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Halftime Report
How to Trade Choppy Stocks 8/5/25
00:44:18
Scott Wapner and the Investment Committee debate the state of stocks with the economy once again in question and markets entering a historically rocky period. Plus, Palantir hitting a record high after earnings, it’s our Chart of the Day. And later, Josh Brown adding Dominion Energy to his “Best Stocks in the Market.” Investment Committee Disclosures
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- [00:00]
Edward Jones Representative
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes.
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WhatsApp Representative
And everything in between.
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Edward Jones Representative
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.
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WhatsApp Representative
Because with all you've done to find.
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Edward Jones Representative
Your rich, we'll do all we can to help you keep enjoying it. Edward Jones, Member, SIPC on WhatsApp, no one can see or hear your personal messages. Whether it's a voice call message or sending a password to WhatsApp, it's all just this. So whether you're sharing the streaming password in the family chat or trading those late night voice messages, that could basically become a podcast, your personal messages stay between you, your friends and your family. No one else, not even us. WhatsApp message privately.
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Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. All right, David, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the state of stocks, the economy once again in question and the markets entering a historically rocky period. We'll debate the the best ways to play the markets with the investment committee. Joining me for the hour today, Josh Brown, Joe Terranova, Anastasia Amoroso and Jim Lebenthal. We will check the markets. We're trying to build on yesterday's gains. We started out that way. We did reverse though. Some of the economic data today wasn't great. It was a miss on the ISM services. There's the S and p down almost one half of 1%. So Josh, I'd love to get your take on where you think we are. HSBC today raises the target for the S and P for year end to 6,400. They say their bull case is 7,000 mostly because of a fueled optimism. We did have that below expectations ISM report. We're coming off the weak jobs report and the revisions. What say you about where we are?
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Josh Brown
Well, 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. Consumer spending has ground to a halt. The gains that we had been experiencing, the labor market for the last couple of years despite higher rates are now grinding to a halt as well. You look at esm, really not a lot of great things in the commentary outside of Capex spending, electrification Grid updates, all the things that we all already know. And I think that's okay because the stock market and the economy are not the same thing. I wouldn't suggest that they can diverge forever, but certainly we could live through a period where everybody just gets accustomed to a slower pace of economic growth and services growth and things are good, not bad, but certainly not at the pace that they were in, let's say 23 or 24. And I think that's where we are. That being said, the companies that comprise all of the market cap in the s and P100 and, and certainly the Nasdaq, that's where the earnings growth is happening and it's almost happening sort of on its own timetable and on its own track. So I think all of these industrial stories about grid build outs and data center buildouts, like all of that is going gangbusters. You can't deny it. You hear it on every single call. Everything that has to do with cloud computing and data center, it's, it's on fire. And is that enough is really the only question. And will the consumer hang in there until we get a growth driver for them? So I'll finish this by saying there is a growth driver out there for the consumer. It's when the Fed starts to cut rates, mortgage rates meaningfully change and all of a sudden we get a little bit of life back into the cadaver that is existing home sales and we start to see a housing cycle. I don't know if that's had, you know, fed funds, four and a half percent, it's probably lower than that. But that's the big thing out there that will be a game changer for the middle class and to see a resurgence in services spending. Until that happens, you really have to rely on mega cap tech and the industrials that are benefiting from the Capex numbers. They continue to ratchet higher. It's okay. We probably can not definitely, but if you're, if you're rooting for a great finish to the year and a 7000s and P target, that's the only way it's going to happen.
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Scott Wapner
Yesterday, Joe, smacked of rate cut optimism. The market was up big. You got the Dow getting all of its Friday losses back. The Russell was the outperformer. The thing that would jump the most if you were obsessed about getting more rate cuts than you thought just one week ago today, smacks of bad news is bad news. I mean, here we are wondering, okay, what is the state of the economy? What's the Fed going to do about it? Can they even do anything about it? So we're in a historically choppy period. August is a nothing burger in terms of performance. July is always pretty good and September seems to be pretty bad. And here we are in this period of time where we have significant questions that need to be answered.
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Joe Terranova
So you have to set an expectation. I think that expectation relies on being somewhat patient here. You're going to have to be patient towards the end of the month. Will Jackson Hole be the moment in which the Federal Reserve telegraphs that a rate cut is coming in September, which I agree with, Josh, will have a positive effect on, most importantly the wealth effect. It will stimulate the housing market and that's important right now as a catalyst. But until then, look, I'm just looking at it at a chart over the last two weeks and you could see clearly the last three trading days we've had an expansion of the bars, we've had widening of the trading ranges. It's elevated volatility. It's classic August environment. And in that type of choppy environment, to borrow the word that you're using, I think it's important that you understand your position. 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.
- [06:39]
Scott Wapner
Yeah, Anastasia, I'm not sure the market really is convinced of anything. You know, Gundlach told us yesterday when we talked to him, he thinks two, maybe three. But I'm not sure the market really can make up its mind as to when it thinks it's going to get cuts. There are some firms on the street that still, still think you won't get any because inflation is going to remain above, above target. And that's going to be the concerning factor for the Fed. Even, even if the labor market continues to look a little more dicey. Now, there is a decidedly different point of view that says labor market, they're going to err on the side of caution first and the first real sign now, the revisions notwithstanding, that they're going to cut rates because they're not going to wait around.
