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Halftime Report
The Key Questions for 2026 12/22/25
00:44:29
Scott Wapner and the Investment Committee debate the three key questions for stocks in 2026. Plus, the Committee shares their latest portfolio moves. And later, we hit the latest Calls of the Day. Josh Brown also spotlights a sector in his "Best Stocks in the Market." Investment Committee Disclosures
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- [00:00]
Joe Terranova
Introducing Fidelity Trader Plus.
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Joe Terranova
Involves risk, including risk of loss.
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Fidelity Brokerage Services, llc Member NYSE SIPC.
- [00:15]
Capella University Announcer
At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more@capella.edu I'm Scott Wapner, and you're.
- [00:32]
Scott Wapner
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. All right, Carl, thanks very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the most pressing market questions for 2026. We'll debate them with the investment committee. Joining me for the hour today, Joe Terranova, Liz Thomas, Steve, we Josh Brown along in just a moment. We will check the markets here as we wind down the calendar. We are green across the board, but I said we're going to investigate the key questions for stocks in 2026, which we've listed as such, and I think you'll agree, and we'll debate whether we've missed some of them or there are more pressing questions, too. Can the trade get beyond the bubble banter? That's number one. Is the broadening trend durable? Right. That's what we're hearing a lot about. And can the rally one run without rate cuts? Critical questions, Joe, Are those the three most pressing questions? Did we leave something out?
- [01:35]
Joe Terranova
No, I think we have all three of them. I think the most important one is is the broadening trend durable? To me, that is most important. If you think about coming into the fourth quarter, a quarter in which the S and P is 3% higher, I don't think very many people expected that health care would be up 11% and outperform the other 10 major S&P sectors by 8%. So I think what has happened is the personality of market. It's becoming more discerning. It's becoming more discerning from the standpoint, looking at the 2026 and realizing there probably might be more rental opportunities than long term anchoring in one particular investment theme. I think the market's going to rotate to a lot of different places and that implies you're going to need, Scott, the 493 to participate. You cannot just rely on seven individual stocks. You cannot rely on the AI Halo to really lead the market higher. I think that's what's going to be most critical for us. Real quick on AI. I think 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 that halo and correcting that. And I think we just witnessed that over the last 10 days.
- [02:53]
Scott Wapner
You're almost back at 6900, Liz. The tail of the tape, if you want to call it that, looks like this for 2025 for the majors been a good year obviously. S And P up 17%, we'll call it that. Dow good for about 13 and a half. Nasdaq 21 and a half speaks to what has driven this market from the outset. And then the Russell 2000 has done quite well. 15% to the upside there. Liz, what about the questions that we ask? Are those the most important for investors to consider when they think about what stocks can do in the new year?
- [03:28]
Liz Thomas
I think they are the most important. Joe covered the broadening trend and I would agree with a lot of what he said. So I'll take a couple of the other ones. Can the trade get beyond the bubble banter? I think the fact that all worried about the bubble banter, the bad thing rarely happens when we're all talking about it happening. So I think it can get beyond the bubble banter. The one thing that I would sort of counteract to Joe's point is that I think we do need the enthusiasm for 2026 to actually look good. We do need the enthusiasm for the broadening out trade to remain because it's so important to sentiment and that broadening out trade in my opinion relies a lot on the idea that I will start to have productivity gains in other sectors, other places in the economy will benefit from it and CapEx can continue not just in AI, but just generally because the economy is durable and because productivity and growth are expected to reaccelerate in 2026. So we need it for sentiment. We need it for investor sentiment and economic sentiment. But I agree that it may not be the leader in the clubhouse as far as returns go next year sounds.
- [04:34]
Scott Wapner
That sounds right to me. What do you think?
- [04:37]
Mike Santoli
Well, I think first of all, I think one of the most important questions you didn't mention who's going to be the next Fed chair and what's going to happen at that first meeting because economic policy is what ultimately controls the market.
- [04:48]
Scott Wapner
Well, it's inherent in the can the rally run without rate cuts? I mean because yeah, whoever the next chair is going to be, is going to be perceived to have a cutting bias. Like you don't have to be a rocket scientist to figure that.
- [05:00]
Mike Santoli
No, that's absolutely true. He's made that clear. But it's going to be will the market, after that first Fed meeting, if there is a press conference, we don't know if they'll continue to follow that. Will the market have confidence in that person? So that's going to be a critical question. We got some, we got till mid year. Even when they name, we know who they're going to name. Markets say, okay, we like all four. We're okay. Going back to your question. Look, I, it doesn't have to continue to Liz's point with what we saw in the first nine months of the year, first eight months, but it's still got to be a relevant trade to the upside because if it's not, it's still a very large portion of the indices and still very important that will bring down the whole market.
- [05:44]
Scott Wapner
Liz's point is like it's not, it's only a big part of the indices. It's a big part of the economy. It's a big part of the narrative. It's a big part of sentiment. It's kind of the biggest part of everything.
