← Halftime Report
Halftime Report
Live from Future Proof in Miami Beach 3/10/26
00:46:52
Scott Wapner and the Investment Committee are live at Future Proof Citywide in Miami Beach, Florida to debate the turnaround in the markets and how they are trading it. Plus, we hit the latest Calls of the Day. And later, Josh Brown spotlights some Biotech names in his "Best Stocks in the Market." Investment Committee Disclosures
Loading summary
Transcript174 lines
- [00:00]
Jennifer
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones Member sipc Thy ticket, Lady Jennifer of Coolidge. Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance Fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Get it with the times. With the times.
- [00:49]
Josh Brown
You're playing the loot.
- [00:52]
Rob Seachen
Yeah.
- [00:52]
Jennifer
And it sounds pretty good, right?
- [00:54]
Bill Baruch
Discover is accepted at 99% of places
- [00:56]
Scott Wapner
that take credit cards nationwide. Based on the February 2025 Nielsen report. I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. All right, Carl, thank you very much.
- [01:19]
Bill Baruch
Yes.
- [01:19]
Scott Wapner
Welcome to the Halftime Report. I'm Scott Wapner. We are live today from the Future Proof Citywide conference in beautiful Miami Beach. Few thousand wealth advisors are here and let's just say there is a lot on their clients minds these days. We will discuss the business that is being done down here a little bit later. First though, the markets, they do remain volatile. We do have a pretty nice day going here, but it's been a whipsaw action over the last not even 24 hours. I've got the investment committee, several members here with me. Josh Brown is joining us today, Bill Baruch, Malcolm Etheridge and Rob Seachen. I just told you we can show you what the majors are doing. So we are continuing to rebound and most especially because of what you're looking at the bottom of your screen, WTI crude down almost 11%. That's the most important thing I would suggest, Josh, and I'm sure you would agree to watch. It's been an interesting 20 hours. We had a sizable sell off yesterday. We had the President's comments before the close, a nice reversal. And we're trying to build on it, but we're only going to build on it if crude oil remains lower. Right?
- [02:25]
Josh Brown
Yeah, look, I think, I think you trust the equity market here, believe it or not, more so than you TR the oil price or the commodity market. I think there's a lot more volatility on the commodity side than there is on the stock side. But the stocks related to this energy trade. They got it right. If you consider on February 11th there was a net 76% of all of the stocks that make up the XLE index. So three quarters of all those stocks were making 52 week highs. And that was a full two weeks before we began operations in Iran. The market knew. Stock investors knew. They might not have known the exact details, the exact timing, but they got that part right. And so that's what I'm focused on. You're seeing oil give back a lot, but you are not seeing a slaughterhouse in those XLE names. They seem to be holding relatively firm given the volatility in the underlying commodity.
- [03:20]
Scott Wapner
So Rob, what do we do with the last 20 hours? How does it formulate our views as either wealth managers are or investors? But before you had the reversal yesterday, JP Morgan was suggesting you could get another 10% from the peak to trough pullback. Ed Yardeni had raised the odds of a market meltdown in his mind to 35%. Wolf, talking about a notable spike in volatility still lies ahead. Does any of that hold anymore?
- [03:50]
Rob Seachen
I think all of it's possible for sure. And I think to simplify what market participants should be thinking about, specifically the clients that work with the wealth advisory community, there's those that have new money that they're looking to put to work. There's those that have capital needs and there's those that might be overweight equities because of long term outperformance, that need to think about rebalancing in the first cohort. Those that need to put money to work, I'd say you'd be patient. You want to see how this plays out a little more. There's huge technical support at the 200 day. There's further, further support at the pre liberation day highs. And those are areas that aren't that far from here where we would say you need to be a buyer. There's those that have capital needs for the year and I would say those that have capital needs. The market has given you a chance and in not fighting the White House, in believing the possibility of a benign outcome to take advantage today and raise those funds. Rebalancing is a little more tricky and the reason is because it has huge tax consequences. So this ends up being transitional. That was a waste to rebalance. And so I think selective hedging to get through crisis periods using put spread collars and some interesting strategies will allow them to get to the position they want without seeing selling into what could end up being a don't fight the White House environment.
- [05:19]
Scott Wapner
Okay, So I want to play off of that, the don't fight the White House environment, you could call it as Tom Lee did with me on the stage on the beach earlier this morning, the Trump put. You know, Malcolm, I want to know how we were supposed to react to that. You know, some of the policy making and the decision making within Washington has caused at times over the last year severe sell offs in the market. Okay, we've all witnessed that. But in each occasion there's been a pretty market snapback of a V shaped rebound because the belief is that there's only some degree of tolerance inside the White House for a declining stock market of any magnitude. And maybe we're learning that over the last 20 hours, as I suggested. How as an investing class, are we supposed to deal with that? Trying to, at the worst levels of this market at many times since April, realize that it might actually be an opportunity to buy?
- [06:14]
Malcolm Etheridge
I think the reaction that the market is having this week so far, the whipsaw nature of it is showing that we've been conditioned basically that just what you said, the President will gauge just how much tolerance the market has for whatever new policy action he's decided to take and then temper his response or direction he might go from that based on what the markets give. I think in this case we might be acting a little too complacent right now as investors simply because the President today alone has already shown that he's looking in two different directions to gauge which, which stance he wants to take versus Iran. We also heard rhetoric coming out of Iran earlier today that could shift again the way that he decides he wants to respond and how long we want this hot war to go. And so I think investors might want to actually consider that this could go on a little bit longer than we've already assumed.
- [07:04]
Josh Brown
Why?
- [07:05]
Rob Seachen
Why on that?
- [07:06]
Malcolm Etheridge
Yeah.