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WhatsApp Representative
Look, I agree with that sentiment, Scott. And when you think about what Fed Chair Powell said last week is he really talked about the one off increases in inflation due to tariffs being a one off. He talked about, you know, looking at the one year and beyond inflation expectations and really not seeing much in terms of higher inflation expectations over, let's say a five year or five year period. So I do agree with you, Scott, that he really cited the labor market weakness as something they're cautious about and they do see downside risks that are also apparent. So so to bring it back to the point of market choppiness, I agree with the sentiment here. This is a choppy period of time and I think this is a quarter of adjustment, a quarter of adjustment to higher tariffs, which is now everyone's base case and at the same time also the quarter of adjustments to lower rates. And I think we'll see this sort of price action because some days we're going to react to the fact that for example caterpillar had to take 1.3 or 1.5 billion hit to earnings because of tariffs. So we have to price that in, which means lower margins. And on the other hand when you do get a services ISM number which is weaker than expected, you start to ratchet up the rate cuts. So the base case for me is choppy price action until we get to that September meeting, which is not until September 17th.
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Scott Wapner
You still feeling a correction is coming?
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Jim Lebenthal
I'm going to change the term because Correction is down 10%. I don't think we'll get 10%, Scott. I do think we'll get that full 5 to 7% from the high and I don't think that's much of anything. I think it's going to be catalyzed by exactly what we're talking about today, the ism services mix. Ms. I said this yesterday. We're like we just can't afford it in this environment. And who knows, who knows? You know, the next kind of macro data that I'm looking at is Thursday's jobless claims. Those have been very quiet. You just don't need a spike there. That's the sort of thing that could move the market.
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Scott Wapner
Let me begin to really zero in on today's number yesterday. Yeah, you said it was one of your bull points. Given that we're two thirds of service.
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Jim Lebenthal
Based economy and frankly I'm surprised we're not down more. I am. But there are reasons there are positives out there. I mean let's not forget that GDP is growing. Now many of us will say yeah, that's because of inventory adjustments, that's because of trade fluctuations around tariffs. But GDP is still growing. More importantly, profits are growing. Second quarter earnings are now looking like they're solidly in double digit year over year growth. Remember that was expected to be around 4.8% as we started the the quarter. Why does this matter? It matters because if profits are growing, companies don't want to lay People off. They're clearly not hiring. We see that in the continuing claims. But they don't want to lay people off. If they can just get more crystallization about what the tariff picture will actually be, then they can lean in, particularly, particularly when the Fed cuts rates. I'm going to come out and say this. I definitely think the Fed's going to cut in September. A little bit more provocative, Joe. I get your point. I just don't think the market needs to wait to accept that to Jackson Hole. I think the market's accepting it now. That's why it's not down more.
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Scott Wapner
Well, we'll see if they want some confirmation and it may get it at Jackson Hole if the chair uses that platform to set the table. I want to move and talk about the stock of the day because it's Palantir and it is at a record high after beating on earnings, surpassing a billion dollars in quarterly revenue for the first time ever, the stock has just ripped. We've mentioned it on so many occasions because of what's happened in the high beta universe where most of those stocks have ripped. But this is the one that investors have continued to zero in on. Yes, valuation might be high, but you know what? Performance is high. And it remains that way. Joe, when you doubt it, it smacks you in the face and says, we can do it, we can do it, we can live up to this high expectation.
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Joe Terranova
These are staggering numbers fundamentally when you combine the revenue growth with the, with the margins. You know, I know the rule of 80 is coming into play here, the combination of that. But they have delivered here beyond the expectation and the expectations were obviously, and needed to be remarkable, remarkably high. I do think, and I mentioned this yesterday on the show, the analyst community surprisingly enough really wasn't embracing the type of price action. There was skepticism there. The 12 month price target was $116. We've got a lift in that today to 142. So look, quite candidly, I'm relying on the rules based nature of the ETF strategy which has been in the position since January of 24. There is no way, if I had discretion over the account, I would have kept us in Palantir for the entirety of 900 plus percent.
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Scott Wapner
Well, look at the. Let's go back, let's go. Show me the chart prior to when you just put up from the April low until right now is extraordinary in and of itself.
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Joe Terranova
Absolutely. And listen, when we declined in April, I was at that point saying to myself, okay, this is a shakeout that could take this Stock bounce back down to 50 or $60. And I was wrong there as well. So I'm relying on the rules here to keep us in the position. But you have to credit this company. They are absolutely delivering on all the fundamental metrics. So if you're skeptical here and you're just blaming price, if you're saying no, this is just a representation of momentum, it's the reason why and trees don't grow to the sky. It's more than that. It is actually delivering on the fundamental AI story.
