The Bull Market Backdrop in Question: The Investment Committee Weighs in 10/20/26

West Pharmaceutical Services

• Josh Brown · Ritholtz Wealth ManagementBullish

  West Pharmaceutical's GLP-1 exposure and margin gains make it a breakout buy.

  West makes rubber stoppers, seals, plungers, syringes and auto-injectors that pharma and biotech companies buy, including for GLP-1s. High-value components grew 19% in the latest quarter and are now 49% of sales. GLP-1s are about 18% of revenue, and gross margin rose 200 basis points to 37.7%. He says the sales are high-value, global and somewhat insulated from the economy. The stock is breaking out toward its highs from almost five years ago. He had called it a breakout on October 1 and says he should have bought then. He added it to his portfolio.

  “West Pharma had been a boring stock. Now it's a stock on the verge of an even bigger breakout. I added it to my portfolio.”at 19:33

• Joe Terranova · Virtus Investment PartnersBullish

  West Pharmaceutical is a strong company with accelerating revenue from GLP-1 and peptide demand.

  Joe agrees with Josh that West is seeing accelerating revenue growth. He attributes it to obesity drugs, peptides, and demand for better equipment and technology in medical services. At a market cap of about $27 billion he calls it a very strong company.

  “Josh is correct. They're seeing an acceleration in revenue growth, and it is based on not only obesity drugs, the growth of peptides... Very strong company, only a $27,000,000,000 market cap.”at 19:52

Thermo Fisher Scientific

• Josh Brown · Ritholtz Wealth ManagementBullish

  Thermo Fisher is breaking out to records as the largest life-science tools company; bullish.

  Thermo Fisher has risen 19% since his call last November. It is the largest company in life-science tools, with about $46 billion in trailing revenue. Revenue rose 10% on its last report. The stock gapped out of a long base at the end of July, stayed above $5.55, and broke to a new record. RSI is 64. He calls it a very strong stock and says a weekly close below $600 would signal the uptrend may be ending.

  “...it went up 19% since the call. Thermo Fisher is the largest company in life science tools.”at 35:23

• Jim Lebenthal · Cerity PartnersNeutral

  Thermo Fisher breakout is real short term, but its premium multiple makes re-entry hard.

  He agrees the stock is breaking out in the short term. A five-year chart shows it went nowhere for a long time before that, and the stock was digesting a big merger. He calls it high quality but says it trades at a premium multiple, so it will be hard to get back in at this price. He concedes Josh may be right.

  “It is obviously breaking out, Josh, in the short term. But if you look at, like, a five year chart of this thing, it went nowhere.”at 36:35

United Airlines Holdings

• Joe Terranova · Virtus Investment PartnersBearish

  He prefers Delta; United's fuel exposure and capacity growth will limit fare gains.

  Terranova prefers Delta because of fuel concerns. For United to offset elevated fuel costs, fares would need to rise about 25 to 30% from current levels. Capacity keeps growing, so United would be unable to realise those higher fares even if it grows. Over the last 52 weeks United is down about 1 to 2%, while Delta has done better.

  “I like Delta better than United, and it's because of fuel related concerns. You need to see fares about 25 to 30% higher from here if fuel stays elevated for United. The problem is capacity continues to grow.”at 42:00

• Jim Lebenthal · Cerity PartnersBullish

  United is a good, attractively priced airline that should rally on lower oil prices.

  Lebenthal says United is a good airline that is attractively priced compared with Delta, which has been the group's winner. The stock is a play on fuel costs. Any reduction in oil prices, especially a lasting one tied to the Persian Gulf, would help United's margins and should lift the stock.

  “United Airlines is actually a good airline. I think it's attractively priced. And if you get any reduction in oil prices, any any piece, you know, real lasting piece in the Persian Gulf, United Airlines should take off”at 42:33

Apple

Across the shows: 6 speakers in other episodes, 1 bullish and 3 bearish calls, past 30 days

• Jim Lebenthal · Cerity PartnersBearish

  Apple's multiple is too high to own a full market weight; he is at half weight.

