Podcast Summary: The Exchange — 12/30/25 (CNBC)

Host: Contessa Brewer (in for Kelly Evans)
Date: December 30, 2025
Theme: A comprehensive look at the day’s top business stories, focusing on Federal Reserve strategy, global market dynamics, big tech, AI investments, and the evolving experience economy as 2026 approaches.

Main Theme & Purpose

This episode dives into the complex landscape of business as 2025 ends, focusing on the Federal Reserve’s divided outlook, global stock market performance, the aggressive expansion of AI in tech and industry, and emerging investment trends for the new year. Thought leaders share insights on what 2026 may hold for investors, consumers, and the broader economy.

Key Discussion Points & Insights

1. Federal Reserve Uncertainty and Market Outlook

• Fed’s Rate Cut Debate:
  • Steve Liesman (Washington correspondent) explains that the Fed minutes reveal division over timing and magnitude of rate cuts for 2026.
  • Market expectations: Only a 16% chance of a cut in January, but an 84% chance by June.
  • Uncertainty over new Fed Chair appointment and the Board’s makeup.
• On Fed Independence:
  • Liesman notes (04:00) that while Fed members value independence, they don't feel political pressure impacts their rate decisions:

    “They're going to vote the way they think the policy ought to be relative to the economic fundamentals... not concern themselves with the political process.” — Steve Liesman [04:03]

• Investment Strategy for 2026:
  • Barry Bannister (Stifel) forecasts the S&P 500 in a range between 6,500–7,500, with a “digestion” or consolidation phase likely after four strong years.
  • Cautions on big tech—suggests hedging with sectors like defense, food/bev/tobacco, biotech, and electricity infrastructure, noting AI’s influence in biotech and infrastructure upgrades (06:00–07:00).

2. Global Markets Outperform U.S.

• International Outperformance:
  • Sima Modi highlights that China, Japan, Brazil, and Europe logged gains of 20–40% in 2025—beating the S&P 500 (08:50).
  • Japan’s outperformance tied to reforms, while Europe (specifically Germany) is buoyed by infrastructure and defense spending.
• Impact of U.S. Trade Policy:
  • America First tariffs prompted other nations to invest domestically, fueling their growth rather than hindering it.

  • “...the opposite has happened because it basically pushed them to invest in their own countries.” — Sima Modi [11:30]

• Emerging Market Middle Classes:
  • Consumption and middle-class growth are key drivers in China, India, and Brazil’s market strength.
• China’s Evolving Landscape:
  • Brendan Ahern (CraneShares) notes that China pivoted export focus toward ASEAN, lessening U.S. tariff impact.
  • Consumer spending remains strong, but unlocking more will depend on government incentives—recent EV and electronics subsidies given as examples (14:30).
  • China’s Hong Kong IPO market is robust, with several major AI and robotics companies coming public in 2026.

3. Big Tech & AI — The Arms Race Intensifies

• Meta’s Aggressive AI Expansion:
  • Mackenzie Seagalos reports Meta bought Manus AI (AI agents startup) for $2B, reflecting urgent moves to stay relevant as rivals outpace Meta’s Llama model (19:50).
  • Instant $18B market cap boost on $2B deal—investors applauded the move.
• Big Tech CapEx & ROI:
  • Mark Mahaney (Evercore ISI): Capex across Google, Microsoft, Meta, Amazon set to jump from $350B (2025) to $450B (2026).
  • “Rising ROI” observed in revenue per employee, attributed to AI-driven efficiencies:

    “You’ve seen that in kind of one of the simplest metrics... revenue per employee. It’s really inflected up the last three years at all of the hyperscalers.” — Mark Mahaney [23:20]

• Regulatory Risks on Superintelligence:
  • Mahaney considers global calls for AI guardrails unlikely to derail the “gen AI” movement, but acknowledges it as a distant “black swan” risk (25:20).
• Travel & Leisure Outlook:
  • Demand for travel is resilient; after a mid-year slump, it rebounded.
  • Companies like Airbnb, Booking, Expedia integrate AI for efficiency, not displacement:

    “They don’t anticipate AI is going to put them out of business, but rather... that it will be harnessed to power their business.” — Contessa Brewer [27:47]

4. Commercial Real Estate and Top Stock Performers

• CRE Outlook:
  • Diana Olick notes (29:00) commercial real estate is cautiously optimistic.
  • Office vacancy rates may finally bottom out, premium office buildings almost fully occupied.
  • Multifamily remains strong; data centers are the “bright spot”—high demand, fully pre-leased pipelines, but face financing and zoning headwinds.
• Top S&P 500 Gainers & Stock Analysis:
  • Steve Grasso (Grasso Global) reviews:
    • Western Digital (+300%): Benefited from hyperscaler Capex, but valuation high—advises patience before entry [33:25].
    • Palantir (+141%): Government contracts, push into healthcare/enterprise; recommends buying now as it’s already pulled back.
    • Goldman Sachs: Benefits from increased IB and trading. Mixed recommendation—let it “breathe” before buying [35:26].
    • Caterpillar: AI data center boom driving results, but room for caution if data center expansion slows [36:22].
  • Notable Grasso quote:

