Title: Stocks Rise as Oil and Yields Ease: Your Next Move 9/21/26 Show: CNBC Halftime Report (podcast of the live noon ET show) -- Monday after Fed week; S&P +1%, Nasdaq +2% late Host: Dominic Chu (in for Scott Wapner) + Investment Committee -- Joe Terranova, Stephanie Link, Jim Lebenthal, Bryn Talkington Guest: Mackenzie Sigalos (Google Gemini sandbox breakout); Megan Cassella (Trump on AI safety, White House); Oliver Renick (crypto options action, Cboe); Frank Holland (CNBC News Update); Brendan Ahern, CIO KraneShares (ETF Edge, China/KWEB); Annika Kim Constantino with Eli Lilly Chairman & CEO David Ricks (exclusive, Houston plant groundbreaking); Mike Santoli (Market Memo) Date: 2026-09-21 (Monday) URL: https://open.spotify.com/episode/2MQHjXSEdvBi3VGPeax51W Length: 44:20 Note: Spotify auto-generated transcript (accuracy may vary), extracted 2026-09-21 from the episode page's Transcript tab. The panel is virtualized, so the full section list (719 sections: timestamped sentences + speaker/chapter headings) was read from the page's React state in one pull and joined into paragraphs, each prefixed with the (m:ss) start of its first sentence; "##" lines are Spotify's chapter headings (its untitled sub-chapter markers were dropped). Coverage is CONTINUOUS from the cold open through the podcast outro; nothing was invented. Timestamps are real episode offsets, but this is an audio podcast with no YouTube id, so the analysis page links the episode ("listen") rather than deep-linking a time. SPEAKERS: Spotify's diarization is numeric ("Speaker N") and badly merged in this episode (three labels for ~12 voices). From context: Speaker 1 = Joe Terranova and Jim Lebenthal (also Oliver Renick, Frank Holland, Brendan Ahern, David Ricks, Mike Santoli, and some Dominic Chu links); Speaker 2 = Dominic Chu; Speaker 3 = Stephanie Link and Bryn Talkington (also some Dominic Chu links, Mackenzie Sigalos, Megan Cassella, Annika Kim Constantino). Relabelled by name below from who is addressed and what they say they own; the short bond back-and-forth at 14:05-14:48 is left as "Speaker N" because it cannot be assigned with confidence. A few fragments are split mid-sentence across speakers by the auto-diarizer (13:39/14:05, 22:46/22:55, 27:10/27:12, 35:10/35:14). CLEANUP: fillers (um/you know as interjection) and stutters ("it's, it's, it's", "the the", "I I") removed; obvious speech-recognition mishearings corrected: AI numbers -> AAII numbers; Max seven -> Mag 7; queues -> Qs; Scott Besson -> Scott Bessent; Brynn/Brent -> Bryn; Tom -> Dom; dumorism -> doomerism; anthropic and open AI -> Anthropic and OpenAI; Mackenzie Sagalos -> Mackenzie Sigalos; Megan Casella -> Megan Cassella; Etherium -> Ethereum; IB IT / IB. IT -> IBIT; master / MSR -> MSTR; SIBO / SEBO -> Cboe; Crane Shares ... ETFKWEB / K web -> KraneShares ... ETF KWEB; 10 cent / $0.10 -> Tencent; Zai and Mini Max -> Z.ai and MiniMax; AIA driven -> AI-driven; Msci's -> MSCI's; Chinas -> China's; Andrew Maddock -> Andrew Mattock; Anika / Annika, Kane -> Annika Kim; Hey, John -> Hey, Dom; forglapron -> orforglipron; Foundeo / Foundaio / Found a -> Foundayo; ZAP Bound / Zeppelin -> Zepbound; GOP one / GPN one -> GLP-1; retatritide -> retatrutide; Alora lintide -> eloralintide; Liebenthal -> Lebenthal; Terra Nova -> Terranova; Data Dog -> Datadog; Dallas up -> Dow's up; clock- style prices read as times: 2:10 to 2:30 -> 210 to 230, back up at 2:30 -> 230, up around 2:00 -> up around 2, between 7:00 and -> between 7%. Left as heard: "51,009 O3" (Dow level), NVIDIA "23236" (from context a 232-236 ceiling), "Parabola storm", "a mean data center business", "Roth" (the research shop), "Novo Nord escort", "K Star" / "case star" (the KraneShares China semiconductor fund), "10%" in Bryn's reply to Jensen Huang's "0%". Wording otherwise verbatim.
## Initial Market Rally Drivers and Committee Outlook [0:00]
(0:00) Scott Wapner [podcast intro]: I'm Scott Wapner and you're listening to CNBC Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.
(0:15) Dominic Chu: All right. Thank you very much, Carl. Thank you very much, Kelly. Welcome to the halftime report. I'm Dominic Chu in for Scott Wapner. The market rally is front and center this hour as stocks soar and yields fall. As we kick off a new trading week, our investment committee is standing by to breakdown how they're playing it and what it all means for investors.
(0:32) Dominic Chu: Joining me for the hour are Joe Terranova, Stephanie Link, Jim Lebenthal and Bryn Talkington. Let's get a check on the market right now. I talked about the rally here. The Dow is up about a half a percent of 220 some points, 51,009 O3. The S&P 500 up north of 1% at this point, up 85 points to 7736.
(0:52) Dominic Chu: So trying to creep back towards that 8000 mark and the NASDAQ Composite, the tech heavier side of things up and three quarters percent that's worth 455 points to the upside. That Composite Index currently sits at 26,978. So let's kick off the conversation now with just what exactly is driving the positive sentiment after we saw a little bit more volatility over the course of the past week.
(1:13) Dominic Chu: And Joe, I will start with you for this one here. From a macro big picture perspective, are the markets feeling constructive for what we've now said a lot is a seasonally weak time for the market.
