The Rally's Road Ahead 7/24/26

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**Scott Wapner** (1:00)
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.

**Dominic Chu** (1:16)
All right. Thank you, Carl. Thank you, Leslie. Welcome to the Halftime Report. I'm Dominic Chu. And for Scott Wapner on this Friday, front and center this hour, bracing for a big week ahead for earnings with a third of the S&P 500 and four mega cap names reporting their results. We're trading the setup for stocks in the days and weeks ahead with the Investment Committee. They are today for the hour, Jim Labanthal, Kevin Simpson, Stephanie Link and Bryn Talkington. Let's now check on the markets. We are seeing at least a little bit of positivity overall. Fractional gains for the Dow up about 352 points. The S&P is up about a half of 1% as well to just about 44 points on the upside, 7452 the last trade there. And the TechHeavier NASDAQ Composite up just about 1 10th of 1% or may call it about 36 points to a level of 25,170.
So that's the state of play right now. We look to close out the week on a slightly positive note. Let's go to the committee. And first of all, to Jim Labanthal directly to my left.

**Jim Labanthal** (2:15)
Hi, Dom.

**Dominic Chu** (2:16)
We talked yesterday about the market dynamic and then you kind of juxtapose it to today. It sure seems as though there isn't a feeling that there's a deeper decline ahead. There seems to be some stabilization. Is it something that people can feel comfortable about or is it too early in earning season to be able to make that determination?

**Jim Labanthal** (2:34)
Well, I think we have to remember where we are in the calendar, kind of mid getting into late summer. And as much as I think seasonality is inane, should not exist, there's one seasonal pattern that just comes up year after year and it's this late summer swoon, August into September. But again, should not happen. This should be something that's arbitraged away, but I want everybody to be aware of it. And more importantly, and to your question, Dom, I think we all have to invest through that. We have to look at what's going on with profits, what's going on with the economy, what's going on with the labor market, what's going on with capital expenditures, which I understand some people are nervous about. I think it's good for the economy. And putting that all together, I see a pretty good end to the year here from where we are now. So just invest through whatever summer volatility happens. Regarding CapEx, because I do think that is at least one, if not the biggest topic du jour, certainly with Tesla and Alphabet yesterday, good results from Intel.
I think this CapEx is healthy. I know there is a growing contingent of people who think that all of these hyperscalers are locked in a prisoner's dilemma. Nobody dares to be the first one to pull back on the CapEx. That's what the bears' case is, and that at some point, that's going to crack. I take the other side of that simply saying that these capital expenditures are profitable. They generate a return on investment. This is not the late 1990s and the fiber optic networks that were dark. This is a profitable venture and will be for the next few years.

**Dominic Chu** (4:05)
Kevin, what do you think?

**Kevin Simpson** (4:07)
I like how Jim focused on earnings because I think that's the foundation of the bull market that we've been built on for the right reasons. If you look at the headlines and you think about the oscillation of all the narratives, it's pretty crazy because a few weeks ago, we were worried about high inflation. Then we had CPI, PPI, that kind of went by the wayside. Some people may have been worried about the strength of the consumer in the face of said inflation and then the banks reported and they told us about the health of the consumer. And then a few months ago, we were worried about geopolitics, higher energy prices, tariffs, things that maybe were Middle East focused. And then here we are again coming full circle. So if we can keep the eyes laser focused on earnings and the actual data, I think that is the right way to approach not just next week's huge earning season, but to Jim's point the rest of the summer.