B (5:07)

Yeah. I should note that the transports today.

C (5:10)

They put it up, Scott.

B (5:11)

They did. They did. They're good. They almost beat. They hear you, they follow you. Nice job, guys. Transports are getting crushed today, okay? I don't want to ignore that, but you know, it's been happening lately and that's why people like Ed Yardeni continue to overweight those names. The industrials have done well. It's hard to look at the tape of the Dow industrials today down more than 1%, down 500 points and say, what's he talking about? But I mean, you guys know what trend has been. It's 50,000 on the Dow. You got there for a reason. And Jason Snipe is buying more Eaton. So that's play on kind of everything we always talk about, right?

D (5:51)

There's no doubt about it, Scott. And I think Josh kind of points out a lot of the points that I think are driving the old economy, right? So it's electrification, these megatrends, electrification, energy transition, infrastructure spending, digitalization. These are all the places that Eaton sits. I bought this stock. I'm relatively new to the stock. I bought it August 22nd. Last year there was a little bit of a fallback. It was kind of in a steady uptrend in the first half of the year. I kind of bought it on some weakness, then it went down. Right. So that obviously doesn't feel good. But this year, in terms of equipment, heavy industrial type of names, you're seeing the trend upwards is up 24% year to date. So we decided to add to our position last week.

B (6:38)

Malcolm, you have no ownership in either of the areas of transports and industrials. You just tell me why. Why are you avoiding that?

E (6:46)

I don't love old economy as much as these guys do. I completely understand the notion that I can't disrupt an airplane out of the sky, can't disrupt earth moving equipment at construction sites and things like that. But I think there's a ton of opportunities being created right now in the software space, in the tech space that are probably being ignored. Some of them are old tech. And I think that's where the opportunities are that I'm more interested in than.

B (7:11)

Kerry got some exposure. Lynn Wab TAC waste connections.

F (7:14)

Yes. So I think it's important to have diversified your portfolio if you are heavily invested in tech and communication services. And we've said that for the last couple of years, even though it hasn't really worked. But let's remember that owning some of these industrials and Wattech, which has been a fantastic start for US and had really strong earnings is sort of suggesting that UNP one of their big customers might be pulling back a little bit on their capital spending this year. The stock has continued to go higher. But the risk with some of the old economy, such as Delta as an example is that maybe they don't make money, they lose money. Maybe the stocks get very expensive or people just sell them because they're extremely volatile stocks. And that has been true through history. You have to be careful about just moving out of growth.

C (8:08)

And I couldn't agree with you more. And a really great, a really great example this week was Coca Cola. So we wrote it up for our best stocks in the market column at CNBC Pro on Monday. And we said, do not buy it. Yes, it's, it's undisruptible. Yes, we understand. That's why it got swept up in this wave of popularity. But at the time we wrote it up was an 85 RSI. So we said, let it cool off. Not that I predicted the earnings. The next day they reported a good quarter. The stock fell 6%. That was your chance to reload. And now here you go, Coke, back to making a new high. We can't just indiscriminately buy stocks because they're not disruptible. Because let's remember, those are the only risks. We have economic risk, right? We have consumer risk. We have risk no matter what stocks we buy. There is not a segment of the market that's not risky. We're talking specifically about disruption, risk this week as an investment community. It's, but it's only one of many risks.

B (9:04)

So Piper Sandler today says, quote, we're witnessing a distinct passing of the torch as sector rotations intensify and capital shifts from growth to cyclical and value names. Now you obviously can see, see the passing of the torch in the performance of many of the Mega Cap names. There's the note. Let's show you the performance at least on a week basis. All right, so Nvidia has had a really nice snapback. Remember when we were, when we were out in California last week, we were going to say to Jensen Huang during the interview that we had with him, man, your Stock's down like 10% in the last few days. And then of course it was up 7% by the time we sat in the chair. So that didn't work. And then, and then the stock on Monday had a big follow through. So it still didn't work. And that's why it's up now 10% over one week. And Microsoft is trying to get something going after virtually doing nothing. But I'll tell you what, look at Amazon, okay? One week Amazon down 11%. Let's look at it live now because it's been down seven straight days into today. The longest losing streak was eight from August of 2019. So we're chasing history in the wrong direction for a stock that over the last year, let's show the last year has done absolutely nothing. It's just disappointed people. There it is, right, that, that shows you what it's done. Now it's down 12% but in calendar year 25 it was a nothing burger was almost exactly a zero. Gaynor, you own Amazon. What's going on here?