(1:25) Joe Terranova: 2 words risk on. That's exactly what we are seeing right now. Before we began the show at a conversation with Stephanie, I said, Steph, in the near term we are seeing really positive momentum that suggests we can advance rapidly right back towards the S&P all time high from August.
(1:45) Joe Terranova: Steph made the excellent point and guess what, sentiment is really bearish. So it kind of aligns when you think about sentiment and positioning which moved to be somewhat defensive heading into the Federal Reserve meeting. Maybe markets are a little bit caught offsides in that regard.
(2:02) Joe Terranova: You have the pullback in oil, you have yields relaxing. You've got past the Fed meeting that looks like we have a near term low in place from that day. And guess what, after that Fed meeting, we talked about the meeting bringing clarity.
(2:17) Joe Terranova: You didn't get the response in bond yields that speculators wanted. Remember, speculators went into that meeting short treasuries thinking that yields would spike. You'd see the 10 year go to 5 1/4%. You didn't get that.
(2:33) Joe Terranova: That basically was the moment where if you were short treasuries, you kind of had that exhaustion. So we now have a very significant technical price gap for the S&P 500 Friday into today, semis higher, software higher, which is a rare formation in the near term.
(2:52) Joe Terranova: The market has just established some really bullish momentum.
(2:56) Dominic Chu: So Stephanie, it's an interesting point because when we talk about a possible repositioning that's happening right now, given the bearish sentiment going into Jackson Hole, going into this Fed prints, the last time we had an interest rate meeting this past week. There is a question about whether repositioning has legs because oftentimes repositioning can be a very short term to maybe medium term phenomenon.
(3:18) Dominic Chu: And then we kind of consolidate and go back to where the trend was before. Is this enough to clear the decks to make room for constructive moves to the upside given maybe repositioning in places in the market like treasuries?
(3:30) Stephanie Link: Sure. I mean September is the worst month of the year, but that follows then October and November are the best two months of the year. So maybe September can continue to be volatile. To kind of answer your question, I wouldn't be surprised. But back to sentiment, AAII numbers are at a year low.
(3:50) Stephanie Link: I mean that they're you're high, sorry. And that is just really, really negative. The economy is still doing well in the face of all this negativity. I mean, last week retail sales we had the weekly jobless claims are historically low. They remain historically low.
(4:05) Stephanie Link: The consumer is clearly spending. The Atlanta Fed tracker is running at 5.1. So in the face of all this negativity, we're still growing. And why do we care? We care because earnings are actually continuing to be revised higher. Multiples have come down from 22 times to 19 times.
(4:21) Stephanie Link: That means it's a little more attractive and credit spreads are very, very tame. And I just don't think 25 or even 50 basis points in terms of a Fed hike is really going to damage the economy. So it just goes back to if the economy is good and earnings are going higher.
(4:38) Stephanie Link: And to Joe's point, risk on is out there. I think you want to really be looking at opportunities in September.
## Debating Broadening Rally and Geopolitical Risks [4:43]
(4:43) Dominic Chu: Jim, the other thing that's curious about the move that we are seeing higher right now is this notion that the leadership here is the leadership that we had been accustomed to talking about for the better part of the last decade. And that is mega cap technology, media and telecom stocks. Those are the ones that have assumed kind of a new leg higher in this last move that we've seen.
(5:02) Dominic Chu: The MAG 7 ETF to that point hit another record intraday high in trading just today. So I wonder if we talk about the broadening out rallies, being healthy, something that's constructive and then we see once again that there's a certain maybe 10 stocks that are powering a lot of this move higher.
(5:18) Dominic Chu: Is there something to be worrying about if that broadening out thesis is not necessarily the primary focus for traders going in the next 6 months?
(5:26) Jim Lebenthal: I don't think so, Dom. It's an excellent point to raise, but the reason that I'm not that worried about it is because these rotations, as we've all seen from the MAG 7 to the other 493, from growth to value and back again, have happened with such rapidity that I wouldn't be surprised if a week from now we're saying just the opposite.
(5:44) Jim Lebenthal: It wouldn't surprise me at all. And the reason that that may happen is because, much as Joe was just talking about technicals and Stephanie, you were talking about sentiment and then you got into fundamentals. The fundamentals are really strong to support the broadening. I mean, let's just start by talking about you, Stephanie.
(5:59) Jim Lebenthal: You mentioned the Atlanta Fed at 5.1% and let's pair that with unemployment at 4.1%. Let's pair that with profit growth at roughly 25%. And if we look at next year's S&P 500 numbers, we're trading at 18.6 times.
(6:16) Jim Lebenthal: Now here's the important part. As we go through the back half of this year, it's the other 493 stocks that are starting to increase their earnings acceleration as the Mag 7 starts to decrease. Let me be very clear about what I'm saying. The Mag 7 growth rate of earnings is still spectacular.
(6:34) Jim Lebenthal: There is no question about it. But it is coming off the boil just a little bit. And as that happens, that's allowing the financials, the industrials, materials and energy stocks to really start accelerating. And that's the basis upon which the rally should broaden.
(6:49) Jim Lebenthal: Even though Dom as you pointed out the last week it's been the technology mega cap stocks that have done it for look at mega wow, I mean would have run there.
(6:58) Dominic Chu: So it's interesting because I'm watching Bryn right now and she's been nodding and kind of focused in on a number of points that you guys have made in the last five minutes. She wants in. So I want to maybe I'll kick it off Bryn with my question to you being, would you be focused on the top 10 market cap stocks or the other 490 and then you can go from there?
(7:20) Bryn Talkington: Well, since I own the Qs and RSP, I would say yes and yes right? So I think I own both for the reasons Jim said and also many other things that everyone said. I will say, going back to Joe's 2 words, I was thinking my 2 words for today are oil and yields.
