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Halftime Report
Are Stocks Still Vulnerable 4/1/26
00:44:22
Scott Wapner and the Investment Committee debate the resilience of the market and whether stocks are still vulnerable amid the uncertainty in the Middle East. Plus, the Committee share their latest portfolio moves. And later, we hit the latest Calls of the Day. Investment Committee Disclosures
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- [00:00]
AT&T Business Wireless Representative
Before we had AT and T Business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer even livestreamed the whole thing. Not good for business. Now with AT&T business wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
- [00:25]
Scott Wapner
AT&T business Wireless connecting changes everything.
- [00:31]
Strayer University Announcer
At Strayer University, we help students like you go from is it possible? To anything is possible by offering access to up to 10 no cost gen Ed courses so you can reach your goals affordably and fast. Visit Strayer. Edu to learn more. No cost gen Ed is provided by Strayer University affiliate sofia. Eligibility rules apply. Connect with us for details. Strayer University is certified to operate in Virginia by Chev and has many campuses including at 2121 15th Street North, Northern Arlington, Virginia.
- [01:01]
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, thank you. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, this market bounce, which is, as you know, continuing today. Can you believe in it? That's the question. Or are stocks still vulnerable? We discuss and debate that key question with the investment committee. Joining me before the hour today, Joe Terranova, Liz Thomas, Jenny Harrington and Steven Weiss. I'll take you to the markets. 12 noon in the east and we got another pretty good one going. Dow is good for almost 1% S&P and the Nasdaq are now above that. And crude oil is lower. That's helping. Yields are down. That is helping. You know, Liz, some are asking the question, is this a short covering rally? Is it more durable? JP Morgan today says it's a bounce, but the technical setup still suggests vulnerability. So I'd say if we get back above the 200 day moving average, I think that would be a sentiment game changer. We're still like 38, 35 ish points away on the S and P from that. Do we need to get above that level again to make people into true believers?
- [02:20]
Liz Thomas
Well, I think there's a few things that would need to happen from a technical perspective. Yes, because it did change sentiment when we dropped below it last Friday. So getting above the 200 day and staying there convincingly I think would help from a technical perspective. We're in this weird range right now again on technicals where we're looking at levels that used to be support that are now resistance, right? So we don't want the market to be making lower lows. We don't want there to be a new trend channel. So yes, that would help. However, the risks have not gone away as far as the war is concerned. And last week on closing bell I said this, I stand by it. Unless the Strait of Hormuz is back open and this supply shock has dissipated, we're still in the same situation. I think we all want a cease fire, but then that doesn't necessarily solve the problem. So I think there continues to be this fear and even fragility that the market has not priced in the possibility that things do continue to get worse. Now of course we're going to hear comments out of the administration that things are perhaps getting better and that progress is being made. And I do think we can have these little counter trend rallies, but there is still potential, if not high potential for the market to continue going down.
- [03:33]
Scott Wapner
What do we think, Joe?
- [03:35]
Joe Terranova
So first of all, as it relates to the 200 day moving average, we've now had eight consecutive closes below that level. When you look at trend following systems generally, if you are eight days below the 200 day moving average, the time to spend above it needs to be greater than those eight days. Let's say you spend 100 days below the 200 day moving average, then it's a shorter time frame, but you only had a short period of time and eight days below it. So you need to exceed that for systematic trend followers to go back and establish laws.
- [04:08]
Scott Wapner
Does that mean that you would answer the question or you would agree that we're still in a fragile.
- [04:13]
Joe Terranova
No.
- [04:14]
Scott Wapner
So you think this is more durable now that we've had this follow through so far?
- [04:18]
Joe Terranova
I think it's a couple. I think a couple of things happened. First of all, the news broke during the second half of our show yesterday, right? Not really enough time for a lot of the rebalancing that was going to occur at the end of the quarter to really be affected in the marketplace. So I think today you're going to see an extension of what we saw yesterday afternoon where a lot of shorts are going to cover. Look at the momentum funds once again. Today the momentum funds are far exceeding the S and P equal weight and the S and P outright. That's indicative to shorts being unwound. If you look at a basket of Goldman Sachs, the 50 most shorted stocks that was up 7% yesterday. So no, I think barring Some news headline that's extremely bearish. I think just the simple technical dynamics of the market. This should extend over the next several days. This rebuild in momentum, this rebuild in short interest.
- [05:14]
Scott Wapner
There's an assumption, Jenny, that tonight, you know, the President's going to address the nation and sort of make it clear that the end is near rather than getting a little more protracted boots on the ground or setting the table for anything like that. So for now, the market's comfortable in believing that we'll see what happens at nine o' clock tonight, obviously. But Ed Yardeni is pretty convinced that what we're seeing in the market both yesterday and then again today is legit, where he says if Trump's declaring mission accomplished, then so are we. Regarding our stock market correction call, we will probably lower our recession odds back from 35% to 20 once we have a better handle on whether the conflict is actually over. Of course, we reserve the right to change our mind as often as the President does. He says, nevertheless, we're maintaining 7700 on the S and P for year end and our commitment to his roaring 2020base case. Time to move into the Yardeni camp and think post conflict now, maybe.
