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Halftime Report
A Make or Break Day for Stocks: The Committee's Top Strategies 4/29/26
00:44:03
Scott Wapner and the Investment Committee discuss their top strategies with Fed Chair Powell's final Fed meeting and several mega cap earnings looming over the market. Plus, the desk share their latest portfolio moves. And later, the desk give you The Setup on stocks reporting earnings this week. Investment Committee Disclosures
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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. All right, good stuff, Carl. Thanks so much. Welcome to the Halftime report. I'm Scott Wapner. Front and center this hour, what some are calling a make or break day for stock. Several mega cap earnings are looming. The chairs final Fed meeting. We are trading all of that with the investment committee. Joining me for the hour, Joe Terranova carrying Firestone, Stephen Weiss, Malcolm Etheridge along in just a moment as well. We'll check the markets here on this very big day. Carl said a little bit of a leg lower in the last few moments. We are red across the board, led lower by today the Dow and the Russell. But it is a momentous day for this market. Is it? In fact, as some are calling it, a make or break day for stocks,
- [01:57]
Joe Terranova
it is more important right now than it certainly was 24 hours ago. And I think the reason for that is this rise, the uncomfortable rise that we're seeing in energy. You have gasoline once again, the first five contract months all at a 52 week high. The price of spot WTI up near $107. So, yes, that places a higher degree of emphasis on the ability for these Mag 7 companies to deliver tonight. What do I like about the market? I like the fact that the semis bounce back. We'll talk a little bit more about some of the names like an XPI that are contributing to that recovery today. But I do think it's about the Mag 7, we have Amazon, we have Alphabet once again recording Microsoft. Well, you have Amazon and you have Alphabet once again recording 52 week highs today. I think that's important. But overall, as we get to the other side of this, I think the Magic 7 will deliver.
- [02:50]
Scott Wapner
Well, they have to carry, deliver. I mean, you know the NASDAQ's up over the last month, right? Like a little less, like almost 18. Yeah. Right. So the stocks have roared back, they've, they've helped the S and P roar back to a new record high. We're off that by a little bit, but not much. So now, given the comeback, they better meet the moment.
- [03:10]
Kerry Craig
Oh, exactly. And part of what's so important today is what we heard from OpenAI or we heard from the Wall Street Journal about OpenAI and how there are concerns about their revenue growth and if their revenue growth is weaker than expected, you're going to start to hear that in terms of cloud storage. And these companies are going to have to talk about what they expect to be spending, how much they're going to need, how big of a platform play this continues and the usage of all of these chatbots.
- [03:40]
Scott Wapner
We're going to get to, we'll get to the specifics of what is most front and center today for all these companies in a moment. But I want to stay on the idea of what many on the street today, because I got the notes in front of me are saying a make or break for stocks. These reports today, given they're coming all for the most part at once. Throw Apple in tomorrow and Nvidia is down the road a little bit. But this is a very significant moment for this market.
- [04:11]
Stephen Weiss
Yeah. And how many times have we seen a Fed meeting not matter?
- [04:17]
Malcolm Etheridge
Right.
- [04:17]
Stephen Weiss
So that doesn't matter. So what matters is what happens after 4 o' clock today that's going to be critical. Now what happens if it's if King Solomon day and you have some that good and some that were bad? So what does the market focus on? Is the market in moving to a risk off situation and they accentuate the ones that miss? I don't know. But it is, it's going to be so interesting tonight. And look, I'm positioned anything in front of it. The ones that I own I'm happy with. If they get dislocated tonight, then that's fine. I have a little room to buy with some cash. But. But the other interesting thing is what happened with Open Air that you mentioned. Now if that were a public company and if the competitors are public Companies you'd be able to read through and say, is that happening at Anthropic? We don't know. My suspicion is Anthropic and Google Alphabet have picked up share and that's why they're not meeting their targets. I think that's evidence in all the conversations you have.
- [05:18]
Scott Wapner
Right.
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Stephen Weiss
So the read through yesterday, you know, that hit the market. I'm not sure that's a big deal, but it's going to be just a hell of an evening and tomorrow morning it's just going to spill over.
- [05:27]
Scott Wapner
Yeah. Malcolm, there's a report, one, one report saying 80 seconds of big tech earnings will decide the stock market's fate. Do you agree with that assessment of what's going to happen in overtime tonight?
- [05:42]
Jyoti Dowell
I think that that is a great characterization. I think that it's, it's interesting that coincidentally, the four companies planning to spend the most capex related to AI infrastructure this year are all reporting within 80 seconds of each other. So it is very much a make or break moment for the markets this afternoon. Joe, I thought was taking us in the right direction with the setup where he mentioned the last 24 hours and what has changed in the last 24 hours and Kerry caught it. It's really the overhang of open air. It's the fact that we now have five fresh questions related to open air and whether they're going to be able to actually meet those spending commitments where, if you remember, it was in October where we started to have questions and doubts about whether they could actually make good on those $1.4 trillion worth of spending commitments that sent the tech trade downward anyway. And now as we're starting to get on the high, get on a good foot, the tech trade now could unravel all over again in the shadow of this. So the Wall Street Journal picked the perfect time, I say that sarcastically, to release that report.
