Podcast Summary: Halftime Report — "The Key Themes for Stocks in 2026"

Episode Date: December 30, 2025
Host: Frank Holland (in for Scott Wapner)
Panelists: Jim Lebenthal, Jason Snipe, Josh Brown, Steve Liesman (Fed Analyst), Courtney Reagan (News), Diana Olick (Real Estate), Mike Santoli (Markets)

Episode Overview

This episode of CNBC's Halftime Report focuses on setting the agenda for the markets as 2025 ends and investors look towards 2026. The panel discusses the three key themes shaping markets for the coming year, including the Fed’s evolving role, broadening market leadership beyond tech, sector rotation dynamics, and key stock picks. Special attention is given to the impact of Fed policy, the performance of the "Magnificent 7," sectoral shifts (especially into value and international stocks), and significant developments in real estate and commercial property.

Key Discussion Points & Insights

1. The Federal Reserve’s Evolving Impact on Markets

Timestamps: 00:59–08:57

• Fed's Recent Division: The Fed is notably divided; three dissents in the recent vote underscore internal discord (01:54–03:12).
• Jim Lebenthal: Current Fed minutes seen as “a lot of noise”, not likely to shift market narratives until inflation and labor data become clearer (01:54–03:00).

  “I feel like the minutes are going to be a lot of noise because of all that dissension… Those items being things like how much is the labor market weakening and where is inflation and the Effect on tariffs.” — Jim Lebenthal [01:54]

• Jason Snipe: Labor market is the focal point for the Fed. No major policy shift expected before May when a new Fed chair is announced (03:12–04:07).
• Josh Brown: The Fed is currently “the least important chess piece on the board.” Global market strength and wealth creation are driving returns, with Fed policy relegated to a secondary role unless there’s a major data shock (04:17–06:52).

  “…literally, the Fed is the least important. Not because the Fed isn’t powerful…but…you’re looking at a 16% chance of a cut that could go to zero…We’re not talking about the next 25 basis point cut. What we’re really talking about is a wealth creation atmosphere of enormous magnitude.” — Josh Brown [04:17]

• Steve Liesman: Supports the panel’s consensus: Fed will likely wait for further data. New FOMC members' impact is minimal in the near term, but productivity versus GDP/labor growth will be a story for 2026 (07:12–08:57).

2. The Shape of the Economy and Earnings Outlook

Timestamps: 10:24–12:20

• Jim Lebenthal: Not seeing recession risk on the horizon; any bearish case would have to be based on “unknown unknowns”. Current economic growth (Q4 GDP at 3%) is real, but highly concentrated in AI-related sectors; stealth easing by Fed (expanding balance sheet) is stimulating the economy (11:00–12:20).

  “I think we’re in a strange and unusual economy… you do have growth, but it’s very much focused on artificial intelligence infrastructure build out… housing and manufacturing outside of AI is in the doldrums…” — Jim Lebenthal [11:00]

3. Sector Leadership: From the Magnificent 7 to Broader Market Participation

Timestamps: 12:20–17:55

• Josh Brown: This year marks "the triumph of index investing and diversified portfolios." Leadership has shifted away from a tech monolith; only two of the "MAG7" are outperforming the S&P 500 in 2025 (12:38–14:21).

  “…some of the biggest stocks on earth had horrible years relative to the rest of the market… The market is finishing this year plus 18% … And this is the beauty of this year for investors. You didn’t have to be overweight [tech]. There was money to be made all over the place, including overseas…” — Josh Brown [12:38]

• Tech Stock Highlights:
  • Apple: Underestimated in AI by some, but may leapfrog competitors by leveraging its huge installed user base.

    “What Apple actually has done…is it has won by not playing… They did not announce record setting capex numbers…Instead… they’ve sat back, watched everyone, and will probably end up rolling out… the most important version of AI because it’s the one that’s in all our pockets.” — Josh Brown [14:40]

  • Microsoft & Other Tech: Azure’s growth continues to be strong, but the tech landscape is broader now with flows moving into non-tech names like Western Digital, Robinhood, Seagate (16:50–17:55).
  • Alphabet & Meta: Both having strong years. Alphabet left out of key lists possibly due to valuation, not fundamentals (17:55–19:06).
  • CrowdStrike & Palo Alto: Cybersecurity is a major theme; AI growth drives exponential demand for cyber protection. Despite recent corrections driven by AI infrastructure doubts, opportunities remain strong (21:26–24:09).

4. Rotation, Broadening, and Sleeper Sectors

Timestamps: 24:09–27:36

• Broadening Outperformance: Equal-weight S&P, health care, financials, and industrials are performing well; evidence of sector rotation and broader participation (24:09–24:43).

