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Halftime Report
A Bubble in Tech? 8/19/25
00:47:56
Scott Wapner and the Investment Committee whether there’s a bubble in tech after Sam Altman’s warning and now options traders bracing for a potential downturn. Plus, we hit the latest Calls of the Day. And later, Josh Brown reveals another stock that has made his ‘Best Stocks in the Market.’ Investment Committee Disclosures
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- [00:00]
Edward Jones Narrator
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC Our state has.
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Edward Jones Narrator
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Multicare Narrator
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Scott Wapner
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Multicare Narrator
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- [01:03]
Scott Wapner
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, a bubble in tech. First, a warning from OpenAI Sam Altman. Now options traders bracing for a potential downturn will tell you exactly how and debate the markets with the investment committee. Joining me for the hour today, Josh Brown, Joe Terranova, Liz Thomas, Jim Leventhal will take you to the markets and you will see that we are read across the board and it is the NASDAQ that is the drag today. Metta, Amazon, Microsoft, the laggards there. Bloomberg story caught our attention today. The headline reading quote options traders brace for a big tech sell off with disaster puts. This is a trade according to Jeff Jacobson. He's the head of derivative strategy at 22V Research whom we reached out to and the trade looks like this. These are puts bought on the Invesco QQQ Trust Series 1 ETF. That's the ETF that tracks the NASDAQ 100. The cost of hedging against a sharp downturn and a smaller one is at an almost three year high. The spread of that is at an almost three year high. Apollo's Torsten Sloke on Monday, tech is vulnerable. AI will have a significant impact in our lives and productivity, but that doesn't mean that the tech companies in the S and P are correctly priced. I mentioned what Sam Altman said earlier this week. Joe, what's your thought on this trade that is being put on right now? This disaster? This disaster?
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Joe Terranova
I'm not sure I like the term disaster. I'm not sure that the recent earnings reflect that. That's the word you should be using right now. But last week we did talk about going out and purchasing some volatility, going out and protecting, reshaping the risk ahead of what could be a period over the next three or four weeks where you don't have the clarity and markets have this corrective behavior. Now for Today you have eight of 11 sectors which are actually positive. Obviously the two sectors which are down, communication, services, technology and energy's down. It's always down. Forget energy for a second. But it doesn't really feel like you're getting that broadening out. That's being reflected in 8 of 11 sectors being higher because loss. The overwhelming positioning, the overwhelming bullish sentiment really is in the AI trade. It's in the technology trade, it's in the mega cap.
- [03:40]
Scott Wapner
I get that. And that's what's unwinding right now, is it? Well, wait a second, you say that's what's unwinding?
- [03:46]
Joe Terranova
Well, for today it is for today.
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Scott Wapner
It's just, I mean you think it's just a one day thing.
- [03:49]
Joe Terranova
I don't think anyone that is on.
- [03:50]
Scott Wapner
Track to post its worst two day drop since April. Okay, so remember what happened in April. That's when the market bottomed in April and it was ugly in April and it was, it was uglier in April because the mega cap stocks rolled.
- [04:07]
Joe Terranova
So generally what you see is that when you have, and let's, let's be clear, these are momentum names and over the last five days you have momentum down nearly 2%. Obviously momentum, the best factor year to date, takes the market higher. If we're going to get a little bit of a crack in momentum. Yeah, then I don't, I think you're going to have instability in the market. I don't think the market's going to stay here. And it could be a multi day process of correcting a lot of these names. Look at Palantir. We'll talk about a little bit further. We'll talk about that later. But it's a great example of a stock that had that one day crack and then over the next several days you had the follow through selling. So I think you will see over the next several days a continuation of a little bit of this momentum correction.
- [04:50]
Scott Wapner
Josh, is, is tech vulnerable as Torsten Slo portrays in this note on Monday? Do these so called disaster put trades make you sit back and say, okay, there's at least a cohort of traders that suggest that this tech mega cap trade could be a little vulnerable here. And I can give you a catalyst for why in a moment, but address the issue first.
- [05:20]
Josh Brown
Okay. Yes, it's a bubble, but everybody has the consequence of that statement. Wrong. Let's start with the bubble part. Very obvious. Look at that last raft of high profile IPOs. They're all getting smoked because the enthusiasm on the first day is message board and Internet driven. And the financial media gets really excited about the valuations, et cetera, et cetera. And then people stop paying attention because there's something else to point out. Another shiny object. But lo and behold, you have circle, which hit $263 a share in the last week of June. It's 1:35. It's down more than 100 points. Take a look at Figma. Not quite as bad, but pretty bad, was $122 on the first day of this month. It said 70. No sign of a bottom in sight. I can go on. You know, we can, we can look at.
- [06:18]
Scott Wapner
Right. How about the Bullish one? That was a one day.