- [06:14]
Jenny Harrington
But, you know, I agree with Ed, like 90% of the time, and I don't think I agree with him full throttle on this one. You know how they talk about the fog of war. I think that's where we are. And even if Trump goes out tonight and says, all right, it's over, we're still in a fog and we don't know where things are going to land, so we don't know yet where supply chain disruption is really going to fall out. I think the next two weeks until earnings get, get kicked off, we could just be really reactionary. And I'm not sure that anything that happens in the next two weeks should be insightful or should be predictive. It's going to take until we hear those earnings calls that we start to figure out what's becoming clear, what's coming out of the fog of war. Things like helium. Right? We don't really know what helium disruption is going to be. We don't really know how much is offline and how much is online and how that's going to affect chip production. We don't really know what's going on with lng. We don't really know how much oil, even if Trump says, oh, it's all over, we don't really know how much damage has been done and how much oil can start flowing and where those prices can be okay. I think we need to get to earnings before we can start to say anything to.
- [07:20]
Scott Wapner
So on that note, bank of America is talking about that today and I thought had one of the notes of the day, honestly to set up a good conversation because you would assume, oh sure, oil prices, Weiss, are going to remain elevated and then, well, that's going to destroy input costs for companies. Then margins are going to come in multiples are going to come down and so on and so forth. Bank of America has a little bit of a different perspective today where they suggest that oil is more of a headwind for GDP than for earnings and stocks. They say higher oil is worse for US GDP than for the S and P. Our economists bumped down their 2026 US real GDP forecast from 28 to 2 3. But energy costs are a relatively small portion of total S and P operating costs. They maintain their $310 earnings forecast, which is 13% year over year growth. It's, it's an interesting call, but I feel like it sets up a good debate over, you know, where we go from here, even in an environment where oil remains a little elevated for a little longer than people may be comfortable with.
- [08:24]
Steven Weiss
Yeah, so, so let's just go over in answering that question, what's happened. So what's happened is and the reason why, and we'll get this later, I started to put money into the market, as I said in my note to you and the producers on Monday, is that Trump's talking about regime change and that clearly didn't happen. But that's his off ramp. And once that happened, it was saying I want to get out of this and I want to get out of this as soon as possible.
- [08:50]
Scott Wapner
And that's kind of he's trying to sell right over the prior and he sold it even again this morning.
- [08:55]
Steven Weiss
So what he sold it to is a market that was perhaps oversold, where there was short interest and into month end. We're looking for marks. I'm surprised of the carry through through today, but that's based upon what happens in the speech tonight. Where he's going to reiterate, I'm tired is so now when you go back to your question, oil, that's the great unknown, right. Because you're essentially ceding control if you don't do anything to Iran, the Strait of Hormuz, and that will increase if they get their way and apparently, you know, Trump is willing to let them get their way to a toll road into restricting what goes through. So, so when you get to gdp. Yes, it's a nominal input, supposedly in the S and P, but that's the S and P broadly. For some companies, it's a tremendous cost. So you've had to pass on tariff increases. Now you've got to pass on oil surcharges that go into it. So I'm not so sure. So I do think it, it's gdp, but I do also think you got to be careful as to which companies you're getting involved.
- [09:55]
Scott Wapner
But let's be honest. If, if investors thought that earnings were going to deteriorate meaningfully because of an increase in oil, the market wouldn't look like it does, right? Both yesterday and today, because that story is still intact. So as of today, the earnings story is intact.
- [10:17]
Steven Weiss
So it is intact. And it's going to stay intact when companies report and give guidance, because CEOs tend to be optimistic and they're going to hope and they'll deal with it later if it doesn't happen, that oil price is going to come down. And keep mind oil is much trading on the reality of, of the commodity as it is on what speculators believe. So you could very well see oil continue to come under pressure until something else changes. So again, that's why I put money in the market. Not all the cash I had, but a decent amount.
- [10:51]
Jenny Harrington
So just piling onto that to this bank of America note. To me, I read it and I thought it was a very first derivative argument, with the second derivative being exactly that, which is when does it start to hit the consumer? And that's where we're in this super ambiguous time period, which is if the Strait of Hormuz stays, you know, closed for three months, even if we declare victory and oil prices stay high, that impacts the consumer so much more. So it's. So it's so important for us to see what the CEOs say when they're looking at the actual consumer and starting to say, like, all right, we're seeing a little bit of weakness. To your point, they're always overly positive. So it's going to be a lot of reading between the lines.
- [11:25]
Scott Wapner
I would almost say that, you know, in, in one instance this maybe has an analog back to the tariffs of all of thinking in terms of what you just said. Well, at some point this is going to hit the consumer, isn't it? And it's going to have a negative impact. But you know what, the, the stock market and the great companies in this country have an amazing ability to deal with stuff. And they figured out a way to deal with tariffs to a point that stocks reached new highs even in the face of tariffs, albeit not as large as they were on Liberation Day. And I think we all know that. Nonetheless, the market figured out a way to get beyond that and so did companies, and they'll probably figure it out again. X certain specific idiosyncratic stories where input costs are a huger part of the bottom line, but otherwise, maybe we figured that out too.
