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Halftime Report
The Final Push for the Year 12/29/25
00:44:09
Frank Holland and the Investment Committee size up the path for stocks as we close out 2025. Plus, the desk shares their latest portfolio moves. And later, we discuss some retail names in the athleisure space as Lululemon launches a proxy fight to overhaul the board. Investment Committee Disclosures
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Learn more about our most powerful trading platform yet@fidelity.com TraderPlus investing in Vault's risk, including risk of loss Fidelity Brokerage Services, LLC Member nyse, SIPC what made you.
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Confident that you could do something that hadn't been done before?
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I have no fear of failure.
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Trailblazing women, changing the game.
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One of my favorite pieces of advice, think about what your boss boss needs. Leadership can look in many, many different forms.
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It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
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I'm Scott Wapner and you're listening to.
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CNBC's Halftime Report, the podcast the most.
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Profitable hour of the trading day.
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We record this live weekdays at 12 Eastern. Listen in.
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C
Thank you very much, Sarah. Welcome to the Halftime Report. I am Frank Holland in for the judge. Scott Wapner, front and center at this hour, the final push for the year, how the investment committee is setting up for 2026. Joining me for the hour to discuss that much, much more, Joe Terranova, Jim Lebenthal and Britain Tau. Tim, before we get this conversation started, quick check in the market. You can see it's all red across the board right now. The Dow down just about 250 points, the S and pulling back nearly a half a percent. The NASDAQ down more than a half percent. We got the Russell on there, too, also down more than a half a percent. I think we got to start right here. Joe, I'm going to turn to you. Is this just profit taking in your mind? I mean, is that all that's really going on? Because we were hoping for a Santa Claus rally. We've never missed it three years in a row. We did miss it the last two years. I think a lot of people were very bullish on these last days of the year.
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B
Yeah, I think it is profit taking. I think that's accurate. I also think think what's going on in the precious metals market is a little bit of a reminder how you need to think about risk and how are you going to be treating the management of risk as you move into 2026? I don't think the environment of 2026 is going to be very similar to what we've seen here in 2025, which for the majority of the year, excluding the period surrounding Liberation Day in April, it's been a pretty calm environment. An environment where if you find a trend, you could attach your positioning to the trend and you could ride the trend. This could be a little bit more difficult, a little bit of fits and starts. More of a rental market more than an ownership market in 26. And I think that's what's being reflected today. And certainly what we're seeing with the volatility and significant parabolic move and reversal in precious metals, in particular for silver, I think that's indicative of the environment.
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C
Brian, coming over to you. How are you viewing with the action that we're seeing today? I want to ask the same question. Do you just think it's profit taking? Is this a sign of anything else going into 2026? We just heard Jo say it's more of a rental market than an ownership market.
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We've had a great year.
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C
Right.
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F
The queues are up. What, 2021, the S& P high teens return. So whatever happens over the next two days, I don't think portends to what happens next year. Sure. Today could be profit taking. I do think next year, though, to me, the big setup where we could have again a bunch of volatility is really around the Supreme Court decision, around the IE and the Trump tariffs that goes against the White House. That would be incredibly chaotic to undo. And so I think that that event, whenever that clears, could potentially be a nothing burger if they side with him or to me, an event that really creates some volatility. I do, though. I do think, though, 2026, we will have volatility like we had most years, but I don't think we're going to have a benign market that just goes straight enough to the right.
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C
All right, she's mentioning it. Jim, I want to come over to you. Just the idea of the tariffs might be overturned. Some other hurdles coming up next year with the Fed and a couple other things. We had Jeremy Siegel on our air earlier today. He mentioned some of those things. He was actually very bullish about the 493 as opposed to the Mag 7, seeing those as really the drivers for the action in the new year. Do you agree with that thesis that, you know, assuming that those things get unwound in a benign way, whichever way that is, whether it's struck down, held up, whichever way market sees it, it's really the 493 that are the drivers next year.
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A
So before I answer that question, allow me to just set the context of. Because I think this matters. I find it hard to believe in any way that there will be a recession in the next 12 months. And absent a recession or a meaningful scare of one, it's hard for me to believe that we will have anything other than a positive return as measured from December 31st of 2025 to December 31st of 2026. However, within those 12 months, I do think there will be a lot of volatility. I think it will be to Bren's point, I think the top of the list as far as reasons for volatility is the IPA potentially most likely being overturned by the Supreme Court. Now, the president will find other ways to institute tariffs and we'll get through that, but it will create a ruckus. There is likely to be geopolitical issues going on. We've got very high earnings expectations. And even if they're disappointed a little bit, they still will be great earnings growth. Remember, Frank, we're projecting 15% year over year earnings growth next year for the S&P 500 as a whole. What if it comes in 14%? Well, for a market that's trading at roughly 22 times next year's earnings, that's going to matter. Now I put this all together. Where did I start? We're not going to have a recession. We will have a positive year next year. But there will be volatility. And to me, now I'm going to answer your question. Thank you for giving me the Runway. I do think the opportunity to hedge most of that volatility comes in looking at the other 493 stocks or the other sectors outside of technology. Not that technology is going to do bad, but that's just probably given prices where the most volatility is going to be. So we do favor the equal weight S&P 500 as a tactical trade here. And I do think financials, industrials, materials, energy and health care are sectors to look for in 2026.