- [06:46]
Scott Wapner
Yeah. So there's so much anticipation in the air. And as I mentioned, we'll come back to this in, in just a moment. I want to clear the decks though, so to speak, on this final Fed meeting of Chair Powell's tenure because Steve Liesman doesn't have a whole bunch of time before he has to get ready to go in the room and he's figuring out exactly what questions that he wants to ask the chair. So, Steve, it's nice to have you. As always, no policy moves are going to happen today, barring some unforeseen thing, and we don't really expect that. There are big questions, though, and we will want answers. To does the chair stay after his term ends? Does he clear the decks completely for Warsh? What hand does he leave the new chair? And how will history judge his tenure, his stewardship of the Fed? I think those are the key outcomes that we'll all be looking for today, right?
- [07:41]
Steve Liesman
I think those are three great questions and I think all of them in some sense will be asked in one way or another at the press conference. I think some of them bear on the future. So was it Steve Weiss who said it's all boring, time to go get a cup of coffee and come back in a minute. So, so here's the thing. The first thing is does he stay or does he go? What's important about that is if he goes, the President will have a, a majority on the Federal Reserve Board of Governors and another vote potentially inside of the, the fomc. So that's important there. And I think there's a couple of things that he'll be weighing whether or not he wants to stay until the, for example, the Supreme Court rules on the Cook case. Does he wait for the IG Report? Does he wait until the successor is named, likely going to be Stephen Myron or the Department of Justice appeal deadline on the subpoena case? The other question is whether the Fed makes a move towards a more neutral standpoint with the idea that the next move can be a hike or it could be a cut. Right now the Fed is kind of leaning towards a cut, but with the high inflation we've had on the price spike, I think those are, there are some members of the committee who want a more balanced statement. And then you look at the outlook for the Fed. What's been remarkable to me, Scott, is look at that extended period of time there, all the way out to July 2027, and we can't even get to a 50% probability of a rate hike under a chair who said he wants to cut rates or, sorry, rate cut under a chair who says he wants to cut rates.
- [09:13]
Scott Wapner
You know, it's interesting. I asked Jim Bullard, the former St. Louis Fed president yesterday when he was on closing bell with me, what grade he would give the Fed chair. And he wasn't willing to go there acknowledging the pluses and the minuses along the route, if you will. I'm curious as to how you think history will Judge Powell, somebody who really guided the Fed through a once in 100 year health crisis, the tariffs, the highest inflation in some 40 years, an unprecedented level of personal attacks and attacks on the institution, Constitution itself, you could say he dealt with all that magically. But there is the knock of the getting transitory wrong. There's the knock of buying mortgage bonds for too long. There's the knock of waiting too long to hike rates. That will sort of take a few notches down on the grading. Do you agree with that?
- [10:13]
Steve Liesman
I do. And the question is how much you want to, you know, what kind of curve you want to put on the grade. Scott? Right. A lot of Fed Chair Powell's tenure happened under President Trump and he withstood really withering criticism and a level of public admonishment that has never been seen before. And he mostly kept his mouth shut. So I'd probably give him an A on politics. Perhaps that would be the first thing. The second thing is it's a big question of whether, how you want to tell the history of, of the pandemic. There is a version of the pandemic that is told by Powell's critics where the pandemic doesn't exist, where there is no invasion of Ukraine by Russia and no price spike in oil. That version grades Powell very poorly. Another version that takes that into account gives them a somewhat better grade. He was late to the party, but how late and when he might have moved and would it have mattered is another question. So there's a more is an easier way to grade Powell and a harder way. I think his critics are too tough and maybe his supporters are too easy on him. That will be a big factor. But overall, I think he delivered relatively low inflation, relatively good growth and low unemployment over the balance of his tenure. With the big question about how we debate and discuss his performance in the
- [11:41]
Scott Wapner
pandemic, which we will continue, I think to do. And I'll look forward to seeing you outside the room, Steve, when you join me later on three o' clock when the chair is done and I'm in the midst of the conversation with Jeffrey Gundlach. I look forward to speaking with you and we all look forward to hearing your question to the chair after 2pm 2:30pm Once the news conference does begin. That's, that's Steve Liesman. We don't, I don't, we don't need to debate here. I don't think the, the tenure of Chair Powell because I really want to get back to I think what matters a whole heck of a lot to, to our viewers today. That's the earnings that are coming. We, I think broad brushed it right in terms of the companies themselves. We looked at the market impact. Let's talk specifically about some of these companies. Let's begin with Amazon. Okay. AI monetization is going to be front and center for everybody, along with the AI spend growth rate. Will it meet the moment? What will they say about the Trainium chip business, which has been on fire? They're expected to reiterate their $200 billion spend. It's the most on record. Does that change? I don't know. What are you most looking for with Amazon Care?
