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Halftime Report
6,100 in Sight for the S&P 12/9/24
00:44:31
Scott Wapner and the Investment Committee debate the run for stocks as 6,100 is in sight for the S&P 500. Plus, Reddit hitting all time highs, it’s our Chart of the Day, shareholder Josh Brown calls in with his thoughts. And later, Steve Weiss reveals his latest portfolio moves. Investment Committee Disclosures
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- [00:01]
Scott Wapner
Support for this program is provided by Chevron. The Anchor offshore platform is utilizing breakthrough technology to enable us to produce oil and natural gas in the US Gulf of Mexico at pressures up to 20,000 psi. A new industry benchmark. Anchor is part of Chevron's plan to produce 300,000 net barrels of oil equivalent per day by 2026 in the US Gulf of Mexico, home to some of our lowest carbon intensity producing operations. That's energy in progress. Visit chevron.com anchor what's your boldest, truly ambitious life goal?
- [00:34]
Anastasia Amoroso
Everyone has one and everyone deserves a.
- [00:36]
Jim Leventhal
Way to get there.
- [00:37]
Anastasia Amoroso
That's why State street offers a wide variety of ETFs to give all investors.
- [00:40]
Scott Wapner
Access to the market and the chance.
- [00:42]
Anastasia Amoroso
To reach their goals. Like with DIA where you get 30.
- [00:45]
Scott Wapner
US blue chip stocks in a single trade.
- [00:47]
Anastasia Amoroso
Wherever you're heading, getting there starts here with State Street.
- [00:50]
Scott Wapner
Before investing, consider the fund's investment objectives, risks, charges and expenses. Visit ssga.com for perspectives containing this and other information. Read it carefully. DIA subject to risks similar to those of stocks All ATF are subject to.
- [00:59]
Jim Leventhal
Risk, including possible loss of principle.
- [01:00]
Scott Wapner
Alps Distributors, Inc. Distributor.
- [01:03]
Jim Leventhal
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the run for stock 6100 is in sight for the S and P. We'll discuss and debate the road ahead for your money. Joining me for the hour today, Anastasia Amoroso, Steve Weiss, Jim Leventhal, Josh Brown's joining a bit as well with his take on the news moving Reddit today. We're following everything in the markets. We'll check the picture. Right now we do have a mixed picture. Dow's gone positive, but we're going to fight it out. It feels like for this day as we try to get to 6100 on the S&P K web's ripping today on stimulus news in China. The metals are up, as you would expect, and then stocks that work off China doing better certainly are there too. And we have a New Street High Target, 7170, 100 from Oppenheimer for 25. Does that sound reasonable to you?
- [02:04]
Anastasia Amoroso
I think it's the right direction for sure and it does sound reasonable because let's face it, the economy is on solid footing and inflation is slowing down. And if we just specifically talk about heading into the year end I do still think positive momentum continues. Look, stocks may be down a little bit today, but the volatility is down quite a lot. So that systematically, Scott, means that investors are likely to stay long equities and also so investors certainly are feeling more upbeat and also consumers are feeling more upbeat about the economy. So retail traders likely to come in this week, Scott, we get the CPI report next week, we get the Fed. We also get the ECB rate cut this week. So I think all of that, this tide of central bank easing is likely to impact stocks positively. Why I think the momentum continues.
- [02:48]
Jim Leventhal
7100, you know that now is the, is the top, you had 7,000 roughly. Was the top four. Are we going to end up with looking at strategists who just continue to think that this market's going to outdo itself?
- [03:03]
Steve Weiss
Well, this is Wall Street's version of the game. Can you top this?
- [03:07]
Jim Leventhal
Yeah.
- [03:08]
Steve Weiss
So it's kind of troubling actually.
- [03:10]
Jim Leventhal
Is it?
- [03:11]
Steve Weiss
I guess it is. So I'm not saying the market can't move higher, but at this point I think there's broad ignorance of what the, I don't say the bear case could be, but what could upset the apple cart number one.
- [03:25]
Jim Leventhal
Okay, tell me, what is that?
- [03:27]
Steve Weiss
Well, take a look at what China announced today in retaliation for Trump's proposed tariff increases. They said we're going to cut back on rare earths, rare earths, power, everything. In other words, they're a component of the semi chips of basically all electronics. What will that do to the economy? What will that do to inflation? So that's just one thing. Trump's other plans, if he enacts them and we're beyond the point of saying, well, he's just using his negotiating, all we can do is take what is presented to us and not assume that 25% tariffs are going to be 10% are non existent. So I think you've got to take that into account in your calculus. And then the other important, he's not.
- [04:09]
Jim Leventhal
Even president yet though. Right.
- [04:10]
Steve Weiss
So he's certainly acting like he is and he should be. He's going to be president in a month.
- [04:15]
Jim Leventhal
I get it. But we still don't know the extent to where the tariffs are going to go and by how much and by what the fallout is going to be and if it's at least in the near term offset by some of the other things that will be a benefit.
- [04:31]
Steve Weiss
The economy, which are inflationary. So the other question is how much of that has been pulled forward. Look, we've had A pretty big run all year. But especially since the election, we've now moved up after a momentary sell off.
- [04:46]
Jim Leventhal
Yeah, we were up 5. The S&P is up 5% since the election.
- [04:49]
Steve Weiss
Right. So that's pretty good on top of what we've done. So how much of what's going to happen? And I agree Trump's policy policies will be pro business, but they don't come without a price tag. So the question is how much is left near term and is today something that we're going to see in January when we've got a new tax year and there is others selling to take gains that have been monstrous.