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C
You got a lot to say. We went to you last year. You did not disappoint. You were definitely.
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We're only five minutes in it into the show.
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Well, nobody's counting. I'm just saying you had a lot.
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To say right there.
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C
I'm giving you some credit. What you're saying really echoes some of the things I heard from Lauren Glubin from New York Life. She was saying there's a new regime set up, more volatility, geopolitics having a bigger influence. She also believes that we're going to See more inflation next year. She's saying something similar to you that.
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A
I don't believe, by the way, which I think inflation is a, is more than a little bit of a canard. I think, look, the jury's out, but.
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C
We don't know more inflation.
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A
Well, no, I mean, the question is whether you have a price adjustment, which is what the Fed believes. Which is what I believe, that tariffs will cause a price adjustment and then inflation will be a nothing burger for the rest of the year. Could be wrong. By the way, when I say the jury's out, the jury is out. We don't know the verdict. We're going have to wait and see the data come in. But it doesn't seem to me that this is a strong enough economy to get wage growth. I mean, the labor market's okay, but it's not strong enough to get wage growth. And absent wage growth, I think it's hard to get a real wave of inflation. By the way, productivity will help on inflation.
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C
I want to go back to your original point. You see the SCOTUS striking down the IPA tariffs, but then you see the administration putting in new tariffs. And that doesn't create a big negative impact to the market.
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It does.
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Just the uncertainty.
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It does.
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And then the market recovers at the end of the.
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I mean, Frank, that's the volatility that I'm talking about. That's exactly the volatility.
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C
Now, volatility in the short term, that's the thesis. I mean, obviously, you know, we're a couple days away from the start of the new year and probably a ways away from the SCOTUS decision. But what creates the recovery? I know you don't have a crystal ball, but in your mind.
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A
Yeah. So I mean, hopefully the scotus, the Supreme Court comes out with this ruling in January. I mean, let's not make us wait. And they've kind of telegraphed it. I mean, I'm not some, you know, soothsayer for the Supreme Court. They've kind of telegraphed what their decision is going to be. Get out with it. Okay. Make the, make the decision about whether there's going to have to be refunds. And then what we're will happen is trade policy uncertainty will shoot up again, hiring will freeze again. Companies are not going to know whether they're supposed to have manufacturing plants in Mexico, Thailand or the US but in the weeks to come, then, then the administration, Secretary Bess and President President Trump will institute other tariffs using other statutes that have much stronger legal standing. And that Trade policy uncertainty. Frank will come down. So what we're looking at is a first quarter that could be kind of choppy. Hey, look, I do think, by the way, earnings are going to be okay, but to my point that I made hand in glove with this is, what if they come in up 14% instead of 15%? That will include. That will cause some volatility on top of what we're talking about. So let me be clear. It's not like there is some fatal flaw in the economy or the markets, but volatility should raise its head.
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C
All right, Joe, want to come in? You reacted to a few things. I wasn't sure which one.
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I'm trying to read his face.
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He gave me the eyes. Brent, I wish you were here. You could see the look that he shot me. I'm not sure which part of it.
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Was you looking at him while he was. While I was talking, but now that I'm looking at him, I'm going to dare to say he disagrees.
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No, it's not that I disagree. I always look at it from the lens of position and positioning and sentiment, because I think that's what matters. It's most important. I think here in the fourth quarter, the market is set, ascending a very subtle message to investors in the trading community in the way that when you look at the various 11 sectors, you're seeing performance, health care with dramatic outperformance relative to the other major sectors. You're seeing some areas of the market where there was very strong strength, like the AI trade, which is now pulling back on some of that strength and working off some of the positioning. So I think the market is accurately getting in front of what Jimmy's highlighting, an anticipation of elevated volatility. The anticipation, as you said, of several events that are in front of us. You know, we have to fund the government by the end of January. That's obviously going to be a concern as well. So there's things that the market is getting in front of, and I think how you treat that is kind of going back to what Brin said. It actually works in your favor because you've got a more healthier suite of opportunities. You just have to be very, very judicious in mining for those opportunities and understand when risk turns against you quickly, you have to move to the sidelines. And I think that's really the message here in the fourth quarter. If you think about what we saw in various names like Applovin, like Palantir, when they reversed, you have to be quick to move to the sidelines Oracle is another great example of it. So you turn the calendar to 25, you could find opportunities in financials, you could certainly find opportunities in healthcare. I've got my eye on Merck, which is breaking out significantly. I already own the XPI and McKesson energy right now is coming back very strongly. I think Exxon is close to a 52 week high. You could look for opportunities of Exxon so it's healthier, but just because it's healthier doesn't mean it's not going to be a little bit more difficult because I think it is going to go.