- [12:48]
Kerry Craig
Yeah, I think it's the growth in AWS. So people are expecting 28% for the quarter. It'll be great if it's 30%, if they raise the year. The year I think is 36%, maybe up 20 toward 40%. They've been on fire. The stock in the stock has been fantastic. We're looking at growth. The numbers should be 163 for the quarter, hopefully higher than that. But it's more important about what they're saying on the storage business and how
- [13:16]
Scott Wapner
that's, that's stocks up 27 and a half percent month to date. So. So, Malcolm, you know, given the roar back that many of these names have had, how does that influence the context of how you'll judge this tonight?
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Jyoti Dowell
Yes, so I actually think Amazon is the one that I'm most, I'm most sure that Amazon is going to have a positive, the street is going to have a positive reaction after Amazon reports. Yes, it has run up considerably. Yes, we do expect 28% growth and they'll probably give us exactly that. But I think there's a, there's an opportunity to tell a story around Trainium that we haven't really locked in just yet. So the street did respond to last quarter when they told us that they had positive performance and they actually could now turn themselves into an AI chip business if they wanted to and really start to turn these things, turn this on. And so I think that's really where the guidance story is going to go. That's probably where Amazon shares start to take off again from here if we do get a strong guidance related to their chips.
- [14:19]
Scott Wapner
I'll come back to this in a moment. I want to go back to D.C. though. We have breaking news. Megan Casella has that for what are we learning here?
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Megan Casella
Megan Scott, President Trump just told Axios in an interview that posted just a few minutes ago that he's going to keep his blockade in place against the Iranians until there's some sort of deal worked out that addresses Iran's nuclear program. Now, this is the clearest we've heard yet from the President himself that he's rejecting that deal that we heard over the weekend the Iranians had given to the Pakistanis. The deal that the Iranians had offered was that they would reopen the Strait of Hormuz while pushing nuclear talks to a later stage. Now, the president saying he will be keeping his blockade in place until they address the nuclear side of things directly. Now, Axios is also reporting, citing three sources with knowledge that U.S. central Command has prepared a plan for a short and powerful wave of strikes on Iran in hopes of breaking the negotiating deadlock. They say the strikes would likely include infrastructure targets and that would likely the US Would use it to press the Iranians to come back to the table. Trump telling Axios that he sees the blockade as somewhat more effective than the bombing, but the option is out there now. Scott I reached out to the White House myself on this and have no further confirmation from them. But I do want to flag that. We know from earlier today a White House official confirmed to me that the president met yesterday at the White House with some oil and energy executives. Some top officials were in that meeting, too. And one point of discussion, I'm quoting a White House official here, was steps that we could take to continue the current blockade for months if needed and minimize impact on American consumers. So we do know, according to a White House official, that the president has been having these discussions about what it would look like to keep this blockade in place, they say, for months if needed.
- [15:54]
Scott Wapner
Scott yeah, hard, hard to do that, obviously, when when oil is priced on a global basis and the gas price is going to be reflective of what that ultimate price is going to be. Meghan, thank you very much. That's Megan Casella. We'll get back to our conversation. Moving it to Alphabet. Google Cloud expected to grow 47% in the quarter, more or less. Revenue growth needs to be good. Right. Where margins what a margin is going to do given the company is going to spend 185 billion this year, you need a certain degree of revenue growth to obviously meet that moment and justify that. Jyoti, what's most important for you here?
- [16:32]
Joe Terranova
So I think it's the cloud growth. Seeing them achieve 50% year on year
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Scott Wapner
is critically important that the whisper number you think because they what they do 48 last 47 now. So it's what you see, 50.
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Malcolm Etheridge
Yeah.
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Joe Terranova
So I think what's happening is both in the and I completely agree with Malcolm's assessment of Amazon. I think the street is going to greet that really well. But U.S. growth, 28%, that number was down around 25 and a half just a couple of weeks ago, slowly rising. Same thing is happening for Google Cloud. You're seeing a slow rise in what the anticipation is now towards 50%. I like that story. This is a company, nine consecutive quarters they've delivered, I think the diversification element of where the business is right now with Gemini, with the tensor processing units. And I think when you look at Alphabet and you look at Amazon, I think they're a little bit late. When you give consideration to the mega caps, to the AI story in terms of their price performance, they really didn't initially rally to the degree that Nvidia did. I like that they're late to the story because I think there's more room to build positioning there. I like both Alphabet and Amazon.
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Scott Wapner
Alphabet's up 23 and a half percent month to date. Weiss, your expectation here, you are pretty optimistic going in.
- [17:49]
Stephen Weiss
I am optimistic.
- [17:50]
Scott Wapner
I don't know how you can't be. That's, it's like almost a dumb question question even asked, like, all right, so forgive me for asking it, but I mean, look, what's there not to be optimistic about? Well, the stock raise their. Raise their spend. I mean, is that, are you worried? Is that something to worry about in all of these reports?