- [05:52]
Mike Santoli
But there's a difference between the market and the economy and they're not always reflecting one another. So my view is it will continue to be a big part of the economy whether it's part of the market or not. I think it will be. I think the trade is going to continue. I think there are more landmines, frankly, on the private side than the public side. But open air, even though it's a private company, it's sort of as regards a public company. So if they have major issues, which is a possibility, then I think you'd see the trade collapse. But the base case, my base case is you still want to be in those stocks in the max seven.
- [06:28]
Scott Wapner
So, Josh, we laid the questions out as we see them. We gave you the tail of the tape on where we enter 26. UBS says equities have further room to rally and they list the obvious reasons. The current environment of solid economic growth, healthy corporate earnings, lower interest rates and structural innovation drivers means investors can still add exposure to equity markets. So let's get your opinion here.
- [06:56]
Josh Brown
Well, I think we already have the answers to both questions and I think this year has really revealed a lot about these huge misconceptions people have about how the stock market actually works in the first Half of the year, all the bears, even like, even like the newsletter writers, the podcasters, people who don't actually manage money, the talkers, the big thing that they told us all, they warned us, they pounded the table. If anything happens to these AI stocks, you're all dead. Remember that was the thing. Well, none of these stocks look good going into year end and the stock market looks amazing. So I think we already have the answer to that broadening question. We already know that the market has broadened out and is not reliant. And just don't take my word for it. Looking at the 20 largest companies in the XLK, that's S&P 500 tech. Use that as your proxy for the AI trade judge. The median percentage of those 20 largest companies below their individual 52 week highs is negative 14%. So almost all of them are verging on a correction slash bear market. Nvidia is in a 15% drawdown from its high. Microsoft 13, Broadcom 18. Oracle, we know much worse.
- [08:16]
Scott Wapner
Amazon 12 points. Well taken.
- [08:20]
Josh Brown
Well, here's the second point. Here's the second point. I don't care which Kevin is the Fed chair. What I care is that earnings are going to be growing next year in large part because of the benefits of AI. And also these corporations, mid cap, large cap, mega cap, have just gotten really good at finding new ways to improve profitability. And we're going to see profit margins higher next year according to Wall street's expectations from 13 and change percent up to like 15 and change percent. I think the use of AI is part of that story. But look, if we can do $315 in earnings per share next year and we're at a 21 times multiple of that, I think there's still room for the market to have another good year next year. So what matters, does the trade broaden out? Well, it already has. And will earnings deliver next year? Yeah, I think they will.
- [09:19]
Scott Wapner
That that simple?
- [09:20]
Joe Terranova
Well, I think, I think it is and I think you have to look at just today, look at the 52 week high list in the S&P 500. I think there's nearly 30 of them. But it's Citi, it's Freeport McMoRan, it's C.H. robinson, it's GM, it's Marriott. Yes, you have your lam research there. So it is about the broadening out and I think that's the most important theme from an investment perspective that we carry into 2026 and the ability to kind of maintain that as it relates to the Federal Reserve. Look I think it's built into the market already that you're going to maybe get one rate cut, maybe another rate cut thereafter. But I don't think the market's reliant in the second half of the year on further rate cuts. And in fact, if you're cutting rates in the second half of 2026, we have some sort of problem in the economy. So I think Josh is right to highlight the earnings growth because we're coming off the four consecutive quarters of double digit earnings growth and the expectation is that you're going to see that again as you move into 26. Now, is that expectation maybe a little bit too generous and a little bit too aggressive potentially. But 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 where we're just thinking about seven stocks in an AI halo.
- [10:37]
Scott Wapner
The average strategist target for for 2026 is about 11% upside. From here, the average target is 76 29. The highest is 8,100 from Oppenheimer. You got 8,000 and you got a lowest one of 7,100, which would be disappointing, obviously, if you're going to close the year at near 69 and you think you're only going to get 200 more S&P points in 2026. Liz, that would be a disappointment for many. What do you think of the range? What do you think of the top?
- [11:15]
Liz Thomas
I think the range is average. Right. The average annual return on the S and P is right around that range. So I think it's a safe range. And I think the reason we're seeing most of the targets in that range is because we've had over 80% returns over the last three years. So the chances when you look over history after three years of 80 plus percent returns, the one year forward return is like 5%. Right. So I think people are playing it safe by saying the likelihood of us having another 15 to 25% year is really low. So we're going to just say average for next year and it's going to come from different places. I think that's fair. I want to be a little bit more clear about the broadening out trade and what I think is really promising going into 2026. We're not broadening out into defensive areas, we're broadening out into very pro cyclical areas. If you look just month to date, the performance and the Leaders on the sector board, we've got financials, materials, industrials, right. This is all very pro cyclical behavior. And the market is telling us that it's looking forward to 2026 and perhaps we even do better than we expect from a performance standpoint. I think the earnings growth right now is promising and it's something to be optimistic about. But hitting that earnings target I think is going to be tough. So it's possible that earnings are a little overestimated and maybe returns are underestimated.