- [07:07]
Rob Seachen
Are professional traders in the energy markets, when you look at futures on energy markets, 12 months out there, 70 summertime, they're 87. Why are they complacent? They know more than I think most of us know about that situation.
- [07:22]
Malcolm Etheridge
But I think the question Scott was asking me was more about the individual investor. Right. This is more of the investor class watching this and watching what's happening in oil that frankly might not even understand what oil futures are. An April contract versus a December contract. They're watching their 401k balance and they're asking the question of should I be taking action right this moment? And my direct response to that is I think we better wait Well, I
- [07:44]
Scott Wapner
mean, they're watching the price of gasoline as well, which goes towards a lack of tolerance in Washington for a tremendous spike in gas prices and as well as a larger decline in the stock market. But let's not be naive to the fact that we still have largely unknown trajectory ahead for the price of oil, at least in the near term. We're not talking over the long term, but in the near term you still have what the Wall Street Journal referred to yesterday as the most severe energy crisis since the 70s that still exists. As we wake up today, even with the reversal of yesterday and the commentary
- [08:22]
Bill Baruch
from the President, this is par for the course. I mean, not necessarily how we got here, but it is year two of a presidential cycle. There was going to be expected to be some volatility and this is where it is. And you know, I, coming into the year, I said we're going to have some volatility, we're going to have a sell off at some point. We're not going to know, you know, what it is leading up to it and it's likely going to be a surprise when it happens. And that's, this is where we are right now. I think we come out of this fairly well in the near term and then there could be some, some larger impact later this, maybe around June or so. But here, I mean, going into this event, going into this war that drove oil prices up, we've already seen a tired consumer. We've had private credit fears, we've had slowing growth and firming inflation. Now it's more stagflationary. So a lot of this is getting flushed out. But we've seen corrections across different sectors and I think it's an opportunity to, to think that in the near term we're going to respond and see the market move higher.
- [09:20]
Scott Wapner
I would tell you, without the, the variable of having to discuss the war and the fallout and the move in energy prices. The note today from Deutsche Bank. Upgrading tech and software would be the lead of many programs today because that has been such a focal point of concern within the markets. What's been happening with the AI trade and most especially and quite obviously with the software stocks. Deutsche upgrades tech to neutral. All right. It's not too overweight, but it's too neutral. Software, though, is too overweight. They suggest that software companies are trading at historically low premiums versus the market. The facts are telling a different story. US software companies earnings were up 29% in the fourth quarter and expectations for their earnings this year have been revised higher. That AI Disruption worries have peaked. Now, I want to know how you feel about that, because if you take the war variable out and all of the asset classes that move as a result of that, the biggest questions hanging over this market leading into that was
- [10:26]
Josh Brown
about the AI trade in software, unfortunately, and this won't be popular. But I think if we were to take the war part out of the equation, it would be. And now back to our regularly scheduled programming, which is the slow motion panic in private capital. Private, private credit specifically. And the endless headlines about anthropic can do this, Anthropic can do that. Here comes altruist here. So that's where I think we would be. And you get this big upgrade today that you refer to. What is Price telling us? These stocks are down. Palantir is down 3%, Microsoft 1%, CRM down 2%. Applovin minus 6 ServiceNow negative 4 on no news. Nothing's happened. None of them are reporting earnings.
- [11:13]
Bill Baruch
They've had tremendous relative strength over the past couple of weeks.
- [11:15]
Rob Seachen
It's a rubber band.
- [11:17]
Josh Brown
But how has the total journey been over the last, I don't know, 90 days? So I don't think that we've seen the last of disruption concerns. And the worst part about it is these are all great companies. Most of them are now no longer selling at a premium multiple to the S and P. The problem that they have is that you can't prove a negative. It's impossible to say, look, we weren't disrupted because the pessimists will say, well, not yet, pal. Talk to me in a way that's
- [11:47]
Scott Wapner
right, because it's a matter of. Josh makes a good point. It's a matter of time, not price.
- [11:52]
Josh Brown
And time is frustrating.
- [11:53]
Scott Wapner
Time is going to dictate what happens to a lot of these software companies. The answers are, to Josh's point, frustratingly unknown.
- [12:01]
Rob Seachen
So really good points that he's made. I think the current multiples discount that bad news. And while we're not going in wholeheartedly to the software space, we do have some exposure that we're comfortable holding. I think what's interesting right now is this stagflationary impulse has led us back to the more durable growers. Okay, so when you have a slow growth environment, you pay up for growth. And the most durable growers have gotten cheaper. So that's why I think you're seeing strength there right now. And I think that probably continues. But I don't think you can write the epitaph or the tombstone for these software names.
- [12:42]
Josh Brown
I agree. It's not an epitaph, it's people just saying, you know what, this is in the too hard pile.
- [12:47]
Rob Seachen
And same with private credit, Josh. Actually same thing.
- [12:49]
Josh Brown
But to your point, the median trailing PE for the IGV names the 100 or so stocks in the IGV is 27 times and median forward PE is 18. So cheaper. But here's the, here's the overall S and P X software, 26 times trailing median forward 18. So not even yet at a, at a discount. And I think that's really what the market is waiting for. And we're a ways out.
- [13:16]
Scott Wapner
Do you know what Wells Fargo says that software stocks are now priced at from a valuation standpoint? Department stores. Okay. They have made the link between software and department stores. The threat of AI disruption has pushed software valuations to multi decade lows. Disruption risk largely priced in. In our view, the software companies deemed most exposed to AI risk now trade at a similar valuation as department stores.
- [13:44]
Malcolm Etheridge
Can I say though to that point specifically, this whole moment in software is reminding me a lot of how the Internet was supposed to kill the mall. All of the stores in the shopping mall were supposed to disappear. And once it was two decades ago, Internet shopping was gonna kill everything. And what we ultimately saw was online shopping just made it easier for these stores to do their business. They haven't been better. So I think that we should consider, I think we should consider though the fact that what we're seeing is a recognition that the incumbents are going to figure it out. Microsoft isn't going anywhere. IBM is not going anywhere. These companies that earn their business helping other businesses move more efficiently and helping their employees extract more productivity, these companies aren't going anywhere.
