CNBC Halftime Report — "The Key Questions for 2026" (Aired 12/22/25)

Episode Overview

In this episode, host Scott Wapner and the Halftime investment committee dive into the most pressing market questions as the calendar turns to 2026. As stocks end 2025 on a high note, panelists debate the durability of the current rally, implications of market broadening beyond the so-called “Magnificent 7” tech stocks, the outlook for Fed policy, and where investors might find the best opportunities — including in China, gold, financials, and transports.

Key Market Questions for 2026

The Three Central Topics (00:32)

• Can the trade get beyond the "bubble" banter?
• Is the broadening trend in the market durable?
• Can the rally run without rate cuts?

Scott Wapner frames these as the main questions for 2026, asking the committee if they’ve missed any other critical issues.

Main Discussion Points & Insights

1. Is Market Broadening Durable? (01:35)

Joe Terranova:

• Picks the durability of the broadening trend as the most important question.
• Notes 2025's unexpected sector outperformance (healthcare up 11%, outpacing other S&P sectors by 8%).
• Warns against relying solely on the AI “halo” and mega-cap techs to lead markets; emphasizes need for “the 493” (rest of the S&P) to participate.
• Observes markets now rotate more among sectors; predicts 2026 will be about “rental opportunities” rather than anchoring to one theme.
• “The market’s doing a really good job in its behavior of recognizing when valuation positioning and sentiment gets to an extreme as it relates [to the AI halo] and correcting that. And I think we just witnessed that over the last 10 days.” (01:35-02:53)

2. Getting Beyond Bubble Fears (03:27)

Liz Thomas:

• Agrees bubble fears are overplayed: “The bad thing rarely happens when we're all talking about it happening.”
• Maintains that continued enthusiasm for broadening is essential for sentiment; real economic growth and productivity gains (including from AI) remain key.
• “We need it for sentiment. We need it for investor sentiment and economic sentiment.” (03:27-04:33)

3. Fed Policy & Leadership (04:36)

Mike Santoli:

• Introduces the next Fed chair's identity and first meeting as another major question, as policy “ultimately controls the market.”
• Suggests market confidence in the new chair at that first meeting could matter as much as the act of cutting rates itself.
• Warns of landmines, especially in private markets, but expects the “AI trade” (Mag 7) to persist unless major issues emerge. (04:36-06:27)

4. Earnings, Rotation, and Breadth (06:55)

Josh Brown:

• Argues that the question of market breadth has already been answered by 2025’s performance: “None of these [AI] stocks look good going into year end, and the stock market looks amazing.”
• Cites drawdowns in leading tech names but notes other sectors – and overlooked tech – are thriving.
• “What I care is that earnings are going to be growing next year in large part because of the benefits of AI.” (08:20)
• Predicts higher margins and continued upside: “If we can do $315 in earnings per share next year and we're at a 21 times multiple...there’s still room for the market to have another good year.” (08:20-09:18)

Joe Terranova:

• Adds that further rate cuts are likely not required for the rally to continue unless there are economic problems.
• “Seeing strong earnings growth is going to lead you into the direction of saying, okay, I have a variety of different places that I can allocate capital and that's a healthier environment than where we were just nine months ago...” (09:19-10:37)

2026 Market Targets & Sector Rotation

Strategist Forecasts (10:37)

• Average S&P 500 target for 2026: ~11% upside; 7,629 median.
• Range: Oppenheimer at 8,100 (bullish), lowest at 7,100.

Liz Thomas:

• Views targets as “average,” reflecting caution after multi-year outsized gains.
• Favors the nature of broadening into pro-cyclical areas (financials, materials, industrials) rather than defensive stocks.
• “The market is telling us that it's looking forward to 2026 and perhaps we even do better than we expect...It’s possible [earnings] are overestimated and maybe returns are underestimated.” (11:14-12:32)

Macro Headwinds & Tailwinds

Tariff Policy & Inflation (12:32)

Scott Wapner, Mike Santoli:

• Discuss potential upside surprises if tariff headwinds ease in 2026, possibly fuelling further market outperformance, particularly in margins and inflation pressure.
• Santoli is optimistic: “Rates have played an outsized role in hitting markets...And we've seen the market go through high interest rates and still move up.” (13:18-13:59)

The AI Trade, Market Breadth & Competition (14:20)

Josh Brown, Joe Terranova, Mike Santoli, Liz Thomas:

• Oracle's upside call from Wells Fargo seen as emblematic of the AI/data center trade’s durability.
• Panel discusses the difference between broad participation and indiscriminate bubble behavior.
• “These stocks are not acting like AI is unraveling...That’s not a bubble, that’s just a bull market.” — Josh Brown (17:52-18:32)
• Debate over whether heightened competition among Mag 7 is a risk or a positive for the broader S&P 493; Liz and Joe see increased sector benefits from AI, Mike downplays risk to big tech.

Rotation into Financials & Regionals (21:48)

Joe Terranova, Josh Brown:

• Notes renewed momentum in regional banking stocks and insurance companies; regional bank ETF at new highs.
• “This is like a triple to quadruple better than normal situation for those names and nobody owns them, like literally nobody.” — Josh Brown (23:13-24:20)

Global Opportunities: China Tech, India (26:09)

China Tech Rally (26:09)

Mike Santoli, Joe Terranova, Liz Thomas, Josh Brown:

• Panel discusses BTIG’s call for a January China tech rally.
• Joe Terranova: Points out China performance strongly correlates with the “momentum” factor. “If you’re telling me in January China is going to have outperformance, that means the momentum factor comes back once again.” (27:32-28:29)
• Liz Thomas: Labels China her 2025 contrarian call; adds to KWEB exposure. “They are fighting to win. I don't know that they will win...but it’s a good opportunity.” (28:53)
• Mike Santoli: Highlights Baba as “the horse in this race” for China tech. (27:23-29:17)
• Discussion: If China does well, India may underperform, and vice versa.

Single-Stock & Sector Calls (33:37)

Transports & Logistics

Josh Brown:

• Highlights CSX and FedEx as top transport picks for 2026.
• CSX: “Unqualified buy...Relatively small downside if you’re an investor. But once it breaks above 37, I think this name rolls right into the low 40s.”
• FedEx: “Next year will be a better year on revenue, pricing power, margins, earnings per share than this year...Third time’s a charm, I think the stock will break out.” (33:52-35:44)

Joe Terranova:

• Likes global logistics names, including Expeditors International and Prologis (PLD).
• Emphasizes the broadening out into cyclical sectors, not just tech.

Moves in Options Exchanges (36:55)

Joe Terranova:

• Sells Cboe (CBOE) due to relative underperformance, remains long CME and Nasdaq.
• Expects 2026 to be positive for options activity and volatility: “I think volatility is going to increase substantially in ‘26, even in a bull market.” (37:36-38:02)

Commodities: Gold, Silver, and Oil (44:08)

Joe Terranova:

• Exits Apache (oil/gas) after poor trade, but remains positive on gold.
• “I bought [GLD] one month ago, up about 10%. I think that continues to move higher because gold’s going higher.” (45:00-45:13)
• Liz Thomas: Agrees on gold, but feels silver is now a bit too hot: “Silver’s up a little high for me, a little fast.” (45:21-45:41)

Notable Quotes & Memorable Moments

• “You cannot just rely on seven individual stocks. You cannot rely on the AI Halo to really lead the market higher.” — Joe Terranova (01:35)
• “The bad thing rarely happens when we're all talking about it happening.” — Liz Thomas (03:27)
• “If anything happens to these AI stocks, you’re all dead...Well, none of these stocks look good going into year end, and the stock market looks amazing.” — Josh Brown (06:55)
• “I think the average strategist is just playing it safe.” — Liz Thomas on ’26 S&P targets (11:14)
• “That’s not a bubble, that’s just a bull market.” — Josh Brown (18:32)
• “Volatility is going to increase substantially in ‘26, even in a bull market.” — Joe Terranova (38:02)

Timestamps for Major Segments

| Segment / Topic | Timestamp | |------------------------------------------------------|----------------| | Key questions for 2026; market overview | 00:32–02:53 | | Broadening, bubble risks, sentiment | 03:27–04:33 | | Fed policy & next chair | 04:36–06:27 | | Breadth, rotation, S&P targets | 06:55–12:32 | | Tariff/inflation, upside surprises | 12:32–13:59 | | AI trade, competition, Mag 7 vs. S&P 493 | 14:20–21:34 | | Financials, regionals, insurance momentum | 21:48–24:20 | | China tech, rotation with India | 26:09–30:32 | | Transports & logistics sector calls | 33:37–36:19 | | Options exchanges, volatility outlook | 36:55–40:22 | | Crypto-tech link, new themes | 42:44–43:33 | | Commodities: gold, silver, oil | 44:08–45:41 |

Episode Tone & Takeaways

The discussion is lively, direct, and loaded with specific sector and single-stock insights—with the analytic, market-wise tone fans expect from Halftime Report. Broadening leadership is the consensus watchword. Sentiment is optimistic for continued upside in 2026, even amidst headwinds and uncertainty about Fed policy and global politics. Despite warnings of overextension, there’s substantial faith in earnings growth and opportunities beyond just the biggest tech names.

Final Trades (46:09)

• Josh Brown: Post Holdings (POST) — “Snapping a declining 50-day, headed higher.”
• Mike Santoli: Uber — “Think it continues to bounce.” (46:13–46:21)
• Liz Thomas: Materials sector — “Expected to be the second-best in earnings in ‘26.” (46:27)
• Joe Terranova: SPDR S&P Biotech ETF (XBI) — “No better reflection of the broadening out trade…has been the best trade for me.” (46:35–46:41)

This in-depth panel, bookended by sector picks and macro debate, provides a comprehensive roadmap and range of perspectives for investors heading into the uncertainties and opportunities of 2026.