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Halftime Report
Building a Strategy Amid the Uncertainty 4/6/26
00:44:00
Scott Wapner and the Investment Committee debate how they're managing their portfolio amid the geopolitical uncertainty in the markets. Plus, we hit the latest Calls of the Day. And later, the desk debates the race for AI names to go public and how you should position yourself ahead of their IPOs. Investment Committee Disclosures
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Edward Jones Narrator
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all.
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Jim Lebenthal
Because life is a winding path made
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Edward Jones Narrator
rich by the people you walk it with. Let's find your rich together. Edward Jones Member SIPC At Uber, every
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- [00:51]
Scott Wapner
Hey, how's it going?
- [00:52]
Joe Terranova
Yeah, good.
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Megan Casella
Thanks.
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Uber Safety Announcer
Annual driver screenings from Uber One more way Uber is putting safety at every turn. Learn more@uber.com safety I'm Scott Wapner and
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Scott Wapner
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 very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the state of the markets is more presidential threats, FOMO fears and overall uncertainty continue to keep investors guessing. We will discuss and debate the markets with the investment committee. Joining me for the hour, Joe Terranova, Jim Leventhal, Steven Weiss, Bryn Talkington. We'll show you the markets here. We're just past 12 noon obviously in the east and we're hanging in there. We are green across the board. Oil stable, yields are stable. Feels like we're in a bit of wait and see Joe for the alleged 8pm Tuesday Trump deadline. So we'll see about that. And it's worth since it's a new week and we usually do this is give you kind of the scorecard for where we are since the war started. The S and p is down 4%. Feels a lot worse than that.
- [02:07]
Joe Terranova
A lot worse.
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Scott Wapner
There's no question about that. And under the surface it probably looks a little worse than that because the mega caps have traded better lately. So that's helped the S and P. Mike Wilson, Morgan Stanley we remain in a bull market. The main risk remains central bank policy and rates. Doesn't say the war. Ubs we think investors should remain positioned for medium term upside in global equities. And Ed Yardeni says we think there's good value in the stock market at current levels. All right, what Say you?
- [02:40]
Joe Terranova
So I agree with Mike's comment regarding a policy mistake on the part of the Federal Reserve being a really big headwind that you would introduce to the marketplace. I think they should not be reacting to the spike in oil prices with not only the implementation of a rate hike, but even the talk of it. I disagree with that. I think internally within the market we are pushing towards the 200 day moving average. And if I were just to step back and really not know about this binary 24 or 36 hour period that's in front of us right now, I would suggest that the market can move higher from here. And the reason for that I think is we have worked off a significant amount of bullish positioning and bullish sentiment. And I think that works in the favor of markets lifting here. I think in the interim, what you want to do is you want to look at the exchanges which continue to perform remarkably well, whether that's cbo, cme, ice, nasdaq, all of them working really well. And look, I pointed it out last week and full disclosure, I don't own the stock, it would never do that because I have a very long standing friendship with the owner of Virtu Financial. But you have to point out that company and as the only true publicly traded market maker that you could buy shares of and it is trading it to an all time high today, it speaks towards the volatility that's in the marketplace right now and trying to allocate in that direction.
- [04:08]
Scott Wapner
We appreciate the disclosure on that. In terms of we've had a fair amount ways of de risking in the market. Right. Some say, you know, well, we didn't go down enough, we didn't have the classic capitulation, blah, blah, blah. But if I told you that according to Goldman Sachs on a trailing six week basis, net selling by hedge funds was the third largest over the past decade and that CTAs had sold nearly 55 billion in US equities since the start of the war. You'd probably say that sounds like a pretty good amount of de risking as this whole thing began. And maybe that has run its course as to why Joe thinks you could still have some upside into why Mike Wilson's willing to say we're still in this bull market until we're not in UBS talks about medium term upside as well.
- [04:59]
Joe Terranova
Yeah.
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Steve Weiss
And the reason to point them out, they're the marginal buyer and the marginal seller index funds which are more than half the market. They don't have cash positions. Right. That's not the point. Of being an index fund, it's to match whatever the stocks are, the S and P. There's no cash there. Most long only managers, maybe they can own 10, maybe they can have 10% cash, maybe they don't. But typically they don't get paid to be the asset allocator. So they're typically all in, except keep some cash opportunistically. So that brings you back to your example, CTAs and hedge funds, which don't have the biggest asset base, but they're big enough to influence direction of the market. And right now their exposure is pretty low. Their gross is pretty high. So you get to a high gross by having low net exposure because you've got short positions. CTAs, they may be net short because
- [05:47]
Scott Wapner
they are, according to this, they're about 18 and a half billion short.
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Steve Weiss
Right. So that is potential buying firepower that has to come in. So the only question to me is, and this question nobody can answer, what happens? Do you go after Iran's energy infrastructure? If you do, then you'll put a floor under oil at a much higher level and that could really turn over the Apple card.