- [14:27]
Scott Wapner
Oracle is not going anywhere. But the stock price and the CDS have been going somewhere, right? The stock price has been going lower as the CDS has gone higher. I bring it up, it's down 23% year to date. You own the stock they report tonight. Yeah, right.
- [14:42]
Bill Baruch
We bought more, we bought more on Friday. You know, late in the day on Friday. It's testing the 200 week moving average. It's down 60% from the highs by the way. We sold it, we trimmed it at $300.
- [14:54]
Josh Brown
What do you want to hear from? What's the number one thing for you to stay long tomorrow that you need to hear tonight?
- [14:59]
Bill Baruch
Well, Cloud and capex. But what is the revenue that they're going to get outside of OpenAI and we got to see where the money is coming in.
- [15:07]
Malcolm Etheridge
Didn't they just find out the flagship Product they were banking on with OpenAI might not come to fruition as planned.
- [15:12]
Bill Baruch
That was news late on Friday and it did come off the highs pretty sharply, but it's held since then so far this week.
- [15:17]
Scott Wapner
You're saying that you want answers on okay, they're borrowing all this money, right to continue their build out. You want answers on where the that debt that's being raised and being spent is going to pay off.
- [15:33]
Bill Baruch
And I do think that there is in this environment or the environment that we are coming from within private credit and lending. If you, if you needed a million dollars, you might be asking for two and you may not be looking to deploy at all. So I think that they're going to see the situation clean up a bit more. And I like where it is you talked about. Time is going to tell us, but it's not going to be price. But right now I do think price is what you have to watch again. Testing at the 200 week moving average. This isn't the first move we've made in software last week. Last Monday we added CrowdStrike, we added a Microsoft week and a half or two before that ServiceNow we were underweight software. That gives us the flexibility to step in here and, and expect this thing to.
- [16:14]
Rob Seachen
Either way they are telling you that we need to play catch up. Microsoft under invested, they're investing now. Amazon under invested, investing now. They're the smartest guys in the room around this. They are chips in on this. They don't give a about what happens.
- [16:35]
Scott Wapner
But being the smartest people in the room doesn't really matter in the short run.
- [16:41]
Rob Seachen
It does in the long run.
- [16:41]
Scott Wapner
We learned our lesson in 08. You don't think that the smartest people in the room got some stuff wrong in 2008.
- [16:49]
Rob Seachen
There were a lot of people that got stuff wrong in 08 and by the way, in 2002. But I can tell you those that sat on their hands in those times got eviscerated.
- [16:57]
Scott Wapner
And I'm not trying to make a comparison in any other way between now and then just with the smartest people in the room stuff, it doesn't always work out.
- [17:05]
Rob Seachen
It's easy to hack on the Wall street crowd.
- [17:07]
Scott Wapner
I'm just saying it's just as a matter of fact, the smartest people theoretically are always in the room.
- [17:13]
Rob Seachen
But you always have to make a business judgment as to where and when you spend the incremental dollar and how you do it. And I think if you're underspending, you're going to find yourself Playing defense very aggressively.
- [17:27]
Josh Brown
There's another component to this, though. It's not just over and underspending. It's what are you spending on and what is the point? And I think that's the challenge that Meta shareholders wake up to. It's unclear even whether or not that particular activity will bear fruit. There's very little traction.
- [17:46]
Rob Seachen
Why can't you fail quick, Josh? So Meta use it as an example. Yeah, they got tattooed for capital spending
- [17:53]
Josh Brown
three, four years ago. Yeah.
- [17:55]
Rob Seachen
22. They reigned it in. They understood they failed quickly with that and then they reinvested again and it's been a massive success since. If you fail quickly, redirect, I think that's the environment that we're in. I see it in my business every day. We have, we have a policy right now that we are going to advance and if we're headed down the wrong direction, we're going to redirect. And that's what these companies have to do.
- [18:22]
Scott Wapner
Quickly is all relative too. Let's not forget Metta had to go through its worst year from a stock performance to find the religion along with Brad Gerstner's note. Okay, they did that and then the stock had its best year, so they had to go through some significant period of pain to find that. And yes, was that quick.
- [18:44]
Rob Seachen
But what if they were monetizing the Metaverse?
- [18:47]
Josh Brown
That's.
- [18:48]
Rob Seachen
Let's pretend they did. Okay, pretend they did. Would Brad Gerstner have been up there? No, he wouldn't have been.
- [18:57]
Malcolm Etheridge
You know what was missing at that moment though? They were spending free cash flow to fund the build out of the metaverse. We now have these companies, the hyperscale that's included, borrowing hundreds of billions of dollars in addition to spending 100% of.
- [19:11]
Josh Brown
And in the case of. And in the case of Metta, moving these leases off balance sheet so as not to make it the reality of the spend level look even worse. We also aren't sure about the strategy. Lama has been open source, does not have traction in the marketplace. It's unclear whether or not continuing to run down that road is going to have the sort of ROI that would justify what Metta has proven. They are the best at monetizing AI ads. Literally the best.
- [19:40]
Rob Seachen
Google too.
- [19:41]
Josh Brown
Best in the world.
- [19:42]
Rob Seachen
The monetizers are winning.
- [19:45]
Josh Brown
Yeah.
