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Halftime Report
Earnings and the War Guide the Market 4/13/26
00:48:50
Scott Wapner and the Investment Committee debate how the war in Iran and earnings reports are guiding the market right now. They share their top strategies in this environment. Plus. The desk discuss the key levels to watch out for in software stocks. And later, we hit the latest Calls of the Day. Investment Committee Disclosures
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- [00:00]
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- [01:00]
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, thanks so much. Welcome to the Halftime Report. Scott Wagner front and center this hour. The new and very busy week in the markets. Earnings in the war on investors minds. We will discuss and debate with the investment committee. As always, joining me for the hour today, Joe Terranova, Stephanie Link, Jim Laventhal from talking to check the markets here open lower. As you know, we've turned around though. We're basically flat on the s and P. Nasdaq's green, Russell's green, Dow's down about one half of 1%. And I have to say guys, the plethora of notes that are out today, the ones that I've seen anyway are like 90% skewed positive. So you've got Ed Yardeni sticking with their call that the S and p bottomed on March 30, 7700 on the S and P. Mike Wilson, Morgan Stanley Much of the adjustment for geopolitical risk, private credit concerns and disruptions already taken place already already in the market. Matejka over at JP Morgan markets could show more weakness but we stick with the view that if one has a longer time horizon, 3, 612 months, one should be using the weakness to buy. In other words, buy the dip V shape RBC near term, yeah, fragile foggy bottom but bottom. So what do you think?
- [02:25]
Joe Terranova
I don't think any of us suggested when the market was was trading with that heightened sense of urgency in early March that that was going to be a major inflection point. And we thought we were on the beginning of a precipitous decline, something like we saw in 2022. So I agree in the theory and the perspective that everyone has, I think one of the best dynamics that ultimately has happened in the month of March is when you look at positioning. And if you think of the institutional community, community leans defensive right now, the systematic community, they are basically carrying a neutral bias, which means they have limited exposure. And then we did hear about the retail community making a little bit of a bearish turn for the very first time. So I think that setup is one of the reasons why you have the resiliency in front of you right now at a very rapid advance above the 200 day moving average. You're sitting there. So the theory and the bias of yes, we want to be long, the markets in place, but I think you still have to rebuild positioning and that bodes well for further upside in the near term.
- [03:27]
Scott Wapner
Why the market maintain this resiliency? Because it obviously believes that earnings are more important than oil. At least right now it doesn't. You know, it's trying to look past the whole situation stuff with oil and it is focused on earnings and the economy. Kind of like you have, Ben.
- [03:45]
Stephanie Link
Yeah, I've been buying since the, since March, beginning of March to be fair. Not the bottom for sure. You know, better be lucky than smart. But I do think, yeah, the economy has been so resilient led by the consumer and the consumer in the labor market to me has calmed down. We were so worried about the labor market softening and while it's cooled down from the highs, certainly is solid. There's one job available in this country for one unemployed person.
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Unidentified Guest (brief comment)
Pretty good.
- [04:12]
Scott Wapner
Do you believe what I said? Is it, do you agree with that? Is it true? Is that, is that the reason why the looks like it does because it's, it's more focused on earnings and the economy than the war and oil.
- [04:24]
Stephanie Link
And I start with the economy because that's going to impact earnings. So yes, to answer your question short, yes, absolutely. We care more about the economy hanging in there, led by 70% of the economy is consumer. So we can't have that fall apart. Sure, there's problems with inflation, I got it. But they have jobs and wages are growing 4% and spending is growing 4% and savings is growing 4%. All that is leading to better than expected earnings. And I expect them to be better than expected. And I think you're going to get kind of conservative guidance. It's the first quarter of the new year. It's always conservative. I think you're going to look for opportunities. I don't own Goldman Sachs and I know we're going to talk about it, but I'd be buying that stock because that was a very good quarter. But what's the most interesting to me is since March 30, the S&P 500 is up seven and a half percent, the Dow Jones is up six percent and the Nasdaq is up 10. If you waited, and I have said this many times, if you wait for certainty, you're going to miss some of the easy money to be made. And what I also think is really very interesting too is year to date, the Russell 1000 value is up 5 and the Russell 1000 growth is down 5. And there has been a massive rotation, almost liquidation in growth in some parts of growth, especially software, not all, but some. And that's really hurting a lot of people in the psyche. I think of a lot of people that own growth.
- [05:39]
Scott Wapner
I think farmer Jim in in some respects became jittery Jim, as this whole situation unfolded. I mean you articulated as much on this program on numerous occasions. It even formulated part of your investing decisions. I'm thinking about, yeah. On holdings, are you in agreement with the Yardeni Wilson Mateca RBC idea that brighter skies are ahead and you need to focus on that. If you're always looking up at the sky for rain and it doesn't become you're going to miss out on the sunshine.
- [06:22]
Jim Laventhal
I feel good, Scott. I do. And that's, you know, appropriate. Bring up the on holdings, you were out Friday. I did add meaningfully to BlackRock, so I'm getting in. Like if I thought things were worrisome, I wouldn't be making that move. I think we've had great discussions from you, Steph, and you, Joe, about the importance of earnings. I would say something that fundamentally the energy market is in much better shape than you might think. And why am I saying that? Because yes, while West Texas Intermediate is whatever it is right now, I'm not going to look at the screen $103 a barrel. Brent is cheaper and you know, it's cheaper than either Brent or West Texas Intermediate Omani crude, which shot up to $160 a barrel in the heart of the conflict just a few weeks ago. These are the sort of folks fundamental esoteria that actually matters. And what it's saying is that the flows of oil and energy products through the Strait of Hormuz don't matter as much as they did two weeks ago. Now let's not parse my words too carefully. Of course they still matter. We're talking about $100 handles. But even if you look at where the most pain has been felt, the most pain has been felt in Dutch natural gas pricing, that's off meaningfully from those highs. And what it's saying is, well, workarounds are being felt now maybe for the same reason. And I'm not just going to continue talking about earnings. You already did that. That was fabulous. But if you look at things that have also perplexed us, worried us, things like high yield spreads, those have come down. You go back to January and the bank of America high yield index was about 265 basis points over treasuries. It shot up to 342 in the middle of March. Where is it now? 284. That is a meaningful decline. And what I'm telling you is when you lift the hood and really look at the pieces of the fundamental engine, there are things that are going right in addition to earnings.
