Halftime Report: Gearing up for Tech Earnings (07/22/25) - Detailed Summary

Released on July 22, 2025

Introduction

In this episode of CNBC's Halftime Report, host Scott Wapner, alongside expert panelists Josh Brown, Joe Terranova, Stephanie Link, and Citi Wealth's Chief Investment Officer Kate Moore, delves into the current state of the markets as they approach a critical period of tech earnings announcements. The discussion centers around the sustainability of the ongoing market rally, potential signs of market froth, the impact of upcoming earnings, and the evolving landscape of the financial sector amidst deregulation.

Market Performance and Indicators

The episode opens with a snapshot of the current market conditions. The Dow Jones Industrial Average shows a marginal uptick, the S&P 500 experiences a slight decline, and the NASDAQ is under pressure, down approximately half a percent after a multi-day rally. Chip stocks are identified as a significant drag on the NASDAQ index.

Joe Terranova highlights the critical role of the semiconductor industry in the market's recovery since April. He notes, “The semiconductor industry… is going to hear some earnings in the coming weeks. Texas Instruments is going to report tomorrow” (01:58). Terranova expresses a cautious optimism, suggesting that if semiconductors underperform, it could trigger a mild market correction. However, he remains confident that the macroeconomic environment supports continued growth, especially as capital expenditures remain robust.

Signs of Market Froth and Volatility

Stephanie Link addresses concerns about potential market overheating and volatility, emphasizing the strength of the current economy. She states, “The economy is humming at two and a half percent… Inflation is still a little bit sticky but it's come down way from three years ago” (03:05). Link anticipates earnings to exceed expectations, projecting a possible 10-11% growth due to a combination of revenue increases and margin expansion, particularly led by the tech sector. She advises investors to view upcoming volatility as an opportunity to buy cyclical stocks rather than defensive ones.

Josh Brown and Frank Holland further discuss the nature of the market rally, distinguishing between sustainable earnings growth and speculative movements in meme stocks. Holland cautions against equating the erratic behavior of stocks like Kohl's and OpenDoor with the overall market health, emphasizing that such “sideshows” should not distract from the underlying earnings growth in leading sectors (04:37).

Tech Earnings and Market Rally

Kate Moore underscores the importance of mega-cap and big tech earnings reports as pivotal for the continuation of the market rally. She highlights that the market is closely watching how widely held and well-managed companies respond to earnings reports, drawing parallels to past bank stock performances (07:41). Stephanie Link reiterates the strategic advantage of the earnings season, suggesting it presents buying opportunities, especially when stocks with strong fundamentals experience temporary declines (08:29).

The discussion then shifts to Alphabet's upcoming earnings report. Frank Holland expresses a nuanced view on Alphabet's ability to maintain market dominance amidst evolving consumer behaviors and potential revenue shifts, emphasizing the importance of management’s strategic communication during the earnings call (21:07). Kate Moore adds that while Big Tech needs to post strong numbers, it is also crucial to observe discretionary stocks and their performance to gauge broader market sentiment (23:08).

Financial Sector and Deregulation

A significant portion of the episode is dedicated to the financial sector, particularly in light of recent deregulation efforts. Joe Terranova discusses Piper Sandler’s perspective on higher beta, lower quality financial stocks and recommends focusing on money center banks like Wells Fargo and JPMorgan for their growth potential and attractive valuations (09:32). Stephanie Link shares her bullish stance on specific financial institutions, citing Wells Fargo's strong performance, buyback programs, and strategic positioning (12:48).

The panel also explores the implications of deregulation on financial services, with Frank Holland explaining how relaxed regulations are fostering an environment conducive to mergers and acquisitions. He notes, “There are tons of those stories everywhere I look in the sector. So I think it's going to continue to work” (15:02). Kate Moore echoes this sentiment, highlighting that deregulation is unlocking capital for M&A and encouraging strategic growth within the sector (19:07).