- [12:33]
Scott Wapner
Weiss, we didn't even talk about, you know, the headaches and the headwinds of, of tariff policy. Right. Which you know, if you look at the, the market board, like the S and P from year to date, which we have up there, you can see, you know, obviously what happened when you had the so called liberation day. So I wonder what happens to some of the tariff policy if it goes away even further into 2026, if that's when you get a upside surprise even to the more optimistic targets, you know, if you get that headwind out of the way because then we're not talking about, well, you know, companies, they didn't, they passed on this, they didn't pass on that, they ate this, they passed it to a supplier, their margins might do this or that. You eliminate a lot of questions around those, those, those issues.
- [13:19]
Mike Santoli
And you also eliminate question of what it's doing to inflation once you lap the liberation date, like the Supreme Court decision. Well, that's, that's critical because that's going to extend it then if they have to pull them back and who knows what happens there. But I think tariffs definitely become less of a problem going forward. I'm more optimistic on the market next year. And the reason is because it's typically rates that have played an outsized role in hitting markets because of an overheated economy, overheating inflation. And, and we, and we've seen the market go through high interest rates and still move up. So I think that's going to support markets on positive 100.
- [14:00]
Scott Wapner
Sound realistic to you? You know, I know you don't forget, I know you don't like to, you take shots at the targets, but it's not an exercise of target practice on doing that. But it's a, it's a sentiment idea that hey, if we can have a pretty darn good year next year, Maybe we top 8,000, maybe we can do that kind of number. That would be reflective of a pretty good environment for stocks.
- [14:20]
Mike Santoli
Let me answer it this way. I think the direction's right. And to your point I don't know if the target's right or not and I tend not I tend, I am always bottoms up. So to me it's what stocks can work and I still, I still like my positioning in the big cap tech stocks because again the balance sheets, the growth and I think you'll be out of that narrative of capex is too high and I do believe you'll start seeing a return on it.
- [14:46]
Scott Wapner
Well look like Wells Fargo today is standing by Oracle for example, they have an overweight, they have 280, that's 45% upside. I find it hard to believe that if you can get 45% upside out of Oracle that the AI trade is going to look bad and tech's not going to lead because if Oracle is going to do 45% then you're like okay, all of this data center build is, is real. All the debt worries are over overestimated and that this trend is durable for far longer than people the bears on this topic would like to believe.
- [15:22]
Mike Santoli
Yeah. And there has been no really decline in data center builds. What we've heard some delays are occasion and I know this factually because we're in that area is you can't get the labor, skilled labor is held very tight, can't get the elect, you can't get the plumbers, etc. So supplies are out there. So look, I still like it. Do I think that you'll get to a point where data centers could be overbuilt for sure but I don't think we're close to that at this point. As I look at how we're broadening the market out, I still like financials. I think this is 26 going to be a record year with a cooperative market and cooperative interest rates to get rid of all these companies that are on that private equity funds are looking to exit. That in fact itself may be an issue for the market can absorb all this capacity. So. So I like financials. I continue to look at Citi, I continue to look at Morgan.
- [16:18]
Scott Wapner
Five weeks in a row for that space. Okay, longest streak since September.
- [16:22]
Mike Santoli
I will buy one of those two. I keep waiting for pullback, but one.
- [16:26]
Scott Wapner
Of the two of which Citi and.
- [16:28]
Mike Santoli
Citi or Morgan Stanley?
- [16:30]
Scott Wapner
Morgan Stanley, yes. Citigroup just in the last month. Citi's up 19%, Morgan Stanley's up 30.
- [16:36]
Mike Santoli
Has been the laggard year.
- [16:38]
Scott Wapner
Yeah, Josh, how about you on on that topic? I mean like I said, you got the Oracle call. That to me says everything about if that works then AI and Nasdaq Tech is going to work. I mean you're not going to have Oracle have some amazing year and all of a sudden these other names are not going to work. Defense today of Microsoft outperformed 625 from, from Dan Ives. What do you think?
- [17:06]
Josh Brown
Yeah, look, I think the paint the picture that I painted earlier in this a block about how some of the big names were in pretty substantial drawdowns from their highs. What I didn't get to is a lot of names that maybe we don't talk about as much but certainly we talk about look much better and they are also part of that trade. Palantir is only 7% below 52 week highs. Who, who would have imagined that would have been the name that would have held up given how it's obviously the Most expensive. Cisco, 3% below 53 highs. Micron is at highs.
- [17:39]
Scott Wapner
Oh, I'm literally looking at right at Micron. I'm glad you mentioned Micron staring right at it. 223% year to date. It's less than 2% off of its 52 week high.
- [17:50]
Josh Brown
Not until the last month.
- [17:52]
Joe Terranova
Well that's because it didn't really.
- [17:54]
Josh Brown
These stocks are not acting like AI is unraveling. It's just, it's just people have gotten a little bit more sensitive on a stock by stock basis. And to me when you hear people say oh it's a bubble. Oh is it really? Then why are half of the stocks involved down and the other half up? A bubble is indiscriminate buying regardless of price or even news. And we don't have that. We have Micron reacting really well to great news and we have Oracle reacting really poorly to big concerns about the company's balance sheet. And then we have everything in between. And that's not a bubble, that's just a bull market.
