Joe Terranova (2:12)

Sure.

Scott Wapner (2:13)

But bigger picture, we don't feel the bottom is in. Just before we came on the air today, 11:53, Jonathan Krinsky of BTIG puts out. Assuming the S&P closes below 66.27 today, it will be the fourth consecutive close below the 200 day moving average. Okay. We suspect any resol rally is still a fade. We'll stick with Our call that as long as the S and p is under 6800, a move towards the 6000 level is likely. What do you say to all of that?

Joe Terranova (2:47)

So what I say to all of that is, look, if you are in the wealth management industry, which I obviously through Virtus Investment partners have a relationship with, you understand that moments like this potentially bring an opportunity because we're buyers for the long term. We believe in the long term. So everyone, with all due respect, is going to say you're going to buy for the long term. However, if your optics are over the next three to six months and you believe because of yesterday's tweet that there was a dynamic change in where you can get confidence that a bottom is in, I don't think you have the ability to find that confidence. In fact, what I see in front of me is we have actually had a significant breakdown and lost all defined trends. Find me a defined near term trend. Volatility. Yeah, you have a higher trend there. Oil, yes, you have a higher trend there. But if I look at the major indexes, the NASDAQ 100, the COMP, if I look at the Dow, if I look at the Russell, if I look at the S and P, they have all broken down. If I look at the various sectors, they've all broken down. So I don't know which way to go. Do I want to be bearish or do I want to be bullish in the nerd in the near term. And that is an uncomfortable position.

Scott Wapner (4:01)

You're looking for the wrong trend. And that, Brian, the trend that matters more than anything else is when the stock market gets unsettled enough for the person who lives at 1600 Pennsylvania Avenue, there's going to be a reaction. The so called Trump put which people have talked about endlessly. Okay, maybe that's the trend that investors need to focus on more than anything else. That's what occurred yesterday morning. That's why it's hard to get all beared up. Maybe that's why the market has reacted the way it has today. Some of the technicians out there say, oh, stocks weren't oversold enough. Well, they were to the technician who matters most of all, President Trump, they were oversold enough to get a reaction. What do you think?

Brian Belsky (4:54)

I think there's a lot there to unpack. Especially considering that with respect to how markets have done the last two years during the first quarter, number one, number two, in terms of the technicians wanting this perfect blow off, sell off, in terms of the V shaped bottom and yeah, of course it looks like a dead cat bounce yesterday like you said, when Wolff does such a great job talking about 80% of the stocks outperforming, that is a recovery rally. But I go back to last week and when the market was trying to recover, when the markets were positive, you had this very strong broadening out. Things are all working together. Small cap financials, value growth. So it's not just as easy as the Trump put. I think you have to be really careful on that to build strategies longer term around the Trump put. But again it's part of the buy the dip mentality that clearly has been working. And we Joe, talking about investing, when you are an investor you have to, if you're missing the 10 best days in the market, you're going to lose out longer term. So I think you have to be investing for the long term. And in these days and then the week like we had in terms of oil spiking, Scott, you can, will and should be adding to positions on these kind of reactive moves to the downside.

Scott Wapner (6:09)

I would suggest that until earnings expectations deteriorate in a meaningful way, we're still looking at like double digit earnings growth. Then why should your opinion longer term of this stock market change in any way as long as earnings are intact? Now it remains a question if oil prices remain elevated for a very long time and the war carries on for a much longer than expected period of time, well then all bets are off. But until something changes, what about my, my perspective?

Carrie Firest (6:42)

So I would say yesterday at 7am I was on a plane watching a screen and suddenly the futures went nuts. And it showed all of us how important it is to the market to resolve this war and have oil prices come down dramatically important. And therefore since it was short lasting because there was no confirmation of it, I think the market could have been up 5% for the day. The S and P could have had a 5% day if in fact we had something. So it tells us that there are a lot of buyers out there. They may be machine driven, it doesn't matter, they're still buying. What did they buy? What went up a lot, what has been sold, a lot of stuff that

Scott Wapner (7:29)

was down a lot. Like a lot of tech stocks, discretionary, like all the stuff that obviously would be down was up.

Carrie Firest (7:34)

Correct. So I, I guess we would say parts of the market were oversold. In general, all of the market wants this to resolve and wants oil prices to go down because we don't want a recession. And if you just look at what has happened in the Last few weeks the change in the so called heavy asset stocks which were up on a spike, I mean we feel that they might have been overbought selling at about 30 times P E for many of them versus the tech stock.

Scott Wapner (8:02)

You mean those so called halo names.

Carrie Firest (8:04)

They, they have been hurt more. Those stocks have come down an average of 10%. The big cap names, while the tech names Amazon is up, the others are down 3 to 5% so they've done better.