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C
Back to your rental idea. So you want to rent the defensives in the first part of the year to see how things play out. Knowing that the SCOTUS decision can.
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B
I don't, I don't think what you do when you look at positioning is you initiate a position saying this is going to be potentially a rental. I think you understand the parameters of how you manage the risk. You define where your loss threshold is ultimately going to be. And I think you have to size your positioning with an expectation. If there's elevated volatility, there's a higher probability that you're going to reach that loss threshold quicker than maybe you did in 25 or 24 or 23. So you have to treat the market as a little bit more guilty because I think in that elevated, elevated volatility environment, the market's going to move much faster. I think on the other side of establishing positions, you're going to look back on it and say, oh, I only had that position for 90 days. I was in and out of it relatively quickly. Unlike in prior years. Like in 24, I could hold a position from the beginning of 24 through the end of 25. I think that's kind of going to be a little bit more of the environment where you're going to be moving from place to place.
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C
I want to come back over to you. How are you viewing the cyclical trade? I know we're generally talking about it, but is that really the place? Whether you're renting, whether you're going to go there, be bullish. Ned Davis out with a note talking about the improving technicals when it comes to cyclicals, saying higher percentage of cyclicals trading above their 50 day relative strength, moving averages in over a year or the highest level in over a year. Broad based leadership from cyclical sector has been a bullish condition in general. Are you seeing signs in the cyclicals that are bullish and that make you want to put Your money there going into the new year.
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Well, I think about, if you think the economy is going to continue to expand, we're going to have a steepening of the yield curve which can tell you multiple things. But what it does tell you one thing is you have a good economy where short rates are coming down, long rates are coming up, but not unanchored. And then you have within the OBB that starting to permeate itself through the economy. No tax on TIPS, higher refunds for investors, 100% depreciation, etcetera, etcetera. You know, that lends itself to a good cyclical trade. I know people continue to talk about small cap think the way if I don't know how well, how, how well small cap will do next year. But I think in terms of the way I would view, I would say by, I like the private equity managers, you could do small cap value which actually would be industrials and regional banks. And so I think you still want to have a quality bias to it because I think to, to Joe and I talking about, or to Jim and I talking about the Supreme Court, that is, etc. I think that volatility will create huge opportunity. But I think people will get panicky about the economy if we do get the wrong side of the Supreme Court case. So I think I like Joe's idea about renting certain areas versus staying, you know, strategically invested throughout the year. So I would rent some of those cyclical spaces versus having a new, we'll say long term secular position.
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B
Yeah. I also think in terms of positioning, when you move into the new year and you establish a positioning, you're going to need to take smaller positions. But I want to ask Brin and Jim, if we expect elevated volatility in 26, should we then not also expect to move that far away from the Mag 7 because they're the purest definition of quality in an environment that we could experience higher volatility.
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I don't want to come out as being negative on the Mag 7. It's just not where I intellectually or from my heart feel. I mean if we take in video as the bellwether, the poster child, trading at whatever is trading 27, 28 times forward earnings with the earnings per share growth that we see in front of it, I'm okay with it. And yes, we have these worries about the circular nature of the revenue and you know, when will the data center overbuild happen? I mean, my answer is not in the next year. Could be wrong. But that's my answer. I think the, the, the bigger answer to how you handle the volatility that we, I think we all see coming up is for me, when you get into early 2026, it is likely a good time to trim some winners that I for one have held off on. Now believe me, this is not a back slapping contest. That's not what I'm doing. Joe, if you feel that way, you can tell me about any of a number of stocks that I've picked poorly. But if I focus in on Citigroup and Alphabet as two stocks that have done massively well this year and if it were not the last week in December, I probably would be trimming them now. But I don't want to take that tax hit. Now I don't think I'm alone in saying that. So I would expect that in the month of January you decelerated. Do see some trimming of those winners by the way, Joe, to the names that you were talking about earlier, maybe that hits app loving too. Maybe it hits Palantir, I don't know. But I do believe without being able to prove it that there has been some pent up selling from those people like myself who don't want to take realized gains this late in the year. And the way I'm going to handle that with regards to the volatility coming up is to trim, not sell entirely, but trim those winners that have simply gotten too large.
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C
All right, Brent, are you adopting a similar strategy? You want to hold on till January for tax reasons or maybe just a wait and see approach after some of this volatility to end the year?
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F
There's no, there's no wait and see. Right? You want, you want to be, you want to, we're always invested. But I mean next year I feel plays right into our playbook. I mean we love selling calls and so what we know for sure if you get increased volatility, that call premium is going to get higher and higher. So like right Now I have 500 calls on Tesla, Tesla to 10 calls on Nvidia, 130 calls on Robinhood. I don't think those are going to, any of those are going to get called away. And so I think next year this is where whether you want to do it with an ETF, whether it's JPI, Q, Kevin Simpson's Devo, these covered call ETFs are having individual positions take advantage of that volatility and then if it gets called away, so be it. Let's let the market take it away from you. But I think Next year will be. This year was a good year. I think 2026 will also be an excellent year to take advantage of selling calls on your, on your holdings, so then you actually don't have to make the decision of, of to sell them outright. If it gets taken away, then, then, then that's great. You can, you can invest those dollars elsewhere.
