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How To Invest in Volatile Markets 4/24/25
00:44:29
Scott Wapner and the Investment Committee debate the state of stocks in this highly volatile market. Plus, Alphabet earnings after the bell tonight, the desk debate how to trade the tech giant. And later, the Committee debate how to trade some stocks on the move today.
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- [00:00]
Scott Wapner
Hey, Fidelity. Can I get a second opinion on stocks in the Fidelity app?
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Josh Brown
With Fidelity, it's easy to get an outside opinion from independent experts in a single score. And then when you're ready, trade US stocks and ETFs with no commissions.
- [00:16]
Scott Wapner
That's right.
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Josh Brown
I am always right.
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Scott Wapner
Investing involves risk, including risk of loss, online US equity trades and ETFs and retail fidelity account sell order assessment fee not included some account types and securities excluded. Details of fidelity.com commissions Fidelity Brokerage Services.
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Bryn Talkington
LLC member NYSE SIPC.
- [00:31]
Jim Laventhal
Our state has changed a lot in the last 140 years. We know because MultiCare has been here.
- [00:39]
Josh Brown
Guided by a single making our communities healthier.
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Jim Laventhal
That comes from making courageous decisions, partnering.
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Josh Brown
With local communities to grow programs and.
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Jim Laventhal
Services, and expanding healthcare access to those.
- [00:53]
Josh Brown
Who need it most.
- [00:55]
Jim Laventhal
Together, we're building a healthier future. Learn more@mycare.org.
- [01:03]
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. All right, Carl, thank you very much. Welcome to THE Halftime Report. I'm Scott Wagner. Front and center this hour, the state of stocks in this still highly volatile market. We'll debate it with the investment committee today. Joining me for the hour, Josh Brown, Jim Laventhalt, Jason Snipe and Bryn talking to we will check the markets. We have a pretty decent day going, as you see green across the board, almost 5,450 on the S&P 500. Dow is trying to get back to 40K and the NASDAQ is the biggest winner thus far. Big evening ahead, obviously, with Alphabet. Josh, I go to you first. You know, we have a little bit of a back and forth about trade headlines. Obviously, we're probably going to have that. I thought the Wall Street Journal's headline today was interesting. Trump meets his match. The markets forget about the trade talks with, you know, this country or that country. It's the markets that have maybe spoken the loudest and moved the needle the most. Eamon Javers yesterday, our own reporter, of course, on the ground noting a, quote, tonal change in the conversation, perhaps around China, a softer tone around the Fed chair. All of it adds up in your mind to what?
- [02:22]
Jason Snipe
Yeah, we, we've been through markets like this before where there's this game and every day the game resets and you have to guess which side is going to win that day. Back during the European crisis, we used to play this game called Risk on Risk Off. And it was this thing where like, if the dollar was up, the yen was up, probably it meant that oil was down, stocks were down, banks would be down the most. And that would be like, Monday is a risk on day, Tuesday's risk. Somebody actually invented ETFs, believe it or not. Remember these? Onn and off. Yeah.
- [02:56]
Ken Griffin
Are they still?
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Jason Snipe
I don't know. There's a lot of zombie ETFs left. But we're doing a new version of this. It's Besant on or Lutnick on. Or like maybe it's Besant Navarro. But this has been documented. Neil Dutta put out a funny chart yesterday. There's a lot of these charts going around where it's saying very explicitly on days where the headlines have tons of Navarro in them, I don't need to look at my quotes. I already know what's up and what's down. So that's the short term. And I think most investors should not try to play that game. People that are trading, people that are swing trading, day trading, have at it, have fun. I know there's some money to be made there. It's not my game. What I'm, what I'm seeing when I look at my stocks is the winners keep winning. And Netflix is a really powerful example of this phenomenon. They crushed earnings, but that was already like the middle of last week. Normally the market moves on. It's like, okay, Netflix was a Friday story. Who cares? But they happen to have done it on Thursday night. The next day the market was closed for good Friday. So you had this delayed reaction on Monday where we reacted to all the upgrades. Monday, Tuesday, today.
- [04:04]
Scott Wapner
Yeah, up 12%.
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Jason Snipe
Today's already, today's already Thursday. This thing won't stop rallying. It's up 40 points today. It's knocking on a $500 billion market cap. I talked about this name going into the earnings and I think that this is a name that really, if you're a long term investor and you're a growth investor, you have exposure to the communication services sector. You look at what's happening with Metta vis a vis some of, some of the lawsuits and some of that stuff. You look at what's happening with the uncertainty around. I spend with Alphabet and it's like this whole litany of problems. And then you look across and it's like, wait a minute. It's the most obvious thing in the world. It's Netflix. Nobody cancels their subscriptions. If they downgrade, they go to ad supported. Netflix actually makes even more money. It's recession resilient. And by the way, that earnings report is already in the past. We don't worry about it for 90 days. Hit the buy button and that's why you get that phenomenon. I'm looking at CrowdStrike acting in the same manner. We talked about this being recession resilient whole sector. So those stories continue to work. Uber is another great example. Expecting 40% growth this year, selling it at 16 multiple. Guess what people do when they are laid off. Uber is a really great option to earn money while they figure out their next chapter. Recession resilient actually started in 2008. A lot of people don't know that. So those are my names that are doing really well and I don't see why that wouldn't continue even on a risk on day like today or a besant. On day where big cap tech is rallying, Semi equipment is rallying, these defensive names are still rallying and I really like that that that set up.