  He says you do not have to own a market weight of Apple at its current multiple. He holds half a market weight and sold part of it before the last two earnings releases, when the stock was around $230 and it has since risen. He uses this as an example of how the market can be held below index weight without owning all of the mega caps.

  “take Apple. You don't have to own a market weight of Apple at this multiple... I am at half market weight of apple.”at 12:55

UnitedHealth Group

Across the shows: 1 speaker in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Kevin Simpson · Capital Wealth PlanningBullish

  UnitedHealth is improving after earnings; the firm added to its position again.

  The firm has added to UnitedHealth three times in the past month after emptying it last year. Last week's earnings validated re-entry: earnings rose, Medicare ratios improved, and the full-year guide was raised. Problems are not all in the rearview mirror, but he only needs improvement. The firm owned the stock for more than ten years and hopes that will repeat, and says it is trending in the right direction.

  “We added to UnitedHealthcare again... Their earnings were up. The Medicare ratios were up. Their guide for full year was up.”at 20:36

Eli Lilly and Company

Across the shows: 1 speaker in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Joe Terranova · Virtus Investment PartnersBullish

  Eli Lilly has dominated the GLP-1 race and is diversifying; he keeps owning it.

  Lilly is the clear winner in GLP-1 and is diversifying the model with about $20 billion of acquisitions in 2026. Its market cap is about $1.2 trillion, up from around $750 billion two years ago, while Novo Nordisk, which was near $600 billion in June 2024, is now under $200 billion. He says the competition has been annihilated and that Lilly keeps setting all-time highs despite people who said it could not keep appreciating at this rate. He continues to hold the stock.

  “Lilly has absolutely annihilated the competition... They are in the clear position as the winner for GLP one and the diversifying. I continue to maintain ownership.”at 22:30

Rocket Companies

• Josh Brown · Ritholtz Wealth ManagementBearish

  Rocket is well positioned but cannot overcome the housing recession; he sold most of it.

  He sold most of his stock a long time ago and kept a stub, hoping rates would fall and let mortgage companies recover. He says the company is fantastically positioned, but that is not enough to overcome the housing recession. He has spoken with the CEO, and there is nothing they could do differently. Mortgage plays will come back into favor at some point, but not today. He describes the stock as a dead horse.

  “I think this is a fantastically positioned company, but it's not good enough to overcome the housing market recession that we're experiencing.”at 27:20

Lowe's Companies

• Kevin Simpson · Capital Wealth PlanningBullish

  Lowe's housing refresh cycle is a 2028 story; hold for the replacement wave.

  Kevin argues that the housing super cycle is a home-refresh cycle. During COVID people refreshed their homes, and six to eight years later they need to do it again. That cycle would benefit Lowe's as well as Home Depot, and he says holders should expect a 2028 story, not 2027, even if rates do not fall.

  “...there's a super cycle that takes place in housing... So I'd say if you're holding on to Home Depot or Lowe's, it's not a 2027 story, but 2028.”at 27:51

The Home Depot

• Kevin Simpson · Capital Wealth PlanningBullish

  Home Depot's housing refresh cycle is a 2028 story; hold for the replacement wave.

  Home Depot is an inverse play on rates, and he hopes Jim is wrong and rates come down. Even if they do not, housing has a super cycle: during COVID people refreshed walls, floors and appliances, and six to eight years later they need to do it again. So for Home Depot or Lowe's holders, the payoff is a 2028 story, not a 2027 one.

  “...there's a super cycle that takes place in housing... So I'd say if you're holding on to Home Depot or Lowe's, it's not a 2027 story, but 2028.”at 27:51

Live Nation Entertainment

• Josh Brown · Ritholtz Wealth ManagementBullish

  Live Nation is a crown-jewel live entertainment asset he will never sell.

  Live Nation is a one-of-a-kind publicly traded way to play the idea that people want to be together and go to shows. It is the best in the world at managing venues, now building venues, and handling ticketing, artists and merchandise. He has owned it for a long time and calls himself a never-sell. The stock has been downgraded many times and he does not pay attention to downgrades.