C (10:38)

I think when they came out and said we're going to spend $200 billion in CapEx, it caught people by surprise. I know everyone was expecting big capex numbers but this is like in the cartoon when the safe drops on the coyote. You think it's over and then a piano falls. And if you're an investor in this stock there's two things can be true. One, it's been a good bet over the last 30 years to trust what they're doing on capex because eventually the cash flows come through and you just have to believe that they know better. The problem with that is they did not know better. At the rate that they were spending in 2020 and 2021 they hired a million. Too many people spent three years working off that excess and it has not been an enjoyable ride for shareholders. So right now I think there is a very legitimate question. Yes, we know you can spend $200 billion. Are you definitely going to spend it in such a way that by Q3, Q4 you can point to an ROI and say hey, this is making sense.

B (11:39)

I mean people don't believe it. You had the head of web services on literally in the last hour with, with John Ford who obviously asked him about the spend and, and he like everybody else continues to be bullish about it and justifying everybody on the desk owns it. We can go right down the list on what you think about this now. Eight day losing streak, a stock that's done next to nothing over the last at least calendar 25 and is off to a bad start yet again.

F (12:06)

Yeah, I think what we're seeing is this wholesale selling of these stocks either because of Capex or because they just happen to be in software or something that's disruptible. But what's going to happen and what does generally happen is if you take a trillion Dollars or one and a half trillion which has been sold. I mean that's if you add up what's been sold. It's about at that level. You can't just throw that money into let's say Coke and Pepsi.

B (12:35)

Yeah. Or the small cap.

F (12:37)

It would be double the small cap index of all the stocks. So at some point you're going to have a basing out and it could be a month from now and people will come back into these stocks and Amazon may say, may give us some good news and say, you know, we're actually, you know, going to curb that enthusiasm and spend a little bit less because, you know, capital spending on and on and on is never a good sign for stock.

C (13:03)

The partnership with Anthropic is going to become important too though in the second half. So there's a race between Open air and Anthropic to come public and I assume they both. Well, that's going to be meaningful for Amazon.

B (13:14)

Come back at 1. That comment you finished finished on capital spending is never good for stocks. Now I know this time is, is it, is it different this time? These companies would tell you that this spending is justified and it's going to lead to higher free cash flow than Lower, lower initially. But the benefits are going to pay off Malcolm down the road. That's, that's for the most part the argument that Jensen made with us out in California amidst all this consternation about what the spend is.

E (13:47)

So I think that that was true. That was the narrative we were willing to accept and buy for the last three years and suspend our disbelief and buy into it and really love it. And I think what's happening now is the market is starting to pay attention to the fact that at some point you went from asset light to now asset heavy with all of these data centers.

B (14:05)

I want to see too if we can grab that sound bite to you guys, can you work on that? See if we can see if we can wreck that.

E (14:09)

Whether it the other day, whether it appears on your balance sheet or not, you now own the debt.

D (14:14)

Right.

E (14:14)

So matter with its creative financing and special letter ruling from the SEC and everything else, you own that debt for that data center. So now you're capital intensive on the CapEx side. Now you own these heavy assets that need depreciation at some point on that balance sheet. And I think that's what investors are trying to get ahead of right now. Michael Burry raised concern over the depreciation of the chips and the data centers themselves and we kind of waved it off A few months ago. I think it's coming back to a head now. It's not just an Amazon problem, it's all of the hyperscalers that are having the answer for you're now raising debt where we were all excited that you were doing this with free cash flow. So now Google issues a hundred year bond and we're not supposed to get at least a little bit shaken that the idea that throwing $100 billion into the ground in one year is not going to come back to haunt us. And I think that's more what we're seeing. The narrative has shifted.

D (15:03)

Yeah. Now the debt financing is absolutely a major story. And I think to Malcolm and Josh's point, it's like when is that RI ROI coming? Right. So when you, when you're talking about hundreds of billions of dollars being spent again, the plan for this year at the end of 2025 is a $500 billion capex number from the hyperscalers. We'll be well north of that already.

B (15:25)

Right.