- [12:54]
Scott Wapner
Not all momentum type names are created equal. Deutsche bank, to Joe's point about the analyst community not necessarily buying in, so to speak, Deutsche bank throws in the towel. Today. They had a sell call on the stock. Current valuation still challenging, they say. Can't wrap our arms around that. But our conversations with multiple customers in the company over the past several months have further reinforced the view. Something special is going on here that doesn't underscore the. Really, I don't know what does. So they're hold. They can't bring themselves to buy it because of the valuation questions that they continue to have. But they have taken it off of sell. Josh Brown, why know you here? Why don't you own a name like this?
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Josh Brown
So we have exposure to the s and P500. This was added on September 23. I'm one of these idiots that's worried about the valuation the entire way up. And I don't always do that. And in this particular case, I just absolutely missed, I missed on the, on the story being as powerful as it is fundamentally just purely in terms of the growth. This was never a cheap stock. All right, so it's up 124% year to date. Even at those April lows that you just put the chart up. There was no, like opportunity was never selling in any sort of a discount on like price earnings growth. Just never, literally never. And this is a hallmark of some of these classic growth stories where they just don't let you in if you're thinking with, if you're thinking with like 1980s or 1990s brain, because that's not what's moving the stock. What's moving the stock. They have signed almost a thousand customers. Forget about all the government contracts, which are of course huge and a major part of the story. Alex Karp spent a lot of time in his remarks talking about the business customers, the commercial customers. And commercial revenue was up 93% year over year to 306 million. The government revenue only, I say only with air quotes, rose 53%. So a lot of people looking at this like a defense contractor, but in fact their commercial business is growing at double the rate on a year over year basis. Now they're guiding to $4 billion in revenue this year, which is great. But the market cap is 400 billion. So it doesn't make sense where the stock is trading. But I understand it. I listen to the call. Alex Karp is the new Elon Musk. He's downright messianic. He comes on the conference call and like one of the first things he says is sorry to the haters. Invest the new class of investors, they love that. They care more about that than anything. A sell side analyst who's accustomed to covering Lockheed Martin learned in business school. So that's the component of, of this that I missed. Not only are they executing, they're doing it with swag. That's what investors want. And you look at like growth managers who are not in this name and they have a mutual fund with, you know, 200 positions and Palantir is not one of them. You ask yourself who the hell is buying this stock? Up 7% today after this huge run. That's who I'm not. I don't have to do that for a living, thank God. But a lot of people do. And that's where that buying pressure continues to come from.
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Scott Wapner
Karp's the kind of guy who he kicks you, you know what and then he gets in your face afterwards and he tells you that he just did that. And I mean that as a company, the market can't argue with investors seem to like I'm not arguing with Karp.
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Josh Brown
Doesn'T set the valuation carp. Karp manages the business. And this company with a rule of 40 score of 91 or 92, you can't make a chart of that and put other software companies on the same chart the scale like they wouldn't. So what he's doing is impossible. Amazing. He doesn't decide the market value is going to be half a trillion dollars on 4 billion in revenue. That's not up to him. That's what investors have decided.
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Scott Wapner
Right there are. If you want to use air quotes, we can put it around culty Culty stocks. Maybe this has entered that universe like Josh was talking about regarding Musk and Tesla. Do you see Lemonade guys today in terms of. If you want to say some of the. And I'm not putting Palantir into the lower quality category by any stretch of the imagination, but meme like names Lemonade surging today up 29%. There's Axon. Joe owns that. It's the old Taser that hits a record high. There's a bit of that going on there, too. Yes, they raised their guidance. Their earnings beat. The target goes to 915 from 875 at Wolf. It was on Josh's best stocks list on June 17th. It's up 13% since then. It's been in the Jyoti for how long?
- [17:50]
Joe Terranova
One year. So we purchased this stock at the end of July last year at $300. We've stayed in the stock. They've delivered on the earnings growth. This is public safety equipment. And there is a degree of cult following here, in particular in the law enforcement community. So they understand the technology. They understand the purpose of the technology being utilized. And keep in mind, as municipalities continue to be strained in their budgets and you see staffing issues for law enforcement, you're going to be relying more and more on the technology. And this company is delivering that technology. And along with delivering the technology, they are delivering the earnings growth and growing into what several quarters ago was an obnoxiously extreme valuation. And, but now you're seeing the growth and that valuation, they're slowly growing it to. It's still triple digits, but slowly on that, too.
- [18:49]
Scott Wapner
I mean, the chart from last fall until now is like, wow. I mean, you've literally.
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Joe Terranova
There's, there's in the market like this, there's Palantir, there's Axon and the, there's Applovin. And those have been the three quote unquote momentum names that actually though, have been supporting their price appreciation with some actual revenue.
- [19:09]
Scott Wapner
Give me Joby too, guys, if you would, please. Because the news was yesterday, of course, about the acquisition of Blade. Yes, the stock is down today. It did hit a record high yesterday. Shares are up 200% in three months. Our Josh Brown just talked about, about that in the last couple of weeks as he owns it. What do you think?