- [06:10]
Scott Wapner
Overall, I agree.
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Steve Weiss
Intermediate, it looks fine. Long term looks fine. It's no secret you can have 14%, 14.4% earnings growth this quarter. So that is attractive for stocks. The guidance, you know, I don't know about the guidance. Is it going to be somewhat couched and we don't know what happens?
- [06:29]
Scott Wapner
Probably, yeah, it should probably.
- [06:31]
Steve Weiss
But overall productivity because of AI is increasing dramatically.
- [06:36]
Scott Wapner
We always, you know, not always, but you know, you try and criticize. Oh well, they're going to, you know, never, never waste a crisis, so to speak, to, to think about how you guide. But I think post Liberation Day period and also now, given the war uncertainty, it's fully justified for CEOs on these earnings calls to say, I mean, we feel pretty good about the environment, but we just don't know if this lingers on any further, that's going to leave people maybe dissatisfied, Jimmy, with, with what CEOs see. But until the numbers change, like the Weiss talking about 14 and a half percent nearly earnings growth, then the commentary doesn't really matter much.
- [07:21]
Bryn Talkington
Yeah. So talking about earnings growth, and now we're up to 16% projected year over year growth. The amazing thing to me is that earnings estimates for this year on the s and P500 have increased by 3% since hostilities broke out. And some may want to say, okay, well that's higher energy prices flowing through to energy companies it's not, I mean that's a part of it. But three times that effect is going to be felt in technology stocks. And by the way, it's going to be a good three weeks or so before we get technology stocks reporting. So I think the real danger to this market, if there is one, is that technology stocks disappoint either in reported results or Scott, as you're just pointing out here in the guidance.
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Scott Wapner
But we've got the chances of that, honestly.
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Bryn Talkington
Well, here's, here's, I don't, let's just
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Scott Wapner
not, let's, that's not stated as throwing it out there in the wind. What are the real probabilities that these big tech companies are going to disappoint on their numbers or their spending things to, and all that?
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Bryn Talkington
Two things to consider. One, expectations are high. They've done nothing but rise over the last three years. The second thing is there are going to be margin pressures, particularly from the semiconductor space. We do know that there are pressures on the supply chain in semiconductors. We all know very well what's going on with memory chips and pricing there. So I don't think, let's be clear, I don't think these stocks are going to disappoint, but I don't think we can rule out that along the way there are some disappointments. Remember by the way, last quarter, Microsoft, for instance, disappointed because they were supply constrained in building out Azure growth. So things like that can happen. But ultimately, just go back to this week. You know, it's hard to, and famous last words here, it's hard to see things getting worse. Like do we think that the Strait of Hormuz is going to be more closed? There's about 10 ships going a day through the Strait of Hormuz. Before the hostilities it was over 100. So of course Iran can bomb more energy fields, refineries, etc. But I do think that, you know, it's hard to see things getting materially worse.
- [09:17]
Scott Wapner
Also it's, it's hard to try and use technical analysis I think at moments like this because in certain instances this is different in that if you, if you say like Jonathan Krinski does today, that the bottom's not in yet, the reality is we're lacking the fully oversold conditions that typically accompany a breach of the 200 day moving average, especially since that breach has now lasted 11 straight days, I'd say, well, of course, that is, that can be true. We didn't have, according to those who watch Brin, the classic capitulation or full washout. But you also don't have, you know, the classic kind of communicator, I suppose you could say, in the Oval Office. I mean, people are afraid of being too negative. If maybe you didn't get and wouldn't get the classic washout that you would expect at times like this, because people are afraid of missing out on a post on social media, a change of direction. It's happened sometimes multiple times a day. The language has. So it's left people, I think, a little confused as to how to position, but certainly afraid to be too negative. This market,
- [10:37]
Jim Lebenthal
100% agree. I think the way I'm looking at the technicals from the 200 day, we don't have to have a washout. Those washouts are actually quite rare. We had it at Liberation Day, we had it during COVID And so what I look at, I think what's been a very good guide is we broke the 200 day. I want to say March 18th or 19th, going back 20 plus years. If we get back above the 200 day within 30 days by April 19th, there's actually 100% hit where the market's up a year later. If we start, if we do not get above there by April 19, the data is not so great because then it starts turning down. And so I just think that we still have a couple of weeks. I don't think we need a washout. But I do think investors watching the 200 day, let's see what happens. And I will say, you know, Ed Yardeni had very good points in his piece about the fundamentals that, yes, Jim's talked about, earnings are going higher. But if you go back, really since the World War II, two years later, after major, we'll say military excursions or military wars, etc. Two years later, the market's up on average between like 35 and 44%. So it's like worth it to take the risk. And then earnings are going higher. And so I think between fundamentals and technicals, we're still so close to the 200 day, we're like 30 points that if you are getting very short, I think to your point, that is not a good idea because there's no clear indication. But I want to close and say one thing about tech earnings. To me, the one thing that does give me pause is tech is looking to grow 30% this year, let's say overall earnings growth. All of that, all of that is in video and Micron. If you take Nvidia and micron out of Q1s and P earnings. The S and P earnings is like 3%. And so I will say we are hyper concentrated with two names. And so I don't, one thing I don't like is the breadth of earnings within tech. Google, Apple, Microsoft and Metta, their earnings growth. This Q1 is not, is not great by the way. It's all Micron and Nvidia.
