Can Stocks Keep Climbing? 5/8/25

Summary

Halftime Report: Can Stocks Keep Climbing? - May 8, 2025

Host: Scott Wapner, CNBC
Guests: Josh Brown, Kerry Firestone, Steve White, Bill Baruch
Release Date: May 8, 2025
Duration: Approximately 47 minutes

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1. Market Overview and Trade Deals

Timestamp [00:59] – [02:04]

Scott Wapner kicks off the episode by highlighting a robust market rebound. Stocks are green across the board, reaching daily highs. He introduces the panel of experts to analyze whether this upward trend can sustain in the current economic climate.

Key Discussion Points:

• Trade Deal with the UK: Josh Brown commends the U.S. for securing a significant trade deal with the United Kingdom, marking a pivotal moment in U.S. trade relations after 200 years.
• Market Sentiment: Positive headlines are replacing previous negative sentiments, fostering renewed investor confidence.

Notable Quote:

"Against all odds, the US managed to make a trade deal with its greatest ally over the last 200 years. It's really remarkable."
— Josh Brown [02:04]

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2. Earnings Reports and Market Sentiment

Timestamp [02:04] – [07:16]

Josh Brown discusses the impact of strong earnings reports on market sentiment. Companies have exceeded earnings expectations, contributing to a 12% year-over-year earnings growth rate.

Key Discussion Points:

• Earnings Growth: Significant growth rates have bolstered investor trust amidst previous uncertainties.
• Future Prospects: Potential deals with Japan and ongoing talks with China could further stabilize and enhance market sentiments.

Notable Quote:

"We’re talking about a 12% year over year earnings growth rate, which considering all of the negativity, is pretty fabulous."
— Josh Brown [02:04]

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3. Recession Debate: Resilient Economy vs. Impending Downturn

Timestamp [05:07] – [08:28]

A debate ensues between Scott Wapner and Steve Weiss regarding the likelihood of an impending recession.

Steve Weiss's Perspective:

• Recession Indicators: Despite short-term market gains, he foresees a recession due to factors like slow but active supply chains and reduced corporate investments.
• Market Vulnerability: Expresses difficulty in finding stocks that can withstand a potential downturn.

Notable Quote:

"I can't find stocks that will withstand a recession. And I do believe we're going to recess."
— Steve Weiss [05:07]

Scott Wapner's Counterpoint:

• Economic Resilience: Highlights the economy's strength, particularly the labor market's stability, suggesting that the economy has been more resilient than anticipated.
• Positive Earnings: Emphasizes that earnings have held up better than expected, contributing to sustained market confidence.

Notable Quote:

"The economy is pretty darn resilient, that the labor market has held up better than people thought."
— Scott Wapner [06:07]

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4. Defensive Stocks and Individual Highlights

Timestamp [16:19] – [36:42]

The panel shifts focus to defensive stocks that exhibit resilience in uncertain economic times.

Netflix:

• Resilience: Steve Weiss praises Netflix for its ability to maintain demand despite economic downturns by offering flexible pricing tiers.
• Strategic Moves: Expansion into sports content further strengthens its market position.

Notable Quote:

"They can raise prices every year if they want, every six months. It won't hurt demand."
— Steve Weiss [28:55]

eBay:

• Growth and Stability: Josh Brown introduces eBay as a top performer in the consumer discretionary sector, highlighting its steady growth and minimal reliance on Chinese markets.
• Recession Resistance: Increased seller activity during tough economic times positions eBay as a recession-resilient platform.

Notable Quote:

"When times get hard, more sellers come out with more things to sell and more people turn to a platform like eBay to score a bargain."
— Josh Brown [34:30]

Other Stocks:

• Fastenal and FTI: Discussions around adding Fastenal and FTI to investment portfolios, emphasizing their strong fundamentals and strategic acquisitions.

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5. Cryptocurrency Market Updates

Timestamp [40:53] – [43:14]

The conversation turns to the cryptocurrency market, noting significant developments and bullish sentiments.

Bitcoin Rally:

• Surpassing $100k: Bitcoin rebounds above $100,000 for the first time since February, reaffirming its status as a resilient asset amidst market uncertainties.
• Broader Impact: This rally positively influences other cryptocurrencies and related assets like Coinbase.

Coinbase's Acquisition of Deribit:

• Strategic Expansion: Coinbase announces the acquisition of Deribit, a major crypto derivatives exchange, for $2.9 billion, aiming to bolster its international presence and trading capabilities.
• Market Positioning: The deal positions Coinbase to compete with leading global exchanges like Binance.

Notable Quote:

"It's a flywheel at this point. You've got the ETF companies as well. They all make a ton of money on their crypto products. There's no real fee compression thing happening there like there is in stock."
— Josh Brown [43:14]

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6. AI and Google's Future in Search

Timestamp [19:20] – [25:56]

The panel examines the evolving landscape of search technology and Google's strategic positioning amidst AI advancements.

Challenges Facing Google:

• Search Commoditization: Concerns about Google's core search business becoming commoditized due to AI-driven competitors.
• Stock Valuation: Discussion on whether Google's current stock multiple justifies its future prospects amidst technological shifts.

Notable Quote:

"The principal business has been commoditized... That's why I own the business. It's a big question right now."
— Bill Baruch [24:35]

Potential Leadership Interventions:

• Sergey Brin's Role: Speculation on Sergey Brin potentially taking a more active role to steer Google through these changes.

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7. Papacy Update

Timestamp [13:03] – [13:56]

A brief segment covers the election of a new Pope, signifying global developments that may indirectly influence market sentiments.

Key Points:

• Announcement: White smoke indicates the conclave has concluded with the election of a new Pope.
• Global Impact: While a minor topic, such events can have cultural and economic ripple effects globally.

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8. Closing Remarks and Final Stock Picks

Timestamp [46:16] – [47:12]

Scott Wapner concludes the episode by summarizing the key stock picks and previewing upcoming segments.