D (15:25)

There's no doubt about that. 650 or so. This is a major differential from, from what was planned. So then, then it becomes the AWS re acceleration story is just quieted. No one really cares because we're talking about doubling on the CapEx numbers and where does that go? And then the debt financing story. So I think it's shoot now, ask questions later. The old adage that we always hear about and that's why folks are investing in kind of the picks and shovels.

B (15:51)

Of this was that, I mean I asked, I want to play what I asked Jensen Wong about all these fears about the spending that led into the time that we sat down on Friday. What he makes of it, whether it is justified or not, here's what he said.

C (16:09)

It is appropriate and sustainable. And the reason for that is because all of these companies cash flows are going to start rising. You know, people are comparing it to cash flows. One of those numbers are wrong. It's just the cash flows wrong. Every single company sees the same inflection point and that's why everybody leaning in so hard. I think there's a misunderstanding about how defensive some of this capex is. And I'm not an expert on where every dollar goes. I couldn't itemize it for you, but I would guess this is existential to these platforms. They can't afford to to pull back, not have the capacity needed. And then a corporate customer says well we were standardizing on aws but actually Google is advancing much more quickly and let's let's do some trial workloads there, see how that goes. None of these companies can afford to be the one that can't meet the demand. The demand is obviously there. The other interesting thing is historically when we talk about capex we pick picture in our mind an ROI that looks something like higher unit sales, right? Like oh, they're shipping more of whatever because they put in the capex two years ago. And this is subscription revenue we're talking about it materially. Hang on guys. It materializes in a very different way where yes, there's an roi, but the way in which it comes in, it's not an immediate revenue like all at once. It's like okay, user base base is growing, subscription revenue to that user base growing. And I think that they're all playing defense as well as offense.

F (17:43)

But you know, we do know that Google said they have the same number of headcount as they did three years ago and $120 billion more of revenue.

E (17:53)

So productivity has gone up, right? Employee has gone up again.

F (17:58)

So it's, that's what you're, you know.

B (18:00)

We have Jensen Wong saying hey, this is sustainable, justified. You just trimmed Nvidia. Why?

E (18:08)

More risk management than anything else. Nvidia for the last, I can't remember the exact date you just had on the board, but I think it was Monday. Attracts back to the last few days it's been trading right back up close to its all time high of about 202. And to me this looks like a good place to be doing some risk management and taking some profits because at some point the GPU and the TPU become indistinguishable from each other as far as their capabilities. At some point that's really good for Broadcom, it's really good for Google, it's not as good for Nvidia. And so to me it's not a matter of I don't like the company anymore. I think they'll find the next wave of innovation and get there too. But it looks like a great place to be taking some profits and just spreading those dollars across other opportunities among this SaaS apocalypse that's happening right now, creating much better looking SaaS apocalypse.

B (18:55)

It has been, it really has been that which plays into another move of yours which I'm going to sort of leave as a cliffhanger for a moment. I thought there was an interesting note. If you think about what's happened with software, we'll just show you the IGV which tracks it obviously and it's so Many of these stocks have gotten hammered now. Some are responding this week in a bounce back, but the longer trend has been been ugly to say the least. How about. There's a note today that says it would probably be helpful if software execs bought some of their own stock as a show of good faith in the business model. However, there has not been, according to this source, a single executive level insider open market purchase of software stocks in the past two weeks. Not one. That's interesting.

C (19:43)

Yeah, and I think that speaks to the, I think that speaks to the amount of silver SBC there is in this sector, perhaps more so than any other sector of the economy. The executives own stock in these companies for pennies per share. It's very hard to get them to see an opportunity has been created. Stock price falls from $350 a share to 310. Yes, percentage wise it's a decent sized sell off, but they own the stock for 40 cents. So you're probably, probably only going to see token buys if you see any. And I would just point out, let's not act like software stocks haven't been market leaders for 15 years. They have outpaced almost any other sector you could think of. And throughout the entirety of that rally, and we're talking about compounding at 25% a year for 15 years nobody's been buying. So I don't know that that's a necessary agreement ingredient, but I would agree with that, that note. Because if you're a retail shareholder and you don't understand these things, seeing these guys continue to sell on their, on their plans that are planned in advance, could you, can we at least put a freeze on some of the pre programmed selling? Even if we're not buying, can we stop selling?

B (20:56)

That's a little, well, we do have a little bit of buying at least here in our own little orbit. You bought more service now, Malcolm. So that stock year to date is down 34% week to date, while others have bounced. It has not. It has not.