- [05:42]
Scott Wapner
Is that the way that you need to play this market right now? Just lean on to the winners whether they have a defensive tilt or not. How should we play this year?
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Eamon Javers
I absolutely think so. I mean you talk about Netflix and I think about the quarter right where this is the first quarter, they stopped reporting that subs, right. And they, and they talked about the profitability metrics and I think the key, the keystroke for them is the trade down optionality that is there. And to your point there is margin growth even on the lower tier. So there's names like that where I'm not saying they're completely immune to the macro, but these are names that can continue to run. Uber is another example as you mentioned. I think cybersecurity is the big one for me as I think about the new wars that we face and these types of names that are software related, not so much hardware related, that have real opportunity. ServiceNow is another one that's exploding to the upside.
- [06:35]
Scott Wapner
I know we're talking about later leading the S and P. At least it was in the pre market after a beat and there's been a really big conversation around chips and software lately. If you look at what Texas Instruments did and then you can throw up any number of chip stocks today. It doesn't have to be the biggest Nvidia, but you can put that one up. Amd, Micron, Broadcom, the chip equipment names like Josh was talking about lam aim.
- [06:58]
Eamon Javers
At all all moving. And if I just just kind of opine a little bit on ServiceNow, the concern was around Doge right. They have a lot of government contract business and that was kind of the concern going into the quarter. They've obviously blown through that. You know, they beat them. There's a double beat. They, they reiterated the guide. This is a guidance world where it's tough to kind of discern through the macro and they are obviously confident in what lies ahead. So it's names like that and they're an optimizer. Again, if you're looking at trying to control costs and figure out, hey, I don't know what sales look like going forward. These are the type of companies that you employ strategically to help move your companies.
- [07:39]
Ken Griffin
I love this discussion. I just want to echo it on the opposite side of what I do not try to do is trade the markets. I understand some people do that. I will give full credence to Ken Griffin being an extraordinary trader. Okay. Or Mark David Tepper or anybody like that. What I want to point point out to the people who are watching is that that is absolutely the faraway minority of investors out there. More people are successful by buying the high quality companies, the top name in each industry and sticking with it through thick or thin. If you want to be a trader, if you think you're Ken Griffin, God bless you.
- [08:13]
Scott Wapner
Just I don't know, I find that that argument is a little specious in a market like you have now. Like why wouldn't you.
- [08:26]
Ken Griffin
I'll tell you exactly.
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Scott Wapner
Why wouldn't you hyper focus on the best companies in your.
- [08:31]
Ken Griffin
That's exactly what I'm saying. How did I say something that sounded different than that? I said buy the best companies because whatever the market is going to do, if it's going to go down, if you're going to go down another 10, 15%, eventually the markets will recover.
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Scott Wapner
There are a lot of best companies that you would describe as best companies that still going down a bunch.
- [08:49]
Ken Griffin
I totally agree. And they will recover. It's a matter of time. I don't know if It's a month, six months or 12 months, but they will recover.
- [08:56]
Jason Snipe
The eloquent way of saying what you're saying is investors make trades as part of the investing process. Like nobody would say Warren Buffett's a trader, but Warren Buffett places massive trades, buys and sells. Traders are not looking to make investments.
- [09:13]
Ken Griffin
What I'm saying, saying, and I know you agree with me, I think Jason agrees too. If market timing is a fool's errand, more people destroy wealth doing it by far. And I'm not saying this, I don't care if you think I'm smart. I don't care if you think I'm a good investor or a bad investor. I'm experienced. I've been doing this for decades. I have seen more people blow up their wealth by trying to time the markets than I can. And it hurts me when I see it. That's why in this moment, when I hear a lot of people saying trade the markets. You should be in, you should be out, I think that is a way to destroy wealth. You can disagree with me. Absolutely.
- [09:43]
Jason Snipe
Allow me to introduce my new etf Besant on coming coming very soon to be very easy way to do it.
- [09:49]
Scott Wapner
What's your take, Brent?
- [09:51]
Brent Schutte
I think that 2025 is going to end up looking very similar to 2018, maybe on steroids. And that I agree with, with, with what Josh, Jim and Jason said about the resiliency of a lot of companies this year that you wouldn't necessarily expect. When I look at my stocks I own, I mean, Palantir at 104, it's still a really expensive stock. Robinhood, Uber, there's so many great companies that have really bucked the trend. I also think that there's an opportunity this year to accumulate names that you had not been in before because like 2018, which saw eight large drawdowns between 5 and 15%, very large drawdowns frequently throughout the year. This is a great name to accumulate some names in financials. I think we'll talk about it later. Like earlier this year I bought APO and kkr. Those stocks have been decimated, but those are wonderful companies. And so I think investors need to look at this opportunistically as an accumulation year. Obviously I do a lot of sell calling, which has just been a great strategy because call premium is so high. But I do think this, which you guys haven't talked about it today, but this whole, like obsession about recession talk is just so overblown. The US economy is incredibly resilient. 45% of GDP are services. We are not China. We're not these other countries that rely so much actually on like making tennis shoes, what have you. We are a service economy, very resilient. And so I just think that if you have a narrative that we're going to have volatility, the economy will be fine. There's tremendous opportunity this year to pick up new names that you haven't had a chance to own before.