Scott Wapner (8:16)

So Barclays today raises their S and P target. They raise their target to 7650 from 7400. Shannon, they say yeah, macro risks are rising, Middle east war disruption, private credit stress. But the US still leads on nominal growth. Tech led secular tailwinds were incrementally bullish on the profit outlook, raising their earnings estimates. Okay, and the price target that to 7650. Not multiples but earnings goes to exactly what I was talking about. Until the earnings picture changes, should anyone's view of the stock market change?

Shannon Sokotia (8:52)

No, and I think to Kerry's point, she made a great point about what's been under more pressure over the last couple of weeks. And it has been been these companies that I think are leveraged to stronger nominal growth and a lower interest rate environment. And that's where we saw that broadening coming into this year, since August of last year. So yes there has been some, some tech buying. The other thing Scott, is that if you look at earnings expectations, firms that have continued to increase their earnings expectations for this year, Evercore just, just increased theirs and they have been at the low end of ranges across strategist across the street. And I think that that's an important indication that yes there is this potential for margin compression. But you go back to where what we were talking about in February, we're talking about productivity enhancement, we're talking about margin improvement, we're talking about all of the things that could potentially come to this broadening out support this further broadening out. So you look at things yesterday, yeah, the tech was strong yesterday. So is materials you are going to get potentially the foundation for this continue continued broadening in the market. And I think that's what's different from the bounces that we have seen over the last couple of years that have been led by mega cap tech stocks. These bounces are going to be broader in our view. And that lends itself to going back to your positioning in late January, early February and looking at it and saying where have things perhaps gotten more attractive and buying into that broadening trend because our view is that we will get a resolution and that we're still on this nominal growth path.

Scott Wapner (10:18)

You want to weigh in on this Barclays raising their target. I mean, it implies that, that you're going to end up at like 24 times. Now, again, they say it's going to be an earnings led, earnings driven expansion, not a multiple expansion. But nonetheless, raising your price target on the S and P to 7650 right now is I think, emblematic of those who are trying to look past this saying, well, history says you should. History's proven most of the times to be correct. Because once you do get past this, you're going to be right back to earnings are good, the economy is pretty strong and you still have the benefits of the policies from the administration. All the things that people were hanging their hat on before this conflict even started.

Joe Terranova (11:00)

You had about three major tailwinds coming into 2026 that were supporting the bull market that began in October of 2022. It was a disinflationary trend. It was monetary policy that aligned with investors. And then it was the earnings growth that you speak about. I don't think in any regard that has changed. So I agree that for the long term and whatever your price target might be, I think we are higher 12 months from now relative to where we are today. I agree with that. I guess it's just what I'm advocating, advocating for is stop trying to call the near term because I don't think there's any visibility into doing that.

Scott Wapner (11:39)

Yeah, no, but we don't. But you are, you are in a sense calling the near term because you're, you're probably more tactical of a, of a person than anybody else on this hats though, so.

Joe Terranova (11:50)

And I think you know that I wear two hats where I'm telling people on a daily basis, stay invested for the long term. This is not an inflection point. I've said that over and over again for throughout the month of March. No, but where this is not analogous to something that we witnessed in 22 or heaven forbid in 07 or 01. This is an environment that if you're focused on near term opportunities and you're trying to take down and generate alpha, you're trying to be tactical. It's very hard to find any clear defined trends.

Scott Wapner (12:21)

You're, you're. So what is the personally buying the GLD and personally buying Apple, what does that represent? So those are two moves that is

Joe Terranova (12:29)

being, you have, that is being tactical. And if you, if Scott, if you Remember a conversation we had in January, I said to you, I think the early part of 26 is going to be about being a little bit more tactical in the market if you're going to generate alpha. And that's exactly what I'm doing. So do we all know the fundamental usages of gold and the importance of gold in the environment that we're in now? Sure, of course we know that. I don't need to sit here and reiterate all that to all the viewers. We know about Apple. We know that Apple's been one of the best fundamental companies that has ever been brought public to the marketplace. What I'm trying to identify is setups in the market where I believe I have a favorable risk to reward scenario. And that's exactly what I see in front of me with the GLD. Okay, I'll buy the GLD here. I'll stop out against 375 which is the 200 day moving average. You finally got the retreat in gold and silver back towards that critical moving average. I don't want to go to silver. It's a little bit more thin, more volatile. I like the stability I see in gold relative to silver. And then as it relates to Apple, I've traded that back in August, I bought it, I sold it in November, I made 20%. In early February I tried it again. I lost, lost 4.7% literally in a matter of days. The stock pulled back.

Scott Wapner (13:49)

You said to me why Kramer says trade Apple own it. Well, hard stock to.

Joe Terranova (13:53)

Jim, Jim, Jim, Jim might advise that for the viewers and he's right. But in that regard, for someone who does this professionally for a living, I'm comfortable with my record, what my track record is that I could successfully do that. So buying Apple here, let's 25347 pull up the chart. You'll see it's coming real close to your 200 day moving average.

