Closing Bell - Closing Bell: 1/2/26

Episode Date: January 2, 2026

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to closing bell. I'm Courtney Reagan. And today for Scott Wapner, we're live from Pose 9 at the New York Stock Exchange. This make or break hour begins with stocks sputtering to start the new year. Markets coming off a roller coaster end of 2025. Key questions and risks remain. And we will ask our exports about all of that over the next hour and more. Let's get a check in on the scoreboard today. You see the Dow is leading the way six-tenths of a percent higher. Nasdaq lagging, but just buy a hair here in S&P 500 higher by about 10 percent. Key chip names. are surging, though, Micron. And what a year it had in 2025, Intel and NVIDIA, all higher here today. Other areas, Eden Tech, outside of chips, suffering a bit, including software names like CrowdStrike and Salesforce. But look at RH, Wayfair, and William Sonoma. Those names are surging after President Trump announced a one-year delay on those previously announced furniture tariff for upholstered furniture and cabinets. Well, Tesla shares are moving lower, and that's after deliveries missed analyst's estimates. You can see down by about 2%. All of it takes us to our talk of the tape. She tried to say the future of the bull market and if it's stalling out or not.

So let's ask Solis alternative asset management's Dan Greenhouse. Dan, it's great to have you here with me and you're looking at sort of three keys as we go into 2026. Yeah, the calendar turn, but you think other things are fairly intact. Walk us through. Yeah, you were talking to Steve Weiss on the halftime show and I think his points were entirely accurate. The calendar turns, but that doesn't mean that your investment thesis changes in any way. Obviously, there might be tax or regulatory adjustments, but practically speaking, the three things that have been driving markets are likely to continue doing so. And very quickly, what's that? It's the AI trade, which doesn't appear to be slowing down in any meaningful way. I know we're worried about it. But no company has told me

anything other than demand exceed supply. It's the Fed still accommodative, maybe not as much as some people hoped, but they're more than likely not going to be raising rates. And they're beginning to provide liquidity the market. And then third, you have pretty healthy GDP growth, not the best ever, but healthy enough, call it two, two and a half percent, which should drive top line growth. And with a little bit of margin expansion, probably call it 10 to 15 percent earnings growth in the year. So those three things are your tail wins for much of last year and likely much of this year as well. So let's drill down to those a little bit more. So the AI story, front and center, but it's not going to be just enough for a company to throw out AI in a conference

call and hope they get a bump from it. What do investors really want and need to see from that AI trade to continue the acceleration. I don't actually think a lot of companies really did that. Just said, listen, I know that at one point there were some like a T companies that were changing their names to Bitcoin and they got a big pop. But on the AI story, I've made this point repeatedly. I'll do it again. I know a lot of people are saying that this is the year we need to see the adoption, we need

to see the productivity, we need to see the earnings growth. I mean, maybe, but I don't know that. I know right now, again, on the investment side of things, KAPX is still enormous, hundreds of billions of dollars. Demand still exceeds supply. It's benefiting, as you mentioned, Micron, NVIDIA, Broadcom, on down through the infrastructure, the industrial-type names that are helping this build out. And again, I don't know why all of a sudden, it'll happen. I just, I don't have any evidence for why all of a sudden with the calendar turn, I now need to see Proctor and Gamble have AI productivity and efficiency gains. Maybe, but I don't know.

Fair enough. And then consumer resilience. That, what I was trying to think about, 2025, was one of the key themes to me that admittedly surprised me because if you would have said retail stocks or consumer tilted stocks would have ended the way they did, albeit less than some other names, but still after the April 2nd announcement, pretty amazing what the consumer has done in the face of all this pressure. I think that's exactly right. At the highest level, you can look at the credit card companies, American Express, Capital One, MasterCard Visa, obviously. They're all close to or near record highs. That captures obviously all spending. But at the specific stock level, you've got a couple of things working for you.

Clearly, the low-income consumer, we know this for two years. I don't need to repeat it, the low-income consumer is challenged. But to make the point of how difficult investing is, well, what if I told you the low-income consumer was challenged? We'd better short dollar tree and five below. And those companies are experiencing a tremendous rally. And in the case of five below, which was dealing with shrink and a lot of other problems, they figured out that. They figured that out margins are benefiting.

So that stock is up a whole lot. But you also have turnarounds in Ulta and Decker's and Coles. Names you're obviously very familiar with. And then at the highest level, you have companies that are just resonating. Brand resignation is doing quite well with tapestry and Coach and Ralph Lauren, aspirational, higher income, but still doing exceedingly well. So, yes, you have some trouble in the space. But on balance, the consumer has been incredibly resilient.