- [11:27]
Scott Wapner
The whole problem with this, this idea of, you know, the recession talk being overblown is everything is a lag. You just don't Know what damage has been done by the trade war? If you listen to a Chipotle which says consumers are already reducing the frequency of their visits due to, due to the consumer concerns about the economy. If you listen to some of the airline commentary, it's only a matter of how bad does it get. The economy is obviously softening. I don't think we're debating that. It's the degree to which it ends up on Chipotle.
- [12:03]
Jason Snipe
This is a really, this is a really good example because this is a stock that's in a 29% drawdown. Reported earnings, earnings not as bad as feared. So it's up a half a percentage, you know. But what do you think this looks like tomorrow when the talk goes back to hawkishness on trade? So the tone has been softening for three days and that's great. And hopefully it sticks. Trump met with all the major retailers on Monday. They spooked him. They told him, you're gonna have empty shelves this summer. You think that's gonna make you look good or bad to the average American who's not playing this Kremlinology game about who's ascending in the White House? So, so the tone softens and that's, that's productive for a couple of days. But here's the Chipotle story. They squeak out a 1 penny beat 29 versus 28. They miss on revenue, 2.88 versus 2.95 expected. The CFO comes on and says tariffs will add 50 basis points to their cost of sales on an ongoing basis. No time limit on that for the duration, for as long as this goes on. And that's just where things stand today. In the second quarter, they're telling you tariffs will hit their cost of sales by 20 basis points. So there's no end in sight. There might be, but for the time being, Chipotle gets hit by a softening consumer demand situation. Foot traffic is down. Less people want to pay $17 for a lukewarm burrito. I can't imagine it, but it's true. And then their cost, their costs go up of operating the store. Stores. Yeah, we're in a services economy. That's a services business. That's emblematic of the problem with this stuff continuing on way past where it already has.
- [13:43]
Scott Wapner
Yeah, I mean, the shipper hotbag Lloyd says 30% of all container shipments from China have been canceled. To your point about, like, if the, if the falling markets and falling consumer sentiment doesn't get the White House's attention straight and center empty shelves, this Summer just might. Right. Because that's kind of the breaking point when consumers are like, all right, this is getting absurd.
- [14:09]
Bryn Talkington
Right.
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Ken Griffin
And we know from the data that retailers and manufacturers have stocked up ahead of time. Right. Front ran the tariffs.
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Scott Wapner
Right. Consumers to some degree have tried to front run it as well.
- [14:21]
Ken Griffin
Which by the way, even if you solve this tomorrow, there's probably been some pull forward from the second half of this year. But the main point here is the longer this goes on, the longer the damage is done or the more damage is done and the longer it takes to recover. The flip side of that is if you stop this nonsense, if you get this, get this tariffs down to maybe just the universal 10% before say June, then everybody can start the Trans Pacific flows again. By the way. Think about this, Scott. The longer this goes on, you know, we're going to have that back up at the ports of Los Angeles and Long beach again.
- [14:53]
Scott Wapner
I mean already talking, they're already talking about that happening now. Bryn, you have, you know, Deutsche banks out today. Everybody pretty much has cut their target for the year. They have a still, you know, optimistic one from where we are now. They're 6150. They were at 7K. So you know, they've dialed it back considerably. They take their earnings estimates down considerably. What do you think about that idea? Just kind of getting a little more I guess, real on what we can actually do from here forward.
- [15:25]
Brent Schutte
Yeah, it's obviously we have different scenarios that you have to play out but if you just go to the end of the year, it seems like this would not be a year that stocks are going to make all time highs. Right. It just seems that's very plausible. You can end the year negative from a stock market performance. And that's why I think this is an accumulation year because there is this self fulfilling prophecy where I get consumer sentiment is negative and that can flip on a dime. But CEO sentiment I don't think does flip on a dime. And so that's where if you start getting the self filling prophecy where CEOs are pulling back and you hear like a satya Nadella, they're still spending 80 billion. But how they're spending it and what they're doing, he talks about, well, there's economic uncertainty. So hey, we're going to pull back some. And so I do think it's hard for these analysts that are trying to predict where the markets are going to end. I could easily see a negative here. We saw -4% in 2018. Why, why can't that happen? Again, because I don't think we're going to get the Fed come in and just you know, cut five times, maybe one or two. But I just think we're, we're dealt with a different set of ingredients so we could have a negative year and that's fine. Will all survive.
- [16:33]
Scott Wapner
What's Alphabet going to. The importance of it, Josh, tonight is what you're recently out of the name as of I think maybe it was a week ago today as a matter of fact or right around that period of time. Good read on spend, there's no question about that. Good read on the economy. All because of advertising.
