The Bull Market Backdrop in Question: The Investment Committee Weighs in 10/20/26

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Scott Wapner (0:57)

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All right, guys. Thanks so much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. The rotation trade as sectors other than tech lead the market yet again. We discuss and debate that with the Investment Committee. Joining me for the hour today, Joe Terranova, Jim Blaventhal, Kevin Simpson, Josh Brown. Take you to the markets. We're green across the board. Dow is leading the way, as you see. Good for about 1%. All right, AI stocks, they're mixed. You had the South Korean data center firm, Ellis, down 32% in its debut. HSBC today, Joe, says Coraweave's gonna drop another 30%. The housing number was a disaster. Oil's around 100

And yet stocks are up. The curve's flatter. I wonder if part of this is the market saying, you know what, the housing market's so bad. And now we have all these concerns. There's not gonna be a hike in October.

Maybe there is in December, but we'll deal with that when we have to. Is that what this move is about in any way?

Joe Terranova (2:11)

Well, I think a lot of it is the price of oil was $110 earlier this morning. We've seen a significant retreat on some headlines that I don't know are true, not true. So, I'm not going to go into that, but you can't wash away the price action. I still believe the opportunity is in the AI trade. You do? I do. I think the opportunity is in the AI trade. It doesn't mean I can't own health care. It doesn't mean I can't own some of the better performing financial services names. But I think from the perspective of positioning lightning over the last month, the hedge fund community lowering their exposure, I still think we set up nicely for that November and December rally. The price action today in CoreWeave, I told you yesterday, look, as far as CoreWeave, understanding from an analytical perspective where the equity should go or not go, I'm not going to weigh in there. I haven't followed it closely enough. But I do like the price action today that we are seeing bad news, good price action, bad news coming off South Korea.

Scott Wapner (3:09)

Yeah, but I mean, yesterday CoreWeave was green and then it was red. I mean, you're really going to hang on price action today at that.

Joe Terranova (3:16)

You had bad news out of South Korea and it looked like it was going to roll over.

Josh Brown (3:20)

It did not.

Joe Terranova (3:21)

That indicates to me that maybe we've seen enough deleveraging in the AI semi-trade that you could look to rebuild positions and close out strong 2026

Scott Wapner (3:31)

So Josh, I mentioned all of the things that are going on and UBS today says the bull market remains intact. They don't seem to be wavering. Why? Because of solid or economic and corporate profit growth, as well as the AI investment and adoption. Monetary policy no longer a tailwind, but we don't expect the Fed to feel an urgency to hike rates aggressively. That's kind of what we were just talking about here. We believe they're still healthy upside for stocks. They maintain their mid 2027 target on the S&P. It's a June target, mind you, of 8,400. The point is, they don't think that this story is ending or is close to over.

Josh Brown (4:12)

Yeah, well, so I think that they're kind of echoing what we've been saying on the show. One of the most remarkable characteristics of what we've seen over the last year is that when the leadership falls, so semiconductors, the latest example, we find other things to buy. The rotation has kept us alive for so long now. It's almost pointless repeating that line, but it just happens to be true. People want there to be this different environment, but there really isn't. And think about that backdrop.