- [19:45]
Scott Wapner
Let's talk about private credit if we, if we could for a moment, because it is that overhang still. Again, I had a conversation with, with Tom Lee. He's going to be on closing bell with me a little bit later here. But we were on the stage this morning and I asked him about private credit. Are you worried? And he said it's bad, it's bad. It echoes a lot of the commentary that we've been hearing of late. You know, it was, I don't know, was it A week ago, 30 blocks up the beach, maybe a little bit more from Boaz Weinstein of Saba where he said the wheels were coming off. Well today our Leslie Picker had an exclusive interview with him as part of her Inside Alts newsletter and presumably made more headlines, less with you, Scott.
- [20:30]
Jennifer
I was going to say, yeah, he had those comments in Florida, not too far from where you all are sitting right now. And interestingly I thought Weinstein was net net surprisingly bullish on private credit. In our interview, he said he's long the stocks of Apollo, Ares, Blackstone and even Blue Owl. He recently launched a tender offer to buy shares in a non traded Blue Owl fund at a 35% discount and has plans for others. He said that quote, if we go bid on something, it's a sign we think the manager is good. Weinstein didn't have the same pleasantries though for all private credit managers. However,
- [21:05]
Malcolm Etheridge
Cliffwater, which is the one that we're watching the most closely because they actually own, they don't own the loans directly. They've invested in other managers. And so when they get their outflow number, they can't even sell the loans in the market. They're going to be held to that 5% liquidity as a fund of funds. And so when, let's say their number tomorrow, the betting between the various experts, I talked to her, it's going to go to something like 10 to 20% which is going to I think really for redemption, 10 to 20% redemptions.
- [21:35]
Jennifer
Cliffwater disclosed in an SEC filing that at the end of last year, 31% of its corporate lending fund was invested in private market funds, while the remaining 69% comprised direct investments. Cliffwater declined our request for comment. Weinstein said the Cliffwater business of funds investing in other funds is akin to a turducken, a chicken stuffed inside a duck stuffed inside a turkey. Essentially, you can't redeem from the chicken unless you first cut through the turkey and the duck. You can watch the full conversation with Weinstein on CNBC and be sure to subscribe to our monthly Inside Alts newsletter using that QR code that you see on your screen there. Scott.
- [22:13]
Scott Wapner
All right, let's good stuff at the forefront of this conversation, really from the beginning. We appreciate you for that. That's Leslie Picker. Not much relief frankly in the market this week for these names. Many Ares is down three and a half. Blue Isle's down, Carlisle's down. We do have ownership on the desk. Josh, you own Carlisle, as does Malcolm and Rob, you own Blackstone. Where do we come down today on this, Josh?
- [22:37]
Josh Brown
Look, I think you look at the four big P E firms that are publicly traded and in the s and P500 to take your cues for what sentiment is right now. And basically Ares minus 44% from its, from its high Blackstone 42, KKR 41, Apollo 31. There are three problems here that I can see. The first is, of course, people are worried about credit just in general, and that's obvious. And that won't just affect private capital, that will affect the banks too at some point. And that's a question mark because these companies by and large do not have like the sort of massive credit issues that people are worried about. Hasn't happened yet. Issue two is a tougher one for an investor in these equities. If you thought that these companies were going to get the retail investing public from effectively 0% allocated to private equity and private credit to 5% by 2030, those were the projections. That was the growth story. All of these stories in the Wall Street Journal, the Financial Times about redemptions coming, redemption requests coming in above what these interval funds will allow. That darkens the outlook for the potential growth of these stocks. And what that does is it mitigates the extent to which you're willing to pay the current multi multiple. So right now the asset management sector is flat. These are all substantially unflat. These are down huge.
- [24:00]
Scott Wapner
We'll come back in a moment. I want to go to Washington. We do have a news alert from our own Eamon Javors. Hi, Eamon.
- [24:07]
Eamon Javers
Hey there, Scott. I'm here at the Yale CEO caucus meeting in Washington D.C. this is that group of business executives that's organized by Jeffrey Sonnenfeld of Yale. And this group of executives have just heard a presentation from the President of Israel, Isaac Her Herzog. And what Herzog's message to the corporate world is very much one of stay the course, continue this military action against Iran. He said, I know it's difficult for you guys in the business community, but he said destroying or eliminating Iran's capabilities is the number one goal here. He also flagged something new in the world. He said, this is the first time you're seeing openly a coalition of nations, Jewish and Muslim nations, working together. He said, for the first time we are operating together in what he called a NATO like structure. He said this is something new and these are strong nations that are not giving in to Iran. Obviously he's referring there to the Arab states that have been under attack from Iran as much as the nation of Israel has. During the course of this, he was asked a couple of questions by some big American CEOs. He also said that we need to be in this go to in this stay the course language. He said we need to be steadfast, take a deep breath and finish the undermining of Iran. He said if we think big and think for the next generation, this can be a huge change. So, Scott, the message from the government of Israel to the American business community here is very much stay the course. We need to continue to undermine Iran and all this will be over at some point. Back over to you.
- [25:45]
Scott Wapner
It's an important update. We appreciate that, Eamon, thank you very much. With the backdrop of the nation's capital there, quite literally, that's Eamon Javers. Still ahead from Future Proof Citywide, the Altruist founder and CEO Jason Wenk. He joins us live. His company's new AI tool sending shock waves through the financial services industry lately. We'll discuss more when we're back after this break.
- [26:13]
Rob Seachen
Hi, I'm Chef Franklin Becker. You know the jingle now discover the facts about Ozempic, a GLP one. There's only one FDA approved Ozempic made by Novo Nordisk. Learn about the real thing.
- [26:23]
Jennifer
Talk to your healthcare professional today. Call 1-833-OZEMPIC or visit ozempic.com to view the medication guide and to learn more about ozempic. Semaglutide injection, 0.5 milligram, 1 milligram and 2 milligrams. Ugh. Could this vintage store be any cuter? Right? And the best part, they accept Discover. Accept Discover. Except in a little place like this, I don't think so. Jennifer.