(7:38) Bryn Talkington: And we've seen this very high correlation this year between oil and yields. And so as oil goes down, yields go down, stocks go higher. And so I really think in the short term, this market is going to continue to be very anchored on oil because if oil goes back up and this war re escalates, yields most likely will go higher as well.
(7:59) Bryn Talkington: I do think it's important for investors. I mean, if you go back 6 1/2 decades between the August highs and the midterms lows, we've had a draw down every single time between 7% and then the extreme 25%. So I don't know why that would be different.
(8:15) Bryn Talkington: Maybe it will be. But I do think this time that if we get this draw down, which really haven't seen, that is going to be a great time to add to positions because what happens after mid times midterms is like between November and February are the best times of the year post midterms.
(8:32) Bryn Talkington: So do you think investors need to be aware of that midterm seasonality, which has a perfect track record of having pretty significant draw downs? But then I would take those draw downs to add to positions on both RSP and your Q holdings because to Jim's point, the breadth of earnings is also strengthening, but also NVIDIA, Micron, etcetera are still making up a huge part of earnings growth.
(8:54) Bryn Talkington: And so I want to be positioned with those types of names in my portfolio as well.
(8:58) Joe Terranova: Hey, Dom, I just want to key off what Bryn's saying here because we all obviously we're pretty optimistic on what we're seeing, but there's need for balance here. And Bryn points out what's going on with oil and rates that may have a lot to do with events going on in New York City this week. Last night, you had Vice Chairman He of China and Scott Bessent, the US Treasury Secretary meeting, and the verbiage that came out of that was very positive.
(9:21) Joe Terranova: We've got the Iranian president speaking. I think it's tomorrow at the United Nations. We've got President Xi and President Trump speaking together, having a summit on Thursday, and there is a lot of positivity that is expected and perhaps being priced in today from all of those geopolitical events.
(9:37) Joe Terranova: We have to be careful, right, Because we've known over the last two years that there have been a lot of false starts, there's been a lot of head fakes when it comes to geopolitics. So just we have to be balanced and acknowledged. There are still risks out there, primarily in the geopolitical space.
## Market Sentiment, Retail Activity, and Bond Appeal [9:51]
(9:51) Dominic Chu: Now, Stephanie, you mentioned before the sentiment, right? You mentioned AAII in terms of sentiment and framing the market moves in context there. It's kind of interesting to bring that up alongside an interesting note that's coming out from Ned Davis Research. And basically the take away right now is that it's tough to get to bearish.
(10:08) Dominic Chu: That's the take away from Ned Davis Research, especially when they say seasonality turns positive in October. To your point, through year end we would want to see much more trend deterioration and for longer to become more concerned. At the same time let's flip it because this is a bull bear debate.
(10:26) Dominic Chu: You have Roth coming out this morning saying that leadership holds but internal trends are cracking, adding. Our best guess is for the S&P to pull back to trend similar to March and then you should treat semiconductors as the signal that decides whether this is a pullback to trend or something maybe worse.
(10:47) Dominic Chu: Interesting debate and juxtaposition there.
(10:50) Stephanie Link: Yeah. I do think that there are more negative analysts out there right now though, and that makes me feel a little bit better actually. It's like a pile on right now. All of a sudden everyone's like lowering target prices and lowering multiples and getting defensive. I think that's absolutely the wrong decision.
(11:06) Stephanie Link: And I go back again to point to the economy. If the economy is starting to roll over, if the Fed decides they're going to go three times between now and the end of the year and surprises people, that's something that you have to watch. But I just believe that earnings are still so strong.
(11:23) Stephanie Link: And last quarter we had eight out of 11 sectors that saw double digit earnings growth. So to everyone's point of the broadening out, we're seeing a broadening out and that's very healthy. September on average is down 2.7% over history, October is up 2.8 and November is up 3.9.
(11:42) Stephanie Link: I am not going to get bearish into the seasonality and I like the fact that I have fundamentals that I'm anchored to that support the reasons of why I would be a buyer on the volatility.
(11:53) Dominic Chu: Joe, to that point, I want to bring up another note that caught my attention this morning and this is coming out of Vanda Research talking a lot about retail trading activity and flows. An interesting point there is they're making the point that retail activity is now turning lower. It had been seeing somewhat of an uptick and ramp up, right?
(12:09) Dominic Chu: But now they're seeing that retail buying had begun to pick up at the start of the month, which we kind of saw, but that momentum has quickly stalled In their minds, 1,000,000 rolling net buying worth of individual stocks and total listed securities is now rolling over again, reinforcing that the broader retail bid remains relatively subdued.
(12:29) Dominic Chu: Their words, Is this something, I mean because you run an ETF that has retail traffic in there alongside institutions that window, is it something that you can actually glean something from that retail buying activity?
(12:42) Joe Terranova: I think that's a response to the choppy environment over the last 30 days. I think clearly we are challenging the S&P having this 1% move, but for certain over the last 30 to 45 days we are void of a significant amount of those types of days.
(13:02) Joe Terranova: So it's been a very tight range of volumes have been on the decline. I think where we are today and what's interesting, a lot of people might look upon today and say, well, it is a day in which volumes were lower, maybe there's not full participation in the market, but let's remember something.
(13:20) Joe Terranova: Non discretionary capital doesn't analyze those conditions. Non discretionary capital sees the result of price and the result of price is going to be a very powerful and strong reversal higher off of where we were early Wednesday morning of last week.
(13:39) Joe Terranova: So I think that is what is significant today is seeing that that non discretionary capital will engage just reflective of price. I don't know that you need that retail participation. I think retail is sitting comfortably on a lot of existing long positions and didn't feel very compelled to do much in an environment that became choppy and somewhat uncertain given the rise in oil prices and.