Not surprising to me, I might add, because I think, you know, the jobs market, not great, but not terrible either. And as inflation has come down, real income growth has been positive. And I think that's been a powerful support for the consumer in general. And then you're talking about the Fed remaining accommodative. Even if there are not more than one rate cut, you say, well, they're not going to hike. So it's good enough. Yeah, I think that's probably right.

But let's also remember that if you had to put in a hierarchy of importance, the Fed or the AI story, I think the Fed takes a back seat to the AI story. Yes. Now, that's not to say the Fed's not important, but if you told me next year, I could have as expected, 50% or so, whatever, net income growth for broadcom, for NVIDIA, less so for some of the other names. But I could have the type of growth that I'm anticipating with one less Fed cut from the Federal Reserve.

I would certainly take that scenario. I think that story is driving markets down through the industrials, down through the financials, through some of the materials names, the power names, as we know. It's spider web throughout the entire market right now. I think it's far more consequential. But, again, it is helpful to have the federal. Reserve talking about additional liquidity in the market in the form of reserve purchases. They're probably going to cut rates a couple of times.

I caution viewers the Fed walked back some of their rate cut predictions for this year. I think some of that is positioning in front of what might be a super doveish incoming Fed share. And so maybe there's some politics going on there. But again, the point that you made, which I made before that, you're reiterating. I agree. They're very unlikely to raise rates this year. And that's probably more than enough, more than anything else good enough. Okay, so those are some sort of three tent poles that we can work on throughout the show.

Stick with me for a second. I want to send over Christina Parts Nettles because she has a closer look at some of the big moves in the chip names today that we talked about here. Yeah. Hi, Christina. Yeah, hi, Courtney. The semiconductor stocks really just rallying to kick off 2026. Flash memory names, really leading the gains. Sand disk jumping 14% while Micron gaining about 10% right now.

Chips are higher for two particular reasons. First, you've got next week's Consumer Electronics Show, CES, where NVIDIA's CEO, Jensen Wong and AMD, least. Sue and many others are going to be giving speeches, panels, et cetera. So let's just call it the pre-CES trade. But the more immediate driver today is a wave of positive headlines coming out of Asia. You have Chinese AI chip designer Shanghai, Buren, surging 76% in its Hong Kong debut today, showing just so much appetite for anything AI and chip related in China. Then you also have Chinese tech giant Baidu filing paperwork for its own chip unit IPO.

Then you had memory maker Samsung's CEO saying, Samsung is back. That was the quote, signaling the company is closing in on a deal to supply and video with high bandwidth memory. In other words, demand is very strong. And also just two days ago, TSM secured a one-year license from the U.S. government to keep importing American chipmaking equipment into China. All of that, TSM up 5%, all of that fueling this buying right now. ASML, one more name I want to mention because that lithography maker from the Netherlands, Jumping about 9% on those Asia trends and a double upgrade from my Hong Kong analyst, which flipped the stock from sell to buy with a $1,500 price target.

The big thing, though, is lower volume and thin liquidity today are also helping amplify a lot of these moves. And we're also seeing some rotation out of software into chips, too, that was just helping that purchasing. Corny? Good stuff. Christina. Thank you for giving us so much detail on all of that. Do appreciate it. We're going to bring in Robin Hood's CEO Stephanie Guild in MetLife's Drew Maddust. Dan Greenhouse is still with us, of course. I'm going to start with you, Drew, because I think you have some points that sort of piggyback off of what Dan was thinking about the Fed and the likelihood of them, at least to not cut rates going into the new year. Even if we don't know who the Fed chair is, even if we know that there's somewhat of a division on where we should go from here,

how important is the Fed's monetary policy to the new year? Well, I think it's actually quite important because I think if you're talking about the behavior of the markets around a curve steepening versus a curve flattening, a curve steepening is much more supportive of kind of what we're hoping to see in the new year. And, you know, for most of Dan's points, he and I align a lot, but I would say that one thing I'm a little concerned about is actually how sustainable the U.S. consumer story is into the new year. I'm afraid people spent their 2026 tax refunds on Christmas in 2025. Hmm. That is an interesting point. I'm always a little worried about the consumer, but I've been wrong and they've continued to surprise me. Stephanie, I'd love to broaden it out a little bit because you've got a target for us for the S&P 500, which to me looks relatively bullish based on where we sit right now at around 6860. What are you thinking for the new year? Yeah, we have a target of 7,500 for next year. We obviously, that's our base case. We do have a bull and bare range around that of around 7200 to 7800. We're right in the middle of the pack. actually, of all the strategists, and probably similar to what you may hear from others, we are aligned with the view that we will see strong earnings growth from, you know, tech sector, but actually discounting less than what consensus is. Consensus is at 27 percent right now for