D (21:12)

Yeah.

B (21:13)

So why are you buying more now?

E (21:14)

So I'm glad that I stayed disciplined on this one and have been averaging my way into it. I've been catching the falling knife as we all say. So I started buying. I called it Peak Pessimism on this name. When it fell all the way to 150, then it fell to 125, I bought some more. Now it's fallen to 100 basically. And I just bought again. And I think that what's being missed right here, most software companies tend to be unprofitable. And we tend to value them based on just a multiple of their revenues, multiple of their sales. In this case. ServiceNow actually has growing revenues 20% or so from their last earnings. They've got growing free cash flow above 30%. There's an actual business here which is being extremely discounted. And so I'm buying it on the premise that all of the good that's baked in there, all the moves into AI, the acquisitions they've made, everything else will eventually start to show itself as value creation and not so much taken away as the street seems to be discounting.

B (22:11)

We've also been telling you every day about the, the roll on effect of the pullback in software hitting different areas than just pure play software. It's private co credit. They've been, they've been hit over the last month. There now has been the brokers over the last few days. Altruist, right. They, they came out with a, a new tool and next thing you know you've got all these financial services stocks, lpl, Ameriprise, Charles Schwab, Raymond James and Stifel and others getting hit pretty hard. We bring it up yet again today because Josh Brown, you know these guys well. So much so that you have partnered with them on various parts of your businesses.

C (23:03)

Yes, I'm a shareholder and Altruist full disclosure. And I'm an advisor to the company as well. And we're a customer. So we use all the major custodians to when our clients send us money, that's where their money is held at the custodian. And then the custodian often provides technology tools. And what Altruist announced is pretty amazing. It's a feature of their in house AI which is called Hazel that goes into tax mode. And literally my advisors and the CFPs who work at my firm can feed our clients tax related information into this ecosystem that of course is very heavily protected. Protected and get insights directly from Hazel telling us exactly what their situation is. And if you don't know much about tax work I can just tell you they are saving people like weeks and months worth of time when they're dealing with high net worth families, business owners. So it spooked lpl, it spooked Schwab, it spooked Raymond James. Maybe it's not completely unfounded. I do think that those reactions were overreactions because we will see this type of technology available in many places. Altruist just happens to be a pioneer and they're very early to a lot of the Tech trends and I think maybe some of those moves are overdone. But the, the importance of what they launched and what other firms are launching, AI tools for advisors should not be overlooked. They absolutely are going to change the economics of the wealth management.

E (24:32)

So can I, can I go out on a bit of a limb and say it is overblown? So when we see the sell off that's happening in the insurance companies because of a piece of Claude code, when we see the sell off and the real estate servicers Now Jones Lang LaSalle is down like 12% today because of a Claude tool. Like all of these different companies selling off 10 plus percent because a piece of code suddenly when is it going to be adopted by the. With, with Claude's cowork it's got to be able to take over your entire machine and log in as you with your credentials. Do you think before you're willing to allow that in your company?

C (25:06)

Sellers, I don't know the answer to this. Nobody will admit that they're selling is the first. I got calls all over Wall Street, I talked to asset managers, I talked. Nobody's like yeah, I'm selling, but somebody is everybody. What do you guys think the sellers are thinking? Are they thinking this is real disruption, these companies are screwed, I got to get out now. Or are they playing chess and saying it doesn't matter if I think this is overblown, I can't have a stock down 20% in the next month because enough other people think I think it's the latter where people are just like, well everyone else is scared so let me sell first. But I'd love to hear what you.

B (25:42)

Guys don't by the way, don't even look at a stock like Microsoft. I don't think we focus on it enough individually in the residual impact of anthropic and the things that they've come out with recently, the you know, Claude for work, etc. Microsoft is down, look at it over a month.

C (26:00)

Yeah, they're worried about co pilots, worried about Excel, they're worried about 30%. What do you guys maybe sellers are thinking?

F (26:07)

The sellers think that they want to get out before the next seller shows.

C (26:11)

So they don't believe it's disruption. They don't believe it's disruption.

F (26:14)

They think it might. Sure it's going to be disruptive. But all of these companies having their business vanish.

E (26:21)

There's been a, there's been a narrative out there for over a year comparing this moment, the circular deals and everything else to that of 2000. So everyone's been on edge saying as soon as something looks sketchy, I got to sell, I got to sell. And I think this is that moment.