- [18:06]
Stephen Weiss
No. Here's what's to worry about. When we hear how Meta has assumed the number one position in ad spend picking up ad. Ad revenue. When you, when you look at YouTube, what's that done in prison? Prior quarters, last quarter, not as great as prior quarter. So there are lots of moving pieces here. More so I believe than in the others, including Amazon. So you've got a number of place to be. But what I'm optimistic about is the, is what they'll show is the uptake in Gemini and how that's picking up share. So I think that's very attractive. But just to extend the conversation, when we talk about these, these companies, and you alluded to this before, it's not just these companies. And people have to understand that. Sure, they're a big part of the S and P and of nasdaq, but when you go through, you take a look at OpenAI, what it did to Oracle yesterday.
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Scott Wapner
Yeah. What's that with Core, there are many derivative.
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Stephen Weiss
Exactly. And that's what will really take the market down or up.
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Scott Wapner
Well, that's the whole. That's why we talked about it with such significance yesterday, this web of business.
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Stephen Weiss
Yeah.
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Scott Wapner
And all roads, you know, lead back to a couple of places. Which is why the conversation around the open AI thing was Was in some corners worrisome because you can't afford to have a break in the link. Right, right. In the chain.
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Stephen Weiss
Exactly.
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Scott Wapner
In, in any respect. So but as.
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Stephen Weiss
As to Outfit, you know, because. And Meta and the others, because they've had such a big run, there's a little air underneath it.
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Kerry Craig
Right.
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Stephen Weiss
So if there's a miss, there's a big miss.
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Scott Wapner
Metta. Right. Revenue growth that needs to justify the AI spend. You're looking at 31 to 33% of revenue growth of 56 billion. That would be the best sales growth since 21. Right. So there are high expectations. The first in house AI model Spark that they recently debuted CapEx 115 billion to 135. Do they increase that? You remember what happened a couple quarters ago when pull the chart out much longer guys, like a year. If you could please. You remember what happened when they increased their spend that last time? Yeah, it shows pretty dramatically last fall what happened on the chart when they did that. The street obviously didn't like that. Kerry, how about that issue?
- [20:24]
Kerry Craig
Well, yes, and that's why if you were to look up we have a chart of what's gone on since March 30th where this group, I mean the communication services and tech so outperform the rest of the market. I mean there's, they're not even in the same ballpark of territory in terms of performance. So if they don't beat the numbers or the expectations, sure, we can see these stocks go down 5 to 10% easily. But they're up so much 30%, you know, in less than a month.
- [20:58]
Scott Wapner
All right, Malcolm, Microsoft Azure growth better hit the number. Right. At least 38%. What is the status of the Open Air relationship? I feel like no company out of this entire earnings period has more maybe to deliver or prove or dispel in some respects than Microsoft. That software trade has been awful. It's the poster stock within that, that orbit. And then it has to answer all these questions and also meet the expectations of where the street is. What about you?
- [21:33]
Jyoti Dowell
Yeah, I don't think there's a right answer for Microsoft tonight. In all, in all honesty, I think they probably are going to end up seeing shares respond negatively after earnings simply because as I started with, any company that is inextricably linked with Open Air at this point is going to get punished. Now that there are fresh concerns over whether OpenAI is going to be able to meet its spending commitments and make it out in ipo. Because one of the positives to Microsoft was related to OpenAI finally getting to IPO and them getting a chance to monetize see the fruits of that $13 billion investment that turned into over $100 billion worth of growth. So I think that Microsoft is probably going to end up seeing sitting this one out so to speak. But I also think that there's an opportunity for them to tell a story of where they see opportunity with Copilot and how much they're able to weaponize that 400 million global enterprise subscribers that they have their install base, if you will. That's where I'm more interested in hearing a story of where they think there is an opportunity to monetize the capex that's going into this. But one thing I want to go back really quickly to the conversation you guys were having about Meta versus Alphabet. I do think that they probably are both going to tell a story about how they've already started to monetize that capex. I don't own either of these companies but I can see a positive story building here where MET has already told us about how they've managed to experiment with taking folks interactions with their homegrown chatbot and then using the chat queries the questions that the people are asking to target ads directly to them for the things that they're asking questions about. And I have to believe that Alphabet is going to be able to tell a similar story. And so that is the direct answer to the question of okay, you're spending $135 billion in one year to develop AI. What are you going to do with it?
- [23:26]
Scott Wapner
We're going to keep the train moving down the track. Right that way. Okay.
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Joe Terranova
I want it to go to.
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Scott Wapner
We're not going that way, we're going that way. So bank of America Equity client Flow bought tech. They say their their clients bought tech for the first time in five weeks. Yes. It plays perfectly into a move that you made ahead of the.
- [23:43]
Malcolm Etheridge
Yes.
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Scott Wapner
The biggest earnings report. That's not happening tonight.
- [23:46]
Stephen Weiss
Yes.
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Scott Wapner
Well, Nvidia is not happening tonight too. So forgive me, but Apple is tomorrow, right? It is. And you bought more of the stock ahead of the number. That's gutsy. Somewhat move. No.
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Joe Terranova
You want to make an omelet, you got to crack some eggs.
