Is the Worst Over for Stocks? 4/15/25

Summary

Halftime Report: Is the Worst Over for Stocks? (April 15, 2025)
Hosted by CNBC's Scott Wapner

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Introduction

In the April 15, 2025 episode of CNBC's Halftime Report, host Scott Wapner engages with top investors from the Wall Street community to dissect the current state of the stock market. The central question posed is, "Is the worst over for stocks?" As the trading day hits its midpoint, the panel delves into market sentiments, sector performances, and strategic investment moves to provide listeners with a comprehensive analysis of where the market stands and where it's headed.

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Market Update

Scott Wapner opens the discussion with a market overview, noting a general upward trend:

"We are green across the board. We do feel, Joe, a little more settled down today. Yields are down. Maybe that's the reason why bond market seems to have calmed down just a touch." [00:59]

He highlights recent adjustments in stock price targets from major financial institutions:

• Wells Fargo: S&P 500 target adjusted to 5,900-6,100.
• Jefferies: Lowered its target from 6,000 to 5,300.
• Bank of America: Reported the fifth most bearish global fund manager survey in 25 years, with heightened recession expectations and increased intentions to cut US stock holdings.

Scott references Jim Cramer's contrasting bullish stance:

"Jim Cramer declared this morning on Squawk on the Street that says buy, not sell. What do you say?" [02:24]

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Sentiment Indicators

Joe Terranova provides insights into market sentiment, emphasizing a shift away from earlier pessimism:

"The consensus is pivoting away from where they were at the beginning of the year... The VIX is below 30. That's the first time it's been there since April 2nd." [02:24]

Laura Castleton discusses the improvement in sentiment indicators:

"It's up, but it's still. We're still in oversold conditions... The S&P oscillator is now negative 4. It's still oversold, but not nearly as much." [03:51]

She praises the resilience of major banks:

"I was pretty impressed with Wells Fargo and Net Interest Income, Bank of America Net Interest Income." [04:52]

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Investment Strategies and Stock Analysis

Shannon Sokotia on Market Positioning

Shannon Sokotia addresses whether it's time to buy or hold:

"Our view is that it's, it's more on the side of being time to buy... You're not going to be able to time that." [05:33]

She emphasizes overweighting global equities, particularly in Japan and Europe, anticipating additional fiscal stimulus in 2025.

Josh Brown on Defensive Stocks: Selling Alphabet, Buying Netflix

Josh Brown shares his strategic move of selling Alphabet shares and investing in Netflix as a defensive play:

"Not everything is an extreme. I'm not in the camp that thinks Alphabet's gonna lose the AI race... I think it's a defensive year." [08:20]

He details his bullish stance on Netflix, citing its resilience and growth potential:

"I think this is the most defensible technology company almost to the point where it's a consumer defensive stock... I don't think it's necessarily a cheap stock at today's price, but I think it's going to act more defensively and has way more potential upside." [09:57]

Scott probes into the market's rerating of stocks:

"There does seem to be a rerating at the very least of expectations. And I think that's what you're talking about for these kinds of stocks in this kind of environment." [14:16]

Dubravko Lakoš on JPMorgan's Market Outlook

Dubravko Lakoš presents JPMorgan's revised S&P 500 target amidst ongoing trade tensions and economic uncertainties:

"We're trying to think about it through scenarios. So we basically put a bull case of 5,800, a bear case of 4,000... the base case is 5,200." [16:56]

He discusses the impact of tariffs, particularly focusing on China, and the challenges in forecasting amidst a concentrated trade war. Lakoš also touches on potential fiscal policies and their implications for future growth.

Sector-Specific Discussions

• Energy Sector

  The panel scrutinizes the underperformance of the energy sector, with Joe Terranova highlighting resilience in major players like ExxonMobil:

  "I still think when you're looking at natural gas on a discretionary basis, to me that is more relevant and you have more opportunity there versus crude oil itself." [36:49]

  Josh Brown explains his decision to sell Baker Hughes after it breached a preset stop loss, while maintaining long-term positions in major energy companies like Chevron:

  "It's a more defensive way to be in energy... Not quite as reliant on day-to-day spot price moves." [36:11]

• Cybersecurity Sector

  Josh Brown and Laura Castleton express strong confidence in the cybersecurity sector, citing its critical role in the evolving technological landscape:

  "This space, and I'd love to hear Steph agrees, I think this space has legs throughout the rest of the year." [43:09]

  Castleton adds:

  "I actually think this is my favorite theme for the next decade... Due to AI, you're going to need cyber." [45:02]

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Notable Stock Movements

Boeing

Laura Castleton discusses Boeing's minor setback due to halted deliveries to China amidst the trade war:

"It's down 50 basis points on this news. So clearly this is not material for Boeing at this point in time." [30:22]

Palantir

Joe Terranova highlights Palantir's significant share increase following its AI military system acquisition:

"This is a huge win. It speaks towards the products that they have as it relates to AI and the integration of AI and defense weaponry." [31:22]

Northrop Grumman and Fastenal

Josh Brown introduces Northrop Grumman and Fastenal as top performers and new additions to his best stocks list:

"Northrop is on the verge of a massive breakout... Fastenal is one of the best stocks in the market." [40:12]

Joe Terranova reinforces Fastenal's prospects despite recent earnings:

"Stock is up 13%... assuming that demand remains strong." [42:38]

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Conclusion and Final Remarks

As the discussion wraps up, the panel emphasizes the importance of strategic positioning amidst market volatility. With a focus on defensive sectors like cybersecurity and resilient companies like Netflix and Fastenal, investors are advised to navigate the uncertain landscape with informed confidence.