- [06:20]
Josh Brown
I mean, could that be any more on the nose? Yeah. So Mike Bird from the Wall Street Journal said if you were writing a novel or a screenplay about a stock market bubble and you use this as a plot device, that a company named Bullish would go public at the apex of it, the editor would pull it out and say it's a little bit too much. So you've got, you've got that activity going on. It's not like, it's not bad. I like that there are IPOs. And I'm not against these companies. I'm talking about the investor behavior around them. The rugs are now being pulled within hours as opposed to days or weeks. And maybe that's healthy. I'm not going to argue that these stocks belong where they opened up, but we, we can't pretend it's not happening. Now, my friend Todd Son at Strategic keeps these amazing charts where he looks at the leverage to X ETFs and the amount of fund flows going into them versus the the inverse ETFs, which would be bearish bets off the charts. Bullish activity. We don't have anything to even compare it to in terms of the way that people are placing their bets. And there are a lot of other examples that I could cite, but we don't have that much time. So I want to just conclude by saying, yes, of course, this is ridiculous activity. Palantir might simultaneously be the most exciting company in the world and also the most overvalued stock I've ever seen in my life. It's not their fault. They're not telling people that the valuation is great. They're just running an amazing business. But they're going to do $4 billion in revenue and it's a $400 billion market cap. Like, I get it, I'm excited about Palantir too. But the stock price action has gotten crazy. So the air is coming out.
- [08:02]
Scott Wapner
Can we do a one week Palantir, guys? Not a, not an intraday or a year to date. Because what Josh is talking about, I think if we have the ability to do a one. There it is. One week. Thank you. Down almost 13%. So there you get the worst, by the way, streak for that stock since March.
- [08:21]
Josh Brown
But this is my conclusion to everything that I was just saying, if, if this activity continues and people get a little bit more selective in hypergrowth tech and the air comes out. The funny part, the ironic part is it's going to go back into the mega caps. Not on day one, but people are going to say, well, I still want to invest in AI, I still want to buy growth, I just don't want to pay 100 times sales. So what should I do? I'm going to pull the lever for Alphabet, which has a reasonable valuation. I'm going to buy Amazon, I'm going to buy Apple. So the joke is that if you want to hedge the runaway train of enthusiasm for AI, that's fine. Maybe you should, maybe you should take profits, whatever the case may be. But like a lot of that money is going to find its way right back into mega cap tech. Which means the QS may not be the ideal way to hedge, like a September shock or a negative in video call. You might be better off doing some other sort of hedge. But I do agree with the premise of your question, Liz.
- [09:28]
Scott Wapner
I just wonder if Powell's speech in Jackson Hole holds the key to not only this so called disaster put trade, but the whole sort of tech thing as a whole. Like if, if Powell comes out and he surprises to the dovish side or the market deems him to be dovish, the chances that you're going to get a pile into the broadening trade I would suggest are pretty high. Maybe the market right now is trying to sniff that out. Here we are. The NASDAQ's down 250. It's a little more than 1%. The equal weight S and P has outperformed the S and P over the past week. It's still obviously lagging over the last three months. But Does Powell hold the key this week to this trade?
- [10:27]
Liz Thomas
Well, first of all, I think there's going to be a lot of action before Powell even happens that probably doesn't have a lot to do with him. And the other thing that we have to lay the land here, S and P is trading in the 94th percentile of its historic valuations. I don't think it's a surprise that we're seeing elevated cost on puts. Right. Elevated cost on protection. Now the elevator again, the difference, the.
- [10:51]
Scott Wapner
Difference of the costs in the spread.
- [10:53]
Liz Thomas
Right.
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Scott Wapner
From a bigger downturn versus a smaller one.
- [10:57]
Liz Thomas
Correct.
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Scott Wapner
That's at the. The spread that's gotten the attention of some.
- [11:01]
Liz Thomas
That's right. And I think the reason for that, a big part of that is that even if you look at what happened in April, there are, there are two portions, if we really simplify it, two portions of return in the index. You've got the fundamentals, so earnings growth, and then you've got multiple expansion. You look at what happens when multiple expansion starts to take over as the lead return generator. If things turn in the other direction, multiple expansion evaporates in a heartbeat and actually takes a bigger hit than the rise that it previously saw. So I think that's the protection that people are putting on. I wrote last week about why to diversify and this is exactly why. Number one, we're heading into a seasonally weak period that's been an overdone story. We know that worst month of the.
- [11:43]
Scott Wapner
Year, September, but over the last problem.
- [11:45]
Liz Thomas
With that, and I find seasonality a really weak reason to do anything. But the problem with it is we talk about it so much that we end up actually creating it in and of itself. So we have to watch out for that. Obviously, valuations are elevated. There are some liquidity concerns because the reverse repo facility has been almost drained. So the market could hit some financial tightening that isn't intended. And Powell is speaking on Friday and in anticipation of a Fed meeting that's still to come. So right now I actually think the market is overestimating the chance of a cut in September. And there is a chance that if he on Friday takes the optionality to say, you know what, I want more time, I want more flexibility possibility, I want to see more data. I'm not going to confirm for all of you that we're cutting in September. I think that could turn things.