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Scott Wapner
Okay.
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Joe Terranova
This is a game of risk. The end of March I bought Apple at 252 and a half up against what I thought was a really nice point of reference. I'm buying more. Buying more because I think it's the next mega cap that makes a new high. Why? First of all, you Announce a new CEO. Generally you would make that announcement in earnings, wouldn't you? Unless you know you got a really good quarter coming and you don't want anything to disrupt the optics of a really good quarter. So you kind of announced that before. Now we're back to a company that's going to give me the mid teens revenue growth. That's the Apple that I like. Mid teens revenue growth. Shipments out of China, 20%. Probably going to hear a little bit tonight about what the iPhone 18 launch is going to look like September 1st. John Terence is taking over. I like the setup fundamentally. I like the setup technically.
- [24:53]
Scott Wapner
Yes.
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Joe Terranova
It's an example of buying more shares of a stock as it moves higher. And I think that the sentiment is somewhat muted around Apple relative to the others.
- [25:04]
Scott Wapner
Well, I mean, it'd be interesting to see if, if Turnus is on the call with Cook, that that's something to listen to as they, you know, pass the baton figuratively and literally at, at the company. You have the stock.
- [25:18]
Kerry Craig
Yeah, we own the stock. And I, I think because it's open, Only gone up 9% since March 30, it's been a laggard. But they're right now given a luxury of not being such an enormous spender on chips the way the others are. There's a little pressure off if they have a good revenue number, if the iPhone selling well, people feel comfortable about costs and about China. I think that the stock could break out. We could see a new high.
- [25:48]
Scott Wapner
Yeah. Malcolm would do you think?
- [25:52]
Jyoti Dowell
I like the call by Joe. I don't have the confidence that he has to be buying here. I would be looking to add to Apple as well, but I don't want to buy into this strength. I'd rather wait for a point of weakness. But I definitely think that at a moment where we're again talking about how are we monetizing AI, Apple's in the best position amongst all of the hyperscalers to monetize it simply because they collect a 30% toll every single time a new app gets launched. Launched on the. In the App center, in the App Store. And new apps are flying off the shelves right now because they're being built so much quickly, so much more quickly using AI. I know they're trying to crack down on vibe coded apps and that sort of thing, but they're still showing up and they're still collecting those revenues at probably a higher clip, which is why I'd be wanting to add additional shares in the future where I can, which is why I Understand Joe's point about them trying to froze front run what's what's probably some really strong numbers in the services sector segment of their revenue mix specifically so.
- [26:50]
Scott Wapner
So that'll be the biggie tomorrow and we'll spend I promise you enough time on that then. But still ahead, payment plays, Visa, MasterCard, Amex, they're all on the move today. We have ownership and we do have many moves to get to as well. Malcolm's got Bill Baruch's going to join us a little bit later. He's got. Carrie's got so we're going to. We'll run through all of the activity on this desk today when we come back
- [27:16]
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- [28:36]
Scott Wapner
AT&T business Wireless connecting changes everything. All right, let's talk some moves. Show me Spotify, please. Because the stock got hit yesterday. In fact the worst day since July 25th of 23. It's up today. Got upgraded. The target did get cut to 500 bucks from 670 at Rosenblatt. They've tempered their enthusiasm on it, but they do upgrade it at the same time. Just maybe it's not going to run as much as they thought initially. Malcolm, you bought more. So you bought it on the dip.
- [29:23]
Jyoti Dowell
I did. I mean it was down nearly 15% just on one earnings release. Then I saw an opportunity to buy ad shares to a company that I already own and love, that I had already been looking for, an opportunity to build more of a position. And so Spotify, the earnings release, you know, I understand that the street was looking for growth in paid subscribers. Subscribers from about 300 million by the end of this quarter that we're currently in. And guidance came in at 299 million. So what's a million subscribers among friends? So I think it was a bit of an overreaction. They actually hit the numbers both on earnings and revenue. The guidance is what kind of shook confidence among the Street. But I think that this is a company that has been flexing its, its pricing power and will continue to. And you also have to consider that these streaming platforms like Spotify and Netflix have become more of a utility than anything else. So I understand the concerns that near term it looks like, you know, they may be slowing down, but monthly active users are up. Their paid subscribers actually grew year over year in the past in this last reported quarter. And so overreaction here. Opportunity to be building in the name if you don't own it.
- [30:35]
Scott Wapner
Okay, Kerry, you bought more Boston Scientific. Tell me why you did, did that.
- [30:39]
Kerry Craig
Well, the stock's been in a real tailspin, and they did report it was somewhat disappointing. They took down guidance. We think that establishes a reset where now they can start to beat expectations. Showing some strength in a product line which is very, very broad across many devices. Cardiovascular endoscopy, others that we feel good about and so add to the position.
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Scott Wapner
Okay, I appreciate that. Okay, where are we now? I lost my place.
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Joe Terranova
We're at the New York Stock Exchange.
- [31:12]
Scott Wapner
I lost my place in the movie.