Scott Wapner closes the episode by reiterating the necessity of staying engaged and vigilant:

"All right, we'll take a break with a hot take on the other side from Josh on one of this year's top-performing tech trades." [29:08]

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Notable Quotes

• Scott Wapner:
  "Is the worst of the turbulence over for stocks?" [00:59]

• Joe Terranova:
  "The consensus is pivoting away from where they were at the beginning of the year." [02:24]

• Laura Castleton:
  "We're still in oversold conditions, but not nearly as much." [03:51]

• Shannon Sokotia:
  "You're not going to be able to time that [the market]." [05:33]

• Josh Brown:
  "I think this is the most defensible technology company almost to the point where it's a consumer defensive stock." [09:57]

• Dubravko Lakoš:
  "We're trying to think about it through scenarios." [16:56]

• Joe Terranova:
  "Energy has been a struggle, down 14% month to date." [36:49]

• Laura Castleton:
  "I actually think this is my favorite theme for the next decade." [45:02]

• Josh Brown:
  "Northrop is on the verge of a massive breakout." [40:12]

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This episode of Halftime Report provides a multifaceted view of the current market dynamics, balancing optimism with caution. The insights shared offer valuable guidance for investors seeking to navigate the complexities of today's financial landscape.

Transcript

[Laura Castleton]

Hello, I'm Laura Castleton with Janice Henderson Investors. Is a brighter future possible? At Janice Henderson, we think it is. We work to help our clients achieve superior financial outcomes and fulfill our purpose of investing in a brighter future Together. We never forget that this means our thinking and our investments are helping to shape millions of futures. At Janice Henderson, we are committed to helping you invest in a brighter future. To learn more, go to Janashenderson.com.

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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. Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wagner, front and center this hour. Good question for you. Is the worst of the turbulence over for stocks? We will ask the committee. We'll also document some very interesting new moves. Joining me for the hour today, Josh Brown, Joe Terranova, Stephanie Link and Shannon Sokotia. We will check the markets. We are green across the board. We do feel, Joe, a little more settled down today. Yields are down. Maybe that's the reason why bond market seems to have calmed down just a touch. However, Wells Fargo today, the investment institute, they take their S and P target to a range of 5,900 to 61. Jefferies lowers its target to 53 from 6,000. And bank of America's global fund manager survey was the fifth most bearish in 25 years, fourth highest recession expectations of the past 20 years and a record number of global investors intending to cut US Stocks to which Jim Cramer declared this morning on Squawk on the street that says buy, not sell. What do you say?

[Joe Terranova]

I think they're reacting to price. Reacting to price more than anything else. The consensus is pivoting away from where they were at the beginning of the year. I continue to try and focus on what is the messaging in the market. I thought yesterday the messaging in the market was positive. You had a lot of the technology, the semiconductor names that were participating today. There are other things that I like. I like the fact that the Vix is below 30. That's the first time it's been there since April 2nd. I like the fact that we finally have a offering in high yields. We've got a junk offering today, an LNG distributor. We haven't had a high yield offering since April 2nd. And then lastly, and we'll talk a lot about this, we could actually focus on some pretty strong earnings. We seen the last several days, the trading revenue has been really strong for the likes of JP Morgan, Goldman Sachs, and Bank of America follows along with it today. So what does that do that gives the market a degree of comfort? Does it take us away from the extreme volatile scenario of the last couple of days? No, it probably does not. But it feels much better this week certainly than it did the end of last year.

[Scott Wapner]

Steph, is the B of a fund manager survey a contrarian indicator, as people are trying to suggest, because it is true that everybody does feel like they're on the same side of the boat. Now, that doesn't always mean that you're on the wrong side of the boat. And there have been reasons to all be gathered together in a consensus of caution and negativity because of all the uncertainty.

[Laura Castleton]

But a lot of the times when you're on one side of the boat, you don't make that much money. It's when you're in the center or off the other side. I don't want to be on the other side where no one is, but I want to be kind of like in the middle because that's where you can make a lot more money. We are not as oversold as we were two weeks ago when I was buying, when it really was hard to buy, but we had fear and greed. This is a sentiment indicator that got to four. So zero is really, really bad and 100 is really, really good. We got to four today, it's at 22. So it's up, but it's still. We're still in oversold conditions. I look at an S and P oscillator kind of index, negative 11 two weeks ago. It's now negative 4. It's still oversold, but not nearly as much. But Joe made a good point. Earnings pretty good so far. We're really early on, but everyone thought it was going to be doomsday for the banks. And we all thought, well, we're watching guidance. And the guidance actually is pretty good. I mean, I was pretty impressed with Wells Fargo and Net Interest Income, bank of America, Net Interest Income. These are big parts of their businesses that they're guiding in line and the.

[Scott Wapner]

Fact that they're even giving guidance is, is a plus.

[Laura Castleton]

And that just given the fact that we sold off ahead of time now we have a lot to get through in terms of earnings but I do think we are going to continue to see solid earnings. Something like let's forget tariffs for half a sec, 9 to 10% that's ex tariffs. With tariffs is it 5%. But I still see growth, Scott and I still see growth in a lot of sectors that will be beyond that 5% growth, namely in technology, which is what I have been buying, but also in industrials and parts of discretionary as well. So I think you can pick your spots. You know I don't have that much cash anymore. Right. I went from 9% to 1 and that was two weeks ago. And I think I'm set up pretty well at least into earnings because I do think you're going to see a pop.