- [12:24]
Jenny Harrington
So I have two thoughts on that. And the first is what's the smartest thing you can do as an investor? You never bet against the US and you never bet against the US Consumer in the long term, in the shorter term. I've been thinking about the same thing and I think the difference here could be that Trump had more control to ratchet back the Liberation Day tariffs than he may have to ratchet back.
- [12:46]
Scott Wapner
I don't even think it's a question. I think, of course, yeah, but I'm making a bit of a nuanced argument that's a little different. This is nothing like the US Tariffs in the sense that the President doesn't have the same kind of control that he did to say, oh, you know what, okay, we're not going to do 100%, we're going to do whatever. This is obviously different. They don't control everything that happens in what is now a more chaotic part of the world. I'm only suggesting that if you're saying, well, sure, if oil prices remain this high for, for long, maybe the consumer is going to pull back. I'm just saying, like, the market has figured out how to, how to get beyond that until it actually sees the impact.
- [13:27]
Jenny Harrington
And it's a battle of time periods. You know, how long does it last, how long, when are people willing to put money to work? And I think that's what's so hard right now is dealing with the short term and the long term, the long term American consumer wins.
- [13:39]
Scott Wapner
Let me ask you all this. Let's assume that we are days or a couple weeks, a few weeks, whatever, as the President has suggested, maybe two to three more weeks or whatever it is away from this legitimately being a different story. And we've, we've moved on in some respects. What does the post war playbook look like? What is it supposed to look like? Do you sell your energy names that have led as a result? Do you go back to believing in the broadening story of all these other cyclical areas of the market that can once again take the lead, or do you acknowledge that things are Going to remain potentially challenged for a bit. So you go right back to the mega caps.
- [14:21]
Joe Terranova
There's a lot there. But I like where you began it, which was, was, do you sell energy? And I think that's the thing that's in front of all of us right now, including the viewers. Keep in mind, there really has been nowhere that you could hide. There's been no particular asset where you could have safety during this period except oil and energy equities. What that means is that there has been significant usage of energy equities and oil itself as an institutional hedging mechanism. It's been the hedge. It hasn't been, let's go buy volatility. It's been, no, you own energy equities, you own oil.
- [14:56]
Scott Wapner
Volatility has gotten more expensive.
- [14:59]
Joe Terranova
Coming into this, there was fundamental reasoning to increase your exposure to energy. We talked about that coming into the year. On the other side of this, I think you maintain your exposure to energy, but if the purpose for energy in your portfolio has been that it is a hedgehog, I think this is a moment where you need to reduce your allocation to energy. On the other side of it, you maintain the position to energy. Because I'll tell you what, I don't think energy is going to fall very quickly back to the 60s. I think there's going to be an overwhelming hesitancy in particular for the hedge fund community to say, let's go short energy. Why would you do that when the potential for there to be one headline that could flare up at the some point, whether it's six weeks or two months from now. I don't think whatever we're going to hear tonight signals the end of any type of friction and consternation in the Strait of Hormuz.
- [15:51]
Scott Wapner
So how would the rest of you answer that, that question?
- [15:54]
Jenny Harrington
Okay, so to be really precise on it, Lionel Basil was one of my holdings that was up 80% on the year. What did I do? I cut it in half because there's no version of even the oil prices and the petrochemical prices that that had moved up that justified an up 80% move in that one stock. So you take half off the table, but I only took half off because I'm not sure how long it lasts. What did I do with the proceeds? I repurposed them into stocks that had fallen because interest rates went up and petrochemical prices went up. So presuming it doesn't last forever, I think that's what you do. You just do like disciplined portfolio management.
- [16:27]
Scott Wapner
We'll get to those later, by the way, you're teeing up sort of yield proxies, right, that, that you did put money into that. I don't want you to do those now because I won't save that. But I hear where you're going.
- [16:39]
Jenny Harrington
Yeah. And remember last week I said I bought Clorox. Why did I buy Clorox? Because the petrochemical fuel price spike punished Clorox. It was down, as we discussed, over 32%. You know, so you kind of just manage your portfolio, take the things that have worked off, add to things that are punished.
- [16:54]
Liz Thomas
LIZ okay, so looking at the energy trade in particular, I absolutely agree with everything that Joe said. I think if you've been using this as a trade to play the war, then you probably have to start unwind, unwinding that position because we will see big movement in oil prices if there is a convincing de escalation. But I don't think it goes back down to pre war levels. I think it probably hovers somewhere between 70, 80, maybe 70 and 90 for a while. And the industry has structurally changed because of this. There's been damage done to infrastructure that's going to take a while to to repair. And it just takes a long time to ship energy from the Middle east to everywhere it needs to go. So I do think there's still opportunity in energy stocks and you can buy those. As far as the consumer and GDP and opportunities there, I would be careful in consumer discretionary because increased energy prices has not created demand destruction at this point. It's not high enough, hasn't gone on long enough. But all of the optimism that we had about the consumer coming into the year, much of which was predicated on stimulus, that stimulus has now been eaten up by increased gas prices. So I think consumer discretionary is going to hit a little bit of pressure for the rest of the year, as
- [18:05]
Scott Wapner
typically happens, you know, on the, in the, in the hours leading up to a presidential address, either, you know, news or leaks of what, you know, the President may say start to, you know, trickle out. And maybe we have one here from Reuters which is citing a White House official that the president tonight is expected to reiterate in the address the two to three week timetable for ending the operations in Iran. So if, you know, there was any sort of ambiguity of, well, is he going to do that or is he going to potentially lay the groundwork for boots on the ground, it appears as though it's the former, as people have been trying to anticipate, as the market has been up for a second day in a row here. So knowing this, so this question to all of you becomes even more relevant and pertinent. The post conflict playbook reads like what?