B (26:34)

All right, so let's, let's squeeze in a break. So outside the US Trade beat the pants off inside the US last year. We're going to talk about that coming up. While more firms, big ones too, are dumping and pivoting the US for other places we will discuss, there are a few more to tell you about today and what it all means to your money. Next. Hey there.

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B (29:24)

All right, welcome back. Let's talk about the so called cell US trade. Maybe you say it's getting louder in certain areas. Just as a reminder, as I mentioned going to break last year the outside the US trade trounced the inside the US trade by the widest margin in a long period of time. Give you an idea. The Israel ETF up 43% S&P was up 16 and a half, Brazil 41, emerging markets 31, Japan 26 and the Footsie in London up 21. So that gives you at least an idea. Then we heard a week ago or so that blackrock's Rick Reeder was dumping US credit in favor of emerging markets. Now we learn from the Financial Times that PIMCO is pivoting away from US assets as well. According to the firm's cio, which told the FTSE that because of the President's quote, unquote unpredictable policies, it was leading to a multi year diversification away from US assets. Just last week a Mundi, which is Europe's largest asset manager, said it would cut US dollar assets over the coming year and expects the dollar to weaken further. Earlier this week you might remember that headline for the Wall Street Journal, Wall Street's hunt for Cheaper Stocks goes Global. Last spring it was Sell America. Now it's just buy everywhere else. Not saying that America's done. Not sell America, buy everything else. Buy America, but buy everywhere else too. What do you think of this?

C (30:56)

I think it's real. I think it has legs. Don't think it's a one hit wonder as some emerging market and international stock rallies have been over the last 15 years. We build portfolios. We build them with international stocks as a permanent part of the mix. In many years that means you have to say you're sorry. In some years that means not having to say you're sorry. But it's an important thing to do because the US equity market has been so strong that the rest of the world has looked at it and said what are we doing wrong? And they are fixing not all of their problems, but many. Larry Fink's letter to BlackRock shareholders last year was about why did the US recover from the pandemic so much better than everyone else? The depth and breadth and sophistication of our capital markets, the stock market and the bond market led the economic recovery. The other countries didn't just read that and say, oh well, look at what Japan did, the Nikkei. They forced the companies that are listed on that exchange to come up with a plan in writing how they're going to make the their shareholders money, going to buy back stock, we're going to get this stock above its book value. You look around the world, all these different markets working, all of them have put through market reforms to build their capital market strength. And the result of that is people are interested in owning those equities, not just US investors going overseas with a Vanguard ETF local in country institutional investors instead of sending 80% of the of their money to the S and P are now holding some back and investing in their own companies.

F (32:31)

Also. We know that Kevin Wash and Donald Trump have talked about this multiple times. One expects there to be several interest rate cuts in the US that's not necessarily true overseas. So that's one reason. And on Rick Reeder, and maybe he wasn't happy that he didn't get the job, so he dumped a lot.

B (32:49)

This was before that was, this was, this was way before the US dollar.

C (32:52)

Is down 9%, which is a very big factor here too.

E (32:57)

I have, I have an idea for you because we're, we're on this international trade very heavily within My firm, the IDV, the iShares International Select Dividend Fund is that old economy you guys were talking about. It's energy, it's materials, its utilities and that is what's growing internationally right now as everyone else tries to build the infrastructure to support the AI trademark. So worth giving it a look.

B (33:19)

All right, let's get the headlines now with Pippa Stevens. Hi, Pippa.

I (33:22)

Hey, Scott. Four Democratic led states are suing the Trump administration to block it from cutting off roughly $600 million in public health grants. California, Colorado, Illinois and Minnesota argue the cuts are in response to their opposition to the administration's immigration crackdown. Some of the grants could be terminated as early as today. A Health and Human Services spoke spokesperson said in a statement to Reuters the grants do not reflect the agency's priorities. The US reportedly smuggled around 6,000 Starlink terminals to Iran amid the country's deadly crackdown on anti government protesters last month. It came as the regime carried out Iran's longest ever Internet blackout. The Wall Street Journal reports President Trump was aware of the deliveries, but the White House has not commented on the report. And the Kremlin said today Russia has blocked The Meta owned WhatsApp for failing to comply with local law. Officials in Moscow suggested Russians use the state owned messenger Max instead. Critics say Max is likely a surveillance tool. Scott, back to you.