(14:05) Speaker 3: Yields and switching and buying bonds. Bonds have been a horrible investment.
(14:10) Dominic Chu: Yeah, we've talked about 5% being that level group. People say maybe I want to back up the truck a little bit here.
(14:15) Speaker 3: I think so. I mean, I would personally myself, because I think I haven't talked about bonds in forever, but I think it has to stay about the tenure, has to stay above 5 for a long period of time to see substantial changing and switching. But I do think it's tempting.
(14:30) Speaker 3: I would be careful though, because over the long haul, stocks well outperformed bonds, right? Long term total return for the S&P 500 to 7.7%. For the bonds, it's about 3%. So you can diversify, but I think some of that retail money is moving into the bond.
(14:45) Speaker 1: You probably want corporate bonds over government bonds, yes.
(14:48) Speaker 3: On munis, yeah. I mean, why not munis?
(14:50) Dominic Chu: But by the way, and you've noticed this, you mentioned before the spreads, they're not exactly blowing out here right now. They're still relatively healthy even though they have re rated a little bit to the downside.
## NVIDIA, Meta, Qualcomm: Mega Cap Tech Analysis [14:59]
(14:59) Dominic Chu: Bryn, I want to bring this conversation because the yield story gets us into just how much that story effects the mega cap technology trade. One of the places that has become not just a retail but institutional darling, of course is NVIDIA. I want to highlight something interesting here because over the weekend we had CBS News sitting down with CEO Jensen Huang over at NVIDIA.
(15:20) Dominic Chu: NVIDIA and they said that he said Jensen Huang that there was a 0% chance, 0%. Those are his words of AI being the end of the world. Also adding, he also said that people that are sounding the alarm about the dangers of AI quote, unquote, scaring people is unnecessary and it is irresponsible.
(15:41) Dominic Chu: NVIDIA is a stock that everybody on the committee here owns today. So Bryn, I'm going to start with you. You mentioned the mega cap trade. You own the Qs. NVIDIA is also part of that story in your holdings, the NVIDIA story. How much can we rely on that as being indicative of that AI trade and sentiment going forward?
(15:59) Bryn Talkington: Well, I think the 10% is a made-up number and I think zeros like I would trust Jensen by the way, he's like in the mothership of AI. It depends like how far AI scales, by the way, I mean. So I think 0's probably also a made-up number.
(16:14) Bryn Talkington: But I think that Jensen giving comfort around the noise because to me, we saw this like peak doomerism and peak regulation, the last couple of weeks as we feel like Anthropic and OpenAI really want liability coverage from the US government, which I don't think they're going to get.
(16:37) Bryn Talkington: And so I think having the calming words from Jensen is very, very helpful. And so I just think this doomerism gets in the FOMO goes both ways. And so that's why like I own DRAM, the ETF, it's having a really nice day. It's broken up above 60.
(16:53) Bryn Talkington: And I think that you're still going to be with NVIDIA, this 23236, this is where NVIDIA has not been able to get over. And so until NVIDIA gets over that 23236, it's going to be range bound between 210 to 230. So I would love to get it to go over that because once it does, I think it goes meaningfully higher.
(17:12) Bryn Talkington: But until it can break out, I would just sell calls. Just understand that trading dynamic which has been very, very solid for the last six months.
(17:20) Dominic Chu: Jim, the next step on my Mega Cap tech tour in this first part of the show is going to be on Meta Platforms. Interesting analysts note and commentary coming out on Meta this morning from Wells Fargo reiterating the overweight buy rating may be no shock there, but the target it gets raised to $796 per share from a prior $640.
(17:42) Dominic Chu: Interesting point being made here about whether or not those types of stocks on the mega cap side of things deserve to be rated higher or price for a higher band going forward. And what is nobody owns it by the way Meta platforms. But what would get you into it?
(17:58) Jim Lebenthal: Well, when you say those types of stock, I mean, obviously that's open to interpretation. The way I interpret that as a kind of cheap stock, and I mentioned Meta just a few minutes ago, not only because it's cheap, but because the market is clearly preferring Meta right now over a number of names. I mean, this run from 600 to $700.00 is impressive.
(18:16) Jim Lebenthal: It's happened in a short time frame. There's fundamental reasons behind it. This shift in the compute strategy where they're going to sell excess compute is something it took the market a little while to get its arms behind it. Dom, if you don't mind, I'm going to call a little bit of an audible here, but maybe front run something we're going to do in a second.
(18:32) Jim Lebenthal: I see a similar setup with Qualcomm right now, which I added to today. I doubled my position in it. I did actually trim it by half back up at 230 during the Parabola storm in May. And look, I could have bought it at 160. There's no question about it.
(18:48) Jim Lebenthal: Bought it back, that is. But what I see here is momentum. It's up over the last month about 19%. They've got a mean data center business that's growing. And just like with Meta, the market is waking up to the fact that this is not what they thought it was just a few months ago. OK, so Qualcomm is not, I'll make this real quick.
(19:05) Jim Lebenthal: Qualcomm is not just a smartphone chip manufacturer, automotive, Internet of Things and data center. That's what the market's waking up to. Joe, go ahead.
(19:05) Joe Terranova: Let's talk about what's going on with the because we're going to get to the same place in terms of we think that Meta is seeing the positive momentum because of fundamental condition.
(19:23) Joe Terranova: But I think what's going on here, and I think it's also affecting Apple, is now we are delivering on a tangible product that the consumer can actually see. In the case of Meta, that's the AI assistant, that's Muse.
(19:38) Joe Terranova: All the skepticism, all the questions around the spending, where's the monetization for the spending on Meta? Maybe now you have a glimpse into that. There is the monetization of spend on delivering a tangible product. And I think that's what the street is seeing here with Meta, that potentially Muse is something that the consumer can understand.