2026 earnings growth. And we're sort of pulling that back and saying we expect to see higher earnings growth from some other places. So we're aligned with the view that we will continue to have a steep yield curve. And so we like regional banks, for example, and expect financials to do a bit better than expected. And the consumer story is actually something we've been positive on for about a month now. And a lot of that has to do with the fact that we have this thesis around investing aligned with fiscal policy. And we think 2026 actually will be a year that fiscal policy will be around this theme of keep the customer happy, you know, keep voters happy, and we think the consumer will, you know, will benefit from that in 2026.

So I will say, I've been positive, viewers should know, I've been positive on the consumer for some time now, but to Drew's point, first of all, it's always a good day when Drew Mattis says he agrees with you, Drew is one of the best. But I will sort of meet in the middle here and say that, as you will, know next year, there are some changes here to Medicaid eligibility, SNAP benefit, crackdown, the student loan repayment story. The president talked about garnishing to borrow a fletch phrase, garnishing people's wages. So there's certainly some additional worries next year that weren't in place this year for the low-income consumer. But again, from an investment standpoint, I don't know if it's sufficient to outweigh the real income growth, the stock market being at a record high,

home prices being at a high, and how that balance sheet improvement on the part of the consumers as a whole helps support at least consumption in the immediate. So, Drew, if you have concerns about the consumer resilience being able to continue or withstand everything that they have so far, what would you be doing with portfolio positioning? Well, I think you just have to be more careful in terms of what risk you're taking, what credit risk you're taking. You know, MetLife is obviously more of a fixed income focus shop. And so, you know, credit's important to us. So we want to make sure when we invest, we get paid back.

And so you really need to go and do your deep dives on your names, make sure you're comfortable with risks you're taking. Dan, I very much appreciate it. And I would just turn it around and say, you know, I'm going to have to go back and check all my kind of, like, underlying arguments that I've been making and make sure that I'm actually still comfortable with them because when I hear you're looking at different direction than I am, I worry about that a little bit. You're the best, true.

You're the best. Stephanie, I do want to come back to you just as we sort of. of button up this conversation about the consumer because you're mentioning some oversold names like lulu lemon and on holding and i believe it was ubs and one other well-known firm one had a had a had it was jeffreys jeffreys had a short on and ubs had a buy on and then lulu lemon is obviously down about 45 percent year-to-date potentially some internal missteps and it looks like they're on the lookout at least for a new CEO who knows if we'll get one in 2026 but are those names that you would be looking at potentially buying

them being oversold? Yeah, actually, maybe a few weeks ago, three, four weeks ago. We actually bought it in Robin Hood Strategies, which is our digital advisor. You know, we risk manage our positions, so it's not like it's the biggest position in our portfolio, but it was actually down more. It was down 55 percent, and the earnings were better than expected. And we see this as a turnaround story. The brand is obviously still has a lot of value itself. And so we just saw that as an opportunity. And I think regardless of what happens with the consumer this year, we like the micro story here. And it reminds me a little bit of gap, which had a relatively much better year in 2025 after, you know, a new CEO, after a lot of sort of micro changes.

And we kind of see the same potential in Lulu. Yeah, this is, I think this is exactly right. All year long, people pointed, or I should say, the first half of the year, people pointed to Alta and Decker's and Coles as evidence that the consumer was struggling, ignoring the names like Chipotle that for many years were doing quite well. And to Stephanie's point about Lulu, what Gap has done, what Coles is in the process of doing, et cetera, et cetera, should give you hope that we, the argument is, yes, Allo is a problem for Lulu Lemon, but ultimately it's a fashion issue. And for a lot of retail names, as you all know, it's ultimately a fashion issue. And if they can get the right people in place and they're obviously trying to fix some of those, some of those reform. mentioned fashion issues now. There's no reason to think that the stock can't turn around. There's 10 companies that we can point to in this weak consumer environment that have done exactly that. And so, listen, I'm not saying you should go out and buy it or not. I'm simply saying the weak consumer has not been a headwind to either Gap or calls or any of the names,