- [16:52]
Jason Snipe
Yeah, Google is important because it is the number one or number two local, largest advertising business in the world, certainly United States depending on which metric you're focused on. But it's a read through to every part of the consumer economy. Travel had become a really huge portion of Google revenue in the post pandemic period. So that's definitely something that we'll watch whether we own the stock or not. Just to kind of get a little bit of a heat check. They're expected to report 89.16 billion in revenue which would be an 11% year over year jump versus last year. If they can hit that hurdle, I think the Stock should be okay. 24.68 billion in net income, which is $2 a share. That would be up from a$89 a year earlier. Again, if they hit that number, the stock should be okay. It's a very, very inexpensive stock, not just relative to the other mag 7 but on an absolute basis. Not the reason I sold it. I don't think it's expensive. I think they have other issues. So they just had a ruling go against them saying that search is an illegal monopoly. They're going to battle on that front legally, but they're also battling on that front for user attention because perplexity is not going away. I saw the guy this morning on Squawk, he was great. Search is a huge priority now at Meta. It's a huge priority at obviously OpenAI. And Google's never really had competition competitors before it came public in 2004. They already won the search wars before they they IPO'd. This is a different situation now. The bulls would say okay, I get it. More competition, unclear who's gonna win an AI. That's why there's an opportunity created. That's why I could buy this thing at 15 times earnings or whatever, go for it. It's not, I don't buy value tech. It's not my game, but I get it. There might be a big opportunity. I think this is an important report for a lot of reasons and I'll be paying attention tonight. Even though I have no position currently.
- [18:46]
Scott Wapner
You guys do. Yeah.
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Eamon Javers
And I think the concern for me is obvious. Obviously we've seen Timo and Sheehan advertising spending slowing down. You know, Google Ads. 21% of Google Ad revenue is retail.
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Bryn Talkington
Right.
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Eamon Javers
So when we think about whether, forget about a recession, if just a slowdown, we know ad spend will slow down. So that's obviously a concern for me. The other is capex. What's going on with Capex? What's. What is the true number going to be? I think the bright spot for me as it relates to Google is, is YouTube and obviously Google cloud, which is starting to increase profitability there. So that for me is what I'll be watching closely.
- [19:21]
Scott Wapner
But not necessarily in that order. I just want to make sure.
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Eamon Javers
No, not necessarily that over, right? No, not at all.
- [19:25]
Jason Snipe
Not at all.
- [19:26]
Scott Wapner
The latter is the one that is. Is most important I think to this market you got right. In terms of the Capex cloud revenue.
- [19:33]
Jason Snipe
Cloud revenue growth is the most important. The bogey is 25%. That would be $12 billion in cloud revenue for Q1. If they don't hit that, the stock's going lower. Now keep in mind that's a 25% growth rate, which seems great. Unfortunately last quarter was 30%. A year ago was 40%. YouTube's important, also an ad business. 11% revenue growth is what's expected. That would be like 8 billion if the YouTube number is good. If the cloud is good, I think we could overlook weakness in like Chinese e commerce web. I think like, I think we can get past it.
- [20:11]
Brent Schutte
Right.
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Jason Snipe
But again, there's a lot of question.
- [20:13]
Eamon Javers
Marks and I think it's a fair point even to mention that Google is value tech. I mean 18%, 18 trading at 18 times forward, but only a 7% growth rate.
- [20:23]
Ken Griffin
Man, how the mighty are fallen is Value Tech. I get it. Listen, great points made right in your wheelhouse.
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Scott Wapner
I mean the argument has been made for the longest time that it, it is the. Has been the epitome of value big tech. No question about that.
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Jason Snipe
Which is why it could work relative.
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Scott Wapner
To the, the valuations of the other names. It's always been among the lowest val along with, with meta.
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Ken Griffin
Yeah, I just. Let me say two things. One, I want to make sure that we're not really, you know, pounding the heck out of it in terms of the labels that we're putting on it. Five year track record on stock 20%. Three year track record, annualized 10%. That was an annualized number. It goes through periods where it wanes. We know that. Absolutely. This for me, I'm not going to add to what Jason and Josh have already said. They've covered the major points. But going back to where I was at the start of the show, if you're going to build an all weather portfolio, the we don't know if the next 10% on the S&P 500 is up 10%. Down 10%, I want Alphabet in there. And look, I'm not taking a shot at you, Josh. You could take a shot at me and say, well Jimmy, you don't own Meta. Fine, okay, I don't own everything, but I do own a lot of quality like Alphabet.
- [21:32]
Scott Wapner
I'm comfortable with you worried about the CapEx side of this equation for the.
- [21:36]
Ken Griffin
Big picture of the market, for the economy, the global economy. I'm not going to say I'm worried.
- [21:41]
Scott Wapner
Look, I'm not talking about the global economy about relative to the AI trade as it relates to Alphabet.
- [21:47]
Ken Griffin
I am paying close attention to it. Close attention to it. We have this teetering going back and forth whether it's Alphabet, whether it's Amazon, whether it's Microsoft saying, confirming their capex plans and then you get once a week a headline, oh, Amazon's pulling back. Microsoft isn't doing this data center lease. So you bet you I'm paying attention to it.