Scott Wapner (14:15)

That's a nice setup.

Joe Terranova (14:16)

That's a nice risk to reward scenario.

Scott Wapner (14:18)

Was reiterated outperformed today at Evercore. ISI330 is the price target. Kerry, you own that name too. Is it? And by the way, stocks having a pretty good week. Yeah, I know yesterday obviously was a huge, was a big day but the stock's up on the, on the week to date more than 2% the best performing of the Mega Cap names.

Carrie Firest (14:36)

So it's also been in the past, I would say the safety stock of the Mega Cap names there. And if you look at some of these stocks that you know we, we have owned but other people don't own that. I think have priced themselves to a level where anyone who doesn't own Apple, Metta, Amazon, and then I gave two others health care names, Thermo Fisher would be an example, and Boston Scientific, names that are down between, you know, they were down 12% from their high to the mid-30s%. This is an opportunity and you can buy stocks if you haven't owned these names and feel comfortable that the earnings growth over the next few years is going to reward you for owning them. We can't all be saying, oh, gosh, this is not a time, because there's so much uncertainty. There's always uncertainty. We have to think about what price we want to own stocks at and buy them.

Scott Wapner (15:30)

Okay, So I mentioned as part of the Barclays target raise on the S and P to 7650, that they identified the macro risks that you all know about Middle east war disruption and private credit. So on private credit, we need to hit that because many of those names are lower again today, if not all of them. Well, now, Ares just, just blinked green as I, as I said that, of course. So there are many big stories today. They're the latest. Aries is to limit withdrawals. I asked Jeffrey Gundlach about what's been taking place in private credit because he's been really gloomy on it, as you know. I want you to listen to what he told me yesterday regarding redemptions, especially from retail. Listen, anybody that has been around the block at least as many times as I have or even half as many times as I have, should know that the next window of liquidity from these investors, particularly the retail investors, they're going

Joe Terranova (16:27)

to ask for a lot more than

Scott Wapner (16:29)

they did in March. Everybody knows this. All right, well, I mean, that's, that's one person's opinion. However, it's backed up by what Guggenheim's executive chairman, Alan Schwartz said in the 11am hour. He's pretty close to private credit.

Jamie Dimon (16:46)

Listen, when redemptions can't be met, there is the potential effect of more and more people wanting liquidity from illiquid assets. And that can create ripple effects and spasms in the market. So it's a very important part of the financial system right now to keep an eye on.

Scott Wapner (17:08)

Right. Care. I mean, concerns beget more concerns. Redemptions beget more redemptions. What do you, what do you do with that? What Both Gundlach and Mr. Schwartz had to say. You own Apollo, I think is the one that you have. Correct.

Carrie Firest (17:22)

We also own Blackstone, which we've owned for 15 years.

Scott Wapner (17:25)

Okay.

Carrie Firest (17:26)

And I would say that with hindsight, it would probably have been a good idea to sell or trim those positions several months ago because they were becoming crowded, the industry had grown a lot. There's an awful lot of interest in having retailers held clients, advisors suggesting that they become part of portfolios. And when any trade gets crowded, perhaps that's the time to take some profits off the table. Of course, there's something different that's been pointed out between private credit funds, people wanting redemptions and banks. With banks, you have to get. You have to give the depositors their money, otherwise they shut your bank. With private credit, you can gate them. And will this pass? Yes. With pain? Yes. Does it mean there's potentially more downside? Possibly. These stocks have gone down a ton, you know, between 30 and 50%, depending on the company. Are they're selling at 10 times earnings, 9 times earnings, adjusted for some of the shortfalls here. So do I think there's sales now? Probably not two.

Scott Wapner (18:31)

There's two issues. Could it get worse? Sure. Everybody. Well, not everybody, but a lot of people believe that it can get worse. Is it systemic? Most people who are opining on that, who are either very close to those situations or just, you know, commentators say not really. I mean, Gundlach doesn't think it's systemic. Alan Schwartz went on to say that he doesn't think it's going to be systemic. But you're getting asked about it a lot, I bet.