- [12:39]
Scott Wapner
Joe, you know, the, the fact of the matter is in this current market, the risks are so easy to see both ways in a highly foggy and opaque environment. I could easily make as negative a case as I could a positive case. Yes, cease fire. You get all negative, you get a cease fire, market's going to rip in part because the short, the shorts, there's still a lot of shorts of the institutional side. You get a short covering rally like, like that, you get all, you know, bulled up and then you get some degree of escalation. Okay, well obviously I can make a cogent case that the market's going to be susceptible to significant downside on that. So then just X both of those out. Play the hands you got. Play the hands you got is that earnings are expected to be good. The macro environment is still pretty good. I know there are risks and Jamie Dimon mentions them in his shareholder letter yet again today. Some are worried about the Fed making a policy mistake. But again, cut out all that noise and just play the hand you got right now. Markets, I mean the economy is pretty decent. The jobs report, surprise to the upside. You can hit it on, some of it was volatile and you know, the revisions, etc. But that's what I think we're looking at.
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Joe Terranova
But I think you're correct and I think what that means to the, the viewers and certainly the, the wealth management industry, Jimmy, is that this isn't an inflection point. This isn't something that is similar to what we were experiencing in the early 2000s around the Great financial crisis. This is something where we have elevated volatility, a recalibration on valuation, and therefore we have corrective price action.
- [14:13]
Scott Wapner
We hold you just for two seconds when I go to the White House, Megan Casella is there. The President is making some comments, obviously the Easter Egg Roll this morning. And let's listen in to what Meghan's reporting is. Hi there, Scott.
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Megan Casella
That's right. This is the second time now we heard from the President out on the South Lawn this morning ahead of his 1pm press conference. And what he was doing here is he was knocking down the idea Primarily of that 45 day cease file proposal that we've been talking about so far today that's being pushed by intermediaries. This is the idea that a 45 day cease fire would take effect ahead of the president's tomorrow 8pm deadline to reopen the Strait of Hormuz while a broader deal was being negotiated. What the president said just now was, quote, the only one that's going to set a cease fire is me referring to himself knocking down that idea of the proposal. He had earlier called it not good enough, but a very significant step. So more to come possibly in the later press conference about how he feels and how he does want to proceed. He also was really maintaining a firm deadline line on that tomorrow 8pm deadline that he set. Of course, he has moved this around a few times. That's the deadline for the Iranians to reopen the Strait of Hormuz. Or he says he'll be targeting things like power plants and bridges. He says that, yes, that is the final deadline this time around. And he also appeared to brush off any concerns that targeting those power plants and bridges, given that they are civilian infrastructure, would amount to a war crime. He said he wasn't worried about it and he said instead that the only war crime is allowing Iran to have a nuclear war weapon. He also gave us a little bit of color on how negotiations are ongoing or at least who is leading them. He said that the vice president, J.D. vance, is involved in those negotiations with the Iranians or with the intermediating countries. He also said that Steve Witkoff, the special envoy and Jared Kushner are involved in those negotiations as well. And when he was asked whether the vice president might be dispatched to have some in person meetings with the counter with the Iranian counterparts, he said he could be. So more to come on that front as well, Scott.
- [16:04]
Scott Wapner
All right, Megan, thank you. Megan Casella, head of the president's news conference, about 45 minutes or so from now. So again we discuss, you know, play the hand that you have. Let's talk about that in the context of Weiss positioning. Okay. Because we've talked a lot about, well, it's been hard to hide. Okay. The Russell 1000 value index up 2.4% so far this year, beating the Russell 1000 growth index, which is down 9.1. It's the largest margin since 2022. The gains though, for many value stocks are now at risk. Some are suggesting with the escalating conflict roiling the stock market, oil prices are obviously up. It's hard enough, it's hard to believe in the broadening trade against that backdrop, that's what they're saying. The belief in that in the early part of this year had helped value outpace growth. Technology had sold off, everybody knows that now. But now money starting to flow back into tech, which has made the environment a little more difficult to figure out from a positioning standpoint.