- [22:05]
Jason Snipe
That's the thing I'm least worried about. Good. Think they'll affirm Capex because. Because the narrative on the street around Gemini and Google's AI ambitions is that it's make or break for the company. It's existential. It's not nice to have. If they don't win, if they're not among the three top AI plays on the street, then what is it really? So that's the part that I think is probably the thing that we could worry least about. They're going to come out and say we're throwing in talent AI because it's just not going to happen. They may quietly spend less than we thought they would, but you won't know about it.
- [22:40]
Ken Griffin
Let's buy more Nvidia then.
- [22:42]
Scott Wapner
Well, I mentioned that stock, but also, you know, price targets today since we're talking about mega caps. Metta Target cut to 650@ Deutsche. Meta reiterated top Internet pick at Citi. It was also, by the way, reiterated a buy at Deutsche. No one's getting all you know, bared up on those kinds of names. Even though Goldman takes Microsoft's target down Brin today they reiterate buy, they go to 450 from 500. It's just I think a move by everybody to just be maybe a little more realistic to where stocks can potentially go if this trade war persists in the manner it does now, a headline, a quote unquote, deal deals, plural, anything can change this.
- [23:29]
Brent Schutte
Right? And so I think that once again, analysts follow price. The prices are falling. So analysts are going to pull down their price. They have to, they have to just be cognizant of the market we're in. I think Microsoft, it's interesting, they're looking for revenue and earnings to grow about 11 and 10%. So decent earnings growth. Satya yesterday had a great post about how he uses uses Copilot and the agents and you know, he's using notebooks. So they're really obviously trying to push Copilot, show users how to do it. We'll see what happens. But I think like Google, Microsoft, it's going to be about Azure. And I think the street expects about 31% growth rate in Azure. If it comes in at 29 or 28, that will definitely be a negative for the stock. It's also interesting, you know, where these big multi, big tech companies have huge international business. Microsoft's about 52% in the US 48% overseas. So I know the dollar has been weak. But I will say that, you know, the strong $net net narrative has been real where these companies are like on a constant currency basis. So I think if we continue to have a weak dollar and that becomes more of a stable place that is incremental for these tech stocks that have so much exposure overseas.
- [24:41]
Scott Wapner
Yeah, good point. All right, let's take a quick break. We come back, we have more committee stocks that are on the move today, including one of the biggest losers on the Dow right now. Jason's in it. We debate it next.
- [24:56]
Bryn Talkington
Introducing CNBC plus the new streaming platform from the number one source in business news. Watch live or on demand. Access any market, anytime, anywhere. Start Streaming. Go to cnbc.com stream now.
- [25:14]
Scott Wapner
All right. Welcome back. We'd like to call your attention once again to CNBC's newest subscription streaming product, CNBC Plus. You can stream Halftime Report all of your favorite CNBC shows anytime, anywhere. Also on demand, you can see the data feed on your screen. That's how it looks right now. So you get stock information, you get the latest news and headlines that driving this market as well. Let's get some stocks on the move now. We start with Merck. Earnings beat. They cut their first year profit outlook due to tariffs. The stock is a marginal loser today. Jason Snipe owns it.
- [25:45]
Eamon Javers
So I'm actually not in Merck.
- [25:47]
Scott Wapner
You're not, but yeah. Oh, I'm sorry, my bad. You own the ibb?
- [25:51]
Eamon Javers
I do own ibb, yeah. But obviously, I mean this is, this is kind of just in the array in that, that arena of health care and obviously the tariff concerns, I mean $200 million expected tariff hit obviously is, is a, is a hit to the stock and a hit to guidance. So when I look at names in that space, I mean, Gilead has been one of the names that has worked, not, hasn't worked as well recently. But there's just an overhang in the space just related to some of the macro.
- [26:18]
Scott Wapner
I got. You fumbled that. Sorry about Procter and Gamble. EPS cut earnings outlook due to tariffs. I mean, you're going to hear that a million times. Do you own Procter and Gamble? I do own Pro.
- [26:29]
Eamon Javers
Procter and Gamble. So for me, as, as it relates to a slowdown, clearly there has been a change in consumer behavior. And with staples like Procter and Gamble that are expensive by the way, and are not immune to obviously the macro background, these are stocks that do get hurt in the near term. So for me it wasn't a huge miss, you know, on the top line. They did beat on, on, on earnings. So I'm just going to kind of continue to watch its name and see how it develops over the next couple quarters.
- [26:57]
Scott Wapner
What about PG and E? They reaffirmed their guide, Jim?
- [27:01]
Ken Griffin
Yeah, just a solid utility, but it is laboring under the, under the shadow of what happened in Los Angeles. They were not responsible for that fire, but there's still a question about whether Southern Cal California Edison is responsible. If it turns out that was sparked by utilities, all the utilities, including people, PG and E, are going to have to make contributions to the insurance fund. So that's what everybody in PG and E is waiting to find out.
- [27:26]
Scott Wapner
Bryn. I'm looking at The Uranium Miners ETF coming off its best day since April 9th. Fourth positive day in five. You still in that?