- [19:01]
Steven Weiss
Well, first of all, I wouldn't pay much attention to those because they should be written in visible ink because he could change his mind right up while he's giving the speech.
- [19:10]
Scott Wapner
But let's just assume that this is so. So this is the base case point, of course, but let's play the cards that we have in our hand.
- [19:17]
Steven Weiss
Okay, so in terms of energy, I don't think this is dramatically different. Obviously there are nuances, but every time it's different than other situations where we've seen a flare up in the Middle East. So lots of tourists come into the energy stocks, they bid them up. And so while the fundamentals may actually be improved, you're betting that those tourists already left and aren't going to impact the trading. I'm making the other bet. I think that energy, if we see a cessation of, of the conflict, I'm betting energy does come down. It may go back up to answer the fundamentals. But the near term on energy, in my view, the risk reward is decidedly unbalanced in terms of going lower. Obviously headline depended on the straight of hormone movement, so.
- [20:03]
Scott Wapner
But then the third part of my question was do you, do you go to the mega cash which have found themselves?
- [20:10]
Steven Weiss
I think you do, absolutely.
- [20:12]
Joe Terranova
I think the market is telling you today that it wants growth. The market is telling you it doesn't believe that the broadening out narrative which we carry into 2026 from 2025 plays out here. Steve, to your point, okay, if oil prices fall, I don't think you believe they're falling, falling back to 60 now. But if they fall and they remain above where the previous range was over the last several years, maybe there is a little bit of pressure on the consumer.
- [20:40]
Steven Weiss
You know, the consumer you want to, they may be in a net neutral position because they're about to get a lot of tax refunds.
- [20:47]
Scott Wapner
You know, not that so far. Since you just bring that up, might as well just say it. I mean, so far the indications are that refunds aren't as big as people were expecting them to be. Yeah, that's been in many, many notes that have come out from strategists.
- [21:02]
Steven Weiss
But it still is cash in their pocket. So whether it's 9% better than last year or 5%, it still is a balance that's going to increase in their cash.
- [21:12]
Liz Thomas
Well, you're still going to have It's a one time cash in their pocket at the same time as their expenses on non negotiable items like energy rose.
- [21:19]
Steven Weiss
But so keep in mind they're naturally optimistic. Optimistic, right. Which is why the market goes up 90% of the time. So they're going to assume that like past oil shocks is going to be Joe's answer.
- [21:31]
Scott Wapner
Makes perfect sense to me because of course if you're, you're still going to have growth scare questions.
- [21:37]
Steven Weiss
Yeah.
- [21:38]
Scott Wapner
As a result of oil being elevated, gas prices being elevated and in that environment would anybody be shocked if you have now a comeback in the mega cap names? On that note, many are in need of one. Microsoft worst quarter since 08. We read that to you yesterday. It was initiated by today at benchmark 450 is the price target. CGC Capital says they like the Mag 3 now which is Alphabet Meta and Amazon. And Weiss playing right into this question, you bought more Meta?
- [22:12]
Steven Weiss
I did. I just thought, I didn't understand why it traded down so much on the court decision which is take a long time to play out. So I didn't buy more then because you can't catch a falling knife in this market. But it seemed to have reset and I think got overdone added on you know to the decline that we saw on Monday, the reversal. So I just thought it was a good spot to add. It was already one of my largest core positions. This obviously made it supersize the position. I'm comfortable with it because I think they will still be a winner. And I know all the debate about having to buy stock to offset your option, all that. I get that the increased CapEx spending. But I want them to invest in the future because AI is where it is and where it's going to be. We're just at the beginning of it.
- [22:59]
Scott Wapner
I'll tell you what I mean the other thing, we're still on memory watch, so to speak, Right. Watching these memory names like Micron, which you know that specific one has gotten hit pretty hard. It's down 10% in a month. Weiss, you bought this as a fresh buy.
- [23:15]
Steven Weiss
Yeah.
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Scott Wapner
There was time years ago you used to own this name. I used to own like a hedge fund hotel for a while too.
- [23:20]
Dominic Chu
Yeah.
- [23:21]
Scott Wapner
Maybe less so now but it was like five years ago like one of the preeminent hedge fund hotel names that, that you would see it's obviously had now it's up a lot 11% here. So that's a pretty, pretty good rebound. Right. Why did you buy it now?
- [23:36]
Steven Weiss
Well I thought it would Bounce, you know, so I thought the market was going to bounce and I thought the ones that got beaten up the most, the Momo stocks of which this was one until it got killed, they did have a great quarter. I'm as suspicious as, as ongoing supply demand being intact for memory as anybody. And I come from a time where these stocks are consistently traded at single digit multiples because they're commodities. However, now you're eating up so much memory, you know, in the market and they're basically done for this year in terms of their earnings. And it's selling a discount to the market. I would never think that a slight discount to the market would be appropriate for this. It should be at a 50% discount to the market. But I like the momentum.