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C
All right. By the way, something we're going to talk about not only today, but tomorrow and Wednesday as well. Possibly today we're not talking about as much because the markets are down, but we could possibly see three straight years of 20% gains in the market, something that obviously very rarely happens. But then next year we do have a seasonal factor. I just want to bounce off you guys. Want to talk some more about tech? In the second year of a president's term, the average gain since Reagan is about 3.3%. Is that something you're worried about? Just that seasonality that we've seen during previous administrations, and I know this one's a bit different because the terms are separated by another president in between, but is that something you're thinking about going into next year?
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B
Well, in 2022, one of the things that worked to our advantage was you had a market that it was in significant decline from January through the middle of October, down greater than 25%. But what you were able to rely on was the consistency of the midterm election statistics. Let me share those with you. If you go back to the start of World War II in 1939 for the midterm election years, there has never been a year in which, if you bought the market on the November date of the midterm election and held on to June 30th of the following year, you did not see a profit. So if in fact, in front of the midterm election, you get that elevated volatility, you kind of can rely on those statistics that you have going back to 1939, set an expectation for yourself. So we're coming off three really strong years. We're coming off three strong years because we've seen a pivot in terms of global monetary policy, policy, not just Federal Reserve policy. We've seen, to Jimmy's point, significant earnings growth. We've had, most recently four consecutive quarters of double digit earnings growth. And then you have the advancement of taking the technology related to artificial intelligence and advantaging it, moving it forward rather to generative AI, agentic AI, general intelligence itself, and all the places that we believe, believe this is ultimately going to go. And that's been the tailwind really behind, I think three consecutive really strong years.
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C
All right, Jimmy.
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Yeah, Joe, thanks for bringing up the earnings again because I think it's important for everybody to recognize what's the signal and what's the noise. The signal is earnings growth. The noise is all the political vitriol that always comes out during the midterm election years, first in the primaries, then in the general election. Now historically that has focused on health care, right? Health care care has been a terrible sector into which to invest during a midterm election year. I will tell you this coming year, I don't think that's the case because we've already got the camel's nose under the tent, so to speak, in terms of IRA Bill and the pricing for Medicaid and Medicare on prescription drugs as well as President Trump's whatever his his drug pricing exchange is. So I think health care will do fine. But ultimately I'm going to go back, Frank, to what you opened the show with. Earnings growth in the second half of 2026 is supposed to be better for the 493 stocks than for the MAG7. That's the projection and that's the reason why I think probably the equal weight is worth having a tactical trade on for 2026. Side note, or rather a disclaimer that projection has failed to come true even having been projected in the past year. But it does make sense to me that the benefits of AI should be flowing through to other industries.
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C
Now speaking of benefits of, I want to talk about infrastructure. That race is set to kick off a wave of tech price increases starting in 2026. Want to bring in Christina Parts and Evolis now with more details on that. Christina.
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E
Well, Frank, let's start with TSMC because they're reportedly raising prices on their most advanced chips for the for actually four straight years starting this January 1st. That's according to Economic Daily. And the reason comes down to AI. AI data centers are locking up leading edge capacity years in advance and paying premium pricing. That gives TSMC unusual pricing power and those costs will move downstream. At the same time, AI servers are absorbing huge amounts of memory, pushing advanced memory prices even higher. More expensive chips plus more expensive memory means PC and device makers actually have to raise their prices as well. Dell has reportedly raised commercial PC prices this month. Acer and asis are expected to follow in January. AMD and Nvidia are reporting planning monthly GPU price increases starting next month, while Analog Devices is considering hikes of up to 30% more IDC shows that the PC market could shrink roughly 9% in 2026 even as device prices rise between 6 and 8%. And this isn't necessarily about weak demand. A lot of people have to refresh their PCs because of Windows 10. It's AI permanently reallocating capacity away from consumer products towards AI products. The winners could be TSMC memory makers like Micron and AMD gaining share. But the potential losers could be those volume dependent names like Qualcomm, budget PC makers like HPQ and essentially gamers being priced out. These pressures though are expected to last through 2029.
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Frank.
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C
All right, Christina Parts and Evil is live from the nasdaq. Christina, thank you very much. Want to jump off from what Christina had to say? As promised, we're going to talk more about tech. I'm going to start with you Brian. You own Dell. Fewer PC sales, chips, more expensive. It does not sound like a great setup.
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F
Yeah, but we're all of Dell's growth and the only reason you own Dell is because of their infrastructure services group which is doing really a key component of all the data center build out. And they're growing, it's growing about 25% a year. And so the Dell PC business has been anemic at best the past few years. So I feel like that's already priced into the stock. So if you think that you want to own a company that's doing share buybacks, great CEO, founder, it's at the core of the build out, kind of like a growth at a reasonable price. I think Dell can be a, a good, you know, mid teens to 20% type return winner if we, if the narrative is positive. By the way the narrative goes negative, Dell going to go down with the rest of them.