- [08:09]
Scott Wapner
I'm going to guess that there are a few people, at least out there who are listening to a lot of this and saying, man, these people are too complacent. They're in denial about what is actually happening within the Middle East. The risk at this point is that it gets a little worse before it gets better. If you believe the rhetoric and some of the on the ground dealings, there a lack of an agreement over the weekend, what's going to happen with this blockade in the Strait? I feel like. I know it. I know there are people out there who are channeling that.
- [08:50]
Joe Terranova
Why is it the market?
- [08:51]
Jim Laventhal
The market is. The market is telling you, I mean, to be up today. And I'm sorry, Joe, for the, for the S and P to be green on the news we got yesterday. I mean, anybody who's an investor or a trader will look at that and tell you up on bad news is a sign. Don't give in. Don't give in here.
- [09:07]
Scott Wapner
Okay, so, Brin, you channel those that I just mentioned, or are you in agreement with those on the desk and the yard, Dennis and Wilson's and Matteka's and gosh knows there's others out there who are just as positive on this market here.
- [09:24]
Brin Palantir
Well, I try to be pragmatic and I think that investors need to take right now as a learning point that history shows us and this shows us right now that markets adapt very quickly to the fogs of war. And so I think we've adapted very quickly. I think on top of that if we haven't talked about yields, the 10 year seems very well anchored around 430 really hasn't moved. I think that's another big signal. We're well above the 200 day, which, you know, that was really my biggest concern is that we are going to stay under that tuner day for more than a month. We're well above that. I think strategically talking about the war, the US Blockading now, the strait is very smart tactically because China buys 85 to 90% of Iranian oil. And so if we have a full blockade, then that prevents that. And I've said all along, I think that China can be the player here to end this because they do need that oil. And I think that that's why President Trump said we're going to charge them a 50% tariff to try to say, hey, do not give the Iranians any missile defense. I think probably that works. And I will say on earnings, earnings are strong. What's interesting though this quarter though, is Micron and Nvidia are going to be 50% of the total growth this quarter in S and P earnings. So we're still very concentrated. I think that's why you can't count technology out, because almost all of the earnings growth is coming inside of tech.
- [10:56]
Scott Wapner
Joe Technically the market's gotten better. TONY P. Goldman Sachs Pascarello, head of their hedge fund client coverage, says the following following technical factors are supportive flows, seasonals, liquidity, but they constitute a guarantee of nothing. When the trading environment is this fickle, I suspect that earnings will be a net positive. So he believes that you're at 15% year over year earnings growth. Again, it goes back to how we began the conversation. The market obviously is more focused on the Pascarello perspective than whatever is fluctuating in the world's energy markets.
- [11:33]
Joe Terranova
And the anticipation is as you go through the course of 2026, the earnings growth actually will rise closer to 20%. So to Brent's point, to my earlier point, the bond market is calm. Steph mentioned before the relationship between growth and value equal weight, s and P500, 100%. I'm in total agreement and I want the S and P equal weight to perform well. But since the March March 30 intraday low for the S&P 500 at about 6316, growth is outperforming value by about 8%, S&P. And you want to see that because that's confirmation that we're seeing positioning. Go back to where the market first saw the reduction in the positioning and the challenges and the concern and the market is validating where they believe that they will find the more reliable earnings growth.
- [12:26]
Scott Wapner
I think the debate that needs to be had between you and Steph because it sounds to me like you're making, you're making the case that you think that the, the makeup of the market has changed. The war has changed it back to now a more growth oriented environment from what was working before, which is why you had the broadening, which is why Steph can read off the stats she did about value out performing growth. I hear you making a case that you think that's going to be the new normal now. I think as I think Steph is trying to make an argument that she thinks we're going back to the broading
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Stephanie Link
story yet you know what's the most interesting in this Downdraft? The most names that I've bought has been in technology. Some hardware, some semis, some software getting hit there for sure that's not an easy play. But I do like the valuations there. So I think it's not all or nothing things, Scott. I think we find sectors, we find stocks where profits are going higher because I think it's as simple as stocks follow profits on the way up and on the way down. And that's one of the reasons why we did so well these last three years. Yes, I know the last three years it was very concentrated, doesn't matter. Earnings were going higher as a result. I think this year is the same but maybe the makeup is a little bit different. It's broader because the economy is doing right.
- [13:39]
Joe Terranova
But can I respond?
- [13:40]
Scott Wapner
But yeah, go, go, go respond. I feel like you're making, you're making the case you wouldn't have brought up the state stat of value over growth if you didn't think that value that that's how it was going to continue.
- [13:49]
Stephanie Link
Maybe some of the software and technology names that I'm buying actually are value, Scott. That's the whole point.
