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Halftime Report
How to Trade Around the Hot Jobs Report 2/11/26
00:44:09
Scott Wapner and the Investment Committee debate how to play the hot jobs report pushing stocks higher. Plus, the desk share their latest portfolio moves. And later, we get to the Setup on two Committee names reporting earnings tonight. Investment Committee Disclosures
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- [00:00]
Julianne Moore
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. EDWARD Jones, Member, SIPC Comcast Business helps.
- [00:32]
Scott Wapner
Retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering, quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business, powering possibilities. Restrictions apply. 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, Cube, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. Well, lower stocks after that better than expected jobs report. Yields are higher, rate cut hopes are lower. We'll trade all of it with the investment committee. Joining me for the hour today, Joe Terranova, Carrie Firestone, Jenny Harrington and Brian Belsky. All right, so we been around the way a little bit in the markets, but we are settled lower across the board here, slightly for the S and P, slightly for the Dow, a little bit more for the Russell again on that rate move higher. So you know, our stocks lower because you put the rate cut hopes on the back burner. Are they lower because rates go up? I mean, Beth Hammock, yesterday, the Cleveland Fed press was like, I think we're going to wait a bit. We need to be patient on rates. Don't expect much anytime soon. What do you think?
- [02:04]
Joe Terranova
I think that's a question that gets answered on a secular perspective, not really on a cyclical perspective. I think what today's jobs report did is it validates what I said yesterday. Bond market volatility is calm. That's good for risk assets. As far as what's troubling the market today, I think it's a little bit of a rollover in crypto.
- [02:24]
Scott Wapner
Trouble quotes, obviously, right. S and P is flat, right?
- [02:27]
Joe Terranova
Exactly. A little bit of a pullback from where we were yesterday, the enthusiasm we had for it. But you got a little bit of a rollover in crypto, the momentum names and software. So software Had a nice run the last couple of days and it looks like software is kind of rolling over a little bit. We'll see what happens from there.
- [02:43]
Scott Wapner
So Jenny, you know, Bespoke puts out this, this note for the first time in its history, The S&P 500 went from overbought to oversold and back to overbought in a week or less. It speaks to kind of how frazzled the last week of trading has felt.
- [03:01]
Jenny Harrington
Yeah. And I think the only way you can contend with that saying is to, is to push out your time horizon. And I think if you're, if you're an investor who's investing for one year, three years, five years, 10 years, the frazzle and the insanity of last week has a lot less negative impact on you because weeks like last week, they can make you behave very poorly. They can make you make very stupid, panic stricken decisions that have long term negative impacts on your portfolio. But if you take the approach that I do, where you say I tune out the short term noise, I focus on the horizon, I know where this company is going. I'm going to focus on valuation. Even if for say three years or five years, valuations don't matter. Ultimately they do. Then if you can focus that way, it helps you keep your wits about you. So maybe if you are a shorter term oriented investor or a trader, maybe when you see it get this crazy, just pretend to be long term for that week or two.
- [03:52]
Scott Wapner
Yeah, well, or maybe even longer than that. You know, Carrie, Tony Fascarello over at Goldman Sachs today says, I can't recall a time that was this noisy, this high velocity, this wide open. Others say they can't recall a time that was this expensive. David Einhorn was just on says, I think this is the most expensive market that we've been in. Says the Fed's going to, the Fed is going to cut, quote, a whole bunch of times, many, many more than is currently priced into the market. What do you make of both of those gentlemen sort of opining on where we are?
- [04:28]
Carrie Firestone
Oh, gosh. Well, David Einhorn is a very smart guy and he doesn't speak so Pascarello, very smart. So I would say there's pieces of what they both said that are true. Yes, the market is exp. You can't deny that fact. There are many reasons that it's expensive. One of them is because there aren't as many stocks to buy. I mean, we talk about shrinking market cap and that inflates the value of everything. And earnings have been good coming out of COVID we're still having the post Covid high to some extent. Is there a reason to be particularly concerned? I would say that's a more important factor. What should we be most concerned about? Well, if, if we're not going to have the kind of slowdown or soft is growth period and employment is strong and inflation is also hot, I think.
- [05:17]
Scott Wapner
But it isn't. Right. But it is.
- [05:19]
Carrie Firestone
We don't, we don't know for sure. I mean, the market is skittish.
- [05:22]
Scott Wapner
Well, we know now. We do know now. I mean, if you want to say, well, well, we don't know if it's going to start ticking higher again. I mean, that's fair. But we don't know, you know, what the, what the weather is going to be a week from.
- [05:35]
Carrie Firestone
Correct. But we have earnings that are growing nicely but not great.
- [05:39]
Scott Wapner
I mean, exceeding patients, they're, they're way exceeding expectations. Ed Yardeni says their earnings season is among the best ever.
- [05:48]
Carrie Firestone
I understand that. But relative to. It's always supposed to. They're ahead of expectations aggregate six months.
- [05:55]
Jenny Harrington
Right. But it's only great in aggregate. And this might be all, all year like, and we know this, you know, as portfolio managers, you take it in aggregate. There's a few big things that buoy the whole thing up. You disaggregate it. You look at the other 493, it's not as rosy a picture.
- [06:08]
Scott Wapner
I don't know, earnings have been pretty darn pretty good. We're not. You're talking like, you're talking about, well.
- [06:13]
Jenny Harrington
You have one stock out of tons.
