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Halftime Report
Awaiting the Fed Decision 9/17/25
00:44:28
Frank Holland and the Investment Committee debate the fate of the rally as we count down to a high-stakes Fed decision today. CNBC Senior Economics Reporter Steve Liesman joins us with the latest. Plus, Lyft rising while Uber falls, it’s our Chart of the Day. And later, the desk discuss the latest Calls of the Day. Investment Committee Disclosures
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A
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C
I'm Scott Wapner and you're listening to.
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CNBC's Halftime Report, the podcast the most.
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C
Profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Thank you, Sarah and David. Welcome to the Halftime Report. I am Frank Holland in for the judge. Scott Wapner front and center at this hour, the fate of the rally as we count down to a high stakes Fed decision. Our investment committee standing by to game out the expectations. Joining me for this hour, we do have Joe Terranova, Liz Thomas, Steve Weiss and Jim Laventhal. We're going to give you a quick check of the markets before we get this discussion going. Stocks sitting very close to record highs as we await that Fed decision. But you got to see the red there on the board. The S and P pulling back fractionally, the NASDAQ pulling back about a half a percent. Nvidia part of that story, the dow up about three quarters of 1%. We want to get right to our senior economics reporter, Steve Liesman. He's in Washington with much more on what to expect from the Fed. Steve, good afternoon. Good to see you. I think the question on everybody's mind, 25 basis point cut, that seems like the most likely outcome, but is there really a chance of a 50 basis point cut?
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E
I just lost.
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C
Think Steve's having some technical difficulties right now. See him pointing to his ears. I'm just going to toss this around. Joe, I'm going to come over to you. Do you see the possibility of a 50 basis point cut actually happening? If you look at the CME Fed watch, 96% chance, a 25 basis point cut, it seems to Be the consensus we're going to get something. Is 50 basis points possible?
- [02:28]
D
I don't think so. I think you get 25 basis points. And I think the, the more interesting dynamic surrounding this afternoon's Fed meeting is how many dissents do we get? We potentially could get three dissents. That's the first time since 1988 the dissents will be regarding what you're speaking toward, which is we should get a 50 basis point cut. So I'm interested to hear from Steve at some point what he thinks they should be doing with the balance sheet. We've run it down to somewhere around 6.6 trillion now. Maybe we need to start buying MBS instead of letting those securities run off. But I think today is going to be about a 25 basis point rate cut with dissent.
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C
All right, I believe we have Steve liesman back in D.C. technical difficulties resolved. Steve, coming back over to you, I'm going to ask you the same question that Joe just answered. Is that 50 basis point cut potentially on the table here?
- [03:20]
E
I think it's on the table for maybe people who want to dissent. Frank, I don't think that's where the Fed is going. Here they go into this meeting, you have a couple of lackluster job reports. You got a pivot by Fed Chair Jay Powell in Jackson Hole towards the dovish side. Markets have confidence in the cut today and two more this year. So I just want to go through Frank real quick how the Fed might signal more cuts to come. Three places to look. Look at the level of concern with weak jobs versus sticky inflation on tariffs. Look for changes to the dot plot is going to show the rate outlook for the committee. And look for potential dissents in this guard in this regard, showing how much leaning there is for tighter or looser policy on the margin back in June. It's the latest Fed forecast. Seven officials saw no cuts this year. Eight forecast two that made the median just barely. Two here. That could go to three today. Affirming the market's view of multiple cuts this year. Another issue, the one Frank brought up. Possible dissent in favor of 50 basis points cut. There you see Stephen Myron, the new Fed governor, unpaid lead ups from cea, sworn in as Fed governor right there. Reflecting President Trump's desire. Does he reflect his desire for a drastic decline in rates? He could be joined by two other Trump appointee governors. Both of them are candidates for Powell's job as chair. It may be offsetting that, though, a dissent on the more hawkish side from some Fed members. More worried about inflation than jobs. So a rare possibility of dissents on both sides, Frank, unless Powell does what he often does, find a way to forge consensus on the committee. I don't think that consensus, Frank, is in the 50 basis point rate cut today.
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C
All right, I want to go to Jay Powell, the press conference, obviously after the rate decision. How do you expect the tone to be? Could we potentially see a hawkish cut here? And if so, what would be Jay Powell in your mind with your expectations? What would he be focused on? Because a lot of concerns about stagflation. But just yesterday we got a much better than expected retail sales report that seems to signal at least more strength in the economy than we feared.
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E
Yeah, this is weird. I see The Atlanta Fed GDP now running at 3.3% for the third quarter here. And I see a lot of economists on the street with a 1 1/2% full year GDP number. So we're going to have to have a real slowdown in the fourth quarter to get there or we're not going to have that slowdown. I really think Powell is going to try to be measured here, give the market the minimum of what they want, hold open the possibility of additional cuts this year, but not necessarily promise it outright because I think he wants to hold on to the flexibility if things coming in, Frank, the way you suggest, stronger than expected if that inflation from tariffs ends up being worse. Our CNBC Fed survey, Frank, I think it's important said substantial amounts of price increases are yet to come from tariffs. There's a limit the extent to which the Fed is going to be promising much lower rates while that inflation rate is moving away from its target of 2%.