Shannon Sokotia (19:02)

Absolutely. I would say it's probably, you know, 1a, 1b with the conflict in the Middle east right now, our view is that it is not systemic. And our view is based on not only our. Our exposure to the private credit space, but also our exposure to the public credit space. And the fact that you see this in leveraged loans, you see this in the securitized market, you see a significant divergence in a subset of the loans that are issued in the private credit market and the rest of the private credit universe. Also, just to be clear, the terms of these redemptions and the levels that are set are technically part of the structure. So it's not as if you're in a situation where these are new gates that are being put on these tenders are set at the levels that they're set at in accordance with the underlying liquidity of these assets. And so, yes, could we see potential. Continued looking for redemptions here. These are. These are usually a yield complement to a core bond portfolio. And potentially there's some concern from investors about the opportunity to still earn that yield. And so you could see redemptions in terms of the equities of these, of these private credit firms. However, there also was a significant amount of enthusiasm coming into this year, about a tick up in M and A. And so not only have you seen sort of this concern about private credit, but also seen rates go up. And so there's a couple of headwinds for these companies. I think in our view, again, it comes down to is this something where we see a broader ripple effect to credit? And our view is no, but there could be additional layers of stress in these underlying portfolios, particularly if they're not well diversified in terms of their issuer.

Scott Wapner (20:34)

This has been like a full 180 performance wise from what people expected was going to happen at the beginning of the year. When we talked about, we use the word realizations a lot coming into 2026.

Joe Terranova (20:50)

Yes.

Scott Wapner (20:52)

Suggesting that this was finally the moment. Right after all this time, private equity was going to finally get to, you know, have all these realizations. It would be great for business. And the stocks are all a mess year to date, 30% down, 25% down, etcetera, etc, etcetera. Because of this issue.

Joe Terranova (21:11)

And I think the strongest correlation and biggest obstacle regarding private credit's performance look no further than software and I truly believe it.

Scott Wapner (21:20)

You're going to go next. You can't talk about one without the other.

Joe Terranova (21:24)

The requirement for, in my opinion, publicly traded private credit to bottom is that first software has to bottom.

Scott Wapner (21:32)

Why haven't told people that it had?

Joe Terranova (21:34)

Well, we had the.

Scott Wapner (21:35)

But told the people that it had, I mean, a month to date. A lot of these names are up. The IGV had looked a lot better. It had a lot better lately.

Joe Terranova (21:43)

It had. I don't like the price action post Oracle earnings. Oracle's reported on March 10th it has basically lost all of the gains since earning, which is disappointing to me. We own Oracle. I think if software is going to rally, Oracle, Microsoft, there's certainly Palantir, they're going to lead the way. But it would be incredibly helpful if software would find a final bottom for private credit to rally.

Brian Belsky (22:10)

Well, you went back to the beginning of the show and you're talking about how important earnings are. The earnings for Oracle were great. Now I think it answers the question whether or not it is systemic or not. And so we sold all of our Blackstone in February. We were late. We owned it for five or six years. But we don't want any public, we don't want any public companies dealing with Credit on the software side. Joe's. Joe, we're aligned. We think the ones that are going to win are Oracle, Microsoft and Palantir. But in the meantime there remains a tremendous amount of specter around Oracle. I go Back to the March 8 report. The numbers were good. So we just have to get through this belief and prove that it's not systemic and these stocks are going to rocket.

Scott Wapner (22:52)

Software is not getting a lot of help by the way by Microsoft. No. And I mean that's like the elephant in the room. You could talk about all these other software names, you could talk about SaaS being disrupted or what have you but until Microsoft finds its own footing, I have a hard time believing that this space is going to perform any better. Look at the charts. Just stocks.

Joe Terranova (23:11)

Terrible.

Brian Belsky (23:11)

I think it's more than that on Microsoft. We've talked a lot about Apple on the program so far today. Remember Apple and Amazon underperformed last year and part of that was Apple's not talking about what they're doing in AI. He had AMS issues in Amazon. And so where the money was chasing was everyone was saying Microsoft is going to be the place to be because of the war chest of cash now because they're having a harder time monetizing and proving some of these things in AI.

Scott Wapner (23:39)

Getting called out by OpenAI Absolutely.

Brian Belsky (23:41)

And the copilot product and all that stuff.

Scott Wapner (23:44)

Analyst yesterday Amelius was like somebody's got to say it. There's a problem.

Brian Belsky (23:47)

Yeah, that was a great, that was a great known and it made a lot of sense. I don't think it's. I think it's really difficult to be overweight Microsoft here just because of the headlines. So that's why we are much more overweight. Like I said Amazon, Apple that underperformed

Joe Terranova (24:01)

last year and look today you get the announcement that Amazon Web Services is introducing new AI tools and all the software stocks have the sensitivity to move low. So Brian, you're right. Like we have to get away from those headlines And I think Stephanie Link has correctly said this. There's no proof point to know ultimately what the disruption is going to look like as all these mega caps keep introducing these tools.

Scott Wapner (24:22)

Feels like all of the exciting headlines in this area are from every company but this one. Right. I mean what any. It's like open AI is doing this anthropics doing this Lumeta and Amazon and even Apple isn't good. Wall Street Journal had that piece a couple days ago about Apple. It's like oh well they, they behind they're so behind in AI, it's been actually good. And you look at what the stock has done, kind of proofs in the pudding there.