- [17:06]
Steve Weiss
So if you go back over the 15 years, we've had these false starts where value was going to be the lead horse and takeover for growth. And I still think that's going to be the case where value is going to be there for a little bit, then it's back to growth, it's back to fortress balance sheets. I agree that their free cash flow has been impinged somewhat, but their spend. But given where we are in the demographics of investing, that you're more likely to find growth leading a particular time. And so when there are values to be had there, as there were when the NASDAQ was in correction territory, people are going to seize it. So look, I still, I don't really know what value is anymore when I take a look at Caterpillar, which I own, which used to be a value stock and now it's, it's still overvalued. So, so I think the waters have gotten murky. Clearly the only one that's drawing the lines towards value versus growth are the ETFs. That value ETFs, because it's got a
- [18:05]
Scott Wapner
title to it, let's just say almost everything but tech. So I mean, I guess in the, for the, for the context of this
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Joe Terranova
bank, for this conversation, the outperformance of energy and materials has contributed to value surging and having this mean reversion advantage over growth. If you were to tell me as we move forward to Jimmy's point that things don't get any worse and oil prices retreat, then I'm with you, Steve, because then I think it's about the Mag 7. I think it's a rebuilding of position and technology. And I think overall you want to be tactical. I still believe in this environment you want to be tactical. I bought Apple at 252 and a half last week. It's now approaching to 60 on the close today. If it is sitting here close to 260, I'll add to the position. I'll try and build the position as it move higher. I think you want to see these tactical opportunities as they are presented to you in front of you. It's refiners, it's fertilizer names, it's the exchanges Those are the areas right now where you can find a little alpha.
- [19:04]
Scott Wapner
Brin Tech saw the biggest inflow in four weeks last week. The gains for a lot of these mega caps over a one week period have been, have been pretty Darn Good. Alphabet up 9% in a week. Now a lot of these names I'm going to read to you certainly needed this because the week prior they would have looked like the opposite. Meta up 7.5% in a week. Nvidia 7, Amazon, Apple and Microsoft all with pretty good gains. And as we said, tech had the biggest inflow in four weeks. So in times of uncertainty, especially about the macro, perhaps money's going to flow right back and we're learning that lesson over and over again.
- [19:43]
Kate Rooney
Yeah.
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Jim Lebenthal
And then, and then also to that, you know, the premium of these tech companies to the S and P is has come down dramatically. And so I think it's hard to get too bearish on tech in general because as we said at the beginning of the show, albeit it's concentrated, all of the earnings growth is coming from or the majority is coming from technology. And ultimately these companies are investing in a new technology called AI. There'll be a ton of waste, we see a ton of waste at Metta that they've already wasted. But ultimately I think it's too, it's, it's, it's just too consequential if you're going to get bearish because these names are just such a big part of the index and also going into earnings. I think Google is going to have great earnings, I think Apple's going to have great earnings. So why would you want to be bearish on these names after they've already had a correction when in about two weeks are going to come out with earnings which I think will be very strong just in aggregate.
- [20:37]
Scott Wapner
Yeah. What do you think, Joe? I mean Nvidia has gotten 170 back the other day. Right. We had waited, it was stuck, it got above and it's held. So, you know, now it's nicely above. But there's the dip last week and then, and then the recovery.
- [20:52]
Joe Terranova
Look, I've spoken over the last several weeks about how I don't understand the frustration that appears to be exhibited in, in the industry regarding the performance of Nvidia over the last six months. Okay, it's down 4%, I understand that, but it's basically consolidating and I think your expectation is that this consolidation base leads to over the next six months in overall advance. I don't think anything about the Semiconductor industry is telling you a story that we're going to see a deterioration in the quality of earnings. I think when you look at the semi equipment names, I think when you look at some of the semi names like amd, there's a really embedded, powerful story underneath that suggesting AI is advancing much faster than we anticipated. Agentic AI is advancing much faster than anticipated and therefore the need, the pull, the demand for these chips is going to remain insatiable.
- [21:46]
Scott Wapner
Well sure, but you know, if you look at Jimmy, we can just look at Micron for a moment. I know you don't own it, but it, it needs to be looked at almost every day. So it's 380. Let's back it out for I don't know, a month. Let's take a look at a month because it tells the story here. There's your big slide down. So it was 314, $314 on March 31. It's had a nice move obviously since that. So we're, we're at 381. This is almost now a barometer for how the semis are being perceived within
- [22:20]
Bryn Talkington
the market or at least a segment of it, which is the memory chips. And as I mentioned before, there's high demand for the memory chips. Prices have been going higher and unlike normal cycles for memory chips, there hasn't been a flood of new supply coming online. So that slide over the last few weeks is not because of new supply. It's because of companies that use these chips finding other solutions, finding more ways to be efficient and perhaps decreasing the demand. Ultimately I think the demand is to going, going to be there for these memory chips. As I referenced earlier with Microsoft, that wasn't the only one. I mean there are a lot of companies out there that have been looking for and this isn't even, I'm talking about AI applications right now. This is, this is to say nothing about non AI applications for memory chips where they just simply can't get the chips.
- [23:05]
Scott Wapner
You had a nice buy in this.
