Talk of the Tape: Is more broadening ahead for 2026
2025-12-30_20-35 • 4m 48s
Mike Santoli (Senior Markets Commentator)
00:00.000
Our
talk
of
the
tape,
where
we
ask
whether
the
markets
two
months
sideways
action
means
the
bull
market
is
stalling
or
merely
resting.
Let's
ask
Trivaria,
it's
Adam
Parker,
Wilmington
Trust,
Megan
Chu,
and
Wells
Fargo's
Scott
Renne.
Adam
and
Megan,
our
CNBC
contributors.
And
Mike Santoli (Senior Markets Commentator)
00:15.880
thanks
to
you
all
for
helping
to
wrap
up
the
year
for
us.
And
Megan,
let
me
start
with
you.
I
mean,
the
S&P
is
right
where
it
was
a
couple
of
months
ago.
There's
been
some
subtle
rotation
in
favor
of
cyclic
goals.
So,
it's
kind
of
slowed
down,
but
it's
it's
obviously
still
in
a
Mike Santoli (Senior Markets Commentator)
00:30.480
decent
position.
Is
this
giving
us
any
kind
of
a
preview
for
what
you
expect
into
next
year?
Meghan Shue (Head of Investment Strategy)
00:36.480
Thanks,
Mike.
I
think
it
is.
I
think
as
we
look
towards
next
year,
we're
expecting
a
little
bit
more
volatility
than
we
saw
at
least
for
the
first
two
thirds
of
this
year.
A
little
bit
more
focus
on
the
source
of
spending
when
it
comes
to
tech.
We
started
the
year
where
it
was
Meghan Shue (Head of Investment Strategy)
00:53.440
really
just
all
about
the
AI
trade
and
investors
didn't
really
weren't
really
deterred
by
the
amount
of
spending
coming
from
those
companies,
but
now
it's
really
about
whether
is
that's
being
spent
from
cash
or
debt
markets
are
being
tapped.
So
I
think
that's
a
shift
that
we're
Meghan Shue (Head of Investment Strategy)
01:10.320
seeing.
I
think
that
will
lend
itself
towards
more
of
a
focus
and
better
performance
from
higher
quality
names,
which
really
lagged
last
year.
But
I
do
think
to
your
original
setup,
I
think
this
is
a
healthy
sort
of
churn
as
we
reset
for
the
next
leg
of
the
gold
market,
which
we
Meghan Shue (Head of Investment Strategy)
01:27.560
expect
to
continue
outside
of
what
we
still
have
as
a
decently
high
recession
risk.
Mike Santoli (Senior Markets Commentator)
01:33.640
Right.
Yeah,
so
that's
the
interesting
maybe
contrast
there
or
at
least
just
the
position
of
the
macro
outlook
with
how
the
market
is
set
up.
Adam,
I
feel
like
you
always
have
a
pretty
good
feel
for
what
the
market's
rewarding,
what
themes
are
kind
of
coming
out
of
the
action
in
Mike Santoli (Senior Markets Commentator)
01:50.200
terms
of
how
what
it
shows
us
about
investor
preferences.
So
what
would
you
say
right
now
are
kind
of
top
of
mind
in
terms
of
what
the
market
is
is
revealing?
Adam Parker (Founder & CEO)
02:01.240
Hey
Mike,
thanks.
Yeah,
I
mean
I
I
think
a
lot
of
it
comes
down
to
margin
expectations
and
estimate
achievability.
And
the
reason
I
say
that
is,
we
just
came
through
a
stretch
in
the
last
six
months
of
2025
where
the
penalty
for
a
company's
missing
estimates
was
really
harsh
Adam Parker (Founder & CEO)
02:18.480
versus
history
and
much
worse
than
the
reward
for
beating.
So,
and
it
didn't
matter,
expensive
stocks
that
missed
went
down
the
same
amount
as
cheap
stocks
that
missed.
So,
it
wasn't
valuation
that
matter,
it
was
missing
that
matter.
So,
we
kind
of
are
looking
now
kind
of
Adam Parker (Founder & CEO)
02:34.200
scrubbing
the
2026
estimates
and
they
look
pretty
optimistic.
So,
I
think
the
problem
or
the
challenge
as
we
kind
of
rotate
the
clock
a
little
bit
is
I
think
the
probability
of
multiple
expansion
is
probably
lower
than
the
probability
of
multiple
contraction
and
we
have
high
Adam Parker (Founder & CEO)
02:50.240
estimates
and
we
have
a
bullish
set
of
sentiment.
So,
it's
not
the
same
setup
as
it
was,
you
know,
6
9
months
ago.
And
Mike Santoli (Senior Markets Commentator)
02:59.120
so
Is
there
a
way?
I
mean,
I
need
to
see
you're
scrubbing
the
numbers,
but
are
you
basically
trying
to
isolate
where
the
earnings
achievability
seems
to
be?
Or
is
you
just
kind
of
looking
at
the
trajectory
of
of
forecast
and
and
figuring
that
the
revision
story
is
going
to
tell
Mike Santoli (Senior Markets Commentator)
03:13.720
you
what
you
need
to
know?
Adam Parker (Founder & CEO)
03:15.920
Well,
you
know
we
do
pretty
quantitative
stuff
at
at
Triview
Research.
So,
one
of
the
things
I
like
to
do
is
look
at
what
we
call
the
incremental
margin
or
the
margin
on
revenue
above
today's
level.
And
we
do
that
by
doing
a
regression
between
the
change
in
sales
and
change
in
Adam Parker (Founder & CEO)
03:30.800
income.
We
see
what
the
company
usually
could
do
for
their
margin
on
new
revenue.
And
we
compare
it
to
what's
in
the
estimates.
We
use
that
as
sort
of
a
barometer
for
estimate
achievability.
Obviously,
margins
come
down
to
revenue
and
that's
that's
pricing
and
mix.
They
come
Adam Parker (Founder & CEO)
03:45.800
down
to
costs
which
are
labor,
materials,
logistics,
currency,
depreciation,
etc.
I'm
a
little
worried
that
that
you
got
mid-teens
earning
expectations.
A
lot
of
companies
expecting
margin
expansion.
I
get
AI
productivity
is
going
to
go
from
hitting
5%
to
maybe
15%
of
the
S&P
Adam Parker (Founder & CEO)
04:03.600
500,
but
the
bar
is
not
as
low.
And
what
was
unusual
about
2025
is
estimates
came
up.
I
mean
they're
higher
now
for
2026
and
they
were
in
the
middle
of
the
year.
That's
a
pretty
unusual
pattern,
as
you
well
know,
and
have
been
writing
about
for
years.
So
I
I
think
that
the
mix
Adam Parker (Founder & CEO)
04:19.760
here
is
company
by
company.
I
think
healthcare
estimates
do
look
more
cheable
than
average.
I'm
a
little
bit
worried
that
in
the
consumer
discretionary
sector
as
an
example,
every
single
industry
in
there
is
expected
to
have
accelerating
revenue
despite
the
fact
we've
got
very
Adam Parker (Founder & CEO)
04:34.800
low
confidence
if
you
look
at
Michigan
consumer
and
other
things.
So
I
I
I
think
it'll
come
down
to
stock
by
stock,
but
I'll
say
healthcare
looks
a
little
better
to
me
than
discretionary
as
sort
of
um
uh
you
know
a
first
a
first
glance.
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