Final Stock Highlights:

• Fastenal: Added to the portfolio for its industrial strength and positive earnings.
• Blackstone and Fastenal: Discussed as recovering private equity firms showing signs of strength after downturns.
• Toast: Anticipated growth with upcoming earnings reports showing significant revenue and earnings improvements.

Notable Quote:

"We have to adjust our thinking based on what the price of the stocks are that we're looking at."
— Bill Baruch [11:35]

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9. Notable Quotes

• Josh Brown on Trade Deals:

  "We’re talking about a 12% year over year earnings growth rate, which considering all of the negativity, is pretty fabulous."
  — Josh Brown [02:04]

• Steve Weiss on Recession:

  "I can't find stocks that will withstand a recession. And I do believe we're going to recess."
  — Steve Weiss [05:07]

• Scott Wapner on Economic Resilience:

  "The economy is pretty darn resilient, that the labor market has held up better than people thought."
  — Scott Wapner [06:07]

• Josh Brown on eBay’s Resilience:

  "When times get hard, more sellers come out with more things to sell and more people turn to a platform like eBay to score a bargain."
  — Josh Brown [34:30]

• Josh Brown on Cryptocurrency:

  "It's a flywheel at this point. You've got the ETF companies as well. They all make a ton of money on their crypto products."
  — Josh Brown [43:14]

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Conclusions and Insights

The Halftime Report episode delivers a comprehensive analysis of the current market dynamics, emphasizing the tension between robust earnings growth and concerns over an impending recession. While positive trade deals and strong corporate performances bolster investor confidence, experts like Steve Weiss caution against underlying economic vulnerabilities that could precipitate a downturn. Conversely, the resilience of key sectors, particularly defensive stocks like Netflix and platforms like eBay, offers a counter-narrative of sustained market strength.

The discussion also extends to the burgeoning cryptocurrency market, highlighting Bitcoin's resurgence and strategic acquisitions by major players like Coinbase, positioning the crypto sector as a significant growth frontier. Additionally, the evolving role of AI in transforming search technologies presents both challenges and opportunities for tech giants like Google.

Overall, the episode underscores the intricate balance between optimism fueled by positive earnings and trade developments against the backdrop of economic uncertainties and technological disruptions. Listeners are left with a nuanced perspective, encouraging a vigilant yet opportunistic approach to navigating the market's multifaceted landscape.

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Listen to the Episode: Halftime Report: Can Stocks Keep Climbing? - May 8, 2025

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Note: The transcript provided included several advertisements interspersed throughout the content. These have been excluded from the summary to focus solely on the substantive discussions and analyses presented during the podcast episode.

Transcript

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[Scott Wapner]

I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to THE Halftime report. I'm Scott Wapner. Front and center this hour, this rebound, stocks looking to continue their recent advance. We will discuss and we will debate with the investment committee where your money's going from here. Joining me for the hour today, Josh Brown, Kerry Firestone, Steve White, Bill Baruch. We'll check the markets here. We are green across the board and nicely so. We're at the highs of the day. Joshua, on the back of this announcement, obviously with the UK we'll let others debate the specifics of it, the importance of it. And there are obviously still bigger fish to fry and we're going to start cooking on that with China treasury secretary obviously heading to Switzerland. But what's clear today is that this market seems very content with any kind of deal in hopes that it leads to more and bigger.

[Josh Brown]

I think that's right, Scott. Against all odds, the US Managed to make a trade deal with its greatest ally over the last 200 years. It's really remarkable when you think about where we were a month ago and the sentiment around the Chinese situation escalating around all of these different country by country bilateral disagreements that were being aired out in public. All the market really needed to kind of like regain a little bit of trust that things are going to work out well was good headlines. And that's all we're getting right now is positive headlines. We're not getting any more of the saber rattling. We're not getting any more of the ratcheting up and new demands being thrown out. And it's good enough. And the reason why it's good enough is really important because I don't think we'll be able to say this in two weeks. The reason why it's good enough is if you take the blend of actual earnings and expected earnings of the companies that still haven't reported and we've got most of them by now, you're Talking about a 12% year over year earnings growth rate, which considering all of the negativity, is pretty fabulous. When you also consider that the multiple has come down as these companies have beaten and exceeded expectations. It's been like the right elixir that we needed to pull ourselves out of that funk. Now, again, in two weeks, I don't know what the upside catalyst will be unless we get more deals, get something with Japan, get some talks going with China, maybe that'll be good enough. But you're not going to have that backdrop of companies coming out with earnings, the rest of us being like, oh, okay, I guess things are still pretty okay. But that's what we've been able to do in the last two weeks and you see the results. It's been more than enough.

[Scott Wapner]

I mean, Weiss, the catalyst that Josh is talking about and many are still looking for could very well find itself, at least according to the President, who in the context of the remarks that he made in the Oval and the news conference that followed, not an official news conference, obviously, but the Q and A with the pool that was gathered in the Oval, the president made the following statement, thinking about the bigger picture of a bill that he hopes to get done in the House. We're talking tax cut extensions, obviously deregulation. And he says of those things, quote, and if that happens on top of all of these trade deals that we're doing, this country will hit a point that you better go out and buy stock that's directly from the President today in the Oval. For somebody who has been.

[Josh Brown]

Did he mention any specific tickers?

[Scott Wapner]

He did not. Not yet. Okay. For somebody, for somebody who's been fully hedged at times recently, who certainly had a negative, if not more cautious bias than most, I think it's fair to say on this desk, this market's up a bunch, man. I mean, if you look at where we are, and this is before today, the S and P up 16 and a half percent from the lows, and now we're at the highs of the day.

[Steve Weiss]

Yeah.

[Scott Wapner]

What say you now?