- [19:29]
Josh Brown
Yeah. So this is not on the best stocks in the market list. Highly speculative there. Let me give you an example. They report earnings tomorrow. They're expecting revenue of $60,000. So the good news is, the good news is that's up 113% year over year when they reported like $20,000. But like, what's happening here is really unique. I have a small position. I'm up substantially in the stock. I'm going to hang on to it. Buying Blade makes perfect sense. Blade is going to now rebrand. They're going to keep this medical evac Thing that they're working on and all of the consumer rides like booking helicopters and short hop routes, those will come over to Joby, which makes sense because Joby is going to have the aircraft itself, which Blade does not have. So it's a really smart deal. But when you look at the news flow with Joby, this, this whole sector is just so red hot right now all over the world. And I don't know when we're really going to see like the hardcore commercialization of electric vertical takeoff and landing like in a city near you. But they're working on it in the Middle east and they're working on it in California and everywhere in between there are opportunities and I think Joby is in the. Is in pole position to really have like the most market share, the most mind share as this stuff starts to commercialize. So very speculative. I never tell people to imitate what I'm doing here, but I am keeping my position. And a lot still has to happen in order for this to be a long term successful company.
- [21:14]
Scott Wapner
Stock's definitely taken off. See what I did there? Are you listening?
- [21:19]
Josh Brown
And it's you vertically taking off.
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Scott Wapner
Yeah. What do you think about these moves in these types of names? You can, you can put them into whatever category you want. You don't necessarily have to put Palantir in there. But the meme stocks, the culture stocks, the low quality stocks, the high beta stocks concerning to you in any way. When you look at some of these.
- [21:41]
WhatsApp Representative
Charts, I mean, yes, near term, but at the same time, I think the question that was flashed on the screen and Scott, that you're asking is whether there's still more room for those high beta stocks. And I do actually think so. Because first of all, the cyclical environment is slowing. And what do people do during that time? They look out for that secular growth. Growth. And that's exactly, I think, why we're seeing, seeing some of those names outperform.
- [22:02]
Scott Wapner
I'm not even asking you whether there's room to go. I don't even think that's the question.
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WhatsApp Representative
Whether it's justified, you mean?
- [22:08]
Scott Wapner
Well, I mean it very well could be. I don't know. I mean, does it give you any kind of pause of a speculative fervor as part of this market that makes the quality of it or at least the durability of it in some kind of question?
- [22:26]
WhatsApp Representative
Well, I would answer it. Looking at the aggregate valuation levels, whether you look at Palantir or whether you look at the S&P 500. We've come a long way in a short period of time. So I think there's definitely something there. But at the same time, Scott, has it been justified, whether by getting the trade deals done, whether by, you know, having the momentum? I think it has been justified. And the other reason why I say some of this can further be supported is I do agree with Jim that we're headed for September, December rate cut. And so if that's the case, that could further fuel some of those valuations. So near term, maybe I would be looking for a consolidation, but I think there's some momentum. I will say, Scott, just really quickly on Palantir and the momentum. It is very clear we're early innings and I think you want to stick with those stocks, but probably be really mindful of valuations there.
- [23:12]
Scott Wapner
Jimmy, you need, you need one or.
- [23:13]
Joe Terranova
Two of these in your book.
- [23:14]
Jim Lebenthal
I mean, here's going on with you. Well, live a little.
- [23:18]
Scott Wapner
Have some excitement in your life.
- [23:20]
Jim Lebenthal
Bring back the Roku trade.
- [23:22]
Scott Wapner
I mean, why not? Every now and then you have a hunger for this.
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Jim Lebenthal
So here's the serious answer. It's a good question. What do you do here if you're me and you actually do pay attention to valuation? You know, it was funny when Josh said, if you have a 1980s, 1990s mindset, I'm not so conceited to think, Josh, you were talking about me, but I felt it nonetheless.
- [23:41]
Josh Brown
Here's what you talking about me.
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Jim Lebenthal
Okay, Josh? It's okay. Well, here's what you do. You wait for your spot and it feels uncomfortable right now. But bear this in mind. You know, Palantir, just hang on. Just hang. Hey, hey, hang on.
- [23:56]
Scott Wapner
I don't know, I think the glass of white milk down and grab like a brown spirit or something. Live a little. Come on. Come on, Jimmy.
- [24:05]
Jim Lebenthal
All right. Our friend Adam Parker did a study on this on the last year and it's really good. If you have a 10 bagger like this and you know what else is this is relevant to Nvidia over the last five years, you have to be prepared that there will be pullbacks of 40% or more. Now there will be a pullback in this name and Josh, you said it. It's, you know, if you're looking for the way in, it's not giving it to you right now. Believe me, I feel that you got to be patient if you're not in it here, buying it at this level seems tough to me. Just wait for the, the inevitable pullback. I'm not going to wait for a 40% pullback, but something comes down 10, 15%. I'm telling you, this looks like Nvidia five years ago. I eventually got into it, Scott, I did, and I've had great returns. But I wasn't Josh Brown. I feel bad about that, but only.