  “This is a one of a kind crown jewel live entertainment asset. There is no other publicly traded way to express this idea that people like to be together.”at 29:29

Spotify Technology

• Kevin Simpson · Capital Wealth PlanningBullish

  Spotify is a global audio alternative to Netflix with runway; the stock should move higher.

  He says the firm has long liked Spotify as an alternative to Netflix in audio streaming. It is a much more global company with a lot of runway left. He is surprised the stock has stalled as much as it has and does see it moving higher. He thinks Morgan Stanley's $640 target might be a bit extreme.

  “I think we've always liked this name as an alternative to Netflix in the streaming space for audio. They're much more global company. There's still a lot of runway here.”at 30:18

Waters

• Josh Brown · Ritholtz Wealth ManagementBullish

  Waters is an unbelievable life-science tools business with beats and raised guidance; buy.

  Waters makes the instruments and software labs use to separate and identify molecules. Q2 revenue was $1.65 billion, adjusted EPS was $3, and both beat the street. Management raised full-year EPS guidance. The stock is up 57% from its March low and is a best-stocks pick, with a stop tied to early October lows. It reports November 3.

  “It's an unbelievable business. Q two revenue was 1,650,000,000. Adjusted earnings of $3. Both beat the street. Management took that opportunity to raise full year earnings per share guidance.”at 34:33

Space Exploration Technologies

Across the shows: 6 speakers in other episodes, 3 bullish and 2 bearish calls, past 30 days

• Kevin Simpson · Capital Wealth PlanningBearish

  SpaceX's post-IPO story needs monetization proof not coming this quarter; he owns it but not for 2026.

  Simpson says the options market is pricing the report correctly, with only a tepid move after the report. The August enthusiasm came from the first earnings report, which he says is not a repeatable catalyst. He argues SpaceX, like many recent listings, must prove it can monetise its story, and that this will not happen in the current quarter. He holds the stock but does not expect it to work in 2026.

  “Scott, we own SpaceX, but not for 2026. ... They need to prove monetization, and they're not gonna be doing it this quarter.”at 39:02

Netflix

Across the shows: 1 speaker in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementBearish

  Netflix's layoffs and exits of three top executives bode poorly for its upcoming report; he trimmed.

  Brown sold half his remaining position and keeps the other half. He does not think Netflix's financials are deteriorating, noting about $3 billion in profit last quarter. The problem is the company's recent wholesale changes: it cut about a thousand jobs and removed content chief Bela Bajaria and film studio head Dan Lin along with other decision-makers. He argues companies with a great report on tap do not make such abrupt moves, so he went into the report lighter. He would buy more if the stock is unfairly punished for a good report.

  “companies that have a great report on tap aren't announcing snap layoffs and getting rid of the three most important people at the company. So for that reason, I wanted to go into the news tonight lighter.”at 40:41

CME Group

• Kevin Simpson · Capital Wealth PlanningBullish

  CME should benefit from rising volatility and new product launches over the next two quarters.

  Simpson argues CME's trading revenue depends on volatility. If volatility rises into year-end and early next year, trading will increase. He points to a wider product set, including daily expirations and single-hour expirations, as further drivers. He does not think it must be bought before earnings but calls it a good name for the next two quarters.

  “CME Group is gonna trade on volatility. If we see more volatility heading into the end of the year and into the first quarter of next year, it's gonna translate to more trading. There's a lot more products, daily expiration, single hour expiration”at 42:57

Cboe Global Markets

• Joe Terranova · Virtus Investment PartnersBullish

  Cboe is breaking out on its six-month chart; he bought it in June and calls it the exchange to own.

  Terranova says he bought Cboe in June, at what he states as $2.63 (the price looks like a transcription error for a much higher figure). He cites the stock breaking out on a six-month chart and the extension of options trading hours as support. Scott Wapner then calls it the one exchange to own.

  “I bought CBO back in June at $2.63. The stock is breaking out. If I'm speaking, if you could show a six month chart on it, we're extending hours for option trading.”at 43:19

Cleveland-Cliffs

Across the shows: 1 speaker in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Jim Lebenthal · Cerity PartnersBullish

  Cleveland-Cliffs has more upside than Steel Dynamics because of its deleveraging path.

  Lebenthal concedes Steel Dynamics has the better balance sheet. He argues Cleveland-Cliffs has a strong path to deleveraging, and that the gap between analyst estimates for next year's EBITDA and where analysts think the company will actually land is wide. He says he is not calling Steel Dynamics a bad stock, but that Cleveland-Cliffs has more potential to make money.

  “there's a very strong path to deleveraging at Cleveland Cliffs that you could drive a truck between analyst estimates for next year EBITDA and where they think they're gonna come in. ... you have the potential to make a lot more money in Cleveland Cliffs.”at 44:52

Steel Dynamics

• Joe Terranova · Virtus Investment PartnersBullish

  Steel Dynamics beats Cleveland-Cliffs on balance sheet, capital allocation and multi-year returns.

  Terranova prefers Steel Dynamics. He says it has a better return to shareholders through its capital allocation strategy, better debt levels and a much larger market value of around $35 billion, versus about $7 billion for Cleveland-Cliffs. He calls Cleveland-Cliffs a volatile small-cap turnaround story. He acknowledges that Steel Dynamics' aluminium business was the problem that day, but says Cliffs does not face a comparable challenge. He says Steel Dynamics has clearly rewarded shareholders over five and ten years.

  “better return to the shareholder in terms of capital allocation strategy, better debt levels, and rewarded on a five, ten year basis clearly.”at 45:27

Amazon.com

Across the shows: 9 speakers in other episodes, 4 bullish and 3 bearish calls, past 30 days

• Josh Brown · Ritholtz Wealth ManagementBullish

  Amazon's higher lows and highs point to a breakout toward its summer high on earnings.

  Brown bases his view on the chart: Amazon has a pattern of higher lows and higher highs and is heading back toward its earlier summer high. He expects it to break through when it reports earnings. This is a technical call with no fundamental evidence.

  “The stock has been making a pattern of higher lows and higher highs headed back toward the earlier summer high, and I think we'll break through when they report earnings.”at 46:20

US stock market outlook

• Josh Brown · Ritholtz Wealth Management

  Rotation away from failing leaders keeps the bull market alive; broadening beyond AI is key.

  Over the last year, when leadership fell (semiconductors being the latest example), money moved into other groups, and that rotation has kept the market up. He points to growth in healthcare that has nothing to do with the semiconductor, memory and neocloud worries. He agrees AI is still the biggest trade but says it is not the only one, and that broadening is needed for the bull market to hold into year end.

  “...when the leadership falls, so semiconductors... we find other things to buy. The rotation has kept us alive for so long now.”at 4:15

• Jim Lebenthal · Cerity Partners

  Equal-weight and cap-weight S&P are tied YTD; broadening has happened all year.

  The equal-weight S&P 500 and the market-cap-weighted S&P 500 are in a dead tie year to date. Equal-weight has outperformed at many points and underperformed at others, so leadership has rotated all year. He is about 36% in tech versus 40% for the index and overweight healthcare, energy, metals and agriculture. He argues that you do not need to match index weights, and the broadening is more than defense.

  “The equal weight and the market cap weighted S and P 500 are in a dead tie year to date... The new composition has been taking place all year.”at 7:21

US Treasuries & yields

• Josh Brown · Ritholtz Wealth Management

  Higher rates help stocks via flight to mega caps and money-market income; falling rates would be scarier.

  He says higher rates push money into companies that don't care about rates, like Google and Apple, which are about 40% of the stock market, as a flight to safety. Higher money-market yields boost upper-end consumer spending, which pushes investors back into the mega caps and lifts the S&P. Rates falling for the wrong reason would be scarier than rates at about 5%, and the recent decline is an overshoot correction rather than a sign that things are fine.

  “The higher rates help the market... It's a flight to safety. Everybody buys the companies that are impervious to higher rates, and those happen to be 40% of the stock market.”at 14:50

• Jim Lebenthal · Cerity Partners

  Around 5.1% 10-year yields are fine; he expects a 4.8%-5.2% range.

  The 10-year fell from about 5.3% to 5.1%, which he reads as an overshoot unwinding, not a sign of economic weakness. Stocks have adjusted to 5.1%, and nobody should call that a nosebleed level. Yields spike and then return to a range, so he would not be surprised to see 4.8% to 5.2%. Stocks that struggle when rates rise have adjusted. If the S&P keeps climbing he would worry again, and a drop below 5% would bring hand-wringing over the economy even though it would just be a new range.

  “I'm saying yields are fine where they are. 5.1%... I wouldn't be surprised if we're settling into a range between four point eight and five point two percent.”at 17:45

AI chips & semiconductors

• Joe Terranova · Virtus Investment Partners

  AI semiconductor trade is the opportunity; positioning is washed out, setting up a November-December rally.

  Hedge funds have cut exposure over the last month, so positioning is light and the setup looks good for a November-December rally. CoreWeave rose despite bad South Korea news, which he reads as a sign that enough deleveraging has happened in the AI semiconductor trade to rebuild positions and close out 2026 strong. He says the market swings between fear and greed with nothing in between, and that low-volatility stocks are performing best in 24 months, so the market is defensive. He sees the opportunity in the pure AI trade (semis, memory, optical) that has stalled since June.

  “I think the opportunity is in the AI trade... I still think we set up nicely for that November and December rally.”at 2:27

Earnings & corporate profits

• Josh Brown · Ritholtz Wealth Management

  S&P 500 earnings and revenue are beating estimates; the long bull thesis is intact.

  Josh cites S&P 500 earnings expected to grow 24.6% in the current season, 6 basis points above estimates at the season's start. 79% of reporting companies beat estimates. Revenue is up 12.3% year over year, 20 basis points above estimates, so this is not just buybacks. Profits are expected to rise in 10 of 11 sectors, including tech, materials and energy. He says the long thesis is intact and earnings are surprising to the upside.

  “Profits for the S and P 500 are expected to grow 24.6% in the earnings period that we're in right now... So that part of the long thesis is intact. Earnings are good and surprising to the upside.”at 4:47

AI: overall outlook

• Kevin Simpson · Capital Wealth Planning

  AI earnings will be powerful in 2027, with a split between profitable AI firms and leveraged borrowers.

  He believes Jim's thesis that AI-driven earnings peak in 2028 is believable, as long as the economy stays decent, with 2027 remaining very strong for AI and technology. He expects a bifurcation between very profitable AI businesses and companies that borrowed and rely on the AI revolution. Last week there was a repricing of that second group, which he calls a reality check. He is only about 25% in tech and wants broadening, but people will always pay up for innovation, so he will not abandon the tech trade.

  “I think '27 is gonna have tremendously powerful earnings for AI and for technology... there will definitely be a bifurcation, haves and have nots.”at 9:11

US growth & recession risk

• Jim Lebenthal · Cerity Partners

  The economy is not slowing; Atlanta Fed GDP at 3.5% shows the yield drop is not weakness.

  The Atlanta Fed GDP estimate was revised to 3.5% real growth for the current quarter. Weekly jobless claims and industrial production show no sign of weakness. He argues the decline in the 10-year yield from 5.3% to 5.1% is the removal of an overshoot and not a sign of slow economic activity or a bad economy.

  “Look at the numbers. The Atlanta Fed GDP today came out with a revised estimate for this quarter, 3.5% real GDP.”at 16:14

AI infrastructure & data centers

• Jim Lebenthal · Cerity Partners

  AI spending is not at peak and this does not look like 1999; data centers pay back fast.

  He believes AI spending is not at peak. He admits he could be wrong and says the market will show it. He says the situation does not feel like 1999 because data centers are still profitable the moment they come online. If spending is not near a peak, and that means more than a year away, then smaller players like CoreWeave and Oracle can have time to work through their troubles.

  “I've said today... I'm a believer that we are not at peak spending in the AI trade. I could be wrong. We will see. But this does not feel like 1999 to me.”at 16:54