Shannon Sokotia (24:49)

Microsoft needs to show that they can move nimbly here and they have an installed base that is beyond parallel. And so I think that that is the challenge for them right now is that they're sitting with, you know, this defined enterprise base that they are not able to take advantage of right now with their product.

Scott Wapner (25:04)

All right, lastly, let's talk about another area that we need to discuss. It's not discretionary, by the way. Market. Let's take a look. Picture the market real quick. Just because what was looking kind of dicey has started to look a little bit better. And that's the market as a whole. Dow's good for 130s and P is up 5. So we're all now in the green. Nasdaq's trying to get there, but it's having a little bit of a problem in part. You saw what Microsoft's doing in some of these other names too. And some of the chip stocks are still low. But I wanted to hit discretionary because as I looked earlier, many were lower restaurants. Some of them have turned around, though, as you saw the discretionary chart trying to move positive on an intraday basis, that's helped the market come back too. I was looking earlier at like Brinker and Texas Roadhouse. They were red, they're now green. There's discretionary right on the line of trying to go positive. Why do I bring it up? Because you bought more Target.

Brian Belsky (25:58)

I did.

Scott Wapner (25:58)

What's behind that?

Brian Belsky (26:00)

That's a contrarian play because I really like the new manager, the new CEO, the righting the ship there. We own in both our value and our dividend growth portfolios. I think that's going to be the turnaround stock. And remember too, they were really late in terms of their online presence post Covid. And so I think that they're still trying to right that ship. Scott. I think there's some money going back into Target.

Joe Terranova (26:20)

Tjx, Ross store, we've owned both of them.

Jim (26:23)

We've been rewarded.

Joe Terranova (26:24)

But listen, Brian's not wrong, just from a valuation perspective. Perspective. Ross store, TJX, they're rich. They're above 30 times targets.

Brian Belsky (26:31)

And TJX was when everyone was worried about the market last year. TJX is a defensive name because of the home goods and people go there, shop for the discounted pricing. So that was a fully loaded stock. We own it, but it was a fully loaded stock within Consumer Discretionary, which was a sector that has been iffy. Now, remember last year Consumer Discretionary did okay because of Tesla. So sometimes the numbers are skewed in and in the discretionary sector. And so TJX is a name that we still like, but fully priced.

Joe Terranova (26:59)

Yeah, it's fully priced and everyone knows about off price and the value of it. Yum. China Darden. Those are two names. Consumer Discretionary we own working well.

Scott Wapner (27:07)

All right, I have a news alert down in D.C. i got to get to Emily Wilkins for that.

Emily Wilkins (27:12)

SCOTT well, we are here at the Hill and Valley Forum, of course, bringing together big names in Silicon Valley, big names on Capitol Hill. We just heard of course from JP Morgan's Jamie Dimon and he said that he had a lot of frustrations when it came to the current military procurement process. Give a listen to what he just told the audience here.

Jamie Dimon (27:32)

I am deeply frustrated and I think this relates to the Department of War too, about our own policies in America which set us back. We are unable, we become, we become like Europe. We're unable to move and change, change budgeting, change procurement, you know, let people do what they need to do, you know, the rules in place and compliance in place and Congress gets involved.

Emily Wilkins (27:55)

In addition to military procurement, Dimon also talked a little bit about the impacts of a I he said that JP Morgan is set to be able to handle some of the fluctuations that could come, but said not everyone will be able to do so. He said there is a role for the government here, here to play in terms of giving incentives, making sure there's education and basically helping prepare the workforce for the transition that's going to come to. I touched on a lot of different topics, but those two I think were really the prominent ones and kind of the big takeaways for the audience here at Helen Valley.

Scott Wapner (28:26)

SCOTT Anytime he speaks, we listen. Emily, thank you. It's Emily Wilkins for us with that update from Jamie Dimon. Coming up, more moves from the investment committee. We have Brian Bellson adding to a name up nearly 20% in a month. Cary's buying the dip in a beaten down industrial stock too. We'll tell you what they are coming up.

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Scott Wapner (30:14)

AT&T business Wireless connecting changes everything. All right, let's do these moves that I mentioned we had. Carrie, we come to you first. You bought more Flowserve, right?

Carrie Firest (30:40)

Yeah.

Scott Wapner (30:40)

FLS down 18% in the past month. It's still up 34%, however, in the last six months. Tell me more.

Carrie Firest (30:48)

So we bought it because we liked the categories they're in pumps, valves, seals, energy extraction products. And we're very heavy on technology stocks. We moved out of some of them. The stock came down 12%. We bought. Now it's down 18%. We bought more and we think there's big opportunities there.

Scott Wapner (31:08)

Okay, Belsky, you bought more Netflix. It's had a nice move since they bowed out of the bidding for Warner Brothers Discovery.