- [05:14]
Jim Leventhal
People aren't buying the market just because they think that the new administration's policies are going to be pro business. They think they're going to be pro growth. Pro growth. So the reason why you have the multiple at 22 times being justified, Jim, is because you're going to get growth to back it up, as UBS today suggests. P E's high. Yes. Too high. Maybe not.
- [05:39]
Scott Wapner
Well, I concur with that. And if you look beyond the hood or underneath the hood, you'll see that the average stock is trading more at 19 times. Is that cheap? No, but it's not expensive either. Look, I'm more with Steve than not on being a little bit cautious here. But I want to say just very clearly, the rest of this month is likely to be positive. I mean, it's not just that nobody wants to sell, it's that FOMO's back animal spirits are in force, people want to buy into this market and it doesn't really matter whether the multiple is 22 times or as I just said, 19 times on the average stock as measured by the equal weight S&P 500. What I think you have to be looking out for is not what the month of December is going to do or Scott, what the year end 2025 target is going to be. Might as well be 70, 100. I think what you have to look out for, and this is where Steve, I'm agreeing with you, is that in the first quarter of this year there may be a little wake up call. Little wake up and smell the coffee of exactly what Steve's talking about. Some of these policies are likely to.
- [06:37]
Jim Leventhal
Be most worried about tariffs.
- [06:39]
Scott Wapner
Yeah. And just inflation in general. Look, I'll feel a lot better and I'll be on with you at the end of the week. I'll feel a lot better if we get a soft cpi. But most recently we've gotten some inflation Reports that would indicate that inflation is sticky on the much heralded last mile down to 2%. And you know, if you're hanging out at around 3, 3.3% on core CPI, you simply cannot rule out that the Fed might go back to hikes sometime by the middle of the year. I know that's a minority opinion right now, but you cannot rule it out. So I'd really look, we'll talk about it at the end of the week. It's not that far away from here. But let's see what that CPI report Evercore today says.
- [07:17]
Jim Leventhal
You know, you're talking about whether people are in a sense too bulldog, ignoring some of the risks that exist. Evercore today, exuberance is rising, they agree with that, but not yet irrational. And you know, valuations, yes they're high, but they're not extreme enough. Why? Because the Fed's cutting right and the economy's strong. So you think you're going to get earnings to justify where the multiple of the market is and then you're going to get rate cuts, albeit smaller and slower. You're still going to get them. The direction is still lower for interest rates until it isn't. And the likelihood that it isn't I think are slim.
- [07:53]
Anastasia Amoroso
Look, the direction of travel is lower interest rates and I do think the base case scenario for 2025 has to be equities that move higher just based on those fundamentals of earnings that are likely to come in at 304 for 2026. That's what you eventually trade up to and you assign that 22 times multiple. And by the way Scott, there's also rate relief, there is deregulation, there's capital markets activity that's expected to pick up. There's productivity growth that we talked about. So all that to me suggests a pro risk stance. Having said that, I do agree with some of the caution and some of the sentiment going into the first quarter. Because Scott, as we talked about, it's not tax cuts that come first, it's really tariffs negotiations or tariff threats or tariff actions. And I am particularly cautious on semiconductors and I think Steve is right that you know, what we saw today from China is probably what's more to come and there's more chip wars that could potentially take that sentiment of semiconductors lower. So I'm concerned about that.
- [08:51]
Jim Leventhal
Okay, so you know in video is lower today China's probing the company or said to be over a possible breach of their anti monopoly law. I do wise have amd downgraded today to Neutral over at B of A they look at downside risk. Semis have been just knocked unconscious really by software over the last handful of months. We've repeatedly showed you a move of those two spaces that began to diverge about six months ago and has only grown further apart. Let's try and pull that up as I throw the ball to Weiss to answer that. But you know, how about what Anastasia is saying and how we need to look at all of those trades in video included.
- [09:36]
Steve Weiss
You know, I agree with that. And I did cut back on Taiwan semi a little bit because the position has gotten so big I had to cut back on it. And I think it's going to be somewhat of a rocky road because, you know, as we continue to bump heads with, you know, with China.
- [09:54]
Jim Leventhal
See here's we're showing what we're talking about. This is, is just software blue chips, orange.
- [09:59]
Steve Weiss
Right. And, and it's natural. Right. Money's got to come into the software space from somewhere. The semis are the space that became the source of funds. And it makes sense. The challenges with Nvidia of course is that not an insubstantial, unsubstantial amount of their business comes from China. Now it's already been halved because of the last time that we did this, last time that you put restriction.
- [10:23]
Jim Leventhal
But you sold today, you sold a little bit of Taiwan semi.
- [10:27]
Steve Weiss
Yeah, this morning. This morning I, you know, it's down marginally, you know, because let's face it, they, they make a lot of the chips that power China's technology universe as well. But right now we don't have a clear plan. My comfort and I've got to think about this a lot more. Biden had said and other administrations, we will protect, protect Taiwan. There's been no such announcement by Trump. And yes, he's not president yet, but this is critical to the global economy whether or not we do protect Taiwan.
- [11:00]
Jim Leventhal
I was fully expecting you, by the way. I even said to our executive producer early, wouldn't surprise me if Weiss, even if it was for a trade.
- [11:07]
Steve Weiss
Yeah.
- [11:08]
Jim Leventhal
Got into some of these K web names today, the Baidu's, the Barbas and the pd just because of the stimulus news coming out of China. If we want to, you could pick any four or five stocks that are relative to that up. I mean you see it today over.