- [24:20]
Jenny Harrington
So I think it actually is, I think on 20, 26 and a half or 2027 earnings, I think it is trading at 10 times earnings.
- [24:26]
Steven Weiss
27, yeah, yeah.
- [24:27]
Jenny Harrington
And the crazy thing about that is if you look at earnings expectations, it's like 50, 60%. So you could have almost the share price stay flat and it return to its former 5 times earnings. It's pretty compelling even to me.
- [24:39]
Scott Wapner
Got some news. General Motors Philippeau has it for us. Hey, Phil.
- [24:44]
Phil LeBeau
Hey, Scott. Take a look at shares of General motors reporting its Q1 sales dropping 9.7%. Remember that's compared to Q1 of last year. And in March of last year, ahead of the expectation that the Trump administration was going to announce huge increases in tariffs, which ultimately we had with Liberation Day when they did announce tariffs going up on imported vehicles. There was a surge in sales in March of last year. So keep in mind this comparison of a decline of 9.7% is compared to last year when it was just sort of a strange first quarter. One other thing, their inventory, 5 16, 516,000 vehicles, a little over that. That is flat compared to Q4. So they're not building up inventory. And perhaps we're seeing EV sales perhaps finding the fluoroscop because after the big drop off in the fourth quarter, they were up 2.5% compared to the fourth quarter in Q1, still way down compared to where they previously were. But maybe there's a floor being built there for EV sales.
- [25:45]
Scott Wapner
Yeah, well, I would bet the last month of the quarter played a significant role in that given the five week now war and the way that oil prices have reacted in gasoline. To Phil, thanks for the Update. That's Phil LeBeau with breaking news coming up. Speaking of breaking, we have new developments now and what could be the biggest IPO ever. Space X reportedly filing now confidentially to go public. Mackenzie Segalas is standing by with those details. Straight ahead.
- [26:12]
AT&T Business Wireless Representative
Before we had AT and T Business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer even livestream the whole thing. Not good for business. Now with AT and T Business Wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
- [26:37]
Scott Wapner
AT and T Business Wireless connecting changes
- [26:40]
Jenny Harrington
everything
- [26:43]
Strayer University Announcer
At Strayer University, we help students like you go from is it possible to anything is possible by offering access to up to 10 no cost gen Ed courses so you can reach your goals affordably and fast. Visit Strayer. Edu to learn more. No cost gen EDS provided by Strayer University Affiliate sofia. Eligibility rules apply. Connect with us for details. Strayer University is certified to operate in Virginia by Chef and has many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [27:13]
Jenny Harrington
What made you confident that you could
- [27:15]
Liz Thomas
do something that hadn't been done before? I have no fear of failure.
- [27:19]
Julia Boorstin
Trailblazing women, Changing the game One of
- [27:22]
Liz Thomas
my favorite pieces of advice Think about what your body boss's boss needs.
- [27:26]
Mackenzie Segalas
Leadership can look in many, many different forms.
- [27:29]
Liz Thomas
It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
- [27:35]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [27:59]
Scott Wapner
Welcome back. We're following developing news now on Space X and the ipo, the company reportedly filing confidentially for one a little bit earlier today. Mackenzie Seagallos has more for us. Hi Mac.
- [28:11]
Mackenzie Segalas
Hey Scott. So CNBC's David Faber confirming with sources that paperwork filed confidentially with the securities and Exchange Commission shows Space X on track for a June ipo, setting up what could be the biggest listing in history and the first in a wave of blockbuster AI debuts this year. The company could reportedly seek a valuation of more than 1.75 trillion, but details including the number of shares to be sold and the expected price range would come later. In a subsequent filing now for the offering itself, Reuters says SpaceX has tapped Morgan Stanley, Goldman Sachs, JP Morgan, bank of America and Citigroup for senior roles while building out a much larger bank syndicate around them, 21 in total, according to that report. The company is also said to be weighing an unusually large retail allocation that could reach as much as 30% of the deal. 3x the normal range. And that helps explain the intense focus on which platforms could get access to those shares of Morgan Stanley's E Trade, seen as a leading contender for smaller investors. Elon Musk, though, pushing back on the idea that Robinhood and so far could be cut out entirely, posting on X that those reports were false.
- [29:18]
Scott Wapner
Scott all right. Well, I guess to be seen. Mac, thank you. Mackenzie Segalus with the latest on what is going to be a hot ipo. There's no question about that. All right, stock of the day today, Nike. How could it not be? I guess it could easily be rh. See those shares today, RH is getting destroyed. But we're going to go with Nike today, which is down as their outlook has disappointed. They expect a 20% sales decline in China. It's the second largest market downgraded by Matt Boss of JP Morgan, who look has been on with me on closing bell and thought maybe that they had turned the corner, which is it's that's one interesting call. Part of this though, Weiss analysts have looked at the Nike report and said the read through is positive for the stock that you just bought more of. DKs Dick's Sporting Goods.
- [30:06]
Steven Weiss
Yeah, so I bought more excuse me, of this yesterday morning and I was looking great for a while, but I'm staying there. It's, it's now a good size holding for me. The read through was great. US has turned for Nike.