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C
All right, Steve Liesman live in D.C. stephen, you got to get over to the Fed for that decision in the news conference. Thank you again, Liz. I want to come over to you just talking about a little bit about what Steve talked about. These dissenters. We're going to get that dot plot. There's potential for some of these dots to be just kind of out of the range of the rest of the group. What would that signal to the market?
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F
So the dot plot in June was had a lot of dispersion. It was really heavy on the no cut side and then really heavy on more cuts. So what I think we'll see this time is first of all base case being I don't think a lot changes in the summary of economic projection. So I think that they're going to use their ability to just not change their projections for 2025. The dot plot itself probably starts to look more dovish. So I think the weight of it starts to look like more cuts in 2025, but the average still probably signals only two for this year. I think actually the devil will be in the details of the dot plot and all of the summary of economic projections for 2026 and some of these, the market moving events. The potential for a market moving event is if we see something like the unemployment projection move up or if the Fed starts to signal that they're seeing more cuts necessary in 2026. But right now there's a pretty big distance between what the market wants by the end of 26, which is six cuts total from now until December 26th. The Fed is only signaling three cuts between now and then. So if those two numbers start to move together, I think the market will like it. If they don't, we have the opportunity for volatility.
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C
To your point, bank of America out with a note lowering their US Growth and Fed outlook saying, you know, a number of issues here. The lower U.S. growth, Fed yields and dollar outlook. They now expect the fed to cut 125 basis points, 50 this year, 75 next year. Less than a lot of people were thinking before we came into this meeting. Joe, I see you going and maybe, maybe not. Steve Weiss, I'm going to come over to you. There is the possibility of a hawkish cut here. How do you think the market will react?
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G
I think the market may take a knee jerk reaction down, but then again, it's off to the races. This market is a market that's unconcerned with valuation or fundamentals. It's only concerned with direction and feeds off direction. So what people will focus on, perhaps what they should focus on is that as much as I don't like to engage in trite sayings, you don't fight the Fed, pure and simple. So whether it's 75 bips this year or 50 and 75 next year, it just doesn't matter. And if you take an intermediate, longer term view, short term, I mean, you can't keep hitting new highs every day with the lack of news. Right? And in fact, you can argue that a lot of news is negative, including, to Joe's point, the three dissenting votes, which, if that's what occurs, are politically driven and gnaw at what should be an independent Fed. So look, so I think the market looks okay here because I can't find reason to go down and the currents are just too strong driving it higher. And you know, if they do cut Then obviously that's positive. Hawkish or not, I don't think anybody expects Powell to be overly dovish anyway. But the point, the other, the counterpoint is what does he say about inflation? Inflation has been ticking up. Now it's going to continue to move higher with tariffs unless the Supreme Court comes out and says and affirms with lower court, as alluded to, which is that you don't have the power to do this.
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C
Steve, to your point, ever grow with the note headline don't fade. The Fed basically saying the backdrop for global equities remains compelling. They're maintaining their S and P price target for the end of this year at 7,400 as the Fed begins cutting rates and we also transition into the strongest quarter of the year for equities. Jim Leventhal, you've been waiting patiently your views on this Federal Reserve meeting, the Jay Powell press conference, cuts expected, the tone may be the market mover here.
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B
Yeah, well, I'm happy to go last because I wanted to see if something that the three of you said would change my mind. Here's my hot, exciting take. I have never been more bored in advance of a Fed meeting than this one.
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D
I mean, is it by what we said?
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B
Terrific. And I was just hoping that there was something that would get my juices going. I don't care. I mean this is the most Telegraph 25 basis point rate cut that we've that I've ever known. As far as the dissensions, they're there. We know they're coming. And you know, when we talk about what Chairman Powell may or may not say or what the dot plots and may or may not indicate, let's face it, that these things change and they change rapidly. I don't care if we're looking at Fed funds, futures markets or the dot plot or any particular economist projections about where the Fed funds rate will be or what Steve Liesman was saying about economic growth, it always changes. What really matters to me is that the economy is strong. That 3.3% Atlanta Fed GDP indication is very strong. Sure, there's some cracks in the labor market. I'll tell you what's more exciting to me is tomorrow's weekly jobless claims because we had that blip up last week. It may have been fraudulent claims in Texas. I want to make sure that that indeed was a blip. That's more exciting to me. We don't have any meaningful earnings. Joe, I see you looking concerned.
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I'll tell you why I'm surprised.
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There's no reason to say that's what I want.
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D
Hear this out for a second. I'm surprised because you have been one who has advocated for, for the broadening out, who has said it could reach the cyclicals, it could reach small caps. I am focused on what we're seeing today. I keep going Back to the Fin5 again. You have four of them ex Morgan Stanley making 52 week highs. I don't think you need to trade down to small caps based on a rate cut. I think, I think you get the broadening out in large cap financials and industrials but this is the moment that those who believe the small cap trade is about to awaken, this should be the catalyst, right?
