Podcast Summary: "The Exchange" – Quadruple Witching, Stores Save (December 19, 2025)

Host: Kelly Evans (CNBC)
Main Guests: Jeff Kilburg (KKM Financial), Chris Murphy (Susquehanna), Scott Kroner (Citi), Julia Boorstin (CNBC), Peter Galbo (BofA), Jason Robins (DraftKings), Brendan Gomez (CNBC), Courtney Reagan (CNBC)

Episode Overview

This episode of "The Exchange" explores a jam-packed trading day as the markets face the largest options expiration ("quadruple witching") ever recorded, investigates key consumer and corporate earnings, and delves into major business trends closing out the year. The show features analysis on market volatility, options strategies, the impact of tariffs and China on major brands, changing retail dynamics ahead of the holidays, policy shocks (like cannabis rescheduling), and the rapid growth of prediction markets.

Key Discussion Points and Insights

1. Market Pulse and Earnings Movers

Consumer Discretionary and Tech Leadership

• Stock Market Update: S&P and NASDAQ remain strong, while the Dow is wobbling, possibly ending its positive streak.
• Sector Standouts: Discretionary (retail, travel, etc.) is leading, driven by holiday sentiment; Energy lags. Metals like silver and copper are at multi-month highs.
• Carnival: Shares jump after earnings beat and dividend reinstatement.

Nike: A Brand in Trouble

• Earnings Recap: Beats on top/bottom lines, but China headwinds, lower quarterly guidance, and a gross margin squeeze (blamed on tariffs).

• Outlook Concern: Nike stock down 57% in five years.

• Quote:
  "We talked about Nike a year or two ago. You asked me specifically what would be the catalyst for me to buy. I said Michael Jordan coming out of retirement. Well, come out of retirement, and it’s trading in the 50s."
  — Jeff Kilburg (02:33)

• Tariff Skepticism:
  "It just makes it a little bit hard to believe that it's a boogeyman for them more so than it is for everybody else."
  — Kelly Evans (03:52)

FedEx: A Boring, Essential Blue Chip?

• Turnaround Story: Solid numbers, core parcel business up 24% YoY, but investors uneasy about freight spinoff.
• Opinion:
  "FedEx is a name I think you need to own...this is a blue chip, boring US economic centric name."
  — Jeff Kilburg (05:25)

Mega Cap Tech Rotation

• Mag 7 Update: Kilburg sees continued sector rotation, favoring Apple and Google over high-flying names like Nvidia for now.

Homebuilders and Adjacent Trades

• KB Home Results Weak: Existing home sales down, homebuilder stocks drag.
• Alternative Play:
  "Home Depot, Masco, 3M—those are ways to play in the home construction space because I think the do it yourself projects are going to come back online."
  — Jeff Kilburg (08:29)

2. Quadruple Witching: Options Market Mayhem

Historic Expiry and Market Liquidity

• Stat: Over $7 trillion in options contracts expiring; biggest on record.
• Insight:
  "I think the story of most of this year was low correlation. The index products themselves were not moving a ton and you saw massive moves in underlying stocks...that’s been the story."
  — Chris Murphy (11:30)

2025 in Options

• Idiosyncratic Moves: Low index volatility but big individual stock swings.

• Positioning for 2026:
  "Cautiously, really optimistic. Mostly call spread buying in Mag 7 names...nobody wants to miss a rebound."
  — Chris Murphy (12:43)

• 24/7 Trading Trend:
  "Liquidity is still most likely going to be in the US hours...I think it's mostly going to be trading during the same trading hours."
  — Chris Murphy (13:40)

3. Tech & Social Media: Oracle and TikTok's Shakeup

• Oracle Surges: Up on news of a TikTok deal to spin off operations for US regulatory approval.
• TikTok's Challenge:
  "The main risk is not ownership, but execution. The transition could introduce friction across the consumer experience and advertiser infrastructure..."
  — Brian Weiser, cited by Julia Boorstin (15:08)
• Ad Stakes: TikTok has just 4% of the US digital ad market; Meta is at 23%, Google at 25%.

4. Fed, Rates, and Economic Outlook

John Williams (NY Fed) Speaks

• Inflation Data Quirks:
  "Technical factors related to how the inflation data was gathered...might have biased it to the downside."
  — John Williams via Steve Liesman (20:03)

• Rate Path: The Fed is "mildly restrictive," sees room for cuts if data allows.

Next Fed Chair Odds

• Current Odds: Hassett leads, Warsh and Waller in contention; Waller impresses by deadlifting 350 lbs.

Street Forecasts and Caution

• Equities Outlook:
  "The setup here, in our view, is still for a fairly accommodative bias into 2026."
  — Scott Kroner, Citi (23:05)
• But... Too Bullish?:
  "When we go into January, whatever the consensus is, usually the opposite happens."
  — Kelly Evans (24:26)

5. Cannabis: Policy Shifts and Market Skepticism

• Executive Order: President Trump moves cannabis to Schedule 3 (from Schedule 1), but stocks slide.
• Key Issues:
  • Regulatory process is ongoing; Congress just passed a future ban on most hemp products.
  • Medicare pilot to distribute CBD to some seniors.
  • Still no federal legalization for recreational use.
• Quote:
  "Not a disappointment...if this is a marathon, we're at the 5K mark. They needed this to happen to conduct medical research..."
  — Brendan Gomez (29:03)

6. Consumer Staples & Food Inflation

Commodity Relief Ahead?

• Outlook: Prices for certain commodities (cocoa, coffee, cattle) may ease in 2026, but comparisons will be tough due to 2025’s spike.
• Quote:
  "Unless these companies are going to give them a break on pricing on certain products, we think that that volume drag from low income continues to be a headwind."
  — Peter Galbo, BofA (34:28)
• Top Picks: Coke, Monster, Vita Coco (coconut water).

Lamb Weston: French Fry Maker Tumbles

• Misses expectations: Stock hits 5-year low on margins, despite steady sales.

7. Retail Trends: Stores to the Rescue

• Last-Minute Shopping: Target sees 97% of online orders filled <90 min at fast stores; surge in “buy online, pickup in store” (BOPIS).
• Cost Factor: Pickup is 90% cheaper than home delivery for Target.
• Widespread Trend:
  • 80% of Walmart customers plan in-store shopping in the three days before Christmas.
  • Old Navy: BOPIS rises 250% the week before Christmas.

8. Prediction Markets: The New Betting Boom

DraftKings Joins the Fray

• Launch: DraftKings officially launches predictions in 38 states.
• Competitive Landscape:
  "I think in the states that we offer our online sports betting product, we have a vastly superior product to anything that the predictions markets offers in the realm of sports."
  — Jason Robins (41:53)
• Threat from Robinhood:
  "The much more existential threat it seems to me this week comes from Robin Hood...they’re definitely making a move onto your turf. How do you respond?"
  — Kelly Evans (42:31)
• Strategy: Focus on best product and experience; new products launching as standalone apps initially.

Memorable Quotes & Moments

• "I said Michael Jordan coming out of retirement. Well, come out of retirement and it's trading in the 50s." — Jeff Kilburg on Nike (02:33)
• "FedEx is a name I think you need to own...this is a blue chip, boring US economic centric name." — Jeff Kilburg (05:25)
• "The story of this year has been, idiosyncratic risk...it's a stock picker's market, that's better for us and it's better for your show." — Chris Murphy (11:30)
• "Liquidity is still most likely going to be in the US hours..." — Chris Murphy on 24/7 trading (13:40)
• "The main risk is not ownership, but execution." — Brian Weiser, via Julia Boorstin (15:08)
• "K is for cookie. We're talking about the K economy. We're looking at the low income income consumer." — Peter Galbo (34:28)
• "If we're talking this is a marathon, we're at the 5k mark. Right. We're just the beginning of the race." — Brendan Gomez, on cannabis policy (29:03)
• "We have a vastly superior product to anything that the predictions markets offers in the realm of sports." — Jason Robins, DraftKings CEO (41:53)

Segment Timestamps (MM:SS)

• Market summary, Nike/FedEx/Nvidia/homebuilders: 00:40–09:50
• Quadruple witching/options action: 09:59–14:23
• Oracle/TikTok/Meta competition: 14:55–16:34
• Fed, inflation data, and rate path: 19:30–25:17
• Cannabis rescheduling: 26:50–29:28
• Consumer staples/food prices: 32:27–36:18
• Retail/BOPIS trends: 36:38–38:56
• Prediction market segment (DraftKings, Kalshee, Robinhood): 40:04–45:48

Tone

Informative and analytical, peppered with competitive banter, investor skepticism, and a newsroom’s real-time urgency on breaking developments. The hosts and guests candidly scrutinize management narratives, debate sector outlooks, and tease each other about shopping habits and strength feats (deadlift, anyone?).

For Listeners Who Missed the Show:

This episode is an essential listen for anyone tracking market volatility, the transformation of consumer and retail habits, regulatory shocks (Fed and cannabis), or fintech’s wild prediction markets. The episode shines with market intel, bold takes from seasoned guests, and real-world strategies for trading, investing, and shopping in the current environment.