[Scott Wapner]

Shan, is it time to buy or is it time to sit tight?

[Shannon Sokotia]

I think our view is that it's, it's more on the side of being time to buy. I mean we went overweight Scott and global equities this week and this week. Yeah. As part of our.

[Scott Wapner]

Why did you do that?

[Shannon Sokotia]

Because I'm going to tell you why.

[Scott Wapner]

Would you bury the lead? I don't see that on the front.

[Shannon Sokotia]

Back page 2 through 10 otherwise you would have come to me first. I didn't want that. So you know, listen, when we came into this quarter one of the things that we really thought about was if you're a client of ours or you're an investor who's been sitting on cash, who's been waiting for that opportunity. April 2nd gave you that opportunity, to Stephanie's point, to be able to buy at much more attractive valuations even in technology where the valuations were very vulnerable coming into this year and we were underweight areas like technology and communication services. Our view is that this rerating may still have a little bit to go but you're not going to be able to time that. So areas that we've gotten more constructive on, I think we're still very constructive on the cyclical part of the market. We are still overweight small and mid cap stocks. Again we could talk about treasury yields and the potential pressure on that trade and you know, some continued concern as it relates to tariffs and their impact on small and mid cap companies. But we also went overweight in developed ex US stocks And our view is that from our perspective we have been constructive on Japan. We are much more constructive on Europe. The bottom line here is that we're looking for areas where, one, there's going to be additional stimulus. So I look at Europe and China as being two areas where we're going to see fiscal stimulus in 2025. And then the third thing is, again, this rerating. If you look at multiples, not just for the s and P500, but for the S&P600, if you look at those multiples, they're a lot closer now, Scott, to, you know, em and developed X international. So it feels like if you've been sitting in cash, this is the time to start putting money into the market.

[Scott Wapner]

So overall, bottom line, you went overweight US Stocks.

[Shannon Sokotia]

No, we went overweight global stocks. We are still neutral us.

[Scott Wapner]

Still neutral us.

[Shannon Sokotia]

But we are. But we have been. And you know this. We have been more cyclically, you know, more cyclical in terms of our allocation. So we're not quite there yet to add to large cap because we're waiting for potentially some. Some additional pain, particularly in some of those vulnerable parts of the body.

[Dubravko Lakoš]

Okay.

[Scott Wapner]

So I'm glad we drilled down on that. I think we're all on the same page. Which brings me to Josh Brown, who has made some interesting moves today that I wanted to have a little larger conversation about where we stand before I get to that. So how long have you owned Alphabet, which you sold today? I'll talk about what you can, but you've owned it for a long time.

[Josh Brown]

Yeah, I had. I had sold earlier this year half my position, which we talked about a couple of times on the show. I don't know where that was in the 180s, the 190s. I sold the rest, and I think that Alphabet will be fine. Not everything is an extreme. I'm not in the camp that thinks Alphabet's gonna lose the AI race or it's got, like this fundamental issue with all of these large language models taking away from. From the use of search. I think they will be one of the top AI services, but it's just. It's never had to compete the way that it does now. And younger generations are jumping literally right into ChatGPT when they want to know something. They're not looking for blue links and sponsored links and ads. They just want the answer. And so, like, Google is going to have to come up with an answer to that. And I think that's reflected in the multiple that the stock now sells out. I think other people understand that. It's not a unique insight to me, but I think it's gonna be a defensive year. And I think, you know, when you look at who is most reliant on advertising revenue amongst large cap tech, it's really matter and it's and its Alphabet and arguably the meta mode around Instagram is stronger than the Google moat around Google search. So I think it's just that simple. I wanted to do something more defensive and so what I bought instead of Alphabet in that category is Netflix. You want me to pause here so you can question or.

[Scott Wapner]

Yeah, I mean it was your final trade about a week ago, I guess exactly a week ago Netflix was. So maybe the writing was on the wall that you were looking at this name for a while, which has proven to be resilient relative to many of the other names in that universe, certainly of the larger cap, but not Mark, but, but not mega cap tech. But why? What made you finally buy that?

[Josh Brown]

So it hit, it hit my list of the best stocks in the market a while back. I've been stalking it ever since. I've come to the conclusion that not only is it on the list of best stocks in the market, quantitatively I actually think it's the best stock in the market for, for this year. That doesn't mean I think it'll go up the most. But I am not on the hunt for the hardest hit stocks to try to bottom fish. I'm not on the hunt for falling knives. I'm looking for resilience because I think in a defensive bear market, that's the number one quality of the stocks that by year end will have performed the best. So consider this from the market top on February 19th, Netflix is down 5.9% going into today. The S&P 500 is down double that 12% and Nasdaq's down almost triple that 15%. It's been a remarkable name in the tape. This year it's only 8% below a 52 week high. The median communication stock is 17% below the 52 week high. RSI is still 58. So in a market where almost everything's got a relative strength right now of like 40s, 50s, nothing special, this stock stands apart from almost everything else. There's a piece in the Journal that I think everyone should read about the discussion taking place at Netflix's annual business review meeting. They're talking about literally doubling revenue by the year 2030, which is only five years away. And they're talking about joining the $1 trillion market cap club. Market cap right now is about 400 billion. I think that this is the most defensible technology company almost to the point where it's a, it's a consumer defensive stock. I don't think this is the type of service that anybody cancels. And even if they're thinking about canceling, the lower priced ad supported tier will catch those people. And actually what's interesting is Netflix makes more money from the ad supported tier than they do from a premium tier household. So I love everything about, I love everything about it. I don't think it's necessarily a cheap stock at today's price. Obviously Alphabet's cheaper. I just think it's going to act more defensively and has way more potential upside.