- [11:23]
Steve Weiss
The last six months or year. You know, look, what's this? The. I've lost count of how many, you know, liquidity announcements China has made and guess what? They haven't worked apparently. So do you see on the margin something's getting better? Yeah, but not enough to justify getting into China with.
- [11:41]
Jim Leventhal
Let me ask you this. So you look at the Tepper move. That clearly shows you what the Tepper move was, right?
- [11:47]
Steve Weiss
Yeah.
- [11:48]
Jim Leventhal
When he came on Squawk and he said that it was these were stocks that were going to go up and go for a while, you know, he's not going to come out and tell you how long he's going to be in the stock. So let's preface that. You know, he's of course, but you had this huge move and then you had a little bit of a comedown. Is his broader suggestion of the trajectory. Right. That at any moment of weakness or what perceived peril, China is just going to stimulate and then these stocks are going to go up?
- [12:19]
Steve Weiss
Well, let's keep in mind that when Dave came on and talked about that and he's been involved in Baba for a while, you know, we have talked about it fairly often that that was before we've gotten this heightening of Jia political risks. And it's just not just relating between us and China. China has been a supporter of Iran and so we're going to take that or Trump will take that into account as well. So it's not so clear. So yes, if we're just stimulus, if that were the clearest question, the only thing I'd worry about, of course I'd be in. But I've got so much geopolitical risk there that I can't do. What if, for example, that China takes their ADRs that are listed in the Caymans and said we want it all here because we want to prop up our market in China, our stars market and others. What happens then? You'll get pennies on a dollar.
- [13:16]
Jim Leventhal
You know, I mentioned earlier this Reddit move today. We made it our chart of the day because it is a record high today after an announcement of a new AI powered search tool, which meant we had to hear from Josh Brown, who's been in that name in a reasonably recent period of time. He does join us now. What's your take on this move today with Reddit?
- [13:39]
Josh Brown
Hey guys, thanks so much for having me on. I was really excited when I heard it. The stock immediately made a new record high. And I think what people are realizing, which is really interesting, is that for the first time in 20 years, search is actually up for grabs. It's this crazy thing that like nobody could have contemplated even three years ago. But Reddit sees this opportunity because number one, anything you Search for on Google. Now it appears that Reddit increasingly is bubbling up to the front page for results. And this makes sense when you consider Reddit has one of the largest, broadest, deepest libraries of user generated content. This is peer to peer, people talking to each other, this vacuum cleaner works great, that hotel is terrible, etc. So it makes sense for why Google is paying them for access to that content for their own AI. But now Reddit is saying, actually we're going to launch this new thing, it's called Reddit Answers. You can log directly into that and you can search Reddit itself. And the benefit for going straight to Reddit, in addition to the richness of the information itself in response to your query, is that it's going to be more real time. Reddit is saying you might have content Surface as an answer to your question within minutes. So think about this. Who won in the Kansas City game that just ended five minutes ago? Having that response on Reddit is going to be way faster than what a traditional search might produce in terms of just showing you links. Let me give you the answer itself.
- [15:20]
Jim Leventhal
What do you make of the price action today alone? It's never so easy to say, well, it was up like this and then down like this for a specific reason. But presumably the stock was up, as we just showed. Can we throw that back up, please? You have the move up on this news and then a basically flat situation. Maybe it picked up a little bit since you started talking about it, but it does the market, you know, is it not as great a news as maybe you, you look at first blush.
- [15:55]
Josh Brown
Two months ago the stock was $50. So, you know, I think, I think when you consider where this thing has come from, I guess a sell the news reaction might make sense. The NASDAQ's down. I don't know. I mean, okay, if you're, if you're invested in Reddit this year, you're having an incredible year. Would I rather see the stock at 180 versus 165? Sure. But I think directionally all of the dominoes are falling in Reddit's direction this year. They have explosive user growth. They're having now daily average user numbers like 100 million. Who else can really say that? And the advertising business at Reddit is underdeveloped relative to Metta. It's obviously underdeveloped relative to two Alphabet. That's what's changed here. And that's why the stock's been so heavily favored on the momentum side. So I don't know why it's not up today? I'm just telling you, the stock is up huge. People that have been up 175% in six months.
- [17:00]
Jim Leventhal
No, I totally get it. I'm just curious if you had a point of view on that. By the way, Morgan Stanley obviously agrees with you and is taking a mea Copa today. They upgraded it to overweight. They had it equal. They say we've been wrong. They were on the sidelines year to date, so they missed a lot. But they don't think they fully missed it now. Right. They admit that they were wrong and they did miss this run. But like you, they're like, well, okay, better late than never because it's going to go a lot higher in their mind. They look at 200 is their price target now.
- [17:40]
Josh Brown
So look, look, I'm relatively new to the story and I bought it around. I bought it around like 100 or something. So I didn't catch this thing at the low. I don't. That's the important thing here. Reddit is by the look, it's a couple of things. Number one, the users of Reddit don't use a lot of other social media platforms and that's one of the things that makes it most attractive to advertisers. It's not like the Reddit user is also the Facebook user in many cases, according to the company, the people using Reddit only use Reddit. So it. And it's a huge audience, not a niche. It's not Pinterest where it's like moms who are crafting. This is a massive audience. That's number one. And then number two, they've been hiring talent from some of the biggest social media platforms. Now that they have this high stock price, they have a currency to bring people over from places like Mehta who really know what they're doing and can help them ramp this thing. So I think Morgan Stanley is making the right move here. And the last thing that I would say, and I think it's really important in the arms race for the LLMs that want to be able to scrape data from these massive pools and lakes of data. Reddit truly stands alone in terms of it's an Internet 1.0 company. They literally have 20 years worth of user generated information on that site. It's extremely rich. I keep using that term because it's apropos and Reddit is a very unique property as a result.