- [30:21]
Scott Wapner
That's what they say. The North American business remains a bright spot and that's why they glean good things for Dick's from this.
- [30:28]
Steven Weiss
Exactly. And if you take a look at what's hurting Nike, it's increased competition. Guess what? Dick sells the competition, right? So, so there's nothing here that's bad. You're coming into again, you know, the sports season, right? Outdoor weather. They've not been disintermediated by Amazon or Wal Mart or anybody else to continue. New store format is phenomenal. It's like an amusement park. So I think it's the best positioned retailer out there. Costco may be as well, but they're much more expensive.
- [30:59]
Scott Wapner
All right. Let's go to Dominic Chu now with a CNBC news update. Hi there, Dom.
- [31:02]
Dominic Chu
Good afternoon, Scott. Amazon's cloud computing operation in Bahrain was damaged on Wednesday after an Iranian strike. That's according to the Financial Times. It comes a day after Iran's Revolutionary Guard Corps threatened attacks on several US Tech companies in video. Apple, Microsoft and Google were flagged by the Guard as, quote unquote, legitimate targets in retaliation for US And Israeli strikes. On Iran. The NFL has approved a succession plan for the sale of the Las Vegas Raiders from controlling owner Mark Davis to Silver Lake Co CEO Egon Durbin. The league approved Durbin buying a 3.5% stake of the team at an $11 billion valuation, and it gives the option of Durbin purchasing an additional 3.5% stake in the near future. Durbin and a partner purchased a 15% stake in the team back in 2024, and a Delta Connection jet approaching New York's LaGuardia Airport mistakenly contacted the wrong air traffic control tower last month. The flight was on final approach when the crew radioed JFK's control tower instead of LaGuardia's. The flight performed a go around and later landed safely after contacting the correct tower. So, Scott, some of these travel mishap stories still irking travelers? I'll send things back over to you.
- [32:21]
Scott Wapner
Yeah, Dom, thank you for that. Dominic Chu Coming up, Calls of the day one firm says the next $100 billion industrial is in sight. Joe owns it. We reveal it next. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you
- [33:04]
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- [33:36]
Jenny Harrington
What made you confident that you could
- [33:38]
Liz Thomas
do something that hadn't been done before? I have no fear of failure.
- [33:42]
Julia Boorstin
Trailblazing women, Changing the Game One of
- [33:45]
Liz Thomas
my favorite pieces of advice Think about what your boss's boss needs.
- [33:49]
Mackenzie Segalas
Leadership can look in many, many different forms.
- [33:52]
Liz Thomas
It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
- [33:58]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [34:19]
Scott Wapner
All right, let's do some calls of the day. Today, Quanta reiterated a buy at B of A. They Call it the next $100 billion. Industrial is in sight. That's what they say. They say their targets are achievable. Joe owns the name. The power names haven't traded all that well this week. We've obviously been watching events in the Middle east, but how do you view this one now?
- [34:40]
Joe Terranova
Oh, this is one of the better trades that we have established in the Jyoti etf. So for Steve's comical comments during the commercial break, you're up 240% since October of 2023. And this name was early identified as participating in the AI infrastructure buildout. It's about electrification, it's about fuel diversification, and it's about an antiquated and aging utility grid. And they're contributing on all their metrics. Free cash flow continues to accelerate. The company has had double digit revenue growth over the last five years. And looking forward, the valuation on this company, a Forward valuation of 43, I consider that somewhat reasonable to some of the others that are participating in that logistical build out as it relates to AI and data center demand.
- [35:30]
Scott Wapner
Did Weiss make an out of character snarky comment about Quanta or the ETF in which he is a investor in?
- [35:39]
Joe Terranova
So, as you said, can it go to 100 billion? And it is 82 billion right now? Steve said, well, did you own it initially at 200?
- [35:47]
Steven Weiss
No, I didn't say that. I said, is it 200 now?
- [35:51]
Joe Terranova
Implying that I own 200 billion. Great company.
- [35:54]
Scott Wapner
Check the paperwork that you get from the return.
- [35:58]
Steven Weiss
It's Sir Joe. Paperwork served me well.
- [36:00]
Scott Wapner
All right. Check that.
- [36:01]
Steven Weiss
If I don't get thrown out of the fund, that is.
- [36:04]
Scott Wapner
The committee's discussing that now. Disney upgraded to outperform at Ray J. We see the current macro backdrop and international visitation headwinds as an opportunity to invest at very attractive valuation. By the way, Kramer this morning said Disney's not an expensive stock anymore. Those were his exact words. It's like 15 times, something like that. I think that's what he said.
- [36:23]
Jenny Harrington
14 times earnings. 9 times. 9 times EBITDA. 7% free cash flow yield earnings are expected to grow 12% next year, 10% the year after that, 11% the year after that. This is one where you almost don't even need to tell the story. You can just look at the numbers. But on the story side, it's pretty great too. So the stock, as we all know, has been under pressure for a long time because of cable, linear and cable and sports. That's all down to 33% of operating revenues and the balance Theme park movies streaming like that, that should get a premium. That's 70% of the business at this point. When you have a franchise like this, it should not trade at 14 times earnings. This goes a little to our conversation about Micron. Right. I don't know if it should trade at 10 times or 8 times, but I know it shouldn't trade at 5 times. This is all I know is it shouldn't be 14 times. Not sure if it should be 17 or 18, which would be a lot higher.