(20:01) Joe Terranova: And I think the same dynamic is going on with Apple, where ultimately as Apple looks like it's pressing towards a new all time high, Apple is going to give the consumer that tangible product. As well.
(20:12) Stephanie Link: You are seeing monetization from a lot of the Mag Sevens. I mean, if you think about AWS growing 37%, Google Cloud growing 82%, Azure up 43%, I know it's not what we want it to be. We want it to be a lot, lot higher.
(20:26) Joe Terranova: Consumers don't feel that and see that I.
(20:28) Stephanie Link: Understand, I understand, I understand. But I do think the multiple contraction has been substantial. I was just looking at Amazon's. I own it, of course. It's at 20 times, it's 10 year historical averages 44 times.
(20:42) Dominic Chu: Cheaper for NVIDIA as well.
(20:44) Stephanie Link: I don't and I just recently bought NVIDIA when it was really almost at the lows. Actually I got lucky because of that point NVIDIA the long term multiple average 35 times and it's trading at 17 times.
## Google Gemini, Trump: AI Safety and Regulation [20:57]
(20:57) Dominic Chu: OK, so we're going to go from Muse and Meta, Siri and Apple to Gemini and Google right now because Google's Gemini did become the latest AI model to hack an outside computer system. Mackenzie Sigalos joins us now with the latest. And this monetization story, Mac Gemini at Google is something that they are actually hanging their hat on.
(21:17) Dominic Chu: So tell us what happened with Gemini over the course of this past weekend.
(21:22) Mackenzie Sigalos: As a Gemini now part of this the prestigious, albeit infamous club of frontier AI models breaking out of controlled tests and into real world systems, a designation that Google had largely managed to avoid to date. But this happened during a cybersecurity evaluation where Gemini agents gained access to the open Internet from a closed sandbox, found credentials online, and then ultimately broke into three companies.
(21:45) Mackenzie Sigalos: These incidents raised serious safety concerns, but they've also become almost a way of proving just how capable a frontier model is, especially for the private labs trying to show that they're at the cutting edge. Up until this attack, Google had stayed out of that conversation. But the company tells me there's an important distinction in Gemini's case, that once the model realized it had reached real companies, it stopped on its own.
(22:08) Mackenzie Sigalos: They say that shows that its safety measures worked. But the question of what happens when these models cross into the real world is reaching the highest levels of government. Treasury Secretary Scott Bessent says the US and China discussed a new system over the weekend for alerting one another to serious AI incidents.
(22:24) Mackenzie Sigalos: And Alphabet's Sundar Pichai is among the tech CEOs expected in Washington this week as President Trump meets with China's Xi Jinping right as its model is now part of the safety debate. Dom.
(22:35) Dominic Chu: All right, Thank you very much, Mackenzie Sigalos for that. Mac, thank you. We're getting some breaking news, by the way, out of Washington, DC at the moment. Megan Cassella is at the White House with the latest. Megan, what can you tell us?
(22:46) Megan Cassella: Dom, just in the last few moments we heard from President Trump on Truth Social once again talking about concerns over AI, saying that any safety concerns there are a hoax, but he also.
(22:55) Megan Cassella: Presented the Justice Department as a possible safety backstop on.
(22:58) Megan Cassella: AI So here's part of what he said in his post. He said I'm not going to stifle growth of something that will be bigger than the industrial revolution or the Internet itself. We will be careful and that's why we have the Department of Justice and other law enforcement bodies that will rein things in if we have to.
(23:14) Megan Cassella: But I will only encourage AI. So Dom, the key language there being rein things in if we have to. I want to be clear here, the Justice Department is not a Regulatory agency. So he's maintaining his stance of no new regulation, no safety regulations around AI for now. But the Justice Department could be something of a backstop here as an enforcement matter.
(23:33) Megan Cassella: Importantly, the Justice Department couldn't really act until after a safety incident did happen. If something happened, they could potentially go after a company and hold that company liable for whatever did happen. But the president now saying they will of course be careful on AI and rein things in, he says if they have to Dom.
(23:50) Dominic Chu: All right, Megan, trying to identify the toolkit here for AI. Thank you very much for that.
## Crypto Market Comeback and Options Trading Action [23:53]
(23:53) Dominic Chu: Coming up on the show, the crypto comeback as Bitcoin hits its highest levels going back to January. We're going to see where the committee stands on that trade next half time is back in 2.
(24:23) Dominic Chu: All right, welcome back. Crypto prices are rising sharply with Bitcoin hitting its highest level going back to January. We're currently at 85,791 and change. Bryn, you've got a decent amount of crypto exposure, so take us through whether this feels good to you and whether or not you think there's any move that's constructive going forward.
(24:45) Bryn Talkington: I mean, I think just looking quarter to date, the S&P is up around 2. I think the Nasdaq's down 3, Ethereum's up 66%, Bitcoins up similar to that, but they're both still down for the year. Ethereum's down 7, Bitcoins down a couple percent.
(25:00) Bryn Talkington: That being said, you're definitely above the 50, above the 200. And I think just like software where just like there was so much FOMO around AI, that's clearly now broadened out. And so I think like software, Bitcoin and Ethereum will continue to slowly move higher.
(25:18) Bryn Talkington: There may be some backfilling because it's really had this massive move as I just said earlier. But I do think there'll be some backfilling. But I think setting up for 2027 both securities to me look way more constructive than they did three months ago.
(25:33) Dominic Chu: All right, Stephanie, I'm going to go to you because you're a Coinbase person.
(25:36) Stephanie Link: I am. It's a small position, but I want to have exposure to crypto and that's where the Gen. Z's and Gen. Alphas are actually investing their own money today and I want to be part of that. In addition, this company has a very diversified revenue mix away from transactions more into subscriptions and services.