- [27:39]
Brent Schutte
I'm still in it. It's the fourth positive day, but I mean it's down 30% the last year. All this talk about we're going to need more nuclear. China has no problem building nuclear plants about every 18 months. But because of the bureaucracy here, it's going to take us seven to eight years. So we'll see. This is on my chopping block. I've owned it for a while. It goes in fits and starts. So it's got a little bit of a bed. If maybe, if it moves a little bit higher, I may, I may punt this name just because there's so many other names. I feel like we're going to go higher.
- [28:09]
Scott Wapner
Yeah. You know what we will do? Adobe, they're going to launch a mobile app for, for AI image generation as OpenAI steps up its rivalry there. Jimmy, you on that stock? Two stocks up a little bit today.
- [28:19]
Ken Griffin
Yeah, but I mean this, this is a value tech stock and I don't think it should be value, but it is what it is. I've been in it probably about a year now. It has woefully underperformed at the end of the day. I look at a company that is growing its top line by high single digits in some years over 10% and is projected to grow earnings per share at around 15%. You're getting this at a 17 times forward multiple. I think it is way undervalued. I'm sticking with it.
- [28:44]
Scott Wapner
Okay. Coming up we'll do calls the day first though, we go to Silvana. And now with the headlines for us today. Hi Silvana.
- [28:49]
Jim Laventhal
Hey Scott. Good afternoon. The U.S. will demand Russia accept Ukraine's right to have its own army and defense industry. Bloomberg reporting. Today U.S. envoy Steve Witkoff is expected to bring up the issue with Russian President Vladimir Putin who and when they meet again as part of a peace deal between Russia and Ukraine. The State Department and Woodcock didn't immediately respond for comment. There's been an arrest over the massive wildfire burning in southern New Jersey. A 19 year old ocean Township resident was arrested and charged with aggravated arson. Police say the teen set wooden pallets on fire and left the area without extinguishing the fire. The about 15,000 acres have burned so far, forcing thousands to temporarily evacuate. And the FDA is suspending a quality control program for testing milk and other dairy products due to layoffs in its food safety and nutrition division. Now that's according to a Reuters review of an internal email to staffers. An HHS spokesperson tells Reuters the lab was already set to be decommissioned and although testing will be paused during a transition, it will continue. Half time report. We'll be right back.
- [30:05]
Bryn Talkington
CNBC News Update is sponsored by Morgan Stanley where old school hard work means bold new thinking. Introducing cnbc, the new streaming platform from the number one source in business news. Watch live or on demand. Access any market anytime, anywhere. Start streaming. Go to cnbc.com/stream. Now.
- [30:47]
Scott Wapner
We mentioned headlights can come at any time. In fact, we do have some from the White House. The president speaking moments ago about the trade war. Eamon Javors there. EAMON SCOTT that's right.
- [30:56]
I
The president is meeting with the Prime Minister of Norway at the White House at this hour and just moments ago he made some comments about China trade in this bizarre back and forth standoff between the US And Chinese government in which the Chinese government insists there are no trade talks taking place. The president has said there are active trade talks taking place. Here's what he said just moments ago.
- [31:17]
Jason Snipe
They had a meeting this morning. So I can tell you it doesn't matter who is. We may reveal it later. But they had meetings this morning and we've been meeting with China.
- [31:29]
I
So the president there saying they had meetings this morning with China saying he won't reveal who they is, he may reveal that later. So sort of a mystery here, Scott, as to who's meeting with who. The president insisting there was in fact a meeting but he can't say who it was who met with the Chinese side. Now it's possible that refers to some kind of, you know, coordination on the intelligence lane, but it's just not at all clear what the president was talking about there. Scott we'll have to figure it out.
- [31:59]
Scott Wapner
Yeah, yeah, I feel for you trying to figure out what what all that means. Eamon thank you for, for the headline. Nonetheless, Eamon Jabbers at the White House as you see market may be trying to sense out some optimism. Obviously moving low.
- [32:13]
Jason Snipe
We're not moving lower on but look.
- [32:16]
Scott Wapner
And that's part of the issue here too is that the risk it seems had has flipped from risk to the downside. When the market was all upset, when the bond market was screaming, when the dollar was acting the way it was to now the risk feels like it's to the upside because if it is true that this market move has got gotten the White House's attention firmly and squarely and the commentary from the CEOs, the big box CEOs got the white House's attention firmly and squarely, then any incremental headline is liable to drive the market in one direction, in one direction only. And the one you're looking at your screen where the S and P is at the highs of the day good for nearly 100 points now.
- [32:58]
Ken Griffin
And remember the starting point now is a lot lower than it was three weeks ago. We are certainly going to do this back and forth. I Mean, we've been doing it for weeks. And I remember two weeks ago, Scott, the Friday after the pause on tariffs, we were talking about the pain trade is higher. Go back to Monday of this week, the pain trade was clearly lower. Now it's higher again. What matters in all of this is where we are 12% off of the high. I mean, that's a different starting point than where we were just two months ago.