- [12:31]
Scott Wapner
Well, that's why they felt like, you know, yesterday was a tremendous wait and see trade, you know, and today's price action in the Nasdaq is is interesting a couple of days before Powell, I feel like B of A and their trading desk today is channeling this whole conversation because they, and actually they've given us a, a reason to even discuss it. Further along with this, this options trade, they list three reasons why mega caps are poised to cede their leadership. Okay, number one, mega caps lag more than lead in easing backdrops. Hello, Powell. Our US regime indicator shifts to recovery where mega caps have lagged two thirds of the time and a shift into value and equity income is how they see the second half of this year shaping up. So the first one, if you're going to get a backdrop of easing, which I think we all kind of agree we're going to have a backdrop of easing. We're only arguing about is it September or later. But the, the Fed's next move is likely to be easing and thus you get a shift into value that speaks exactly to the rotation that some are looking for here.
- [13:43]
Jim Leventhal
Right, Scott? So that rotation, which there are many barometers for, I do use the relative performance of the equal weight S&P 500 versus the headline S&P 500. It's fledgling that rotation right now. I mean it's, it's less than 100 basis points of outperformance over the last week. And before that, forget it. It is absolutely critically dependent the broadening, the rotation, whatever you want to call it, on the Fed easing or I'm sorry, on Chairman Powell indicating that September is a likely date to start easing again. Absent that, I strongly, strongly suspect that you will see flows go rapidly back to Mega Cap Tech Tech. Everything that's been said about the palantirs, the IPOs are very valid points and just extending on something that Josh said. If you look at Mega Cap tech, sure, the Mag 7 is trading at roughly 2930 times forward multiple and maybe you say that's expensive but bear in mind this is also where the growth in earnings has been coming from and is projected to come from. So you're looking at mid teens earnings growth year over year projected for the next several quarters. That gives a peg ratio of 2.0. Some of the Mag 7 are a little bit more expensive. Don't really want to talk about Tesla. Some of them are cheaper like an Nvidia, which is the biggest stock in the, in the universe and it has a 1.4 times PEG ratio which frankly is cheap.
- [15:04]
Scott Wapner
Okay, speaking of Nvidia and these other mega caps, Morgan Stanley out with a note today, excuse me, that says Mega Cap tech stocks are more under owned versus the S&P 500 exiting the second quarter of 2025 than at any point in the last 16 plus years. Nvidia is now the most under owned large cap tech stock followed by Microsoft, Apple, Amazon and Broadcom. While Intuit remains the most over owned name. Joe, you have spoken most recently about Apple being under owned. It is and you can explain this for our viewers. It's counterintuitive and I have the monitor of Josh in front of me, the large monitor that people can't see where he snickered a little bit as I read that. Because when you read that and you say Nvidia is now the most under owned large cap tech or that mega cap techs are more under owned versus the S and P exiting this quarter than at any time in the last 16 and a half years, you're like what? How's that possible?
- [16:03]
Joe Terranova
Because people panic and react the same way and through the course of market history they have proven to be remarkably consistent. If you think about the fall, we went through that period where it looked like we were having what the easing backdrop and the market rotated. It rotated into areas like industrials and financials and it moved away from semiconductors and it moved away from mega cap technology. And then you moved into the early part, part of 2025 and you had that April liberation day massive shakeout in the market. And yes, it presented a scenario where you had a lot of growth managers who moved away from these mega cap companies. And very quickly, very quickly because the revenue growth and the earnings were present, they had to rebuild positions. And I've said there is no better example of that than than what we have witnessed in Apple over the last three and a half weeks, the rebuilding of position. We talked at the end of July about when we rebalanced the quality momentum etf. I said at that time we were seeing momentum building for the very first time in the mag 7 momentum that we hadn't seen build since the Latter part of 2023. So it kind of all fits together and unfortunately it really reflects the emotional element and the deficiencies that we all have when thinking about investing. And we react to price. That's what we do. And that's exactly what's happened over the last six to nine months. That's one of the reasons why you're seeing Apple move as aggressively as it has over the last several weeks.
- [17:41]
Scott Wapner
Speaking of rebalancing, Jimmy Mahaney at Evercore isi, he has rebalanced his top Internet picks for after earnings Q2 he's keeping Google ears number one long. Amazon's the number two long, but he's replacing Uber with Expedia as number three. What do you think?
- [18:03]
Jim Leventhal
A side note, all of us have a wide cadre of fellow money managers that we speak to and I will tell you, many money managers are focusing on exposure, Expedia. Frankly, I don't quite get it because it always seems to me like that's a middleman that can be cut out by Delta's website, by Hilton's website, etc. But nonetheless, it could have.
- [18:21]
Scott Wapner
It would have.
- [18:21]
Jim Leventhal
Well, okay, fine, I mean, for whatever, however you want to phrase it, money managers are focused in, in my observation on Expedia.
- [18:29]
Scott Wapner
What about Google on this show?