(25:52) Stephanie Link: I can't tell you the day-to-day price of crypto or Bitcoin, but I do want to have an exchange that benefits one way or the other.
(25:59) Dominic Chu: All right, so let's talk a little bit more about this. Oliver Renick is following some big options action in that aforementioned crypto trade. He joins us live from the Cboe Global Markets out in Chicago. Oliver, what do you got from shutdown?
(26:14) Oliver Renick: The risk on comeback Crypto options traders are indeed jumping into action Volume. In Bitcoin ETF IBIT is 4 times the 30 day average. In MSTR, it's 2 1/2 times. Flows are leaning clearly bullish, with more than twice as many calls bought versus puts in IBIT.
(26:31) Oliver Renick: The same in MSTR, though some call selling also suggest traders are hedging some of these upside bets. The strongest short term aggression is in Strategy where bulls are buying calls. It strikes from 170 to 175 and even the 200 strike expiring Friday, which is a bet on a 30% rally in MSTR in five days.
(26:55) Oliver Renick: IBIT bulls certainly aren't shy either. The most popular contract by volume bought today is the 70 strike December 18th call, which needs Bitcoin to trade back near its all time high of just under 130,000.
(27:10) Oliver Renick: Market makers are pinning the odds of that.
(27:12) Oliver Renick: Happening at about.
(27:13) Oliver Renick: 12% and selling that contract for about $0.46 Dom.
(27:19) Dominic Chu: Interesting options action for sure. Thank you for Oliver Renick over at the Cboe Global Markets. We appreciate that. Now let's send it over to Frank Holland with a CNBC NEWS UPDATE. Good afternoon.
(27:28) Frank Holland: Frank, good afternoon to you, Dom. Iran said today that it would use new weapons and target locations that have not been previously attacked if the US launches a new offensive. The Iranian Revolutionary Guard made that statement to the Fars News agency, adding Tehran is prepared for a prolonged conflict.
(27:43) Frank Holland: It comes a day after Fox News correspondent said he spoke with President Trump about the situation in Iran, who reportedly said the choices were on the table. That were on the table are wiping Iran out, letting them rot economically or making a deal. The Federal Aviation Administration issued a ground stop today for Newark Liberty, Philadelphia International and Teterboro airports because of an equipment outage affecting air traffic control.
(28:06) Frank Holland: According to the flight tracking website FlightAware, more than 300 flights into Newark and Philadelphia have been delayed as a result, and Donatella Versace is partnering with Gen. Z fashion retailer Revolve. The two announced a partnership today to create a new beauty and fashion business. It comes after she stepped down as the Italian fashion house's chief creative officer in 2025 after nearly 3 decades.
(28:27) Frank Holland: Revolve says the name of the new venture, it's creative vision and first launch will be revealed in the coming months. Dom, back over to you.
## China Investment Prospects Amidst AI Focus [28:35]
(28:35) Dominic Chu: All right. Thank you very much for that. Frank Holland coming up on the show here, the very latest on the battle for GLP-1 dominance. Eli Lilly is breaking ground on a new manufacturing facility down in Houston, TX and CEO Dave Ricks is standing by for a CNBC exclusive interview.
(28:51) Dominic Chu: Keep it right here. Halftime is back in 2 with that must watch.
(29:14) Dominic Chu: The Dow's up at session highs, up 325 points. Still ahead on the halftime report. Our CNBC exclusive interview with Eli Lilly chairman and CEO David Ricks. But first on ETF Edge, we're going to look ahead to this weeks high stakes meeting between President Trump and China's President Xi Jinping.
(29:31) Dominic Chu: And with bilateral relations in focus and AI threading through just about every investing story these days, what do you need to know about investing in China more specifically and Asia more broadly? That story is coming up on ETF Edge on the halftime report.
(29:46) Dominic Chu: Keep it right here. Welcome back to Halftime Report here. We're back with today's ETF Edge. President Trump is hosting China's leader Xi Jinping later on this week. Now from AI to trading right and those relationships that you have a lot to review.
(30:05) Dominic Chu: So is now a good time for you to review the prospects of investing in China? Joining me now is Brendan Ahern. The CIO at KraneShares runs one of the largest ways that people express a view on China, which is the KraneShares China Internet ETF KWEB.
(30:21) Dominic Chu: So Brendan, if you could maybe some insight from you on just where you see people trying to take this view either on China as a broad macro play or on China more specifically as an AI play. I.
(30:33) Brendan Ahern: Think it's a little bit of both that First and foremost you're seeing particularly in the options market a lot of call options in KWEB, very big open interest on that ETF I think people are expecting a potentially a better than anticipated outcome. At the same time, there are AI plays obviously Alibaba, Tencent and Baidu with cloud.
(30:52) Brendan Ahern: And then you have direct large language models like Z.ai and MiniMax in the portfolio and then companies like Lenovo which makes AI-driven servers.
(31:01) Dominic Chu: How much do people focus on it? And it has been for years now the kind of upper echelon market cap of these Chinese tech and Internet related companies versus many of these other ones that we're hearing a lot more of because of the AI trade, but not necessarily ones that are worth the same amount that a Baidu or a Tencent or an Alibaba.
(31:20) Brendan Ahern: Is. I think this is where the underlying index which drives ETF's is so key. So MSCI's definition of China is 80% Hong Kong, Alibaba and Tencent are very big percentage of that index. At the same time the Shanghai and Shenzhen which is only about 15% of the index, those semiconductors that we hold in our China semi fund K Star is up 31% year to date.
(31:46) Brendan Ahern: So again global investors, their definition of China is Hong Kong which is having a rough year. But if you look further afield, there are companies in China really benefiting from AI hyperscalers and that's in the case star in the semis play.