Decker's, Alta, et cetera. And Lulu Lemon should, in theory, be no different. Fair enough. Yeah, some micro stores going on. They're in internal issues for sure. Stephanie, before we wrap things up, I would love to get sort of your opinion on some of the net cells that you have here. one of them, Oracle as well. I mean, these have been quite winners, and Christina sort of led us into this segment talking about the chip names. Can you tell us where you are, what you're thinking is on some of these high-flying sort of tech software chip names? Yeah, actually, that's our customer-based activity that we've been seeing. So, yeah, so, and it's, it's very much

in line with the way that we see our customers doing a lot of sort of trading around the core positions that they hold. So, you know, customers still hold, you know, a decent, amount of Nvidia, but they were trimming it on, you know, kind of better improving prices over the last few weeks. Okay, makes a lot of sense. Thank you so much. Dan Greenhouse, Stephanie Gill, Drew Mattis. It's great to have you here. Appreciate it very much and happy New Year to everyone. We are just getting started here on the closing bell up next. Home goods retailers getting a big lift today. We've got those details. Plus top retail analyst Oliver Chen is breaking out his 2026 playbook. The names he is betting on. That is next. We're live from the New York Stock Exchange.

closing bell and CNBC on the first trading day of 2026. Welcome back to closing bell. Shears of furniture retailers bouncing today, Wayfair, R.H and William Sonoma, all higher. After President Trump issued a year-long pause on increased tariffs of upholstered furniture kitchen cabinet, and vanities. Wayfair hire by 6%. It actually had a pretty strong run last year. Well, our age didn't, but is up more than 9% here today and William Sonoma higher by 5. Well, sticking with retail, the holiday shopping rush may be over, but the sector could still be getting a boost as the New York gets underway. Obviously, we just had a long discussion about the

consumer. So here to discuss a little bit more TD Cowan's Senior Retail analyst and managing director Oliver, it's so great to have you here to kick off the new year. So I'd love to just get us started with sort of where you see the general consumer going in 2026. As many of our other guests have said, yes, because the new calendar turned a page doesn't mean everything changed overnight, say for the consumer or otherwise. But I cannot believe how resilient the consumer has been through everything that we had to manage in 2025. What do you think the consumer is up against this year? Courtney, I continue to be excited about the consumer and where the consumer's heading. Holiday period was very good. We raised our estimates to up 45%. Consumers being highly

selective. Also, there's bifurcation where the top 10% account for 50% of spending. That being said, we've always thought the consumer has and will continue to be resilient. Only certain retailers are winning in this environment, however. Walmart's our top idea for the year, and part because it's executing to the high end and high end customers, as well as being a retailer, are very famous for value and middle and low incomes really seeking value. All customers are looking for value. So we're somewhat selected when it comes to stocks. We like Costco on the pullback as well. Overall, we're bullish for the consumer and the health of the consumer. And this is underscored by low unemployment as well as savings and dollars on the sidelines.

Very interesting. I'd love to drill down for just a second into the Walmart name. Obviously, you know it well. Many may not be familiar with John Ferner, who is, coming in to take over that CEO role on February 1st, but you and I sort of know a bit more about his background. People really loved what Doug McMillan has done with the company in his tenure. Are you sort of heartened that John Ferner will continue that playbook and or continue to advance it? It doesn't sound like you're at all worried about a change at the top impacting the performance of the company. What's great about this transition is that it's happening from a position of strength. Doug McMillan made some wonderful strides positioning Walmart

very strongly against Amazon, and particularly driving bricks plus clicks as well as online and AI and other initiatives. John Ferner has a really wonderful background being at Walmart U.S., being a top executor there. He's also a people person, so I think you need to bring both magic and logic as well as technology into this role, and John's well positioned to do that. Walmart U.S. is a real machine in terms of dominating grocery, which is a very hard business. So John's stepping into a position of strength. That being said, there'll be many retail

challenges this next year, including supply chain volatility, the implementation of AI. But Walmart is well positioned in that it's really executed with technology, as well as a core industry-leading grocery business. As we think about technology, Courtney, one topic you and I talk about is digital advertising and retail media. It's a $5 billion business that could be much, much bigger. It could quadruple at Walmart, and that's operating at 60% plus margins. Also, the marketplace. They have 500 million sellers there, and they could grow to many, many more. That will increase the performance at Walmart as well. Not only do you study the marketplace, but I think you shop there, too. I understand you're wearing something special today from Walmart. Yeah, it's open assembly, and I think this is a key

indicator of where Walmart's heading with great clothing, great value, customers trading up and down. So thinking hard about what they're doing with product and apparel and taking share from players like Target and apparel. That's a story too, as well as really appealing to value across all household income. So they've done a really nice job with apparel. And that's the big opportunity for retailers to address needs plus wants, needs and grocery plus discretionary goods as well. I'd love to talk a little bit more about AI in retail. Obviously, it's a topic that's got so much attention in 2025, just generally, AI. And retailers have been experimenting with AI in the consumer front as far as online search recommendations, things like that, personalization of offers.