Brian Belsky (31:16)

Sure did, Scott. This is the second time in the last five years that I'd put Netflix in the value portfolio. And I did it opportunistically because the stock was just getting pummeled from this deal. So we bought it February 24, about a week before the deal went the other way. And we just knew that that stock was going to. We thought the stock was going to go up regardless if they got once they got the deal or didn't get the deal. But once Paramount got Warner Brothers shareholders like that and they didn't have to spend the money. And that's why Netflix has gone up.

Scott Wapner (31:50)

Yeah, I mean, it's obviously up. I mean, you see.

Brian Belsky (31:52)

Yeah. And when you do, when you buy these opportunistic growth stocks, broken growth stocks, and put them in value. Joe used the term earlier. This is a tactical move. We're not going to be in this stock forever. Probably be two or three months and we'll see how much we can get. But I think there's more to go there.

Scott Wapner (32:06)

There's your 19% move.

Joe Terranova (32:07)

All right.

Scott Wapner (32:08)

Some calls of the day or Otherwise. Some movers. KB Home outperformed 77 bucks citizens. You own that they report today by the way. Right. You have that stock.

Brian Belsky (32:18)

Yeah. Now this is a company that has done amazing during this malaise with respect to housing. $600 million back to the shareholders. Revenue guidance looks pretty good. This is again from a small mid cap perspective. This is a perfect name to own in the consumer discretionary space.

Scott Wapner (32:33)

Monster Beverage outperform Morgan Stanley. Good entry point they say because the stocks had a pullback of 15%. Joe, you on that.

Joe Terranova (32:40)

Absolutely agree with that. I think you could add Coke and Pepsi into that conversation. Opportunity on the pullback. The concern has been margin pressure for the beverage names related to oil beverage industry in 2025 ran with 48.5 margins. You're looking at Coke at 61. You're looking at Monster at 56. Pepsi at 55. They could endure the margin pressure.

Scott Wapner (33:02)

Yeah. Then they'd say the geopolitical risk is manageable as they look back through through their history. Certainly Morgan Stanley. Okay. Ecolab upgraded overweight at jpm. You have that too.

Joe Terranova (33:12)

Recent purchase for us. This is in the material space. I know Josh highlighted this. Forgive me for not knowing exactly. I think it might be on his best stocks in the market list. The stock has pulled back from where he bought it. They are participating in the cooling dynamic related to data centers. I don't think that's going away at all. The pullback really is more related to the materials sector pullback that we witnessed in the month of March.

Scott Wapner (33:34)

Harry. Investors like consistent compounders and today B of A calls wabtech just that.

Carrie Firest (33:41)

Yeah. It's interesting. We've owned this stock for many years and they make rail cars and rapid transit equipment. One point they didn't make is that if you see fuel prices up at $100 or higher and you don't want to use as much fuel use trains or metro systems.

Brian Belsky (34:00)

I think Farmer.

Scott Wapner (34:01)

Does Farmer Jim own that lab tech?

Joe Terranova (34:03)

He does maybe.

Jim (34:04)

Yes.

Scott Wapner (34:04)

Yes. Right. Fits with his new book I think which drops today. Isn't it today? New books out today. Speaking of subway cars. Go Farmer Jim.

Carrie Firest (34:12)

Submarines.

Scott Wapner (34:13)

Yeah. Now, now the brand new book is not exactly that but sometimes it misses. It's ok. Brandon Gomez. Help.

Brian Belsky (34:21)

Hey Scott.

Jim (34:22)

Yeah.

Brandon Gomez (34:22)

NASA announced today it will spend $20 billion to build a base on the moon. The agency is canceling plans to deploy a station in lunar orbit and will use its components to construct the base over the next seven years. Now an executive order signed by President Trump last year aims for the US to land astronauts back on the moon by 2028 and begin building a permanent lunar outpost by 2030. And the White House is reportedly expected to announce that King Charles will visit Washington for a second state visit next month in honor of the US 250th birthday. Punchbowl News reports there will be a state dinner for the king, and he's expected to address a joint meeting of Congress. That would mark the first time a British royal has addressed lawmakers since Queen Elizabeth in 1991. And Gap is partnering with Google Gemini to allow shoppers to check out directly on the AI platform. It'll be the first major fashion company to work with Gemini. Shoppers will check out with Google Pay and Gap will handle logistics, including shipping. Scott, back to you.

Scott Wapner (35:19)

All right, Brandon, thank you. Brandon Gomez. Up next, trading the financials fallout. Brian Belsky makes a new move in this year's worst performing sector. We will tell you what the name is when we come back.

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Brian Belsky (36:59)

Let's talk

Scott Wapner (36:59)

some financials beyond a private equity and private credit because they're the worst sector so far this year. Now obviously they've been dragged into that whole conversation. You sold U.S. bank Corp. A regional bank, a large super regional bank.