- [31:13]
Bill Baruch
Oh, yeah.
- [31:14]
Scott Wapner
Bill Baruch. Bill Baruch. I was. I was trying to look up something on Uber because he sold it. And let's show the chart.
- [31:22]
Joe Terranova
Do we have to?
- [31:23]
Scott Wapner
You there? He's there.
- [31:25]
Bill Baruch
Yeah, I'm here. It's been a tough ride.
- [31:27]
Scott Wapner
All right, all right, all right, all right. Take a breath. It's all good. Tell me what. Tell me why you sold it. You just run. Are you running?
- [31:39]
Bill Baruch
A little bit. A little bit running. Running away from Uber at the moment.
- [31:42]
Scott Wapner
It's been.
- [31:43]
Bill Baruch
It's been a tough, tough ride, and we've been very, very patient with it. Free cash flow has been great. Free cash flow, growth. We looked at it as undervalued. It wasn't performing with value stocks than it did it perform with, you know, the AI and the growth move. This is kind of why we build our whole, whole top down Thesis on having a secular cat catalyst. And this name just doesn't seem to have a secular catalyst. We want to put our, put our cash somewhere else. So, so we, we moved on from it. We've been trimming it throughout the year and finally out of it all.
- [32:16]
Scott Wapner
Okay, so hang on, hang on one second real quick, because you own Uber.
- [32:19]
Stephen Weiss
I do.
- [32:19]
Scott Wapner
He says there's no catalyst. Is that, is that in your view as well or what do you think?
- [32:23]
Joe Terranova
Well, you would, you would hope that there will be a catalyst when we hear from them in the upcoming earnings report. But currently present, no, there does not seem to be one. It is certainly not a momentum name, which it once was for several years. And in the industrial sector, there's other places that you can go which have the AI relationship.
- [32:45]
Bill Baruch
Okay.
- [32:45]
Stephen Weiss
You also figure out, you got to figure out where they stand with Robo taxis and what the cost, who's bearing the cost of that. So they're in a difficult spot, I believe.
- [32:54]
Scott Wapner
Okay. And then you sold Leidos, which Weiss owns. So why did you do that? And then we'll get his comment on that.
- [33:02]
Bill Baruch
Yeah. And Weiss and I have talked a lot about Leidos. I know he likes it. I've loved the name for a while. It's, you know, the thing here, it is getting hit on the software narrative and then you look at the defense names. They haven't even performed, performed very well lately. So it's getting hit really on both sides. They make maybe about a fifth of their revenue comes from the aviation space and that could be slowing down. So we just see better place for our cash right now as this name has had, is in a technical breakdown, is going to have a tough time getting back above 150 to 155.
- [33:37]
Stephen Weiss
You know, I don't disagree with that. They're going to need a phenomenal quarter to, to reverse the trend. It is a software hit that, you know, people wondering, well, there are so they. A lot of what they make. You know, like you go through the airport, right, it's the scanners, but it's also a big software company. And how are they going to do now? I think it's too early to call, you know, to call game over on the software. But for defense companies, a much higher bar to get in.
- [34:03]
Scott Wapner
Otherwise you put your hands up, right. And you go through.
- [34:05]
Stephen Weiss
Exactly.
- [34:06]
Scott Wapner
Thing goes off like a million times when you get in there.
- [34:08]
Steve Liesman
Exactly.
- [34:09]
Scott Wapner
They gotta wand you all over.
- [34:10]
Stephen Weiss
Yeah, yeah, it's, it's all of that. Yeah, it's all that. But, but I don't know what to do with it is is really the answer right now. It's an expensive Stock's down from 200, so it's been a painful ride. But you know, I love management here. I just don't know what to do with it.
- [34:27]
Scott Wapner
Okay.
- [34:27]
Stephen Weiss
Him selling it may be the right thing. I don't know.
- [34:29]
Scott Wapner
You have a number of new buys too. You got Eaton and Vistra. So you're playing AI power. Makes sense. Cadence.
- [34:37]
Bill Baruch
Yep.
- [34:38]
Scott Wapner
That's interesting. Why are you getting into one of Joe's names?
- [34:42]
Bill Baruch
You know, Cadence has been underperforming this year with the AI trade and obviously AI trade and cities have been really, really hot. This is a software name, but they own the AI chip design and the electronic blueprints for AI chips. We expected a really phenomenal quarter. It was a good quarter. We bought it ahead of earnings on Monday and we liked the print. We thought, we were fearing that maybe this was going to be a blowout quarter and we'd see it higher. It's just continue to consolidate. But they have contracts with Nvidia amd and you know, I think it's really extremely important in the the build out. So I think it's going to come alive in the second half of the year.
- [35:26]
Scott Wapner
Okay. I got a call today too over at Barenberg on that name. Bill, thanks. Appreciate it. That's Bill Baruch coming up, calls the day. We got the setup too on some key names outside of the mag seven that are reporting in the next 24 hours. We're back right after this. Men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need and that needs to change. I'm Dr. Guy Winch, your host for season three
- [35:52]
Steve Liesman
of the Visibility Gap presented by Cigna Healthcare.