- [06:16]
Scott Wapner
You're saying everything outside of the mega caps in terms of earning. You said, you just said, you said look at the other 493.
- [06:23]
Jenny Harrington
And this because that's a lot of stocks. I'm not saying the mega caps are the only ones buoying it up, but I'm saying in aggregate growth is there. Once you start to disaggregate, it's not, you know, it's not as good a picture.
- [06:33]
Scott Wapner
What do you think? You warm enough over there?
- [06:37]
Brian Belsky
It's, you know, it's all about layers, quite frankly. It is.
- [06:41]
Jenny Harrington
Everybody loves layers.
- [06:42]
Scott Wapner
There's a lot of layers conversation already.
- [06:45]
Brian Belsky
You know, I'm a big red onion.
- [06:49]
Scott Wapner
Having earnings mean. If Einhorn says, I think this is the most expensive market that we've been in, someone like Ed Yardeni would say, that may be true, but justifiably so. Look at, look at where earnings are.
- [07:02]
Brian Belsky
Yeah. I love Ed's comments. Not just because we agree, but we kind of come from the same vintage and he's talking about some of the same things that. Yeah, we do.
- [07:09]
Scott Wapner
No, you don't. Go ahead.
- [07:10]
Brian Belsky
Okay, just continue. We're in the process of transitioning in this fourth year of the bull market from a momentum multiple driven market to an earnings driven market. When we wrote our year ahead piece for 2026, we talked about traditionally and historically over the last 80 years, when the S&P 500 moves into more of an earnings driven market, the returns are roughly half. What a momentum in multiple driven market doesn't mean it's not going to be positive, is still positive. That to me is a much more fundamentally driven market. And what's happening with the market and with the participants with these binary moves, Buy, sell, there's a big disruption between short term, intermediate term and long term. And I think at the end of the day, what the market showing you is that other areas of the market are working. Dividend growth, value, small cap. And the more that they work, the more credibility they have. The more credibility they have, the better performance. So performance, performance begets performance. And we continue to think that those areas will continue to lead in this broadening out.
- [08:10]
Scott Wapner
Barclays today upgrades value, downgrades momentum. Joe, you can, you can go on that and cautions on small caps. Small caps got out of the gates like a Ferrari to start this year. And then that's, that's obviously cooled a bit. There is the rates question, you know, there was a bit of the is the economy slowing question. But then you get this hot, hot jobs thing today and you know, who knows? But upgrade value, downgrade momentum. You say what?
- [08:41]
Joe Terranova
So the broadening thesis is supported by earnings and it is not just domestic. It is in the emerging markets. It is in areas like industrials and financials, and it's in small caps too. Small caps finally are seeing on an annualized basis positive earnings. Momentum can go to different places. Momentum can reside itself in high data, momentum can reside itself in low quality. And what momentum is currently doing is it's pivoting more towards quality and more towards value. So there are names that we identify as value, there are names we identify as quality that have established momentum. That is what the momentum factor ultimately does. Now, is the momentum factor outperforming the rest of the market like it has since the first rate cut in September of 24? No, it is not. And I would argue that's a healthy condition for investors.
- [09:35]
Scott Wapner
Okay, so Jenny, here's another one for you. So you, you paint a reasonably dour picture of earnings like they're not all, you're not all that wowed. So why don't you tell me why is the Dow at 50k and why is the equal weight hitting new record highs every day if earnings outside of the mag seven are just kind of.
- [09:59]
Jenny Harrington
No, that is not what I said. I didn't say earnings outside of the mag seven are ho hum. I said once you look Outside of the Mag 7 you can see a much different picture. There's many companies outside of the mag seven that are reporting excellent earnings and frankly I've been the beneficiary of that for a nice change this year as with but more value oriented discipline growth oriented strategies. So I think of things I'm really focused on the concept of the K shaped economy, right. But I also see it as a K shaped market where there's haves and have nots. And so what my beef continues to be is to say oh, earnings are up 15% therefore do we think the market should be up another 15%? No. And what have I been saying for the past four months or so I've been saying take some risk off the table, whatever the form that comes in and go to other areas. And that may mean if you have a concentrated position in Nvidia or Amazon or Microsoft because they've grown, take it off and go to maybe small cap or mid cap or value or international or dividends go elsewhere with it. Because I've said Scott, I think the earnings growth potential of the of companies in that 493 can be very good. But not all of them are obviously.
- [11:09]
Scott Wapner
Not all of them are. Nobody saying that all of them are. But you're not getting to new record highs almost every day on the equal.
- [11:17]
Jenny Harrington
Let's look at the data.
- [11:18]
Scott Wapner
You know the majority, I think the majority probably are earnings have blown past Earnings have blown past expectations. There's no other way to say it.
- [11:27]
Jenny Harrington
Okay, then why do you have earnings past expectations? And you and you see Microsoft and Amazon like well, because there are different.
- [11:34]
Scott Wapner
Challenges around those particular names. Why should there are still idiosyncratic stories. Amazon, the market had a great year last year. Well let me finish. The market had a great year last year. What did Amazon do? Zero did nothing. Is that, is Amazon more representative of the market? No, but the market had a great year and many of the mega caps had just fine here. Okay, this is Amazon did not.