  “I do believe in the broadening and… all of the effects that have so far been concentrated in artificial intelligence stock earnings…are going to start to flow through to the industrials, to the material stocks, even energy…” — Jim Lebenthal [24:43]

• Utilities & Staples: Mixed outlook; utilities may see more upside into 2026, while staples remain pricey with little organic growth (26:27).
• Healthcare: Strong prospects due to less political risk post-IRA bill; biotech could continue to work as companies rebuild pipelines amid patent cliffs (27:00–27:36).

5. Key Stock and Sector Spotlights

Timestamps: 28:49–32:08

• Best Stocks in Travel:
  • Hilton spotlighted by Josh Brown for its asset-light, points-focused business model. Travel remains the standout within consumer discretionary as other areas slow (28:58–31:04).
  • Delta & Airlines: Strong tailwinds (low fuel costs, high utilization, debt reduction). Bearish view would require broad recession, not currently projected (31:04–31:55).
• Final Trades:
  • CrowdStrike (Josh Brown): “I think the stock wins in 2026.” [43:59]
  • Amazon (Jason Snipe): Reacceleration seen, stock favored into new year [44:04]
  • Pacific Gas & Electric (Jim Lebenthal): Recovery story in utilities; legal headwinds overstated earlier in the year [44:11]

6. Special Features: Dogs of the Dow & Real Estate

Timestamps: 34:06–41:37

• Dogs of the Dow:
  • Dividend strategy criticized by panelists—historically, high-yield “dogs” can underperform, with risks of flat or negative price performance even after collecting dividends (with Verizon as cautionary tale) (35:36–37:55).
  • Panelists favor “winners, not losers,” seeking price appreciation over yield.
• Real Estate & REITs:
  • Sector has struggled in 2025; office vacancies high but bottoming, data centers are a bright spot, multifamily rent pressure as new supply comes online [38:23–40:02].
  • REIT returns mostly via dividends; price recovery unlikely until mortgage rates drop meaningfully (40:17–41:37).

7. Broad Market Trends & Tactical Insights

Timestamps: 41:37–43:59

• Mike Santoli: Year-end flows favor mean reversion in “laggard” sectors; early January might see pickups in over-sold areas due to tax-loss harvesting finishing (42:07–42:44).
• Josh Brown: Only major asset class negative on the year is Bitcoin; commodity and international equities broadening global wealth creation story.

Notable Quotes

• On the Fed:

  “The Fed is the least important chess piece on the board right now.” — Josh Brown [04:17]

• On Market Leadership:

  “Some of the biggest stocks on earth had horrible years relative to the rest of the market… this is the beauty of this year for investors. You didn’t have to be overweight.” — Josh Brown [12:38]

• On Apple and AI:

  “What Apple actually has done, which is sort of fascinating, is it has won by not playing any… and will probably end up rolling out what’s arguably going to be the most important version of AI because it’s the one… in all our pockets.” — Josh Brown [14:40]

• On Dividends/‘Dogs of the Dow’:

  “With these stocks, what you see is you get the dividend and nothing else… The poster child for that is Verizon… the share price is gone nowhere… You would be much, much better just buying a diversified ETF.” — Jim Lebenthal [37:04]

• On Travel Stocks:

  “Travel… never slowed down even for a minute, almost at every segment, every level… Hilton has the same business model as Marriott… they’re in the points business.” — Josh Brown [28:58]

Section Timestamps Guide

| Topic | Start Time | |-----------------------------------------|-------------| | The Fed’s Influence & Dissension | 00:59 | | Broadening Market Leadership | 04:17 | | Economic Outlook, AI-centric Growth | 11:00 | | MAG7 and Index Investing | 12:38 | | Sector Rotation, Health Care, Utilities | 24:09 | | Dogs of the Dow, Dividend Cautions | 34:06 | | Real Estate/REIT Outlook | 38:23 | | Travel Sector/Best Stock Picks | 28:58 | | Final Trades | 43:59 |

Conclusion

This Halftime Report episode sets a cautiously optimistic tone for 2026. The Fed, though still a background factor, is not seen as leading markets—broader wealth creation and global risk-on sentiment are the driving forces. Diversification, sector rotation, and global equities are key themes, with tech no longer the undisputed champion. Panelists advise against chasing high-dividend “dogs,” favoring strength and adaptability in stock picks. Real estate remains challenged, while travel and asset-light hospitality models shine. Investors are reminded to stay nimble and open to opportunity as sector leadership evolves in the new year.