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B
Whether it's small caps or the broadening, you know, the equal weight S&P 500, your Fin 5, whatever you call that, I like that. By the way there's just today's Fed meeting isn't the substance to me at least on which any segment is going to go higher. I need earnings, okay? Now every indication, every indication is that the third quarter earnings season is going to be great. In particular note that the negative revisions going into the third quarter have been very, very low. That's a positive sign. But the problem is, the problem is.
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C
This isn't a positive catalys for cyclicals but we're going to show it's already price industrials, it's already financial since Jackson Hole. And it seems like you may have, you may have a case here. They're outperforming today but if you look since Jackson Hole they're underperforming the market. But don't you think that a rate cut, especially for the financials, that's a big tailwind.
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B
The market anticipates the market. Look at the market, look at Citigroup. I mean the market anticipates, we know that. And Steve, this is, I think what you were saying about a market that continually goes higher at some point it's got to give something up. I wouldn't be surprised that this is a sell the news day.
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G
You know, first of all I'd just like to agree with Jim on something. I wasn't bored until he spoke but if I look at what he's saying the reality is the market has pulled forward not just one cut but multiple cuts because there's no other reason for the stocks to be where they are and for the broadening that we've seen. But if you take a look at the Mag 7 you don't really need the broadening. That's where the form has been. That's the. Where the performance will be. Now, of course, you just can't. Only on those. Most managers I can be very concentrated. I am. And to me diversification is the enemy of performance. But there will be a broadening out because at some point institutional investors say, you know what, I just can't pay those multiples. I can't pay the multiple for Broadcom, as we discussed. I can't pay the multiple for. Maybe Microsoft is a bad example, but they're going to look for other place to put money. The problem with that is as I look at Caterpillar, which has done quite well, that's not cheap, you know. So where do you go?
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D
The last several weeks it has been a Mag 7 story and I think that's the conflict right now. Money managers, yes, absolutely. But there was this apparent belief that we were going to see this dramatic broadening out, whether by equity size, class, geography or sector that really, really hasn't unfolded to the fullest extent in 2025. And I think this is the moment where, okay, if you're waiting for it, if you're waiting for this pivot, this should be the catalyst.
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B
You know, Joe, you're factually correct. I just want to point out on the other side of what you're saying, the gap between the equal Weight S&P 500 and the market cap weighted S&P 500, while it's still in favor of market cap unquestionably is a lot lower than it was this time last year or the year before. Now I do think the rally is going to broaden. We're seeing it today. This is just one day. I think that gap can actually close by the end of the year. That's my call. I think that broadening.
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G
So here's a question for you. Do you think that's a fundamental trade or a catch up trade? The broadening?
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B
I think it's fundamental. I mean, I'm.
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C
Joe, back to your point. Evercore also.
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D
Wait, I like that. That's a good point.
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F
The catch up. And after this, Frank, you can take it wherever you want to the. The catch up trade from small cap to large caps is what is going on. Small caps have been underperforming large caps for a long time. Recent weeks though, not in recent weeks, but the thesis has been, okay, we have this rate cut that's coming. We've got a new rate cut cycle that's coming. This is when small caps shine. In reality, small caps don't start shining until you're. Let's say 200 basis points into a rate cut cycle, because that's usually paired with a recession.
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C
So then what's the last few weeks been? Because when Jim's over here saying the market anticipates a catch up, it's a.
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F
Catch up, not an outperformance. So there's a short term catch up trade that could happen through the end of the year. But reality says if you look even at history, when you have an adjustment cutting cycle, so the Fed cutting because they can not because they have to large caps actually outperform.
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C
You go. You go. I want to go back to one of the things that Jim, you were saying you're kind of shrugging off this Fed meeting. I do think there's some other issues, some questions about Fed independence. Two very smart people, Ken Griffin, also Roger Ferguson, former Fed vice chair, both have said there's a lot of concerns about Fed independence, how it could raise inflation, raise bond rates that could be a threat to the market. Do you have any thoughts on that? That dot plot that we were just talking about, those outlier dots, they may signal that one member, maybe two members, not only dissenting, but perhaps trying to jockey themselves to be a Fed chair or stay on the Fed board.
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F
Yes. I mean, so I think most of the dots, if not all the dots, are just going to move down a notch. So everybody getting a little bit more dovish. I do think that there are probably going to be some outliers calling for maybe even four cuts by the end of the year, but knowing that that's not actually going to happen or change the trajectory today. So yes, I do think that's a risk. I think the bigger risk is actually in the comments. And I say this almost every time I'm on a Fed day. The most dangerous time to Trade is between 2 and 2:30pm Eastern Time. So you get the data, but we haven't heard from Powell yet. So it's an important time to just be careful.