- [11:54]
Jenny Harrington
This is why beef against like hey, earnings are up a lot Because I think that just sends people straight back to the same playbook where I think that there needs to be more nuance. I think this is a year for active management, which has not been a lot a year for active of management for a long, long time. And I think you need to suss through it. And I know later in the show there's like, you know, I think you're going to show us a list or I will.
- [12:13]
Scott Wapner
But what's the same playbook? Because it's not the same playbook. No, the whole point is that the playbook.
- [12:17]
Jenny Harrington
Same playbook.
- [12:18]
Scott Wapner
We've added pages to the playbook we were calling like, I'm sorry, the playbook is the industrials in the playbook is do something different.
- [12:26]
Jenny Harrington
And so, Scott, we are only buying.
- [12:27]
Scott Wapner
The industrials and we're buying the transports. Like, what are we doing?
- [12:30]
Jenny Harrington
When you say, like, hey, everything's great and rosy, the S and P earnings are up, are like, are blowing it out. They're terrific. I think, I think it paints a picture that it's the same as last year. I think it says all companies are doing great. They're not. Right. I think you're saying, like, all consumers are healthy. They're not by. For A lot of people are saying that. So there's massive bifurcation. And I think, I think the misleading part of a headline like that, which is why Beef against it is that is that it says like, oh, the market's great. I don't think the market's great. Right. And that's goes to Tony Pascal.
- [12:59]
Scott Wapner
The market was up like 20% last year. You didn't like the market. The markets, all right, it's a little frazzled to start the year. Certain parts of that, you still don't like the market. Earnings are beating expectations. You don't like the market.
- [13:12]
Jenny Harrington
Okay, so You've got Russell 1000 growth down 2%. You've got Russell 1000 value up 6%. You've got NASDAQ. Yeah, but I'm just saying change your playbook. People. Like, if you hear up 15%, don't just go back and this because, this because I talk to people all the time having a conversation last night. This one says, oh, hey, like I heard the market's terrible. I go, well, the market's up 2%.
- [13:34]
Scott Wapner
Materials are up 16%, energy is up.
- [13:36]
Jenny Harrington
Tax down to good.
- [13:38]
Scott Wapner
Isn't that doing something different? Are we doing what you're saying?
- [13:41]
Jenny Harrington
Are we. Do you think the viewers are doing what we're saying? Because I think people are sitting in the same place where the markets.
- [13:47]
Scott Wapner
What's moving the market?
- [13:48]
Jenny Harrington
What's moving the market are other things. Right. Which is why you see growth up.
- [13:52]
Scott Wapner
Like I think, I think viewers are smarter than maybe you want to give them credit for. I think they've been going to the other areas and diversifying.
- [14:00]
Jenny Harrington
Yeah, but obviously they have not paint broad brush comments, you know, like, oh, earnings are terrific. Earnings are mixed.
- [14:07]
Joe Terranova
But earnings being terrific is the reason that you have optionality as an investor that you could own industrials, you could own materials, you could own, own Brazil, you could own the emerging markets, you could go to other places.
- [14:19]
Jenny Harrington
Right.
- [14:19]
Joe Terranova
You could own a dividend strategy. Your dividend strategy is crushing it this year. Be happy about that.
- [14:24]
Jenny Harrington
Yeah, I'm like the Baltimore Orioles can't be happy when I'm.
- [14:27]
Scott Wapner
Dividend investors are just, they're never happy.
- [14:30]
Jenny Harrington
Scott, you'll. I'm like an Orioles fan ever. I'm miserable when I'm losing and I'm skeptical when I'm winning.
- [14:35]
Scott Wapner
Well, we talked to our executive producer, Kevin, who already went viral once this week and is doing it again because he's an Orioles spending. You may know what you're talking about. I don't know. Let's. Let's move on because I can't take it anymore. All right, let's talk about some moves. So we know that the transports and industrials have done well. Most people do anyway. You, Jenny, sold JetBlue. Why did you do that?
- [15:02]
Jenny Harrington
Well, first of all, we have a huge loss in it. We bought it several years ago. And then things got really up of kilter with the pandemic. The reason we've held it for the last year and a half was we thought it was wildly oversold. So you have a weird year like this year, and you've got a crummy stock like JetBlue that's suddenly up 36%. And you know what you do? You take your loss. It's something I can see us going back to one day because we're pretty high conviction that it will get back to a dollar, maybe even $2 one day of earnings. But we can take that capital loss, offset realized gains and sit it out for the next year with an up 36% percent move. I don't know how much more upside there is from here.
- [15:36]
Scott Wapner
Okay. Why has it struggled when other airlines have done so well?
- [15:41]
Jenny Harrington
Yeah, so what happened was like pre pandemic. Right. They were, they were a lot of like smaller routes, discount airline. During the or following the pandemic, that space got flooded and they ended up kind of in no man's land. They had a ton of competition. They weren't unique anymore. They took on too much, much debt and they just, you know, they just didn't get out from under that. And then there was the whole spirit combination, you know.
- [16:06]
Scott Wapner
Right. I mean it's like there's, there's a good representation of it at least. You know, Delta for example, versus that.
- [16:11]
Jenny Harrington
They were in no man's land. They were neither a spirit that was super discounted. They weren't a Delta that had higher end and first class. They just ended up in no man's land with huge debt.
- [16:20]
Scott Wapner
So we have another move to talk about and that is Joe Terranova not in the ETF because obviously he's, he's locked up until the, the end of the quarter to do anything there. But you bought personally Apple.