- [26:50]
Josh Brown
Oh yeah, huh?
- [26:51]
Jennifer
Discover's accepted where I like to shop. Come on, baby, get with the times. Right. So we shouldn't get the parachute pants. These are making a comeback, I think.
- [27:03]
Bill Baruch
Discover is accepted at 99% of places
- [27:05]
Scott Wapner
that take credit cards nationwide. Based on the February 2025 Nielsen report.
- [27:10]
Malcolm Etheridge
Before we had ATT business wireless coverage,
- [27:13]
Eamon Javers
our delivery GPS wasn't the most reliable.
- [27:15]
Scott Wapner
Once our driver had to do a
- [27:17]
Malcolm Etheridge
14 point turn to get back on route.
- [27:19]
Scott Wapner
A 14 point turn.
- [27:21]
Eamon Javers
An influencer, even livestream the whole thing.
- [27:24]
Malcolm Etheridge
Not good for business. Now with AT&T business, wireless routes are
- [27:28]
Eamon Javers
updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
- [27:34]
Scott Wapner
AT&T business Wireless connecting changes everything. Oh, we have a lucky backdrop down here in Miami Beach. Advancements in AI are threatening to upend many different industries, including financial services. It was one month ago today that an announcement from a little known wealth platform named Altruist sent several stocks in that space lower. We made a wall graphic so you can see what happened on that very day from Raymond James, lpl, Charles Schwab, even Stifel. All of those names down. They haven't traded well since either. Jason Wenk is Altruist founder and CEO. He's with us today alongside Josh Brown. His Ritholz Wealth Management is a partner. It's great to have you and thank you for speaking with us first. You haven't really done anything since that day. Welcome.
- [28:39]
Jason Wenk
My pleasure. It's a blast. And I've been super busy for its worth, I think fielding calls from every major wealth business in the US and some all over the world actually with a lot of curiosity about what exactly they should be doing with their AI strategy.
- [28:51]
Scott Wapner
It's been a lot of fun literally getting a passing shower here. So bear with us. You never know what Miami I suppose is going to bring in the middle of the afternoon, but we'll do our thing. Were you surprised at the way that those stocks traded down on the day of your announcement?
- [29:07]
Jason Wenk
I mean so I'm an engineer, not a, not a stock trader. But what I'd say is that my general view on, on, on equity prices is that you want companies that are in wealth, they are growing their assets, they're growing their revenue and they're expanding their operational efficiency. So like their profit margin. So a 10% sell off in a day is pretty irrational I think in most respects. But I think it's kind of a harbinger of, you know, what might be expected over the coming 10, 20 years. You know, will these companies be able to grow assets, expand revenue, grow their margin? Right.
- [29:38]
Scott Wapner
Like do all. That's why the stocks pulled back 100%. Right. For those who don't know, what do you guys do? Why did this happen to these stocks?
- [29:47]
Jason Wenk
Yeah, well, I think we're a little bit unique for, for an AI company in that if people don't know, Altruist is a self clearing broker dealer. So we are a custodian. We compete directly with most of those names that were on your chart like Schwab, Fidelity, LPL and so forth. And we have this wealth Platform if you, which is what you can house assets at, do trades, etc. And then we have an AI platform called Hazel, which is kind of what kind of broke markets. And so I think an AI product by itself is not that disruptive. I mean it should be a net benefit for a lot of different businesses. But if it can potentially impact the flow of assets, again impact the revenue that you earn and the operating margin you have, I mean, that's where I think all of a sudden you start to have challenges. If you have both the custodian and you have the platform, that's kind of the magic recipe and kind of have to have both. Otherwise one without the other is not that disruptive.
- [30:35]
Scott Wapner
So when you talk about the flow of assets, are we to think that, you know, many of these independent financial advisors are going to leave their existing platforms and come to yours because of in part the AI model that you have and the others that you continue to develop?
- [30:53]
Jason Wenk
Well, I think a great proxy, if you look at maybe 50 years ago, my guess is I wasn't around yet, of course, but my guess is in the boardrooms of major wealth companies, people probably didn't think that much about Charles Schwab 50 years ago. Discount broker, who's going to really use that. 25 years goes by and they go, well, the discount brokers turned out to be a real thing with tens of millions of customers. And now you fast forward to today and it's arguably one of the most important financial institutions in the world, certainly in the US for wealth management. And so I think that over the next 50 years we'll see innovations. AI might be one of those big things that drives change. You know, today you have 75, I think trillion in assets in warehouses, 15 trillion at custodians and independent broker dealers. There's a lot of money out there. I think all will keep growing. It's just a matter of will they grow at the same rate. And if you start to change the direction of the flows, eventually there might be new leaders. Of course I'm betting heavy that we're that next big story that 50 years from now we're talking about.
- [31:53]
Scott Wapner
What's the nature of your relationship with these guys?
- [31:57]
Josh Brown
I am both a customer of Altruist. My RIA is opening accounts on the Altruist platform literally every day of the week. And I'm also a shareholder. And when I saw the reaction to the tax tool, for example, that Hays Hazel is the AI layer on top of Altruist, I saw the reaction the stock market because this Disruptive tax tool gets launched not by a random software company somewhere, but by a brokerage custodian, meaning all of the RIAs who are custodying assets at Altruist instantly have access to a tool that makes it so that you're almost 10xing what the advisor is able to do on just that one front tax. But I understood the reaction the market because it was very clear to me, okay, now we're starting to handicap which brokerage custodians are coming the fastest with the best technology. And you talk about it redirecting flows. If you're a young up and coming firm today or you're an advisor with a high growth rate and you're not talking to Altruist effectively, you're not seeing the cutting edge of what you could be doing for your clients.