[Steve Weiss]

Well, I'll say what I said last week, which is that the short term market's going up, the intermediate term, the market's going down because we are going to recession. I sent Kevin a text last week, maybe you were on that as well, that said I'm stupidly long, which means I was 120% net long market. A lot of that was through indices, but I've added. And the reason why a lot of it's through indices is that I'm not married to the market. Continuing. Look, we got all the negative stuff out of the way, right? So the news couldn't have been worse. I got that right. I did not catch the first day of what is probably a 12 day move at this point, but I caught quite a bit of it. And don't forget the beta I have in my portfolio. So I've actually done quite well over this period. But my view is still that I can't find stocks that will withstand a recession. And I do believe we're going to recess.

[Scott Wapner]

Look, I'm so convinced that we're going.

[Steve Weiss]

Into a recession because unlike reacting to news and reacting to momentum in the market, I'm actually talking to CEOs, I'm talking to the heads of private equity firms. I'm talking to the companies that I'm involved in privately investing in. I sit in the board. Things are frozen. CEOs are not investing in their business. Private equity firms. Tell me the last big or even decent sized private equity deal that was announced, they will get a. They will get sooner, sure, but they.

[Scott Wapner]

Will get it later mean that we're going into a recession. I think everybody knows a story well told at this point that exactly what you've said. We get it. We've heard it on earnings calls, we heard it out at Milken about hiring and capital deployment. We get it. But it is also happening, mind you, at a point where the economy is pretty darn resilient, that the labor market has held up, I think better to this point, to this point than people have thought, that the economy has held up to this point better than I think people thought. The soft data hasn't necessarily become the hard data. The earnings have held up, I think better than most people thought.

[Steve Weiss]

Well, to this point about that. Let's talk about that. Let's go through it one by one in terms of the economy holding up. There's a massive rush to stock your personal shelves, to stock store shelves before the tariffs hit. So you're buying in advance, you're stocking in advance. I can tell the Supply chain. Supply chain is not frozen like it was in Covid. But I can tell you that the supply chain is very, very slow. So companies have switched again, like private companies involved that switch their supply chain from China, India. They won't get delivery for four to six months on critical items. So you have to distinguish that number one. Number two, when you talk about earnings.

[Scott Wapner]

Yeah.

[Steve Weiss]

Have you ever. Has anybody here ever seen earnings period like this, even during COVID where guidance was pulled because the CEOs don't know what the future is? No, but nobody has a problem with that.

[Scott Wapner]

I think we've got. Of course they do. But I think you will admit, I hope that we've gotten more guidance than maybe we thought we'd get despite the fact that they were pulled. No. We expected to get no guidance.

[Steve Weiss]

That may be largely true.

[Scott Wapner]

You're going to argue with me no matter what I say, so I'm just going to say no.

[Steve Weiss]

I'm going to correct you.

[Scott Wapner]

No, it's different. We're not going to do this again. I think most people assumed that earnings were going to be the guidance was going to be terrible, if any at all and that earnings wouldn't have come in.

[Steve Weiss]

Don't disagree.

[Scott Wapner]

They have.

[Steve Weiss]

Don't disagree in the quarter on the quarter we saw.

[Scott Wapner]

So what's the problem? Where's our disagree?

[Steve Weiss]

Give me a chance.

[Scott Wapner]

Where's our disagreement?

[Steve Weiss]

Place the disagreement. There is no disagreement on the quarter. The disagreement is moving forward. Again, let me repeat, I'm long the market because the short term momentum is going to continue because the market is paying attention to the momentum. Look, the president comes out and says buy stocks. Every president says that. What's the analysis behind it? Of course he wants you to buy stocks. Of course he wants to.

[Scott Wapner]

I'll know the last time. Wrong with the last time he said buy stocks, the market went up like a, like a rocket ship.

[Steve Weiss]

Right. So all of us should go home, retire and just listen to what he says. Didn't just buy the market.

[Josh Brown]

Didn't have a. Let me just have a recession in 2022 because people didn't lose their jobs. And so far we don't have that yet either.

[Steve Weiss]

Okay.

[Josh Brown]

We might write.

[Steve Weiss]

Right.

[Josh Brown]

But it's not there.

[Steve Weiss]

Right. People aren't going to lose their jobs. The cost of replacing labor is too great a burden on companies. And they still have that issue coming out of COVID Right. Where wages went sky high, particularly in the health care field in terms of a recession, if the economy, if companies stop spending, stop investing, if foreign capital Stops coming in. If we cut entitlements and cut corporate government spending, you will go into recession. So party now. I'm partying with you. But next quarter the market may be.

[Scott Wapner]

I'm not probably the one, so I'm not the one throwing the party. I'm looking at a market that has been up a ton from the low and no argument. I'm there and is pretty content with where the situation looks to be today until the market or the economy or something shows it otherwise.

[Steve Weiss]

I'm going to go commiserate with, with Ken Griffin. I'm going to go commiserate with Paul Tudor Jones with all the others who see what I see. Okay, so they're all idiots. We're all wrong.

[Scott Wapner]

Said that they're idiots.

[Steve Weiss]

Well, apparently you're discounting what they're saying so you don't buy into it. You think it's going to keep going and going, going. I'm going.

[Scott Wapner]

I didn't say that it's the best investment. Say that it's going to keep going and going and going. The only point I was making that it's that it's that it's gone, I think a little bit better than many had had feared that it would.

[Steve Weiss]

Undoubtedly, it's a story of momentum.

[Bill Baruch]

If we, if we talk about what the market has done. I mean, let's just get back to the market. We started the year the market was at a fairly lofty level and then we had Liberation Day and it was a perfect storm for how things could get worse. And the market took that seriously. So the market fell 20% from, from the peak. Now what the market has done is adjust to the fact that it had discounted too much bad news at that time. That's why we thought they were attractive stocks to buy like a mat and Apollo.

[Scott Wapner]

And by the way, those stocks are up 20 and 15% respectively since you made those buys and came on the show and said, I'm ready to buy some stocks that got too ugly out there.