- [33:26]
Jason Snipe
I think price sets the mood and not vice versa. So we're having this conversation about a back and forth between the President and China. China says there's no negotiations, the President says there is. Everybody's pretty sanguine about it because the S and P is up like 2%. Nasdaq's up. We're coming off 3, 2, 2 up days going into this. So like, everyone's like, yeah, I guess it is what it is. If we were down 700 points in the Dow and the Nasdaq were having one of its negative 3% puke days, nobody would be talking about that. China, US back and forth as calmly as we are. So I think it's really like, what's the backdrop of the market? And then let's like draw our inferences about the ongoing tariff drama from that. It's not vice versa where something happens. And then, right. Only on really big consequential days can we say that the rhetoric is driving prices. Last week, the week before, it was different. Last week, the week before, it was like tape bomb bang market reaction. Now it's like, should we react? I don't know. Stocks are green, Apple's up, I guess, who cares? That's, that's a really weird place to be in. But that's where we are, Brent.
- [34:38]
Scott Wapner
I mean, we are though, you know, obviously starved for good headlines and dying to hear positive outcomes on whatever talks in whatever place with whoever the day is, the market is ready for something to happen.
- [34:55]
Brent Schutte
But I do think we're also getting a little bit anesthetized because I don't think this is going to end quickly. Right. We have 90 days, which I think ends up to be around July 4th, which probably isn't a mistake. And so I think we're going to stay in this volatility, but we are absorbing the, and becoming anesthetized ties to this, the treasury market. I feel what happened with the treasury market, there's so much leverage with hedge fund traders, etc. That we're definitely not positioned very levered On August, on April 2, that is unwind, unwound, and so I think as long as the treasury market remains calm and moves in the right direction, earnings have been pretty good. Obviously there's scenario analysis. I think this is more a nest becoming anesthetized to the news than anything else. Obviously, we're always having chalk talks with China. You know, China can say whatever they want. I absolutely believe Trump and he's saying we're having talks. Who's having them? It doesn't really matter. This is going to take a long time because China is about national security. We're not just going to get some trade agreement with China overnight because it's very complicated because they keep stealing our data, etc. And so I think you'll get some other wins, maybe with Norway. I guess we have issues there, but I think this is here to stay.
- [36:04]
Scott Wapner
All right, so Dow's back above 40K. We'll certainly watch it. Stocks across the board at the highs of the day. We'll take a break. Santoli's on the other side. All right, we are back. Senior markets commentator Mike Santoli is here for his midday word. It really feels like, you know, anything incrementally positive is just going to drive this market in the direction in which it's going. Now, as you heard from Eamon and you saw on your screen for now.
- [36:51]
J
Yes, in this range and we are at the very top of it, you know, the high for the day on April 3rd in the S&P was 5499. It couldn't be any more clear. There's a line across 5,500. So keep in mind that's another 2 or 3% above that to where we closed on the day the tariffs were announced, 5,670. So in this realm, it's all about which way did they turn the dial, escalator de escalate. What the market truly would love is surrender, like unilateral disarmament. Let's forget this happen. It's not going to get that. So we have to read the gestures of, you know, are we pretending there's more talks than there? Are we trying to find a path to declare some kind of a victory? And the market's willing to sort of price that in the short term, but only because we're coming off a super oversold level. What I'm watching is the evidence of most stocks taking this opportunity to rebuild. You have 80% of volume to the upside again to today. A lot of those signals that suggest you get these succession of broad rallies and it means good things for a potential bottom are Close but not quite firing yet. So I think that's the, that's the game we're playing right now.
- [37:56]
Scott Wapner
How are you feeling about Alphabet this afternoon? What it means in the bigger context?
- [38:00]
J
It's a little bit of its own animal as you guys were talking about, as opposed to just being kind of a Pure bellwether for Mag 7 or broader tech. The stock is cheap. Is it cheap for a reason, is it not? I've been, I think more encouraged and discouraged by the stock reactions to most earnings not because they're all been positive, but because it does. The markets are pretending like it didn't expect any of this in general. So I feel like that's a net positive. But you string from one to the next. In other words, it's not like Alphabet's reaction is going to tell us a ton about, you know, Amazon next week or something like that. But you know, little baby steps in the software group. Taking off today with service now we'll see if that's a one day refresh or something more.
- [38:41]
Scott Wapner
Yeah, chips having a nice day too. I'll see in a little bit on closing belts. Mike's in totally. Coming up, the bitcoin breakout. We'll talk more about this week's big rally. Find out how the committee is playing it from here next.
- [39:04]
Jason Snipe
Foreign.
- [39:11]
Scott Wapner
Welcome back. Bitcoin rallying this week, as you probably know, on pace for one of its best weeks of this young year. Brent, talking to. You own the grayscale Ethereum ETF and shares of the ibit, correct?
- [39:26]
Brent Schutte
Yep, I own this. Long term, I think that you could see after gold's parabolic move that we've seen more of a trader speculator taking some chips off the table and moving into, moving into Ibid or Bitcoin. I mean Bitcoin's flat for the year. I do think the big change of the next few years is between Paul Atkins at the sec, David Sachs, the sovereign wealth fund. I think from a regulatory framework it's going to be a 180. And so I think we're going to get some smart, smart regulatory framework around digital assets, assets in general which should be, should be a positive catalyst over the next few years for the asset class.