- [18:33]
Scott Wapner
Ed Yardeni says expect the rotation into the S and P impressive 493 in 2026. Says the bull market's going to rotate away. That's because the mag 7 he says are facing more competition in the air race from one another as well as from other companies. The impressive 493 should benefit from that competition using new technology to boost their productivity and profit margins. Liz?
- [18:56]
Liz Thomas
I agree. I mean at the top of the show that's what I said. That sort of the broadening out depends on the idea that this will start to reach into other sectors of the economy, other sectors of the market and that as competition heats up it actually gets better. For the other sectors that are going to use AI for, for productivity, it gets better for consumers that are going to use AI. The reality is we're still very early in this life cycle and we have no idea how this is going to shape up for the next five to 10 years. I mean, the Internet was sort of the same way. And the other thing about if you're looking at what's happening in the economy and the Fed and all the transitions that are likely to happen in monetary policy in 2026, we've got, very simply put, a first half of the year that's characterized by stimulus and bond buying again. And then whenever this new chair gets into the seat, we've got a second half of the year that if it does reaccelerate, maybe they don't have to cut rates. Maybe they even start talking about pausing and having to hike. At some point back in the 90s that happened. They had to hike. They had to start hiking again because the economy heated up. The market did just fine. So all of this fear that everybody has about if we don't get the rate cuts we need, it's not going to work, I think is completely overblown.
- [20:07]
Mike Santoli
I disagree with that. I don't, I don't. I disagree with Ed Yarden. His premise. I don't see competition heating up and that being the death knell for the performance I actually see in a market that's expanding at a pace that we've never seen with any other technology before, that's creating more opportunities for these companies. Now, aside from Metta and Google Alphabet competing for ad dollars, I think the ad markets continue to grow for them. I don't see the competition, but the.
- [20:33]
Scott Wapner
Dispersion among the group has already been taking place. He just suggests that it's going to, it's going to continue to be that. If you look at the performance of the Mag 7.
- [20:42]
Michael Santoli
Yeah.
- [20:42]
Scott Wapner
What was at one point, all things looking kind of equal? Not so much.
- [20:48]
Mike Santoli
Well, we.
- [20:48]
Scott Wapner
Not so much.
- [20:49]
Mike Santoli
And we've seen that periodically. I mean, at certain points, you know, Microsoft's outperform one, you know, or all of them. I just don't think that that's the case. I think the market market looks, the stock market looks great for all of them, and the true economy market looks phenomenal for them. So I wouldn't, I wouldn't make that determination.
- [21:08]
Joe Terranova
I don't think the Oracle story is going away. That doesn't, that doesn't mean the stock can't rally in 2026. You're talking about as it relates to Oracle, the need to continue to fund, whether it's for lease obligations or the spending, their free cash flow is going to go negative. That story is not going away in 2026. So you're going to have this environment. As I said, I used the word before discerning. And I think that's the environment when you're looking at the Mag 7 name.
- [21:34]
Scott Wapner
Well, what about what, what about what?
- [21:37]
Joe Terranova
You know, the broadening, the broadening out is underway. The question is, is it going to expand now into the energy sector? Is it going to go to some of the sectors that haven't performed this quarter?
- [21:49]
Scott Wapner
That yeah, but maybe it can. Like for example, if you look at, since we were talking about financials, what about insurance? Roth Capital today says those are ready to break out right after. They look pretty good. They looked bad and now they seem to be picking up again. You got a lot of exposure here.
- [22:06]
Joe Terranova
I do. And there is their assessment there is a little bit incorrect because what it is is making a return. Remember it was the insurance companies that led the financial sector in the early part of 24 and then as we moved into 25 they kind of lost their pricing power and underperformed the rest of the financial sector. They're coming back once again. Why? Because in most recent earnings you're seeing that the pricing power came back once again. So I think it's a place that you could be in 26. They're reestablishing momentum. And I think the best thing that happened for these insurance companies is they worked off some of that overbought positioning and extreme bullish sentiment because in the financial sector in early 24 they were really the story that you didn't have the money center banks, the regional banks participating at that point. Now you do. You have the dispersion in the financial.
- [22:55]
Scott Wapner
Sector Josh was talking about. You spotlighted regionals in terms of your best stocks column within the last week or so. Huntington bank shares on the list. Joe owns that. There seems to be, you know, the regional bank ETF hit a 52 week high last week. So there seems to be momentum behind that.