- [19:15]
Jim Leventhal
All right, we'll watch it. Certainly. It's up 2% now. Josh, thanks. Wanted to hear from you today. And I appreciate you. That's Josh Brown joining. You know another stock hitting a new record high today's Oracle. Jimmy. It reports earnings after the bell. Let's hit that. Throw that one up too. We'll keep an eye on Reddit though. Now it's up better than 2%. But there's Oracle, it's. Oracle's had an incredible run. It has no, I mean you look at a throw up a year to date on this one, you'll see up to the right on steroids, Jimmy.
- [19:42]
Scott Wapner
Look, no longer cheap. I'll be the first to admit that it was great when it was. But I think you still continue to hold this and the reason why it's in the sweet spot of AI data centers, all the capex build out there. Beneficiary of there was a story. I think it's actually true. I don't think it's apocryphal but a couple of months ago, maybe three or four months ago, Ellison sat down with Jensen Huang and at a high end sushi bar and said, hey listen, I really need those black wells. How many can you give me? And he's gotten a lot of them. They're building out the data centers. This is, as I just said, the sweet spot of AI. You add that fundamental story to the technical factors of. Everybody wants to be an. I mentioned this in the earlier in this block that there's sentiment right now fomo and this is the place to be. Now if you don't own this stock, what I would say to you is probably wait for the earnings to come out. It has had Scott, as you just acknowledge, one heck of a run. There may be a little bit of pullback when you get the earnings out there, but either way, I do think this is one you want to add to right after earnings tonight.
- [20:40]
Jim Leventhal
Was it Nobu in Malibu?
- [20:42]
Scott Wapner
You tell me. I mean this is, this is your crowd. I, you know, I'm a little, I.
- [20:45]
Jim Leventhal
Mean I think I'm a little bit.
- [20:46]
Scott Wapner
More up on the farm.
- [20:48]
Jim Leventhal
I'm pretty sure he owns that. He does he place to make a deal.
- [20:52]
Steve Weiss
He does own it. And if you need help getting in, let me know. I'm a VIP there. It's a tough reservation.
- [20:58]
Jim Leventhal
It is a very tough reservation.
- [20:59]
Steve Weiss
I can help you.
- [21:00]
Jim Leventhal
That's a very good spot. Like I said, easy to make a deal when you're sitting on the balcony and the waves are crashing underneath your.
- [21:06]
Scott Wapner
Your feet and also helps when you're Larry Ellison, let's face it.
- [21:10]
Jim Leventhal
Yeah, you don't, you don't own this name though.
- [21:12]
Steve Weiss
I don't. You know, it's kind of interesting. I was looking at the long term PE chart and it's selling at levels that had reached a few times before in market melt ups, but for very short periods of time. So the multiple generally over their longer term history is below 30 and actually around 20. So the question is actually started at PE at 30 this year. So the question is, are things 50% better there now than they were 12, 11, 12 months ago? And I don't know if that's the case. And look, I'm not saying that there shouldn't be multiple expansion, but 50% multiple expansion seems, seem kind of, seems kind of wild.
- [21:55]
Scott Wapner
As I said, it's not cheap. It just isn't cheap. It was cheap earlier this year. And this is again, it's sentiment. It's sentiment that's driving it.
- [22:02]
Steve Weiss
Right, exactly.
- [22:03]
Scott Wapner
The fundamental support, but the sentiment are driving.
- [22:05]
Steve Weiss
I agree with you and going back to our opening conversation, that's what concerns me, this massive multiple expansion.
- [22:13]
Anastasia Amoroso
But maybe that's the case for Oracle. That's not necessarily the case for all the AI software stocks out there. And in fact when I look at software multiples at 8 times EV to next month's next 12 month sales, you know, that's well below the 17 times that we saw at the peak of 2021. So I actually really like this rotation trades coming out of some of the semiconductors going into some of the AI software names that earnings growth for software has been decelerating. But it looks like that's poised to change. And we've seen quite a few beaten raises actually from some cases.
- [22:44]
Steve Weiss
I mean if you take a look at Salesforce, I mean, good quarter and good.
- [22:48]
Anastasia Amoroso
Great commentary on Jenny.
- [22:50]
Steve Weiss
Right. But I just don't remember aside from the last couple of years. And you guys can back me up. This where a penny better or worse and the same guide, or a penny better or worse than the guide leads to a 20% move in the stock. It's kind of crazy.
- [23:07]
Jim Leventhal
By the way, the restaurant was in Palo Alto. No, Boo. Palo Alto.
- [23:11]
Steve Weiss
Right, but he owns that too. Yeah, yeah, there's Nobu in Malibu.
- [23:16]
Scott Wapner
If it was farm to market.
- [23:17]
Jim Leventhal
Yes, it was in Palo Alto where the meeting happened.
- [23:20]
Steve Weiss
Right.
- [23:21]
Jim Leventhal
At a said to be high end sushi joint. We are speculating of course that it would have been Nobu in Palo Alto since it's within the Ellison portfolio.
- [23:30]
Steve Weiss
I haven't been there, so get your own reservation.
- [23:32]
Jim Leventhal
Okay, I have. So I can hook you up.
- [23:34]
Steve Weiss
Well, I'm not sure about that.
- [23:35]
Jim Leventhal
All right, we'll we'll take a quick break and we will will have a call today on a red hot private equity stock plus the trade on another one that is about to enter the big leagues, so to speak. Next.