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C
All right, want to go to another name as you mentioned, Qualcomm, Joe, you own it. And Jyoti Jim, you own it as well. Your thoughts on what Christina had to say just about scarcity when it comes to chips and also their ability to raise prices.
- [23:09]
B
Yeah, I think there's a lot of things fundamentally that we already know about the semiconductor industry and they're mostly favorable. I think if you are turning the calendar to 26 and saying to yourself, okay, what am I looking for as an opportunity? Opportunity. I think the thing that's important is that you continue to observe the relationship between semiconductors and software. 2025 was a year where we saw significant outperformance for semiconductors. The SMH, I believe year to date is up about 49%. I think we're showing the chart there and the IGV which is your software ETF that's up probably only about 7%. If we could show that as I'm speaking making as well I think when the calendar turns into January you need to observe that relationship. I'm not going to predict where the opportunity is going to be. I'm going to react to the opportunity. But we have the initial signs of potentially some of the software names that have kind of been dormant in 25, maybe they're reawakening as I speak. If we could show maybe a one month on Salesforce. Salesforce is up about 18% since that November 21st first low. Now is that just specific to Salesforce itself or is something build in the first quarter where you see the relationship between semis and software have that mean reversion trade and there's an opportunity embedded in that. If in fact we see that.
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A
I'd love to Qualcomm but I think the software comment is is right on target. I mean there's a couple of things going on here. One, you would have expect Salesforce and Adobe to be absolutely mulch Docusign in the month of December. You would have expected tax loss harvesting to absolutely clean these things. Clocks didn't happen. And I think what's happening is after three years of AI entering the the atmosphere for these stocks and saying that AI is going to kill their business, that the world is recognizing that you've had three years of great profits from these companies and they're run by really good people and we're going to take shots at Mark Benioff. Of course we're not. And Salesforce is embedded every everywhere as is Adobe and DocuSign. So I do think that as we go into 2026 this absence of a December tax loss harvesting mauling is showing that these stocks can and probably will perform in 2026. Can I give you a quick one on Qualcomm? This has been just a dormant stock for many years. Yes, it's made some money but nothing like the rest of the semiconductor space. They have not gotten credit for their expansion into automotive Internet things but they are starting to, they're starting to get away from everybody looking at them as a cell phone chip manufacturer. And importantly in 2026 their chips will be going into those Saudi Arabia data centers and I think that moves the stock higher your date.
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C
Qualcomm shares up just about 13%. All right, coming up next on half we have some trades from Joe Reading who sells that he wants to tell you all about. We're going to talk all about it coming up right after the break. More halftime in just two minutes.
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D
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What made you confident that you could do something that hadn't been done before?
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E
I have no fear of failure.
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D
Trailblazing women, changing the game One of.
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- [27:31]
C
And welcome back to the Halftime Report. Let's get to some committee moves. Joe, you sold the jail. A lot of talk about metals and gold in particular. Recently. You sold the gld.
- [27:39]
B
I did so in the middle of November. I entered a position in the GLD as a trade. This was not on an expectation that this was going to be a long term investment. When I think about how I view 2026 for the precious metals, I want to be long the precious metals. So for those of you that are sitting in investments in precious metals and have had them over the last several years, I think you maintain those positioning. I think you'll be fine. I will make a return at some point once again and I'll probably make a return in silver because that is where the trading opportunity is. But overnight, when you see the type of parabolic move that you witnessed in the precious metals, you see the dramatic reversal, you see the spike in volume, you have to pay attention to that message. If you are looking at something from the optics of it being a trade, you cannot ignore the type of price reversal that have we we saw last night and sit there and do nothing. So you have to at that moment reduce your risk. That's in fact what I did with the gld. I rang the register on what is a small winning trade. But I understand that an elevated volatility environment, a parabolic move, a big move higher and then a reversal lower. There's a message in that, and the message is that is to reduce positioning if in fact you're looking at something, something from just a purely trading opportunity. And then as you move forward, you look for an opportunity to reestablish a position. I'll do that from the long side, most likely in silver.
- [29:06]
C
I want to come over to you. We're talking, to use Joe's word, parabolic moves. We're looking at gold, we're looking at silver. Copper is making some moves, Platinum and palladium as well. How are you viewing the metals complex and some of the stocks in that trade?
- [29:19]
F
Well, I've been a long term buyer of real gold and silver. Not the ETFs, but gold and silver. And so I mark where I buy gold and silver. I have a bunch of silver that I bought in 2011 around 40 to $44. 2011. So guess what? It got back to $44 in September of this year. So for those of you that are following this speculative move higher, just know that narrative will always follow price. And you read all the reason why about silver being in a structural deficit. Deficit. Well, it's been in a deficit for five years. All of these different things. Just be very careful because I think people can say this time is different. But once again, I bought it at 40:44. It took me 14 years to get right back here. So I get that these are can be a great asset class. But just understand your sizing and positioning. And so I think kudos for Joe to taking profits on a really good trade.