- [23:14]
Josh Brown
Yeah, the consumer, the consumer is okay. Of course not every single consumer in the country, so nobody write an email. Generally speaking, the consumer is spending small and mid sized businesses are navigating higher costs and things along. And we're maybe going to get a housing cycle. I don't, I can't say that definitively but the 10 year cools off and you get a little bit more relief in mortgages than we've already gotten. You're going to see an upcycle in housing. And so business lending, small business, midsize business, housing and the consumer is what matters for these stocks in addition to their net interest margin. And you've got this confluence of events where you're starting to get green shoots across a lot of those things. 17% of names in the KRE Regional Banking Index ETF are at 52 week highs today. That number averages over all months about 4%. So this is like a triple to quadruple better than normal situation for those names and nobody owns them, like literally nobody.
- [24:21]
Scott Wapner
This is interesting. We'll take a quick break and when we come back, we're going to tell you about one area of tech. January is the best month for it. We'll reveal it, we'll trade it. We do have ownership. We'll discuss next.
- [24:42]
Capella University Announcer
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Scott Wapner
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- [25:51]
Josh Brown
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- [26:09]
Scott Wapner
Welcome back. BTIG Jonathan Krinski today says China Tech is poised for a January rally. That January is the best month of the year for the SEE QQQs averaging a 4.22% gain. Attractive entry point. Now for that trade. Weiss, you bought more baba on Friday. Maybe that was good timing to do just that.
- [26:35]
Mike Santoli
Yeah, and I didn't have that in mind when I did what I had in mind.
- [26:39]
Scott Wapner
Well, presumably you didn't know that. As much as you know.
- [26:42]
Mike Santoli
As much as I know that. No, I don't focus on the minutia. I focus on what's important? Yeah, look, I think the stock is very inexpensive. They are the leader and in cloud and will be and are in AI. So I think the same trends that are company that have we've seen with stocks in this market will continue that mark. Now the stocks almost doubled, you know, over the last year. So it's not undiscovered. But I still think there's an appetite, including me, of some skeptic, you know, of skeptics to get involved in China.
- [27:16]
Scott Wapner
He does mention Baba specifically in charts that in his mind look constructive along with Baidu and Tencent and Joy. Why?
- [27:24]
Mike Santoli
Yeah, look, I just think Baba is the horse in this race and that you want to be involved with them.
- [27:31]
Scott Wapner
You have a thought here?
- [27:32]
Joe Terranova
I certainly do. China so far, year to date has had a very strong return. If you look at the etf, the MC H I, it is most recently that we've seen the pullback since October 1st. Why is that? Scott, I know you're a huge fan of the momentum factor.
- [27:46]
Scott Wapner
I am.
- [27:47]
Joe Terranova
If you look at when the momentum quality, when the momentum factor outperforms, okay. There's a strong correlation with other factors, equity styles, high beta names and in fact, if you go back and study over the last five years, when momentum output performs, China outperforms along with it. So ownership of a lot of the names we're talking about with China, the environment that they need is a strong momentum factor and a strong high beta factor for those names to work. Since October 1st, China's down 8%. Momentum factor is down 1%. If you're telling me in January China is going to have outperformance, that means the momentum factor comes back once again.
- [28:30]
Scott Wapner
Josh, you've been in this trade me. Bob is getting a lift. What do you think about this Krinsky note for something you've been in? I mean, you've done it through the K Web in the past.
- [28:39]
Josh Brown
Yeah, on my radar. I haven't pulled the trigger yet. I mean, these stocks don't need me. They seem to be doing really well. But I do find it an interesting setup going into next year. I'm going to have to sharpen my pencil.
- [28:54]
Liz Thomas
China was one of my contrarian calls in 2025. I've owned K Web for a long time, actually added to K Web on the Friday. So I'm with Krinsky on this one. I do think China has a good fighting chance. I mean, they're in this race and they are fighting to win. I don't know that they will win the race, but they're in it. And I think that it's something to certainly right now a good opportunity to get in. If you haven't been in it, they.
- [29:17]
Mike Santoli
Don'T have to win it is because it's a closed market. Baba just has to win it for themselves. You just have to see the expansion of the market which we are seeing there to have the same effect that we've seen here.
- [29:29]
Scott Wapner
But just feels like 24. 2024 was like uninvestable, the idea on the desk.
- [29:35]
Mike Santoli
Yeah.
- [29:35]
Scott Wapner
Right. 25. Obviously, if you look at the gains, the CQs are up 3111 half K, web up 19, but Bob is up 77% year to date. Baidu's 46 other names are almost similar in terms of, of what the idea about this trade is. Now. Who knows what 26 could go back and be like. You know what, there's some regulatory thing that happened now. I don't trust it again. And then you see the volatility come back. But there seems to be enough optimism heading into the new year around these names and then maybe the technicals are lining up with that too.
- [30:08]
Fidelity Trader Plus Announcer
Yeah.
- [30:08]
Joe Terranova
In 24, it was India that you wanted to own over and I did.
- [30:12]
Mike Santoli
And you.
- [30:13]
Josh Brown
You did.
- [30:13]
Joe Terranova
And in 25, India has dramatically outperformed China. So, so look, I think I heard India coming. Their negative, that negative correlation is in place in 26. If it's going to be a strong year for China, then I don't think India performs well. And the alternative is if China does struggle, I think you want to own India.
