Markets after Nvidia and Warsh: Your Next Move 8/31/26

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**Scott Wapner** (0:53)
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.
David, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the next move for stocks as a traditionally tough month looms. We'll discuss and debate all of that with the Investment Committee. Joining me for the hour today, Joe Terranova, Shannon Sakosha, Jenny Harrington, Bryn Talkington. Take you to the markets. We'll show you what we're doing. 12 noon in the east, red across the board. Rates are up, oil's up, and thus stocks are down. Iran and the US trading military strikes, so that's got a little bit of unease in the market. And as we said, September, historically, the worst month for returns for stocks, that's looming large. I thought we'd start with what is our takeaway from what happened last week, which was such a consequential week going in.
Nvidia, what did they do? They validated the AI story as much as they had to and where demand is currently sitting. And the war speech, he was definitely hawkish, but I mean, that doesn't mean September's a shoe in in any, by any means for a rate hike. So what now? Where does that leave us as we have September looming?

**Joe Terranova** (2:14)
Oh, I still think we're stumbling a little bit as we go into September, specifically related to the momentum.

**Scott Wapner** (2:20)
Oh, I know you were going to go there.

**Joe Terranova** (2:21)
You knew I was going.

**Scott Wapner** (2:22)
I'm glad you did. So tell me more and then I'll bring in something to add to that conversation because the Wall Street Journal was writing about that today and some of the stats that they have are pretty staggering.

**SPEAKER_5** (2:34)
But you tell me what's on your mind.

**Joe Terranova** (2:36)
I had hope, and I think Bryn can confirm this, I had hope that you'd get that shot of adrenaline into the momentum factor as a derivative of the Nvidia earnings call. You really didn't get it, Scott. It was somewhat disappointing in that regard. I don't think Micron or Corning really went anywhere. The following day, you heard from Marvell, that was a second opportunity to kind of restart the momentum trade.

**Scott Wapner** (3:02)
That's right too, because that didn't do anything either.

**Joe Terranova** (3:04)
It didn't. So we kind of had this inability to do that. I think that leaves us in a position where focusing on positioning as you move into September and October, momentum funds like myself, they're kind of getting more confirmation of moving away from that high beta AI exposure into your health care, into your energy, and by the way, into commodities. We're going to talk a little bit about this as the show evolves.

**Scott Wapner** (3:31)
We will.

**Joe Terranova** (3:32)
But I will tell you, agriculture prices right now are on fire. The momentum is clearly intense in that commodity.

**Scott Wapner** (3:40)
I think strategists are speaking to exactly what you're talking about. As for momentum, and I mentioned this piece in the journal by Greg Zuckerman and Gunjan Banerjee, I thought it was interesting. The momentum index has tumbled more than 9% since July 1st, lagging behind the S&P's 2.8% gain. The index is on track for the biggest quarterly underperformance in 25 years. July was the second worst month for the momentum trade in around 40 years.
That's according to Bank of America estimates that they cite. The only month that was worse was April of 2009, when we were right in the midst of the financial crisis. So if you needed more evidence of just how tough it's been, Shan, for momentum, say no more than that, because that paints it pretty clearly. Wolf points out on Marvell the rallies come to a screeching halt.