But what does it mean on the back end for retailers? Is it helping them save money in any way when it comes to employee and labor? And are there actual potential downsides for that because of the amount of employment that retail is responsible for in the country? Yeah, Courtney, I think there's many issues with AI from ethical considerations to rethinking jobs. As we think specifically, numerically about retail, there's three things happening, merchandising, labor, and inventory. On the inventory side, you can cut about 20% of inventory based on reducing safety stock. On the merchandising side, you can increase full-price selling by about two to three percentage points,

which is quite, quite material in terms of selling more full-price goods. And finally, on labor, labor savings of 5 to 8%. So, while these things need to be reinvested into retail, retail is not a high-margined business. So the future is AI playing a role in each of these buckets as well, as well as transforming how employees get trained and thinking about the supply chain. AI has many magical features in terms of consumer-facing and conversational commerce, but it has a lot of supply chain features, specifically inventory management, computer vision,

kicking and packing and saving on packages, which is really what needs to happen all around. So it's going to permeate throughout. What needs to happen for society at large is thinking about the future of labor as well as retailers embracing human connectivity as well simultaneously. That's great stuff. I want to pivot back to Alta because that's one of your top ideas. And for so long it seemed like beauty and wellness. That was all the trend.

That was all the rage. Not that it's fallen apart, but it doesn't see. seem like it's as excitable a topic as it once was. Do you disagree or do you think Alta is just uniquely positioned in the category? I agree with Ulta being very uniquely positioned in a great category. The future in our opinion is wellness as well as beauty and thinking about health and wellness more generally. Alta isn't a nice position because in many ways it's a portfolio manager of beauty ideas. So 50% cosmetics, 20 skincare, 20 hair. And as we think about wellness and all these categories growing. It's nice, sustainable growth. Alta and Sephora are their main players in

specialty beauty. And beauty is quite a healthy and vibrant industry, in part because for, for, it's not great, the ticket prices are so high. That's not great for parents or others spending tons of money on beauty, but it is good for margins. And Alta has margins in the high to mid-teens, and that's a very healthy place. We see continued growth domestically. There's a lot of competition happening in beauty, specifically TikTok and Amazon, but cosmetics, skin care, skinification of hair, wellness, longevity, the future of GLPs. Those are all important, sustainable growth categories, much better categories than apparel at large. Yeah, very interesting stuff. And then lastly, just Costco, and you mentioned that that's partly a pick on the stock pullback. Is that less on fundamentals and more just sort of on the stock price right now and the valuation you feel is appropriate? Or is this also a fundamental story? Courtney, we like both. We like the fundamental story because renewal rates are still at a very high level at 92% plus.

But the stock has pulled back about 20% since the February peak. We see this as a great buying opportunity in particular because the PE ratio and the 40s is a nice place. And Costco is a legendary vertically integrated retailer. Membership fees are the bulk of EBIT. So it's a very different retailer in that it's generating membership fees and bringing members' pleasure. The comp momentum has been very sustainable as well as not very varied, which is a testament to Costco offering tremendous value to the consumer. It also has nice global growth characteristics as well. So the future of warehouse and club, Costco will lead the pack.

We also like BJs and Sam's. We think overall this is a great channel, in part because of value, in part because of vertical integration. And then this magic and logic theme, specifically the Kirkland brand, private lay. and what Costco does so well in terms of just finding stuff that you didn't know you needed when you're in that store. Absolutely, that is key, right? You can get people to buy things they didn't know they needed or didn't intend to buy when they first walked in. Oliver Chen, it was so great to start the new year with you.

Thanks for joining us today. Happy New Year, Courtney. We'll still ahead. Top Tech Place for your portfolio. We'll hear from a strategist with his forecast for the sector this year and where he thinks the AI trade is headed. Clos and Goalry, but be right back. Welcome back to closing bell, the NASDAQ wavering to start the new year. Chip stocks, however, bucking the trend with names like NVIDIA, Micron, and Intel, all seeing some nice gains.

Joining me now for what lies ahead for the tech trade this year is Baker Avenue's King Lip. Yeah, it's a really interesting here moves on a day that is otherwise fairly muted, at least when you look at the indexes, but some decent moves here for some of those names that we just went through in Micron. My gosh, what a year that it put up in 2025. So as we look forward to 2026, what do you think it portends for the chip names in particular? Hi, Courtney. We think 2026 is shaping up to be another banner year for tech. We're looking at earnings growth somewhere in the mid-20s, which is the highest of any sector in the S&P 500. When you combine those fundamentals with an accommodated Fed, historically, you have a 70% win rate for the NASDAQ in January.