    “The multiples trading at 25 times, trailing. Usually, historically, that should be in the mid-teens. So... I think that's warranted to have reservations about valuation.” — Steve Grasso on Western Digital [33:25]

5. AI in Fast Casual Restaurants

• Automation to Boost Experience:
  • Kate Rogers breaks down how Kava and Chipotle are investing in Hyphen, a robotics + AI startup. Aim is faster, more efficient meal prep without eliminating hospitality; automation focuses on back-end, freeing staff for customer-focused tasks [38:00].

  • “We're probably making a bowl every 10 to 15 seconds at peak throughput... relieving that kind of bottleneck.” — Stephen Klein, Hyphen CEO [38:34]

6. The Experience Economy in 2026

• Resilient Travel & Entertainment Spend:
  • Chris Waronka (Deutsche Bank) believes travel will remain robust across all customer segments, with a focus on upselling out-of-cabin experiences on cruises and immersive entertainment at theme parks (41:15).
  • Six Flags and United Parks (ex-SeaWorld) seen as top picks for evolving into more diversified entertainment experiences, with new CEO leadership and celebrity investments (44:00).

  • “The roller coasters are still going to be there, but... more immersive entertainment. Things like pop up concerts, different ways to enjoy dining... can kind of appeal to everybody.” — Chris Waronka [43:54]

• Ski Resorts (Vail) Caution:
  • Expensive passes and poor current snow conditions temper enthusiasm for Vail stock.

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote or Moment | |-----------|-------------------|---------------------------------------------------------------------------------------------| | 04:03 | Steve Liesman | “They're going to vote the way they think the policy ought to be...not concern themselves with the political process.” | | 11:30 | Sima Modi | “The opposite has happened because it basically pushed them to invest in their own countries.” | | 23:20 | Mark Mahaney | “You’ve seen that in... revenue per employee. It’s really inflected up... at all of the hyperscalers.” | | 27:47 | Contessa Brewer | “They don’t anticipate AI is going to put them out of business, but rather... it will be harnessed to power their business.” | | 33:25 | Steve Grasso | “The multiples trading at 25 times, trailing. Usually, historically, that should be in the mid-teens...” | | 38:34 | Stephen Klein | “We're probably making a bowl every 10 to 15 seconds at peak throughput... relieving that... bottleneck.” | | 43:54 | Chris Waronka | “The roller coasters are still going to be there, but... more immersive entertainment... pop up concerts... different ways to enjoy dining.”|

Segment Timeline (Key Timestamps)

• 01:03 — Market overview, Fed preview (Contessa Brewer)
• 01:57 — Fed minutes breakdown, 2026 outlook (Steve Liesman)
• 04:22 — Strategic outlook on rate cuts, S&P 500 (Barry Bannister)
• 08:47 — Global market outperformance (Sima Modi)
• 13:41 — China’s trade pivot, consumer resilience, IPO outlook (Brendan Ahern)
• 19:50 — Meta's Manus AI acquisition and strategy (Mackenzie Seagalos)
• 21:54 — Big Tech capex, ROI, regulatory concerns (Mark Mahaney)
• 26:40 — Travel demand, Airbnb & AI in hospitality (Mark Mahaney)
• 29:00 — Commercial real estate optimism (Diana Olick)
• 33:25 — S&P top gainers, Western Digital, Palantir, more (Steve Grasso)
• 38:00 — AI in fast casual dining, future tech in restaurants (Kate Rogers)
• 41:15 — Experience economy for 2026, theme parks, cruises (Chris Waronka)

Tone & Style

The episode is fact-heavy, brisk, and analytical, with a tone that balances optimism about tech-driven growth and global market opportunities with honest caution regarding valuations, policy uncertainty, and structural economic challenges. There is a strong emphasis on real-world business implications, actionable investment insights, and a forward-looking perspective.

Summary Takeaway

As 2025 closes, The Exchange underscores a market marked by Fed policy uncertainty, global economic surprises, and an AI-fueled investment arms race — both in big tech and across traditional sectors like real estate, restaurants, and entertainment. The experience economy and consumer resilience, especially at higher income levels, remain key themes for 2026, with experts advising selectivity and awareness of both opportunity and risk as the new year begins.