Brian Belsky (37:15)

We did. A couple reasons why you don't have to own everything, number one. Number two Back to you, Back to you, Scott. No, we really like the big ones and the really small ones in banks in between have a scale problem. They can't compete with the big ones and they can't compete with the relationship based on the small ones. So we sold US Bank. It's got some issues with respect to wealth management. I don't like the BTIG acquisition. I work for Piper. We saw how that, how that worked out. And so at the end of the day, we like PNC better for wealth management. We like Truist for their multi line divisions in terms of line of businesses. We like Regions because they're in the right area of the country. With respect to the southeast, we like Pinnacle for the same reasons. And so again, we don't want to own everything and US bank is the casualty.

Scott Wapner (38:05)

So Baird today has a note that says the group looks attractive following the recent weakness. They Signal Single out 5th, 3rd Truest, Capital One synchrony. Huntington, what do you have out of that?

Joe Terranova (38:20)

I have Capital One, I have synchrony which look absolutely awful on a momentum basis. Obviously we are overweight financials so we would like to see that occur. We would. Sellers of U.S. bank in the previous rebalance. To me the focus right now for the financial sector is on the insurance companies and it's on the exchanges. We own cme, we own ibkr. Both of those is pulled back. You have a nice point of reference here where I think you could buy them. Cbo, a name that I have owned in the past.

Scott Wapner (38:50)

Cibo.

Joe Terranova (38:51)

Good for you think that is a name job? I think that is a name that you could buy as well. And then if you think about the volatility, don't you think, if you think about the. I'm just, I'm just going to keep going. If you think about the volatility that currently exists in The Marketplace, the 1 publicly traded market maker is Virtu Financial. Pull up a chart of Virtue Financial. It is approaching a one year high.

Scott Wapner (39:13)

That stock's breaking made our executive producer very happy. Two days in a row.

Joe Terranova (39:18)

I do that on a daily two

Scott Wapner (39:19)

days in a row.

Joe Terranova (39:20)

Everyone in my universe, most important, importantly the viewers.

Scott Wapner (39:23)

Okay Shan, what about the banks here? Are they attractive following the recent weakness?

Shannon Sokotia (39:29)

Well, I think if you're looking at regional banks in particular and you look at the multiples on the financial sector, there's an opportunity here. I think even some of the big banks are opportunities. And if you look at, you know, we talked last week about Basel 3 endgame and the potential for lower capital requirements that will translate at some point, especially as we get rates, you know, which are likely to come back down over the course of, of the next couple of weeks. So I think that they're just this is an opportunity to be selective. But you have a few areas of this sector to do that in Reading.

Scott Wapner (39:59)

Yeah.

Carrie Firest (39:59)

So I think in the case of some, such as American Express and Schwab, they got hit hard by the AI is going to replace every type of financial adviser. You're doing it all yourself. That was overdone and those stocks have bounced from that.

Scott Wapner (40:13)

Okay, we'll take a break and when we come back, Mike Santoli, he's on the other side with his midday word. Senior markets commentator overtime co anchor Mike Michael Santoli joins us now with his midday word. As we look at this market today, I feel like yesterday morning's Truth Social post was a bit of a game changer if, if in nothing else. It makes people think twice now about getting too negative. You just don't know what's around the corner.

Jim (41:01)

No, it's a reminder that upside risk exists. I heard the litany kind of went through at the top about people kind of skeptical of this bounce. That is what the standard historical playbook tells you to be, which is, you know, skeptical that this initial bounce didn't really clear any major hurdles. When the market goes down and damage is done to the longer term trend, the burden of proof on the bulls goes up. I understand that. But 6500 on the S and P. It's kind of a plausible place to think that maybe we have a floor unless we get incremental negative information or this negotiating idea is completely debunked in the near term, which I kind of doubt is the case now. The more time that WTI spends above 90 and Brent spends above like $95, you know, maybe the more restrained the, the equity market rebound attempt is going to be. Also watching broader credit, private credit obviously is again kind of under pressure, but spreads have actually narrowed for corporate debt over the as as over yields have gone up. That's been a pattern because people just like the absolute yields getting higher. So I don't know, I think it's a, it's an obvious holding pattern. We still have to make sure that you see some kind of demand come in as a rush as opposed to just that kind of short covering and don't get too negative type of behavior. We saw yesterday.

Scott Wapner (42:21)

Market can probably deal with, you know, WTI a little above 90 for a bit. But once you start to get over the you know, the $100 level, it just becomes incrementally more bearish, I would think, in people's minds for what the markets are going to do.

