The Market Setup for the 2nd Half of the Year 6/29/26

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**Scott Wapner** (1:00)
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**Frank Holland** (1:15)
Welcome to the Halftime Report. I am Frank Holland. In for the judge, Scott Wapner. Front and center at this hour, shifting sector. Stocks are trying to snap. A five day losing streak is rotating market leadership. It just remains in focus. We are trading with this all means for your money with the Investment Committee.
Joining me for the hour, we got a great panel here at Post9. We got Joe Terranova, Stephanie Link, Jenny Harrington and Jim Laventhal. But first, quick check in the markets. It has been a pretty volatile session. Big reversals for the three major indices. Right now you're seeing the Dow is up just about 230 points. The S&P up just over three quarters of 1%. The NASDAQ, the best performer, up just about one and a half percent. The Russell, the outlier here, pulling back about three quarters of 1%.
Joe, going to turn over to you. A lot of things to talk about here. Is this the end of the so-called rotation after a five-day slide last week when we saw the S&P equal weight outperform? Is this just simply things getting back to normal as we're nearing the end of this quarter tomorrow, obviously the quarter end?

**Joe Terranova** (2:10)
Well, the end of quarter generally brings a lot of volatility and a lot of confusion for investors because it tempts you for the wrong behavior. Understand a lot of the dynamics surrounding end of quarter, relates to index rebalancing a lot of institutional capital that's going to be rebalancing and going to different places, maybe going from equities to fixed income. But I think what's important to really highlight is that we keep talking about the rotation that's going on in the market.
I think it's important and I'd love to hear what everyone thinks about this, not to try and identify which is going to be the winner at the end of the year. Because I feel like you're getting rewarded for being in both places.
You want to go S&P Equal Weight? Okay, you're up 10% year-to-date. S&P Equal Weight more recently has pulled ahead of S&P Market Cap Weighted. There was a period during the Iran Conflict that S&P Market Cap pulled forward. So look at today, Frank, S&P Equal Weight's down. S&P Market Cap is up 90 basis points. Here comes the MAG-7 once again. They're not really the LAG-7.
You want something on the 52-week list? You want to pick from Energy? You can look at Valero. You want to look at health care? I've got Lilly. I've got Merck for you. Industrials, CSX, Honeywell, and then technology, once again, semi-equipment working. It's your applied materials, KLA Corp, Lam Research, Palo Alto Network stuff. So I just don't think you want to make the mistake to try and concentrate in one particular direction because the market is rewarding you for being patient and kind of sitting in a variety of different places.

**Frank Holland** (3:50)
Yeah, patience is certainly a virtue. Sorry, Steph, I'll cut you off.

**Stephanie Link** (3:53)
No, no, I was going to say I agree 100% with what you're saying, but I think we just keep it simple. The reason we're seeing other sectors and stocks work is really because the economy is doing much better than most people expected and therefore earnings will actually be more broad in general, not just tech. And by the way, tech is driving me crazy. I don't know about you guys. It's like this flip flop between semis one day, software, another. I think you just call it a day and own both of them, have a basket.