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Steve Weiss
Yeah, in Micro I didn't get anywhere near the bottom but I thought it was overdone. I, I didn't try to get the bottom. I want to get it when it was on the upswing and bounce back because if you go out to next year's earnings and who knows what they'll look like. But right now the guidance or the prediction for next year's earnings from analysts is that it's a very cheap stock. It's back to where the commodity should be priced. But to Joe's point in amd. If you look at the chart on Nvidia to your point, or AMD or Taiwan semi, they're all in consolidation phases now. They didn't have the big drawdown that Nvidia had, but that's where, where a lot of tourist money is. So I think the whole space is really consolidating at this point.
- [23:45]
Scott Wapner
Bren. The only other stock I want to hit before we take a break right now is Tesla. You own it as we know. JP Morgan made a call on it today. That's underweight. Okay. 145 is the price target. They're looking at 60% ish downside from here. I'm wondering what you think about this. So the, the deliveries have been bad. There's no other way to say it. The tracking, 7% lower than the most recent consensus and 74% below the prior consensus stock down 20% this year, 28% from its 52 week high. What do you say about that now?
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Jim Lebenthal
I thought that was like Steve's report, not JP Morgan. It's like, so if the market is going to, if the market is going to price Tesla on the Model 3 and Y deliveries, right, because the S and X are going to go away, then I think his math or her math could, could, could be correct. But we know the market does not price Tesla on that. And I think one of the things that we will want to see is that the snacks were discontinued in Fremont and they are converting that, that gigafactory to Optimus production. And so we'll see how that's coming along over the next few quarters. But I think to get a one handle on this stock just has to be a complete rerating of how the rest of the market values it. So I disagree. I will say the stock's in a really strong downtrend. I continue to sell calls and sell those down because it is in a downtrend. I think probably it could get into like the 3:15, 3:20s before it stops falling. But you're going to need to see some news on Optimus, this quarter's earnings and where they are to get the stock out of its current free fall.
- [25:36]
Scott Wapner
I will take a break. We come back, we'll talk about our calls of the day. One firm seeing more than 30% upside for one of the cruise operators. We'll tell you which one next.
- [25:49]
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- [26:03]
Scott Wapner
Hey, what's your pin?
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Edward Jones Narrator
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- [27:33]
Scott Wapner
All right, welcome back. Barclays Today likes Royal Caribbean. They reiterate their overweight rating.361 is their price target. They say the escalation in tensions in the Middle east negatively impacted March cruise prices in Europe. I don't think that's any surprise. While giving somewhat though of a boost to the Caribbean. And that is the trade off as to why they're bullish. You own the name. Yeah.
- [27:55]
Joe Terranova
But they left out fuel costs, which I think are the biggest concern here as you move forward for this company. Understand when you when everyone likes to talk about Brent and wti, it's really diesel pricing that has been most dramatically affected. It's the refiners that you want to own in that scenario.
- [28:13]
Scott Wapner
But Caribbean, I'm together. They're not making such a tactical call. Like, that's the challenge of what we're talking about here. If you want to say that rising fuel prices are a negative for the airlines and the cruise ships and everything else, it's like, no, you know what? But we're trying to look past that, investors are to make longer term decisions and use some of the dislocation that's happened in some of these names.
- [28:35]
Joe Terranova
Okay, so actually do that while you, I mean while we speak about this, let's pull the chart back one year on Royal Caribbean and what you'll see is that the peak occurred in August. Now look, I am surprised. We've been in this name and this is where the strategy is smarter than I am. We've been in this name Since April of 24 at $139, I would have never expected to be in Royal Caribbean for the better part of two years. But you'll see that the stock peaked last August. Then once again once the conflict began, you saw the precipitous decline. So I guess what I would say to you is that you have to tell me to your point.
- [29:10]
Todd Rosenbluth
Yeah.
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Joe Terranova
This binary outcome has to work in the favor of resolving where diesel and fuel prices are ultimately going to go. For the reset to start on Royal Caribbean and for them to be correct.
- [29:22]
Scott Wapner
I don't know the answer. Do you think that fuel prices are going to be lower 6 to 10 to 12 months from today? Will they be from the moment where we are today?
- [29:34]
Joe Terranova
Yes, yes I do. Do I think they could be.
- [29:37]
Scott Wapner
These calls are often based unless they're specifically tactical in nature.
- [29:41]
Bryn Talkington
You.
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Joe Terranova
I didn't, I didn't. You didn't ask me this question. But I think this is important. Do I think over the next six months they're going to be elevated to where they were over the last six to nine months? I do.
- [29:51]
Scott Wapner
To be back to 60. Right. But in six months from now, if you think that that oil prices are going to be at 110 bucks, then the market's not going to look like
- [30:01]
Joe Terranova
it does now then then Royal Caribbean is basically going to be sitting between 250 and 300 bouncing back and forth. But I don't think, and we own the name and I like the fundamentals, they are a clear leader in the cruise industry. But over the next six months I don't think they're going to have the margin benefit that they had in the last six to 12 months from lower fuel prices to that degree.