- [24:50]
Joe Terranova
Josh is Josh to defend Jimmy and I sincerely.
- [24:54]
Scott Wapner
We're just ribbing him.
- [24:55]
Joe Terranova
No, I know, but listen, human beings are not programmed to manage that type of volatility. Human beings don't have the ability in an extreme environment where you're seeing triple digit gains to think about valuation, to think about strong price appreciation, to think about elevated volatility and to ride through declines of 20 plus percent or more. There are people out there on X that think they could do it.
- [25:20]
Josh Brown
They can't.
- [25:21]
Jim Lebenthal
Absolutely right. Absolutely right, Joe. And look, I mean, you kind of want to call you out. I'm not. But you said something and I caught it. No, you said, listen, if it weren't for the rules based process, which serves you extremely well, you would have been out of this hundred percent. Right. Fundamentally, this is how I take that. Fundamentally.
- [25:37]
Josh Brown
One, one way to do it though, one way to do it is position size. Like we talk about all these risk management methodologies with options and this and that, but like saying to yourself, you know what, Palantir at 250 billion is totally stupid, but what if I'm wrong? I will buy a quarter of a normal allocation. I didn't do it. So I'm just, I'm just, I'm just spitballing here, but there, this is what I've done with stocks like Joby over the years. I did it with Toast. And then as like things develop, it's like, all right, at least I'm already in lower and I can average up. But I don't feel like a complete clown buying an all time high. So position sizing is an underrated way to get comfortable with high growth, high momentum situations where the valuation is stupid.
- [26:26]
Jim Lebenthal
Josh, I totally agree with what you're saying. The problem that I personally have is if I buy that toehold and it does go down 30%, whatever number, and.
- [26:35]
Josh Brown
You know this law.
- [26:36]
Jim Lebenthal
I've got clients, I've got clients calling me and say, why did you buy at that price when you, Jimmy Leventhal, are so valuation oriented, I just can't. That's.
- [26:45]
Scott Wapner
What did you get? That's Roku.
- [26:48]
Jim Lebenthal
Yeah, well, okay. All right, so I mean that's what we're always gonna go to, is that.
- [26:53]
Scott Wapner
What do you mean?
- [26:53]
Jim Lebenthal
It's the most relevant was. It was a total.
- [26:56]
Scott Wapner
Did you get those phone calls, Scott?
- [26:58]
Jim Lebenthal
I shouldn't have done it. But it was so obvious that I just did it and I haven't done it.
- [27:02]
Scott Wapner
Did you lose money in it?
- [27:03]
Jim Lebenthal
No.
- [27:04]
Scott Wapner
Then what do you mean you shouldn't have done it?
- [27:05]
Jim Lebenthal
Because. Because I wasn't true to myself. What, do we have to have a psychotherapy session here?
- [27:10]
Scott Wapner
Jim, let me move a couch over there. You lay down. I'll charge you for 50 minutes. We're already over. I can't even get 50. And it would be good. All right, you hold on.
- [27:18]
Jim Lebenthal
We'll take shouldn't have done it.
- [27:19]
Scott Wapner
We do have more of the day's biggest earnings movers. We'll do that next. Our call the day later, Josh Brown has a new addition as well to his best stocks in the market list. Halftime's back into.
- [27:32]
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- [28:32]
Scott Wapner
And now a next level moment from ATT Business.
- [28:35]
Josh Brown
Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding.
- [28:44]
Scott Wapner
And International Sleep Day is tomorrow.
- [28:46]
Josh Brown
Luckily, AT&T 5G lets you deal with.
- [28:48]
Scott Wapner
Any issues with ease so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere.
- [28:57]
Josh Brown
Learn more@att.com 5G network.
- [29:03]
Edward Jones Representative
On WhatsApp, no one can see or hear your personal messages. Whether it's a voice call message or sending a password to WhatsApp, it's all just this. So whether you're sharing the streaming password in the family chat or trading those late night voice messages that could basically become a podcast, your personal messages stay between you, your friends and your family. No one else, not even us. WhatsApp message privately.
- [29:46]
Scott Wapner
All right, let's do some committee. Stocks on the move. We're starting with Vertex today. It is sinking despite beating estimates. Is this Joe Terranova time? Joe Vertex. Who has Vertex?
- [29:59]
Jim Lebenthal
Yours truly.
- [30:00]
Scott Wapner
Go ahead.
- [30:01]
Jim Lebenthal
Don't act like you didn't know.
- [30:04]
Scott Wapner
Yeah, I was trying to let you breathe a little bit.
- [30:07]
Jim Lebenthal
Okay, breath is over. Look, if you're investing in pharmaceuticals, biopharmaceuticals, sometimes trials are going to go wrong. Vertex has this pain medication that came out at the very beginning of this year. It's a non opioid pain medication. It's non addictive. The FDA yesterday said that they don't see a path forward for this drug in peripheral neuropathy. That is a disappointment. On the other hand, this drug, Journivex, is on the market right now and it is rapidly gaining market share. So this is a disappointment that I think is going to be temporary. Now, the multiple has come down quite a bit because of this. I now think it is fairly valued. Obviously, I didn't know this news. Nobody can know this news unless you're Bud Fox dressing up as a janitor. You know, accessing the headquarters, which is not my modus operandi. You get the information, you make your decision. I'm going to stick with it for now.