B (34:25)

All right, Pippa. Thank you, Stevens. Coming up, Josh Brown's best stocks in the market. We're talking housing today, and there's only one builder that made the list. We reveal that next.

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B (37:02)

All right, we're back. Josh Brown's best stocks in the market.

C (37:06)

This is my favorite part of the show. Can you imagine that?

B (37:08)

The tease said that you have a spotlight on housing but only shining on one name and that is phm, which is.

C (37:17)

Yeah, Pulte Homes. Look, we have other residential construction constituents on the list but the only home builder builder PHM right now. I think this is the bleeding edge of what's about to happen with these housing stocks. As the Trump the wash Fed takes its position. They don't even need to do a million rate cuts. They can just give the market the impression they're leaning that way and that'll be the trigger. This chart that you're looking at here, number one, the yellow line is 200 day moving average. Very simple. Two tests of that level. It barely kicks. Missed that level twice. Look how quickly the buyers came in. That is exactly what you want to see guys. Give me like a five year if you don't mind. I want to show you a cup and handle for the ages. This is one of the most bullish patterns that you will find. There it is. You see that cup. Then you see the handle forming. Now you see the stock about to take out that top line I think above 140. Next resistance 150 and then there is no resistance. This is the best of the homebuilders right now. Your stop, your risk management here is fairly simple. 200 day moving average about 119. If you see this stock break 120 especially with high volume or violence that's your signal that the trade's not going to work. Fairly small risk to take given the potential upside. I like pulte here. I think it's going to work.

B (38:38)

Okay, what about this gentleman?

D (38:42)

I like dhi. You know affordability obviously is a major theme. You know just, just as Josh said, the jawboning from the, from the Fed is going to be important from wars directionally at least if we can believe that rates are heading lower. Names like Dr. Horton who by the way is already up 15% close to 15% year to date and almost 30% over the last year will work. And I think that that's going to be the opportunity. Of course the 10 year, the steadiness there. We kind of need to see that come down for mortgage rates to come down.

C (39:11)

We're pointing out none of the home builders are disruptible by Claude.

D (39:16)

You got it.

C (39:16)

At least 1000 fits into the paradigm of what's working this year.

B (39:19)

We just can't really get anything going though for the most part in anything related very much to housing.

E (39:26)

Can we talk about 10?

B (39:28)

Well I mean builders that's fine but.

C (39:31)

In general stocks are up year to day. Judge. I mean I got to be honest with you.

E (39:34)

Not, not rocket. I mean I own that one arc. It owns the entire process of the home buying experience and until the 10 year does something positive like nothing in that.

B (39:45)

I guess that's what I was focusing on more of that side market. Well the market's been been a disaster for so long. If you look at what the performance of the home builders last year for a calendar year, what whatever The Home Builder ETF is if you look at it from 25. I guess that's what I'm going. It's more of a longer term trend.

F (40:03)

People aren't moving because they've got their low price Morgans. The people who are buying can't afford.

E (40:07)

The house so well out of firepower too. Right. They were paying people to buy houses last year and that just doesn't work in 2026.

B (40:15)

I think that's fits and starts with, with the movement of rates.

C (40:19)

These stocks just look, can we please this. We're going to break the September high. It's a break. I mean, yeah, yeah, I understand the narrative isn't great but like the stocks are working and they're breaking out right now.

B (40:30)

That's why we have a segment called Josh Brown's Best stocks in the Market. Because ideally the what has been dark for a while has been now lit up.

C (40:38)

That's right. You're welcome, America.

B (40:40)

All right, Santol is next. We're back with our senior markets commentator and overtime co anchor Mike Santoli for his midday word. Midday here I guess my words kind of ugly. What, what, what's yours?

J (41:10)

It is ugly and obviously it's reached kind of the surface of the market. I mean I feel like I need to tap the sign again that says a broader market is not a safer or more rewarding market. It's been very broad. It's been four months of this when you've had the average stock, most stocks going up every day, the advanced decline line making new highs. It should mean the S and P eventually does and maybe not, you know, too long from now. But I do think that just the treacherous action below the surface, this hunt for the next potential perceived disrupted area, I think it just saps conviction in general. Too much internal volatility for the broader market to sidestep it for long. I mentioned in the 9 o' clock hour that the difference between the average 10%, I mean the average move in the individual s and P500 stocks and the index itself is in the 99th percentile over the past month. So sometimes that's an inflection point for the overall market or it just means that some of this excitable action is just going to cause people to reduce risk. So I think that's what we're seeing right now. It doesn't really break any ranges or, or upend any fundamental stories, frankly. But it definitely makes people move their feet a little bit.