[Scott Wapner]

It has, Joe.

[Dubravko Lakoš]

Right.

[Scott Wapner]

It has acted more defensively. It may not be. I think I asked somebody yesterday, maybe it was you, if it was recession proof. And I think your answer was it was, it's recession resistant. Oh, maybe. I don't know that anything in the market is necessarily recession proof if the market comes down. But Netflix theoretically would come down less potentially than some other names.

[Joe Terranova]

Well, think about consumer behaviors in a recessionary climate. What are you going to be doing less of? Less of going out to find entertainment and actually staying home to actually enjoy the entertainment that you have at Netflix. So I think in that regard it is, and I think since April 2, Liberation Day, Netflix is actually higher. So there's, there's the resiliency being reflected in this company. It's a classic, classic example of buying something that appears to be rich in a valuation, buying something that appears to be high in terms of price and seeing it move higher. We have a 78% gain in this over the last year after purchasing it in April at around a little bit below $550. And at the time, you know, some people looked at me puzzling for doing it, but I recognized clearly the fundamental chain that you had as it relates to being able to have price pricing power with the price hikes, the ad tier subscription model, seeing the benefit there. And now you're seeing further evolution in terms of the technical. So Josh, reaching for it here, close to a thousand. I have no problem with that because I think this stock clearly takes out the 1064 high and goes to 1250.

[Scott Wapner]

I mean, Josh, we do have price target cuts for several of the mega caps today, including your Alphabet, where your former Alphabet, meta, Amazon Alphabet, all cut at Wedbush. I mean, there does seem to be a, a rerating at the very least of expectations. And I think that's what you're talking about for these kinds of stocks in this kind of environment.

[Josh Brown]

Yeah, look, one of the things that's one of the things that makes this moment in time so difficult is we're all so excited about AI. We all see it sort of like at the edges transforming our workplace flows and the things that we're doing professionally. And we have this kind of like, we have this sense that this is about to spill over into the consumer economy and just completely rewire all of the various tasks and work that we have to do and shorten the length of these things and speed things up and it's exhilarating. So, so we have that on the one hand, but on the other hand we kind of know that if the economy materially gets worse from here. So right now, if you're thinking about we're downshifting into like a 1 to 3% GDP growth world and all this uncertainty makes it even worse than that. We don't have to have a horrific recession for it to be plausible that these ad supported businesses are going to start to warn on earnings. Like it's, it's very plausible. A lot of those companies that you posted in that graphic, they need the ad market to stay really strong. It's also plausible that I spend could take a hit from all this uncertainty. There's news everywhere about Microsoft abandoning an AI related build out in Ohio. It's not clear why they did that, but it seems really sudden. Are there more of those or is that like a complete aberrant one off that's going to have its own, own explanation? I don't know. But I think that gets to the heart of why analysts are saying, look, we still love these businesses, we still think they have huge advantages and enduring moats and blah, blah, blah, 2025 just might not be the best year to own them. So that's the way I'm thinking and I totally agree with the point that you're making.

[Scott Wapner]

Okay, let's get the view of our halftime headliner today. Stubravko Lacos, JP Morgan's head of global market strategy. He's with us here at Post Night. It's great to have you. Thanks for having me, man. I can't imagine what it's been like for you trying to model all this through, but you did take your target down for the year recently and you did take your earnings estimate down as well. So your new target is your base case 52, 5200 or that's your base.

[Dubravko Lakoš]

Case, base case 52. But that's also assuming that tariffs, reciprocal tariffs from April 2 stay in effect. Since then we've had change We've gone from like a broad trade war to a little bit more of a concentrated trade war now focusing more on China. So the way we've been thinking about it, I think thinking about it just through one number, I think is a foolish game because forecasting in this environment I think is very hard.

[Scott Wapner]

Of course, I don't envy the job that you try and do at your best because nobody can model anything in this environment. And yet you're charged with trying to figure out where nine months or eight or nine months from now the S&P 500 is going to be.

[Dubravko Lakoš]

So we're trying to think about it through scenarios. So we basically put a bull case of 5,800, a bear case of 4,000, which obviously would then imply some form of recession and contraction. 52 was sort of more of the middle ground where you do get a hit to growth. But you sort of, you know, you come out of it and you sort of started thinking more about 2026 as a year where you start to see growth again. Right.

[Scott Wapner]

Well, because you're. Let me just stop you for a sec because with your earnings number coming down to 250, $250 for the S&P for calendar year 2025, you put a multiple on that of 20 times you get to 5,000.

[Dubravko Lakoš]

No, but I would think about, if you think about any kind of year end price target, I think the 2025 EPS number is irrelevant. You really need to think about what kind of anchor do you get in terms of earnings in 2026. 2026 number now is that I want to say 305. So you really has 305 the street consensus. 305, 2026.

[Scott Wapner]

I know 2026.

[Dubravko Lakoš]

So let's say if you shave off 30, 35, 40 bucks off of that number, then you're modeling off of let's say a 265, if that makes sense. So that's what I'm saying as I think that we're basically one or two months away from people completely dismissing 2025 from an earnings point of view and everybody's going to start focusing on 2026. Do you have a growth anchor in 2026 or is this now some form of recession that's going to spill over in 2026? Because in 2026 we do have potential catalysts that could help growth get a bit of a uptick.

