Stocks Rise as Yields Fall: The Committee's Investment Strategy 8/19/26

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**Scott Wapner** (0:58)
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.
All right, guys, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour, falling yields, rising stocks, and some very big movers to debate and trade today, which of course will do with the Investment Committee. Joining me for the hour, Joe Terranova, Liz Thomas, Kevin Simpson, and Bryn Talkington. Take you to the market. It's got a pretty good day developing here. Not super strong, but nonetheless, the moving yields has taken the edge off. There's no doubt about that. So that's your picture. There's the 30 year. We were above 530 yesterday. So that's the significance of the move after the Treasury said it would double the size of buybacks at the long end, brings it down.
It's given a lift, because I think, Joe, the market was starting to get to a point where it was a little nervous, I think, and certainly paying more attention to the backup at the long end.

**Joe Terranova** (2:05)
So the spike in global yields the other evening led to a fundamental trigger for what we've seen as a rotation, an internal rotation in the market. And it extends today. Now, the actions from the Treasury, I don't think they're surprising at all. You and I, yesterday, we talked a little about homebuilders and mortgage rates and going into a midterm election.
Do you really want to see mortgage rates rising if you're the party in power? So not surprising to see the yield curve control that's put into place. It'll be 60 days, early September, right up to the midterm election. That's kind of going to hopefully anchor the long end of the curve. We're still seeing today, though, this rotation continue. Capital is coming out of the momentum factor. It's coming out of memory. It's coming out of semiconductors. And I will say this, and I want to use this word in front of the sentence, it is excitingly going into health care and continuing to go into energy. And I really think there are some significant opportunities in both those sectors.

**Scott Wapner** (3:12)
Let's go to Kevin Simpson. Look at this guy.
Welcome. Time machine. What happened?

**Frank Holland** (3:20)
New lid, new suit.

**Scott Wapner** (3:22)
Looking great. You knew that was coming.

**Kevin Simpson** (3:25)
I left the 80s.

**Scott Wapner** (3:27)
You took Steely Dan off the turntable, you put Taylor Swift on, and here you are, my friend.

**Kevin Simpson** (3:32)
I just got a CD player. And some Air Jordans.

**Scott Wapner** (3:35)
The 8-track is dead. It's good to have you back, of course. You knew that was going to happen. Come on, dude.

**Kevin Simpson** (3:41)
It was easier than I thought it was going to be. You look great.

**Scott Wapner** (3:44)
I love it.
So, yields, stocks. You.

**Kevin Simpson** (3:49)
Very important, because this is the advantage of having a Treasury Secretary who's traded the markets. This is not political. No disrespect to the likes of Janet Yellen, but a la Robert Rubin, when you have somebody that understands where we were, the precipice of these rate moves, exactly like Joe said, you start getting a 10-year at 5%, a 30-year at five and a half, you're going to see the institutional quants move out of equities and into fixed income. Not because of a bearish call on equities, but just because of pure math. So the move today was a great move. Equities are celebrating it.
I think that the thing we need to keep in mind is that no matter what the Treasury does or what the Fed does, they can't control the long end of the yield curve. They can control the short end, Scott, but not the long end. So all in all, this was a great move today, and I applaud them for it.