- [30:24]
Scott Wapner
Okay, so Jefferies today cuts the targets across many of the gaming names and they talk about most markets facing headwinds now throughout the the year. Vegas tourism's choppy Macao's now has tough comps and the like. Las Vegas Sands Jimmy downgraded today to hold from buy target to 61 win target goes to 150 from 162. They still, would, they still say buy it, but what do you think?
- [30:51]
Bryn Talkington
I mean, that would be a, that would be a 50% rise to the result to the revised target. I mean, the thing about Win is they have this Al Marjan project and it's right, it's literally on the Strait of Hormuz. So of course, the stock has sold off over the last month, but that resort is not opening until next year. So presumably we're going to get the end of hostilities.
- [31:10]
Scott Wapner
You don't think that's, that's pushed back at all now?
- [31:14]
Bryn Talkington
Maybe a little bit.
- [31:15]
Scott Wapner
And you're banking the whole thing on this to that? You're back in the bull case to that.
- [31:21]
Bryn Talkington
This is key. All right, now, look, you can have a resurgence in loss Vegas, which has been really dormant for several quarters now. Everybody knows that. But the special sauce about Wynn Resorts is this Al Marjan. Could they push it back? Of course.
- [31:33]
Scott Wapner
No, I'm saying like a month. You're telling me that people are going to just, you know, happily rush to the straight gamble.
- [31:39]
Bryn Talkington
There's the question, honey.
- [31:40]
Scott Wapner
Let's go play some blackjack at the straight.
- [31:43]
Bryn Talkington
Okay, There is the question. I mean, if we're talking a year from now, I got news from you. If this thing ends this month and we're, and we're talking a year from now when this thing opens, yeah. Memories are going to be pretty short in that regard. I mean, all of the Gulf countries have placed a lot of faith on continuing to build out tourism. You know, if that doesn't happen, their economies are in shambles. Frankly. Oil doesn't save them from that.
- [32:06]
Scott Wapner
All right, how about Netflix? Getting a ton of love lately. And another one today, Weiss upgraded to a buy from neutral at Goldman. Yeah, it goes to 120. I mean, everybody's now on, on the same side of the boat. It's like, okay, this thing got hit. They're not doing the deal, so buy the stock. Yeah, I know that's oversimplifying it, but that's pretty much what these feel like.
- [32:25]
Steve Weiss
And there's still sellers out there. I mean, you know when Goldman's been a long term bear or neutral on the stock and it started to tick up a little bit premarket, but now it's last I looked and there it is in negative territory. So I think you still got to do some washing out here. I don't know who it is, frankly, that that's a seller because stock's cheap. They still are the best game in town still the most content and they're raising prices and they're going to sports and they're going to games. So I think it's perfectly set up. Just got to get it above par.
- [32:57]
Scott Wapner
All right. Let's go to Christina Parzonopolis now for the CNBC news update. Hi there. Hi, Scott.
- [33:03]
Christina Parzonopolis
Well, the Associated Press right now plans on cutting roughly 5% of the US staff as part of a restructuring effort. The news outlet looks to move away from hyper local print coverage towards more video and national coverage. A note from AP's executive editor says just too much of the outlet's operations are tied to large U.S. newspaper groups who make up less than 10% of its business. The U.S. marshals Service allowed some members of Elon Musk's security team to sidestep experience and training requirements. According to to emails acquired by NBC News, the U.S. marshals approved a request from the White House to deputize Musk's bodyguards, allowing them to carry weapons in some federal buildings. During Musk's five month stint as head of DOGE and the Artemis 2 mission reached the moon early this morning and is expected to set the record for humans flying farthest from the Earth. It should happen just before 2:00pm Eastern Time.
- [33:54]
Kate Rooney
Today.
- [33:54]
Christina Parzonopolis
The crew will go around the far side of the moon, ending up 252,760 miles from our planet around 7pm before they begin their trip back home. Scott?
- [34:06]
Scott Wapner
Christina, thank you, Christina. Parts and novels straight ahead. Your ETF edge Don choose. Got that today? What do you got today?
- [34:12]
Dominic Chu
All right. So Scott, we're going to take a look at which parts of the ETF market are seeing some of the most interest given the ongoing war in the Middle East. And it's not just oil and gas companies getting all the attention. That story is up after the break.
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Scott Wapner
Hey, how's it going?
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Megan Casella
Yeah, good, thanks.
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- [36:31]
Dominic Chu
Welcome back to the Halftime Report. I'm Dominic Chu with today's ETF Edge. Now, market volatility has not really dampened investor demand for ETFs, but it has created a noticeable shift for investor focus back to certain maybe tried and true sector based strategies. Joining me now with that story is Todd Rosenbooth, Director of Research over at vetify. Now, Todd, for a while we saw intense focus on more exotic products, actively managed ones at that. What's driving this renewed interest in returning to more basic sector allocations and industry allocations?