[Scott Wapner]

What's the growth anchor in 26? The tax cuts?

[Dubravko Lakoš]

Well, you could get some form of tax cut. I do think the. On shoring and nearshoring story that many people sort of completely disregard. I do think there is some partial validity to it. So again, if I think we can avoid some form of deeper recession, 2026, and if not the first half, certainly the second half I do think could see some growth.

[Scott Wapner]

And you think 305 is. Forget the number itself, but the number reflects. Reflects a level of optimism that I haven't heard from anybody.

[Dubravko Lakoš]

And extrapolation, I mean, what analysts do, they'll generally extrapolate. I mean, for that matter also, 2025 at 277 that we started was also based on an extrapolation. So I'm not saying the three or five is a number that you want to sort of anchor yourself to. I'm just saying that number gets revised lower. But I don't think it's necessarily a 250. That number could be more like a 265 to 70 in an environment of, call it mild contraction, something that doesn't become sort of systemic because we don't have a credit issue at this point. We don't have a banking crisis. We have more of a big massive tax cut or tax hike, sorry, that's hitting potentially U.S. households, U.S. consumers. And then also we need to see how the corporates basically play out in all of this.

[Scott Wapner]

What am I supposed to do? I've asked every everybody this, and I think everybody's thinking the same thing. What are we supposed to lean into in the market right now? If you actually think, as I asked, at the very top of the program is the worst of the turbulence, at least behind us for now, I don't.

[Dubravko Lakoš]

Think we're out of the woods. I think the volatility likely persists for longer. Do we have to hit lower lows? Not necessarily. I think a lot of that depends on how the trade discussion negotiations continue. We've gone from a very broad trade war to more of a concentrated China. Then China got some exemptions, but we're still basically looking at, I believe, $350 billion worth of goods that are not tax exempt, that are not tariff exempt. So just depends on how things play out. But I will say that time is of essence, and the more time that passes and that we sort of stay in this uncertain environment, there's a sentiment shock that could potentially magnify and start to spill over into hard data.

[Scott Wapner]

Are you surprised in any way relative to how you would have probably naturally come into the year feeling a little more bullish about the administration and what, you know, was. Was lying ahead of us, which I think Consensus was pretty bulled up on all of that. Are you surprised with the willingness that the what seems to be a willingness to let the equity market go down to some degree more than you probably thought and let the economy deteriorate to a level that you otherwise and initially wouldn't have thought would have been possible. And I'm talking on the administration's part, I am surprised.

[Dubravko Lakoš]

I did think that from the get go this is going to be probably part of a broader negotiation. I didn't expect things to go as far as they did. And I think the issue here is. Well, first of all, we're starting from a very healthy spot when you think about balance sheets, when you think about credit. But the problem is that if you, I think, push it too far, you could then potentially start to face unintended consequences that tend to be more non linear in terms of impact. And that's where you're basically dealing with a potential fallout or bigger downside risk.

[Joe Terranova]

To Profco when you think about the sequence of fiscal policy. Now we there's the belief that the tax bill comes in to save the day. That tax bill might not look like what we anticipated it to look like at the beginning of the year. How are you modeling that?

[Dubravko Lakoš]

It we're modeling it with a very fat standard error around it. So yes, we don't know how exactly the sausage is going to get made and what's going to be the ultimate output in terms of not just the original sort of tax bill, but they're talking about potentially tax exemptions for, you know, overtime income, tip income. Some of those things could be quite powerful for people with most need where balance sheets are getting the most affected negatively. So we don't know how that's going.

[Joe Terranova]

To play good for Main street, not for Wall street. Right?

[Dubravko Lakoš]

Broadly, yeah. Yeah. But at the end I think the issue still, I think remains right now what's how the trade discussions are going to play out. China, I think remains a big one and especially China is important I think for a lot of US businesses, small cap businesses, private businesses, mom and pop shops. Right. Their margins are getting potentially wiped out if these tariffs stay in place. And so I think the big ones are probably going to be better off because they'll have pricing power. Josh talked about some very interesting names. There will definitely be resiliency in some segments, but the small segments of the US economy I think get hit pretty hard. So that's why time is of essence. And yes, I think we need to see more progress. That's a question mark.

[Scott Wapner]

You Have a really, I'd say, I think it's fair to say a defensive bent in the market. Obviously you like your overweight utilities, staples, health care. I mean, there's three hallmarks of defensive real estate, for example, aerospace and defense. Yes, comm services is on the list, but neutral to both tech and financials. Why?

[Dubravko Lakoš]

Well, because I think the asymmetry is much better for some of these what I would call low volume bond proxy defensive names because again, I think that they give you pretty decent protection on a relative basis in any kind of downfall. And I think in an environment where perhaps rates come down some because, because of doge, because of some of these government cuts and so forth, I think these names can also do quite well. So in other words, if we're moving away from this higher for longer, I do think that all of a sudden a lot of these what I would call bond proxy names, valuation wise, start to look more appealing and they do give you that downside protection. Having said that, I do think that as part of the big momentum crash that we faced earlier this year, a lot of good high quality names have gotten hit. So I do think this is an environment where you do think about doing some bottom fishing, but not in value in good quality businesses. And so like when Josh talks about a Netflix, when you talk about some of the max seven names, you think about 2026, 2027 earnings resiliency. And there you potentially could have some interesting value.

[Scott Wapner]

I mean, someone who's been a value person who's been putting a lot of money to work lately in some of the growth names.

[Laura Castleton]

Because I've just bought Metta, for example, it was down.