- [13:55]
Joe Terranova
Growth that has become value I think is so I think what's important to understand is we've recalibrated the valuation on the technology growth story for sure. Just look at the max 7. The forward multiple went from 30 to 24. So you have that recalibration in terms of valuation. A lot of these technology growth names look far more appealing. I do think in the near term you are going to continue to see a rebuilding first and foremost in positioning for growth.
- [14:27]
Scott Wapner
Well, okay, how about this?
- [14:28]
Stephanie Link
I think you'll see that say, look, I mean There's a big story here that we're not talking about. We all know it. The whole food chain that's not going away from a war. In fact it's increasing for security purposes. But the food chain being data center, power grid, we talk about it all the time and that's not changing. In fact it's accelerating and that's a big driver of the value trait. Industrials are benefiting, financials are benefiting. There's a lot of industries that are benefiting from that theme and that has only accelerated.
- [14:57]
Scott Wapner
Let me just show you another statistic in because it backs up what you said about where valuations are have compressed to Torsten Slok at Apollo says today valuations are back to the pre AI boom levels. They've compressed from 40 times to 20 times as a sector levels seen before this whole AI boom happened. That's probably playing a large role as to why growth has outperformed recently because there was such a valuation correction at the same time Where I think people have a more confident and consistent view of where the earnings growth is going to come from. Albeit Brin mentions two stocks in particular that may make up the largest portion of it. It's still coming from that area within the market rather than from others that are more directly tied to the cyclical nature of the economy.
- [15:50]
Joe Terranova
Without question. I think that is what we have seen so far in the first several weeks of April. Steph's mentioning the industrials a lot of really strong businesses with great balance sheets and clearly defined as as I look at it as quality. But they have also over the last several years become more growth oriented. We took a position in Trane Technologies in October of 2023. It's speaking to exactly what you're identifying the AI infrastructure buildout as it relates to cooling for data centers. Well guess what? Trane Technologies, we look at that stock now, we think it's a growth well
- [16:28]
Scott Wapner
it's initiated outperformed today at Evercore535 is the target there and there's also as Steph was talking about there's some calls on the data be the power related plays. We'll get to those and we'll get to those a bit later.
- [16:42]
Stephanie Link
Transports are doing quite well too. That's indicative of the economy doing better. That's cyclical.
- [16:47]
Scott Wapner
How about this better? How about this stat Brent from Jefferies Trading Desk Tech Momentum just had its strongest 10 day move in 25 years and the best week since the COVID vaccine was released in December of 2020. Metta posted its best week in some two years.
- [17:08]
Brin Palantir
Yeah, I think that this setup will has a high probability of continuing going into the earnings of matter of Google, of Amazon, maybe Apple, maybe Microsoft because these names have been penalized for capex by the way that is the reason why these multiples have come come down because people question is the capex spend good but now at a valuation level you can say hey the earnings power is still there. And so I think these are going to be really strong names to own during this earnings season. So I think it's a really good setup to on a really good note.
- [17:43]
Scott Wapner
All right, Goldman kicks things off today. As everybody at this point knows the stock has been down after their FICC trading revenue was a Mess. Stocks down 3% it's off of the the worst levels. B of a reiterated a buy after the result they had equity trading, they had record revenue and they had a 48% increase in investment banking fees. You own this name personally, right?
- [18:10]
Joe Terranova
I've owned this name since April of 24. I will continue to own this name. I hope Steph joins me in owning Goldman Sachs because I think it's going to continue to move higher. If you listen to the call David Solomon talked about the analyst community who maintained very high expectations for this company, rightfully so. Remember how it came into this earnings report as one of the leading financial sector names as one of the leading money center banks you didn't see significant reduction in terms of sentiment positioning for this company. So now let's go underneath the surface for the earnings. We understand that equity trading was ridiculously strong. JP Morgan reports tomorrow probably going to see a very similar type of dynamic there strong equity trading. Did anyone think that rates in mortgages was going to be the standout for Goldman Sachs or any of these banks?
- [19:04]
Stephanie Link
I totally agree with you on that.
- [19:05]
Joe Terranova
Like so that was the problem like dig in, do the homework on what the earnings really were. Commodities and currencies were fine. The significant contributor to the underperformance in fact came from rates and mortgage and that's understandable.
- [19:21]
Scott Wapner
Mayo at Wells Fargo securities says underlying trends seem unusually strong in investment banking and equities. A good beat may fall short of expectations for great that that's how he characterizes it. But Steph, you look through the Goldman to others and you come away with what when you own bank of America, Wells Fargo and Morgan Stanley first and
- [19:42]
Stephanie Link
foremost these stocks have all rallied 10 to 15% off of their lows. So a little bit higher expectations which is never really a great setup but if you go through advisory up 89%, equities up 27% asset assets and asset and wealth management up 14%. Those all bode well for all of the big six banks and I expect Morgan Stanley to do very well especially on their rotc. That was the thing that got my attention with Goldman because it came in at 21.5, 21.3%. That is amazing improvement that they have seen. And I think Morgan Stanley had the highest ROTCE last. This is profitability metric. They had the highest one last quarter. I think they're going to continue to see good growth there and that's really very important. But I think all of the metrics are very positive for the banks.
- [20:30]
Scott Wapner
Joe, you've been all over the exchanges trade talking about it reasonably early too. Well Deutsche is on the bandwagon as they include Intercontinental Exchange, ice, parent company of this place as one of its top picks along with BlackRock and Schwab.