- [37:03]
Todd Rosenbluth
Well, the volatility that we've seen in the marketplace geopolitically tied to the war in Iran has caused investor interest into energy ETFs. So the Energy Select Sector Spider ETF XLE was very popular a month ago and remains popular. Energy is a relatively small sector to the S&P 500, 3 or 4%. So we are seeing investors add exposure using that State street Energy SPDR ETF. We're also seeing investors look at the Alerian MLP ETF AMLP MLP Energy the energy infrastructure space is a more stable cash flow generating space within energy and you won't find MLPs within the S&P 500. So we are seeing interest in AMLP as well as an alternative.
- [37:48]
Dominic Chu
All right, maybe no surprise here Todd, that oil and gas, because of the rise in prices precipitously so has been a focus. Where else have we seen more of these inflows into certain sectors and industries tied maybe more directly to the war in Iran.
- [38:02]
Todd Rosenbluth
You're right. So aerospace and defense has been an area that has been in focus for understandable reasons. I think the audience can probably appreciate investors want to get in, but not just towards those tried and true and aerospace and defense ETFs. But we are seeing SHLD. We're showing that on screen. The Global Defense Technology ETF see strong interest and the Rex Drones ETF Dr. NZ, which is a relatively new ETF index based that's offering a more technologically advanced way of getting exposure to the aerospace and defense industry that's also performing quite well.
- [38:39]
Dominic Chu
All right, so specialized parts of oil and gas and more specialized parts of the defense trade as well. Thank you very much, Todd Rosenbluth for that. We're going to continue this conversation over at etfedge.cnbc.com Todd's going to be joined alongside Jeffrey Rosenberg, senior portfolio manager for BlackRock's Systematic Fixed Income Group. Big conversation about a lot of market risk factors. Scott, I'll send things back over to you.
- [39:02]
Scott Wapner
All right, Dom, thank you for that. Don Chu. Coming up, the IPO race heating up. New reporting today about OpenAI's plans to go public. Our Kate Rooney as always following that money force, will join us next. All right, welcome back to Race to Go Public. Heating up. The Information. Reporting today, Open Air leadership said to be split over the timeline for an ipo. While Space X will be the first of the big ones this year. Certainly looks like that eyeing an IPO as early as June. Our Kate Rooney is following all of that for us. Hi there.
- [39:45]
Kate Rooney
Hi Scott. So bankers that I've been talking to are gearing up for hundreds of billions of dollars in new issuance with deals hitting trillions of dollars. These are levels they have never seen. You mentioned SpaceX, Scott, expected to make the biggest debut as early as June, reported 2 trillion with a T billion dollar valuation. About $75 billion being floated on the market according to reports. A Source close to OpenAI meanwhile tells me that tech giant is preparing to be Next in line. OpenAI is on track from what I'm hearing to list as soon as Q4 actively meeting with bankers right now according to a source. I'm also told that CFO Sarah Fryer will make the call depending on market conditions, could be later this year that she actually makes that call. In the meantime, company pushing back aggressively on those reports you mentioned, Scott. By the information this weekend that Sam Altman and Sarah Fryer are at odds over some of the mega spending plans and then what that could do to the timeline of an ipo. Joint statement from those two telling us in part we are fully aligned. And then they talk about durable access to compute at the core of their strategy. Call it a key differentiator. There you can see the full quote. A source though close to those two telling me that the executives are quote unquote confident about an IPO and that demand after raising $122 billion in private markets. That process showed according to this person that investors did not balk at the $600 billion in compute spending that is set to come over the next five years for that company. Also told they are focused on retail investor demand similar to what we're hearing from Space X which might reserve about 30% of the float for individuals. Finally anthropic. Last but not least said to be the smallest of those three sources tell me could be as early as Q4. Although some of the government back and forth that lawsuit throwing a little bit of cold water on that timeline. Bankers are highlighting the competition especially between the giants to list first. Reminiscent of what you saw with Uber and Lyft. Scott.
- [41:33]
Scott Wapner
All right, thank you. It's Kate Rooney. The latest on that IPO race as we said. So Brin, Space X interest you the
- [41:41]
Todd Rosenbluth
ipo you going to be a buyer?
- [41:45]
Jim Lebenthal
Well I think, I think they're trading at 125 price to sales. I think in 2025 they did 16 billion in revenue. The company's been private so long and I think this is a great, a great case. Amazon IPO is a small cap. This IPO is one of the largest companies in the world and so I think the juice has been squeezed from this orange and so I want, I won't be buying it when it IPOs. I just think a lot of the value has already been bid in there because it's once again 16 billion.
- [42:19]
Scott Wapner
Do you in any way think that the either any bit of the current weakness in Tesla or future could be pegged to retail sort of using that as a source of funds in any way to gear up for Space X or any of these others?