[Scott Wapner]

You continue to lean into the financials. So I know. What did you want to ask?

[Laura Castleton]

Because I do, I do want to ask a question though. You talked about resiliency. Have you been surprised at how strong the consumer has hung in there and what does that do to your forecast? Let's just say they stay okay, they're not happy, sentiment's terrible, but they still are spending and they have jobs and they have wage growth. So that's a big part of the economy, economy as a whole. So I kind of find it hard if the consumer stays strong to see a recession.

[Dubravko Lakoš]

I'm having a hard time deciphering the data that we're seeing. I don't know what percentage of the current activity that seems to be relatively resilient is a function of front loading. So I don't know if the true effect, once you sort of strip the, you know, strip the sort of the headlines of some of these like seasonals or one off factors. I don't know what the true effect is. Maybe the a very strong consumer over.

[Laura Castleton]

The last we have here.

[Joe Terranova]

No, no.

[Laura Castleton]

Everyone that they were dying.

[Scott Wapner]

Yeah but that doesn't mean it lasts that way just because it was good.

[Laura Castleton]

Job if they have jobs they Gary.

[Scott Wapner]

Cohn was saying a lot of the same thing about the front loading when he was on within the last hour. It's just hard to know. It's also hard to know where soft data ends up being in the hard data as the Fed is trying to figure that out as well. On that note, before I let you go, how many cuts you think we're going to get this year? I mean how do you, how do you, how do you think about Fed movement relative to what your expectations are for the market?

[Dubravko Lakoš]

So we've basically pushed out the first or the next Fed cut to basically third quarter. So we pushed it out a bit. So we do think the Fed starts to ease but sort of 3Q and then continues thereafter. From everything we're seeing so far, looks like the Fed is still very much so anchored around the whole inflation inflation story. And we're seeing anecdotally more and more businesses using the current environment to potentially introduce a bit of a price hike. And so I'm not sure I would be counting on the Fed right now. I think we really need to sort of see if the Trump put is still alive. It looked like it was alive sort of at that 4900 lower levels than people thought. Right, that's fair because I think at the same time president also came out and said sort of we're disregarding the stock market in the near term.

[Scott Wapner]

Yeah, but all the bond market's calling the shots. Let's, let's, let's not kid ourselves. I mean we know that the bond market tantrum of a handful of days ago made a big impact on a lot of people. I'll just, I'll just leave it at that. Dubrovco, thanks for being here. Thanks for catch up with you again. Dubrovco lacos JPM up next, we have more committee stocks on the move today, including Stephanie Link's favorite 2025 story. We will discuss that next.

[Lisa Schneider]

10 years from today. Lisa Schneider will train in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does and she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills.

[Scott Wapner]

This episode.

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[Scott Wapner]

All right, stocks on the move Today we do start with Boeing on a report that China is ordering a halt to Boeing deliveries because the trade war. This is your favorite story, your favorite stock. You said before 100% coming into this year.

[Laura Castleton]

100% and it's down 50 basis points on this news. So clearly this is not material for Boeing at this point in time. They were supposed to deliver 10737 in the next couple of weeks to China. That will probably go elsewhere. By the way, I think that goes to India because they need planes too. There's 130 of unfilled orders from China on Boeing. So if you add it all up. That's about 2 to 3% of the overall exposure to their back. So their backlog is 5,600. Right. So it's, this is immaterial at this point in time. If it lasts years, well, sure that's a problem. But guess how old the Chinese airplanes are 10 years. Guess how old the global airplanes are in the world. 15 years. So you're getting service and both GE has service and so does Boeing. And that's where you're going to make up the margin shortfall in my opinion.

[Scott Wapner]

Okay. Palantir, Joe, shares are up 25% in the last week in the market recovery. A story today that their AI military system acquired by Naito. What do we think?

[Joe Terranova]

I think that's a big deal. I think it's a big deal because it proves that Europe is still going to be buying U.S. defense products. And the belief was that in fact they would not be. For Palantir, this is a huge win. It speaks towards the products that they have as it relates to AI and the integration of AI and defense weaponry. This has had a very significant bounce back and the analyst community, ex Dan Ives, who maintains the outperform, but the analyst community, 9230 I think is the 12 month price target. And the analyst community collectively in the last several weeks has been downgrading the stock.

[Scott Wapner]

What about Autodesk at There's a report today that T. Rowe Price Investment Management is going to vote for the slate of nominees from Starboard. Yeah.

[Joe Terranova]

So you know, a lower dollar benefits this company there. You're talking about 64% revenue exposure outside of the U.S. the problem is is that they are front facing for the manufacturing and construction industry and with a lot of the tariffs, that's going to be an ultimately a headwind for them.

[Scott Wapner]

Okay, we'll take a quick break. Up next, we do have another move from Josh Brown. We will document that we have a couple of new stocks on his best stocks in the market list as well. But first we get the headlines with Silvana now. Hi, Silvana.

[Silvana Henao]

Hey, Scott. Good afternoon. A federal judge has thrown out a Consumer Financial Protection Bureau rule that caps credit card late fees at $8. The judge granted a joint request from the CFPB and a group of businesses and banking groups that argued the rule adopted during the Biden administration was illegal. Congress last week voted to overturn a rule that would have kept late fees at $5. The rotor from the helicopter in last week's deadly crash that killed all six people on board has been retrieved from the Hudson river. The NTSB said the recovery Monday night, including included the transmission the main fuselage was already pulled from the water. The agency said recovery efforts are now complete and the evidence is at a secure location for examination. And the University of Chicago has received a $100 million gift from private equity investor Konstantin Sokolov. The university said today the funds will go to the school's MBA program to help fund scholarship and the school's operations. The gift comes as several top universities are at risk of losing billions in federal funding. Halftime report we'll be right back.