- [30:32]
Scott Wapner
Well, there's the Baba bounce, just about 1%. We'll watch that. Let's get the headlines now with Christina Parzoneville. Say there.
- [30:38]
Liz Thomas
Hi, Scott.
- [30:39]
Christina Parzoneville
Well, Senate Minority Leader Chuck Schumer introduced a resolution today directing the Senate to begin legal action against the Justice Department, alleging it failed to meet a deadline to release documents related to Jeffrey Epstein. The Democratic New York senator will force the Senate to consider the measure when it reconvenes in January. The deputy Attorney General, Todd Blanche defended the partial release of the file, saying it was just necessary to protect victims. Russian officials say a military general died in a car bombing today in Moscow. It marks the third killing of a senior military officer in Russia in just over a year. Investigators are suggesting Ukraine may be behind the attack. Kyiv has not commented and singer Barry Manilow shared today he has been diagnosed with lung cancer. The 82 year old said in an Instagram post that his doctor found a cancerous spot in his lung. In an mri, he says he will undergo surgery to have the spot removed and will have to reschedule his January shows on his current tour as a result.
- [31:37]
Scott Wapner
Speedy recovery, Christina. Thank you Christina. Parts and Nevilles coming up. Josh Brown his best stocks in the market. He says this struggling stock finally has found a bottom and it's a buy right now. We tell you which one next.
- [31:54]
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Scott Wapner
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Mike Santoli
18 in existence, plated with the very.
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Scott Wapner
Same tungsten that forged the International Space.
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Mike Santoli
Station.
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Scott Wapner
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Scott Wapner
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- [33:37]
Scott Wapner
All right, we're back. Longest streak for the transport since July. Four straight weeks of gains. Which is why the spotlight for Josh Brown's best stocks in the market is shining bright on that group today. And a couple of names. Which ones?
- [33:53]
Josh Brown
What a what a Setup. CSX and FedEx. I'll do CSX is a little bit more cut and dry. I'll do that one first. Very quickly the stock is an unqualified buy right now. It broke out, it had a low volume retest. These are all the things the technicians tell you are are important. I think the stop here for traders is 35 and a half. You can see that that has been support historically. So relatively small downside if you're an investor. Obviously I'd give it a little bit more room. It's not a very volatile stock, but it is challenging. Very key level here. 36, 37. It's had multiple opportunities to try to get above. Has not happened yet. But once it does, I think this name rolls right into the low 40s. FedEx is a little bit more of an interesting story. This is a company going through a turnaround. Reported earnings last week. The earnings were good and they got a bunch of price target bumps from Wall Street. And you can see that the stock had been rallying going into those numbers. So nobody was shocked. But next year will be a better year on revenue, on pricing power, on margins, on earnings per share than this year was. And I think 300 to 315. Give me like a little bit. Give me like a five year chart. What you can see is that this has been an area of resistance that is now being challenged. Again, I don't believe in triple tops. So you see late 2020 into 21, 300 was resistance rejected. Then again, it happened in 2024. Here we are going into 2026. Third time's a charm. I think the stock will break out because it's not just technicals. It's a fundamental turnaround here. And I still believe that there's opportunity. I would anticipate the breakout and I would start getting along right now.
- [35:45]
Scott Wapner
Okay, let's see what we think on the. On the desk.
- [35:47]
Mike Santoli
What do you think?
- [35:47]
Joe Terranova
I like it. I think there's a global logistics story that really is very quietly underneath the market in a very strong bull market. We have ownership of Expediters International that gets you 70% revenue exposure outside of the U.S. i like the names that Josh is mentioning here. FedEx and the rails. I think you could even turn to a name like Prologis, ticker symbol pld. That's giving you the participation in what is right now a bull market for global logistics.
- [36:20]
Scott Wapner
All right, good stuff. Up next, we have a fresh committee move. Joe is ringing the register on a stock. It's up 28% this year. Tell you which one next. All right, welcome back. Gotta move from Joe T. Which is what? What, what did you do?
- [36:55]
Joe Terranova
Cboe, you would say we rang the register on it. I rang the register on it because I own it personally.
- [37:01]
Scott Wapner
Okay.
- [37:01]
Joe Terranova
It really boils down to relative underperformance and something that I look at and I utilize in my investing and trading strategy. And that's. Where is an individual equity name versus its industry or versus a sector relative. Since the last six weeks, going back CBOE has unfortunately underperformed even with really good earnings. It's underperformed some of the various exchanges and certainly it's underperformed the financial sector. So at that point, for me, it's a motivation to move to the sidelines. Ring the register. I still think it's going to be a really good environment. Made money in 26.
- [37:36]
Scott Wapner
Money in it.
- [37:37]
Joe Terranova
I did, I did.
- [37:39]
Scott Wapner
Because when you say you ring the.
- [37:40]
Joe Terranova
Register, I mean yes, I did make money. Let me get my last point out though. As it relates to options, I still think 2026, we look at where the Vix is right now, near a low for the year below 15. I don't think even if it's a positive year next year in 26, you want to be short volatility. I think volatility is going to increase substantially in 26, even in a bull market.
- [38:02]
Scott Wapner
Okay, so you still own the CME Group and you still own nasdaq, which Josh, if you remember, highlighted last last week during his best stocks in the market list.
- [38:13]
Mike Santoli
Yes.
- [38:14]
Scott Wapner
In the context of discussing the idea of the 23 hour trading which they.
- [38:19]
Joe Terranova
Are pursuing and I feel like the.
- [38:21]
Scott Wapner
Exchanges in general, why hasn't this one worked relative to some of the others?
- [38:26]
Joe Terranova
Why hasn't cboe, cboe, cboe? I think since earnings maybe positioning was a little bit full, maybe it was sentiment. I don't think identify one, one specific reason why in fact the stock has been experiencing the relative underperformance. There has been very strong enthusiasm around the usage of options rather in the capital markets. I think that led to a lot of people owning cboe and I think CBOE is going to be fine in 26. I think from where it is right here, I'll look back, I'll say it was a poor sale, but it's really understanding what I use as an indicator and I don't like relative underperformance versus an industry or sale.
- [39:05]
Scott Wapner
Well, you might say this is a good sale because, you know, Morgan Stanley has reiterated they're underweight on cboe. Josh, they reiterate their overweight. On Nasdaq they take the target to 111. CME group reiterated overweight. The target goes to 320. Schwab, they put in that group reiterated overweight and the target to 148.
- [39:27]
Josh Brown
Yeah, it's a strange grouping. Schwab doesn't really belong with the other three. The other three are exchanges and directionally not as important. What happens with for example rates or stocks, I mean obviously in an upward direction is more helpful for certain types of business like nasdaq. But volatility is better for, you know, cboe. So like it's the driver is just increased activity, I guess would be the point. Whereas Schwab, like a lot of the money being made there is coming from sweeps on cash balances, etc. So maybe like the rates picture is more important for them. But I still think they do well with a rising tide, asset management businesses, etc. I like Schwab. I really like Nasdaq. I think it's a, it's just a crown jewel amongst this group. They're benefiting from IPOs, they're benefiting from more data listing activity, trading. Just so many different ways to win.
- [40:22]
Scott Wapner
Okay, let's take a break. Santoli, he's on the other side. He'll join us with his midday word next. We are back. Senior markets commentator Michael Santoli is at the desk. And you, like us here on the desk, are asking the key questions which you think are going to be front and center. I love the way you frame one of your questions when you talk about the broadening, Right. We ask will the broadening trend become durable? You say, should investors truly wish for a broadening trend away from the tech leaders? Why do you frame it that way?
- [41:07]
Michael Santoli
Part of it has to do with how we're going to define it. I mean, if we define a broadening as if, you know, the AI led cohort of stocks, let's call it eight, because you need Broadcom in there. If they're going to somehow see leadership and underperform. Do you actually want that and expect the bull market to continue on in a seamless fashion? It would be against history to say that you're absolutely going to have a wholesale shift of leadership. Now. There has been more strength elsewhere in the market. Right. Banks are leading, I would say selective and eclectic is what you want and kind of a rebalanced market in that sense, as opposed to what worked in the last two years. Let's make, let's, let's hope that that doesn't work. And you know, a market that is in the hands of the Russell 2000 and chain retailers and the railroads and all the other stuff that people feel like it's been neglected is a more treacherous market and it does not have the same kind of valuation upside. It's not anchored by the real capital flows that have been driving this bull market.
- [42:05]
Scott Wapner
Josh, what do you make of, of that? It sounds like something that we really need to think about.
- [42:11]
Josh Brown
Yeah. Look, I think on a day to Day basis. The narrative changes so much and we do have these days where it's in anything but large cap tech and then days where oh look, it's the same old stocks going up again. How come I don't own more of them? I just think that rotation is super healthy. I think Michael probably agrees like we want for there to be that, that passing of the torch back and forth. It's a good thing, not a bad thing.
- [42:39]
Scott Wapner
The other thing Mike, that you ask, is the link between crypto and tech broken in a lasting way? And if so, why? Explain.
- [42:45]
Michael Santoli
It's very interesting. I mean first of all asking the question if it has broken in a lasting way. You see the NASDAQ 100 almost back up to its highs. Bitcoin's trying to base here. It looks like around 90k but it's not really getting a lot of momentum. And I really just wonder if the same kind of attitudes and flows that chase the next big hot exciting technical thing, technological thing is not really going to find itself in Bitcoin the way it did before. And I just put myself in the mind of the 22 year old Robinhood client who says this thing's been around 15 years. It's what it's going to be. It's not necessarily as exciting as the space stocks or whatever AI is going to create or robotaxis and prediction markets. Yeah, right, all of it. And so just I just asking the question as to whether it's no longer going to be the same kind of risk appetite proxy that it's been in the past.