- [20:48]
Joe Terranova
Relative underperformer when compared to CME. I think CME is up about 11% for the year. ICE is basically flat on the year. CBO is up 18%. That's another name that I think you want to own. But when you see this continued elevated volatility when you go out and you read that companies, private companies like Citadel and Jane street and Hudson river are earning more in accordance quarterly basis than Goldman Sachs and Morgan Stanley off of trading, you understand? Well, I need to own Interactive Brokers. I need to own Schwab. I'll say it again with virtue Financial approaching $50 as an all time high. I don't have a position there. I have a personal relationship but it is the 1 publicly traded market maker that you're able to allocate towards. When you see a lot of these private companies earning the revenue that they're earning and the volatility. Volatility, Scott, it's not going away. Is anyone think the volatility is going to diminish significantly? And when you go back to where we were in 2023 or 24, I don't think so.
- [21:47]
Scott Wapner
Blackrock included in the Deutsche note. Jimmy, as top picks. Schwab, Blackrock and ice.
- [21:52]
Jim Laventhal
Blackrock got sold off quite a bit at least in part because of their HP subsidiary that they bought a few years ago which has a lot of private credit in it. You know that's such a small part relative to the overall business that is born blackrock that I saw the opportunity and as I said I added to that on Friday. Scott, it's not a call on this quarter's earnings It's a call on BlackRock over the coming years having many pistons in its engine that are going to keep firing the iShares, the multi asset class and yes the private assets as well.
- [22:22]
Scott Wapner
Take a look at Oracle.
- [22:24]
Jim Laventhal
Yes, if we take a look at
- [22:25]
Scott Wapner
all stock is a rip today. I guess on some headlines coming out of a summit that they're hosting the stock's up 10% but software a lot of the names in here today, Intel's up almost four. Names like Core Weave are up eight and a third. You have some pretty good. Microsoft is up. How often do you say that it's up two and a half percent but you kind of get the point because the stock hasn't traded well. Cyber Palo's up three, CrowdStrike's up almost six. Dell's up five and a third.
- [22:59]
Jim Laventhal
Jimmy, I think simply put, enough is enough. The software stocks in particular and the software adjacent, like an Oracle, they've just been sold down too much. I don't think Oracle is up on the headlines. I mean I've read the headlines, they're not that interesting. But what I said earlier about high yield spreads does matter and we know about Oracle's debt position and how much it's increased and the credit default swaps which are off about 20 basis points points over the last few weeks, they're still very elevated, make no mistake about it. But ultimately enough is enough and I think this is a delayed reaction to things like Open Air which raised over $100 billion in their latest round which starts to put to bed some of these fears that it won't be good for the trillion dollars plus of commitments.
- [23:43]
Scott Wapner
There needs to be like more than one day's activity for others to believe that enough is enough. Wolf today says the downtrend is alive and well. Brin, Jonathan Krinsky, BTIG. Let's show up the let's put up the IGV if we could guys. He says 77 is key so we're a buck above it. 77 was a huge level. He says as long as it's below that we continue to see risk towards 70. Intraday move not so important, not so interesting. We'll see where it closes prices at the end of closing bell today. If it can stay above that line in the sand, the Krinsky line in the sand. Brin Palantir worst week in over a year. It's coming off of that today. How do you see this group?
- [24:31]
Brin Palantir
I think well if you're part of igv unfortunately you're going to get Lumped together.
- [24:35]
Stephanie Link
Right.
- [24:35]
Brin Palantir
So whether you're Microsoft, Oracle or CrowdStrike, three different companies all lumped, lumped together in the IGV, I think Palantir, the thought that Anthropic is a competitor to Palantir, which has been part of the narrative to me, doesn't make any sense whatsoever over the next five plus years. And so I think that Palantir, it needs to settle down. Though we talked about this last week, it's still an incredibly expensive stock. And so how do you value the company? And so to me, I still have a small position. You know, I originally bought it at 25, sold some at 4,575 and 100, and then I have what's left because I do understand and respect the valuations. And so I do think it's going to settle in here. But I don't think that this competitive Anthropic versus Palantir makes any sense because Palantir actually uses all of the AI companies. They're neutral on them, and then we'll use them as they see fit. So I still think from a software company, it's expensive, but they are the original AI company. They have great enterprise, they have great government contracts. So I think once it settles in here, buyers will come back in in spite of the valuation.
- [25:42]
Joe Terranova
Jyoti, we had a significant reduction in our holding of software at the end of January. We're down to five names. I'm not sure about Microsoft, Oracle. I maintain your perspective where I don't think one day is enough. I agree with Brin on Palantir. That is a name you absolutely want to watch. Steph, you might like Cadence Design Systems Synopsis. Okay.
- [26:03]
Stephanie Link
It's cheaper.
- [26:04]
Joe Terranova
It is 100% cheaper, for sure.
- [26:06]
Scott Wapner
You have Cadence, right?
- [26:07]
Joe Terranova
I have Cadence. I think Cadence. I think Cadence. They both work well in the narrative of the software design for semis. And then lastly, Brin, you're going to feel great about Zoom when I tell you I liquidated Zoom because I had it personally and in the etf. I liquidated it after earnings. I'd love to get back in. It is the play on Anthropic. People don't understand. The demand right now is insatiable for Claude. I'm using it myself. If you want a publicly traded mechanism to get some exposure to Anthropic, it is through Zoom.
- [26:39]
Scott Wapner
Oh, all right, all right. We'll take a break, we'll come back, we'll do our top calls of the day. Got another downgrade for a struggling consumer. Name a pair of upgrades in the housing space. We'll trade all of it when we come back.
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Hey, how's it going? Yeah, good, thanks.
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- [28:40]
News Reporter/Anchor
Foreign.
