Believe in the Broadening Trade? 7/2/26

**SPEAKER_1** (0:00)
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**SPEAKER_2** (0:30)
The critics have spoken.

**Malcolm Etheridge** (0:32)
World War II with Tom Hanks is a must watch.

**Josh Brown** (0:35)
It is on a scale no one's ever seen before.

**SPEAKER_2** (0:37)
An enormous accomplishment.

**Malcolm Etheridge** (0:39)
The world turned upside down.

**SPEAKER_2** (0:43)
It's global history on the grandest scale.

**Malcolm Etheridge** (0:45)
All wars changed the world, but none of them like the Second World War did.

**SPEAKER_2** (0:49)
Unlike any World War II docu-series before.
World War II with Tom Hanks. New episode Monday at 8, only on History.

**Josh Brown** (0:59)
Next day on the app.

**Scott Wapner** (1:01)
All right, Carl, thanks so much. Welcome to the Halftime Report of Scott Wapner, front and center this hour. The broadening trade, it is in full effect again today. So what does that mean for your money? We will discuss with the Investment Committee as always. Joining me for the hour, Josh Brown, Stephanie Link, Malcolm Etheridge, Kevin Simpson. Take you to the markets. I'll show you what I'm talking about. Dow and Equalweight, new record highs today. In fact, it's a pretty good session for everything but tech and comm services. Discretionary is modestly negative, but I thought we would start, Josh, with what I feel is the market's role reversal. You want to call it that.
The top three performing sectors in April and May were in the bottom four in June. So the market turned itself on its head. April and May, tech was up 42 percent, comm services up 22.5 percent, discretionary up 18.5 percent. Now, over the last month, for all intents and purposes, you've got June, tech down 3.5 percent, discretionary down 5 percent, and comm services down 8 percent. Is this a tell of what's to come?

**Josh Brown** (2:07)
I think you couldn't ask for a better setup to go into the second half than having sort of a catch-up trade in certain areas, having some of the worst performing areas to catch a bid, like software. I know we'll talk about that in a few minutes. And having a little bit of a breather in some of the momentum stocks within tech that have gotten us this far.
I can't imagine what you would prefer if you wanted to be constructive on the second half.
What could possibly be better than having this intra-market rotation keep us within 2 percent of all-time record highs and really give us a backdrop where people are finding success in every sector, finding stocks that are working, or finding opportunities in stocks that aren't working and being rewarded for that? I think it's a great tape. It's one of the better tapes that we've seen over the last few years. The contra to something like this, I think, would be worse. We have another month where Micron puts on 25 percent, because why not? And we have all of the data center component suppliers continue to double and triple. And we have the rest of the market fading away as everybody chases the same 20 stocks. That would not be preferable. That's the converse of what we're seeing today. I like it.

**Scott Wapner** (3:18)
Because that was the criticism of the move before, is that it was so centered around all of the places that Josh just said, and now you literally have a bit of a reversal from that. This is exactly what the doctor ordered. If you're bullish this market, isn't it?

**Stephanie Link** (3:36)
For sure. I love a broad-based rally and a broad-based market in general. It's healthy for tech to take a breather, and ComServices to take a breather. It's not normal for a sector to be up 42% in the first six months of the year. We'll take it. The growth is there. The earnings revisions are there. Fine. But I think the economy is growing above trend. It is driven by the consumer. It is driven by AI. It is driven by loan growth. H8 data last week up 8% for loan growth. They're at the front line of this economy, and 8% growth is the best in three years. So I think you're going to see a broad-based earnings results across every sector, and the valuations in industrials, in financials, especially in discretionary are very attractive. And I think those are sectors, I think, that lead into the end of the year.