Political News and Market Impact

The episode briefly touches upon recent political developments, including President Trump's proposals to eliminate capital gains taxes for homeowners and his critiques of Federal Reserve policies. Eamon Jabbers reports on these statements, noting the potential positive impact on the real estate sector and the broader market implications of a possible trade deal with the Philippines (24:20). Joe Terranova comments on the real estate sector, emphasizing the potential for increased inventory and market activity resulting from such tax reforms (26:30).

Specific Stock Performances

The panel reviews notable stock movements, including Dr. Horton’s surprising earnings beat and subsequent stock price surge. Stephanie Link praises Dr. Horton’s execution despite flat order growth, advocating for patience as interest rates are expected to decline, which would further propel the stock (29:22).

In the defense sector, the discussion highlights the contrasting performances of Lockheed Martin and Northrop Grumman. Joe Terranova explains the idiosyncratic factors affecting these stocks, such as procurement cuts impacting Lockheed and favorable budget allocations benefiting Northrop Grumman (31:20). Josh Brown also brings attention to TOAST, a high-growth company showing promising revenue and profitability metrics, signaling potential inclusion in the S&P 500 by year-end (34:54).

Market Trends and "Churn"

Mike Santoli introduces the concept of "churn" in the market, describing it as a period of internal rotation and mechanical mean reversion. Joe Terranova elaborates that this term reflects the natural consolidation within the market, where high-performing stocks like Palantir experience temporary pullbacks amid broader stabilizing trends (41:07). Kate Moore supports this view, emphasizing the importance of focusing on fundamentally strong stocks despite short-term technical fluctuations (43:15).

Final Trades and Strategies

As the episode nears its conclusion, panelists share their latest trading moves. Stephanie Link discusses buying Freeport McMoRan due to favorable copper market conditions, while Frank Holland reports a breakout in Rocket Companies, citing substantial share accumulation and strong revenue growth (43:32, 45:08). Kate Moore mentions her position on volatility as a strategic investment into the end of the third quarter, anticipating market spiciness due to tariff threats and other factors (45:43).

Conclusions and Takeaways

The panel collectively emphasizes the importance of focusing on fundamentally strong sectors and companies, particularly in technology and financial services, while remaining cautious of speculative market movements and volatility. They advocate for a strategic approach to investing, leveraging earnings seasons as buying opportunities and staying resilient amidst internal market rotations.

Key takeaways include:

• Sustainability of the Rally: The ongoing market rally is supported by strong earnings growth and robust economic indicators, particularly in the tech and financial sectors.

• Earnings as Catalysts: Upcoming tech earnings, especially from mega-cap companies like Alphabet, are critical for maintaining market momentum.

• Financial Sector Opportunities: Deregulation is unlocking significant growth and M&A activity within the financial sector, making money center banks attractive investment opportunities.

• Market Volatility and Churn: Short-term pullbacks and internal market rotations (“churn”) present both challenges and buying opportunities, reinforcing the need for a focus on long-term fundamentals.

• Strategic Stock Selection: Investors are encouraged to prioritize stocks with strong earnings potential, solid growth metrics, and favorable market positioning over speculative meme stocks.

Notable Quotes

• Joe Terranova (01:58): “If we're talking about the macro I think it's a pause ultimately that refreshes.”

• Stephanie Link (03:05): “Earnings are going to be better than expected… and earnings are going to get revised higher and that is actually what is going to drive the markets higher.”

• Frank Holland (04:37): “What you want to focus on is the leading stocks in the market… that should keep you on the right side even if we get a 5% pullback.”

• Kate Moore (07:41): “Big Tech is table stakes at this point… what we need to hear is that they're going to continue on our trajectory.”

• Stephanie Link (08:29): “Earnings season is silly season though, because good fundamentals even if they are over owned and the stocks fall, that's your opportunity to buy.”

• Joe Terranova (09:32): “Focus, as Stephanie said, on where you see the good fundamentals in the market.”

Conclusion

Halftime Report's comprehensive analysis offers investors a clear roadmap through the complexities of the current market landscape. By emphasizing the importance of fundamentals, strategic sector focus, and leveraging earnings opportunities, the panel provides actionable insights aimed at navigating both the growth and volatility within today's financial markets.