- [30:15]
B
The one other thing I just want to add quickly. When you think about parabolic moves in particular in commodities, understand that the exchanges have the ability to adjust margin levels. And that is in fact what's occurred over the last several days. And when those margin levels are increased, as we've witnessed in the last several days, that only exacerbates the volatility that you're going to see because it works on both ways. Yes, there's people that have good positions, Frank, but there's also people on foreign, unfortunately on the other side that have losing positions that are forced out of it.
- [30:46]
C
Yeah, really quick we got to move on to some of your other trades. But I was talking to some traders. They're seeing a short squeeze when it comes to silver as one of the reasons we're seeing some of the volatility. Are you hearing that? Are you seeing that as well?
- [30:55]
B
I wouldn't be surprised by it, but I've been around long enough to know not to speculate on that stuff within 24 hours. But the price action is telling you that obviously there's a dislocation somewhere.
- [31:04]
C
I want to get to one of the other moves. Phillips 66, you sold this one. It's actually higher. And just earlier in the show you were talking about the fact that energy prices were going up. So kind of give us the trade here, why you're selling here.
- [31:13]
B
So in the middle of July, took a position in three refiners. The names were Marathon, Valero and Philips 66. And at that time really the refiner trade was the only opportunity in energy. As you kind of moved into the fall, the refiner trade had the the strength of momentum, both technically and from a fundamental perspective. And the driving season worked to its advantage as well. The trade has worked out well along the way. I sold out of Marathon, I'm now selling out of Philips 66. I'm maintaining one last position in Valero. I've had this now for the better part of the last five months. As I said, it's worked out well. But I think as you turn the calendar into 26, I think the opportunities in the energy sector might change. They might move away from the refineries, they might move towards a lot of the large end piece. We're seeing that right now with ExxonMobil at a 52 week high. Other names like Diamondback, that could work well. So I think there's going to be other opportunities in energy. I just kind of wanted to slowly wind down what's been a pretty good refiner trade.
- [32:21]
C
Jim, your take, Are you also looking at some other opportunities in energy?
- [32:24]
A
Well, I've got of good energy exposure And Joe mentioned ExxonMobil, which I really, I think is going to hit not just a new 52 week high but an all time high here. It's about 3% off. I've got, you know, within energy there's so many different ways to diversify. I've got the pipeline with Cheniere, exporting liquefied natural gas across the world. Got Transocean, which is the highest beta play you can possibly have in oil. This is an offshore driller but the point being is that you're starting to get news of China stake stimulating its economy. Our economy seems to be doing fine. You know, the shale patch, there's little rumors here and there that maybe there's some productivity losses there. Oil prices are low. I think they're asymmetrically priced to go higher from here.
- [33:04]
C
All right, want to go to one of your other moves, Joe? You sold some Spotify. Give us the trade here and why you're getting out right here.
- [33:11]
B
Don't take offense to this, Jimmy. I know this is not the way you approach markets. I know Brin does look at his this way. When you are putting on a position, there are several things that you have to say to yourself. If it goes wrong, price is a reason to get out if the fundamentals change. But I think what people don't look at often enough is time. They don't say to themselves, okay, I'm going to give myself a period of time for this trade to work. And over the last month, Spotify has not worked. And Spotify is in a downtrend since the end of the June, just like Netflix is. I am still sitting with a personal position in Netflix. I have to figure out what to do with that in the coming weeks. But as it relates to Spotify, I just time myself out. I entered the position one month ago. It didn't go anywhere. And you move to the sidelines.
- [33:56]
C
Yeah. Also Netflix and I heart doing a deal together seems to also be putting some pressure on Spotify. The idea of those radio shows and podcasts going on Netflix I'm sure could be a threat to the business.
- [34:06]
B
Look, three months ago, the podcasts were an obvious tailwind to Spotify. Now it seems as though everything that we're hearing is in fact a headwind to Spotify. So it's difficult to identify exactly which is best benefit.
- [34:20]
C
And now you're out of it. So it's not your problem anymore. All right, time now for the headlines with Christina Parts and Evolis once again. Christina.
- [34:26]
E
Hi, Frank. Well, President Trump and Israeli Prime Minister Benjamin Netanyahu set to meet in the next hour in Florida to discuss the the Israel Hamas peace process and security situation in the Middle East. Trump and Netanyahu's last face to face meeting was in October at the start of the cease fire between Israel and Hamas that has largely held. But progress has slowed with both sides accusing each other of violations. Threats from Iran are also expected to be on the agenda. China launched massive military drills today designed to showcase its ability to encircle Taiwan. According to Beijing, the military is conducting live fire simulations or simulated strikes, along with drills to blockade Taiwan's main ports. Taiwan put its forces on alert and called the Chinese government, quote, the biggest destroyer of peace. And OpenAI is looking to hire a new, quote, head of preparedness who will be responsible for studying risks ranging from computer security to mental health. In a post on X over the weekend, CEO Sam Altman announced the posting and acknowledged that AI models are, quote, starting to present some real challenges, including the impact of the models on mental health. If you're wondering, Frank, about the salary, it's just a little bit over half a million dollars.