[Discover Card Representative]

CNBC News Update is sponsored by Morgan Stanley, where old school hard work means bold new thinking.

[Lisa Schneider]

Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does and she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills.

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[Josh Brown]

Foreign.

[Scott Wapner]

Welcome back. Let's get to Josh for another move. Energy by the way, the worst S and P sector month to date down 15%. Josh, we know that oil prices have been on the retreat on demand concerns. You sold Baker Hughes which was really I think you're well, you only had a couple of oil related positions for the last however long period of time. Why'd you sell this now?

[Josh Brown]

Just broke down below a preset stop loss. Nothing wrong with Baker Hughes in the wrong sector. Still think it's a great company. Maybe I'll take another shot at it at some point when it sets up again but when you buy things because technically they're trending in the right direction and then something market wide changes that you either have a discipline or you don't.

[Scott Wapner]

Do you still I think the other one one was the ieo. Am I am I right or am I am I wrong about that?

[Josh Brown]

That's Not a trade, that's a long. That's not a trade, that's. That's a longer term holding. I've been in that forever. I'm not looking at that technically or anything like that. I think the thing with energy equity exposure is you never want to completely leave the sector regardless of what the outlook is because it's your only hedge against the spike in oil prices. It's the only thing that you know will work in that sort of environment. You don't give up your hedge against something like that. So it hasn't been a great sector this year. Was not a great sector last year. It's okay.

[Dubravko Lakoš]

Okay.

[Scott Wapner]

Joe, what about you? What do you think?

[Joe Terranova]

I wish Josh would have sold some for me. Energy has been a struggle, down 14% month to date. I agree with his comments in terms of having some energy exposure on. But. But remember a lot of what I am doing and a lot of what Josh does looks at price. We hold ExxonMobil, Diamondback, Baker Hughes, EOG. ExxonMobil appears to be the most resilient of all of them. I still think when you're looking at natural, natural gas on a discretionary basis, to me that is more relevant and you have more opportunity there versus crude oil itself. Equity, equity. Look at it, it's up 38% so far year to date. It's a name I own personal.

[Scott Wapner]

I forgot that Josh had recently bought Chevron. Forgive me, I'm reminded on our, on our.

[Josh Brown]

It's a more defensive, you know, it's fit. It fits with this idea you want to be invested but it's a more defensive way to be in energy is to own the majors. Not quite as reliant on day to day spot price moves. And so we're going to stay long. Chevron and Baker Hughes. It might set up again in the future.

[Scott Wapner]

Got some power energy related stuff. Renova GE price target gets cut to 387 from 448 at Baird they're still outperform. They just think that the outlooks are likely to be a little more muted given the uncertainty that we're all seeing in the market.

[Laura Castleton]

And the Stock is down 25% from its highs. So it's not exactly a great call. But it is up 2100 26% from its peak. Sorry. From its trough. And I still think the electrification story is alive and well. I just prefer Quantus Services and Eaton on the same theme. They're cheaper, they haven't corrected as much, but they haven't actually. They're not up triple digits in the last year. So I still like the theme, still want to be there, but a little.

[Scott Wapner]

Less so on GE, Vernova, Vistra, Joe price target gets cut a little bit. 148 from 152. That's at B of A. They still look at Constellation, which I think is another. Another step name. And Vistra as No, somebody else. As you. No, Constellation. Whatever. It's a Vista.

[Laura Castleton]

It's all the same thing. Trust me, Trust me.

[Scott Wapner]

Somebody on this desk owns Constellation.

[Joe Terranova]

Okay, well, we did own it previously. We've owned in the etf.

[Scott Wapner]

Right.

[Joe Terranova]

And it's all momentum based and it's all on the AI fueled affection regarding a lot of the utility names. And Vista falls into that category as well. Well, Texas based company. Vistra. Don't get upset with me. You're a great company, you've got a lot of great fuels. But the momentum is completely lost.

[Scott Wapner]

Companies get mad when you rebalance and bounce them sometimes. What you're saying?

[Laura Castleton]

All right, sure.

[Scott Wapner]

Visa and MasterCard. Safe havens according to Deutsche Bank.

[Joe Terranova]

That I agree with 100%. I think you could factor in stuff. Do you still have American Express?

[Laura Castleton]

No, I didn't. I took games.

[Joe Terranova]

Okay. So I think you could factor in American Expresses there as well.

[Scott Wapner]

All right, we'll take a break with a hot take on the other side from Josh on one of this year's top performing tech trades. Plus I mentioned a couple of new names on his best stocks in the market list. We'll tell you what they are. Okay, we are back. I said we had two new names for the best stocks in the market list. According to Josh Brown, Northrop Grumman made it. Tell me more.

[Josh Brown]

Northrop is obviously defense, military systems, aircraft, spacecraft, they do radar, they do cyber defense. And this is actually a name that has underperformed its own sector for a long time until recently. I think what's important Here is it's $77 billion market cap. It's one of the larger names on the best stocks list. With a 1.5% dividend yield, it's only 4% below its 52 week highs. It's got an RSI of 67, so not overbought yet, as you can see. I think we're showing you a one year chart here. Yeah, as you can see, this stock's on the verge of a massive breakout. I'm going to go ahead and assume the market has this name. Right. They want to be long defense. They want to belong the industrials that don't necessarily have the Secular economy hanging over their head like a sword of Damocles and Northrop fits the bill. I'm not personally in the stock at this very moment, but I do think it's a breakout in progress and I think you're going to see a lot of momentum if you get through this level.