- [30:59]
Scott Wapner
All right. Marathon Petroleum's higher. Their earnings and revenues both beat. So you recently added refiners, including this one?
- [31:07]
Joe Terranova
No, I made personal purchases of three refiners.
- [31:11]
Scott Wapner
What do you mean? Valero, Philips 66. Yeah, I thought you meant an ETF.
- [31:15]
Joe Terranova
I'm sorry, you said you recently.
- [31:18]
Scott Wapner
After yesterday's thing, you're a little jumpy.
- [31:21]
Joe Terranova
So each one of those, none of which I added because of the one month price performance, but each one of those I've added because I believe the price of oil continues to retreat. 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. This report was kind of so. So I would have liked to have seen a better report year on year. Wasn't that good? Technically, you're sitting right at the 50 day moving average. So potentially I think you got a nice entry point. I am going to stay with the trade again. I bought all the, all three refiners because I kind of threw everything at the refiner trade as we move into the fall.
- [31:56]
Scott Wapner
This was in the last two weeks, correct. As I was correctly stating once again, how do you feel about yum China? Do you own that?
- [32:03]
Joe Terranova
Yum China is, was added to the etf. So yes, in fact, I do own that. The earnings, the earnings reports were disappointing for sure. I don't like where it is. It looks like it's had a little bit of a technical breakdown here. Not enough KFC for sure, Jimmy.
- [32:19]
Scott Wapner
All right, let's get the headlines with Silvana now. Hi, Silvana.
- [32:22]
WhatsApp Representative
Hey, Scott.
- [32:23]
Edward Jones Representative
Good afternoon.
- [32:24]
WhatsApp Representative
Well, violent crime in the US Fell last year for the second year in a row.
- [32:28]
Edward Jones Representative
In its annual national crime report today.
- [32:30]
WhatsApp Representative
The FBI said that it fell 4 and a half percent while hate crimes fell by 1.5%. The report also found murder fell to.
- [32:39]
Edward Jones Representative
Its lowest rate in nine years down nearly 3 15%. Meanwhile, assaults on law enforcement did hit a 10 year high.
- [32:48]
WhatsApp Representative
The transportation Department is proposing a new rule that will speed up the deployment of drones that go past an operator's.
- [32:55]
Edward Jones Representative
Visual line of sight.
- [32:56]
WhatsApp Representative
So under the new rule, drone manufacturers and operators would have new requirements to.
- [33:02]
Edward Jones Representative
Safely keep drones separated from each other and aircraft, which is key to the expansion of drones for commercial package deliveries. And the Digital Health Co. Emed Population.
- [33:13]
WhatsApp Representative
Health announced today former CEO Linda Yaccarino.
- [33:17]
Edward Jones Representative
Will head the company which is working on a population health management platform for the weight loss and diabetes drugs known as GLP1s. Yaccarino calls the new job a chance to redefine an entire industry. Scott, I'll send it back to you.
- [33:32]
Scott Wapner
All right, Silvana, thank you very much, Silvana. Now coming up, Josh Brown's best stock in the market. He is ready with a new addition to the list. The big reveal is next.
- [33:45]
Edward Jones Representative
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- [34:15]
Josh Brown
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- [34:20]
Joe Terranova
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- [34:21]
Josh Brown
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- [34:26]
Jim Lebenthal
Building your personal brand.
- [34:27]
Josh Brown
Register now at CNBCMakeIt.com/Personal Brand.
- [34:43]
Scott Wapner
It is Josh Brown's best stocks in the market. Time you added a new name. What is it?
- [34:49]
Josh Brown
That's right, Scott. Today we're going to talk about Dominion Energy. Ticker symbol is D. If I asked most people what they think is the most important geographic location on Earth for the modern Internet, they'd probably say Silicon Valley. Some might say somewhere in Asia. They would be wrong. Loudoun County, Virginia. 70% of the entire world's Internet traffic passes through that area. And Dominion is the electric utility that is responsible for the, the bulk of what needs to happen in order for that 70% of global Internet traffic to come alive. Story here is very simple. When the consumer Internet was born, this is where AOL was based. And from there Yahoo and ultimately Google. Amazon invested $52 billion between 2011 and 2021 right in this area of the country. They've just committed to spending another 35 billion between now and 2440. Amazon's putting up another 42 million square feet of data center space in the region. So Dominion is the company supplying the bulk of the electricity needed. 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. So that's what's happening with, with the company. You look at the stock price. What makes this the best stock is when they reported earnings last week. They affirmed their dividend for the year, their earnings outlook for the year and their credit worthiness. And you know, this is sort of, I don't, don't want to call it defensive, but it is a utility. But you've got a stock. Give me like a one year chart, guys. You've got a stock now about to break out above historical resistance at about 6061, inflation happening as we speak. You've got that moving average crossover that, you know, I just live for. I'm obsessed with this golden cross that we're showing you here. The 50 above the 200. And there's a rate case that we should get results from in September. That's the next catalyst. They have submitted to their regulators the case for why they should be able to increase rates obviously serving all these data centers. If they get it. If the regulators say yes, here's your new rates that you can charge. That's the catalyst that I think takes the stock higher from a risk management standpoint. I would use 50 as a trader. That be my pivot point breaks below that level. Something must have changed and we'll find out eventually. So long as she stays above. I like it here. What's interesting, four and a half percent yield. PS4 and what's yield?