- [28:45]
Scott Wapner
Welcome back. Take a look at shares of Starbucks if you could please, because there a call on it today from Jeffrey. Stock is flat. They raised a target to 92. They had it at 86. They also had an underperform on that name. Can you pull the chart out more please to like I don't know, three months maybe? I think it's a better perspective on Steph. Steph made a call on this name right like a few months back. Handful of the year. Handful of months back. He put that back up please. Oh, there you go. Thank you. Three months, up 7%. Obviously you had a dip late last week. So Jefferies goes to hold from underperform. You had already taken it off Underperform and put it on a reasonably strong buy. Yeah. What did you see?
- [29:40]
Stephanie Link
It was down on the year when I was buying it and I just can't believe that that would be the case of Brian Niccol, the CEO running this company. So it's now up 14% year to date. So it's been A nice performer.
- [29:49]
Scott Wapner
Oh, that's a better chart then let's look at year to date.
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Stephanie Link
But while you speak, I think that they're focusing on culture, they're focusing on execution, new products. And they therefore or think they can get to $4 in earnings power by 2028 and 3% sustainable same store sales. This company has had negative same store sales for the last couple of years. So I think that we're just beginning to see the turn. And the biggest interest to me is the operating margins. I think you can see back to 17, 18% over time. So real operating.
- [30:16]
Scott Wapner
Where'd you buy it at? You remember, like ballpark? It was 96 and a half now
- [30:20]
Stephanie Link
probably in the think of the mid-80s.
- [30:22]
Scott Wapner
Okay, okay. No, it was. It was a big call when you made it. And I know you talked about it on CNBC Pro. I did at the time too. Which was great for everybody to get the perspective at the time of the buy. And then now you see the results. Reasonably short period of time, but nonetheless up since Estee Target goes to 120 from 130B of A. They still like it. They just take the Target down.
- [30:44]
Stephanie Link
This has been incredible. This went from a turnaround story, which you know, I love, to a transformational potential M and a transition transaction which could have pro forma revenues if the combined companies do merge of $21 billion. I know why people don't like the deal because it's down 25% since they announced. They didn't even announce the deal. They're just talking to each other right now. It's down 25% since then because people wanted the turnaround. And this would be a very big transaction under this fairly new leadership team. I think this would expand their their markets, their categories. I think there'd be lots of synergies as well. So I'm sticking with it.
- [31:18]
Scott Wapner
Speaking of fairly new management teams, Brin analysts just think that Nike keeps tripping over its own shoelaces because it got downgraded again today, this time by HSBC. It's to hold from buy. They they had a $90 price target that they've basically taken in half. They're at 48 now. Stock's only 42 and a half. Global outlook for sporting goods remains challenging. Now it's funny because there's bullishness on Dick's Sporting Goods, but nonetheless, that's what they say. They point to weakness within Converse. They point to weakness within China. I think that was underscored in the most recent earnings report. Emerging markets and emerging Asia, Emea and Sportswear continues to weigh on the business recovery. You see, sold it back in February.
- [32:13]
Brin Palantir
Yeah, you know, I had bought Nike and on shoes because I thought the Supreme Court was a high probability would come out and say, well, the tariffs were not, were not legal. Neither stock really moved. And so I moved on because that was the reason why I bought it though has been a complete disaster. And if you've bought it, your hands are all cut up because it has been truly a flat falling knife. And so I just think that they lack execution. They always have a great CEO that's trying to turn things around. But I always tell our team and my kids, you don't have to make it back the same way you did. I think this is a really tough name to own. And there's so many other companies that we've talked about for the first 30 minutes that you can, you can add returns to. So I don't know why people anchor in on stocks that just seem to be a mess. Just, just move on.
- [33:02]
Scott Wapner
Okay. Williams Sonoma up to buy at Goldman. Price target to 218 from 185.
- [33:07]
Joe Terranova
Joey makes sense. You really need to hear from them at the end of May when they release their earnings. Since the prior earnings report, stock has kind of moved sideways to Lower E commerce 60 to 70% of their business. This is a company that's seeing really strong momentum in Pottery Bond. They need to have an improvement in home and that relates to the one area of the economy that just is the laggard and that's housing.
- [33:32]
Scott Wapner
All right, Seema Modi has our news update today. Hi there.
- [33:34]
Stephanie Link
Hey, Scott.
- [33:35]
Unidentified Guest (brief comment)
The U.S. military says it struck two boats smuggling drugs in the eastern Pacific Ocean, killing five people and leaving one survivor. The Saturday attack brings the number of people killed in boat strikes by the US military to at least 168 since the Trump administration began its crackdown in early September. Now the U.S. southern Command posted on X saying the boats were traveling along known narco trafficking routes. More than 1,000. In other news, more than 1,000 actors and directors releasing a letter opposing Paramount's acquisition of Warner Brothers Discovery. The letter was posted to a website called Block the Merger and says the deal would decrease job and creative opportunities across the industry. It was signed by some big names like Bryan Cranston, Emma Thompson and Ben Stiller. Finally, Delta Airlines unveiling the first update to its long haul Delta One suites in nearly a decade. Suites will include beds that are 3 inches longer than the older suites and will give travelers more leg and Knee Room Delta says updates will debut in 2027. Scott, I'll send it back to you.
- [34:33]
Scott Wapner
All right, Sima, thank you. That Seema Modi. Still ahead, your ETF Edge Don Chu tells us what is coming out of Backdrops. Not the same as it was last week, but it's all right.
- [34:44]
Dominic Chu
It's all right. And there's some rotation happening. Scott, to your point, given all that recent market volatility, so are there certain specific areas of the market that are seeing relatively higher demand versus others? We're going to speak with the CEO of one ETF provider for what investors are rotating in and out of. That's coming up next for your ETF Edge right here on the Halftime Report.