- [18:33]
Jim Leventhal
I think it's a layup, a slam dunk. I mean, I'm five foot nine. I don't have that many basketball analogies. So. Scott, maybe you'll help me out there.
- [18:41]
Scott Wapner
But I mean, airball, I haven't seen you play, but I just wanted to throw that one.
- [18:46]
Jim Leventhal
Yeah, I'll spare you. Look, it's just, it's obvious, the multiple, the growth rate. I think that the company is doing a very good job of simply stating we are competitive, okay? We are not going to be left by the roadside. In fact, recent surveys of large language models have, have shown that frankly Alphabet is at the top. And then there's the web services and then there's YouTube and Waymo. Very attractively priced. And look at the price action. Joe, I know you and I had some good repartee over the last few weeks about a tepid response to earnings that however, has been followed with a slow burn higher. And I love that. That's, that's accumulation going on and I think it's going to continue.
- [19:26]
Scott Wapner
21 years ago today, Google went public. So IPO. IPO price of 85. It's only up 90 500%. Only 9500% in the 20 years since. Speaking of Amazon is Mahaney's number two long price target to 300 from 290 at loop. Josh, you want to weigh in here?
- [19:46]
Josh Brown
Yeah. I think this is the slam dunk. There is no AI without huge profitability at us. And yes, they're making tons of capex investments, influence, just like their competitors are. They sort of have to. But I think the story here is just very simple. If anyone's going to find a way to make money and monetize all of this activity and all of this capex that's already been invested, not just by Amazon, but by everyone Else this is going to be ground zero. And, and I think they know it and I think they are operating with, with that in the backs of their heads. And it's so funny. Like I remember a year and a half ago people thought this was about like who owns the large language model. Like is, is Claude going to be competitive with perplexity and, but it's not the point. The point is the, the cloud infrastructure and the data centers and the hold on the customers. And I think us is in great position just like Microsoft and just like Alphabet is. But the under owned thing, we talk about a $4 trillion market cap on its way to 5 trillion. And we're saying under owned, you have to actually look at what they mean by that. They're saying in terms of institutional ownership relative to the stocks waiting in the S and P and they're saying like in video is the most under owned. But when you actually look at the, the data, it's 92 basis points, points below where it was quarter over quarter in terms of institutional ownership. So it's not like this massive chasm where like oh no, nobody owns in video relative to its waiting in the S and P. It's. No, it's not even close to being like.
- [21:27]
Scott Wapner
That's exactly why I posed the question at the outset with that exact thing. It's like you hear that, you're like, no, that's obviously not true on its bro.
- [21:39]
Josh Brown
It's, there's, there's a, that there's 20, there are 20 standalone ETFs. What do you think the number one position in pretty much all of them is? Then there's another 10 AI infrastructure ETFs. So there are 30 standalone ETFs that are all directly investing into the AI theme and they're all buying in video and they're all taking inflows. The Vanguard Technology ETF VGT just broke $100 billion in assets. Joe will tell you he knows the ETF business. This has never happened before. There's never been a sector ETF that's broken $100 billion in assets. None of these stocks are under owned. We're, we're talk, we're doing like, we're doing like microscopic surgery on the fly of a mosquito trying to find some like little edge here. It's, it doesn't exist. They're all plenty owned. You could take my word for it.
- [22:38]
Scott Wapner
No, I think it extends, it extends beyond the mega cap universe. Like I'm thinking of Cyber for example, which has been one of the most popular Areas within the technology universe. We're focusing on it again today because Palo Alto had their earnings. They had a better than expected expected guide. Market loves it. There's a stock up about four and a third percent. Got upgraded today to buy from neutral to 15. Is the price target at B of A. Joe, you own it.
- [23:07]
Joe Terranova
It did exactly what we were talking yesterday that it needed to do. It needed to give you a quarter where you exceeded the expectations. Really the guidance is the strong point here and it's the one of the reasons why it's moving significantly higher. I will say this about the report. It didn't do what I suspected it might do, which would be comfort the entire cybersecurity space, which is in the midst of a mild correction. Take whatever position you want on where we go from here with that correction. But I would have thought that a strong earnings report from Palo Alto, favorable price action, it would have lent itself to see some strong support the other cybersecurity names.
- [23:47]
Scott Wapner
And you're not seeing that CrowdStrike is down. You know, Josh, that's your big name in this area. Why is CrowdStrike down one and a half percent?
- [23:57]
Josh Brown
Look, I think, I think it's a story about the overall software sector just cooling off. It's not the end of the world. The igv, let's just look at the broad sector is only, and I say only with quotes because this would represent in normal times a pretty good year. Only up 9% year to date in, in total returns. So that's kind of like the backdrop. 67% of the companies in the IGV actually are negative on a year to date basis.
- [24:26]
Scott Wapner
None of, not even that. But by the way, 2/3, 2/3 of the IGV are down 20% or more from their highs.
- [24:35]
Josh Brown
That's right. So I think it's a sector story is nothing. It has nothing to do with the outlook for cybersecurity spending or, or cybersecurity related Capex or like demand. None of that has anything to do with what we've seen with these stocks. I think just sometimes people take profits. If you look at, with the, I think with the exception of Fortinet, if you look at the, the earnings calls for the big five in this group, let's say, and there's probably, there probably shouldn't be a big five, there should be a big three. And I know we're getting some consolidation but like none of them really gave you any kind of inkling that there was some sort of a spending pullback into year end or anything like that. So these stocks had an unbelievable 2023 and unbelievable 2024, a great first half and now the space is cooled off, money is shifted to semiconductors. We know that and it's just the kind of thing that happens from time to time. But I think if you're a long term investor in one of these names and I am in Crowdstrike, I think your best bet is probably to ignore it unless there's some fundamental change.
- [25:40]
Scott Wapner
Liz, what do you think about cyber? Is this like going from hot to not?
- [25:44]
Liz Thomas
No, I think cyber is a long term investment and I think if you're in it, you keep it. If you're not in it, it's something that this is probably a decent entry point and you're getting an opportunity. But again, this is not something in my opinion that you trade. I think this is something that you own. Certainly the demand for cyber is not going to going down and just software in general. My 2025 outlook actually chose software over semiconductors. It hasn't quite worked out that way. But I do think that there is opportunity for software to pick up as the year goes on, especially if we get into an easing cycle and money flows out of a lot of the hot names.
- [26:17]
Scott Wapner
Yeah, I don't know. Citi today says we believe more upside, so keep buying the dips in terms of semis. Broadcom gets a price target bump today. Intel's in the News for the investment 2 billion from SoftBank along with obviously the government news of the week. Up next, our top calls the day. Including a price target hike for one of Joe Stocks, it's rallied nearly 200% this year. And later, Josh Brown is back. Update to his best stocks in the market list. You don't want to miss it. We're back after this break.
- [26:52]
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Josh Brown
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Jim Leventhal
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- [28:22]
Scott Wapner
All right, let's do calls of the day. Let's throw up. Robinhood today price target to 160 from 105 reiterated outperform at Bernstein so 160 from 105 Joe they also today Robinhood does launches its pro and college football prediction market so notice DraftKings and Flutter were down on that news.
- [28:41]
Joe Terranova
You own the stock recent purchase into the etf. So we're just trying to kind of understand how it's to going going to trade based on momentum. But I think what is impressive about the company and one of the reasons why it was a candidate overall to be included was the score increased dramatically on the quality side. This is a company that continues to diversify its business model not just oriented towards crypto into other areas of the financial services industry and they're beginning to throw off cash seeing the revenue growth being very strong. And that quality factor is really more than anything else. The momentum has always been there for this company. Now as we move forward, I think you have to acknowledge and I would be humble about this, it is going to be susceptible to where the price of Bitcoin and Etherium and other crypto assets go. So if you see a continuation of the mild pullback that we've seen over the last several days in those crypto assets, I think you're going to see Robinhood trading lower. That's just going to be the effect of crypto.
- [29:40]
Scott Wapner
A bull market barometer in some respects too because the things you cite, you know in a little bit to a bull market.
- [29:49]
Josh Brown
Yeah.
- [29:49]
Joe Terranova
And I love that you're identifying that because I don't think you can ignore it. No, I don't think you can ignore those things. I think those are reflective of behavior more than anything else.
- [29:59]
Scott Wapner
Let's look at DraftKings and Flutter. I did mention those And I just want to touch on them. I saw that earlier this morning they were down and some were suggesting it was because the Robinhood news flutters flat and draftkings not down all that much. So we'll, we'll move on from that. Rocket Companies initiated by 25 bucks price target BTIG Josh, this is you.
- [30:21]
Josh Brown
Yeah, I will not sell any of my shares in Rocket right now because I think if and when they ever get around to normalizing interest rates this is is like an obviously one going to be one of the biggest beneficiaries. While the housing market has been down and out this company has been pulling off very aggressive acquisitions including this Mr. Cooper deal which will close by year end and based on what the analyst is saying that will make Rocket the largest mortgage originator and servicer and they are going to have a war chest of cash post close. They're going to have about 500 million worth of merger related synergies over the next two years and the rate cuts that will spur more housing activity. Don't forget they also acquired Redfin earlier this summer and that deal already closed. So from, from my perspective this should be a $25 or $30 stock if they can execute it won't happen overnight but I'm actually looking for a market wide pullback to get this thing back into the low to mid teens and I'll probably add a lot more if it ever does get down to that level. So I'm looking at this as like an 18 to 24 month situation that could trade substantially higher.
- [31:38]
Scott Wapner
UBS raised their gold forecast today. That's one of the calls we Want to hit. Target 3600 by the end of March. That's up from 35 and to 37 by the end of June. 37 by the end of June from 35 despite the dialing back of some trade frictions they say we see us macro related risks, questions over Fed independence, worries about fiscal fiscal sustainability and geopolitics and underpinning the de dollarization trends and more central bank buying. That's interesting. Liz, what do you think about that?
- [32:09]
Liz Thomas
Look, I have liked gold for a long time but back in spring it started to kind of stall out after the big run up that it had from political volatility and t tariffs right now because policy uncertainty has actually come down. Given the fact that tariffs are either in effect or maybe just the verbiage around it has slowed down a bit. I don't see a ton of upside for gold maybe between now and year end I think we would need an uptick in some more of that uncertainty to see another big bid. Gold has had an incredible run. It has outperformed the S and P over periods, which is just amazing. So I think we've squeezed a lot out of Gold Gold for now and we would need a shift in the policy narrative to put it back on the uptrend.
- [32:48]
Scott Wapner
All right. We'll get the headlines now with Savannah now. Hi, Silvana.
- [32:51]
Silvana Hanau
Hey, Scott. Good afternoon. Switzerland says it's willing to host a possible summit between Russian leader Putin and Ukrainian President Volodymyr Zelensky even though there is an arrest warrant from the International Criminal Court for Putin. Switzerland's foreign minister said the Russian leader could be allowed into the country as long as it was for certain reasons, such as reaching a peace deal. A federal judge in Florida has dismissed part of a lawsuit over detainees legal rights at a detention center dubbed Alligator Alcatraz. In his ruling late Monday, the judge said many of the plaintiffs have in fact received legal counsel. He also transferred the case to another jurisdiction, agreeing with the Trump administration that it wasn't the proper venue. And Texas House Democrat Nicole Collier has spent nearly 24 hours at her desk on the floor at the State House after she said Monday that she would refuse signing off on Republican Republicans condition of a law enforcement escort until Wednesday when the House reconvenes. State House Speaker Dustin Burroughs said today Collier is within her rights to refuse the quote, permission slip. Scott?
- [34:01]
Scott Wapner
Alright, Silvana. Thank you. Silvana Hanau. Up next, Josh Brown's best stocks in the market. He's ready with a new biotech name on his list. Which one will it be? We'll find out next.
- [34:15]
Josh Brown
My name is Josh Brown. Everyone needs to invest. We're going to show you exactly where the best stocks are and what's happening with them in real time. Join Pro for exclusive access to Josh Brown's best stocks in the market at cnbc.com/best stocks.
- [34:43]
Scott Wapner
All right, let's do this. Best stocks in the market list with Josh Brown a new name. I said it was added on August 12th. So a week ago. Insed. Insm. Why?
- [34:55]
Josh Brown
Yeah, well, so I am not recommending that people buy this right this second. But it's a really great example of a huge winner that sneaks up on you. I only have three biotech names on my best stocks list right now. It's just been a horrible sector. But the sector is starting to turn the corner and this is really one of the first to make a, to make a huge move. It's up about 95% over the last three months. The name that we did talk about, Judge, that has worked out for viewers of the show is alder lam al ny. It's up 50% since the day we talked about it here on the air. And that stock still looks fantastic. But these are like vertical moves. The one that I want to focus on is the third Gilead. We talked about the stock once already. This is a giant in HIV treatment and HIV prevention. They had an excellent earnings call which for people that follow the pharmaceutical space will tell you that's pretty rare these days. But they are the world leader in hiv. They announced huge gross margin improvement. The pipeline looks great. They have a new drug on the market that they said scripts were being written within hours of, of approval. And as you can see, yeah, the stock is up slightly from where we talked about it, but it's still hovering just below the prior high. I think 120 when it breaks is a really nice trigger. Traders can use 110 for risk management investors, I would stick with a simple 200 day moving average, currently about 102. This stock has been above its 200 day for 12 straight months. Even during the worst of the market in April, it never even got close. I think this name is under accumulation. So of the three we missed ins med on the lam already worked out. I think Gillian has the potential to be next and I'm not in the trade personally yet, but that could change.
- [36:54]
Scott Wapner
Okay, Liz, what about biotech here? I mean that is one of the areas that has gotten a rate cut, hope boost. Yeah, lately.
- [37:01]
Liz Thomas
Yeah. Well, when you think about health care as a sector in general and full disclosure, I used health care as my final trade last time I was here. But think about the sector in general. You've got pharma and biotech that serve as the growth engines in that sector. So if you're going to see any rotation out of some of the really beloved growth names, I think investors still need and want growth so they're going to look for other opportunities. That's why I like software still and I think biotech can probably benefit from that too. Health care has just been so unloved and I think people are hesitant to get into the sector at all, thinking it's down for a reason. But it can't really go much further down from here. It's in the first percentile versus the S and P valuations over a long term period. Of course everything can fall a little bit further, but it's, it's pretty far down.
- [37:46]
Scott Wapner
Okay, 52 week high today for the XRT. That's retail. We got the setup coming next in what is a busy week for earnings ahead. All right, let's do this. Best stocks in the market list with Josh Brown. A new name. I said it was added on August 12th so a week ago intm why?
- [38:23]
Josh Brown
Yeah, well, so I am not recommending that people buy this right this second. But it's a really great example of a huge winner that sneaks up on you. I only have three biotech names on my best stocks list right now. It's just been a horrible sector but the sector is starting to turn the corner and this is really one of the first to make a, to make a huge move. It's up about 95% over the last three months. The name that we did talk about Judge, that has worked out for viewers of the show is alder lam al ny. It's up 50% since the day we talked about it here on the air. And that stock still looks fantastic. But these are like vertical moves. The one that I want to focus on is the third Gilead. We talked about the stock once already. This is a giant in HIV treatment and HIV prevention. They had an excellent earnings call which for people that follow the pharmaceutical space will tell you that's pretty rare these days. But they are the world leader in hiv. They announced huge gross margin improvement. The pipeline looks great. They have a new drug on the market that they said scripts were being written within hours of, of approval. And as you can see, yeah, the stock is up slightly from where we talked about it market but it's still hovering just below the prior high. I think 120 when it breaks is a really nice trigger. Traders can use 110 for risk management investors. I would stick with a simple 200 day moving average. Currently about 102. This stock has been above its 200 day for 12 straight months. Even during the worst of the market in April it never even got close. I think this name is under accumulation. So of the three we missed ins med on the lam already worked out. I think Gilliatt has the potential to be next. And I'm not in the trade personally yet but that could change.
- [40:22]
Scott Wapner
Okay Liz, what about biotech here? I mean that is one of the areas that has gotten a rate cut, hope boost. Yeah, lately.
- [40:29]
Liz Thomas
Yeah. Well when you think about health care as a sector in general and full disclosure, I used health care as my final trade last time I was here. But think about the sector in general. You've got pharma and biotech that serve as the growth engines in that sector. So if you're going to see any rotation out of some of the really beloved growth names, I think investors still need and want growth so they're going to look for other opportunities. That's why I like software still and I think biotech can probably benefit from that too. Health care has just been so unloved and I think people are hesitant to get into the sector at all, thinking it's down for a reason. But it can't really go much further down from here. It's in the first percentile versus the S and P valuations over a long term period. Of course everything can fall a little bit further but it's, it's pretty far down.
- [41:14]
Scott Wapner
Okay, 52 week high today for the XRT. That's retail. We got the setup coming next in what is a busy week for earnings ahead. Dow did hit a record high earlier today thanks in part to Depot. Depot is up more than 3%. They maintain their full year forecast. It did miss on earnings for the second straight quarter but the market likes enough of what it saw. The builders are up as a result. And it just brings us to a retail conversation. The XRT is hitting a 52 week high today. We do have a number of companies on the docket. Tjx, Jyoti, you own that. That comes tomorrow. It's very close to a new record high as well.
- [42:06]
Joe Terranova
It is very close to a new record high which it recorded back in May. The consumer continues to be cost conscious and that benefits tjx. They're not immune to tariff headwinds. Clearly they will be impacted by that in this quarter. But they do a great job in sourcing their inventory. Very diversified in that mannerism. And it's one of the reasons why I think they'll be able to alleviate some of those tariff pressures that other retailers are experiencing.
- [42:33]
Scott Wapner
You want to give me your thought on Wal Mart, which is Thursday. And by the way, Goldman's Tony Pescarello has a note in which he says following a decent retail sales report last week and the import, it's an important micro week with a set of high profile companies reporting their earnings. And I think we would all say that Wal Mart is just that. I suspect the underlying trends are as follows in order of conviction. One high end is greater than low end. Discretionary is greater than Staples Services, greater than goods. So in the context of that, whether you agree with him or not, what do you think for Walmart?
- [43:07]
Joe Terranova
So it's interesting because you know you have two Differing opinions when you think about Wal Mart from a valuation basis. And valuation is not what I am prioritizing but a valuation basis. People are going to say it's really rich at 40 plus times. But the real fact is the company continues to exhibit very strong momentum both from a technical perspective and from the perspective of what they're delivering on earnings. Did you know that Walmart's gain.
- [43:32]
Scott Wapner
I'm sorry to interrupt you. I'll come back. You know Walmart's year to date is double Amazon's.
- [43:36]
Joe Terranova
Yes, yes. Wal Mart's having a particularly. Well, I wouldn't say particularly strong but relative to remember Amazon stumbled coming out of the gates. But we're going to have to understand in this call how Wal Mart is going to defend against what appears to be coming and that's the competition from Amazon for food in grocery.
- [43:56]
Scott Wapner
Okay, that's what you talked about last week which you thought was a significant, significant catalyst for the stock being down. Absolutely.
- [44:03]
Joe Terranova
One of the reasons why it was down significantly on day and I really do think it is a credible threat that's going to be presented from Amazon.
- [44:11]
Scott Wapner
Wal mart reiterated by today120@b of A ahead of that number. We'll take a break. Santoli on the other side.
- [44:47]
Liz Thomas
All right.
- [44:48]
Scott Wapner
Welcome back. Mike Santoli, senior markets commentator is here with his midday word of the equal weight over the Qs is a significant story. Are you watching?
- [44:59]
Mike Santoli
It is absolutely. Right now the equalize up like quarter of a percent on the day you got Qs down about a percent. And you know we've talked about this from time to time when you get one of these bouts of kind of rotation out of the big winners is this is what the broadening that everyone is rooting for might look like, which is the S and P can't get out of its own way for a while. You have a little more of a retrenchment in the popular big stocks and everything else maybe plays a little bit of catch up. It seems kind of mechanical. I mean a lot of the stuff going on in the last week or so feels very kind of tactical within a narrow range. I've been pointing out for four days that the S and P held to last Tuesday's close, which was like 6445. We lost it here. So I think if that was significant, then maybe we have to figure out if, if just a proper modest pullback is what is what's underway here. But it's probably a net positive that more stocks are up than down in the New York Stock exchange right now. And so that's it's kind of finding a place to go as opposed to just retreating altogether.
- [46:00]
Scott Wapner
Is it, is it trying to front run Powell at all like thinking that maybe it's going to lean dovish and that this trade is going to have some legs?
- [46:07]
Mike Santoli
My guess is not. I mean look yields are down a little bit. I think it's maybe extra expressing some confusion about whether we're going to get complete clarity out of out of Powell. I'm not sure. I do see that. I think it's a rethink of the current velocity and trajectory of the trade. Metta down 5 and a half 6% off the highs times is confirming that report of a restructuring in AI and this idea that it's maybe not a zero sum game but it's not everybody wins who's investing as heavily.
- [46:35]
Scott Wapner
What did we say It's a matters going on it its worst two day streak since April. We know what happened in April right now.
- [46:42]
Mike Santoli
Exactly. And again we're talking about modest pullbacks at this point but I do think that is where we are that look the NASDAQ 100 was up 40% off the low.
- [46:51]
Scott Wapner
Say no more.
- [46:52]
Mike Santoli
It could stand to take a break.
- [46:54]
Scott Wapner
All right, I'll see you on closing belts. Mike Santoli. Coming up, Jimmy Farmer. Jim is flagging an under the radar stock he wants you to know about. We'll do it next. Let's do a month to date on CRH please. Stock having its best month since October of 2011. There it is. And Jimmy says it's under the radar because we didn't know it was up that much. Right Jim?
- [47:30]
Jim Leventhal
You know it's funny that it's so under the radar. It is the biggest aggregates slash materials manufacturer out there. So a lot of people know Vulcan Materials and Martin Marietta Materials. This is twice the size of each of them. It's actually cheaper than both of them. And frankly the price action that you're seeing in the stock is to me a barometer of what's to come. I mean they make cement, they make aggregates paving material, that sort of stuff. We're going to be building of a lot lot of stuff here in the US and frankly abroad too. There's data centers going on abroad and if housing does pick up they will participate as well. So it's this combination of what you're seeing in the housing stocks running as well as AI infrastructure attractively priced PEG ratio of 1.3 which adjusts that high teens multiple for the growth rate in earnings ahead.
- [48:17]
Scott Wapner
All right. Up one and a half or one and a third percent. We will do final trade next. Well, it's going to be a big market to track over the final stretch. Nasdaq lows of the day right now. We will discuss with Adam Parker, Lori Calvacena, Mohamed El Erian and Bill Miller IV. I hope you join me then, 3 o' clock Eastern. Joshua Brown, your final trade is what.
- [48:46]
Josh Brown
I remain long rocket companies.
- [48:50]
Scott Wapner
Thank you very much. Farmer Jim Cisco.
- [48:53]
Jim Leventhal
I find this is an easy one. There was about an 8% pullback after earnings. That was basically because a new CFO is in town and he wants to set an easy bar to clear going forward. This one is obvious to me. It's already coming back.
- [49:06]
Scott Wapner
Wow. Okay, Liz.
- [49:09]
Liz Thomas
Software, I think it's way under loved. Getting more under love by the minute.
- [49:14]
Scott Wapner
Today sure is down more than 2% sector. All right.
- [49:20]
Liz Thomas
Getting it even more on sale. But a beneficiary of a rotation if that should happen. And I still think it's a good adjacent trade.
- [49:27]
Scott Wapner
All right. Thank you very much.
- [49:28]
Joe Terranova
Jyoti Insulin medical device maker Insulin Pod.
- [49:33]
Scott Wapner
All righty. I'll see you on closing bell, three o' clock Eastern. The exchange begins right now. You've been Listening listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [49:50]
Edward Jones Narrator
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 halftime reportdisclaimer cnbc make.
- [50:30]
Josh Brown
It online Course how to build a standout personal Brand Three industry experts will show you how to create and grow your brand so step by step, there's no time like now to start building your personal brand. Register now at cnbcmakeit. Com Personal Brand.