[Scott Wapner]

Fastenal is the other one.

[Josh Brown]

Yeah, so Fastenal is really interesting. This was one of the harder hit names during the first tariff fight back in 2018. They need a lot of steel to do what they do. This is a US based industrial supply company. It's like tools and fasteners and all sorts of supplies for construction. And what they said on the heels of that is never again. And they have gone out of their way over the last five years, including during COVID to fix those supply chain issues, fix those tariff related issues. So if and when it would ever happen again, they would be ready. And look at what the stock is doing as we head into the next tariff trade war. It's not acting at all the way this Name acted during 2018, which is the market realizing, oh, these guys figured it out. 2% dividend yield, $47 billion market cap growing. Revenue at a 7% CAGR over the last 10 years. Earnings at a 9% CAGR. And here you have an RSI at 63. It's only 4% below its 52 week high after all this market turbulence. It's above both moving averages and it's one of only seven industrials on the list. I think it's one of the best stocks in the market. And I also think this is the type of name that could break out.

[Joe Terranova]

Classic example of bad news. Good price action. They report earnings last week. Earnings were not spectacular and in addition to that they announced that because of the tariffs they're raising prices 3 to 4% and the stock rallies off of all of that Stock is up 13%.

[Scott Wapner]

Or 18% if you're raising prices. Of course it would rally. Right. If you have revenue grower, that's part of the reason why you would be in a.

[Joe Terranova]

Assuming that demand remains strong, fair, we'll.

[Scott Wapner]

Keep an eye on that stock. You also have a take on probably the sector, Josh, that you've been hottest on within this market for it feels like at minimum two years. And that's cyber. What's, what's your take here?

[Josh Brown]

Yeah, look I had a, had George Kurtzon in my office the other day and we talked about, you know, just sector wide some of the things that are happening. And if you listen to technology CEOs right now and you listen to companies that are doing business all over the world. There's a lot of trepidation. I just don't think that that is a thing in the cybersecurity space. And if anything, as geopolitical tensions flare over trade and other issues, this type of spending becomes even more mandatory. And one of the biggest problems in the financial media is people think like you have to have new ideas every day or it always has to be something new or a new trend or sometimes the, the short term ideas are just as good over the intermediate term and the long term. I think this space, and I'd love to hear Steph agrees, I think this space has legs throughout the rest of the year. So cyber, the ETF CIBR is flat on the year with the Q's negative 10% only 12 12% below the all time highs. Crowd is the largest holding within Cyber. That's the one that I own. It's about 8% of that index. But cyber itself is above its 200 day. Very rare for an industry group within tech. And within the index There are only three individual names above both the 50 and the 200 day CrowdStrike. Zscaler, which I've also mentioned is part of my best stocks list and CHKP chat point. And I just think like this idea even though we've been talking about it for a while, it has legs and if people aren't in the space they should be considering it right now.

[Laura Castleton]

Yeah, I mean I agree 100%. I actually think this is my favorite theme for the next decade. Decade. It's a trillion dollar total addressable market. It's bigger than AI. Because of AI, you're going to need cyber. And CTOs are only spending on AI and cyber. They they don't have enough money. There's only a finite amount of money. So I like Palo Alto the best at this point in time. Just because it's lagged.

[Shannon Sokotia]

Yeah, I mean if you think about insulation, Terrace Scott software pretty well insulated. But you know, if you look at cybersecurity really just the firewall vendors are really the only ones who have a lot of exposure here. Potential exposure. So it's a good space to look.

[Scott Wapner]

Okay, the setup is next. All right, let's do the setup. We got some earnings after the Bell United and Interactive Brokers. You have both these in.

[Joe Terranova]

I'm sure the guidance for United is going to be overwhelmingly optimistic especially after what we heard from Delta. Look, they have a real challenge ahead of them. Full disclosure, any time the strategy goes into airlines. I'm not happy about that because if I had the discretion, I would never buy an airline. But there's nothing I do is rules based. 40%.

[Scott Wapner]

You run it, you can override the rules.

[Joe Terranova]

Can't do that. 40%. 40% of its flights are international. That's going to be an even bigger challenge for United. So let's turn the page and talk about interactive brokers where there's clearly more excitement. You hope this goes lower because if it goes lower, you could buy it. Trading revenue is going to remain strong. Trading activity is going to remain strong. Net interest income should be good.

[Scott Wapner]

How active is an actively managed ETF if you can't be active because of.

[Joe Terranova]

The rules rebalances and reconstitutes on a quarterly basis.

[Scott Wapner]

April 30th is I like putting you in the hot seat. All right, well, we'll do finals next. All right, Adam Parker, Anka Crawford, Jordan Jackson, Mike Road, Matt Brown all joining me today. Closing bell. I hope you will be too. We'll have another eventful last hour. Josh Brown, your final trades.

[Josh Brown]

What Netflix defensive Tech thank you.

[Shannon Sokotia]

Shannon Developed X US US equities were.

[Laura Castleton]

Positive on Europe the Linkster Schwab cash.

[Scott Wapner]

Deposits improving Jyoti Spotify manoeuvres by the rules. I'll see you on the closing bell. The exchange begins right 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.

[Lisa Schneider]

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 halftime reportdisclaimer Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the re skilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does and she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills.