a fantastic place to invest for many years.”
  —Jim Lebenthal (12:33)

• “The narrative is software stocks just don’t stop going down. RBC with a note today that AI is the death of software.”
  —Scott Wapner (15:28)

• “All AI plays, they're not going to be a bad place to invest...you're just going to have to be more careful in where you invest.”
  —Joe Terranova (17:24)

• “I am innocent. I’m a decent man. I am president.”
  —Nicolás Maduro, via Contessa Brewer (21:31)

• “Amazon Web Services is proving itself as a legit top tier player in terms of AI. Apple... has a lot to prove.”
  —Jim Lebenthal (24:59)

• “The market doesn’t seem to be patient at all with these kinds of stories. They go to what’s working and why.”
  —Joe Terranova (30:08)

Important Timestamps

| Segment | Timestamp | |----------------------------------------------------|---------------| | Start of Market Discussion, Financial Sector Rally | 03:06–08:11 | | Energy Sector, Venezuela Impact, Oil Debate | 09:21–13:22 | | Tech: Semis vs. Software Split | 14:49–20:36 | | Who Gets Disrupted by AI? | 20:36–21:20 | | Maduro Arraignment Updates | 21:31–23:51, 48:29–50:03 | | Apple, Amazon Tech Analysis | 23:51–25:57 | | Uber/Netflix/Disney Stock Debates | 28:39–35:36, 37:31–44:29 | | ETF Edge Playbook for 2026 | 45:42–48:02 | | Mike Santoli’s Market Take | 50:36–52:01 | | Final Trades & Closing | 54:03–54:44 |

Takeaways

• The new year brings record highs but also sector rotation: financials, industrials, and healthcare in focus over past-dominant mega-tech.
• Energy is a long-term play with careful differentiation—returns remain strong, but near-term headlines (e.g., Venezuela) may overstate change.
• Software faces an identity crisis with AI disrupting SaaS models; semiconductors, meanwhile, continue to pull ahead.
• Risks to stocks: overhangs, competition, “fatigue” (Disney), and whether fundamental catalysts are materializing.
• Real-time macro volatility (Maduro case, global instability) warrants close attention as a potential wild card.
• ETF strategies for 2026: AI, covered-call income, and alternative assets offer investors new and diversified ways to participate.

This episode delivered an optimistic yet realistic outlook for 2026, underlining where the committee sees real opportunity—and risk—in a changing, broadening market environment.