- [23:55]
Scott Wapner
Support for this program is provided by Chevron. The Anchor offshore platform is utilizing breakthrough technology to enable us to produce oil and natural gas in the US Gulf of Mexico at pressures up to 20,000 psi. A new industry benchmark, Anchor is part of Chevron's plan to produce 300,000 net barrels of oil equivalent per day by 2026 in the US Gulf of Mexico, home to some of our lowest carbon intensity producing operations. That's energy in progress. Visit chevron.com anchor Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days?
- [24:32]
Jim Leventhal
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- [24:38]
Scott Wapner
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- [25:14]
Jim Leventhal
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Scott Wapner
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Jim Leventhal
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Scott Wapner
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Jim Leventhal
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Scott Wapner
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Jim Leventhal
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- [26:08]
Jim Leventhal
Call the day is Blackstone upgraded to a buy at TD Cowan, the target to 230 from 149. They like the setup. A lot of people like the setup for alt managers, private equity firms, lower regulation, pent up demand, deal nirvana, animal spirits. You pick however you want to describe it, but that's what people are talking about.
- [26:30]
Anastasia Amoroso
Yeah, what's not to Like, I mean, both from the setup that you just described going into next year and also the longer term secular perspective. I mean, just going into this year, you know, first of all, we're seeing fundraising activity really start to stabilize. And across all the different strategies, we're on pace of $1.1 trillion in fundraising, which would bring us back almost to levels that we saw in 2020. Then you've got deal activity that's also on pace to actually eclipse what we saw last couple of years. And then you mentioned, Scott, which is the capital market rebound that is really expected in 2025 and those holding periods along the LPs, limited partners are wanting to have some of the money back.
- [27:06]
Jim Leventhal
They want realizations to happen. Right. They've been waiting.
- [27:09]
Anastasia Amoroso
They have been waiting. And that can come in 2025. It's already started to happen this year. So that could really bode well for solid returns for these managers. But the longer term, Scott, I'm also looking at the asset center management today and alternatives, which is about 17 trillion today, which is forecast to go to 29 trillion by 2029. So that's a lot of growth across private equity, across venture, across private credit. And all of these managers, of course, are very well diversified.
- [27:36]
Josh Brown
Why did that.
- [27:37]
Jim Leventhal
Why the lack of ownership with you guys? Just specifically. Because you're the one sitting here of private equity. I mean, stupidity. Apollo's going to the S and p on the 23rd, before the open on the 23rd. And these stocks are up a lot year to date, but they're up a ton since the election. Right. New environment for private equity, new environment for M and A. And these stocks have ripped.
- [28:01]
Steve Weiss
You know, I did own Carlyle. I sold it, obviously, way too soon. I can't tell you. You know why don't on them because I've had the story. After all, I own Goldman for similar reasons.
- [28:14]
Jim Leventhal
Right. Do you think this story has a tremendous amount of legs still to go? Are we at the earliest innings of a run for PE stocks?
- [28:22]
Steve Weiss
Yes, I do think it does because of the paradigm we're in in this market where it's all about momentum. It's about momentum of fundamentals, not valuation. And that's a general Mark call. So it will. And let's not forget Mark Rowan was almost Treasury Secretary. So I got to believe, you know, that. That. I don't know how to say this, but that his deals that Apollo does will get a good look or maybe not as good look from the ftc.
- [28:55]
Jim Leventhal
Well, but the whole point though is that it could Be Apollo. It could be anything. No, they Aries, whoever.
- [29:04]
Steve Weiss
So. So you could be able to do.
- [29:05]
Jim Leventhal
Deals like you weren't able to do for the last four years.
- [29:08]
Steve Weiss
That's correct. And you still have the disconnect between public markets and private markets. So the valuations in private markets have continued to be depressed. So look, I wouldn't be as optimistic for P. If they're buying public companies. Right. But with private companies with rates coming down and with them having big balance sheets where their cost of capital is lower. Yeah, it's panacea.
- [29:33]
Jim Leventhal
I do wonder if you, if you would start to get more companies that have been staying private longer. Right. The number of public companies has been steadily decreasing in part because of the very service that private equity firms continue to grow. Private credit. If you're a, if you're a private company, you don't need to act access to public markets in a manner at which you used to like depend on them because now you have alternative sources of cash and capital.
- [30:01]
Scott Wapner
Yeah, but if you're. Well, if you're private equity, you do need to monetize these things. Eventually you do have to give money back to your LPs.
- [30:07]
Jim Leventhal
Even more reason why the environment looks rich.
- [30:11]
Scott Wapner
I completely agree. By the way, I'm in blackrock. And don't throw that to the side of the road when we're talking about private equity. They bought Global Infrastructure Partners, they're buying hps, they bought Prequen. So they're clearly getting big in that space. Great company. I'm not taking anything away from Blackstone or Apollo Scott. Looks like you want to say something.
- [30:28]
Jim Leventhal
I do. I just want to look at the other kinds of banks. Weiss mentioned Goldman, which is ripped. It's up like 50 something percent year to date. I think Morgan Stanley got a downgrade today. At bank of America, it's the equal weight they change their price targets to. Bank of America's Target goes to 55 cities, goes to 100 for Goldman to 736. There it is at just let's say 600.
- [30:50]
Scott Wapner
They're all going to benefit.
- [30:52]
Jim Leventhal
That's, that's the Wall street view right now.