- [16:34]
Joe Terranova
Yes.
- [16:34]
Scott Wapner
Well, that's because you sold it in November, late November. And personally. Personally. Yes, personally. November 19th you sold it and now you bought it back. Why did you do that?
- [16:44]
Joe Terranova
If you are running a momentum screen, which is what I'm obviously doing on near term price action, you have a similar pattern match to what existed in August. I want to be clear. I don't know if you're going to get the upside that you got in August. That was, that was a really strong move that we had from the low 2000s up to 250 this time around. It looks to me like we're going to break above the 288 high and have a three handle on Apple. I see that momentum building as it relates to the recent rebalance. I mentioned it on air. When we did the rebalance, Apple scored remarkably high. If you think about owning 150 stocks out of 500. Apple was ranked 154th. The trouble, the trouble rather for Apple was the moderation in the revenue growth. And obviously if that continues to improve, you could expect that Apple might show up once again.
- [17:37]
Scott Wapner
All right, so let's, let's do a little check in on where we think software is because it's been really at the epicenter of every conversation that we've had and for good reason. Cadence bank of America today reiterates that as a top, a top pick, they say, well, software multiples broadly have compressed. We believe the pullback in Cadence and synopsis creates a particularly attractive entry point given resilient fundamentals and AI acting as an enabler rather than a disruptive sector. 400 is the price target.
- [18:08]
Joe Terranova
Yes, I would agree with that. Cadence is one of the five software names that remain in the etf. And I think the compelling fundamental story surrounding Cadence is the relationship that it has in terms of providing the software to design the semiconductor chips. And they have leadership in that regard. They have over the last several years continued to grow the market share and I think that is one of the compelling reasons in addition to what is a very strong balance sheet, why the stock at 298 I believe is undervalued.
- [18:42]
Scott Wapner
So Applovin reports earnings after the bell that is today. So what about, what about that name? In, in light of what's happened with, with some of the other software stocks.
- [18:52]
Joe Terranova
It'S remarkable that when you think about what was thought to be such an extreme valuation has compressed so much. You're talking about somewhere in the 50s looking for 294 and 1.6 to 94 EPS 1.6 billion. You're going to see strength as it relates to advertising in gaming and E commerce. The challenge is I think the street knows that the consensus expectation for this earnings report, Scott, it's really really high. So they kind of have to exceed that and go even beyond the free cash flow is something I would pay attention to. Can the free cash flow come in above $3 billion? That would be a catalyst there.
- [19:31]
Scott Wapner
So there's the year to date. So it's down 34% year to date. Can we do a week to date? We're only three days in obviously but you have had a pretty decent bounce and there it is nine and a third percent now going into the print in a very uncertain environment.
- [19:47]
Joe Terranova
Uncertain environment for sure. I'm going to be very candid. I'm not sure what the reaction here is is going to be. I still think they need a really, really strong report to get a significant restoration of the bullish momentum that if you pull back the lens to a one year two year time frame exists.
- [20:04]
Scott Wapner
Now the other issue with software impacting different areas like private credit, we've focused on that for a lot of this week and we, we heard from what we heard from Mark Rowan earlier from Apollo. Right. Couple of days ago Leslie Picker had that. I mean the consensus is that the, the fears in private credit related to loans to software companies is overblown. I'm simplifying that obviously and paraphrasing what they've said. But that's the deal and that's what Kerry must believe. Right. Because you bought more Apollo.
- [20:36]
Carrie Firestone
Exactly.
- [20:36]
Scott Wapner
Do you think it has been over punished?
- [20:39]
Carrie Firestone
Oh definitely. I mean the stock got hit like a rock. All of these private equity firms did. 80% of Apollo's business is in the credit market. 20% is equity exposure so it's already a lower risk company. It's 14 times the issue's earnings next 12 months. Sorry Joe dropped some of his water it and but what we really think is that only about 1% of its loans relate to software are really exposed to some downturn in the market. We believe that there will be at least mid teens earnings growth this year. They continue to grow assets they are on the conservative side across the their platform for private equity enterprises and so this, this selling has been extreme and we, we're buyers here.
- [21:28]
Scott Wapner
We did buy more stock so we then saw all of this you know I concern go from pure play software, private credit and some other areas like financial related names financial services stocks like Raymond James and Ameriprise and Schwab and lpl. Those stocks were all down a bunch yesterday. Belsky, I'll come to you some say that's, that's well overdone but what do you, what do you think because you have, what do you got? We have Raymond James and you have LPL Schwab and LPLab. So you're right in the thick of this.
- [22:05]
Brian Belsky
So we own LPL in Raymond James in our SMID cap portfolio. You know I think the leaders of those companies came out and did a really great job talking about how it's overdone with respect to what AI is going to add back to in terms of efficiencies and I think you're only going to see more and more of that. I just think with the market is just kind of going down a checklist of where they can pick on in terms of AI and now I don't know what's going to be next but to me the financial situation is is of all of them way overdone.
- [22:35]
Scott Wapner
But I mean there are companies that are coming out with these advanced tools that are, that are. Yeah. The altruist from yesterday that are deemed to be highly disruptive to certain businesses within industries. Yep. It's not. Are you acting like it's. No. Not justified in any way.
- [22:54]
Brian Belsky
I think part of that can be justified Scott. But however if you take two steps back and look at who was investing in AI even before we were talking about financial services. Fintech companies have been investing in pre AI way before all these people. So I think at the end of the day financial companies are actually well teed up to take advantage of what AI is going to bring to their companies versus these spot by spot moments like we've seen this week.
- [23:18]
Joe Terranova
I think it's a reflex reaction I think the algorithm are capturing the moment and seeing automatically AI about to disrupt means eliminate. I think in the case of the financial services industry, it could lend itself to actually assisting. And the thing to think about for the financial services is if we are going to pivot from wealth managers dispensing advice to AI, you have regulatory standards. Where's the liability in that regard for AI? Is AI in some capacity or the creative, the creators of that AI tool, are they accepting the liability surrounding that? You have to think that through. I don't know that that's.
- [23:55]
Scott Wapner
Look, if you use the word eliminate, I think that's a little harsh. No one's suggesting eliminate, but if you're talking about being disrupted, you're talking about multiple compression. You're, you're selling in and you're selling today in anticipation of a much, you know, more different story down the road. I don't think if we were talking about the elimination of businesses, the stock reactions would be much more harsh than.
- [24:20]
Joe Terranova
They are, I'll give you that. My choice of word there maybe is a little bit too strong. But I think it was Stephanie last week who pointed out the proof point is the challenge here. Where is the proof point on all of this? So I think you have to be very careful with that reflex reaction. Selling something down 9% without more information.
- [24:39]
Scott Wapner
Jenny, you own Schwab too?
- [24:41]
Jenny Harrington
We do. It's funny, I had a client email this morning. He said shouldn't we buy more? I said, I don't. I think it's, you know, I think they're over. They're not overdone yet. I think there's so much disruption coming from AI. We have no idea how or where it's going to come and it's just a reminder that like nothing's safe.
- [24:58]
Carrie Firestone
Just one quick thing on disrupting because of I often it's for something that's fairly high priced and the price will be down much to a much greater extent. No one's paying to trade on Fidelity or Schwab. These big platforms are commission free. They're very inexpensive already. So who's getting that advantage? I mean that's, that's to me a positive about the financials being disrupted. Where I can see many other business, Adobe Autodesk being more.
- [25:28]
Scott Wapner
What about the idea that Jenny just said that it's just not overdone enough? You disagree?
- [25:34]
Carrie Firestone
It may be that the stocks are more expensive, somewhat expensive and Schwab has had a great run. It's been a great stock.
- [25:42]
Scott Wapner
That's AGI by the Way, the listing of AGI, ag, bk, that's the ticker. So just to let you know why you're here in the bell.
- [25:51]
Carrie Firestone
So I just think there's less of a downside because of AI. And there might be downside because financials were so strong last year and Schwab was a very good start.
- [26:00]
Jenny Harrington
But the thing about yesterday was it was a reminder to me at least that almost, it feels like almost nothing safe. You know, two weeks ago we thought financials were safe and benefited from AI. And then yesterday it's just a reminder. Nothing's safe.
- [26:11]
Joe Terranova
Why can't you say energy or health care or materials or they, they can't be safe.
- [26:15]
Jenny Harrington
You know what? At this moment, I think they are right now.
- [26:18]
Scott Wapner
Maybe I'm wrong, but it's a very, I think Jenny's point. It's just a reflexive market. All right. Alright, let's take a break. We do have. Wow. We have a lot of committee moves to go. We didn't even get to a couple of Brian's. But we will and we have many, many more. Everybody on the desk has stuff. We'll do it next.
- [26:39]
Julianne Moore
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- [27:10]
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- [27:40]
Joe Terranova
Bubba Wallace here with Tyler Reddick. You know what's more nerve racking than waiting for qualifying results?
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Scott Wapner
Waiting for the green flag to drop.
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No purchase necessary VGW Group void where prohibited by law. CTNC's 21+ sponsored by Jumba Casino. All right, this, this block is going to be all moves of people on this desk because we have so many that I want to get to. We dropped these down from our A block, Brian, because we just didn't get to it. Monolithic Power you sold. Yep. And Astera Labs is getting crushed today. Yeah. And you're a buyer on that dip, so why don't you start there with the one you're buying on the dip Astera and then we can go into monolithic.
- [28:44]
Brian Belsky
So you talk the talk and walk the walk. As the market transitions more into earnings driven and broadening out, we want to take our SMID portfolio and actually make it smaller in market cap. So that's why we sold Monolithic Power and then we went into Astera Labs and then redistributed into two or three other stocks that we own, including one we're going to talk about later on in the show. We think that this is a really interesting company in the semiconductor space, especially given the fact that they're really, they're really centered around data centers and the connectivity. They're very different than a chip company and a lot. So we really like it as a mid cap company. Around $25 billion.
- [29:20]
Scott Wapner
Okay, so we got, we got to both of those. Let's, let's jump to Jenny buying Genpact. Tell us what and why.
- [29:27]
Jenny Harrington
Okay, so Genpact is interesting. It was spun off from GE in 2005. They've grown their earnings at a 13% annualized rate for the past 15 years. They trade at 9.7 times earnings with an 8 1/2% free cash flow yield. By the way, this is in our discipline growth strategy, not our dividend income strategy, but what they are and I always find like it's hard to explain but they're a big global company that helps other large companies run their behind the scenes operations. So things like banking, insurance, health care companies and all of their output sourced like customer service, supply chain, procurement. Okay. The reason it was viable for us is because the Stock's down about 30% in the last year, but more importantly down 20% this year. Why? Because there's the great fear that there's disruption from AI coming. And so it's our job to start to source, sort through these and say where is the disruption real and where. And does this company still have a reason to exist? Is it under threat? Is it under real true threat from AI or is it just a moment in time? Perception, risk, threat from AI when it was down 20% trading at those valuations were like, all right, this is overdone. We can buy this now.
- [30:35]
Scott Wapner
Okay. Thank you. You're welcome. Brian Belsky, back to you. You bought Pinnacle Financial Partners regional bank.
- [30:43]
Brian Belsky
We did. We own First Citizens for about five or six years. In fact, First Citizens was, I think, the best performing bank stock in the s and P 1500 in 2024. So this is a big stock. And so we also used to own this company called Synovus Financial. Pinnacle bought Synovus Financial and we wanted to see how that integration happened, number one. Number two, following the theme that I talked about in the prior segment, getting smaller in terms of our portfolio with respect to market cap. Pinnacle, we think in the Southeast is a great player with respect to a smaller cap regional bank.
- [31:13]
Scott Wapner
So you sold first in Citizens.
- [31:15]
Brian Belsky
We did.
- [31:15]
Scott Wapner
And you bought Pinnacle one for one with. Okay, one for one.
- [31:18]
Brian Belsky
Yep.
- [31:18]
Scott Wapner
Carrie, you sold Health Equity. So it manages health savings accounts. Why did you sell it?
- [31:25]
Carrie Firestone
Well, we've been selling it over the past six months. It had hit, you know, a high in the middle of 2025. Lots of employment has been helping because they sell health savings plans. Unemployment numbers have been coming down if they've been weaker until today. So we have been taking profits and we just decided to sell the rest. And we traded out of that and we applied those funds for Boston Scientific, which has been hit hard recently. Medical device company. It's one of the leaders in cardiovascular and various other types of devices, endoscopy, electrophysiology. And we really think that at this price it's attractive, it's a stable grower. It is not the small device company it was 25 years ago. And the expectations had gone ahead of itself. So we thought this price is one that we'd. We go back in. We've owned it before.
- [32:20]
Scott Wapner
Speaking of health care related stuff, Joe, you trimmed the biotech etf, the xbi. You're so bullish on this for a while.
- [32:26]
Joe Terranova
Still am.
- [32:27]
Scott Wapner
Okay, tell me more.
- [32:28]
Joe Terranova
October 1st, I began buying it at 101. As you know, I made several buys along the way as it moved higher towards a 132 high at the end of January. That raised my cost basis up to112.41. Bought Apple today. There are other moves that we're going to talk about later in the show. I wanted the net of all of that invested capital to be zero. I don't like the way the XBI has been trading recently. It's now underneath the 50 day moving average. It seems to be underperforming health care overall, it was time to take a little bit of profit, but more importantly, manage the position and reduce it somewhat. After all those aggressive buys.
- [33:04]
Scott Wapner
Yeah, can we look at that year to date, even if we showed it already? I just want to see it again real quick. Is what was such a, you know, it was such a hot play towards the end of the year. Just hasn't done anything. The market's been just.
- [33:16]
Joe Terranova
And as you know, Scott, I have buys above here. I mean, I buys close to 130 and you have to manage the position. Position is too big.
- [33:22]
Scott Wapner
Okay, let's get the headlines now with Christina Parts Nevelos. Hi there, Scott.
- [33:27]
Christina Parts Nevelos
Canadian Prime Minister Mark Cardney ordered flags flown at half staff across the country after at least nine people died in a shooting at a school in British Columbia. More than 25 people were also wounded in the attack. Police say they believe the shooter was actually a woman who was found dead from a self inflicted gunshot wound. They say her motives remain unclear. The Trump administration reportedly has withdrawn all federalized National Guard troops from cities across the U.S. the deployments in Los Angeles, Chicago and Portland as well as Oregon faced court challenges from state and local leaders. According to the Washington Post, the troops were quietly removed by the end of January, though 2,500 members remain in Washington, D.C. and TikTok announced today it would launch a local feeds feature in the United States, its first new offering since the social media app came under new ownership just last month. Users can opt in to be connected to content related to their current location. TikTok also has local feeds in select European cities and markets. Scott, back to you.
- [34:27]
Scott Wapner
All right, thank you. Christina Parson, Elvis. Coming up next, even more moves. Joe's got two new trades for you as well. Well, how about Robinhood? We will discuss how they are playing that route today. There are shares down almost 12% following earnings. We're back after this.
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- [36:32]
Scott Wapner
All right, so let's do more moves. So you're. You're done with Netflix Jump.
- [36:36]
Joe Terranova
Done with Netflix Upset. I'm saving everyone in America that has a Netflix position now it can finally go up along the stock from May of 2024 at $66. You don't want to see what was a really great winning trade turn ultimately into a losing trade. I've had a.
- [36:54]
Scott Wapner
Enough.
- [36:55]
Joe Terranova
It was liquidated from the ETF in the last rebalance. I said goodbye today to raise some capital to do some.
- [37:02]
Scott Wapner
And you don't think. I mean, sort of everybody. It's going to. Everybody knows why. Why it's down, it's going to bounce.
- [37:09]
Joe Terranova
But what am I supposed to do? I'm long at 66. Pull that back if you can. Six months. The chart, please. Look at the decline. I don't think you could sit there and just watch a stock continue to go lower.
- [37:22]
Scott Wapner
You're just afraid of round trip or worse.
- [37:25]
Joe Terranova
Well, yeah, I mean, I don't. I don't. I don't want to sit here and say I bought it at 66 and I sold it at 64 after it went up to 115. That's just a terrible way to manage a position.
- [37:36]
Carrie Firestone
Well, plus, it can. It can hang out down here for quite a while.
- [37:40]
Joe Terranova
I don't know. And tomorrow it's probably going to move higher.
- [37:45]
Scott Wapner
Brian, you. You own it.
- [37:46]
Brian Belsky
Yeah.
- [37:47]
Scott Wapner
Right. I think there's a little bit of a difference in the way you guys see the trading world at times. Joe's a lot more tactical, I think, than you, who tends to be a little more longer term. Yeah, right. I mean, what do you think about his move? How do you think about it in your own mind?
- [38:00]
Brian Belsky
I love his move because it just makes me feel better about my move.
- [38:03]
Scott Wapner
What's your move? Tell me.
- [38:05]
Brian Belsky
Still like it? Because I love how emotionally is about. About selling it. That means we're close to the bottom.
- [38:09]
Joe Terranova
I mean, to me, no, it's not emotional. It's just at a certain point, you just have to.
- [38:14]
Brian Belsky
You have remorse. I like that. I like that you have remorse and some humility.
- [38:17]
Scott Wapner
Is it emotional, though? The stock's down 35% in six months.
- [38:20]
Brian Belsky
No. There's some fundamental operational issues with respect to what's going on with the Warner Brothers situation. That's why we still own Warner Bros. By the way, because of the silliness that's going on with this bid. But number one, number two, this is the best streamer. So I want to own the best companies, and I look out at a position for 12 to 18 months. Now, if we see further deceleration and we see some really bad operational moves aside from this merger, then we'll revisit it. But I want to own this stock.
- [38:48]
Scott Wapner
Okay?
- [38:49]
Jenny Harrington
You know what I want? I want to want to own this stock, but I don't because I still worry. This is another one where, like, the valuation's finally coming in to where maybe we could buy it. But then this is one where I'm like, I have no idea how AI disrupts this business fair.
- [39:07]
Joe Terranova
You could also criticize me, the other aspect of it, for holding on and selling it at 80. Probably should have sold it at 95. Should have gotten out a lot quicker, for sure.
- [39:16]
Jenny Harrington
Why not 100? They get 150.
- [39:18]
Brian Belsky
But you were thinking out, too, right? Because you're thinking about the mega second.
- [39:22]
Joe Terranova
I'm thinking exactly what Scott said. Everyone knows at some point the stock's gonna fall once, you know, the deal's done.
- [39:27]
Scott Wapner
So the other thing you bought more is the oih. So we talked about what Energy doing.
- [39:31]
Joe Terranova
I don't.
- [39:31]
Scott Wapner
I don't want to get into that. It's just buying more. More of it. Robinhood. We got to talk about that. Let's show the stock again. Back of earnings, stocks getting crushed. You own that one. Targets go lower today from deutsche Barclays and JPM, too. So 113 is the lowest of those three at JP Morgan.
- [39:52]
Joe Terranova
So this report obviously was not diverse, diversified enough. It was too reliant on crypto. We talked about that yesterday. Crypto revenue was down 38%. We know the company is diversifying its model away from that. There also wasn't much improvement in terms of what you want to see for debt to equity, return on equity, balance sheet type of orientations, the growth is moderating for sure. And it's attributable, it's attributable to crypto and I don't want it to be attributable to crypto. I want it to see other areas of this company be able to deliver an offset. Crypto. Prediction markets, yeah, they're coming but now football season's over. So is there really going to be that much strength in prediction markets? You kind of have to wait until you get the World cup and they spa spring training, pitchers and catchers, baseball.
- [40:39]
Scott Wapner
Ask about so if crypto. So bitcoins at 66, almost 67. If, if bitcoin rallies back, let's say if bitcoin was at 80, would Robinhood look like it does today? No, it's that correlated at this point.
- [40:56]
Joe Terranova
At this point, unfortunately it is. I wish it wasn't.
- [40:59]
Scott Wapner
All right, Santoli, he's next with his midday word. Senior markets commentator overtime co anchor Mike Santoli joining us now for his midday word. What do you think about this market?
- [41:27]
Mike Santoli
You know, Scott, it's a, it's a 5050 market most days. I mean obviously today we couldn't hold the rally. Sort of a preliminary celebration of the jobs number yields up. Doesn't seem like we're really rethinking the Fed path. I don't think this is a market that needs imminent or deep Fed rate cuts for the bull case to work out. But I do think the market liked it when the labor market was understating or seemed to be understating the strength of the underlying economy. The reverse is not as helpful in terms of the Fed outlook. But you know, thanks for Apple because right now the software sell off is back on Apple soaking up some of that, some of that weakness. We'll see if that can continue. We're wearing out this patch of the field on the S and P, I have to say.
- [42:08]
Scott Wapner
Yeah. I mean Nvidia is up almost 2%. Yeah. How about Micron? I mean what continues to happen with these memory names? It's just going to remain this way. You think big moves up, some moves down, bigger moves up again.
- [42:20]
Mike Santoli
We have this very, very, these very narrow lanes of high conviction and that's one of them. Obviously the memory trade. Tactically they got crazy overdone on the upside. Bit of, of a gut check. I don't know what, how to handicap how it goes from here, except they're sold out for years. If you know, if you believe all the, all the reports.
- [42:39]
Scott Wapner
Well, and then prices continue to go up. All right, I'll see you in a little bit later on this afternoon. That's Mike Santoli. We'll do the setup next. All right, we'll do the setup. Cisco reports after the bell in overtime. Jenny, you own that?
- [43:10]
Jenny Harrington
We do. So here's where we are. So our investment thesis on Cisco is that whatever tech comes out, they should benefit. And so expectations are pretty high going into this. It's up 40% over the last year, 12% year to date. They're expected to earn a $2. They're expected to generate 15 billion. That's 9, 8 and change percent growth over last year. And you know what I think? I think they should come in in line and I think that if they do come in in line, the stock shouldn't be punished. So. But this is a challenge and this goes back to earnings. Like are those earnings spectacular up 9%. No, they're perfectly solid. But the stock has been treated as if there's just huge earnings growth and huge potential ahead. So I'm a little worried that there's too much expectation in the stock.
- [43:55]
Scott Wapner
Back the chart up a little bit more for a year, please. Just to see what, what it's been doing.
- [44:01]
Brian Belsky
Forget the.
- [44:01]
Joe Terranova
Isn't it emerging from a story? I mean, we own a nice move up.
- [44:06]
Jenny Harrington
Why is it emerging? They do, they do. They do networking, hardware infrastructure. They have like some software and cyber. This is like the antithesis of an emerging company. They're just in the hardware space and as the data centers build out, like, yeah, they'll have a part in that. But what if that doesn't move as fast as, as, I don't know, stocks like Core, we've expected to like what if it moves a little slowly? And you know what their earnings doesn't.
- [44:27]
Scott Wapner
Feel like the data center, like the what if around that question just seems the probability of your what if is slim. Isn't that the game we play it.
- [44:37]
Jenny Harrington
Going a little more slowly, you know, mean.
- [44:39]
Carrie Firestone
Yeah, maybe.
- [44:41]
Jenny Harrington
But why is it only growing at 9%? That's perfectly respectable. I don't want people to start treating the stock like. And get it caught up, you know, in some ephemeral, you know, huge move up only to fall back down.
- [44:51]
Scott Wapner
But it never really trades like that.
- [44:54]
Jenny Harrington
Nor do I think it should, which is my only point. Like I don't want it to get caught up in that. It should.
- [44:58]
Scott Wapner
Okay, McDonald's tonight as well. Belsky.
- [45:01]
Brian Belsky
Yeah, it benefits from what Jenny's been talking about in terms of the value. McDonald's is one of the largest companies in the Russell 1000 Valley consumer discretionary sector. This is a stock that is steady at a much similarly to Cisco. It's benefiting from the move into value, Scott. And we continue to believe that this stock from a dividend perspective and cash perspective is going to be very strong.
- [45:23]
Scott Wapner
All right, we'll do finals next. Sam.
- [45:58]
Joe Terranova
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast Now.
- [46:12]
Scott Wapner
It's not too late to sign up for the next CNBC Pro Live event, Wealth for Women. It's happening May 28th at the NASDAQ market site in New York. And our own Jenny Harrington, Carrie Firestone will be there. Told you about Stephanie Link yesterday. You can scan the QR code or visit CNBC events.com/wealth for women. Join me today, 3:00 Eastern. Closing bell. Tom Lee will be with me. Nancy Davis, she hadn't been on in a bit, so I look forward to catching up with her. She's always good on volume, volatility, just the markets in general, and then rich clarity, too. Interesting. Jobs report, the revisions. What Beth Hammock has to say yesterday regarding her outlook. And she is a voting member, so we'll see what Mr. Clarida has to say today. Brian Belsky, what do you got?
- [46:55]
Brian Belsky
Palo Alto. We like cybersecurity.
- [46:57]
Scott Wapner
Okay. Jenny.
- [46:58]
Jenny Harrington
Melrose Properties, nine and a half percent yield. Landback spin off, spinoff from Lennar, very little air risk.
- [47:04]
Scott Wapner
All right, Kerry.
- [47:06]
Carrie Firestone
Visa stock's been flat for a year. Sales below a market multiple. Consumers are going to get their rebate. And that's good for Visa.
- [47:12]
Scott Wapner
Okay, that must be you, Joe.
- [47:13]
Joe Terranova
Yep. And I want to give everyone a stop on this. 264 on Apple. That's your stop price.
- [47:17]
Scott Wapner
You said it was going to 300.
- [47:18]
Joe Terranova
It is.
- [47:19]
Scott Wapner
All right, 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.
- [47:33]
Julianne Moore
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the Halftime Report participants consider reliable but Neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer.
- [48:07]
Commercial Announcer
You've never been one to settle, Stand down or stand still. You're a lifelong learner, energized by excellence. There's a fire inside you you can't ignore. You've got competition to outrun, momentum to build on, and your own high standards to meet. Stop now. Not a chance. At Capella University, we help you catch what you're chasing because you've always had the drive. Now go earn the degree. Capella University. What can't you do? Visit capella.edu to learn more.