Episode summary
Shifting sentiment and sliding semis: The Investment Committee's strategy
CNBC Halftime Report
· · 10 min
Summary
The panel argues that the market’s sour sentiment may be overstating the damage, even as headlines around oil, consumer confidence, and rising volatility look ugly. One side says the data are still constructive: 25% of companies have reported and earnings are running up 38%, retail sales excluding gasoline were up 5.1%, and the latest ISM manufacturing and services readings stayed well above 50. Falling Treasury yields and a broadening of performance outside the megacap tech leaders are presented as signs that the economy is still holding up.
The pushback is that some of the rotation looks defensive rather than healthy breadth. Staples, healthcare, and utilities are not rallying for growth reasons, and the panel debates whether the current move is really a broadening or a mask for caution. Even so, there is a repeated view that the recent pullback in semiconductors and AI-related names is more about positioning and technical unwinding than a collapse in fundamentals.
The group is leaning toward buying the dislocation rather than hiding from it, but with caveats. They point to next week’s earnings flood, FOMC meeting, and the election as reasons for caution, while arguing that strong cash flow, continued capex, and AI monetization trends could revive confidence if the big tech reports land well.
Key takeaways
- The host says the market’s negativity looks overdone because earnings are up 38% so far and key economic prints remain firm.
- The panelist argues that some of the recent market broadening is defensive, not a true pro-growth rotation.
- The panelist says semis have sold off partly because of technical unwinding and overlevered players being flushed out, not just fundamentals.
- The guest sees the current pullback in AI and semis as a chance to add exposure before next week’s big earnings reports.
- The panel warns that FOMC, earnings, and the election create too many near-term overhangs to be fully aggressive right now.
Notable quotes
“WE'RE RUNNING UP 38% IN EARNINGS. YOU MENTIONED SENTIMENT. WELL, RETAIL SALES LAST WEEK WERE UP 5.1% EXCLUDING GASOLINE”
“SO YES, THE LEADERS ARE A LITTLE MORE DEFENSIVE. DO I THINK THAT'S THE RIGHT CALL? I ABSOLUTELY DO NOT”
“I THINK IT'S TIME TO TAKE ADVANTAGE, RIGHT? BECAUSE I DO THINK WE'RE GOING TO GET SOME REALLY NICE PRINTS FROM THE FROM THE BIG BOYS NEXT WEEK”
“THERE'S JUST TOO MANY OVERHANGS RIGHT NOW TO FEEL COMFORTABLE PLAYING OFFENSE IN THE MARKET”
“THE POSITIONING HAS ALREADY GONE TOO FAR TO THE NEGATIVE, AND IT IS MOST LIKELY”
How the episode opens
In the s&p is off about a 10th or so of a percent. Ten year note yield under 5%. That's been a big story as well.
Oil is surging. Consumer confidence is dropping. That's a big story today.
You mentioned was it 48. Wall street journal says the second lowest reading ever in the survey's history, and that voters economic mood heading into an election has never been this low. So there's a lot of consternation out there.
Vix at 20 discretionary industrials are down sharply which is about feels like growth. Scare like what what what do you think. What do you think.
Because you've been more optimistic than most on on almost all parts of this whole story.
And the negativity is is actually interesting to me because earnings we've had 25% of the companies report so far, and we're running up 38% in earnings. You mentioned sentiment. Well, retail sales last week were up 5.1% excluding gasoline.
Today, the ism manufacturing and services numbers were strong continue to be well above 50 well above expansion. And then I thought the most interesting thing is that yields are falling. This week we went from 5.36 to 4.95 at the lows.
We're bumping up a little bit today, but at the same time we're broadening out. So the s&p equal weight is up almost 2% week to date. And the s&p is down 0.5%.
So we're broadening out because the economy is doing okay in the face of all the unknowns.
Okay. Let me stop you for a second. Let's debate this for a minute. Okay. Because you say we're broadening out because the economy is strengthening. Yeah. Staples, healthcare and utilities are not going up because the economy is strengthening. You know that. You know that.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market sentiment
- semiconductor stocks
- investment committee strategy
- equity outlook
- stock market volatility
Watch the episode
Watch “Shifting sentiment and sliding semis: The Investment Committee's strategy” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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