- [30:54]
Scott Wapner
I mean you've got lower interest rates. That's going to facilitate dealmaking. You've got the, you got lower volatility in the markets notwithstanding. Steve, what you and I are thinking might happen in the first quarter or first half, you've got lower volatility. That's going to open up the IPO markets. You've got an administration coming in. That's more friendly to mergers. So M and A activity is going to help. And whether this benefits the Blackstones and Apollos of the world, that's one way of playing it. But whether you're Citigroup, JP Morgan, Goldman Sachs, Morgan Stanley, you're going to benefit on the advisory side. Citigroup has said that a lot don't.
- [31:23]
Jim Leventhal
We think though that a lot of that's already in the stocks? Like I said, if you go down the list 55 plus percent for Goldman, Citi's up 40, you know, B of A is 37 and the other gains in the space look pretty similar to that.
- [31:34]
Scott Wapner
Yeah.
- [31:35]
Anastasia Amoroso
But if the trends continue for the duration of 2025, you know, similar for the S and P is for earnings continue to go up. If activity continues to go up, that's what the stocks will ultimately trade to. And you also have to look at the other opportunities said which is, I mean it's all about cyclicals. It's participating in who can benefit from better lending activity from steeper yield curve. So I think despite the valuations which by the way are not all that stretch on a ten year look back, I think the activity in financials continues.
- [32:01]
Steve Weiss
Yeah, there's one other point that that's really not discussed at all is that with the aging of the population. Right. The founder owned business, they still run. And I've seen this as we look at lots of privates are more likely to step up and sell than they are to continue being private. So that's going to fuel private equity. Private equity is not really going after the leveraged companies because they're putting leverage on top of it themselves. So the ones that we talk about that have the high valuation, those aren't their targets. Their targets are ones that they can leverage.
- [32:35]
Anastasia Amoroso
And by the way, just to add a quick point on valuations, they've clearly snapped back in the public markets. In the private markets they have picked up as well. They're not at the trough that we saw 2022. Very selective, perhaps selectively, but on the index basis they're a little bit higher but they're still below the valuations that are available in public markets.
- [32:52]
Jim Leventhal
All right, let's get the headlines now with Courtney Reagan.
- [32:54]
Anastasia Amoroso
A court either Scott, good to see you or jury has found Daniel Penney not guilty of criminally negligent homicide for putting a homeless man in a deadly chokehold on a New York City subway train last year. The decision came after the judge dismissed the more serious charge of manslaughter due to a deadlocked jury Ukrainian PRIME Ukrainian President Vladimir Zelensky said a diplomatic resolution to end its war with Russia would save lives. At a press conference Monday, he met with Germany's opposition leader. And Zelensky also raised the idea of foreign troops deployed in Ukraine until it could join NATO. The remarks followed the Ukrainian leaders meeting with President Elect Trump in Paris, who called for an immediate cease fire. And Lara Trump said Sunday night that she will step down as the Republican National Committee co chair at the next RNC meeting. And a post on X. Trump said she completed three goals she had for the organization. Lara Trump's name has been floated as a possible replacement for Republican Senator Marco Rubio of Florida if he is confirmed as secretary of state in the new administration. Scott, back over to you.
- [33:53]
Jim Leventhal
All right, Coin Reagan, thank you very much. Up next, your ETF playbook for the year ahead. Bob Zani standing by with a look at what's going to drive the action in 2025 following a record breaking year for that market this year. We're back up to.
- [34:16]
Scott Wapner
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- [34:49]
Jim Leventhal
With the price of just about everything going up during inflation, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a.
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Scott Wapner
Thing Mint mobile unlimited premium wireless 30, 30 biddy get 30 but you get 20, 2020 but to get 2020 but you 15, 15, 15, 15. Just 15 bucks month.
- [35:07]
Steve Weiss
So give it a try at mint.
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Anastasia Amoroso
Mobile.Com switch $45 upfront payment equivalent to $15 per month. New customers on first three month plan only taxes and fees, extra speeds lower above 40 gigabytes.
- [35:17]
Scott Wapner
You detailed.
- [35:20]
Jim Leventhal
We are back. Let's get to Bob Pizzani now with today's ETF edge. Hey Bob, good to see you.
- [35:24]
Scott Wapner
As we begin to close out a record year for the ETF industry, what bets are investors making for 2025? Let's talk with Brian Hartigan. He's the global head of ETFs at Investor Go. It's the fourth largest ETF provider in the country. Brian, hot topic is bitcoin we passed 100 billion in assets under management for Bitcoin ETFs that include your Bitcoin ETF. I know you run that one. BTC. Oh. How is momentum in Bitcoin ETFs as we close out the year? It's been remarkable inflows for one year. Yep. Yeah.
- [35:54]
Jim Leventhal
I think you've seen the next chapter of bitcoin, right. We've surpassed 100,000. We know the regulatory environment next year.
- [36:01]
Scott Wapner
Will be conducive and helpful for bitcoin assets and beyond.
- [36:05]
Jim Leventhal
Right.
- [36:05]
Scott Wapner
So we'll see how the options market.
- [36:07]
Jim Leventhal
Starts to create the liquidity within the asset class.
- [36:10]
Scott Wapner
And from there, I think you'll see additional use cases for how investors invest in Bitcoin. Twelve Bitcoin ETFs now have 1.1 million bitcoins. That's 5% of all the bitcoins in existence. It looks like more than Satoshi Nakamoto, the legendary founder. It's not clear how much he might have loaned, but it's amazing here to see how many you now own. 5% Bitcoin community, ETF community. You're seeing the.
- [36:33]
Jim Leventhal
The ETF being the vehicle of choice for. For bitcoin holders.
- [36:37]
Scott Wapner
Institutional adoption is increasing as well. And that's not just for bitcoin, but.