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C
Lizomian interrupts now StubHub just opening up for trade right now, looking at the trades. 2561 I believe, right now, just going public. We just heard the bell right here behind us at post nine. Big round of applause against StubHub trading right now. Looking at the shares right now up just about eight and a half, nine percent. Obviously we're showing you the tick by tick now as it just begins trading. Ready to check back in on StubHub. But again, shares go opening up for trading right now here at the New York Stock Exchange. Level fluctuation but right around 8, 9% in general. So sorry, let's go ahead and finish.
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F
That's okay. So, so let's say Chair Powell comes out. Even if we get a more dovish dot plot, Powell comes out and has hawkish comments, something to the effect of don't expect this to be the beginning of a rate cut series. Right. Maybe we're not going to do it every meeting. And then the market interprets that hawkishly. To your question about the yield curve, what happens, what I think would happen is what's called a bear flattener. So you see the two year yield rise, you see the ten year yield rise, but the two year goes up more than the ten year yield. So you get this flattening effect in the curve which would generally be negative for equities.
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C
By the way, I just want to note stubborn up now about nine and a half percent. So we're seeing an upside move starting to plateau a bit again. Just going public right here at the New York Stock Exchange just a few minutes ago. Now up about 10%. Joe, want to come over to you. Any concerns about Fed independence, concerns that we've heard from again, Ken Griffin, Roger Ferguson, a lot of other very notable investors concerned about what that could mean for both inflation and bond yield?
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D
Well, I think you could maintain two different perspectives as a citizen. You look at it and there's an obvious, obvious concern about Fed independence. Then you look at it from the market's perspective and maybe it's to Steve's point where the currents are just so strong that it seems to disregard anything that's perceived to be a negative. But the market's telling you right now it doesn't really seem to be concerned about Fed independence. I think most important beyond anything else that, that we discuss is earnings. And if you tell me that earnings are going to continue to be strong, if you tell me that profit margins are going to maintain their level for S and P companies up at somewhere around 13 and a half percent, they keep moving higher, then this is going to continue through the remainder of the year. I understand we're at the beginning of a rate cut cycle. I don't think the premise is you need rate cuts to stay anchored to equities. Just think about at the beginning of the year, the expectation, the consensus was you were going to get rate cuts. Coming into this year, people expected more rate cuts than we've ultimately gotten, which to this point has been zero. So I think it goes back to earnings. And I think right now the market itself doesn't seem Too troubled in answering your question about Fed independence.
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C
Well, after this year. And Jim, I'm going to come over to you. What are strong earnings, by the way, bank of America raised their 2026 forecast at 10% year over year growth. Also raising the back end of their 2025 forecast. So Jim, 10% in 2026 is that strong earnings?
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B
You're looking at 14%, Frank. That's what you're looking at as the estimates are right now. And that's pretty darn strong. So to people who say, and I understand this, look, I look at the market multiple trading around 22 times next year's earnings and I say, you know, stroke my beard a little bit. That's a little expensive. Not if you're getting 14% earnings growth. Now the question is, will you really get that? And I think the third quarter earnings season is very important. I'm going to kind of repeat what I said. Negative earnings revisions are lower than they usually are at this time of year, whether you're looking at the third quarter or the year ahead. And that's an unmitigated positive. Now I'm going to back it up with an anecdote as well. I think we glossed over too quickly. You reported the news about StubHub going public. That's great. How many times, Frank, Liz, Joe, Steve, how many times in the past few weeks have we heard that bell ring? How many times have we heard that hullabaloo behind us? It's happening a lot more. The capital markets are strong right now. You're seeing more M and A activity. You put all this together, low unemployment rate, directionally, the Fed is going down. Deregulation, a budget bill, that's stimulative. Sure, there's risks. And Steve, I'm in large agreement with you about the Supreme Court. And if they overturn that, the tariffs will overheat the economy for sure. But right now, look, it's all engines go.
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D
That's, it's all a head flank and to Jimmy's point. And I'm speaking directly towards how we are allocated. We have over 30% weighting towards large cap financials. And I really believe that financials as a sector, while the valuation is approaching getting somewhat rich, okay, it could be rich and it could stay rich for far longer than you can expect. But it is about an increase in M and A activity in investor engagement and regulatory relief. And I think that's one of the reasons why these, these five money center banks are recording 52 week highs. It's one of the reasons why American Express is right along with them. It's reasons why asset managers and private equity and brokerage are all trading near highs.
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G
This is one of the things that troubles me. Number one, when you have a massive IPO cycle and massive issuance, you go back to the laws of supply, demand. And if you have so much issuance coming, and we see it most often in biotech where everything's great, everything's great, then all these companies come, they issue equity with a secondary IPO and it crushes the index. So we could get to a point, it's not anytime soon where all the new issuance takes the air out of the market. The other issue is, and I share your sense in the market is that can't find any reason for the market go down. But something always happens and generally it's a surprise shock.
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D
Yes.
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G
Right. So that's what does it. And it's impossible to, to plan for those because you don't know where it's going to come from. Right. So finally what I'd say is that the danger here and what I come back to is that at 22 times, right, as the valuation of the market, that's usually where you get to in an easing cycle. However, that's the jumping off point for this cycle. So can we go to 26 times?