So the tailwinds for big tech are simply, we think, too strong to ignore. And when you call the Fed accommodative, how are you defining accommodative, assuming that there is at least one more rate cut? That's right. We're assuming one or two more rate cuts in 2026. But we have, you know, we have a Fed now that's more focus on job growth than fighting inflation, we think. So as long as we don't get too hot inflation numbers, I think the current rate environment is very conducive to the tech sector. Okay. And what about seasonality, whether it's the January effect or otherwise? How do you need to consider that if your portfolio is tilted toward tech? You know, from a seasonality perspective, January is typically a very strong muff for tech. 70% of the time, the NASACs up with an average of 2.3%.

So the first quarter tends to be quite good for tech. So for those of us managers, our overweight tech, we're enjoying days like today. What have recent acquisitions that have happened in the tech sector tell you about the health of the ability for sort of M&A to continue in this space? No, there's been a lot of talk about valuations and concerns about valuation. We actually think the recent acquisitions are a big tell for tech and how the giants are spending their money. We've seen deals from Google, from ServiceNow, Nvidia, SoftBank. Unlike the dot-com era where a lot of these deals were done in stock, for example, AOL's acquisition of Time Warner for $180 billion in stock back in the dot-com, Busty, if you would.

Today, a lot of these deals are being done in cash. So when you have these big tech companies spending cash for acquisitions, they aren't just buying growth. They're actually signaling that they believe their own stock may actually be undervalued. So we still think that's a massive vote of confidence in the sector's longevity. And you point out Alphabet buying Intersect Power for $4.8 billion cash. As an example, an alphabet does look like it ends up on one of your top picks list. Can you drill down on that name for us? Sure thing. I think the company is proving that it's more than just a search box. A lot of doubters were concerned about how AI search is going to take over Google search. But I think the company has successfully weave Gemini into this Google search. They've turned a potential threat into a massive growth engine, we believe. So where you layer in the historical seasonalities, you know, alphabet stock is usually up about 80% of the time, 80% at win rate in January.

And you have rising momentum of tailwinds like Waymo and YouTube. I think Alphabet enters 2026 with a diversified strength of many different tailwinds. That is interesting. Do you think that YouTube is an appreciated asset and alphabet when you're looking at the valuation? You know, relative to the size of the company, you know, Google's revenues is still pretty impactful. We're still seeing a lot of strength in conversion from, from cable into services like YouTube TV. So we still think that's a driving force for the company.

And speaking of driving force, you mentioned Waymo, but another one of your top picks is Albumarl. Can you drill down into that one for us? You know, AlbaMAR is an interesting company. 2026, we believe, is the year of the autonomous vehicle. It will go mainstream. We've basically mixed lithium, the new oil, if you would. So Alamara was a quiet superstar in,

2025, it gains 68%. But we think the real story is in the future. We're forecasting over 200% earnings growth in 2026 and 27. I think the world is going to continue to pivot from manual driving to lithium-powered autonomous vehicles. Interesting stuff. We covered a lot of ground here on the first trading day of 26. Kanglip, thank you for joining us. Thank you. Well, up next, we are tracking the biggest movers as we head into the close. Christina Parsonableness is standing by with that. Hey, Christina. Hi, Courtney. Well, Wall Street analysts are placing their bets for 2026 with upgrades driving big moves in data center infrastructure, Chinese chip names, and AI-powered consumer technology. We'll break down those topics and more

when we come back. Just under 15 minutes until the closing bell. Let's get back to Christina Parts and have us for a look at the key stocks to watch. Hi, Christina. Hi, Courtney. Well, let's start with Verve Holdings, because those shares are jumping right now almost 8% after Barclays upgraded the data center infrastructure provider. Analyst over there say recent volatility really makes it an attractive entry point and potential gains from earnings will, what they say, further drive out performance

for this power name. So Verte, you can see up over 8% now. Shares of Baidu, this is a Chinese tech firm, soaring right now, roughly 15% after announcing plans to spin off its semiconductor unit, that would be Kunun Shin while keeping it as a subsidiary. Kunun Shin will share. from being an internal supplier from Baidu to a major third-party chip seller.

The move comes as Beijing really pushes for semiconductor self-sufficiency. Finally, shares of Warby Parker are up roughly about 4% after Loop Capital named the eyeglass maker, one of its top picks for 2026. Analyst over there, like the risk-reward trade-off of the stock, especially, and this is the big part of the recent partnership with Google to launch AI-powered smart glasses this year. That's what they like, shares up almost 4%. Courtney? Interesting stuff. Thank you so much, Christina. Cheers of Tesla slipping in today's session. What's behind that dip that's coming up?