Jim (42:37)

And of course you have to watch the out months, how they're being priced. The reason I mentioned 90 and 95 is that's where the. That's where it's kind of bounced on this run. And it's been sort of a support area. So if you actually spend a lot of time below that, it starts to feel like maybe it's breaking down and the rules are changing a little bit. But yes, there's no doubt. And look, I think that the White House has implicitly told you that $100 oil is also a pain point there. And maybe that catalyzes other action.

Scott Wapner (43:02)

Yeah, no doubt about that.

Brian Belsky (43:04)

Michael.

Scott Wapner (43:05)

Thank you. I'll see you on closing bell. That's Mike Santoli. Still ahead, we have many committee stocks on the move today. We will go through a handful of them next. All right, let's talk about some stocks on the move. Gilead is buying the biotech firm Aura. $2 billion, right. You own the stock? Yep. Humility Capital owns it.

Brian Belsky (43:45)

Humiliates investment strategies. Thank you. His. Yeah, we own it. You know why? Because of this type of move. Lots of cash. This is what they're going to be doing. And they're going to continue to buy these little properties like this.

Scott Wapner (43:57)

You like it?

Joe Terranova (43:58)

I do. I like the fact that they are diversifying the product mix away from the antiviral drugs, towards cancer, towards autoimmune. And they've really strengthened the balance sheet over the last couple of years which has given them the ability to make some acquisitions.

Scott Wapner (44:12)

Do you like the biotechs here or no?

Carrie Firest (44:14)

Yeah, I think I. Yes, I do. I mean, I own Amgen. You do?

Joe Terranova (44:18)

You think you do?

Carrie Firest (44:19)

Yes, I do.

Joe Terranova (44:19)

You think I do.

Carrie Firest (44:20)

Thinking about.

Scott Wapner (44:20)

Right, hold on. I'll give you a couple seconds to discuss it with yourself and you can give us the answer. Hold on. She'll be right back.

Brian Belsky (44:27)

Reconcile?

Carrie Firest (44:27)

Yes, the answer is yes. Well, you know, they were all very cheap. Then they had a run up and Gileads moved up. But this is good acquisition and the stock's still inexpensive. But they used higher price stock.

Scott Wapner (44:38)

Okay, I'm glad we got to the bottom. Thank you. Thermo. Fisher, I'm coming right back to you. So I don't know if you need another discussion.

Carrie Firest (44:43)

I'll let you know if I just.

Scott Wapner (44:44)

They completed an almost $9 billion acquisition of Clario Holdings.

Carrie Firest (44:47)

Yeah, it's another complement to their CRO business. That's an area they've decided to spend more of their capital. I think it's a good idea. Thermos down 23% recently the stock had a big run. Now it's down. It's selling at 18 times next 12 months earnings. So yes, I think it's a good opportunity for them.

Scott Wapner (45:07)

And the stock attractive about FedEx launches launching same day delivery with one rail trying to compete I guess more with Amazon and Walmart.

Brian Belsky (45:15)

They're trying. You know, it's interesting about FedEx because they had a tougher year last year and we added to our value portfolio because the industrial space was so expensive and so FedEx where valuations still make a lot of sense. We like the stock. We like it way more than ups.

Scott Wapner (45:29)

Okay. I guess that's all we got in that one. Okay, we'll take a break. We'll do final trades after this.

Joe Terranova (45:39)

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Keith Lansford (45:42)

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Scott Wapner (45:53)

3 o' clock Eastern Time. Closing bell marathons. Bruce Richards will be right here at post nine. We're talking private credit, obviously. Get his thoughts there. Alex Cantrow, it's you have the anthropic trial today. OpenAI calling out Microsoft. There's a lot to chat about with big technologies. AK he'll join us to Liz Thomas. Bryn talking to Max Keckner. So we'll do all that three o'. Clock. We'll see what happens in this market as well. And we'll take you through that last and final an important hour. Brian Belsky, what do you got for your final trade, Sir?

Brian Belsky (46:20)

Costco, top 25 company in the world should absolutely, positively be part of any large cap core growth portfolio.

Scott Wapner (46:27)

Portfolio. All right, who's the discretionary?

Shannon Sokotia (46:29)

That's me. We've seen oil price obviously weigh on discretionary stocks, but the higher middle income, higher income households remain engaged.

Scott Wapner (46:37)

Okay. Nextera Energy.

Carrie Firest (46:40)

Yeah, Nextera has had a bounce here partially due to data center growth, but now maybe sustainability is no longer a bad word.

Scott Wapner (46:49)

All righty.

Joe Terranova (46:49)

And Valero, yes, oil near the high for the day as we speak at 9,000, 270. But it is formulated gasoline and heating oil to pay attention to. That takes you to Valero.

Scott Wapner (46:58)

All right, thanks everybody. I will see you on the bell. The exchange with Kelly begins now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live. Weekdays at 12 Eastern only on CNBC.

Jennifer (47:15)

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

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