- [37:10]
Scott Wapner
All right, Costco reiterated outperformed Bernstein. Consistent growth for decades to come. That's what they say. Joe, speaking of a stock that I think, you know, some had thought was a little expensive, what about now, second
- [37:22]
Joe Terranova
half of 2025, it struggled. It's had a remarkable comeback here in the first quarter of 2026, along with Wal Mart, along with TJX. It's really about the consumer going out and looking for value, being very price conscious. And Costco and Wal Mart with their scale have the ability to serve that type of consumer.
- [37:42]
Scott Wapner
Jenny's got enterprise products Target today raised to 40 bucks from 34. Hold, though, at Jefferies. What do you think? They think it's a more fair valuation where it is now.
- [37:53]
Jenny Harrington
I mean, it was a little bit of a belated price target upgrade, but it's trading at 37 and a half. This is the kind of company that you can hold pretty much forever. It's a old school midstream pipeline, tens of thousands of miles that transport oil and gas here, there and everywhere. And this goes a little bit back to our conversation about energy. You know, I'm happy to sell a Lion Dell where there's huge, where there's huge fossil fuel exposure. This, it's an energy company. There's relatively little fossil fuel exposure. I've owned this since 2001. And you know, my annualized return is 9%. And I'll bet you that over the next 10 years my annualized return is going to be about 9%. A lot coming from the dividend. So it's a great one to own for the long run.
- [38:30]
Scott Wapner
All right, we're going to take a break. We come back, we'll tell you about a second that just had its best day in almost a year. We know the market was up big yesterday. So many sectors did well, but this one in particular. And there's more news today. Find out how the committee's playing it next. All right, welcome back. Shares of Eli Lilly are higher today after receiving FDA approval for its GLP1 pill stock up four and a quarter percent. Joe T. This is part of yours. This company's been buying companies lately. It's one of the reasons why health care may be turning around. Some say biotech ETF just had its best day in almost a year.
- [39:22]
Joe Terranova
Yeah, and it's biotech that really is the derivative trade off of what we heard from Eli Lilly and over the last two days the two deals that were announced totaling well over $13 billion. So when deal activity is coming back into an industry, that's a display of extreme confidence I mentioned before, I think the market's searching for growth. Biotech is an industry that delivers that growth for you. So right now, universally, the ETF holds Merck, it owns, it owns Gilead, it owns Amgen, it owns Regeneron. Those are all large cap with a touch into that biotech industry itself. And then personally I have the xpi. I've maintained that position since the end of the summer. I did sell a little at around 124. Interestingly enough, someone said to me this morning, oh, you sold some? I said, okay, yes, I sold some. And when I sell right when you sell some an existing position, you hope that that's a bad sale because that means the rest of your position moves higher. You don't want to look like a hero and say I sold 20% of the position, it was a great sale. Well, you stuck with the other 80%. I'm glad I maintained the rest of the positioning. This looks to me like it's breaking out to levels we have not seen since 2021 for the XBI Jenny, you
- [40:39]
Scott Wapner
have a fair amount of healthcare medical device names in your book.
- [40:43]
Jenny Harrington
We've got everything from Frisky, from Pfizer, Bristol Myers, Glaxo and the international portfolio, Regeneron, Thermo. And what I like about these here and now is that when we're talking about this environment with so much uncertainty, these are stocks that are trading at pretty big discounts comprehensively to the broader market. Huge free cash flow yields. Many of them have free, huge dividends. But you know that their products aren't being replaced by AI. And even if the consumer, consumer weakens, even if we have like higher oil prices for a long time, everything they make is still going to be needed. So I like it as a stable, you know, cash flow oriented part of the portfolio.
- [41:22]
Scott Wapner
What about health care?
- [41:23]
Liz Thomas
So I've been bullish on health care for a long time, unrewardingly. But I'm going to stick with it and the growth story. I think is intact, you can find growth in pharma and biotech that remains a story. Other fun fact, if you look at oil price shock regimes a year out from the beginning of that shock, outside of the usual suspects like petroleum and coal, health care is actually one of the better performing industry groups. So I'm sticking with it.
- [41:49]
Scott Wapner
All right, coming up, I'll tell you about those moves that Jenny has. Remember we teased those a little bit earlier. We'll go through those. Santoli though, he's next. Welcome back. Senior markets commentator and overtime co anchor Michael Santoli joins us now with his midday word. Do you take today's follow through as confirmation of anything or not yet?
- [42:23]
Michael Santoli
I would say it's constructive for sure. I think it's also somewhat rational as a kind of incremental repricing of the possibility of maybe more de escalation than we thought we to were going going to get at the end of last week. The fact that oil is actually showing a little bit of downside gives some credence to it.
- [42:41]
Steven Weiss
I think.
- [42:41]
Michael Santoli
We're not seeing this kind of buying stampede. There's not a lot of urgency. It's not the kind of action that you see coming off of a major low where it seems like, you know, we're getting escape velocity so we don't always have to get that. We didn't really get as washed out as we often do before you get one of those episodes. And the essence, The S&P 500 is right now been hesitating for a couple of hours right below one of those levels where it would be logical for the first rally to kind of fail or fade a little bit. So I think you have to be watchful about it. Crude WTI still well above 90 means it hasn't broken down. So I think that's why, you know, we're doing kind of baby steps around the edges. Let's be open minded, let's be balanced as opposed to leaning too far in one direction. Some of the positives though, obviously banks more than fully participating this week. The two days of trading that we've had three days. And then, you know, I think the megas have taken a little bit of the, of the reins and, and have started to actually perform here. So we do have a narrower advance but it's still broadly positive.
- [43:41]
Scott Wapner
We still need some degree, I guess a confirmation of some kind that this is actually ending soon. You know, a coherent understandable idea that this is really going to end. The straits going to open the burner is going to come off of crude so to speak. And we can sort of exhale at least a little bit.
- [44:02]
Michael Santoli
You need a line of sight to those things, if nothing else. And I don't know if we're getting that tonight. Obviously the higher the market goes, the higher the stakes are for actually getting new, fresh and believable good news as opposed to just the prospect of it. And you know, that's the, I think that's the game that we're in right now.
- [44:21]
Scott Wapner
Okay, Michael, I'll see you this afternoon. Thank you. That's Mike Santoli coming up, more committee moves. Told you. Jenny now doubling down in one area of the market. She has love. She'll tell you what it is next. We're back. Told you Jenny was buying some more names, at least adding to. And it's all in the REIT space. Why?
- [44:40]
Jenny Harrington
Why? So what happened to REITs in the last few weeks as, as the war broke out, interest rates went up, rates collectively traded down. Not necessarily because of anything any of these companies did wrong. So I bumped up my positions where clients were underweight or didn't own them already in Melrose Properties, Ryman Hospitality Properties and Vici Properties. So you've got Melrose, that's a land bank for Lennar. You've got Ryman, which is huge non gaming conference centers where many of their conferences are booked out up to five years in advance. And then you've got VT Properties, which is a triple net lease REIT where they have huge tenants like MGM who are not going to say, hey, Vegas is having a tough time for these few weeks and interest rates are up a little bit. Let's cancel our 30 year lease on MGM Grand. They're just not doing that. So they have huge stable cash flows. All of these companies trade at 10 times or less FFO. They have yields in the case of Milro, of 11 times, Ryman, 5 times, Vichy, 6 1/2 times. I'm sorry, yield percents, 11%, 5%, 6% yields. So they're really low valuations, really high dividend yields, really stable companies. You don't need to worry about air pressure, you don't need to worry about oil pressure. And it just traded off. So I thought, okay, I've got ly and up 80%. That seems stretched. I've got these down a ton. I don't know that interest rates are really going to sustain at about four and a half percent.
- [45:58]
Phil LeBeau
Oh yeah.
- [45:58]
Scott Wapner
Do you think they peaked this part of it?
- [46:00]
Jenny Harrington
I think so. So you know, even when I say I worry about what comes next and I worry about the supply chains. I think probably we've seen the worst on oil prices. There could be an end on interest rates. I think, you know, there could be panic moments, but probably we're worse.
- [46:13]
Scott Wapner
We're past the all right, all three, getting a little bit of a move here as as you talk about and we'll do finals after this break.
- [46:25]
Phil LeBeau
All right.
- [46:25]
Scott Wapner
I hope you'll join me 3 o' clock Eastern today on the closing bell with Cheryl Young, Lori Calvert, Stephanie Aliaga, Dan Ives, Warren Pies and low Tony on that Space X IPO. We'll do that. 3 o' clock Eastern. Obviously this market's going to get interesting today. It always has in that last stretch. We'll take you through it. Weiss.
- [46:44]
Steven Weiss
It's meaningfully off its highs and if you believe the momentum continues, this will be a prime beneficiary.
- [46:50]
Scott Wapner
Okay, Jenny.
- [46:52]
Jenny Harrington
OK. Ethan Allen, 7% dividend yield 12 times earnings. No debt to some degree. Restoration Hardware's gain. Pain is their gain.
- [46:59]
Scott Wapner
All right, Stocks down just a smidge today. Liz Thomas, Q. Q. Q.
- [47:05]
Liz Thomas
There's been a lot of multiple compression since October highs, but earnings continue to go up. I think that dislocation closes by prices going up.
- [47:12]
Scott Wapner
Multiple going back up a little bit over the last couple days.
- [47:14]
Liz Thomas
That's true.
- [47:15]
Scott Wapner
But you are correct, there has been a considerable amount of multiple compression there. Joe T. The camera's on you.
- [47:21]
Joe Terranova
A lot of capex go going on in the semiconductor industry. Semiconductor equipment names benefiting from that. I gave you Teradyne yesterday. I'll give you that again today.
- [47:31]
Scott Wapner
Again today. How original?
- [47:33]
Jenny Harrington
Not original.
- [47:34]
Scott Wapner
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.
- [47:48]
Julia Boorstin
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 half time 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 trading@schwab is
- [48:23]
Scott Wapner
powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help. And access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading.