Halftime Report: How to Trade Choppy Stocks (August 5, 2025)
Released on August 5, 2025, CNBC's "Halftime Report" delves into the complexities of navigating volatile stock markets. Hosted by Scott Wapner, the episode features esteemed guests Josh Brown, Joe Terranova, Anastasia Amoroso, and Jim Lebenthal. The discussion centers around the current state of the economy, market projections, and strategies for trading in uncertain times.
Market Overview and Economic Indicators
Scott Wapner opens the discussion by highlighting the present uncertainty in the stock markets. He notes that the markets are entering a "historically rocky period," questioning the sustainability of recent gains amid weaker economic data.
"Front and center this hour, the state of stocks, the economy once again in question and the markets entering a historically rocky period." [00:59]
Josh Brown provides his perspective on market growth drivers, emphasizing the pivotal role of artificial intelligence (AI) in sustaining the U.S. economic expansion.
"If we're going to get to 7,000, it's going to be because of the AI buildout that is the only pillar holding up the US economic growth story right now." [02:17]
He further elaborates that consumer spending and labor market gains have stalled, suggesting that the stock market can sustain a divergence from the broader economy temporarily. Brown anticipates that a potential rate cut by the Federal Reserve could reignite consumer spending, particularly in the housing sector.
Joe Terranova discusses the importance of patience in the current "choppy environment," advising smaller position sizing due to elevated market volatility.
"In that type of choppy environment... sizing needs to be small because I don't think we resolve this big question surrounding Fed rate cut or not until the end of the month." [06:38]
Anastasia Amoroso concurs, pointing out that the Federal Reserve's cautious stance on rate cuts contributes to the market's uncertainty. She notes that the ongoing tariff adjustments and weak ISM service numbers are fueling choppy price actions.
"This is a choppy period of time... until we get to that September meeting, which is not until September 17th." [08:33]
Jim Lebenthal offers a tempered view on potential market corrections, predicting a modest decline of 5-7% rather than a severe 10% correction. He ties this expectation to the disappointing ISM services report.
"I do think we'll get that full 5 to 7% from the high and I don't think that's much of anything." [08:36]
Stock Highlights and Investment Strategies
The panel turns its attention to specific stocks demonstrating notable movements in the market.
Palantir Technologies (PLTR)
Scott Wapner highlights Palantir's remarkable performance, noting its record high following an earnings beat that exceeded expectations.
"Palantir is at a record high after beating on earnings, surpassing a billion dollars in quarterly revenue for the first time ever." [10:23]
Joe Terranova praises Palantir's fundamentals, emphasizing its revenue growth and margin improvement.
"These are staggering numbers fundamentally when you combine the revenue growth with the margins." [11:13]
Josh Brown acknowledges Palantir's exponential growth, despite its high valuation, attributing its success to strong execution and the burgeoning AI narrative.
"They are absolutely delivering on all the fundamental metrics... they're executing, they're doing it with swag." [12:06]
Jim Lebenthal expresses caution, referencing historical patterns like Nvidia's five-year trajectory, suggesting the possibility of significant pullbacks.
"If you have a 10 bagger like this... you have to be prepared that there will be pullbacks of 40% or more." [24:04]
The discussion underscores the delicate balance between recognizing robust growth and managing exposure to high-valuation stocks.
Joby Aviation (JOBY)
The conversation shifts to Joby Aviation, particularly its acquisition of Blade, raising questions about the sustainability of such speculative investments.
"They report earnings tomorrow... they're expecting revenue of $60,000. So the good news is that's up 113% year over year when they reported like $20,000." [19:28]
Josh Brown acknowledges the speculative nature of Joby but remains optimistic about its position in the electric vertical takeoff and landing (eVTOL) market.
"Joby is in pole position to really have like the most market share, the most mind share as this stuff starts to commercialize." [19:28]
Vertex Pharmaceuticals (VRTX)
Jim Lebenthal, representing himself, discusses Vertex Pharmaceuticals' recent challenges and potential.
"Vertex has a pain medication... the FDA yesterday said that they don't see a path forward for this drug in peripheral neuropathy. That is a disappointment." [30:00]
However, he remains optimistic about their existing drug, Journivex, which is gaining market share.
"This is a disappointment that I think is going to be temporary." [30:00]
Marathon Petroleum (MPC) and Refiners
Joe Terranova shares his strategy of investing in refiners like Valero and Phillips 66, anticipating a retreat in oil prices and increased supply from OPEC and U.S. sources.
"I think we're going to get more oil from OPEC. I think we're going to get more oil coming from us up in the north, from Canada." [31:55]
Dominion Energy (D)
Josh Brown introduces Dominion Energy as his latest addition to the "Best Stocks in the Market" list, positioning it as a critical player in powering the Internet's backbone in Loudoun County, Virginia.
"Dominion is the electric utility that is responsible for the bulk of what needs to happen in order for that 70% of global Internet traffic to come alive." [34:49]
He highlights Dominion's strategic importance due to massive investments from companies like Amazon in data center infrastructure.
"They just said that of their top 10 all-time peak electricity demand days in the state of Virginia, nine of those 10 have occurred this year." [34:49]
Sector Analysis and Valuation Concerns
The panel discusses high beta and momentum stocks, debating their sustainability and valuation.
Scott Wapner raises concerns about the speculative fervor surrounding certain high-growth stocks, questioning their long-term durability.
"Does it give you any kind of pause of a speculative fervor... makes the quality of it or at least the durability of it in some kind of question?" [22:06]
Josh Brown and Joe Terranova defend the inclusion of such stocks in portfolios, emphasizing strategic position sizing and the potential for substantial returns despite high valuations.
"Position sizing is an underrated way to get comfortable with high growth, high momentum situations where the valuation is stupid." [25:20]
Jim Lebenthal shares his personal experience, noting client pressures when taking contrarian positions but advocates for sticking to a rules-based investment process.
"If you buy that toehold and it does go down 30%, whatever number, and... clients are calling me and say, why did you buy at that price." [26:35]
Tariffs and Trade Policies
In an exclusive interview segment with former Treasury Secretary Steven Mnuchin, the episode addresses the impact of tariffs on the market.
Mnuchin explains President Trump's dual objectives for tariffs: rebalancing trading relationships and generating revenue to reduce the budget deficit.
"If you did a 10% baseline tariff across the board, you'd raise a lot of revenue... in excess of $2 trillion over a long period of time." [40:56]
He acknowledges market adjustments to higher tariffs and anticipates further negotiations to ensure that trading partners adhere to agreed commitments.
"Tariffs have an impact and different businesses will be impacted accordingly. Some will be winners and some will be losers." [42:47]
Mnuchin emphasizes that tariff revenue should be directed towards deficit reduction rather than being distributed as dividends.
Closing Remarks and Final Trades
As the episode winds down, Scott Wapner summarizes key takeaways and previews upcoming segments. The final trades highlight include:
- Apple (AAPL): Noted for finding support and resisting further declines.
- Dominion Energy (D): Reinforced as a growth-oriented utility stock benefiting from increased data center demand.
- Industrial Sector: Recognized for its strong performance, absorbing tariff impacts while benefiting from infrastructure investments.
"Just like Joe bounced it out of the Jyoti... demand continues from data centers." [34:25]
Jim Lebenthal and Joe Terranova reiterate their strategies around high-growth and sector-specific investments, balancing bullish outlooks with caution regarding valuations and market volatility.
Conclusion
The August 5 episode of "Halftime Report" offers a comprehensive analysis of current market conditions, emphasizing the interplay between economic indicators, sector performance, and strategic stock selections. The panel underscores the importance of understanding growth drivers like AI, managing exposure to high-valuation stocks, and remaining adaptable in the face of economic uncertainties. As the market continues to navigate choppy waters, the insights provided equip investors with informed perspectives to make strategic trading decisions.
For more insights and detailed analysis, tune into future episodes of CNBC's "Halftime Report," airing weekdays from 12-1 PM ET on CNBC TV.