- [40:03]
Scott Wapner
You start in Josh, Coin anytime soon. I mean it's working for some.
- [40:07]
Jason Snipe
No, no, there won't be, there won't be, there won't be any vanity coin for me. I think the most interesting thing about Bitcoin is that if your pitch to your clients for why you were including it in an asset allocation which is something that we did right at the last top in 2021. But it's fine if your pitch was this is non correlated. So this asset will zig while your other assets zag. And when you do your rebalancing, you'll buy it low and then. All right, fine, that didn't work while it was trading with the Nasdaq both up and down. The most interesting thing that's happened over the last week or two is that it's decoupled from the Nasdaq, although not today, and it started to trade with gold and I think so if you said yes, we should have a 1% bitcoin sleeve because it's not stocks but it has the potential for returns. That's actually what you really want to see. You want to see it go up while your other holdings go down. And then you could say, look, I have a non correlated asset. So that's something new. And we'll keep following it and we'll keep watching that.
- [41:09]
Scott Wapner
Speaking of, you know, bitcoin crypto Robinhood, there was a call on that Brin today. The stock you own reiterated outperform at Mizuho. They raised their estimates. What do you think of it here?
- [41:21]
Brent Schutte
This platform just continues to execute their earnings come out next week. They're going to look for 48% revenue growth, 52% earnings growth. It continues to be one of the top apps on Apple on the Apple App Store. I just think Vlad and team, they've grown up. Stocks done very well last year. It's done very well, very well this year. And so this to the beginning of the show where Josh is talking about stocks that are working. This stock is working. I think if you want to trade it, you know, 36 to 50 has been the trading range so far this year. We'll see if we can get above that during earnings. But I think this is a great name to own. You can sell calls. It has great call premium as well.
- [42:00]
Jason Snipe
Brinswide on Robinhood. This is on the best stocks in the market list. And notably it did not fall off during the month of April with so many high growth names broke down. It never closed below its 200 day. It's been one of the strongest names and that's that philosophy because look, the market is now recovering and this is leading the charge. You didn't have to go buy the hardest hit stock to get the benefit of this comeback. Robinhood has been strong. I have this thesis on that. I don't own it because I'm an idiot. I have this Thesis on the name which where actually volatility attracts more activity amongst that age Cohort. They have 30 million users in the average age is 30. Those people are attracted to market crashes and high Vix and all types of price action in both directions. It's more like a gaming app than anything else when you think about it in a correction. So I think this stock is both defensive and offense on offensive. I wish I owned it.
- [42:58]
Scott Wapner
All right, we have more just after this. Let's talk about this call from Goldman about Goldman. It's from Wells Fargo. They reiterate Goldman Sachs is overweight. They call it one of the best banks at investing for organic growth. I bring it up because there was another call today from Deutsche bank saying that the financials have bottomed. You want to take the Goldman call first and then we can broaden it out to the space.
- [43:27]
Eamon Javers
No, listen, I think as it relates to Goldman and obviously came out of the gate strong. Right. And the financials have traded down due to some of the macro. But in this last quarter obviously trading revenue was way up. That's due to all the volatility that we've seen as it relates to IB and IB guide. It's all about the tariff uncertainty and I think that that's obviously what the concern is. But they announced it 40, $40 billion buyback and the IB backlog did rise in Q1. So I think that's accretive for the longer term into the second half and potentially into 2020.
- [43:59]
Scott Wapner
Nice move for everybody today. Goldman highs of the day. B of A Citi, jpm, Morgan Stanley. Everybody's green. We'll do finals next big interview coming up today. Closing bell. It's an exclusive Vista Equity Partners founder, chairman and CEO Robert Smith. We'll talk about the state of enterprise software. That's their bread and butter. We'll talk about private equity. We'll talk about the markets, this trade war and what Robert Smith sees going from here. Hope you'll join me then. 3:00 Eastern Time. Bryn. Final trade is what?
- [44:34]
Brent Schutte
Speaking of private equity, kkr.
- [44:38]
Scott Wapner
Okay, I couldn't hear that, but I hope everybody else did. Jason Palo Alto.
- [44:44]
Eamon Javers
I think that platform strategy starting to really work here.
- [44:47]
Ken Griffin
Applied material. Good, good. Report from Lame Research.
- [44:50]
Jason Snipe
Uber is ripping on this Volkswagen partnership. Volkswagen is the second largest auto manufacturer by sales on planet Earth. They will be deploying exclusively with Uber. Big news. Stocks going nuts.
- [45:02]
Scott Wapner
You said. You said lame research. You meant lam research.
- [45:04]
Eamon Javers
Right?
- [45:05]
Ken Griffin
I really say lame.
- [45:06]
Scott Wapner
You did.
- [45:06]
Ken Griffin
That hurts it.
- [45:07]
Scott Wapner
I'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.
- [45:23]
Josh Brown
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 introducing CNBC.
- [46:04]
Bryn Talkington
Plus the new streaming platform from the number one source in business news. Watch live or on demand. Access any market, anytime, anywhere. Start Streaming. Go to cnbc.com stream now.