- [37:30]
Scott Wapner
What's also interesting to me is trying to and it sounds like you, you're trying to as well. Everybody kind of is wrap your arms around a new way of viewing these types of stocks. What was a historically and classically defensive type thing of utilities is now like a new growth stock.
- [37:52]
Josh Brown
It is, it's a new, it's great. It's crazy. But they're look, you've got the bulk of the people who have owned this stock for the last 10 years own it because it's a regulated utility. It's one of the top payers and it's one of the top payers in the S&P 500 dividend wise. And that's the traditional shareholder base. And over the last year that's changed because people are recognizing there is no AI without electricity. And the demand goes higher, the rates that can be charged go higher. And it's not just rates, it's this entire build out that only a small handful of companies are capable of managing and executing. And this is one of those.
- [38:33]
Scott Wapner
What do you think about this space?
- [38:35]
WhatsApp Representative
I think Josh, and the conversation here is spot on which is this is a new growth stock. I mean you look at utilities for example, they're up just 8% since the beginning of June. And I think it's the realization that hyperscaler Capex is actually once again reaccelerating surprising to the upper side which means more data centers and also more energy needs. And speaking of energy needs, the reason why I think investors are waking up to this being a growth story, Scott, is because we have not seen a lot in terms of power generation growth and really demand for electricity growth until just a couple of years ago. So I think this is a secular trend and sticking with it.
- [39:09]
Scott Wapner
You just added at most, which is a new utility buy in the etf.
- [39:12]
Joe Terranova
Really love that we added this to the portfolio. This, this is a stock that technically looks phenomenal. Look what it's done over the last five years. It's up nearly 50%. It has been really strong recently. And it is the solution as it relates to power generation, data center demand, natural gas is going to fill that void. These utility companies are the new oil.
- [39:34]
Scott Wapner
All right, coming up we have a CNBC exclusive interview. We're live in Aspen Today, Andrew Ross Sorkin standing by with the former Treasury Treasury Secretary Steven Mnuchin. We're back right after this. Welcome back. Let's get out to Andrew Ross Sorkin now in Aspen at the Economic Strategy Group meeting with a special interview. Andrew.
- [40:11]
G
Hey, thanks, Scott. We've got the former treasury secretary here, Steven Mnuchin, of course, the founder and managing partner of Liberty Strategic Capital as well. It's nice to see you, sir. We got a lot of former treasury secretaries. Hank Paulson's here, Tim Geithner is here, Larry Summers is here, you're here. Bob Rubin, Janet Yellen. Who am I missing?
- [40:29]
H
It's a big turnout.
- [40:31]
G
Here's what I want to talk about about tariffs. We talked to the president of the United States this morning on tariffs on these investments that are being made by our trading partners into the United States. When we heard from you, I think this back in April, you said you thought 10% tariffs would be okay, the markets would tolerate that. We're not anywhere close to that right now. What do you think is baked into the way the markets are actually thinking about tariffs today?
- [40:57]
H
Well, first of all, it's great to be here with you and a terrific turnout. You know, the president has two objectives. One is to rebalance the trading relationships and to make them more equal. And that's something I completely support. That's something I was very involved in with the first term in both China and usmca. And the second is he fundamentally believes in tariffs for creating revenues. I think if you did a 10% baseline tariff across the board, you'd raise a lot of revenue if you could score it. You know, I think people think that's in excess of $2 trillion over a long period of time and that would have a meaningful impact on the budget deficit. I think right now, you see he has tariffs somewhere between 15 and 30%. I'm glad to see the EU is done at 15. I'm glad to see he has Japan looks like they're making progress on China. So I think the market is slowly adjusting to what will be a higher baseline tariff across the board.
- [41:57]
G
Slowly adjusting. The market has not really moved. In fact, it's just continued to move higher for the most part. And so the question is, do you believe the market fundamentally believes that these tariffs are here to stay well at these kind of levels?
- [42:09]
H
There was a big correction in the market after Liberation Day, which were much, much higher levels. Levels and quite concerning across the board. And there was some question as to whether they were going to be to negotiate or not. Right now the market is looking at some certainty and some uncertainty. Clearly the market's driven right now by a lot of AI spending, a lot of capex in technology. This is all very, very good things for the US economy. On trade, I think it's going to take time to see how these tariffs are. Tariffs have an impact and different businesses will be impacted accordingly. Some will be winners and some will be losers.
- [42:48]
G
Do you think these negotiations are still open for negotiation? And what I mean by that is even deals that have been reached with the EU for example, or Japan or the like, that he could go back to the well and say actually I need you to do XYZ in the future and if you don't, we're going higher or I need you XYZ in the future and it will go lower.
- [43:09]
H
Well, I think the first thing that the market is looking for is, is actually an outline of what the specifics of the deals are since clearly tariffs are only one component of it. Non trade barriers are another very large component in making this more equal in terms of trading and then investment into the US So I think we're all actually looking forward to the documentation. But I think, look, you know, President Trump is a negotiator and he's made.
- [43:36]
G
It very clear their teeth in these deals though. And we asked the President this, this morning because I was going to say under his last term in that office there were some investments that were announced by China into the US but ultimately they didn't come to pass. And I just wonder how much teeth, whatever these commitments are, how committed they really are.
- [43:56]
H
Well, I think, you know, the, the China trade one phase one trade deal, you know, it was very large deal, very important, negotiated over a long period of time in lots and lots of different chapters. Unfortunately what happened is once we got into Covid, China didn't adhere to the deal and then the Biden administration didn't enforce the deal. So I think one of the important parts of the China negotiation is to make sure that China lives up to the commitments they made in the, the phase one deal.
- [44:25]
G
Do you think that he should give out some of this tariff money as dividends to either lower income or middle income people? Or would you prefer to go to the debt?
- [44:33]
H
I'd like to see it as deficit reduction. I think, you know, many of us are concerned about the size of the deficit and there's really only two ways of dealing with that. One is growing the economy and two is creating more revenues. So no, we should be using the tariff revenue for deficit.
- [44:50]
G
Finally the president talked about Kevin Awards and Kevin Hassett as potential Fed chairs. The two Kevins, which Kevin would you prefer?
- [44:56]
H
I think there's a lot of good candidates. The president mentioned there's two other people who he hasn't announced and I'm sure he'll make a great choice.
- [45:03]
G
You're still a politician. Thank you, Mr. Secretary, appreciate.
- [45:06]
H
Thank you.
- [45:06]
Scott Wapner
Thank you.
- [45:06]
G
Great to see you, Scott. I'm going to send it back to.
- [45:08]
Scott Wapner
You once and always, Andrew. Thank you very much. That's Andrew Ross Sorkin. Our thanks to Mr. Mnuchin as well. Mike Santol is next. Senior markets commentator Mike Santoli joins us now for his midday words. Good to see you. What are your thoughts today about how this market's reacting?
- [45:27]
Jim Lebenthal
Not moving fast enough to really break anything or decide anything is the way I would characterize. I mean, it shows you the ISM services miss did have an impact. Right.
- [45:35]
Joe Terranova
The banks pulled back on that.
- [45:37]
Jim Lebenthal
It seems like it just puts us in check but within a range change. If I characterize the sentiment going into the month, it's yep, the market doesn't owe us anything. We've come a long way due for some seasonal sideways chop or weakness. But don't worry, there's support at 6161 50. So it won't hurt that much. And then it'll just set us up for the fourth quarter rally. It's very plausible. But is it going to go according to script?
- [46:00]
Joe Terranova
Is all the stuff going to fall in line to let us, you know, let us live that out?
- [46:04]
Jim Lebenthal
So I think that's where we are. And the, the erratic flow from the.
- [46:07]
Joe Terranova
Retail stuff is basically hot or cold, depending on the day.
- [46:10]
Scott Wapner
Yeah, that's been unreal as we talked about. Top of the show. We'll see it. All right. It's Mike Santoli. Finals are next. All right. We'll see. On closing bell today, Adam Parker will be with me along with Keith Lerner has an interesting new note about where the stock market is heading in his mind. Stephanie Guild, Jim Stewart ahead of Disney earnings tomorrow and Sherry Paul of Morgan Stanley Private Wealth. So I hope you'll join me then, Josh Brown, your final trade is what.
- [46:40]
Josh Brown
Apple may be finding support here doesn't seem to want to go down anymore.
- [46:44]
Scott Wapner
We'll say, well, just, just as Joe bounced it out of the Jyoti. All right.
- [46:48]
Joe Terranova
I did say I might buy it personally.
- [46:51]
Scott Wapner
Okay, who's pg that is me.
- [46:54]
Jim Lebenthal
That is a California utility that now the there's starting to be clarity about what they might have to pay to resolve the wildfires.
- [47:01]
Scott Wapner
Okay. Industrials have been a great trade record high for that group. Second best sector this year. Who's that? They have.
- [47:07]
WhatsApp Representative
That's me. They're absorbing the tariff impact right now, but they are squarely beneficiaries of infrastructure.
- [47:13]
Joe Terranova
Mercado Libre Nice intraday turnaround.
- [47:15]
Scott Wapner
All right, I'll see you on the bell. You've been listening to CNBC's Halftime Report, the podcast. You can always catch a spot live weekdays at 12 Eastern only on CNBC.
- [47:29]
Edward Jones Representative
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer@ Capella University, Learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.