CNBC Halftime Report — "The State of Stocks" (12/16/2025)

Host: Scott Wapner
Guests: Joe Terranova, Stephanie Link, Malcolm Methridge, Deirdre Bosa, Leslie Picker, Mike Santoli, Surat Sethi

Overview

In this episode, CNBC’s investment committee dissects an increasingly bullish market mood despite clear underlying tensions—an uptick in unemployment, rate cut expectations, AI’s impact on productivity, and high-flying stock valuations. Discussion covers sector-specific developments (especially tech and AI), fund manager sentiment, private equity’s comeback hopes, and looming risks. The state of software, retail, and discretionary stocks also gets attention, along with live reactions to breaking market news.

Key Discussion Points & Insights

1. The Bullish Paradox: Market Sentiment vs. Data

• Fund Manager Survey: Bank of America survey shows most bullish reading in 3.5 years; cash levels at record lows (~3%).
• Tension: Despite a red day in markets and a rising unemployment rate (4.6%), bullishness persists.
• Risk: Overheated sentiment may ironically signal a top or at least justify caution.

Quotes:

• "Fund managers...are the most bullish they've been in three and a half years." — Scott Wapner [01:15]
• "These numbers sound like consensus is building where things start to tip the other direction." — Malcolm Methridge [06:54]

2. Sector Rotation & AI: Opportunity or Bubble?

• Market Leadership: Debate over continued strength of the "MAG7" (mega cap tech/AI leaders), with concerns about crowding and high expectations.
• Bubble Talk: AI infrastructure names like CoreWeave and Broadcom scrutinized after sharp pullbacks and rising debt concerns.
• Diversification: Analysts note that true rotation away from tech has yet to materialize, suggesting continued watchfulness.

Quotes:

• "It's having like an anxiety attack over what's been going on with the spend and the debt and the bubble." — Scott Wapner [11:00]
• "I think the pause obviously stays in place for, for far longer. For the stocks that are not, as we call them, the mega caps...The Mag 7, they will be the first to kind of come out of this." — Joe Terranova [14:01]

Timestamps

• AI Bubble, CoreWeave downside: [15:13–17:09]
• Tech sector rotation discussion: [17:09–18:25]

3. Earnings, Valuation, and Expectations

• Earnings Growth: 2026 S&P 500 earnings growth estimates range 15–17%, but some panelists see 8–10% as more realistic.
• Valuation Pressure: Expensive stocks with strong fundamentals (Broadcom, Oracle) face higher hurdles to “beat” expectations.
• Market Breadth: Broader participation (beyond tech) is cited as a healthy sign.

Quotes:

• "Maybe we have some indigestion in the short term because again the expectations were so high and these stocks are so crowded, they're so over owned and loved." — Stephanie Link [13:11]

Timestamps

• Earnings & valuation discussion: [04:24–05:30]; [10:17–14:21]

4. Spotlight on Individual Stocks & Recent Moves

Tech & AI

• Broadcom, Oracle: Hit on high capex spending, debt loads, and unmet investor expectations despite strong fundamentals.
• ServiceNow (NOW): Malcolm Methridge buys, citing high customer retention and the move into security via acquisitions. [19:15]
• Snowflake (SNOW): Stephanie Link nibbling after a 30% correction, still believes in long-term margin expansion but admits valuation is high. [21:01]

Discretionary & Retail

• Estee Lauder (EL): New management, improving China/U.S. trends, and low expectations—Stephanie Link buys ahead of an anticipated 2026 turnaround. [22:26]
• Gap (GPS): Strong comps, impressive execution, but Link waits for a pullback to add.
• Costco: Hit a new 52-week low, raising questions about traffic and competitive advantages despite dual revenue streams. [30:39]

Financials & Private Equity

• Medline IPO: Largest LBO-backed IPO in history, seen as a key test for the private equity exit market. [23:44]
• Private Equity Stocks (Carlyle, TPG): Recently improved, reflecting renewed optimism about exits and fundraising.

Other Moves

• Verisk Analytics (VRSK): Surat Sethi buys for recurring revenue and high client retention. [39:44]
• PayPal, Constellation Brands: Surat Sethi sells, citing long-term competitive pressure and secular trends. [40:51]

5. Macro Factors & Political Developments

• Jobs data: Slightly better-than-expected jobs print, but rising unemployment tempers optimism.
• Interest Rates: Two-year yield drops, market prices in Fed rate cuts; panel expects rates to fall but uncertainty about magnitude.
• Healthcare legislation: Ongoing congressional tensions likely to impact premiums and insurance markets as deadlines loom. [37:25–39:25]

6. Market Structure & Trading Hours

• NASDAQ 23-hour Trading: Debate over round-the-clock trading, with strong opposition from Wells Fargo warning of "gamification"; others see it as inevitable due to platforms like Robinhood. [44:14–46:19]

Quotes:

• "This is literally the worst thing in the world. I cannot think of an action that single handedly gamifies the stock market even more than it already has become." — Wells Fargo via Scott Wapner [45:11]
• "I think we've already experienced the gamification of trading and investing...the genie is out of the bottle." — Joe Terranova [45:15]

7. Quick Hits & Notable Moments

• Bitcoin: Methridge views bitcoin’s price decline as a stronger sentiment gauge for retail risk appetite than VIX. [09:44]
• Sector Standings: Discretionary is third-best sector month-to-date; financials lead on hopes of a steeper yield curve and more dealmaking. [23:15]
• Final Trades (46:43):
  • Malcolm Methridge: Goldman Sachs
  • Stephanie Link: Capital One
  • Joe Terranova: Monster Beverage

Notable Quotes by Segment

• "These numbers sound like consensus is building where things start to tip the other direction." — Malcolm Methridge [06:54]
• "Let them take a pause is what the market seems to be trying to figure out. The question for everybody is how long does that pause last." — Scott Wapner [13:44]
• "At some point you don't get into a lower law of large numbers, you get into a law of high expectations." — Scott Wapner [12:38]
• "Robinhood initiated this two years ago...it's the reason why Robinhood stock price is up 200% year to date and Wells Fargo's is up about 30." — Malcolm Methridge [45:59]

Important Segment Timestamps

• Opening/Bullish sentiment paradox: [01:01–03:39]
• Bull/bear indicator & bubble fears: [07:32–09:02]; [15:03–18:25]
• Tech/Earnings/AI sector digestion: [10:17–14:21]
• Stock-specific deep dives: [19:15–24:00]
• Private equity/IPO coverage: [23:44–26:57]
• Verisk buy, PayPal & Constellation Brands sells: [39:44–41:19]
• Nasdaq trading hours debate: [44:14–46:19]

Conclusion

This episode captures a market at a crossroads: exuberant manager sentiment collides with data flashes that provoke caution, exemplified in tech’s high-expectation stumbles and debates over what’s priced in for 2026. The guests emphasize careful stock selection, a move toward quality and away from crowded trades, and wariness about consensus exuberance. A sense of market “pause” pervades the conversation, with panelists urging vigilance amidst optimism—while keeping an eye on bubble warnings, sector rotations, and the evolving structure of trading itself.