- [33:09]
Scott Wapner
But are we, aren't we to assume that these other well established, so called quote unquote legacy businesses in this space are either investing heavily now or will in the future to do some of the same exact things?
- [33:22]
Josh Brown
Oh, I guarantee they're investing heavily now. And what I would say is we haven't really had a horse race on the custodian side for a long time. TD Ameritrade was acquired by Schwab. Schwab did an excellent job Schwab incorporating that business. But effectively you've got Goldman Sachs not quite at scale yet. You've got the combination of Schwab tv, you've got Fidelity. We really haven't seen a lot of energy coming into the, into the space and now Jason's bringing a lot of energy, a lot of heat, a lot of headlines and it's exciting for me
- [33:56]
Scott Wapner
to watch and what's next? I mean are we, we have conversations and we have had in the past and I presume we will in the future as we continue to see AI proliferation rate in the manner that it has, that the almost full experience in financial services for the client, the ME as an investor is going to be more and more, if not run by AI, influenced by AI.
- [34:22]
Jason Wenk
I mean that's fair. I mean I think a simple guiding principle should be also in all of this innovation is is it good for the customer? I'm glad you brought that up. Like, are investors getting better outcomes? Are they paying less in fees, less in taxes, achieving essentially their goals at a more rapid pace? AI can definitely do those things, but if your infrastructure is limiting. So like the AI could be the smartest sort of most all knowing kind of tool and advisor's tool chest. But if it's really hard to even open an account or transfer assets or optimize cash or minimize taxes. I mean the benefits are pretty minimal. Right. So I think this is why you have to have infrastructure plus you have to have the AI layer. If you do those two things together, we really should see another Vanguard effect like moment where you see over again multiple decades, a massive compression in cost, a huge compression in minimums quality going way up and the biggest benefit should be to the individual investor.
- [35:15]
Josh Brown
Yeah. On the advisor side, let's start with digital onboarding. The ability to send a client a hyperlink. They click that link, they download the app and within 30 seconds they have an account opened and within five minutes they have a bank connected via API and be able to fund their account. The advisor being able to walk the client through that or leave the client to do it on their own. This is not meaningful to people in their 60s and 70s. They don't care that much about speed, convenience, user interface. But if you're going to be an advisor managing the next generation of wealth and you're sitting across the table from a 30 year old who works at Palantir, has made a ton of money, you can't show that person technology that looks like it's from 10 years ago. You can't be taken seriously. As I'm going to be your financial advisor, look how behind and ours is.
- [36:07]
Scott Wapner
Jennifer looks great stuff. Jason, thank you so much for being with us. It's great to have you learn more about your business and how it's just impacting the way we're going to invest in the future. It's Jason Wank now to Angelica Peebles back at our headquarters with a news update. Hi there.
- [36:21]
Jennifer
Hey Scott. The remains of the 7th American service member killed during the war with Iran were brought back to the US Last night. Vice President JD Vance and Defense Secretary Pete Hegseth joined the family of Sergeant Benjamin Pennington, who died on Sunday following injuries sustained in an attack on Prince Sultan Air Base in Saudi Arabia. He was just 26 years old. Australia granted asylum to fly five members of the Iranian women's soccer team who were visiting the country for a tournament when the war broke out. It comes after supporters, including President Trump, urged Australia to let the team stay amid fears over how they would return to Iran. Another two members of the team have also sought asylum, according to cnn. The rest of the team is believed to be heading home. And Pope Leo accepted the resignation of a San Diego bishop following his arrest last week on embezzlement charges. Emmanuel Sholeta was Appointed apprehended at the San Diego International Airport as he tried to leave the country. He pleaded not guilty to 15 felony counts. Scott, back over to you.
- [37:19]
Scott Wapner
Angelica.
- [37:20]
Bill Baruch
Thank you.
- [37:20]
Scott Wapner
It's Angelica Peebles. We take a break. We come back. Got to tell you about some new committee moves. Josh Brown's best stocks in the market. We're going to do that from here at Future Proof after this.
- [37:28]
Jason Wenk
Break
- [37:31]
Jennifer
thy ticket, Lady Jennifer of Coolidge. Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Getith with the Times. With the Times.
- [37:50]
Josh Brown
You're playing the loot.
- [37:52]
Jennifer
Yeah, and it sounds pretty good, right?
- [37:54]
Bill Baruch
Discover is accepted at 99% of places
- [37:57]
Scott Wapner
that take credit cards nationwide, based on the February 2025 Nielsen report.
- [38:01]
Bill Baruch
Guys, it's no use putting it off.
- [38:03]
Scott Wapner
The best time for an underwear refresh is now.
- [38:05]
Bill Baruch
Tommy. Don Underwear is designed for a perfect
- [38:08]
Scott Wapner
F that stays put all day.
- [38:09]
Bill Baruch
There's zero chafe, thanks to four times
- [38:12]
Scott Wapner
more stretch than competing brands. And their innovative horizontal Quick Draw fly is a game changer. With over 30 million pairs sold, there
- [38:18]
Bill Baruch
are thousands of men out there more comfortable than you.
- [38:20]
Scott Wapner
Don't settle for less.
- [38:21]
Bill Baruch
Go to tommyjohn.com today for 25% off your first order with code comfort. That's tommyjohn.com comfort.
- [38:28]
Scott Wapner
Tommy John comfort. Perfected.
- [38:31]
Jennifer
When I need to impress someone with a gift, I go straight to 1-800-FLOWERS. There's a reason they've spent 50 years as the floral authority. Every stem is hand selected by a vetted florist and with same day delivery nationwide, 100% satisfaction guaranteed. That's why millions go to 1-800-Flowers to celebrate life's most important moments. Order now for up to 40% off. Don't miss out on this limited time offer. Act now and save up to 40% at 1-800-flowers.com sxm. That's 1-800-flowers. Com sxm.
- [39:16]
Scott Wapner
All right, we're back here. Future proof, Miami Beach. Let's get to some committee moves that I want to tell you about. Bill Baruch. Car moves. We'll call them that. You sold Uber, Yes?
- [39:27]
Bill Baruch
Yeah, we sold.
- [39:27]
Scott Wapner
Hasn't done well. Finally threw in the towel.
- [39:30]
Bill Baruch
Well, be clear. It's sold in our concentrated portfolio where we own no more than 10 names. And so we have to have performance there. Is really trying to outperform the market we didn't touch in our main portfolio. And the thing is, I like the name a lot. It's 65% year over year free cash flow growth. It's a great story on that, cash flow growth. But the problem is also we've seen performance, performance outperformance come from sort of narrative names and cash flow names and it didn't perform. It's. You're seeing the flows turn from a tech company to an industrial. It's sort of getting repriced. So I like it, but I just don't know if it's going to perform right now. Although Nvidia GTC is coming up and it did pop out of that last year.
- [40:13]
Scott Wapner
All right, so just to be clear, because now I'm confused myself, you own it still in one of your portfolios. This is just selling it out of another.
- [40:21]
Bill Baruch
Selling it out of our concentrate portfolio where we own no more than 10 names, still 2% holding in a broad portfolio of about 40 stocks.
- [40:27]
Scott Wapner
You still own the name?
- [40:28]
Josh Brown
Yes, I'm still as bullish as ever. I understand why. If you have a concentrated portfolio and you need to generate returns right this second, this is a tough name to be in because technically it's in a no man's land. It's in a pretty decent sized drawdown from the high. It has shown some support here in the low 70s. But it's unclear when people are going to want to return to this name because of course, similar to what we were saying on the software side, there's just so much unknown about how autonomous driving will shape up and people are not yet ready to crown Uber as the company that will unite all of the various services. I think that's how it plays out. But if I needed it to work this month or this quarter, I don't think I would keep it in a concentrated portfolio either.
- [41:10]
Scott Wapner
All right, so Bill, you bought more Tesla?
- [41:11]
Bill Baruch
Yeah, we swapped it out and put Tesla in there and it's, it's about a 6% holding now. Tesla in the concentrated portfolio. And then we added more Tesla to the name in our broad portfolio. So we bought quite a bit of Tesla. The thing here is it's at the 200 day moving average. I think it can perform right now, full self driving. It was launched in Korea, South Korea, in November. There's some great success there. But this is a pure AI play. I think you're seeing AI developers very fast. Even just this week you're hearing news of brain cells playing Doom, the video game with nothing more than being brain cells. I mean the humanoid robots. I mean this is where, you know you want to see the investment perform here this year.
- [41:51]
Jason Wenk
All Right.
- [41:51]
Scott Wapner
We're going to take a break. When we get back at Future Proof. We do have Josh Brown's best stocks in the market. We're back. Right? All right. We're back live. Future Proof citywide here in Miami beach with Josh Brown and the gang, of course. And we do have your best stocks in the market. Just because we're here doesn't mean we're not going to do them.
- [42:25]
Josh Brown
No, got to do it.
- [42:26]
Scott Wapner
What's the spotlight on today?
- [42:27]
Josh Brown
So we took a look at a bunch of large cap biotechs last year at a time where nobody was interested in talking about biotech. It just didn't fit in thematically to any of the things that were happening in 2025. But a lot of these stocks were beginning to trend higher after, I don't know, a lost decade for large cap biotech. That has all changed. Give me a chart of Amgen. This is a $36 billion a year revenue business again ignored for most of the last 10 years. The stock has since broken out. I'm going to give you the risk level here. I think very comfortably you could be in the stock today. I like, let's say the 350 area would be where I would tell you the character of the stock has changed. But until here's a 50 day successful test of the 50 day three times since that breakout and the 200 day is now upward sloping. So Amgen's a, for me it's a keeper. I'm not personally long yet but that may change soon. The other one quickly. AbbVie ABBV, another biotech giant. Keep in mind these stocks are incredibly halo. They're not dealing in bits and bytes. They're dealing in molecules and proteins and the, the laboratories and the clinical trials. None of that can can be disrupted and all of it will be helped by AI. These are growth stocks where you don't have to worry about disruption. They're breaking out. There are more where these came from but that's what we wanted to highlight for best stocks this week.
- [43:54]
Scott Wapner
Rob, you and both. Right.
- [43:56]
Rob Seachen
I own both those and more than that. Abbie, Amgen Bio, congratulations, those are your best. Gilead Lily, we noticed something very similar a while ago. If you look at the portfolios years to date, the reason they're outperforming so much is because of energy in these and we have significant overweights in each. So I agree with Josh. I think these are going to be some of the key, key beneficiaries of adopting and using AI to drive forward Product advancement as well. And plus, if you believe in momentum, and we do, the names that are working tend to continue to work, and we think that's going to be in place for a while. Obviously, energy is a little different given the geopolitical risk that we're sitting through. That can change in a nanosecond, as we saw yesterday. But, you know, thematically, we like this.
- [44:47]
Scott Wapner
Bill, you own both of these, right?
- [44:49]
Bill Baruch
Yeah, yeah, we want both names. Amgen and Abby hanging right around our number 9 and number 10 positions. Amgen has had quite the year and it was consolidating last year a little disappointment on. On like their GLP competitor. But they've had tremendous revenues across the products increase. Abbey, not the greatest earnings report about a month ago, and it's really, it's kind of been a steady, steady out of that and it's consolidated for the last few months. I like to show up in the
- [45:14]
Scott Wapner
next few as well. All right, we'll come back, we'll do our top calls of the day next. All right, we're back live at Future Proof citywide here in Miami Beach. So this is your conference.
- [45:29]
Josh Brown
Yes.
- [45:29]
Scott Wapner
You had the one in Huntington beach, which you still do, which we come to, and now we're here. What's going on here?
- [45:34]
Josh Brown
Yeah, if you were suspicious, you might say, I don't like being home that much. Look, this is a, this is, I would say, 60% of the audience that's at this event. We have 3,600 people here, mostly financial advisors and people working in asset management, wealth tech. I think 60% are at their first ever Future Proof event. And a much bigger east coast contingent at this event than what we normally get in Huntington Beach. And that makes perfect sense. This is a very easy destination to travel to. And who doesn't want an excuse to be in Miami Beach?
- [46:05]
Scott Wapner
Kinds of conversations are happening, happening here. Among the thousands of people who are
- [46:08]
Josh Brown
here, three different types of conversations happening. AI, AI and AI. These are the. This is. Every single session eventually finds its way into what does I mean to the future of my career? How will I help me serve my clients? What are the risks of AI to the markets, to clients? And so it makes perfect sense that we lean into that as the theme for this year's event. We've got 1700 companies presenting. Many of them are either established incumbents who want to show off their own AI or brand new startups that have come along to solve problems that none of us thought would ever be solvable. And it's a really cool mix of old and new. Goldman's here, Carlisle is here, blackrock, Invesco, Schwab, Fidelity, all of the incumbents that you know and love. And then you've got this whole crop of young people who have been experimenting with AI building tools, building layers. And it's very cool mix to see.
- [47:06]
Scott Wapner
All right, well, congratulations on the continued growth. We're happy to be here. Yeah, let's do a couple of calls if we could before we go. Malcolm, I'm throwing you Spotify.
- [47:14]
Malcolm Etheridge
Yeah.
- [47:14]
Scott Wapner
It was named a top pick today at Morgan Stanley. They reiterate their overweight. You own the name.
- [47:18]
Malcolm Etheridge
Yeah. I say welcome to the party. That one is flexing their pricing power. I think they've increased prices on customers, customers two times in the last two years. Yet paid subscriber growth is on the rise. So if you missed the trade in the last 10 days on Netflix, Spotify is probably one for you to be paying attention to.
- [47:34]
Scott Wapner
All right, Rocket Josh initiated a buy. 21 bucks is the target at Compass Point.
- [47:39]
Josh Brown
Yeah, look, this is a company that spent the mortgage nuclear winter making acquisitions. They bought the largest portfolio mortgage servicing company, Mr. Cooper. They also bought Red Redfin, which ties them even more closely in with the realtors and housing leads. And now with this combination of assets, I think the CEO is on the right track. And what he wants to build is the dominant mortgage to housing platform.
- [48:05]
Scott Wapner
One more AT&T outlines $250 billion US investment plan to boost Infrastructure. Bill you on that name.
- [48:12]
Bill Baruch
Yeah. Every talks about AI and every talks about the need for power. Well, how do you get the power to the AI and I mean the AT&T's going to connect it all. They're investing quite a bit and the stock has performed pretty well the last two years. I think it's going to be a great, great move here.
- [48:25]
Scott Wapner
All right, we'll step away, we'll come back, we'll do finals after this break. Let's give you a market check before we get out of here today. You do have a pretty nice rebound across the board. Dow's good for almost 300. Most important chart of the day. There's no question. Bottom of your screen, it's WTI, which is now down by 13%, still north of $80 a barrel. But nonetheless, it is not even close to where it had been trading. And that's brought some relief on the on Wall street as you can clearly see. We're going to run it back at 3 o' clock on closing bell. From here, future proof. Tom Lee, Dan Ives, Adam Parker Brian Levitt. We'll have Liz Thomas joining us as well. I hope all of you will be here too. We'll see what happens in a last hour of trade. It's been volatile of late. We'll see if that repeats itself today. Let's do finals, though. Robbie, what do you got?
- [49:13]
Rob Seachen
Broadcom. Think it's a rotation. Back to AI.
- [49:17]
Scott Wapner
All right, well, it is green. It is green on a board of otherwise red. Malcolm.
- [49:22]
Malcolm Etheridge
Yeah, I'm going to reiterate. Spotify subscriber growth is up. Great time to be getting in.
- [49:27]
Scott Wapner
Who's App Lovin?
- [49:28]
Bill Baruch
I'm app lovin's down 8% today. It's back below 500. I mean, this name has been been quite volatile, but machine learning, advertising and great margins been.
- [49:37]
Scott Wapner
I mean, one of these software names that's been disrupted to say the least. At least from a stock price standpoint lately. Right?
- [49:43]
Bill Baruch
Yeah. Great opportunity though, I think down here for sure.
- [49:45]
Scott Wapner
All right. And then finally, Josh Brown, what do you, what do you have?
- [49:47]
Josh Brown
I remain long uber reiterating my earlier comments. I think the stock is way too cheap. 16 times earnings. It's just gotten absurd at this point.
- [49:56]
Scott Wapner
All right, so you've had a nice move in the market. Nasdaq as well, and we'll continue to track that as I see a fair amount of green today with that big splot of red and that's oil prices. But I'll see you at three o'.
- [50:07]
Malcolm Etheridge
Clock.
- [50:08]
Scott Wapner
You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.
- [50:20]
Jennifer
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 halftime reportdisclaimer O O
- [50:55]
Rob Seachen
Ozambic hi, I'm Chef Franklin Becker. You know the jingle. Now discover the facts about o Ozempic, a GLP1. There's only one FDA approved Ozempic made by Novo Nordisk. Learn about the real thing.
- [51:07]
Jennifer
Talk to your healthcare professional today. Call 1-833-OZEMPIC or visit ozempic.com to view the medication guide and to learn more about ozempic. Semaglutide injection 0.5 milligram, 1 milligram and 2 milligrams.