[Bill Baruch]

Exactly. So you look at individual cases of stock stocks that you've been looking to buy that are down 40, 50, 55% and say this is a price that we like and we're going to take the plunge right here. So now the market is up 14 and a half percent from that level. It's still down almost 7% from the peak. Is it still going higher? If the news flow is good, it will. If it gets to a point where the news flow really can't get better, then people are going to say, well, wait a minute. Maybe we've gone too far. If we're back to where we were at the end of the year, that may well be too much, you know, exuberance when in fact we don't know what's going to happen with tariffs. If there are 20% tariffs on all of the E.U. for example, that would be a lot to handle. The market maybe is thinking too positively about some of the tariffs. China maybe the market's too positive right now, I don't know. But that's what's happening here. And we have to adjust our thinking based on what the price of the stocks are that we're looking at.

[Kerry Firestone]

Steve's running his own soft data survey. We know all the sentiment is in the is in the drain. The purchasing managers indexes have already kind of told us the Michigan data sentiment is bad. But but executives and managers, they're much.

[Scott Wapner]

More just hold your thought for a second. I want to get to our Pippa Stevens. We do have breaking news out of Vatican City today. Pippa, details. Yeah. SCOTT well, we're now seeing white smoke billowing out of the most widely watched.

[Bill Baruch]

Chimney in the world right now, indicating that the conclave has come to an.

[Scott Wapner]

Agreement and a new pope has been elected.

[Bill Baruch]

We will know in short order who.

[Scott Wapner]

Is going to take over the papacy. But once again, you see there that.

[Bill Baruch]

White smoke coming out with thousands gathered in St. Peter's Square in preparation for this announcement and the upcoming Urbi et Urby blessing that the new pope will be delivering.

[Scott Wapner]

SCOTT all right, third time's the charm. A couple days of black smoke from that chimney and then today followed by the white signifying that the next pope, in fact has been chosen. We'll obviously have more details as we learn them. Pippa, thanks so much for that bill. My apologies for cutting you off, but that's six important news that we wanted to bring to our viewers.

[Kerry Firestone]

But purchasing managers are much more versatile than they were a decade and two decades ago. We heard the same same exact thing around Covid that supply chains were going to be be dried up and everything was going to fall apart. We're here. I've talked to people Covid that were running big shops in Texas at the time and heard the same thing I'm hearing from logistics managers now around this time. But at the end of the day, what we've saw is is market managers, portfolio managers, they're also more versatile than they've ever been. I mean, they move very quickly to discount the basically what could be the worst case scenario after the tariffs on April 2 and the market sold off again. I've said this before, we've had three of the most, five high volume days around that and that's capitulation. Now there's two scenarios that we can see from here to Josh's point. We've had great earnings beat and to your point to earnings going forward, the revisions have already happened according to FactSet, the first month of the quarter, 2.4% revision downward on earnings. And that's more than 5, 10, 15, 20 year average of around 8, 1.8%. A lot of this has already been kitchen sink. It's already being priced into the market. So the scenario from here, do we get 2019 in the market where everything the world was falling apart. The end of 2018, liquidity crisis, Powell was, Trump was yelling at Powell and they were in a hiking cycle. They're not in a hiking cycle right now, but they're clearly not wanting to cut rates. And all of a sudden the first or second week of January, Powell said we're listening to the markets and we need to move, we're going to stop, we're stop hiking. I think that moment is coming around the corner, corner at some point here and everybody is offsides and under position in the market. But to play devil's advocate to my end here, what would contain the market? Maybe, maybe the White House doesn't want the market to go run away because 2026 is the midterms. And how do you have 25, 30% gains leading into the midterm elections? By not being up 10 or 15, 20% in 2025.

[Steve Weiss]

That's ridiculous. The White House is not going to manage the market. Let's not go 20.

[Kerry Firestone]

So you think maybe we can.

[Steve Weiss]

You can't cherry pick data with COVID Okay, let's not forget that we had zero interest rates, that we had massive liquidity going in. And let's not forget what Powell said yesterday, that quantitative tightening is going to continue. So you can't just say, hey, the market went up and everything was 2019. Interest rates play a critical component in terms of what happens with the market and the economy.

[Kerry Firestone]

They're saving face against being yelled at by Trump right now and he's going to continue to come at them. They're to going, going to find the right moment.

[Josh Brown]

Can I offer one, Can I offer one trouble job? Can I offer one? One thing, I think one thing that we can all agree on is that the economy being 70% services, it's a very different economy than if we would have had this kind of supply chain traffic snarl even 20 years ago. This is a very different situation and one of the reasons why earnings season has been such a success relative to what we were all worried about. A it's early tariffs haven't really like we, we don't have the impact of tariffs in the real world yet. So we might be whistling past the wave yard. That's fair. But another thing that's fair, some of our largest, most important publicly traded companies that comprise the bulk of the indices that actually determine what the price is going to be are number one more defensive than we might have thought they were. Netflix being a great example. Nobody will cancel. Doesn't matter. All the economic uncertainty. Hold on right spot Spotify what Microsoft has been able to deliver. There is a degree of resilience that only comes from companies that sell something that looks more like a consumer staple than like a consumer electronic. And that's an interesting feature of the current market. Look at the top 50 market caps in the Nasdaq. You really can't find many that are reliant upon China shipping us more plastic things to sell in the $5 stuff store. So I just think that's one thing worth putting out there. It's not to say it won't be painful farmers, etc. Etc. We've said all the right things before. We don't have to rehash them. It's just to say we might have a stock market that is more defensive than it used to be. Even in the tech sector, which quite frankly is the only sector that matters.

[Scott Wapner]

The only thing that just to wrap that up before we move, no one is suggesting that everything is rose colored glasses by any stretch. We could still easily have a recession. It's a lag effect of these tariffs. It doesn't hit everything immediately. I think that it potentially is prolonged a little more than people thought. Just like when the Fed began its hiking cycle. Even the Fed and others expected, well we're going to go into a recession now because that's what always happens when the Fed embarks. Jay Powell a million times said, well, it's a lag effect. Well, well, this is another lag effect. We didn't have a recession then because the economy was resilient.

[Josh Brown]

You put up a chart of Visa economy was.

[Scott Wapner]

I know it was juice. I know that. And it's naive to suggest that all of that is not still in the system in places. That's why the consumer has maintained its ability to be strong too.

[Josh Brown]

Guys give me like more than more than the last 20 minutes. All right, thank you. I mean, that's Visa. It's either the biggest head fake on earth or every one of these credit card CEOs who reported is lying to us. I don't, I don't really know. Like, this is not my expectation. I didn't go into this earnings season saying we're going to get incredible news from Capital One, from Bank of America, from Visa, MasterCard. They're all going to say incredible things about how stable everything seems to be. I didn't expect it. Well, that's what they're telling us.

[Steve Weiss]

Hold on. We don't know how much you've been pulled from forward buying, right? If you're told 25% price hike, what, are you going to wait for that to hit or are you going to buy it now? You buy it now. So we don't know how much of that is in Visa. Right.

[Josh Brown]

We also know what we know.

[Steve Weiss]

We also know that they benefit from balances. Right. So the balances keep going up. Right. People are hoarding cash, possibly, or just spending right now. The truth will come out as to what happened. Not in a month, not until two months after we see the tariffs take hold. So you've got another 60 days or maybe more.

[Scott Wapner]

Let's just hit a couple of stocks, too. I just want to note Boeing shot higher on the discussion in the Oval Office that the UK would be buying $10 billion worth of Boeing jets as part of the agreement that stocks at the highs of the day. That's one name on the move. I think we, you know, we really need to check Alphabet again after yesterday's just amazing decline on those comments from Apple's Eddy Q. About searches going down in April for the very first time. Alphabet came out with a statement giving you, you know, trying to give you a look at where things really are. Quote, we continue to see overall query growth in search that includes an increase in total queries coming from Apple's devices and platforms. I thought overall was the interesting word that they use there. But nonetheless, the move in the stock was significant. Seven firms at least are out today saying it's an overreaction. There are negative calls today, Melia saying that it could be a historic turning point. Gene Munster, most of you know, former analyst now at Deepwater, said, quote, Google's likely going lower because search is in the very early stages of a seismic change, that investors haven't fully factored in current valuation. Kerry own the stock. Were you shaken at all as an investor and an owner of this name yesterday?

[Bill Baruch]

I think Everyone has been expecting someone, either Google or Apple, to say that search searches are down. That was inevitable. The question is whether the stock fully discounts or appropriately discounts that risk. And we know that there's perplexity and people are moving to chat cbt. But the whole volume of searches are definitely higher. I search more and I'm using different platforms on which to search. Does that mean that the growth rate slows? Does it slow much more? I mean, yeah, all of these things are at play. The stock was down enough so that it's less than 16 times expected earnings for next year. Would we sell now? Absolutely. Absolutely not. Is it a buy right here? I think we're a little bit in the wait and see, but closer to a buy than a sell for us.

[Scott Wapner]

So you're not, you're not worried that this is that the first real sniff of an existential crisis that Google's going to have. Alphabet will related to search? Because it's been taken that way in some corners. Like the Munster comment I thought was pretty explicit going lower.

[Bill Baruch]

Right. So I thought that was explicit. Stream. We all know that search is changing, is changing dramatically and people are using all types of different mechanisms to find out information. I mean, I started to use Google Lens where you can identify anything, you know, visual through Google. And whether Google is going to learn how to monetize what they're giving away for free, I think is a big question right now. They probably, probably have the capability to do much of what other perplexity or chatgpt can do. They haven't yet incorporated it sufficiently. Is there going to be war about this? I don't, I don't know if dropping from this point down another 10% or 15. It's already down.

[Steve Weiss]

Look, the primary use case for AI right now is search. And with all these companies have raised billions and billions of dollars years and with the technology for AI search out there, while search overall is up, I actually think search will increase because of AI, that the market share is going down. That's unquestionable. That's probably one of the reasons why Josh sold it. I sold it after Josh. This is where they make their money.

[Kerry Firestone]

Sold it still we hold it.

[Steve Weiss]

We.

[Kerry Firestone]

I was on the show on Monday or Tuesday. We trimmed it on Monday. We're underweighted now. Now Google's or Alphabet's one of the greatest innovators ever. And I mean this isn't new news that we're going to see, you know, search kind of dwindle around and be.

[Scott Wapner]

You know, move around it's new, it's new news. It's, it's well, new news.

[Kerry Firestone]

The expectation, I mean people have been using other search engines or the grocks, the perplexities, the chat GPT, heck I, even if I have, if I have google.com up, I'm searching, getting that, using their AI. I'm not clicking on anything but. So I would imagine that they have expected something like this to come down the pipeline where they're going to, as you mentioned, find a way to monetize the things that they already have available on their tools.

[Scott Wapner]

Doesn't matter if search is the bread and butter goat business of Alphabet and it's going to be now materially impacted, which it sure as heck looks like it is. Justify the multiple for me based on all the other stuff.

[Kerry Firestone]

That's the question. 16, 16, 16 times the point from.

[Scott Wapner]

The people who are talking about it today. It's not low enough. Based on this news and what it potentially means, of course, all things being equal, is it low relative to some of the other mega caps, obviously, and it has been for years. But this is enough of a game changing question that even a low multiple might not be low enough.

[Steve Weiss]

They own the business. It's been commoditized. Their principal business.

[Josh Brown]

Here's your get out of jail free card. In December of 2023, Sergey K came out of retirement. He had stepped down I think in like 2019. And the idea was that he wanted to work on AI, he wanted to, you know, put his mark on this next generation technology and then after that, nothing. Like we haven't really heard any. The tech press periodically writes about him being there. We haven't heard much. I think if this gets much worse over the next quarter or so, it's not going to be long before you start hearing people calling for Sergei to take a more active, more public role as the face of Alphabet's strategy. And if and when that happens, I think that could help you with the multiple on the stock. I don't know if it helps you with the fundamentals. And by the way, the fundamentals aren't really the problem here. The problem here is the perception and to Weiss's point, if now it's a commodity business and a lot of the things that made Alphabet and automatic and untouchable are no longer applicable, it's just a tougher story. It doesn't mean the stock has to fall another 20% and we own it.

[Kerry Firestone]

But we trimmed it and I'll go one step further. Our fear DOJ going after him as well you have the anti competitiveness that they're in the crosshairs of this trade war. There could be, they could be tariffs on services. So we, we started moving down, down the road here, trimming it and if we had a broad market rally I expect alpha be higher and maybe it's well, it's higher.

[Scott Wapner]

We have a broad market rally today and in fact it's, it is higher by about two and a half percent. We'll take a break. We do have a bunch of committee names to get to. Steve Weiss adding to a stock it's up more than 30% in the past month. Bill with a new buy as well. Josh adding a new name to his best stocks in the market. We'll break. We're back in two.

[Edward Jones]

Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single purpose, making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn [e-mail].

[Discover]

Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? It's if this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] creditcard Based on the February.

[Edward Jones]

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[Scott Wapner]

We are back. Let's do some moves. We begin with a stock that has been one of the most defensive plays in this market while really enabling you to play offense at the same time. It is Netflix charts. Unbelievable. Why she bought more.

[Steve Weiss]

Yeah, and this was in fact my largest position by a wide margin. You know I've got very concentrated book which includes the top positions of Taiwan semi. It includes Meta, it includes, includes Microsoft, Netflix and there's one or two other. Look, Josh nailed it. They will do well in a recession because you will cut down the number of streaming services that you have. They have the most content and they still have pricing power. They can raise prices every year if they want, every six months. It won't hurt demand. So and plus there are so many levers they can pull. We've sort of seen them start to get into sport. I would expect more of that. So to me it's just a quintessential stock for this market. It may get overvalued shortly if this continues. But I'm not going to sell at that point. I did buy some for a trading position to get more exposure to the market. So, so I would let that go. But the core position, which sizable will.

[Scott Wapner]

Stay, I mean even if it's certainly proven to be. Well, I mean we're not, we're not obviously in a recession but the idea of being, being that it's at worst recession resilient because you, if you don't want to pay the top tier, you just trade down to the ad supported tier and you pay a little bit less. If you look through by the way, Disney's streaming numbers better than most people expected. Warner Brothers streaming numbers better than most people expected. So again the, the story of wow, this economy is really going to be a disaster.

[Steve Weiss]

Cutting, cutting cord has continued. Right. So we saw that in Comcast.

[Scott Wapner]

Sure. But, but that, but that's, that's more of that idiosyncratic side of that business right now.

[Josh Brown]

Yeah, but it affects every house and every household needs to pay somebody.

[Scott Wapner]

People are cutting the cord because they're worried about the economy. More or less. They're cutting the cord because the trends are just what they are. Yeah. And they have been. And everybody knows if you cut the.

[Josh Brown]

Cord for if you're paying $120 a month and you cut the cord you'll pay $50 for basic WI fi broadband Internet service and then add Netflix for $16 and that's like good enough. Especially if they're showing football, which they are boxing. Like it's a to me and you're prime member. You get other sports.

[Steve Weiss]

You know the content.

[Josh Brown]

It is an economic story and I think it's, it's defensive enough, which is part of the point I was trying to make. I'm a little distracted. I can't stop thinking about Jalen Brunson trying to make is the sports component to it. Sports and Hollywood are two recession resilient things. The consumer, when they have nothing to do, that's the thing that they lean on. And that's why I think these stocks are trading the way that they are.

[Kerry Firestone]

Entertainment guide on margin expansion when everybody's worried about margin compression right now. That was just so huge for them coming out that report.

[Steve Weiss]

Yep.

[Scott Wapner]

Clutch last night. Yeah, again, Again.

[Josh Brown]

Clutch.

[Kerry Firestone]

Like bridges with the block at the end too.

[Josh Brown]

Super clutch.

[Scott Wapner]

All right, Christina Parts. Kerry was at the game. You are in Boston.

[Josh Brown]

Condolences.

[H]

Hi, Scott. Well, let's start with. A federal judge dismissed most of the claims against celebrities and YouTubers who promoted the now defunct crypto exchange FTX. The litigation includes stars such as Tom Brady, Just Zell Bundchen, Steph Curry. The ruling narrows the scope of a sprawling lawsuit from FTX investors that accuses the stars of using their fame to market a fraudulent platform. The judge ruled the investors did not prove the stars had sufficient knowledge of FTX and CEO Sam Bankman Fried's misconduct to be held liable. A judge declared a mistrial today in the second degree murder trial of a Grand Rapids police officer who shot and killed a man at a traffic stop in 2000 2022. Authorities say Christopher Scher pulled over Patrick Laoya who ended up in a struggle with the now fired officer. An independent autopsy showed Loya was shot in the back of the head. And Washington just became the first state in the country to set limits on rent increases. The measure caps increases at 7% plus inflation or 10%, whichever is lower. I was not at the game. Scott, back over to you.

[Scott Wapner]

Maybe you watched. I don't know. Christina. Thanks, Christina. Parts and evolence. Up next, the new name that just hit Josh Brown's best stocks in the market. We'll get to those other moves too. By Bill and Steve.

[Discover]

Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nelson Report.

[Steve Weiss]

Ryan Reynolds here from Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good.

[Scott Wapner]

In this world, stop with Mint.

[Steve Weiss]

You can get premium wireless for just $15 a month.

[Scott Wapner]

Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway.

[Steve Weiss]

Give it a [e-mail] Switch upfront payment.

[Edward Jones]

Of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full [e-mail].

[Scott Wapner]

All right, welcome back. So from I think most of you know by now that Josh compiles stocks based on a number of factors into a group of the best stocks in the market. And he has a new one that he's added today and it is ebay.

[Josh Brown]

Why so that's right, Scott. EBay is the sixth best performer in the consumer discretionary this year. It's up 13%. It's outperforming 89% of the other names in the category. And as a result, we know the types of chasing that managers do. They're chasing this stock. It's making a new 52 week high about to challenge a high that we haven't seen since 2021. And I think it's notable. We're talking about all these recession resilient, not recession proof. We're not idiots. Recession resilient stock market ideas. Ebay is the granddaddy of the recession resilient technology company. It's slow growth. It's not the kind of company that comes out and destroys its earnings or there's no cloud business. But it's reliable growth and that's what people are looking for right Now. It's a 17 P E ratio. Forward P E is 12. You're barely paying anything for the earnings that they have been very, very reliably delivering. And only about 10% of the GMV or gross merchandise value on the platform is coming from China. It's China is a non event. So when all these companies are raising prices on consumers worried about the effect of international trade, et cetera, et cetera, eBay just kind of skates by. You got a stock that is right at 52 week highs 6% above its 50, 11% above its 200. RSI is about 71, not quite overbought, not screaming away. And I think it's an opportunity for people that want a cheap technology play that has been and should be continuously resistant to the types of things that recessions can bring to bear on the consumer. One last thing thing. When times get hard, more sellers come out with more things to sell and more people turn to a platform like ebay to score a bargain. That's why the stock has been working. That's why I think this has legs.

[Scott Wapner]

Okay, it's up a little more than 2%. It was great. Crush it. You did crush it. And it's one reason why now you're on CNBC Pro. And you can sign up for CNBC Pro to see Josh's best stocks in the market, all of them, go to cnbc.com Josh Brown or scan the QR code on your screen. And we hope you do.

[Josh Brown]

We'll see you at the movies.

[Scott Wapner]

All right. Yeah, it was great. You continue to crush it. Best stock on, well, right now, anyway, on Bill Baruch's list is Fastenal. Right? You bought that? That's a new buy.

[Kerry Firestone]

Yeah, we pulled the trigger this morning. They supply the products to manufacturers and industrials that that they use on a daily basis. Now, the stock did get hit on Tuesday, was down about 4 and a half percent. The broad market was a bit lower as well. But the only thing we really see there as a director was, was selling a large amount of shares. They had a great earnings report in April. It's a little bit of a high valuation, so it's a little bit of a starter position. We're 75 basis points into it right now. It's up about 10 or 10 to 12% year to date. I'd like to build into this. And it seems to be along the theme of what we've been rotating into, of things that are levitating in a market that's been struggling throughout the year. So it gives us a little more industrial exposure. We do like this and we'll look to build back, build further into it.

[Scott Wapner]

Okay, thank you. Steve Weiss, you bought more fti, is that right?

[Steve Weiss]

Yeah, I did. I did. The. The company reported quarter and it got crushed. The stock was down 15 or 20%. But the fundamentals haven't changed. And in fact, fundamentals have improved since, you know, which is one of the reasons I got stock because they executed major loan agreement of two and a half billion dollars. And what that does, this company leases jet engines, leases aircraft that allows them to generate more cash flow. So I thought it's a great opportunity to buy it. And it's responded after that. The CEO came out and bought a ton of stock and that took it another 10% higher.

[Scott Wapner]

Okay, Mike Santola, he's next with his midday word. We'll be right back. Senior markets commentator Mike Santoli joins us now for his midday word. I guess this just shows you we just want this trade stuff to be behind us and we'll take, we'll take a deal for the sake of taking the deal, even though we know we have, as I said at the top, bigger fish to fry for sure.

[I]

So right now the market's in a position where it's going to be responsive to signs of incremental progress, the direction of travel if it on de escalation. That's great. We all know that, you know, the details of this particular UK deal, not particularly material, not particularly a reason that the US stock market should be up $700 billion on, on a day, one day basis. But we do know that, you know, we've been under this weight and you're seeing some of that relaxation of the tensions. It's an interesting spot here. The highs of the day, you know, 5713 or whatever, it's less than 1% percent from the 200 day average. That would be like a 19% come back off to low which was a month ago yesterday. So come a long way. I do think it also has to be based on the fact that there's not an imminent or current economic emergency. Therefore the Fed's non response to it is okay for now. So maybe it's delicate the way things are holding together. But if I'm reading the signal of the market is that there's still a bit of room for, for, for folks to get forced in in a way if the trade tensions continually.

[Scott Wapner]

Yeah. I don't mean staples and masking tape work for a while until, until you can get something more substantive.

[I]

By the way, it's also the gestures about China that the for sure mentioned.

[Scott Wapner]

For sure.

[I]

So you know, maybe it sets us up for some disappointment if the weekend is, you know, fizzles.

[Scott Wapner]

I was thinking that too. And now that we know a meeting's happening, we're obviously going to be waiting for any headlines and have less tolerance for something that comes off as negative. But you know, we'll see. Mike, thanks. I'll see you. Three on closing bell. Mike Santoli, by the way, a programming note. Our friends at Fast Money are holding a get together on June 5th and that's up at the Nasdaq. You can grab a front row seat to watch Fast Money live. To order a ticket, you can scan the QR code right there or you can go to CNBC events.com fast money. Coming up, the crypto comeback. We are back on bitcoin. Look at that. Back above 100k. First time since February, in fact, next. We'll trade it next. All right, welcome back. Don't look now. Bitcoin's been in rally mode, crossing 100,000 today for the first time, as we said since February. Our Tenaya McKeel joins us now with more on that. I don't necessarily want to call it a stealth move, but there hasn't been as much focus on it lately because everybody's been fixated on the stock market and these trade deals.