- [43:34]
Scott Wapner
Well, it's a good question. We'll have to wait for the answer obviously. But it's good stuff. Thanks. We'll see at 3A closing bell when Mike is back with me. Up next, the commodity playbook from the committee. Gold and silver prices are soaring to new highs today. Plus Joe with yet another move in that space. Tell you more next. All right, let's talk commodities for a minute. We have gold and silver, new record highs today. Oil not so much. Worst sector for energy. Worst sector last week was energy. Excuse me. That's where your move is, right? Yes, Apache, you sold it.
- [44:08]
Joe Terranova
I did tell. Terrible trade, terrible trade. Natural gas is up around $5 already own equity. That has been a strong winning position for for me. I added Apache as natural gas approached $5 believing natural gas was going to break out above $5. It absolutely has not done that.
- [44:25]
Scott Wapner
How long have you back over?
- [44:27]
Joe Terranova
Apache is a couple of weeks at most. It's terrible trade down maybe 8% on the trade.
- [44:33]
Scott Wapner
Oh, you are?
- [44:33]
Joe Terranova
Yeah. Got right out of it.
- [44:35]
Scott Wapner
Okay.
- [44:36]
Joe Terranova
I mean sidelines natural gas right back below $4.
- [44:39]
Scott Wapner
Okay. I mean because I have it up 3% in a month. Four and a half in three months. I mean, so really you're talking about a very small.
- [44:47]
Joe Terranova
I probably bought the high of the entire move. I know that you roll right.
- [44:51]
Mike Santoli
Don't you want to buy high, sell higher, Sell high.
- [44:55]
Joe Terranova
Sometimes.
- [44:56]
Scott Wapner
Sometimes that doesn't work out itself in his book.
- [44:58]
Michael Santoli
Yeah.
- [44:58]
Joe Terranova
And sometimes that absolutely doesn't work out.
- [45:00]
Scott Wapner
His own book.
- [45:01]
Joe Terranova
Yeah. Natural gas was $5 at a time. I'll tell you a trade that is working that I bought at the high.
- [45:06]
Scott Wapner
Okay.
- [45:06]
Joe Terranova
GLD bought that one month ago, up about 10% on gold. And I think that continues to move higher because gold's going higher.
- [45:14]
Scott Wapner
Still optimistic about that for 26.
- [45:16]
Joe Terranova
I am. I'm optimistic about gold. I'm optimistic about silver. I like that Liz is nodding that she agrees with me.
- [45:21]
Liz Thomas
Yeah, I agree with you. I agree with you on gold.
- [45:24]
Joe Terranova
On gold.
- [45:25]
Liz Thomas
I was optimistic about gold in 25. Still optimistic in 26. Silver is a speculative commodity more than gold is. I think there's more of a floor on the gold demand. I don't think that you see as much of a possibility of a drawdown. But silver's. Silver's up a little high for me. A little fast.
- [45:40]
Scott Wapner
Okay.
- [45:41]
Joe Terranova
So there a little high. Beta Silver.
- [45:43]
Mike Santoli
Yeah.
- [45:44]
Scott Wapner
We'll do finals next. All right. 3:00 clock Eastern. Closing bell. Tom Lee will be with us. Jeff DeGraff, Richard Fisher, Stephanie Link, Malcolm Methridge, Chris Harvey. We'll kick around the key questions facing you in the new year and this market. Josh Brown, your final trade is what.
- [46:09]
Josh Brown
Post snapping a declining 50 day moving average. Headed higher.
- [46:13]
Andy Richter
All right.
- [46:14]
Scott Wapner
Why is your toast? What do you know?
- [46:16]
Mike Santoli
In a similar. In a similar move.
- [46:19]
Scott Wapner
Keep it up your toast.
- [46:21]
Josh Brown
Uber.
- [46:21]
Mike Santoli
I mean I think Uber. It's bouncing today. I think it continue to bounce for a little bit. Okay.
- [46:25]
Scott Wapner
It's a nice looking bounce. Liz.
- [46:27]
Liz Thomas
Materials expected to be the second best sector in earnings in 26. Cyclical bounce, hopefully.
- [46:33]
Scott Wapner
Incoming Joti.
- [46:35]
Joe Terranova
No better reflection of the broadening out trade than the XPI and the performance it has had over the last three months.
- [46:41]
Scott Wapner
You said that was your favorite trademark right now.
- [46:44]
Joe Terranova
It's been the best trade for me so far personally in 2025 and there's very limited time left in the year. So I think continues to move higher above 125 I think is talking 145. 150 at some point in early 26.
- [46:57]
Scott Wapner
Speaking of limited time, we're out see at three 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.
- [47:13]
Andy Richter
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their 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 an 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. Did you know you can opt out of winter with VRBO? Save up to $1,500 for booking a month long stay. When thousands of sunny homes are waiting for you, why subject yourself to the cold? Put the snow shovel down, put the parka back in the closet and don't you dare scrape another windshield. Slip into some flip flops, consider a sunless tan and use the monthly stays filter to save up to $1,500. Book your warm getaway@vrbo.com.