Name: How stocks put up their best quarter in 6 years
Uploaded: 2026-06-30T17:07:45+00:00
Duration: 621 s

Speakers

Joe Terranova — Senior Managing Director, Virtus Investment Partners

Jim Lebenthal — Partner, Cetera Investment Management

Jason Snipe — Founder, Odyssey Capital Advisors

Josh Brown — CEO, Ritholtz Wealth Management

Summary

The Investment Committee reviews the market's best quarter in six years and debates second-half outlook. Momentum factor posted its best quarter ever, while AI capex spending drove equal-weight tech and semiconductors. The panel sees continued momentum and AI beneficiary outperformance, but also expects a broadening rally as non-tech earnings catch up, favoring left-behind sectors like healthcare and investment banking.

Momentum factor had its best quarter ever, up over 40%, and Joe Terranova uses it as his compass.
Jim Lebenthal expects a broadening rally driven by non-tech earnings catching up in Q3/Q4.
Josh Brown highlights equal-weight tech ETF (RSPT) up 41% YTD, powered by data center capex beneficiaries.
Mag-7 equal-weight performance is negative, as investors rotate from check-writers to capex recipients.
Jason Snipe sees opportunities in left-behind areas like healthcare and investment banking.
Semiconductors are expected to continue performing fabulously even amid the broadening.
The panel generally expects the AI capex theme to persist with no imminent reversal.

Ideas

Joe Terranova Senior Managing Director, Virtus Investment Partners 0:30

Momentum factor leads second half

Momentum factor had its best quarter ever, up over 40%. Joe runs a 50% quality/50% momentum strategy and is considering increasing momentum weighting because momentum has been outperforming. He views momentum as his compass for the second half and 2026, believing the momentum-led market will continue despite June choppiness tied to Mag-7 weakness.

Jim Lebenthal Partner, Cetera Investment Management 2:55

Broadening earnings catch-up drives rally

The rally is broadening on the back of a broadening of earnings. The rest of the S&P 500 (the 493) is projected to catch up with technology earnings growth in Q3 and Q4, so rather than trying to time rotations, he favors the catch-up trade fundamentally.

Jim Lebenthal Partner, Cetera Investment Management 3:14

Semiconductors continue to outperform strongly

Even as the rest of the market catches up, semiconductors will continue to perform fabulously. Chips still have strong earnings momentum and remain a standout sector.

Jason Snipe Founder, Odyssey Capital Advisors 5:24

Healthcare spike interesting for broadening

Healthcare is one of the areas left behind that shows a spike and is interesting to him for broadening exposure in the second half, as he looks to rotate into previously underperforming sectors.

Jason Snipe Founder, Odyssey Capital Advisors 5:28

Investment banking attractive for second half

Investment banking is another left-behind area with an interesting story; he wants to add exposure as part of his second-half broadening strategy.

Josh Brown CEO, Ritholtz Wealth Management 5:56

RSPT surging on AI capex spending

The top stocks in the momentum factor are all data center capex beneficiaries. The equal-weight tech ETF (RSPT) is up 41% YTD because investors are selling the check-writers (Mag 7) and buying the companies receiving the capex spending. The capex plans are ongoing and can't easily stop, making it hard to see a reversal in the earnings growth powering this equal-weight tech index.

Josh Brown CEO, Ritholtz Wealth Management 8:48

Avoid Mag-7 as check-writers get sold

On an equal-weighted basis, the Magnificent Seven are negative and detracting from the S&P 500. They are the check-writers funding AI capex, while investors rotate into the beneficiaries of that spending. This relative underperformance is expected to persist as the capex cycle continues.

How stocks put up their best quarter in 6 years

Summary

Ideas

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