B (42:17)

Vix over 20, yeah. Transports down almost 6%. What goes up a lot comes down.

J (42:24)

A lot in that instance for sure. So I do think that, you know, part of this is the market exposing where people were kind of just mechanically rotating into areas that seem like they were going to be, you know, free of any of these. These I think years transports for sure. The run and hot economy trade definitely gets crowded coming into this year. Frankly, the market in general softened up after the existing home sales number. That's when yields cracked and you saw a lot of the cyclicals move lower. I'm not sure if you could say that's that should happen, but that is the way it went. So I just think it's a matter of, you know, you have this one, you know, rock thrown into the pond and the ripples start to go from there.

B (43:03)

All right, I'll see you at three. Thanks, Mike. That's Mike Santoli. We'll see him on closing bell. We'll do the setup after this. Let's do the setup. Some earnings that are front and center. Applied Materials after the bell today. Carrie Firestone, you are in that name. The SMH by the way, I think hit another record high.

F (43:54)

Yeah, exactly. Well, if it's not chips, it better be chips. And this stock we bought last year making year, it's double since then and we think it continued to go higher. I don't think that there's any surprise that the earnings are not going to be great. They've signaled that they expect this fiscal year to be relatively flat. Next year fiscal 27 will be up about 30%. But the business is very strong. I mean they're at capacity and all of these chip manufacturers need their equipment. So that's what driving this. Just as it is the other names in the sector.

B (44:29)

Okay, toast. They're after the bell too. This stock's getting cream today. Down almost 8% every day. It's down 23 and a half percent year to date.

C (44:38)

Give me a, give me like a 30 day chart. I think it went down every day except for one.

B (44:42)

Why?

C (44:43)

Because nobody cares. So they have 150,000 restaurant locations including working with some of the biggest enterprise size customers. Customers like Marriott in the country. I would guess roughly out of that 150,000 restaurant population, approximately 0% will abandon their payment software for something somebody vibe coded in the back of the kitchen on their phone. However, the market does not care. Do not want to be in this name heading into the earnings. I totally understand it. It's a falling knife. I've already caught it twice on the way down. Every average down looks dumber than the one before. But let me just give you the numbers for fun, okay? They grew last quarter, they grew 25% year over year. There was AI then too. Somehow they managed to squeak that out. They are going to do $1.62 billion in revenue this quarter, which would be a 21% growth rate year over year. And analysts are looking for 24 cents a share a year ago, same quarter they did 16. If you think that's a sell, sell it. I'm not going to tell you not to. I have no idea when this stops. I'm only going to tell you. Out of every group of people who might replace their software with AI, this is probably the least likely. And oh, by the way, they're doing tons of AI stuff to bring to the restaurant owner customers. So you tell me when people are going to pay attention and actually care about the fundamentals. I have no idea. I couldn't even guess.

B (46:11)

Alright, we'll take a break. We'll come back and win the finals next.

C (46:22)

All right.

B (46:23)

With the market getting hit pretty good, dow's down almost 650. You probably want to hear from one of this nation's top financial advisors. We have one. Richard Saperstein joins me, three o'.

C (46:35)

Clock.

B (46:35)

He'll be right here on set with me. So perfect timing for that. Adam Parker, Brian Levitt, Stephanie Gill as well, and I hope you'll join me. Then let's do some final trades. Jason, snipe, you first.

D (46:47)

I like AXP here selling off with a lot of the financials. That credit card cap was a little bit of a story, but they've been focusing on the millennials and Gen Z. I think that would be accretive in the long term.

E (46:57)

Now Spotify prices up. Subscriber growth up. I like it.

B (47:02)

Okay, Care, Lindy.

F (47:04)

It's an industrial gas company from Europe, not American. No disruption.

B (47:09)

She got the memo about the green stock on the final trade.

C (47:13)

I'm violating my own rule and pointing out Devon still in its uptrend. Pulling back with the energy sector. I like it.

B (47:19)

All right, good stuff. I'll see you three. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

A (47:34)

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 half time 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 it's tax.

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