- [35:07]
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Avalara Narrator
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- [36:41]
Dominic Chu
Welcome back to the Halftime Report and I'm Dominic Chu with today's ETF Edge. Now with a breakdown in negotiations in the Iran war, investors are now facing protracted impacts on domestic economic conditions. So how are ETF investors repositioning? Joining me now for that conversation is Christian Magoon, CEO over at Amplify. ETFs amplifies a shop, Christian, that has become known on Wall street as having a thematic kind of approach or something suite of products. What exactly are you seeing right now with regard to the market? Volatility and how investors are moving in and out of the markets.
- [37:12]
Christian Magoon
Yeah, definitely a move away from higher beta equity plays like technology. Looking more at hedged equity plays that kind of can limit some of this volatility during all these headline events we're happening right now.
- [37:24]
Dominic Chu
Now, when you say hedged equity, it's one of those situations where they use options and other derivative activities around portfolios.
- [37:31]
Scott Wapner
Right.
- [37:31]
Dominic Chu
To kind of buffer movements.
- [37:32]
Christian Magoon
That's correct. So it's using covered calls or maybe dividend paying stocks to give you a cushion of 5, 10, 15% to the equity market but still add to your total return through this income stream.
- [37:43]
Dominic Chu
Now what types of parts of the market are you seeing some of the most activity? Where are investors gravitating more towards and perhaps a little bit more away from?
- [37:51]
Christian Magoon
Yeah, so surprise, surprise, energy is the big winner this year sector wise. So we've seen a lot of exposure to hedged energy. For example. So we have an ETF NDEV that offers a 10% income stream but also capital appreciation that's been up about 30% this year. We're seeing people move away from some of the more volatile technology names simply due to some of the concerns about liquidity, Fed raising rates or maybe just the economy tipping into recession here with oil prices.
- [38:17]
Dominic Chu
And one quick point here. How much is crypto being affected by the market volatility?
- [38:21]
Christian Magoon
Well, it's kind of removing some of the liquidity from crypto crypto. In addition, the other L word legislation isn't really progressing, so that's hurting crypto a little bit. Seem to be in this chop range of 65 to 75 for Bitcoin.
- [38:33]
Dominic Chu
All right, now we're going to continue this conversation over at ETF edge.cnbc.com Christian is going to be joined by Jamie Harrison, the head of ETF Capital Markets trading over at mfs. So keep an eye on that show. Scott. I'll send things back over to you.
- [38:47]
Scott Wapner
Dom. For the record, I was referencing that beautiful August backdrop when I toss it to you.
- [38:54]
Dominic Chu
I did get to see some of it in person this past week. So I will say that, you know,
- [38:59]
Scott Wapner
it is as built.
- [39:01]
Dominic Chu
It's even more beautiful in person than on tv.
- [39:04]
Scott Wapner
I would only hope that you stayed a bit, Dom. Thanks.
- [39:07]
Dominic Chu
You got you.
- [39:09]
Scott Wapner
Coming up, we'll give you the trade on healthcare. This is a really, really big moving stock today. You could have some ripple effects and some other names you want to take a look at where following that money next. All right, the pool is in the oval with the president.
- [39:32]
Donald Trump
Let's Listen, we agreed to a lot of things, but they didn't agree to that. And I think they will agree to it. I'm almost sure of it. In fact, I am sure of it. If they don't agree, there's no deal. There'll never be a deal. Iran will not have a nuclear weapon. And we're going to get the dust back, Mr. President. We'll get it back. Either we'll get it back from them or we'll take it.
- [39:50]
Reporter
Mr. President, as far as the naval blockade is concerned, what's the end game? Is it to force Iran back to the negotiating table? Is it to open up the straits so that gas prices ultimately come down?
- [40:01]
Donald Trump
Maybe everything. I mean, both of those things, certainly, and more. We can't let a country black or extort the world because that's what they're doing. They're really blackmailing the world. We're not going to let that happen. And you know, the amazing thing is we don't. Can you believe this? We don't use this trade. We don't need this trade. We have our own oil and gas, much more than we need. We have more oil and gas than Saudi Arabia. Think of this. We produce more Saudi Arabia and add Russia to it, substantially more. And by next year we'll have double that amount. So we don't need it, but the world needs it. And many ships are heading to our country right now as we speak to load up with the best. Really? I guess you could say somebody said the best and sweetest. I don't know exactly what sweet is, but when it relates to oil, it's a good thing. But they're coming to our country right now. There are many boats coming to our country now. It could very well be. This is going to be settled before the. Look, we've been called this morning by the right people, the appropriate people, and they want to work a deal. They would like to work a deal.
- [41:10]
Reporter
Is it your anticipation, Mr. President, that other countries will assist in this effort to blockade Iran and those.
- [41:18]
Donald Trump
Yeah, other countries are going to also.
- [41:19]
Reporter
Which countries, sir?
- [41:20]
Donald Trump
We don't need other countries, frankly. But they've offered their services. We'll let it. We'll let it be known probably tomorrow.
- [41:27]
Joe Terranova
Have some blockades started, sir?
- [41:29]
Donald Trump
Yeah, started at 10 o'. Clock.
- [41:31]
Scott Wapner
Classified.
- [41:32]
Brin Palantir
Robert Baron, support to you and your
- [41:34]
News Reporter/Anchor
policies, praising you for defending religious freedoms.
- [41:38]
Scott Wapner
He now says you owe Pope Leo an apology. Will you apologize?