- [36:41]
Jim Leventhal
For ETFs as a whole.
- [36:42]
Scott Wapner
Yeah. So the bitcoin community I know has been very positive about Paul Atkins nomination to the SEC chair. How is the, how is his nomination being viewed in the ETF community? What do we think is going to happen with him? Well, I think with any, any FCC chair, we seek engagement and guidance and.
- [36:57]
Jim Leventhal
A proactive opportunity to progress.
- [37:01]
Scott Wapner
Right.
- [37:01]
Jim Leventhal
So we see that as a positive change for us and, you know, we'll look forward to engaging further with new developments in the industry for sure.
- [37:09]
Scott Wapner
So we're going to close out the year. I want to ask about equity. What kind of equity bets are investors making right now? Now you run triple cues. The fifth largest ETF in the world. World right there, the NASDAQ 100. That's an historic high. Big inflows. You also run the equal weight S and P RSP also. Big inflows. New highs. What are we hearing? What are we seeing as we close the year? What's interesting is that the QQQ bet.
- [37:30]
Jim Leventhal
And QQQM is really a concentration story.
- [37:32]
Scott Wapner
Right.
- [37:33]
Jim Leventhal
It's the magnificent, magnificent seven that has been driving a lot of the returns. But investors are trying to balance out that concentration and identify when market breadth opens up and that where the equal weight S and P RSP strategy helps investors to pinpoint their allocations.
- [37:48]
Scott Wapner
And I want to know your Bitcoin ETF is almost 1 billion in assets under management. Overall, Bitcoin ETF's almost 100. Amazing here. We're going to talk a lot more about that, folks. We're going to have a lot more coming up on hot ETF Trends for early 2025. We're going to talk about Bitcoin and flows into momentum ETFs, quality ETFs, bank loan ETFs are hot right now and that whole new regulatory regime in Washington, Brian will be joined by Nature Raci from the ETF store. That's ETF edge.cnbc.com Scott, back to you.
- [38:18]
Jim Leventhal
All right, Bob, thank you. That's Bob Pizzani. We have more committee stocks on the move coming up, including a pot for one of Jim's Pharma names today. We'll document them, we'll discuss and we'll debate them next.
- [38:31]
Scott Wapner
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast now.
- [38:54]
Jim Leventhal
All right, let's hit some committee stocks on the move today. Vertiv or Vertex? We'll do Vertex first. It's up 2%. It was upgraded to a buy. We're doing Vertiv next. Big tease. Upgraded to buy from hold at Jefferies price target to 550 from 500. This is yours.
- [39:10]
Scott Wapner
Yeah. And I think this is an excellent entry point for anyone who doesn't own the stock. This should be a wonderful long term holding because it really owns the cystic fibrosis franchise in the world. They're continually refining the products that they produce to combat that disease. But on top of that, they have a very vibrant pipeline. It's not just sickle cell disease, which they're actively producing some new candidates in. It's pain, where we know that there are pain medicines out there that are highly addictive. They're about to get approval for a non addictive, highly effective pain medication. Beyond that, they've got some other indications that they're working on. They've made some key acquisitions. Somebody may look at this and say at 26 times forward earnings, it's expensive. The earnings growth is there to just justify that.
- [39:53]
Jim Leventhal
Okay, now Vertiv Weiss, we can spend more time. Which you bought more of. Well, Vertiv's down 8%. Is that why you want to avoid it? Six and a third now. So you bought more on Friday. It's a Core position of yours. Yeah, talk to me.
- [40:07]
Steve Weiss
That worked out for 10 minutes.
- [40:09]
Jim Leventhal
Look, why is it down that much today? What happened?
- [40:11]
Steve Weiss
I have no idea. It's been down since they were insider selling.
- [40:14]
Jim Leventhal
But the key down since you bought more.
- [40:17]
Steve Weiss
Well, it is down absolutely both times. Look, all I can imagine is that's related to the semis because semis power, you know, the chips power what's going into the data centers. However, I think it's entirely misplaced. I can't find anything wrong with it. You know, I'll be talking to the company later this week. I'm not worried about it. I do think it's an opportunity. I get calls every day and every day look for ways to play AI. The tool belts and data centers continue to be that. It's not going to stop the building of data centers. Trust me, it's going to keep going.
- [40:52]
Jim Leventhal
In their critical crh. Both you guys own the stock, right? Jimmy, I think you were in it first. This China related something or other. Why is it down 2% today?
- [41:04]
Scott Wapner
I don't think there's any real reason why it's down 2% today and I'm sorry to give that answer, but I don't think China is a negative and I think it's a positive positive. If they're stimulating their economy, that should produce growth and the need for aggregates and other materials that CRH produces. It's had a fabulous run. I mean this is, you know, same as you were just talking about Vertif. Sometimes stocks go down and there just isn't a real reason for it. But if you look at all the fundamentals for crh, it's very positive. It's not very expensive we're building here in the U.S. china wants to stimulate.
- [41:31]
Jim Leventhal
Go team Weiss.
- [41:32]
Steve Weiss
Hey, there's, there's no reason to just keying off what he said. No reason why Netflix should be down 2 1/2% today. It just happens, it's day to day, you know, so, so look, it's still solid. If anything they benefit from rates coming down from under housed or under owned. You know us, we're really short on it. So again I think it's just some profit taking and nervousness about next year, January, you know, will everybody.
- [42:01]
Jim Leventhal
Maybe there's other stocks that fall into that category like Applovin which is down 14% today. Stocks up like 900% year to date and we've been documenting that for example almost daily how that thing has gone up matter.
- [42:16]
Steve Weiss
Look at Meadow on the news on. You think that the news was ratified on tick tock ban and having to sell it. Yet the stock's down today. Why? Because it anticipated that news last week and moved up. So that's all it is, profit, take.
- [42:29]
Jim Leventhal
Okay, Santoli's next with his midday word right after this quick break. Welcome back, Senior Marcus. Commentator Mike Santoli is at the desk now for his midday word. You're asking the question how much holiday cheer.
- [43:01]
Scott Wapner
Yeah.
- [43:01]
Jim Leventhal
Is too much if you're Juan Soto, you're pretty cheerful today.
- [43:06]
Scott Wapner
Mr. Yankee Fan, I would say didn't get too much. I think he got what he deserved and I think he showed what this market has been about for a while, which is you got to pay up for quality reliability because there's not cheap stuff, unloved stuff out in the market. So I'll, you know, I'll grant that. I guess his year on the Yankees was like Reggie Jackson's year in Baltimore in 1976, which nobody even remembers happened. But anyway, beyond all that, the cheer I'm really talking about is the localized stuff in parts of this market that got overheated. You were talking about these names, Vista, pulling back, you mentioned Applovin, Palantir, Robinhood, Coinbase, Microstrategy, all down multiple percent today. And that to me is just about everybody looked over the weekend how much this stuff has run. You really were getting these blistering moves. Now the question is, can the rest of the market market just kind of, you know, keep in stride and absorb it? And there's an attempt at rotation today. Big picture, you're not bullish today on next year because anything is underappreciated or because, you know, the positive economic outlook is some maverick contrarian position. It's because you think things are going to continue and high expectations are going to be met and bull markets persist. I think that's the rule going into next year.
- [44:16]
Jim Leventhal
Get some data, you know, this week, tomorrow. Yeah, that could, you know, I mean, you're, what are you, a week or so, 10 days from a fed? 10 days from the Fed decision.
- [44:25]
Scott Wapner
Yeah.
- [44:25]
Jim Leventhal
Around matters.
- [44:28]
Scott Wapner
Absolutely. No, it definitely all matters. And I guess to me, I always look at it as are we going to seize on something as an excuse to have a little bit of a setback. I don't look at the chart of the S and P or the action internally and say, oh, watch out. What I do say is it might take a little something extra to accelerate from here. Unless you want to. We've been sitting around for a while. We hit 6,000 on November 11 for the first time.
- [44:51]
Steve Weiss
Here's the interesting number for you. Do you know what Babe where this total career. Babe Ruth's total career earnings would be in today's dollars?
- [44:59]
Scott Wapner
No, but it's a heck of a.
- [45:00]
Steve Weiss
Lot less than sort of 19 million.
- [45:02]
Scott Wapner
Yeah, exactly.
- [45:03]
Steve Weiss
So those contract is 760 million. I looked it up last night to confirm. I have either gone into the NBA or the NFL. Right. I couldn't really hit a fastball.
- [45:13]
Scott Wapner
Don't tell Jay Powell that. Yeah, right.
- [45:15]
Jim Leventhal
All right, we'll get the earnings set up. Coming up on one of Jim's big winners this year. We'll do it next. Give you the setup. Casey's general store. The earnings are in overtime. Jimmy, you own it. What's your outlook here?
- [45:50]
Scott Wapner
Well, it's just been a darling stock to begin with and one as we've been talking about a lot, this show might look at the multiple and say it's too expensive. But apropos of what our friend Mike Santoli was just saying, the default here is that stocks are going, going higher unless there's a reason to go lower. And that's the case here with Casey's. They just closed an acquisition about a month ago that's going to increase their presence in Texas. There's no reason to think that people aren't gassing up their cars and buying the jalapeno pizzas. So I think things are going to look good here at Casey's.
- [46:20]
Jim Leventhal
Are you revealing your order?
- [46:24]
Scott Wapner
You know, unfortunately I haven't been to the Midwest since they announced the how so I haven't had an opportunity to try it. It's a relatively new menu offering and.
- [46:34]
Steve Weiss
As you've heard from his comments today, he doesn't need any more gas. Right? I mean he's fine.
- [46:40]
Jim Leventhal
Okay, finals are next. Hope you'll join me on closing bell a couple hours from now. Dan Greenhouse, Stephanie Gild, Morgan Stanley's Apple analyst Eric Woodring joins us again and Alex Sherman will have more on that record setting baseball contract today. From Soto to the New York Mets. All right, final trades. Anastasia, nice having you here today. What do you have?
- [47:07]
Anastasia Amoroso
Good to see you. Software. Software, as I talked about it is cheap relative to its own history. It is cheap relative to semiconductors and I think next year can be the year of AI monetization. Sephir, by the way, it also has much more of a domestic focus than semiconductors. I like it.
- [47:20]
Steve Weiss
Stephen Weiss vertiv You get another chance, yet another chance to average down. I like it. Here's nothing wrong with the company.
- [47:28]
Jim Leventhal
You're like way too agreeable today. I'm not sure this does not bode well for your next appearance.
- [47:34]
Steve Weiss
I've got to be very perspective going.
- [47:35]
Scott Wapner
To be very cranky abv Nice Parkinson's drug news today.
- [47:38]
Jim Leventhal
Okay, I will see you on closing bell 3:00 Eastern. The exchanges now you've been listening to CNBC's halftime report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:55]
Scott Wapner
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant.
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Jim Leventhal
Education that's designed to focus on what you need to know in the business world.
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Scott Wapner
We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.