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C
I don't really doubt it.
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G
I don't really think so. But all we have to do with 14% earnings growth is what happens then the market will go up. You don't need multiple expansion, you just follow the earnings growth.
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C
Jim, I'll go back to your point about how many times we've heard that Bell. You and I have been here at least four times, I think since when a company's going public right here at the New York Stock Exchange. So a lot of excitement when these companies go public. But if you look at the performance after that, I'm looking at circle. It's about 50% off its post IPO pop. Figma. 60% off its post IPO pop. Bullish. More than 50% off its post IPO pop. Liz, I'm going to turn to you, what does that say about this market? The fact that as Steve mentions, we're seeing a rush of IPOs, but then after that first day pop double digit declines.
- [23:33]
F
Yeah, well, and I think it was Steve's first comment on the show was that the market isn't paying attention so much to valuations and fundamentals, it's paying attention to direction. So there's been a lot of hype. I mean first of all, we've had kind of a drought of capital markets activity. So there's been a lot of hype, there's a lot of exposure, excitement about the fact that there's this revival. And I think that's correct. We should be happy that there's a revival. But maybe we get a little ahead of ourselves just because we have hype around an ipo. So I think it's good that maybe the market comes back down to a more rational place quickly. We don't want things to look euphoric for extended periods of time because that's when you start to worry that we're way too frothy and prone for a bubble bursting. But I think we have to be careful looking at the IPO market. If things are coming out really, really hot, just control your expectations about where they're going to stay.
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C
Jimmy, I'm gonna give you the last word.
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B
Yeah, well, IPOs are not my cup of tea as an investor. However, your point factually made, Frank. You know, if you look past the first month or so, some of these IPOs are actually recovering. I'm looking at core weave, and the danger here is to be anecdotal. I realize that. But if you look at core weave, it had that massive pop, it had that massive sell off, and now it's, now it's gaining traction. I think what happens, and we know this, is when IPOs come out, there's an investor class that gets the allocation or rides the immediate aftermath when they come public and then takes the quick gain that begets some selling. And then the real fundamental investors come in. And I just don't see, you know, whether it's core, we, whether it's circle, whether it's StubHub, I mean, there are fundamental reasons that certain investors will like these, these companies.
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C
All right, to your point, Cor, we've shares flat right now. We shown the six month performance, but they took it away. All right, coming up next on Halftime, Robo taxi wars lift popping. With this deal with Waymox, Uber Share is taking a bit of a different route. We're going to debate it all with our trend of the day. That's coming up. Halftime's back in just two minutes.
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A
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C
This episode is supported by FX Is the Lowdown starring Ethan Hawke. Allow us to introduce you to Lee Raybon, a quirky journalist, rare bookstore owner slash unofficial truth seeker who is always on the tail of his latest conspiracy. This time, his most recent expose puts.
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D
Him head to head with a powerful.
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C
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Meaning only one thing.
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C
And welcome back to Halftime Time for our chart of the day. Lyfton Uber shares, they're just driving an option opposite directions. Today you see lyft up over 13%, Uber pulling back about 5%. This action after Alphabet's Waymo announced plans to launch its robo taxi service in Nashville next year in partnership with Lyft. Joe and Weiss, you both own Uber. Joe, I'm gonna come over to you first.
- [28:03]
D
Steve, I'm gonna give you. I'm give you back the final trade for Monday. We fought over Uber as a final trade on Monday. I said it was gonna go to 100. I won. I got Uber. I still think Uber's gonna be okay in the long run. You're gonna talking about a company about 194 billion that is really turned around their Balance sheet. But there's an opportunity here, I believe, for a trade with Lyft. This is their first partnership with Waymo. It lands itself here in a critical part of the country. Obviously, Uber already has existing partnerships with Waymo itself. But what we're witnessing just in terms of a price reaction from Lyft, is a very strong one for those that just want to kind of follow along here on a trade. You have a stock that's up nearly 80% on the year. I think it's up 133% from the April low. And you have a low risk scenario where you literally could buy this stock against your breakout here at around $20. Or if you're a little bit more, you have the ability to incur a little bit more risk, you could risk it towards $19. So I think you could play along with that trade. I think this partnership is good. I think it kind of puts them back in a headline which they were not participating in. But remember, this is a much smaller sized company than we're talking about, with Uber at 190/billion versus a $9 billion.
- [29:24]
G
Here's how I see it. This is at this point, nothing more than competitive tension. So without, without Waymo bringing Lyft into the equation, Uber could price as they want to price. So Lyft still, we still don't know if they can execute. It's delayed until sometime late in 26. But think of what it does now. It sets the table differently when Waymo and Uber sit down in other cities. So I think actually that Lyft is slightly ahead in the snooze. The company is dead.
- [29:58]
C
Dead.
- [29:58]
G
Not that long ago that brought a new CEO in. Now maybe they take advantage of it and go into other, into other cities and that they say is their plan. But right now you just got to bring a stocking cost there so that Uber doesn't have the leverage.