- [41:42]
Donald Trump
No, I don't. Because Pope Leo said things that are wrong. He was very much against what I'm doing with, with regard to Iran and you cannot have a nuclear Iran. Pope Leo would not be happy with the end result. You have hundreds of millions of people dead and it's not going to happen. So I can't, I think he's very weak on crime and other things. So I'm not, I mean, he went public. I'm just responding to Pope Leo and you know, his brother is a big MAGA person and he's a great guy, Louis. And I said, I like Louis better than I like the Pope. No, you have to have law and order in our country and that's what we have now. We have the lowest crime numbers we've had in a long time, despite the fact that many criminals were allowed into our country. But we've gotten a lot of them out. We've done a great job on crime. So we have the lowest murder rate in 125 years, since 1900, the lowest murder rate. So we believe strongly in law and order. And he, he seemed to have a problem with that. So there's nothing to apologize for. He's wrong. The other thing is he didn't like what we're doing with respect to Iran. But Iran is a, wants to be a nuclear nation so they can exterminate the world. Not going to happen.
- [43:02]
Brin Palantir
The deal is not reached by the
- [43:04]
News Reporter/Anchor
end of the ceasefire.
- [43:05]
Brin Palantir
Does your threat from before still stand?
- [43:08]
Donald Trump
Yeah, I don't want to comment on that, but it won't be be pleasant for them, let me put it that way.
- [43:15]
Reporter
Has your timetable changed in any way in terms of ending this conflict?
- [43:18]
Donald Trump
No, it's going, it's going on right now. There's no fighting right now. We have a blockade. They're doing no business. I didn't like seeing boats come out if they were doing business with Iran, but if they weren't, no boats came out. So now they're doing. Iran is doing absolutely, absolutely no business and we're going to keep it that way very easily. Don't forget their navy is gone, their air force is gone, their anti aircraft is gone, their radar is gone and their leaders are gone.
- [43:47]
Dr. Guy Winch
It's a lot.
- [43:47]
Scott Wapner
Do you still want to charge them to the side?
- [43:50]
Dominic Chu
We're coming from predominantly going to China.
- [43:53]
Scott Wapner
Mr. President, has Xi Jinping reached out?
- [43:55]
Donald Trump
I know you're going to be no, but we have a very good relationship with China. He would like to see this ended also. He certainly wants it ended. Everyone, I want to see it ended too. But we can't give a nuclear weapon to a group of people that have caused Nothing but havoc for 47 years. Look, I'm the president that's done something about it. This should have. And many other presidents regret that they didn't, you know, so I'm doing something about it.
- [44:23]
News Reporter/Anchor
Ukraine impeachment documents that were just declassified show that Eric Charamilla not only submitted false information, but that he had no direct knowledge of the alleged conversation. All hearsay. Do you feel vindicated by those?
- [44:36]
Donald Trump
Yeah, I do. They're a bunch of crooked people you're talking about. With respect to all of the things that they put against me, yes. Well, it's come out that in so many different ways. Thank you very much for that question. I appreciate it. But in so many different ways. The election was rigged. The 2020 election was rigged. We found that out. What you just said is just a piece of that. It's a big piece, but minor, relatively speaking, compared to what they did. They cheated on the election, they cheated on the vote. They cheated in every way possible, and it's the only way. We got an incompetent man to be a president, and he was an incompetent man. Many of the things that we're talking about, even including this, this would have been settled a long time ago, not now. And it should have been settled by other the presidents. But the election was a rigged election. We can't let that happen to our country.
- [45:23]
News Reporter/Anchor
It's concealment of exculpatory information.
- [45:25]
Stephanie Link
What should happen?
- [45:27]
Donald Trump
Well, it's very serious charge against them and the Democrats, they cheat. They can't get elected with their policy, so their policy is no good. They want to have, I mean, open borders. They want to have men playing in women's sport. Do you think that men should play in women's sports?
- [45:46]
AT&T Business Wireless Narrator
I really don't have an opinion on that.
- [45:48]
Donald Trump
You don't? I'll bet you do.
- [45:49]
Brin Palantir
No, I'm here about attacks on tips.
- [45:53]
Donald Trump
Yeah, okay. Yeah, go ahead, please.
- [45:59]
Reporter
Thank you.
- [45:59]
Jim Laventhal
Mr. President, is it your understanding that
- [46:01]
Reporter
during this period of time, while the US has instituted this naval blockade, that oil companies will be able to send their oil tankers through the strait, get more oil out from this area?
- [46:11]
Donald Trump
Yeah, I think they're going to be doing very well there, and I think they're doing very well here. You know, a lot of tankers are coming up here. They're coming in empty and out full. And we have a great capacity to take care of that business. Ma', am, we know your name.
- [46:25]
Scott Wapner
Please have you delivered to the White House before.
- [46:27]
AT&T Business Wireless Narrator
I have not. My name is Sharon Simmons.
- [46:30]
Scott Wapner
And are The White House, good tippers. Do you know.
- [46:33]
Donald Trump
Wait.
- [46:35]
AT&T Business Wireless Narrator
Potentially, yes, very.
- [46:39]
Scott Wapner
Mr. President, can I ask you something else?
- [46:41]
Donald Trump
Thank you. You reminded me of it, Mr. President, one on Cuba.
- [46:44]
News Reporter/Anchor
Sir, you previously said that you had
- [46:47]
Edward Jones Financial Advisor
no problem with countries sending fuel to Cuba after previously promising to tariff them.
- [46:54]
Scott Wapner
What happened?
- [46:54]
Donald Trump
What changed? Well, we're going to see with Cuba. Cuba's another story. Cuba has been a terribly run country for a long time. It's got a bad system. It's been very oppressive, as you know. And we have a lot of great Cuban Americans, all of whom just about voted for me. And they were treated very badly in many cases. Family members have been killed, they've been beaten up and mugged and like terrible things happened in Cuba and Cuba is a failing nation and we're going to do this and we may stop by Cuba after we're finished with this. But Cuba is a nation that was just been horribly run for many years by Castro.