- [35:40]
C
That's a very interesting job with all that's going on with these AI models. Christina, parts and list, thank you very much. All right, coming up next, you got your private equity playbook. Our Leslie Picker is following the money and the setup for 2026. Halftime's back in just two minutes.
- [35:55]
D
What made you confident that you could do something that hadn't been done before?
- [35:59]
E
I have no fear of failure.
- [36:01]
D
Trailblazing women, changing the game.
- [36:03]
F
One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms.
- [36:11]
D
It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [36:25]
C
And welcome back to the Halftime Report. Pressure in private equity stocks continues into the year end, but will 2026 bring bluer skies for the space? While our Leslie Pickers following the money and may even have an answer for us, Leslie.
- [36:38]
D
I don't have a crystal ball, Frank, but I'll do my best here. It's been a rough 2025 for the alternative asset managers, although if you look at the firms that lean more into private equity, think TPG and Carlyle, for example, they're actually poised to have positive performance year to date. The real question for the industry is whether we'll see a real recovery in private equity dealmaking in 2026 that can thaw a frozen backlog. In recent years, managers have had a harder time exiting their portfolio companies either through a sale or ipo. And so that has meant lower distributions for the investors in these funds, which makes them less inclined to fork over additional capital for fundraising. So the industry has been just kind of stuck. Now we're starting to see glimmers of that changing. While the number of sponsor backed exits is still lower this year, the exits that are happening are happening at a much bigger valuation. Prequin, which tracks this space, expects the deal machine to really turned back on next year for a few reasons. If the Fed lowers interest rates a few more times next year, that would be appealing for pe, which uses shorter duration or floating rate financing for its buyouts. Additionally, there's been a noticeable improvement in the valuation mismatch between buyers and sellers of assets. Prequin notes that this gap is already closing in the secondaries market, which may be an indicator that it could also happen in the regular private equity market as well.
- [38:05]
C
Frank all right, our Leslie Picker. Leslie, thank you very much Brian. To cover to you. You got a lot of exposure in the space Apollo, kkr, Blue Owl Tech Finance, your take on what Leslie had to say and just also the landscape and the setup going into 2026.
- [38:19]
F
Yeah, I mean I think, I think Leslie, of course spot on. I think, you know, lower rates are part of the story. I think when you look at Apollo and kkr, which I own, the individual stocks over the last three and five years have probably done far, far better than the actual private funds that investors own. And so that's why we would rather own Apollo and KKR stock versus private equity that has 10 to 15 year locks. Also their fee related earnings are going to be growing around 18 to 20%. So I like these names. I'm up about 15% on them because I bought them around May of this year when they had sold off with everything else. So I think it's a great way to play private equity just by the private equity names.
- [38:59]
C
All right, I want to come over to you guys. Joe, you have some exposure as well. When you're looking at these names, do you think that maybe the landscapes just change? I mean due to deregulation? Is the playing field more level when it comes to banks and some of their ability to do some of the lending that before these asset other alternative asset managers were able to do. And has that gap just kind of.
- [39:17]
B
Narrowed between the two to a certain extent. I still think there's opportunity for investments in private equity. In particular when you look at private infrastructure right now, that's, that's an area of the market which you're seeing significant strength and you're seeing a lot of the AI players that are actually doing some private deals. Oracle talking about doing a private deal, we know that that has done some as well. So I agree with Brin's remarks and I still think for private private equity in 26 there will be opportunities for investors.
- [39:50]
C
Jim, you often talk about the banks, you just mentioned Citigroup earlier. Do you think that gap is narrow between the two and deregulation will give some of these banks some of the ability to make some of these similar plays? Maybe that we're too risky under a higher regulation environment under certainly a Biden administration. But with this administration they have more latitude.
- [40:06]
A
I absolutely do. I recently started Apollo. I know Bryn's been in it for a little while, but about a few months ago got it around 126. And I think that is going to be a direct beneficiary of deal making. By the way, going back to where we started the show, I do think it will probably be a little tricky market for these stocks in the first quarter, particularly as that IA decision comes out. We get all that trade policy uncertainty again, that will be an opportunity likely to add to these stocks. So my Apollo position isn't all that that big right now. I'm looking for an opportunity to an add to it. I think that's when it will happen.
- [40:41]
C
All right. Apollo shares pulling back about 1% right now, year to date, down about 11. You're seeing a lot of red on that board when it comes to private equity names coming up next year on halftime. Mike Santoli joins us with his MIDDAY word. We're back right after this break. And we were back on halftime. Senior markets commentator Mike Santoli joining us with his midday word. Mike, we talk about a lot of stuff just going into the new year, the moves on metals. Joe's calling it parabolic. What are you watching today?