[J]

Yeah, absolutely, Absolutely. Scott, someone I spoke to this morning calling the move back over 100k a reaffirmation of its status as the ultimate bounce back ability asset. Yeah, a lot of uncertainty in the market. The move in bitcoin did start overnight when President Trump first announced that there was going to be a deal on trade between the US and the UK so definitely interesting to see that back above 100k lifting all other crypto assets, especially cryptocurrencies that have really been lagging bitcoin this year. Coinbase up 5%. Roughly 5%. And some other news in Coinbase, it agreeing to acquire Deribit earlier this morning. That's a major crypto derivatives exchange based in Dubai for $2.9 billion. A deal comprising $700 million in cash and 11 million shares of Class A common stock. That's expected to close by the end of the year. Scott, three things that are interesting on that deal. The size is number one, this is the largest deal in the crypto industry to date. Two is the structure of the deal. It's cash and stock. So Coinbase should have bandwidth to make other acquisitions if they see good opportunity. As of December 31, the company had about $8.5 billion in cash on its balance sheet. And finally, Scott, the international strategy. It's important for Coinbase to diversify revenue, of course, but trading is how they make money. Most of their money and derivatives are a huge part of this market. So Deribit did over $1 trillion in volume last year. It has about $30 billion of current open interest on the platform. Not only that, while Coinbase is the biggest crypto exchange in the US it has a smaller share of the global crypto market. So they may be poised now to become an international leader and potentially take on big players like Binance.

[Scott Wapner]

Scott, good stuff. Thank you today. Mikhail. Why she bought more. I bet I did.

[Steve Weiss]

I did. Again to get market exposure. The momentum was undeniable. So I bought it below 90 and. And I'm riding it. I think it's got real legs now. We haven't heard anything about regulation lately. That will come. So I'm going to stay there for a little bit. Momentum dies.

[Scott Wapner]

I'll reconsider you on it as well. Right.

[Kerry Firestone]

75 basis point position and in portfolios it's really an alpha play. This thing can really start to get going. It's good. Running to some resistance at the end of January level. The House is moving me to pass to vote on a bill about pegging some cryptocurrencies against the stablecoins against the dollar. So that's be interesting to see. But you know, I personally do own some Solana and if that gets going, I think there could be some. That's an interesting.

[Josh Brown]

You're going to get a Schwab announcement on crypto and brokerage accounts in the second half of this year. I think that's what they said. That's another tidal wave. In the Meanwhile, you got 30 million users on Robinhood and Robinhood makes most of it its money in options in crypto. So the more that they show crypto to the people that are in it and the more those people make money, the more they continue to allocate toward it. It's. It's one of these things. It's a flywheel at this point. You've got the ETF companies as well. There are 15 of them. They all make a ton of money on their crypto products. There's no real fee compression thing happening there like there is in stock. So almost everybody benefits from crypto. Still remaining buoyant and very much in the view of retail investors and institutional investors. If you have a theory as to why that might stop tomorrow, go ahead and get bearish. I don't know why. It's a money machine for everyone involved. Why would it stop?

[Scott Wapner]

All right, we'll do the setup next. All right, we're back. Let's do the setup. We do Toast today, which reports after the bell. It is a Josh Brown name, as most of you know. What are your expectations here?

[Josh Brown]

I think it could be yummy. This is a company that is up 55% over the past year. It kind of was not on the radar of a Lot of growth managers because it hadn't yet been profitable. That was deliberate. And by choice, they focused on the land grab instead. Getting as many customers as possible. Now the profitability is here, and they're announcing enterprise deals like crazy. They did a huge deal with Marriott last year. They just did the same deal with Hilton and hotels and resorts. Every restaurant, every. Every point of sale in those businesses. We're talking about hundreds and hundreds of locations now running on toast. They're signing those types of deals very often. And when you look at the expectations, 1.3 billion in revenue for this quarter, that would be 25% growth over last year, $0.19 in earnings, which would be 67% above that. These are huge growth numbers. And if they hit those numbers, I think the stock is north among. What else can I tell you?

[Scott Wapner]

3 1/2% going into the print. That raises the stakes a little bit. We'll see that after the bell. As we said, we'll do finals next. All right, I'll see a closing bell today, 3 o' clock Eastern Time. And I look forward to having you with us. We'll see what this market does. We're right around the highs of the day, too. We'll see what other developments we do get. Let's do finals. Bill Baruch, what do you got?

[Kerry Firestone]

Microsoft. It's been the dog of the nasdaq and I think we're starting outperforming. Look at that cloud growth.

[Scott Wapner]

Okay, thank you, Steve Weiss.

[Steve Weiss]

Whitehouse put up a great quarter and I took the opportunity to add to it. They're a winner in the space for sure.

[Scott Wapner]

Okay, who's got Blackstone?

[Bill Baruch]

I've got Blackstone. It's like another private equity firm such as Apollo turning around after. Got hit really hard.

[Scott Wapner]

You think better days are ahead for the whole group because they got hit really hard.

[Bill Baruch]

Yes. Down 30%. Roughly. The group down 30%. And they're all starting to move higher.

[Scott Wapner]

Yeah. I mean, you have kkr. It's still in your book.

[Josh Brown]

No, no, no, no. I'm not. I'm not in KKR right now.

[Scott Wapner]

Carlisle. Carlisle. Right.

[Josh Brown]

Yeah. No, but my final is J.P. morgan.

[Bill Baruch]

I know.

[Scott Wapner]

I know that.

[Josh Brown]

You didn't hear this from me. Stock is now above its Liberation Day close. All right, this is quality. Quality wins.

[Scott Wapner]

All right.

[Kerry Firestone]

Thank you.

[Scott Wapner]

See you on the bell. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live. Weekdays at 12 Eastern only on CNBC.

[Edward Jones]

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 squawk box.

[Scott Wapner]

Tomorrow A special report on cargo theft.

[Josh Brown]

CNBC investigates how criminal gangs are attacking America's supply chain. They literally have a license to seal. Squawk box tomorrow 6am eastern and streaming on CNBC.