- [47:33]
News Reporter/Anchor
You said Mesa by week regulator Bill Pulte, regarding those two recent referrals for Letitia James for insurance fraud, do you know if federal prosecutors have evidence to charge?
- [47:44]
Donald Trump
Well, I don't know. I know she's a very corrupt person and you're talking about the so called Attorney General of New York. She's a very corrupt person. That's been proven now. And I know they, I have nothing to do with it, but they're looking at things all over, all over the place. More than one state concerning her and concerning people like Comey, who's a dirty cop. Comey is a dirty cop and dirty cops are bad. I love. Nobody likes the police more than me, law enforcement more than me. But Comey's a totally dirty copy and not going to. We're not going to stand for it. Yeah.
- [48:21]
News Reporter/Anchor
The UFC fight that's happening at the White House this summer, UFC typically numbers those fights consecutively. But should they label this one UFC 1776?
- [48:31]
Donald Trump
That's a good idea. I'll tell that to Dana White. I like that idea. I will say I've been involved with a lot of big events. I have never had an event that's had more interest in the.
- [48:41]
Scott Wapner
I will take it back. The President still speaking with reporters just outside of the White House there on the situation with Iran. The blockade has started of the Strait of Hormuz. He said Iran would like to make a deal. No deal without an agreement on nuclear. Those are the refrains that really matter certainly to the market at the current time, which by the way has green now across the board. Megan Casella for us is in Washington with reaction to what the president has just said regarding the the unfolding events in Iran.
- [49:12]
Meghan Casella
MEGHAN SCOTT that's right. You hit the highlights there. And I would flag just one more that we hadn't yet heard, which is that he said he'd been called this morning by what he described as the right people and that they would like to make a deal. So that's the first that we've heard that the President sounds like has been in touch with the Iranians or at least with mediators this morning potentially since that blockade began, and that there could be further movement towards a deal. He did sidestep a question about if there was another round of talks planned, saying again, just that there had been a call on the nuclear material. He said, we'll get the dust back. Either they'll give it back or we'll take it. So as you mentioned, holding firm to that idea that Iran cannot have a nuclear weapon, he was asked what happens if there's not a deal by the end of the cease fire. SCOTT remember, that expires just a little over a week from today, next Tuesday. He said he didn't want to comment on it, but that it wouldn't be pleasant for Iran, so keeping up those threats. And he described the blockade a little bit. He said Iran is doing absolutely no business now and we're going to keep it that way. Just one other point, not quite the top headline here, but he was asked if China's President Xi Jinping had reached out. He said no, but that he did have a very good relationship with China, that China's Xi Jinping wanted to see this ended and that President Trump said he does as well.
- [50:24]
Scott Wapner
SCOTT okay, Meghann, thank you very much for that. That's Megan Casella in Washington for us. We'll take a break. We'll come back after this. All right. We'll see you for the last hour of trade. On closing bell, the professor, Jeremy Siegel with me. Dan Greenhouse is as well. Malcolm Etheridge joining the conversation, Jonathan Krinski, Matt Foss, Ankar Crawford, great lineup and I hope you'll join me at 3 o' clock Eastern Time. We are still, I think, green across the board. We'll check that. Yes, we are. So we'll have an interesting one for sure. Brin, do you have a final trade for us?
- [51:00]
Brin Palantir
CBRE stock went down almost 40 points off some cloud plug in. I think it goes back up to 173.
- [51:06]
Scott Wapner
Okay, thank you very much, Farmer. Jim, is that you with Citi?
- [51:09]
Jim Laventhal
That is me I don't normally step in front of an earnings day like I am with Citigroup.
- [51:14]
Scott Wapner
Do it.
- [51:14]
Jim Laventhal
I am, I am. I am. Your Honor, I. Sir, this stock, the market wants it to go higher. And if something goes wrong, you're still going to want to own it.
- [51:22]
Scott Wapner
Back to Farmer Jim. Don't be Jimmy Jitters. Do it.
- [51:26]
Jim Laventhal
We've wiped that off the board.
- [51:27]
Joe Terranova
We take some water staff.
- [51:29]
Scott Wapner
He already crushed like three. I don't know. We have the water camera. What's up with that?
- [51:33]
Stephanie Link
I'm going to go with Morgan Stanley after Goldman Sachs report. I feel really confident it's going to be a good one with better ROTC. Stock is flat year to date trades at 15 times earnings. Two and a half percent yield with a ton of excess capital that's coming our way.
- [51:47]
Scott Wapner
All right. Joe, is that you?
- [51:48]
Joe Terranova
It sure is. XBI Revolution Medicine.
- [51:52]
Scott Wapner
So that chart, we didn't get to it today, but show the chart as you.
- [51:54]
Joe Terranova
Well, that's 1% of the XBI ETF, but deals are happening in the space. This could be the best year since 2019 for M& A.
- [52:02]
Scott Wapner
There we go. Good job, guys. Thank you. We'll 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.
- [52:17]
Edward Jones Financial Advisor
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the Halftime Report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer what does
- [52:52]
Avalara Narrator
running your business feel like with Avalara, the AgentIQ AI platform for global tax and compliance? You don't hover over the submit button. You don't ask for a second opinion. You don't wake up thinking about a filing because Avalara's agentic AI handles it. Calculating, filing, validating with the accuracy and audit defensibility, your team can stand behind Avalara Agentic AI Tax and compliance with confidence.