Plus, wealth enhancements, Aya Yoshioko, standing by to help break down the final moments of this first trading day of 2026. That and much more when we take you inside the Market Zone. We are now in the closing bell market zone. CBC Senior Markets commentator Mike Santoli and wealth enhancements. Ayayyoshioki is here to break down the crucial moments of the trading day. Plus, Philibout, with what's weighing on Tesla shares today and Simomoni, tracking the action in Caterpillar. Mike, we're going to start with you. I mean, what do you think about some of the action here? If you look at the indexes relatively flat, but some big movers underneath,

we've been talking about some of the chip names already today. Absolutely. In fact, the energy is kind of picked up over the course of the day in terms of this rotational energy in the direction of cyclical stocks. So we talked about the chip stocks. That obviously has been this kind of global wave of enthusiasm. The other feature of this is a lot of last year's winners, just absolute top performers for the S&P 500, are getting bid again. It's almost like there's some money reloading in last year's momentum names,

such as even outside of tech, Dollar General, CVS, Tapestry, GE, Huntington Ingalls. So it just seems as if there's just a little bit of a mini chase happening. NASDAQ is the big laggard. Microsoft looks troubled. weighing down on the S&P and the NASDAQ, but in general, it's still in tune with the cyclical rotation we've had in place, really, for a couple months now. Very interesting stuff. Phil, what's behind the move in Tesla here today? Well, the numbers weren't great when we saw them this morning from Tesla for the fourth quarter

deliveries. Not a huge surprise. The company pretty much said, look, we expect the route 422,000 being delivered came in under that, 418,000, 227,000 vehicles. The street was expecting 426. A decline of 15.9% compared to the third quarter. In terms of annual deliveries, 2025 was the second straight year where Tesla reported a drop in annual deliveries. 1.63 million vehicles delivered last year down 8.5% compared to 2024. Quickly take a look at shares of Tesla, GM, and Ford. Why are we mentioning GM and Ford? They report their Q4 sales on Monday.

We'll see what they have to say. And what kind of things we can derive from that in terms of the state of the market. when it comes to autos overall, not just EVs. Cork? Very interesting. We were talking about autonomous vehicles earlier on in the show and the outlook for them for 2026. Phil, thank you so much.

I've sent it over to Seema for more on the move. And Caterpillar, sort of Old Guard or New Guard to Old Guard. Exactly. What's going on with this one? And it's up another 4% today, Courtney. Cat was the biggest Dow gainer in 2025, gaining over 60%. The street seems to be getting more excited around cat's energy and transportation business as hyperscalers.

increasingly rely on its backup generators and gas turbines to speed up access to power. That's a key constraint for data center developers. Wilf Research recently raising its price target on the stock from 470 to 670 share. The average price target for CAT stands at $615. That's where the street kind of sees it going. Caterpillar CEO Joe Creed will be speaking at the Consumer Electronics Show next week, where he's expected to highlight how Caterpillar is capitalizing on this demand, expanding capacity for his energy equipment

that will allow the company to beat out competition from the likes of Cummins. Cord, that's a big story for this year. That is really interesting, Steve. I'm wondering, you know, sometimes we look at John Deere and Caterpillar as sort of proxies for the global economic environment going forward. Any indication of how the street is viewing that

with where Cat is positioned? I know you're talking about the backup generators is sort of a big driving demand there. For so long, China's Caterpillar story has been attached to the global cyclical story specifically China, but this whole narrative around energy and transportation, this absurd and demand they're seeing from data center developers and hyperscalers, that's changed the whole story around Katz. So yes, the story is positive, but it's very much centered around what the

company is seeing in energy and transportation. The other two units like construction and mining, they're growing just not as much. Got it. Interesting stuff. Seema, thanks so much. Mike, I'd love to turn to you just quickly for a moment and get your take on both Tesla and Caterpillar would sort of seem opposite end of the market or, you know, where the world is going. But what do you They are. And the Tesla reversal, because it did start higher, up 2%, seems to be in tune with, and even though this seems to contradict the idea that last year's winners are actually getting bought today, if you look at the retail favorites, retail trader favorites today, some of the downside leaders are Tesla Palantier and App Lovin, all up big last year, and it just feels as if

a little bit of a ringing of the register, they're not as fundamentally supported. Whereas Caterpillar, I mean, you were pointing out Verdev earlier. It's essentially the entire food chain of AI infrastructure. This Michael Sembolist note out of J.P. Morgan today, he does these big think pieces. I mean, the numbers were enormous. It wasn't outright bullish saying the AI trade is up, up, and away from here. But it was just a very detailed look at how power is the main constraint, and the investment levels are going to have to be sustained forever. So I do think that just adds to conviction in names like Caterpillar.

Power story is just so interesting, and I feel like I need to do a lot more homework and understand. I mean, ultimately, that could be the thing that limits how far we get in the near term. Absolutely. It's going to be so, so key. I want to bring in both enhancements, Aiyoscioka. Let's just talk about where we're starting off the year in 2026, the economic backdrop. We've been talking about the Fed being accommodated, but there's also been some debate about what's going on in the labor market. And one of the earlier shows I had one of the traders, they're a little worried about what's going on in the labor market.

while others say, hey, the labor markets are just weak enough to keep the Fed accommodative. What do you make about the economic landscape here going into 2026? I am. Sure. Hi, Courtney. Happy New Year to you. In terms of the labor market, we think it's been a slow and steady sort of normalization in the labor market. We got sort of, you know, after COVID, there was just so much demand for labor. But now we're sort of, you know, getting back to a more normal sort of labor and unemployment rate. And we feel like that's going to continue. It's been sort of a slow and steady sort of uphill battle in terms of the unemployment rate, getting closer to that, you know, four and a half, five percent level that the Fed sort of worried about. But it's been nice that

the Fed has been paying attention to that and has been a little bit more accommodative for markets. And so with that backdrop in mind, what do you think the setup looks like for equities this year? Sure. I think equities are going to be relatively strong. It's a midterm election year, so we do know that it is a sort of lower than average kind of a year. We think maybe mid-single digits in terms of a total return. But earnings growth is strong. It's expected to be at least 10%. And so we continue to think that the equity market is going to hold up in 2026.

Got it. And AI, we obviously have to get your take on AI. It just seems to be one of the driving themes that will continue into 2026. And just because the calendar turn doesn't mean a lot is next. necessarily changed in AI. We've seen some sort of notable gainers today, I was going to say this morning, but here we are almost in the afternoon in sort of that space that is just grinding higher. Absolutely. And it's just going to get louder next week as we get CES and the Consumer Electronics Show and more headlines out of that. You know, we still think that there's still a little

bit more to be had in that infrastructure phase for AI. But I think investors are also turning their attention on who the beneficiaries really are going to be over the long term, over the next three, five, ten years, and not just the infrastructure plays. So we'll see how that plays out in 2026. And Mag 7, it feels like a theme of several years ago, but you still have got ownership there. Does that feel like a place you want to hold on to in 2026? Absolutely. I think when it comes to those sort of large cap, mega-cap tech names, they still command such a large portion of the overall earnings growth in the S&P 500. They're well-diversified, solid balance sheets. So we don't want to necessarily, you know, move away from them. We still want exposure there.

But we don't necessarily think those are going to be the home runs of 2026. And then just before we let you go, you're talking about additional stocks to highlight two of them, Lowe's and Visa. To me, shout out as potential plays on the consumer. Are you not worried about the consumer's resilience going into another year potentially full of pressure? Absolutely. I think the consumer's really been under pressure in 2025. We think they're going to get some relief in early 2026 with the tax bill. And we think Visa and those are two great ways, solid, high-quality companies to play that sort of consumer rebound, at least in early 2026. Thank you so much. Ayah, it was great to have you. And Mike, I want to turn to you as we're just about heading into this closing bell here. Energy, the leading sector of today, Halliburton, up four and a half percent. What is this a plan? in the commodity space?

They actually, a few days ago, you started to see a little bit of a perking up of energy. Crude stop going down. I do think there's a general sense out there. And it's part of that cyclical trade, which is kind of global tailwind, a reflationary impulse, at least the way the market sees. And I see it kind of moving toward this moment where we might have a little bit of a test of this. Everyone's pretty much on board. If you look at the strategist's notes, it's going to be a broadening out of earnings.

It's going to be a little bit of a re-acceleration of the underlying economy. because of the tax bill and all the rest of it. And the market has very much positioned for that and has kind of bid these stocks up going into it. And so we're going to obviously have to see how the GDP, the earnings numbers come through if it does affirm that point of view. And then we have to know if we've already paid up for it

because you just never know what's already priced in. And we've had some sell-the-news responses to the past two earnings season, even though they were strong. Very interesting stuff. It has been quite a first day of 2026, While the markets are relatively flat, we have been strengthened to the close. The Dow's induction is higher by 6 tenth of a percent. The NASDAQ, the lagger, closing just about flat to slightly to the downside.

That does it for the closing bell. Let's send it over to overtime with Morgan Brennan and John Ford.