(32:00) Dominic Chu: So we're going to watch and see investors who got a lot more in tune to the mainland side versus the Hong Kong side. Exactly. All right, Brendan Ahern, thank you so much for that. I'll be speaking with both Brendan and more over at the halftime over at etfedge.cnbc.com. We're going to be joined by Andrew Mattock, who is a portfolio manager at Matthews specializing in Asian investing as well.
## Eli Lilly CEO on GLP-1 Strategy and Biotech Future [32:19]
(32:19) Dominic Chu: So we'll keep an eye on that next on our show here for halftime, the exclusive interview with Eli Lilly CEO David Ricks. Keep it right here. We're back in 2 minutes.
(32:44) Dominic Chu: All right, welcome back. We're back on the halftime report. Novo Nord escort I guess Novo these days. Those shares were falling after the company laid out long term goals that failed to ease some concerns about its ability to compete with the weight loss market giants out there. Meanwhile, Eli Lilly is breaking ground on a new manufacturing facility to produce its new obesity pill.
(33:04) Dominic Chu: That's where we find our Annika Kim Constantino, who's at the site in Houston, TX, with a CNBC exclusive interview with Eli Lilly Chairman and CEO David Ricks. Annika.
(33:16) Annika Kim Constantino: Hey, Dom, thanks so much. Let's get right into it. It's so great to see you again, Dave, and it's so great to be here in Houston. Behind us is around 240 acres of land that will be the site of your $6.5 billion manufacturing facility. So tell me, how much additional manufacturing capacity will this contribute to your obesity pill?
(33:34) Annika Kim Constantino: Foundayo here.
(33:35) David Ricks: Yeah. Well, thanks for covering this. It's a big day for us here in Houston. And another new site for we're announcing 10 sites in the last few years. This is one of them. This is really going to focus on the synthetic medicines or chemical API. So that's orforglipron or Foundayo or oral GLP-1 and then follow on products in that line.
(33:54) David Ricks: But also other kinds of medicines can be made here as well for domestic use but also shipment around the world.
(34:00) Annika Kim Constantino: Got it. And when you joined us on air in April, you said around 20,000 patients have started Foundayo and more than 1000 people were starting the pill each day just a few weeks into that launch. Can you give us the latest numbers on those metrics today or any kind of new color on what the launch has been like so far?
(34:15) David Ricks: Yeah, I think I said at that time, we're going to be fine. We're building a new brand with a new medicine and educating doctors. And then this summer we'd go out with consumer advertising. All that's happened, you may have seen our Martha Stewart ads and raising awareness for the brand. So far so good about one out of three new starts for orals and the oral, pretty new oral category for GLP-1 medicines is going on the Foundayo and that's growing week on week.
(34:39) David Ricks: And then the federal government launched this new coverage for seniors and in particular seniors seem to be interested in oral solutions and we're doing well there as well. So a good start continues to ramp. We're confident long term we'll make Foundayo here. And then we've also launched in four or five international markets, and we expect many more in the next 6 months.
(35:00) David Ricks: International is a big part of the oral GLP-1 story because of capacity and the efficiency in which we can make this medicine. Again, we'll make it here in Texas and ship around the world.
(35:10) Annika Kim Constantino: Right. And you talked about government coverage. So now we've had more than two months of Medicare.
(35:14) Annika Kim Constantino: Coverage of obesity drugs for the very first time. Walk me through what you're seeing so far. What percentage of new Zepbound patients, for example, are now coming from Medicare? And the same for Foundayo.
(35:24) David Ricks: Yeah, so big start so far, I think there's about 700,000 new seniors who've started on GLP-1 Medicine just since July 1. So that's very encouraging that seniors are talking to their doctors, they want to manage their weight. They understand there's long term health consequences.
(35:40) David Ricks: It's very market expansionary, which is what we had hoped. Lilly's doing well in that we're capturing about 7 out of 10 of those new patients and a lot still on Zepbound. I think still we see physicians focusing on those with the most body weight and the most complications.
(35:55) David Ricks: That's where Zepbound plays a big role. Foundayo will play a bigger role for patients who want the convenience, but also maybe just need to lose 25, 30 lbs and that will help them control their obesity, but also diabetes and other indications that are coming. So pretty pleased with how it started.
(36:11) David Ricks: And I have to give a hats off to the government. Actually, CMS probably isn't letters you think about when you think about efficiency and effectiveness. But they did a nice job rolling this out, educating physicians and working with both companies as well as the insurance system. I really haven't heard that many problems with the logistics.
(36:28) David Ricks: So good roll out so far and lots of people are benefiting from this new policy.
(36:32) Annika Kim Constantino: Great. And so you said you're expecting US regulatory decision on Foundayo for type 2 diabetes later this year. So how much additional demand will that new indication unlock? And is this expected to be expansive to the diabetes market in the same way that has been with obesity?
(36:49) David Ricks: I think we know that many, many people with diabetes who either have tried a GLP-1 and like it or who have not yet are really looking for an oral solution. Most the medicines we use early in the treatment of type 2 diabetes are oral. Yeah, it may not be well covered, but actually today is still the oral GLP-1.
(37:06) David Ricks: Medicines are the same size as the obesity market. That seems hard to believe, but it's about the same size market. So that's a big expansion for Foundayo. We're anxious to get FDA approval and begin offering another new treatment option. And Foundayo is an outstanding medicine for people with diabetes.
(37:22) David Ricks: We had data this spring that showed excellent A1C control, more than two points, a great weight loss and actually a cardiovascular benefit seems to be emerging. That's even beyond our expectations. So we're excited about this. There's more data actually next week at the EASD, that's the European diabetes meeting on Foundayo on retatrutide, our next generation GLP-1, and on a new combination of tirzepatide plus another experimental Amylin medicine called eloralintide.
(37:49) David Ricks: So big week next week for diabetes and obesity data.
(37:53) Annika Kim Constantino: Great. Well, thank you so much, Dave. Back to you Dom.
(37:56) Dominic Chu: Alright, thank you very much. Annika Kim Constantino and of course, David Ricks of Eli Lilly as well. Joe, let's kick it around here because you own Eli Lilly for a stock that now trades at 28 times forward earnings and is up decently this year, but is up 55% over the past 12 months.
(38:12) Dominic Chu: Is this a stock that can continue with the momentum it has given the product pipeline that Dave Ricks just laid out?
(38:17) Joe Terranova: Yes, I believe that in fact it will a trillion dollar basically biotech close to a 30 times valuation. You're getting significant growth built off of the GLP-1 medicines, but also this is a company that is now going out and diversifying significant M and A transactions $20 billion so far year to date in 2026.
(38:43) Joe Terranova: So taking that revenue that they are deriving from the GLP-1s, expanding market share, clearly there's challenges for Novo Nordisk. We see that they are dominant. Eli Lilly is in GLP-1s and saying, OK, we accept that significant revenue growth.
(39:01) Joe Terranova: Let's diversify the business model into other areas of healthcare services, different biopharmers and that's going to set us for long term futures success rather and I think that's exactly where they are.
(39:14) Dominic Chu: Jim Lebenthal, would you rather Eli Lilly or somewhere else in biotech or biopharma these days?
(39:19) Jim Lebenthal: Well, I happen. OK, so I don't own Eli Lilly, so I'm voting with my money. Having said that, I have to note that Eli Lilly's valuation has come down quite a bit and it's becoming quite attractive. I think the real question is, can they diversify beyond GLP-1s, beyond obesity?
(39:35) Jim Lebenthal: Now I'm saying that at the same time recognizing that these GLP-1s have a wide array of indications beyond just obesity, as was just pointed out with regards to cardiovascular. But I do like more diverse, what I perceive to be more diverse pharmaceuticals like AbbVie, like AstraZeneca, like Vertex.
## Mike Santoli's Market Memo and Committee's Final Trades [39:51]
(39:51) Dominic Chu: All right. Thanks very much for the Eli Lilly discussion there. Coming up next to the show, we got Mike Santoli joining us with his market memo. So keep it right here. Halftime is back in 2.
(40:16) Dominic Chu: All right. We're just a hair below session highs right now. And that NASDAQ trade, by the way, is up 2% right now. We're back with senior markets commentator and Overtime co-anchor Mike Santoli with this market memo. Mike, I could generically ask you what you're looking at, but I want to look at something specific, Sure, which is the rally today and what Joe called it earlier, a risk on situation.
(40:37) Mike Santoli: Yes, Now obviously people are happy to take on a little more risk today, but I wouldn't say the leadership represents genuine risk. We're going back to the mega cap companies, the AI trade, the Mag Sevens, which have some defensive properties and have basically radically lagged what's happened with their earnings forecast.
(40:57) Mike Santoli: It feels to me as if there's like a first in, first out kind of a situation happening, which is semiconductors in particular. They've been on the outs for three months. They had a 30% drawdown. They've been struggling to kind of get back in gear.
(41:12) Mike Santoli: Maybe they're doing that right now. I think bigger picture, it's the AI consumption story which is helping more than the AI construction story. And it follows the kind of the doom, end of humanity talk last week in a similar way. And I was saying this last week, the Citrini research piece on death of software in February, it happened closer to the low in software stocks than toward the peak.
(41:37) Mike Santoli: And so I just wonder if something similar is going on. Well, we've kind of had a big a bit of a fit around this possible long term risk. We sold out on it. We got washed out. That being said, it's a pretty narrow rally today. We're back to that mode.
(41:50) Dominic Chu: Is mega cap tech going to be the quote unquote safety trade again like it was like 4 or five years ago?
(41:55) Mike Santoli: I think it's sort of reacquiring those attributes at this point. I would look too though, I mean you have obviously oil and yields cracking pretty hard today. So that's clearly giving an extra bit of lift, but it's not creating a super broad market where the cyclicals are working and everything else.
(42:11) Mike Santoli: So I'll reserve judgement as to where we go from here. Clearly last week's low post Fed seems meaningful on a tactical basis at least being treated as such, right?
(42:20) Dominic Chu: Now, all right, 2% gains for the NASDAQ so far today. Mike Santoli, we'll see you later on at overtime. All right, so coming up next to the show here, we got final trades. Keep it right here. Halftime is back after this commercial break. Welcome back to the halftime report.
(42:35) Dominic Chu: We are now here with final trades. Bryn Talkington to you first.
(42:40) Bryn Talkington: Uber, I like the stock at 70. It has a trade, a trade between 70 and 78, so I think it's a good entry point here.
(42:47) Dominic Chu: All right, Uber for Bryn. Jim to you.
(42:49) Jim Lebenthal: Well, I'll be honest, I delayed my final trade until I heard what Mike Santoli had to say. And based on that, I'm going with Micron. I mean, there's similar to Qualcomm where this has been an unloved stock. All the chip stocks, as he pointed out, have been dead money for the last three months. I see them coming back to life.
(43:05) Dominic Chu: All right, Steph, how about you?
(43:06) Stephanie Link: So in healthcare, I like Natera. I continue to like Natera. I've owned it for a while. I buy it on any pullback. This is a play on Women's Health, organ health and oncology.
(43:16) Dominic Chu: All right. And Joe Terranova.
(43:18) Joe Terranova: Rebuilding positions in data software and that takes you to cloud security as well. Datadog is the name that you want to own in that space.
(43:28) Dominic Chu: All right. Thanks very much to the committee today. That does it for the halftime report. The exchange with Brian Sullivan starts right now.
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