- [41:10]
B
Well, watching a little bit of people ringing the register doing some rebalancing is the way the action looks today. The top 20 performing stocks in the S&P 500 year to date, 17 are down today and three are up. That tells me people are kind of rotating around. There should be a slight rebalancing flow out of equities maybe into fixed income, just based on how those have performed in the quarter to date. So I think that's kind of what you're seeing. One of the takeaways I do have though is the s and P500 is precisely where it was at the highs two months ago today. That's October 29th. That was the previous high. So we've gone sideways in terms of the benchmark. And guess what? This is what broadening feels like because you got the equal weight outperforming the market cap. Weighted S and P industrials and financials are up. Semis are underperforming. So this is kind of the way the market can kind of rebalance itself and, you know, kind of take care of some of those excesses. But it also tells you it's going to be hard, I keep saying, to meet the consensus projection for next year if mag7 mega cap tech just kind of sits there.
- [42:15]
C
A lot to think about there. Mike sent to you with your MIDDAY work. Good to see you, Mike. Coming up, we got the trade on retail. As Bren leans into the space, we're going to talk about the big battle that's brewing over at Lululemon. Halftime is back right after this break.
- [42:33]
F
All right.
- [42:33]
C
Welcome back to halftime. We were watching shares of Lululemon. You see they're up just about 1 1/2 percent. Founder Chip Wilson launching a proxy fight to overhaul the company's board. His nominees include the former CEO of On holding and Jim Brand. You both own On. Jim, I'm going to start with you. What do you make of this, the idea of bringing the former CEO into Lululemon, a company has certainly struggled with consumer demand, tariffs, a couple of other issues as well. Competition from companies like Biori and was the other one we were just talking about? Alo.
- [43:01]
A
Yeah. I mean, ultimately, I think this space is about product and who's got the product that consumers want. Right now it's on. And that will change at some point in time. Several years ago it was Lululemon, it was Nike. Obviously, it's not those companies now. So if we're going to change the board and you're going to tell me that impacts the product lineup, fine, I'm all for it. This doesn't quite have that feel to it. So for me, I would wait and see. Number one, does the board change? And number two, if they do change, what is their emphasis on the product lineup after that change? It's too early for me to take a position in Lulu based on this news.
- [43:33]
C
Bryn, your view, I mean, a new CEO is coming. Do you think the former CEO of On is the right person to do a turnaround? That's looks, that's what it looks like we're seeing here with when it comes to Lululemon.
- [43:43]
F
Yeah, I agree with Jim. I think it's too early. I think ultimately one of the big missteps Lulu Lulu did was their no confrontation policy where they just let flash mobs come and just steal everything. Very much of like a target type policy. And so it's just like I agree with what Chip's doing. I hope he doesn't do a good job. But you also have Walmart is Doing a ton in Athleisure. So I agree it is way too early. I do think with on though, which was a recent purchase that I did, I think there was a ton of on shoes and a ton of on clothing under the Christmas tree. And it's also I think if the Supreme Court rules against the White House on the IPA tariffs, I think that both Nike and ON will get a pop from that because they all talk about tariffs related to these policies.
- [44:27]
C
All right, you're mentioning Nike. You also own Nike. Some very notable insider buys. Bob Swan and Tim Cook both buy more shares of the company. Your take on that?
- [44:36]
F
Yeah, it's a turnaround stories. Let's see if Elliot Hill can do it. I will keep this through the summer. So I have a time period. Retail is risky business. They didn't do great in China. They did awesome in the US they did awesome in running. And so I think the company can just get less worse. And the stock price price could be at $75 easily. So we'll see what happens. I'm a holder through the summer.
- [44:59]
C
All right, right now, nike trading about $61 a share up in the green one of the stocks up about a quarter percent. But year to date, you can see pulling back just about 19%. All right, stay with us. Final trades. They're coming up on Halftime. And we are back on the Halftime Report. Final trades.
- [45:27]
D
Bren, you're up first, but it's Christine.
- [45:30]
F
Yeah. Blue Owl's symbols otf their Technology Finance Corp. I've talked about it before. The net asset value is $17.20. That's a 10% distribution. I think a year from now it can be a 20% total return. And they actually have an equity position in Space X.
- [45:47]
C
All right, Blue Al shares Blue Technology Finance shares in the green right now. Jim, coming over to you.
- [45:52]
A
Lockheed Martin, I really don't think you can miss the momentum that's picked up in this name. And I talk about it a lot with regards to the F35 and the missiles business. What I don't talk a lot about but should be talked about is the helicopter business. Sikorsky makes the helicopters that air forces around the world want.
- [46:08]
C
Joe, last word.
- [46:09]
B
I really like Britain's final trade, a blue arrow. I would own that as well. My final trade is Chubb, the insurance companies making.
- [46:17]
C
All right, that's going to do it for us right here on Halftime, the exchange with Contessa Brewer. It starts right now. You've been listening to CNBC's Halftime Report.
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B
The podcast you can always catch us live weekdays at 12 Eastern only on CNBC.
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D
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 the holidays mean.
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