- [42:35]
Jim Lebenthal
I've heard that a few times. I don't think so. I don't think people are, are like oh I don't want to own Tesla because I want to own Space X. I think Tesla has its own own issues that we talked about earlier. They need to deliver on Optimus, need to deliver on a bunch of stuff. And so I don't, I don't necessarily have any data to back that that would be true. But it could be. But I just think right now OpenAI Space X All of these companies never went public like they used to go public. And so what is left for investors? I mean so much is priced in with a company that's doing 16 billion in revenue at whatever 2 trillion market cap. It just makes no sense to me.
- [43:13]
Dominic Chu
Yeah.
- [43:14]
Steve Weiss
When you take a look at. First of all, one of the big reasons they're going public is to be able to give public stock to employees and let employees cash out as well as others that were early. But when you think about it, you got a $2 trillion company. Bring gain gave you the numbers. How much return can you generate off a $2 trillion company? It's got to go to 3 trillion. We have 50%. I mean it's ridiculous. We want a large companies in the world on that revenue base. It just doesn't make sense. I think they'll be disappointing public companies.
- [43:46]
Scott Wapner
Wow.
- [43:46]
Joe Terranova
Two quick thoughts. I think capital has to come from other places for open air and SpaceX people within the market cap. Absolutely. And then anthropic is the one that's exciting to me. And Brin's Zoom is a great way to get in front of that. In 23 they invested about $50 million. Was probably worth somewhere around 2 to 4 billion dollars right now.
- [44:08]
Scott Wapner
Shot right now or the stock. So talk about like Brin on Zoom right now or are you talking about.
- [44:13]
Joe Terranova
Well, Zoom's shot looks great but also Brin owns Zoom Communications as well and Zoom and invested in Anthropom not breaking up at all. No, it's a billion dollar str.
- [44:25]
Scott Wapner
Well done everybody. Mike Santol's. Senior markets commentator Overtime co anchor Michael Santoli is here at post 9. As you look at what's priced in to this market today, it's just a confusing. It's a confusing question.
- [44:59]
Mike Santoli
Confusing because it's. The market is confused. In fact today is a good example of it trying to kind of really not say a lot with this minimal movement anemic volumes actually we obviously have. The rest of the world are mostly closed for trading today. But I do think that the market is trying to stay on this balanced footing and say to itself look, we've reset valuations to a point where if under 20 times S&P 500 forward earnings for five minutes is where we got to before we bounced. And then the NASDAQ 100 more dramatically down to 21. That's exactly where it bottomed in April of last year. If we're still in the same regime and these earnings estimates that are going up can be trusted, then we've de risked on the fundamental side. Now that is regardless of what happens here, how long the oil shock happens and all the rest of it. So I think that's where the debate is. It's about are we still in the same cycle, are we still in the same mode? If so, then I do think that we've priced in, I would say not the most adverse scenario but you know, one that is going to get back to normal without too much delay.
- [46:04]
Scott Wapner
Yeah. Because you, as we said on the program earlier, I mean you could, you could make a very, very compelling case on either side of the risk line.
- [46:12]
Mike Santoli
You can. And the way I come down to is if that was the low last week like 6,300 plus in the S and P, it probably means the upside isn't super explosive because you never really got that far down and that that washed out. So that's why the analogy with April of last year doesn't quite fit. But it's still worth keeping an eye on and being open to that possibility.
- [46:32]
Scott Wapner
I'll see you later on the bell. Okay, thanks as always. That's Mike Santoli. We'll do finals next. I'll see at 3 o' clock today on closing bell. Brian Belsky, Stephanie Gill, Chris Harvey, Chris Verrone, Robert Kaplan. So we got a great lineup. We'll see what this market does. We're also going to hear from the president momentarily too. So we'll see how that factors are into the trade over the final stretch. Let's do some final trades. Bren, you're up first.
- [47:02]
Jim Lebenthal
Google, I like the stock under third, under 300.
- [47:04]
Megan Casella
Great.
- [47:04]
Jim Lebenthal
Fundamentals, technicals look good as well.
- [47:07]
Scott Wapner
All right, well it's just under 300 to 99 and change. All right, Steve Weiss, Dick Sporting Goods.
- [47:13]
Steve Weiss
Obviously the better making is that Trump does not go after the energy infrastructure and impede the flow of oil.
- [47:19]
Scott Wapner
Oil. You want oil prices to come down.
- [47:22]
Steve Weiss
Exactly.
- [47:22]
Scott Wapner
People to go Dick Sporting Goods and spend some money.
- [47:25]
Steve Weiss
Exactly.
- [47:25]
Scott Wapner
All right, summarize that just perfectly right, Steve. I Mean Farmer Jim, JP Morgan Chase,
- [47:32]
Bryn Talkington
all those IPOs are going to lead to banking fees.
- [47:35]
Joe Terranova
We own ebay and Jyoti stocks going to make a new all time high above one or two.
- [47:40]
Scott Wapner
All right, so markets hanging in. We'll see what the president has to say. And I'll see you on the closing bell. The exchanges. Now you've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:58]
Edward Jones Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer with ShareMyTrip from
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