- [35:56]
Scott Wapner
This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.
- [36:12]
Kerry Craig
What made you confident that you could do something that hadn't been done before?
- [36:16]
Contessa Brewer
I have no fear of failure.
- [36:18]
Narrator/Commercial Voice
Trailblazing women, changing the game.
- [36:20]
Megan Casella
One of my favorite pieces of advice,
- [36:22]
Scott Wapner
think about what your boss's boss needs.
- [36:25]
Megan Casella
Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [36:30]
Narrator/Commercial Voice
Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday, wherever you get your podcast.
- [36:54]
Contessa Brewer
Welcome back to The Halftime Report. I'm Contessa Brewer here with the CNBC news update. Family members of victims of a Canadian mass shooting have now sued OpenAI and Sam Altman today. They allege OpenAI identified the shooter as a threat eight months before the attack, but failed to warn police. The lawsuits were filed in federal court in San Francisco. They see unspecified damages. The February shooting left nine people dead, many of them children. The National Highway Traffic Safety Administration says it's banning defective Chinese airbag inflators. They say the inflators have killed at least 10 people and caused serious injuries to two more people in a dozen crashes. An investigation found instead of inflating the airbag in a crash, these inflators actually explode, sending large metal fragments toward drivers. That's terrifying. A new report shows there was a total of $90 billion in insured natural catastrophe losses in North America last year. That report by reinsurance giant Swiss re found nearly 100%, 99.9%, they said of those natural catastrophe losses were driven by so called secondary perils like wildfires and severe storms. Scott, you know, that means that the North American losses account for almost 85% of global insured losses last year, which
- [38:11]
Scott Wapner
is why I was just reading today, I forgot which paper it was in. The fact that premiums keep going up because of natural disasters in place where they're not. Places where they're not even that common.
- [38:22]
Contessa Brewer
And you can't predict hail or severe thunderstorms, which are doing a lot of the damage now. It's not like you can move away from a thunderstorm.
- [38:28]
Scott Wapner
Yeah, yeah. So you like that I threw that little nugget in on your beautiful.
- [38:32]
Contessa Brewer
I like that was very good.
- [38:33]
Scott Wapner
Gotcha. All right, contestant. Thank you, Contestant Brewer, let's hit some committee. Stocks on the move. Visa is higher today. They, I mean, the consumer's been resilient. Would you expect anything less than that? 9%. Malcolm got visa.
- [38:49]
Jyoti Dowell
Yeah. The consumer has been resilient, but Visa is also. There's also been reporting that shows that, you know, visa, which owns 60% or so of all the market share of the credit and debit cards that carry the label between them and MasterCard. Like there has been some slowdown in swipes. Right. Whether it's related to fuel prices or anything else, that that will be sort of a knock against Visa going forward. But I do think longer term, the setup right here is them pushing further into things like stablecoins and payments, where global remittances is a huge opportunity for them. So I want to own it. Long term, I'm not necessarily sure it's one that's going to continue to bounce here near term. But if you're patient, Visa is a good one to own.
- [39:31]
Scott Wapner
Okay. Care, you have Amex, which target got bumped to 345 from 330 at Evercore. And you have Visa too, by the way.
- [39:39]
Kerry Craig
Right. And both these stocks have underperformed with the other financials or financial related companies. Whether it was fears of software AI they're dominant in their categories in terms of technology, in terms of services is the customer base is broadening, it's deepening with richer people who are young and spending more money on their cards. So I think it's time for them both to turn a corner on their stock performance and they seem to be trying to do that.
- [40:07]
Scott Wapner
Okay. Rich and young like Malcolm so far is lower. They have an unchanged forecast that what the street didn't love the the guide because they had good results, but the stock's getting crushed.
- [40:24]
Kerry Craig
Yeah.
- [40:24]
Jyoti Dowell
Yeah. So the company put out a strong earnings report. They, they beat on earnings and revenue like you say. And lending revenue is up, card revenue is up. But the street didn't like the fact that they basically reiterated the same guidance. So I think there's a huge opportunity here where there's a gap. The Wall street analyst consensus estimates about $25 a share where this thing should be. But it's trading as if growth is going to suddenly stop right here, right now, where they just added like a million new members. And their members tend to be like you guys just talked about, younger and wealthier. And so it's an opportunity to get into a member base that is very loyal. There's a ton of, there's a ton of loyalty to the brand itself. Plus as they continue to roll out new products to compete across the fintech landscape, those are all being taken up by that member base. And so there's a lot of growth that's not being appreciated in this name. I will say this is also personally my largest holding. So obviously I have a vested interest in this one. But I think there is a disconnect here.
- [41:26]
Scott Wapner
Okay, what's really on the line tonight? Everybody wants the answer. Mike Santoli's got it next.
- [41:51]
Jyoti Dowell
All right.
- [41:51]
Scott Wapner
Senior markets commentator overtime co anchor Michael Santoli joins us for his midday word. I really built you up. I mean I, I said you're gonna come tell. I did right. Said you're going to tell everybody what's really riding on tonight.
- [42:03]
Stephen Weiss
I don't even think I'd go on if I Were. Yeah, yeah.
- [42:08]
Malcolm Etheridge
No, I mean look, I think, I don't think we can sustain any kind of second guessing or rethinks of all the heroic investment plans. I don't think you're going to get that though. I don't think you're going to have radical updates of their investment plans for the year. It's much more about show us that the businesses continue to grow and maybe show some acceleration that substantiate what you're doing in terms of investment. Whatever they say that bears on the semi complex. It seems like it's all that matters for this market right now. At least for the s and P500 that's been. We were walking a very narrow path to staying near the highs in the S and P. And it is the memory, it's the lower value added parts of semis that are doing a lot of the work right here. The XPS and the storage names. So I don't know if that's something we can count on persisting from here on out. Or maybe you get some of the, the hyperscalers who can, you know, kind of rebuild some more of the premium they lost.
- [43:01]
Scott Wapner
Interesting. So look for the reaction first and foremost maybe under the surface a little bit at the semis based on what they say.
- [43:08]
Malcolm Etheridge
I think that's where the quickest reflex response is going to be. The other piece of it. I know this is kind of a boring point to make but I really doubt there's going to be a uniform message and a uniform unanimous response to all four of these companies. It's going to be give and take. It's going to be somebody who had more priced in than the other one. And you never quite know until the numbers hit and you see the stocks trade. So I think that's where we are. I'm still focused though on oil up at the low, up at the highs, yields up at the highs for 40 on tens and the parts of the market that care about that are starting to show some wear and tear. So you got to get our eyes
- [43:41]
Scott Wapner
on, on all of that. Thank you for the perspective. I think you met the moment.
- [43:44]
Joe Terranova
You think the Mike always moves. Yeah, he does.
- [43:46]
Scott Wapner
All right.
- [43:46]
Stephen Weiss
He caught it.
- [43:47]
Scott Wapner
I'll see you later. That's Mike Santoli. We'll do the setup next. It's not only the mega caps obviously all state is after the bell. You own that? Yep.
- [44:09]
Joe Terranova
Joey t. Near a 52 week high. Property liability should see an improvement. The comps are going to be particularly good for the entirety of the property insurance industry. EBay Interesting tonight, near a 52 week high. Some will argue the valuation is a little bit rich, but we're seeing a acceleration in GMV and also revenue growth. You're getting mid teens growth there. I like the setup. Again, it's another stock near a 52 week high.
- [44:40]
Scott Wapner
Best stocks in the market recently. Josh Brown, remember also in Jyoti Dowell, Michaels pick from way back when. What's up? Al Carvana is tonight too.
- [44:51]
Joe Terranova
They need to clear up the inventory issues of the last quarter. Understand if you're in the stock, there is going to be significant volatility either way. That's just the nature of what Carvana ultimately is. If they're able to rectify some of the inventory challenges of last quarter, it should resume the prevailing uptrend.
- [45:09]
Scott Wapner
Cat. You're interested in cat tomorrow morning before the bell.
- [45:12]
Stephen Weiss
Yes. So I've owned this for almost a year. The stock has just been a moonshot. So again, there's some air under this. They've got to execute is what it comes down to. They can print the number, it'll be fine. But any slight miss any slight slight commentary, which I don't expect by the way, then the stock could, could take it on the chin. Conversely, stocks trade up and down 10 to 20% that you never thought you'd see before. That's what's happening and that's volatility. We can see in the report.
- [45:41]
Scott Wapner
Lilly Merck, Martin Marietta, Royal Caribbean, Valero. Everything's reporting tomorrow too. So it's going to be another, another busy one. We'll do finals next. Fed Chair Powell's last meeting today and as soon as he gets done speaking to the press, we're going to speak to Jeffrey Gundlach on what lies ahead for that institution. Interest rates are the best way that you can play it right now. So we'll speak with Jeffrey coming up in the 3 o' clock hour and I look forward to seeing you then. Malcolm.
- [46:11]
Jyoti Dowell
Final trade today is what Amazon. I'm all in on Andy Jassy and Trainium.
- [46:17]
Scott Wapner
All right, thank you, Mr. Weiss.
- [46:19]
Stephen Weiss
QXO. First it got beaten up on the arb play. They made a major acquisition and now it's rates. But I take this opportunity to buy it. Brad is just a compounder.
- [46:29]
Scott Wapner
Okay. Unh.
- [46:31]
Kerry Craig
Yeah. Keeps plodding along, making some good moves. Cost healthing, revenues improving somewhat. Stocks up 40% can go PSX.
- [46:40]
Malcolm Etheridge
Yep.
- [46:40]
Joe Terranova
Not surprisingly, great earnings.
- [46:42]
Scott Wapner
Okay, good stuff. I'll see at 3. You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.
- [46:56]
Narrator/Commercial Voice
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its 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 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 it's smart
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