- [30:14]
C
Okay, so it's fair. It sounds like you're saying that puts basically a kind of a ceiling on the revenues that Uber can generate with this service.
- [30:20]
G
Not at all.
- [30:21]
C
But if Lyft is a competitor, don't they compete on price? I mean, when they that both sides.
- [30:26]
G
You missed the point, Frank. The point is, is that I don't view Lyft as on equal footing as Uber. You're drawing conclusion they will be that they'll have the same market share, they'll be in the same cities. It's possible. But right now that's not apparent because they don't have the ability to, to compete like that.
- [30:46]
C
Right. But isn't Lyft model. Lyft's model now? I mean, I have both apps on my phone. It's a bit cheaper than Uber. That's the idea. You take a Lyft because you got do to be. Well, that's what I'm saying to you. So when the same apply for autonomous.
- [30:55]
G
Driving, it may, but it depends where.
- [30:59]
C
They, if they succeed.
- [31:00]
G
I never look at lift. Right. If I'm in L A, I do, because it's better in L A in terms of time. But otherwise, you know, I just find that the time for the ride is much longer and Uber's like, autumn is automatic for me.
- [31:14]
D
Uber is, is far ahead in terms of the infrastructure with Robotax and the.
- [31:18]
G
Partnership and profitability and other things they offer.
- [31:21]
D
They're in Phoenix, they're in Atlanta, they're in Austin. Okay, so now we're talking about, you know, they're stepping into Nashville.
- [31:27]
B
Okay.
- [31:27]
D
This is the first stop. They need to go other places. Lyft, they need to go to other places. Let's not dismiss this. This is a good story for Lyft. If you've been waiting a long time for Lyft to file, I think it's nothing more than a trade because to Steve's point, I don't see them in a competitive balance in any regard. I think that story ended years ago where Uber said, okay, game over.
- [31:51]
C
We want.
- [31:51]
G
Here's the dialogue going on in the room between Waymo and Uber. Waymo saying, got to bring down your prices because we've got lift there also, so we can just go to them. And Uber said, go ahead.
- [32:05]
C
Okay. I mean, potentially, I think it's just like Lyft executing. Potentially. It seems like some something that could have happened. We know for sure. Today, investors are taking the ride with Lyft. Uber shares pulling back, last time we checked, about 4 and a half, 5%. Lift shares up double digits. All right, coming up next here on Halftime, Mike Santoli joins us with his midday word. We're back right after this. Stay with us.
- [32:33]
D
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C
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A
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- [33:47]
F
We're back on Halftime report. I'm Kate Rogers with your CNBC News update. The European Union wants to end preferential tariff treatment on more than a third of Israeli goods exported to the EU as it tries to add pressure on Israel amid the crisis in Gaza. The bloc said today the measure would affect about 5.8 billion euros worth of Israel's exports and would require Israel to pay 227 million euros in additional tariffs annually. Alexei Navalny's widow says several lab reports show her husband was poisoned shortly before his death in a Russian prison last year. Yulia Navalnaya said today the two independent laboratories that tested biological samples from her husband's body didn't release their findings because of, quote, political consideration. Navalny's widow didn't provide proof or specify which poison was used. And a supply delivery to the International Space Station has been delayed because of an engine issue with a Northrop Grumman spacecraft. The main engine on the Cygnus capsule shut down while it was trying to boost its orbit. NASA says it's working with Northrop to find an alternate plan for the spacecraft, which is carrying 11,000 pounds of of cargo and research supplies. Back over to you.
- [35:02]
C
All right. Kate Rogers with our news update. Kate, thank you very much. We now want to turn to senior markets commentator Mike Santoli. He's joining us with his midday word. Mike, what do you see and what do you think?
- [35:12]
H
Well, obviously, we have a collective anticipation for what most people think we're going to get in terms of the Fed rate cut in the market, interestingly, is trying to front run one of the kind of playbooks that you might execute if you were going to get a more dovish setup here, which is you buy small caps, you sell mega cap, stable growth. You see the Russell 2000 way outperforming the NASDAQ 100 today. You do have some overbought conditions in those mega cap mag 7 type stocks. So maybe this is just the way the market's going to try to balance itself out. So in general, I think everyone remains anchored to all those historical studies that say, you know, usually it has positive implications for the market if the Fed is cutting with S and P at high or also after a very long pause in rate cuts. So everyone's kind of on that train. You do have to be aware, though, even in those historical studies, the immediate market reaction is not always particularly positive. So we'll see if we have a rethink or settling out after the fact.
- [36:10]
C
Mike, what do you make of a number of banks out here? They're actually lowering their expectations for rate cuts both this year and going into next year. As we go into this meeting, are you seeing a reason for those expectations to be lowered, at least right now?
- [36:21]
H
I think in general, people are trying to put the pieces together that might add up to a kind of reacceleration of growth. You're going to get maybe an extra fiscal push going into next year. Companies are talking, you know, in a way that, you know, they still have pretty good spending plans. You're going to get maybe a pretty active tax refund season the first quarter. So I think basically people are trying to true up, up the outlook for how low rates can go along with the idea that nominal gdp, that's real growth, plus inflation, might actually either kick higher or just stay at current levels for a little while. So, look, I don't think anybody knows much going through. You had a couple of big banks saying no cuts this year until about a month and a half ago. So these things can shift around pretty.
- [37:06]
C
Yeah, absolutely. Mike Santoli with his MIDDAY word. Mike, thank you very much. We'll see you coming up at 1:00'.
- [37:10]
F
Clock.
- [37:11]
C
All right. Coming up next on Halftime, our calls of the day, including two bullish calls on two top streaming stocks. We're going to debate those trades and much more coming up right after this. And welcome back to halftime. Let's get to our calls of the day. Lube Capital upgrading Netflix to buy and raising its price target to 1350 right now, trading at about 1220. Steve, you own this one. You and I, we actually talked about Netflix before after Paul Tyson. Not a great fight, but about 100 million people viewed that one. This one is about 41 million people. It seems like it's getting harder and harder not to own Netflix if you want to watch these big events, bets.
- [38:04]
G
Yeah. So Netflix had come under pressure because of Paramount and And Paramount acquiring Warner and those streaming assets. But the end of the day it's going to be one plus one is going to equal probably one, one and a quarter. Netflix being the clear leader. But regardless, let's say that I'm wrong and Paramount and, and whoever else they acquire, be it one or somebody else, builds a legit streaming service. There's more than, there's more than enough room for 1, 2 or 3. So Netflix is most product. I think stock is reasonably valued here and is upside and as I love to say, a permanent compounder.
- [38:44]
C
Jimmy, you own Disney reiterated to outperform@ Bernstein@129. This ascendancy it seems like of Netflix adding so many more live events, whether it's wrestling or boxing. Is this a threat to disappointment? Disney and Disney plus that of course has the Marvel movies and you know, a library of really classic movies, especially for kids. Also the Star wars franchise. They have a lot but they don't seem to have that same focus on the live events that seem to be drawing viewers.
- [39:07]
B
Yeah, I think Steve just said it appropriately that there's room for more than one player in the sandbox and Disney to me is the clear number two within the streaming services. I also think that now we're looking at Disney differently than we've been looking at it over the last five years. First you had to do the turnaround coming out of the pandemic. Then you had to do the transition from linear to streaming. That's done. Streaming is profitable and frankly I see a lot of room for earnings expectations to be exceeded on the back of streaming going forward. You're seeing earnings estimates already creeping up higher. I think that will continue. I think it's attractively priced at 18 times. That's below market multiple obviously with good growth not just from streaming but also from the theme parks. And I'm sorry, I shouldn't gotten so quickly off of streaming because remember Frank, espn, their streaming capability is just coming online and I think there will be uptake.
- [39:56]
G
And Netflix also deserves a premium for being the pure play. If you don't want to worry about theme parks, you don't want to worry about cruises, you don't want to worry about movie studios, but instead fund the production movies. Netflix is the best play.
- [40:10]
C
All right, Netflix here is up about one and three quarters of 1%. We're going to move on to Walmart. Bank of America increasing Walmart its price target to 125. Also maintaining its buy rating. Walmart trading at about 106, just under 106 right now. Joe, you own Walmart also. Walmart at an all time high today.
- [40:24]
D
Obviously I agree with the call. We've owned it in the ETF since October of 2024. They are a clear leader in a magentic AI e commerce and it's all about really utilizing the technology to buy for the consumer.
- [40:41]
E
Consumer.
- [40:41]
D
I don't know if anyone's used on Amazon the buy from me button but this is something that is compelling. It's something that companies who have scale like Walmart are going to be able to deliver a tangible AI product to the consumer. I think Walmart is on its way to a trillion dollar market cap.
- [40:59]
C
All right, Walmart shares up about 2 and a third percent. One more Barenberg upgrading AbbVie to a buy, raising its price target to 270. It's a big upgrade actually. Previous price target was 170. Jim, you own this one.
- [41:10]
B
This stock has been solid. And as much as people like to talk about the health care industry in general as having been a lousy investment this year, there have been plenty of places like AbbVie where you can select a stock. The price performance has been great. The Humira expiration is well behind them. It's now Skyrizi and Rinvoak. They have no real loss of exclusivity for many years to come. 3% dividend yield 15 times times forward earnings. I mean this is, you can buy it right here despite the strong price appreciation.
- [41:38]
C
Liz, I want to come over to you. What's your just general view on health care? Obviously there's different segments to it. There's the insurers, there's obviously drug companies like AbbVie which actually analysts pointed out survive one of the biggest patent expirations in history when it comes to drugs. But just in general when you're looking at the sector, where are you seeing opportunities? Where are you potentially seeing issues?
- [41:55]
F
Yeah, well first of all, opportunity on valuation. I mean it's, it's up 0.6% in the S and P this year compared to the top sector being up almost 30%. So big underperformance from health care. If you're a value investor, this has to have hit your triggers at some point. And not just that. If we're looking at the different segments of health care, you think about pharma and biotech, not just in the large cap space but moving down the cap spectrum. Those are really growthy areas of health care and they can be an option if you're trying to diversify your growth exposure away from mega cap cap tech. And I think there are some dollars looking to do that, especially on days when the rest of the megacap tech complex is pulling back.
- [42:32]
D
If we could show the XPI while I'm speaking, Steve, you look at this as well. It's up 14% in the quarter. The IBB is up 12%. Very strong performance. And if in fact today delivers the type of outcome that has a positive effect on the small cap universe, you look first and foremost towards those biotechs.
- [42:51]
C
Yeah, biotech could benefit from not only rate cuts, but less regulation in D.C. as well. Looking at the XPI right now, up just about 1% as Joe mentioned, quarter to date, up about 14%. All right, coming up next on Halftime record setting stocks, we're going to review some of the committee's names hitting new record highs. Halftime's coming back right after this.
- [43:36]
D
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast now.
- [44:01]
C
And welcome back to Halftime. Several committee stocks earning fresh record highs today or at least this week. Let's start off with Alphabet pulling back a bit today, but hit a fresh record high yesterday. Joe, you own this one. Weiss, you on this one. Jim, you own this one. Weiss, want to give it a go?
- [44:13]
G
Look, I, I think it's still undervalued. It's undervalued relative to the other Mag seven and the clouds have cleared in terms of litigation number one. And number two, they are making decent inroads with their AI solution. So I continue to be a shareholder. I frankly, I'd like to see correct some and I would buy more because it's not a, it's not as large a position as a matter of some.
- [44:37]
C
Of the Joe Waymo on the news of City Air of Alpha bet as well.
- [44:40]
D
Antitrust ruling to me was the big event, the clearing event. And Jimmy's call in May was epic.
- [44:45]
C
All right. Speaking of Jimmy Citi hitting a 52 week high. It's your chance, Jim. You want to talk about Citi? Here it goes.
- [44:52]
B
I think, I think there's more to come. I mean, obviously it's had a very good run. It was long overdue. I spoke about this yesterday and I talked about the fact that it's now trading at exactly tangible book value. And I put that up against bank of America at 1.8 times or Wells Fargo at 1.9 times. Times. And I'm not saying it's going to go to those multiples tomorrow, but I do think that it should go to 1 point to 1.3 times. Obviously you can do the math. That's 20, that's 30% by the way. If you look at it from a price to earnings multiple point of view, it's trading at 10 times next year's earnings where Wells Fargo and Bank of America trading 12 times. So 20% just to get to parity. Now the question is should it be at parity with those? It's historically been a less profitable company. But that profitability is ramping up very quickly on the back of Jane Fraser's efforts and I expect that will continue.
- [45:40]
C
Speaking of financials, JP Morgan also had a record high, but it's not just stocks. Also commodities hitting record highs. Gold hit a record high yesterday on a win streak for five straight weeks of gains. Liz, I want to come over to you. Also we got Deutsche bank raising their price target up to 4,000 for gold.
- [45:54]
F
Yeah. So gold obviously has seen demand from central banks for a long time. Currency volatility propping that up. And that demand isn't going anywhere anytime soon. But also what's happening this year is you're seeing real yields fall. So treasury yields have fallen, particularly on the short end without a rise in inflation. Gold is a zero yielding asset. So when there isn't as much of an alternative to buy a yielding asset, you're going to see more demand there. And I think the retail trader has woken up about gold as well.
- [46:21]
C
Yeah, gold pulling back very fraction began hitting an all time high this week. All right, stay with us. Final trades they're coming up on halftime and we have a big interview coming up today on closing bell. Scott Wapner is sitting down exclusively with Double Line CEO Jeffrey Gundlach immediately following Fed Chair Powell's news conference. You don't want to miss this one. Be sure to catch closing bell coming up 3:00pm Eastern. All right now here on halftime when it's turn to final trades. Jim, you're up first.
- [46:52]
B
Qualcomm, it's had a little bit of a lackluster year but it seems to making a run for the roses right now.
- [46:58]
G
Weiss Verde, look this is high test beta. So if you get a bad Fed comment then this will go down a lot. But overall the trend still higher with data centers.
- [47:08]
F
Liz, China, let's avoid Fed volatility today altogether. And I think that there's still stimulus coming over there.
- [47:15]
C
You hardly believe we didn't mention in video and some of those tensions in China. Joe, last word.
- [47:19]
D
Northern Trust been running in place for the better part of the last three months. I think it's going to break out to the upside.
- [47:24]
C
All right, one more quick check of the markets right now. Again, Fed Decision coming up at 2pm Eastern. Jay Powell news conference at 230. Right now we're seeing the Dow up just over a third of 1%. The S and pulling back a quarter. The Nasdaq down more than a half a percent. That does it for halftime. The exchange starts right now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays.
- [47:46]
D
At 12 Eastern only on CNBC.
- [47:51]
A
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer@ Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo.