← Halftime Report
Halftime Report
Markets on Edge 6/13/25
00:44:27
Scott Wapner and the Investment Committee debate the fallout of Israel’s attack on Iran and the impact on stocks and other asset classes. Plus, we discuss the latest Calls of the Day and how to trade them. And later, the Committee share their latest portfolio moves. Investment Committee Disclosures
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- [00:00]
Narrator
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- [01:02]
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, thanks so much. Welcome. Halftime Report Front and center this hour, Markets on edge today. As you know, we're following the fallout of Israel's attacks on Iran, the impact on stocks and other asset classes today. There are many joining me for the hour. Steve Weissen and Sakosha Sarat Sat and Rob Seachin. You know the, the, the thing we're playing with today, the backdrop, oil highest since January. You know, yields are up maybe on the oil surge, an inflationary move there. The dollar is higher on the safety trade, the goals, the gold is highest level since April. And then you have UBS saying try to look past what's happening here, that the impact on the market should fade fairly quickly. That's, that's what they suggested. How do you see it?
- [02:00]
Steve Weiss
Look, I've been in the business almost 35 years. We've seen a number of flare ups in the Middle East. Every single one of them has been buying opportunity. Now there's talk that this time will be different because it's going to go on for possibly two weeks. But at the end of the day, the results the same. And I think you see the recovery of the indices today, particularly in nasdaq, that that's the case. I'm not concerned about oil. You know, if I were a trader in oil, I would have sold the pop. I'd probably still sell it. And it was clear, and Trump admitted it recently that the US Knew about this.
- [02:32]
Scott Wapner
Oil was trading over the last least week as if the market quote unquote knew something was going to happen because you had a bid and a bid and a bid, a bid. And now you get the spike on the actual news.
- [02:44]
Steve Weiss
And despite that great point, despite the Saudis continuing to say they're going to pump and pump and pump. So look, I wouldn't be surprised if they were saying that to calm the markets in advance. But here we are. The Saudis, who are also not friends of Iran, will do what they need to to take oil prices down. But even if they don't, the Fed is not going to look at oil prices and say that that's going to derail us from whatever they were going to do. It's going to be a non factored transitory as they'd like to say. So it was a good opportunity to lease trade this morning and I sent that note to, to you and the others at cnbc and I think it's business as usual.
- [03:28]
Scott Wapner
Stabilizing move is never easy for the market to initially digest. It's sort of knee jerk and then dust settles, so to speak. And then you kind of figure out what the longer term implications of everything are. How do you process the news in your thinking about where we are again? We came into today 2% and even with this move we were less than 2. Now we're just barely above 2% away from a new high.
- [03:54]
Rob Seachin
Look, I mean in terms of oil and gas too, it's a great diversify in your portfolio. So we have about 5% of our portfolio in there. It's there for a reason with high quality oil and gas companies. So if you're a trader. Yes, but this is also why as a long term investor I have those stocks in my portfolio and as well as gold. So. But I think Steve's right. You look through this, you know, do.
- [04:14]
Scott Wapner
You believe UBS market impact should fade fairly quickly?
- [04:17]
Rob Seachin
I think you do. And you're going to get a reaction at some point in the Middle east and it'll go back and forth. I don't see oil kind of going back to that 4550 range in the short term just because of this overhang.
- [04:26]
Scott Wapner
I mean, you know, if the straight of Hormuz is, is open now, but if there's a move there and that closes, you know, people that we talk to say well you're looking at 100 bucks again.
- [04:37]
Rob Seachin
Yeah, I mean it could pop at least in the short term. So you know, why do we have certain things in our portfolio? When you have a diversified portfolio, you keep these things in there and you.
- [04:45]
Scott Wapner
Buy them high quality companies Shan impact should fade fairly quickly. Is that how we should think about this? Our viewers are trading public should think about this again. 2% from, from all time highs on.
- [04:57]
Shannon Saccocia
The S and P. Well I think you know, you talk about that level and is there some vulnerability just based on where we're at? There's a lot of factors to think about here, Scott. One thing that I don't think has been mentioned yet, at least in this conversation, is that yes, I agree with Steve, kind of the temporary impact is likely to be faded and you know, certainly in oil prices there's likely to be some excess capacity that can come on and offset some of the price increases. But I think more importantly you think about sort of the arm's length players in this conflict, the U.S. russia and China and there's some other very important negotiations that are going on between US and China right now that I think have significantly more implications, significantly greater implications for the global economy. And so you know, if there was, you know, an escalation where there becomes additional combatants get pulled into this conflict and particularly around the US and China, Russia has a conflict of its own that it's grappling with right now and is probably a bit too busy to get heavily involved here. I think that any implications around the potential for this to derail or delay further negotiations with the Chinese, I do think that that would be something that could potentially make this a longer tail than what we've seen historically China.
- [06:13]
Scott Wapner
Rob, as a market participant, what are your thoughts on the market today? Not overreacting. The price action would tell you that if you look at the S and P, for example, not even down 1/2 of 1% at the time, it seems like it's trying to focus on the broader theme of what UBS is suggesting. Don't do anything rash in the market, that this is soon going to pass and just be another one of those major flare ups in the Middle east that over the longer period of time doesn't necessarily impact all but you know, a few or a couple even asset classes in our markets and even that is only for a reasonably short and fenced in period of time.
- [06:58]
Bill Baruch
And if you look at any history it would tell you exactly the same. But this time, Scott, I think it's all about oil prices and if oil oil prices are contained, markets will move on and they'll focus on whatever the next event is. And that might be short lived too. But this could throw a wrench in both the economies and more and markets higher oil prices have A lot of implications because they're inelastic. It's tax on consumers and it crowds out spending in other areas. It could make headlines. CPI reaccelerate. Remember, remember, oil prices have been a source of disinflation over the last three years and obviously the opposite direction would not be welcome. And higher energy prices constrain the Fed. There's two cuts priced in and this oil prices being much higher makes Waller's good news cuts rather unlikely. And you know, there's obviously a lot of uncertainty of whether they'll sustain higher because there's a lot, a lot of latent supply. It's still abundant, but it definitely has the possibility to slow, slow demand. I think the one interesting thing that no one talked about is how when something like this happens, we have often seen a positive reaction in Treasuries and we have not seen that this time despite seeing it in the dollar and despite seeing it in gold. So what, what does that mean for markets? Is, is the era of US exceptionalism really over? Is international going to continue to do Well, I think it's the derivative effects of this that we should be paying attention to.
- [08:42]
Scott Wapner
Unless it's, unless it's just reacting to the move in oil as an inflationary byproduct of the move there. Your point's well taken, but it's just too hard to know if there are moves to be made today directly related to this outside of just straight equity decisions decisions. Bill Baruch seems to have found some. He joins us now on the phone because he does run a commodities fund and he is making some moves in both gold and oil. Can you tell us what you're doing today?
- [09:13]
Mike Santoli
The moves really sort of started permeating through the week. Early on in the week, news that the US may evacuate embassies in the Middle east, particularly in Iraq, with not a whole lot of context around it. So gold start to react. Crude oil began reacting very quickly. You look at some of that starting to happen in the fact we didn't get context around it I think is very important. And then lo and behold we start to get these moves. Volatility overnight expanded rapidly. Option prices in gold and crude oil. So what we were looking at is being positioned in those really capitalizing on it, exiting, exiting call spreads and crude oil, exiting cost spreads in gold, looking at monetizing this move ahead of the weekend because they think the news flow is going to continue to evolve. And on one hand I do think there is potential to see continued talks. President Trump took the troops social earlier in the day talking about today being day number 61, he doesn't want to see those high oil prices. So I think these conversations will continue to go. Coming out of the weekend, we could see a little bit of a different situation. So if you're trading this, I think it's important to capitalize on these moves. If you're a trader right now and you, if you've been long crude oil or you've been long energy and some exposures there, it's. It's important to capitalize on it and look to move on, but also be ready to see what next week breaks.
- [10:33]
Scott Wapner
What about gold?
- [10:36]
Mike Santoli
I love gold. Overall, I think this move is building up for 5,000. I mean, it's a very nice consolidation. We could get a record high settlement in gold today. What I really love seeing, as well as you're starting to see silver, platinum and some of the others wake up. But gold as it's moved very well in through the middle part of this week. It's important here too. We're looking at monetizing it ahead of the weekend because some of these weekend moves, it's almost like the week has. Loses a bit of memory from week to week. And you want to be prepared for that news to evolve. So again, if you, if you're long gold and you're trading it, capitalize on it. Here, I think is very important. Now in our portfolios, in our diversified portfolios, we have exposure to gold miners, midstream energy, commodities, and about 10% of the portfolio for the exact reason that you hit on and rob hit on that. The treasury market, if you have a fixed income portfolio, is not reacting properly here right now. There are some good auctions this week, and still we fell out after this news on inflationary fears. So we coupled our fixed income with this real asset basket. As a, as an investor, we're not touching that today. We want to see that continue to work for us. There's cash flow from a lot of, a lot of those assets, too. So this depends, what hat are you wearing? Are you wearing a trader's hat or are you wearing an investor's hat?
- [11:55]
Scott Wapner
All right, I appreciate you calling in. These are actionable and interesting moves to what we're all seeing take place in some asset classes within these markets. Bill Baruch, thank you for that. You get past this, Weiss, and then you focus back on the big picture of why Altimeter's Brad Gerstner, who was with us yesterday, reminded all of us as to why he's turned so bullish on these markets. I want you to listen to what he said in total. Why has he increased his exposure so dramatically and taken whatever sort of hedges that he had off? Here's why. We have the AI super cycle. We've seen a re acceleration in both the top line and the earnings. You know, Oracle reported last night blockbuster numbers. 80% of the S and P that reported all beat the Mag 7, all beat and accelerated. And so I think that, you know, so long as the government does these things that I describe, I think the economy's ready to cook. We have these rate cuts coming in the back half of the year. So I think that's the potential trifecta for, for this economy. An incredible pro growth administration that is landing the plane on tariffs, that is landing the plane on the reconciliation bill. And we have rate cuts ahead that caused us to get a lot more bullish at the beginning of May. We remain so today. All right, so that's Brad Gerstner. Now, obviously the tariff issue lingers, the trade, the tax issues linger. We don't have any rate cuts yet. But that's this, that's the bullish scenario. Are there cracks in it or is he right to be focusing on the big prizes at the end of the rainbow here?
- [13:35]
Steve Weiss
Well, I'm saying I'm fully invested now and have been for a little while. Look, you know, it depends what happens. As optimistic as Brad is about the market, I can tell you that the CEOs that I talk to often, the bankers I talk to often, private equity funds, large ones I talk to often, are not as optimistic on the economy, number one. Number two, there's nothing that, that has happened. As a matter of fact, it's only gotten worse in terms of keeping CEOs from deploying meaningful capital in Capex.
- [14:08]
Scott Wapner
You think it's gotten worse? I don't, I don't. I'm not sure I agree with that.
- [14:12]
Steve Weiss
Well, okay, let me, let me say it this way then. It's not gotten better, right? Taking China down from 145% to 55%. What I mean is gotten worse is that there's been no, there's, there's been no off ramp in terms of, of Trump's continuing to talk about tariffs, how they'll be penalized if Europe doesn't come stable and yada, yada, yada. Now the market's been desensitized to it and tacos alive and well in the minds of investors. So, so from that stand standpoint, it's gotten better.
- [14:44]
Scott Wapner
But even from a, even from a Capex standpoint in speaking. Well, let me, let me just, let me just say this. I mean I know you speak to a lot of CEOs in the, in the business that you're in, but I spoke to the CEO of now I know it's a specialized area of the AI super cycle, right. But I did speak to the CEO of aws, right this week.
- [15:02]
Steve Weiss
They have no choice.
- [15:03]
Scott Wapner
They just committed $25 billion in a matter a handful of days right on top of the billionaire more that they continue to dole out for this big build out of data center and the chips that they're making and everything else. Just representative of no slowdown in that perspective or procurement.
- [15:25]
Steve Weiss
There's been an acceleration actually in AI.
- [15:27]
Scott Wapner
Isn't that making the point to Brad's point?
- [15:29]
Steve Weiss
Well, it's making the point is that as you started it's a very unique area, right. And AI which is why my positions, my top positions are better. You know they're Microsoft and others that play in that and have remained my top positions. So that's unique and that will filter down to others like we own part of electrical contractor company that, that really primarily their work is in data centers. So we expect to see that continue. But in terms of the industrial companies, even though I bought the XLI which I talked about earlier in the week and I bought cat, to me they're the ones that are not deploying cap.
- [16:04]
Scott Wapner
Maybe those aren't the stocks to be in. Right. That that's part of the psychology of the market right now, right. Is you once again have to find yourselves in the in the right stocks.
- [16:14]
Steve Weiss
Right. And I've never wavered, not at all. Even when people talk about the temporary rotations industrials even though they've done quite well recently, I've never wavered from saying that the fortress balance sheet tech companies will be the ones that continue to thrive and that they may be momentary setbacks, but that's all they'll be because they've got growth that will survive regardless of what happens with the economy. So I continue to like those. But CEOs just aren't deploying capex aside from in AI and AI related companies just not doing it.
- [16:46]
Scott Wapner
So you had truist yesterday a big call from Keith Lerner on this topic. Really overall of looking at growth versus some of these other areas. He upgraded growth yesterday to attractive. It was at neutral. I think there was a belief that you would get a broadening out tech sort of over the last month has said well maybe not because a lot of the dollars that have been out there for, you know, investable dollars have been going back towards this tried and true trade.
- [17:14]
Rob Seachin
It makes sense too, because if you think about where you go down the supply chain chain and you think of the Fab Seven, spending money on data center, spending money on chips, so all those are seeing growth in there. And then when you look at each of the businesses within them, they're also growing. So that's where capital is going to go in terms of industrials and consumer staples. You know, Steve's right. These companies are not spending money. So why would you actually accelerate investments in there right now? Most of them are fairly valued until we get more clarity as to tariffs, etc.
- [17:44]
Scott Wapner
Now let me ask you this. If you're trying to have a whole of market view, right? If you're sitting out there as an investor and you're like, whose perspective am I going to listen to for mattering more to my investment philosophy right now? A Caterpillar, I'm just picking them out of the sky. Okay, A Caterpillar, an industrial stock which maybe looks at the tariffs differently than at Amazon or a $15 billion Metta investment that they just made in scale. AI, whose perspective is going to drive you and your investable dollars today? That or Caterpillar.
- [18:26]
Rob Seachin
So I think it's the former because that's where the expected return is going to be higher. However, in a diversified portfolio, you have to be careful that 60, 70% of your portfolio doesn't fall into 10 stocks.
- [18:38]
Scott Wapner
Well, just don't be too well. But you also have to be careful that you're not too diversified just for diversification sake.
- [18:43]
Rob Seachin
100%. I'm not.
- [18:44]
Scott Wapner
Everybody comes on, oh, you'd be diversified, diversified, diversified.
- [18:47]
Steve Weiss
Diversify. Diversification is the enemy.
- [18:49]
Rob Seachin
It depends on what. Okay, so, so Bill was talking about, you want to be in some commodities, you want to be in a copper company or a gold company. You can, you can have those also. You just don't have to be all in one or two sectors. You can actually diversify. So at days like this happen, you feel much better owning a gold stock or energy stock.
- [19:07]
Scott Wapner
Rob B of A today says there's more upside. Opportunity for risk. Barclays Animal spirits could fuel the chase for additional upside. Chris Harvey. Wells Fargo has maintained and continues to his view that tariff concerns may be overstated. He has, in the face of everything, stuck to his now I don't know how realistic he really thinks we're going to get there. 7007 remains his target. He's one of the only if not the only strategist who hasn't done anything. He just sat back, he observed, and he said, you know what? I think the second half is going to be much better. We're going to clear some of these issues, we're going to focus on the Gerstner prizes and we're going to have a better second half of the year than we did the first S and P. What do we have, 2% year to date?
- [19:52]
Bill Baruch
It's easy to buy into that view. But I focus on one thing, Scott, that has served us really, really well, and that's institutional positioning and it still remains underweight risk. So I agree. They talk about this pain trade, they talk about markets climbing walls of worry. And we all know there's, there's plenty to worry about. But the pain trade is higher, institutions will get drawn in is there's resolution of these various things. And as long as the, there's not some seismic shift in one of them, which is why I mentioned energy prices at the beginning of the show. As long as there's not seismic positioning shift there, investors will get drawn into markets. What causes assets to go higher is fund flows. You will see that. And so there, there are some gating issues. The gating issue is valuation. But valuation is a terrible, terrible timing tool. So I think we can definitely see that play out. And who knows if it comes with resolution at the end of it to a lot of these worries, we're going to be at a vastly different valuation level on the S and P than we are today. And I think it will be higher. Obviously you can't ignore those other things. So you're paying attention to one other thing that I would say is earnings, right?
- [21:12]
Scott Wapner
Earnings.
- [21:12]
Bill Baruch
We're seeing earnings rerate positively, estimates going up on the growth side of things, and estimates getting trimmed in value small mid. So it's no surprise to us either that we've started to see that outperformance, you know, a little bit of its narrative, a little bit of it's, it's because that's where investors want to be, where the super cycle is. But a lot of it is just these companies are doing better at the margin. There is enormous operational leverage, though, on clarity for these businesses that will leverage AI and ultimately if you don't own them, you will miss the opportunity because there are great companies that are trading at significant discounts to our most popular friends.
- [21:56]
Scott Wapner
You and you and Weiss are right. I mean, many big names and big name institutions are negative. I mean, sentiment is not universally bullish, even as we're 2% away from a high. The people who follow it talk to and keep a close eye on. All of those cohorts suggest the same thing, whether it's Weiss talking to CEOs, Adam Parker talking to institutional investors, bank of America's flow show today. How about this? Biggest outflow in US equities in 11 weeks. You don't have everybody on the same side of the boat here, folks. Even though some of the commentary in recent weeks may have you believe that, you still don't. The contrarian view of that, of course, Shannon, is that that's where the money is going to come from for the next leg of the market to not only get you to these new highs, but get you further than that. Does that make sense?
- [22:48]
Shannon Saccocia
Yeah, I don't I, you know, I don't I think that that's, you know, not necessarily a contrarian view. I just think it's the reality. It's all about the time timing of that. SCOTT and so I think that what institutional investors are looking through is that, you know, they're they're not as perhaps complacent about the pull through of inflation on margin. And, you know, to the point about why people, why investors are rotating back to growth in this, in this shorter term period is because there is a perception that tariffs and higher prices are more likely to affect the more significant cyclical industries. We also are seeing evidence that economic growth is going to be slower this year than we thought it was going to be coming into the year. And so that also has that cyclical overhang. But I think the important thing is, you know, Rob said that valuation isn't a great barometer prognosticator of performance, but earnings growth sure is. And so if you're looking at where am I going to derive earnings growth, of course those estimates are coming down in those more cyclical parts of the market because the uncertainty, uncertainty from policy is more likely to impact those in the short term, particularly from a margin perspective. But if I look out over the next 6, 9, 12, 16, 18 months, if I look at something like the AI megatrend, boy, I better be able to monetize that in earnings and margin in particular, outside of those big companies, because otherwise those big companies aren't going to be able to continue to produce that earnings growth either. And so I think that if we're looking at the here and now over the next three to four months, sure, you know, there's opportunities to play that trend in growth, but, you know, I think we're looking at it in terms of the industrial sector, a lot of talk about that today. But that's a great, that's a great place where you can find the implementation of automation and AI that could be potentially, you know, transform it transformational in terms of margin as you go into 26 and 27.
- [24:37]
Scott Wapner
The other story Weiss to on Focus, focus on this week. IPOs are coming back. They are chime. Yesterday we could show all these charts.
- [24:47]
Steve Weiss
They've been successful.
- [24:48]
Scott Wapner
As I talk about these, voyager closed up 82% but there's chime. We need to look at chime more than just intraday. Guys, please, can we look at this week and see what, what Chime did not today. Voyager was big, Circle was big, big, Etoro was big. And the pipeline looks pretty rich, very.
- [25:09]
Steve Weiss
Robust, which is why I traded a little Goldman. It's core position. But it was down nine bucks was opportunity. Take a look. The IPO market is coming back. That is actually one of the risks that when you see so much supply coming to the market, what happens to other stocks? So the weak sisters, the weak one, the weak holdings, they will get rid of those and try to make in the IPO market. But Scott, there's one thing we haven't talked about which is the consumer.
- [25:38]
Scott Wapner
And we're going to do that later.
- [25:39]
Rob Seachin
Okay.
- [25:39]
Steve Weiss
Okay.
- [25:39]
Scott Wapner
So we'll do that later.
- [25:41]
Steve Weiss
So good tease.
- [25:42]
Scott Wapner
I'm glad you read the doc before the show rather than during it. Well, anyway, but, but, but back back.
- [25:48]
Steve Weiss
To, to the IPO market. That is always a risk we see acutely in biotech where you have big biotech issuances cycles and it kills the indices. I think it'll be more measured here because of the number of stocks that we've taken out of the indices over the last 10 years. So there's room. But clearly, clearly you're going to see major beneficiaries in Goldman Sachs primarily because of how narrow their business is, mortgage, Stanley etc.
- [26:13]
Scott Wapner
Okay, so let's take a break. We are going to talk about the consumer. As we said, we did get consumer sentiment a good number today. So we'll kick that around. We have our calls of the day coming up as well. A number of bullish calls on several committee stocks. We are back in just two minutes.
- [26:37]
Narrator
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- [27:09]
Scott Wapner
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- [27:36]
Narrator
Courage.
- [27:36]
Scott Wapner
I learned it from my adoptive mom. Hold my hand.
- [27:39]
Shannon Saccocia
You hold my hand.
- [27:42]
Narrator
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- [28:06]
Scott Wapner
Calls of the day. Maybe the best stock in this market. I know Josh has his list, but I think I'm going to have mine. Netflix 1425 is the target, was 1200 Oppenheimer. You could just add them. WEISS to the list of companies that have chased this stock on the up and up, let's take a look at a year to date, please.
- [28:27]
Steve Weiss
Weiss Look, I mean stock, I want to say weakened little, but it's still on a percentage basis really trading that size. But weakened little when the hoop Hulu News started coming out and that made no sense. So to me, this is a perma hold. It's a permanent compounder. They still own this space. They're number one in it. And as the economy gets tougher and we'll talk about the consumer later, I believe. SCOTT but as consumer, you know, as it gets tougher, they're going to decide where do I want to spend. They've got their ad supported streaming service. I just think that this one is, you know, is one that looks great.
- [29:03]
Scott Wapner
Yeah. It's been offense and defense.
- [29:05]
Steve Weiss
Yeah.
- [29:05]
Scott Wapner
And there aren't that many stocks in this market that have been able to accomplish both. Given all of the news flow and the headlines, it's just managed to stay above the fray. Even if you're concerned about the economy. Now that you have other tiers, like an ad tier. Okay. You don't want to spend the full freight. Go ad tier and you're still getting the subs.
- [29:21]
Steve Weiss
It's recession resistant. You still have cord cutting. I mean we're beyond the bulk of it, but it just has so many.
- [29:28]
Scott Wapner
Tailwinds NRG outperform Raymond James 326. Not 325 Rob Seachen but 326. I don't think it's a typo. 326 the price target here. What's your take?
- [29:42]
Bill Baruch
I think that's right. Listen, this is a company that we added in January of this year. It's up 69% since second best performing stock to Palantir. You know when we look at it natural gas will be the key to solving the bottleneck in data center power consumption. And energy is incredibly well positioned for that. Its valuation is no longer cheap. It's still at 18 times. There's a multi year story. It's benefiting from both increased loan growth and consumer data center power consumption. So we like this and it's a little cheaper than Bistro which we also own in sold to buy this. A little bit of it to buy this.
- [30:24]
Scott Wapner
Air products Surat initiated outperform 355 at RBC. They're bullish on one. The return to the core industrial gas model to the turnaround plan. 3 rerating to 25 to 30 times PE multiple. What do you think?
- [30:39]
Rob Seachin
So 1 and 2 is really important to the story. You've got a new management team in there that is now focused on the core business. They got rid of all all their other businesses outside the US that were not cash flow producing. The other part that was not mentioned is industrial gas company like our products has long term contracts. You have long term contracts you secure the the future revenue and you also have inflation hedges against them. So that's why a company like that deserves a premium multiple. Their comp is Lindy which trades at over 30 times earnings. If they can even get close to that you're going to see a good pop in the stock and you get paid 2 1/2% dividend yield while holding.
- [31:16]
Scott Wapner
Rob. Wells Fargo says Abbvie is a signature pick. They say it again. They reiterate it. 240 bucks is the price target. Thoughts?
- [31:27]
Bill Baruch
It's up a good bit year to day up 10%. Really outperforming the market. Peace 15 times. It's a high quality pharmaceutical company with consistent top line growth off a Skyriz. They're also focused on Botox, arthritis. It's a, it's a high quality business. I think this is one you can own. The total dividend yield 3 1/2 percent.
- [31:51]
Steve Weiss
That chart looks pretty good. I'll tell you about.
- [31:54]
Scott Wapner
Yeah, that seems to be the most favored biotech healthcare related Name on the desk.
- [32:00]
Steve Weiss
Yeah, without a doubt. I may be the only one who hasn't owned it over the last five years.
- [32:05]
Rob Seachin
You bought back.
- [32:05]
Scott Wapner
Unh. Is that true?
- [32:06]
Steve Weiss
I did buy back and as you recall, when I sold it, I want to see if there were any other skeletons in closet, so to speak. They got through their, their analyst day, their investor day. Some thought that they preannounced and give guidance, but that'll be in the second quarter. Again, I know Steve Hemsley, CEO. I know John Rex, who's the president, cfo, very steady hands on the wheel. And look, they made a mistake in underwriting the amount of business they took. And, and V28 is largely behind them at this point. But it's going to be a kitchen sink quarter and the guidance you can count on. So that will be the relief rally and you'll see continue to move up. You got actually bought some more today.
- [32:47]
Scott Wapner
You got any other cliches? Kitchen sink?
- [32:49]
Steve Weiss
No, but there are certain names I wanted I want to drop.
- [32:52]
Scott Wapner
So closet clean bill of health. You didn't use that one. You want to use that that you gave them?
- [32:57]
Steve Weiss
Well, I thought it was too close to home with the health care company.
- [32:59]
Scott Wapner
Okay. All right. Good stuff. Let's get the headlines now with Courtney Reagan. Hey, Courtney.
- [33:04]
Narrator
Hi there, Scott. Good afternoon. Well, about 200 Marines have moved into Los Angeles amid protests against President Trump's immigration crackdown. The commander in charge of the deployment said today that those Marines will protect federal property and personnel. It comes a day after a federal appeals court ruled the administration can for now maintain control of the National Guard members in California. A federal appeals court will not take up President Trump's bid to reconsider a $5 million verdict he lost to Eugene Carroll in 2023. A jury found he sexually abused and defamed the former columnist in the 1990s. Separately, the president is asking the appeals court to throw out an $83.3 million jury verdict for defaming Carroll when his when he first denied her rape claim. And earlier this morning at Sean Diddy Combs sex trafficking trial in New York, Kanye west, also known as Ye, made a surprise courthouse appearance. He told reporters he was there to show his support for the music mogul who is facing five criminal counts. West spent about 40 minutes at the courthouse but never made it into the courtroom. Scott, back over to you.
- [34:05]
Scott Wapner
All right, court, thank you. That's Courtney Reagan. Coming up next, committee stocks on the move, winning and losing streaks to discuss. And we will do that after this break.
- [34:14]
Narrator
Foreign.
- [34:20]
Scott Wapner
Are you still quoting 30 year old movies. Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99 of places that take credit cards nationwide and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [34:48]
Narrator
Courage.
- [34:49]
Scott Wapner
I learned it from my adoptive mom.
- [34:51]
Shannon Saccocia
Hold my hand. You hold my hand.
- [34:54]
Narrator
Learn about adopting a teen from foster care@adoptuskids.org you can't imagine the reward brought to you by Adopt Us Kids, the U.S. department of Health and Human Services and the Ad Council.
- [35:18]
Scott Wapner
All right, we are back. Let's talk streaking stocks both up and down. IBM snapping its nine day win streak. That's a record high yesterday. That stock, Rob Seachen has just been on a tear. A tear?
- [35:30]
Bill Baruch
We added the D year ago, Scott. It's up 71%. It's more fully valued today at 25 times. Still a great business. They're seeing modest revenue growth, margin expansion and valuation. But they're a beneficiary of this effective transition from a consulting LED business to a software led AI LED business and emerging as a leading quantum computing play as well. Name we continue to believe in.
- [35:59]
Scott Wapner
Yeah, I mean Arvind Christ is probably the the tech CEO not talked about nearly enough. All the focus centers around the Mag 7 and the Mead's done a great job. There's no other. The chart tells the story right. Chart don't lie. Other stocks on a streak 6 day win streak for Suncorp Siege. That's you along with Eli Lilly's on a five day win streak.
- [36:21]
Bill Baruch
Both those names can continue to do well in the portfolio. Sun cores really cheap overall. It's a little harder to get too excited about. The energy space obviously doing great today. There's still a lot of reasonable valuations there. High single digit yields as we've seen Lilly, you know we trimmed a little. It's down from Its peak at 50 times. Trading at 33 times today. Still a great business. They are the front runner in the GLP1s and we still think that's an enormous secular opportunity. They have a 60% market share there.
- [36:58]
Scott Wapner
Surrot, Bristol CVS, Danaher, Thermo, Fisher. Five day win streaks. You have all of those.
- [37:04]
Rob Seachin
Yeah, but if you look at Thermo and Danaher, they're both down 20%. The whole NIH overhang on them. So still very High quality companies. I like those. They are growth companies longer term but they're kind of in the doghouse now. Cus and Bristol, single digit multiples, they've been out of favor to CVS as we know. Got hammered last year, has come back a bit this year it's up about 10%. And Bristol, you're just playing up bet on the pipeline, Rob.
- [37:28]
Scott Wapner
Ping Insurance, a four day win streak.
- [37:32]
Bill Baruch
Ping on. You kind of poked me on this one when I added it on the show, Scott, if you remember.
- [37:38]
Scott Wapner
I know I conveniently.
- [37:43]
Bill Baruch
Very diversified insurance company in China. China is obviously a market that's done really well this year. The story Here is a 6 times P and 50% free cash flow margins for one of the largest companies insurance companies in the world. So exciting to see that it's, it's up 40% since we added it.
- [38:04]
Scott Wapner
What was my pinging about? Do you remember?
- [38:07]
Bill Baruch
I don't remember. I think because you've never heard of it. You were just jabbing at me a little bit.
- [38:12]
Scott Wapner
Okay, that's fair. Fair. I mean it's all fair.
- [38:15]
Steve Weiss
Any opportunity, rob.
- [38:16]
Scott Wapner
That's right. Four day losing streak. Amex stocks up 30% for the year.
- [38:20]
Rob Seachin
You've got some profit taking companies done really well, firing in all cylinders. They're in the right part. So I think it's just some money. Take them off the table.
- [38:27]
Scott Wapner
We'll take a quick break, we'll come back. Santoli joins us with his midday word next. Senior markets commentator Mike Santoli sitting down here with us at post nine for his midday word. What's on your mind today as you watch these markets react to geopolitical events and try and think about the big picture?
- [39:06]
H
Yeah, I mean it's a pretty decent test of the market's resolve. Obviously it sort of moved quickly to kind of underreact in a way. But you had the makings there of something that could have gotten a little bit disorderly under the right conditions if we really were fragile. You had the VIX pop back above 20, even the sell offs and Visa and MasterCard because you know, even it's news driven whether it makes sense or not. Those are kind of crowded beloved stocks in the momentum basket that could have actually destabilized the tape. It didn't happen, at least not till now. I understand why oil's popping but up to a very benign level and you know you can kind of keep that in stride. This sort of tenacious dip buying instinct has remained in place. All that said, you can kind of pull back and say market's kind of slowing down and hesitating as it gets closer to the old highs. It is, you know, maybe a little bit narrower than you prefer it to be. So it's not as if you've sort of convinced anybody that we're up and away from here. You go on and throw a lot of fresh new money at these, at these leaders. But it's really probably an upside surprise in terms of how it's react.
- [40:12]
Scott Wapner
Is the move that we're watching in the treasury market peculiar to you? The way that yields are reacting inversely to what you would think would be your typical risk off? If the dollar is catching a bid and gold's catching a bid, you'd think Treasuries be catching a bit.
- [40:28]
H
You would. I mean obviously that's the textbook. A couple of things I would note. One is there was a pretty good two day rally in Treasuries off the soft inflation numbers. Right. Two days ago you're at four and a half on the ten year. Right. You open today for 35 or something like that. So it was pre bought in a sense. But yeah, I think you have to notice it. You have to be aware that Treasuries, you know, and this has been the case for a few months, that they're just, you know, people are kind of slow to buy quick sell. And I think, you know, maybe that's the dynamic for that said the absolute level of yields, it's just rangebound. It's not really causing alarms but the behavior, you know, maybe we have seen some kind of a shift there.
- [41:05]
Scott Wapner
All right, I'll see you on closing bell. That's Mike Santoli joining us here. Up next, the segment that Weiss could not wait to get get to. We're trading the consumer sentiment beat. Retail sales are next week. Santoli just Talked about Visa, MasterCard, McDonald's got downgraded again. We'll do it all next. All right. It's the moment that Weiss has been waiting for. Consumer sentiment above 60. Right. Retail sales next week. I think there's a good amount of concern over how long the consumer can hang in.
- [41:51]
Steve Weiss
Yep.
- [41:52]
Scott Wapner
You Got the Visa, MasterCard stories today on Amazon and Walmart and others apparently considering issuing their own stable coins. McDonald's downgraded again, which doesn't happen at all. It's a fourth downgrade of the past week. Restoration is surging today after they reiterated their sales guidance. What do you think about the consumer here, Weiss?
- [42:08]
Steve Weiss
Actually Scott, I'm over consumer. Can we move on to another?
- [42:11]
Scott Wapner
Go ahead.
- [42:12]
Steve Weiss
What do you think look, as you.
- [42:13]
Scott Wapner
Take a look Filibuster me wise. Go ahead.
- [42:15]
Steve Weiss
As you take a look at some of the results have come from the retail companies. They've been very, very mixed. And the downside of a number of these stocks, whether it's Dax or Lulu or others, Gap stores, has been pretty significant. And keep in mind that the consumer is still the driver of the economy, two thirds of the economy and they're worried. You hear reports of consumers putting more and more groceries on their credit card bills. So I think it's worth watching out for and particularly with elevated rates on those credit card bills, I think that could really chill spending by the consumer.
- [42:48]
Scott Wapner
You have Visa and MasterCard. Is this a justified move in the stocks? Is it even because of that story? Worry about the stablecoin.
- [42:55]
Rob Seachin
It is. I mean because PayPal is down to they're all down 4 to 5% and look stablecoins have been around. PayPal actually has its own. If you think about how long it's going to take regulatory wise for Walmart and Amazon to get into this business, think about the consumer who uses credit cards because they like to rack up points and they can get credit. It is a long way off. This is an opportunity for a Visa MasterCard. If you haven't bought those two, I think high, super high quality companies that have the Rails, they control it to get an opportunity to put at least a position in there.
- [43:24]
Scott Wapner
You agree with that?
- [43:25]
Bill Baruch
Rob takes we own them both. We've owned them for a long time. They're they're both trading near all time highs Scott. So they were more susceptible to this type of headline risk. They're incredibly hard to dislodge. So I agree. But I don't know if this is the entry point right here from a price, price perspective. This is as, as expensive as they get from a multiple perspective. So I think I'd wait a little bit.
- [43:57]
Scott Wapner
All right, final trades coming up next. Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app.
- [44:41]
Bill Baruch
Follow the Halftime podcast. Now.
- [44:49]
Scott Wapner
Do a check in on Adobe today. Didn't get to it earlier but it is a mover. It's down near 6%. Rob Seachet on the back of earnings. What's up with this stock? It certainly hasn't gotten the performance that anything else really related to almost anything else I should probably better say has gotten. They want a piece of the pie. Can they get it?
- [45:10]
Bill Baruch
You know it's all about monetizing a Scott and I still think the, the investment community challenges their ability to monetize AI. Is there something that can be bought when you can essentially get it for free? They've delivered on number. They continue to deliver every time they report and yet the stock does not perform well. We are going to continue to be patient because we think this is a stock to own.
- [45:38]
Scott Wapner
All right. It was a big week for software names. Oracle had a big week, as you know. What's your final trade? Rob, while I have you.
- [45:46]
Bill Baruch
Alphabet, it's been the best performer in the mag 7 over the past month. It's the cheapest as well. And we think they're trying to quote quiet the bear case around search disruption. I think it's the one to buy Shan.
- [46:00]
Scott Wapner
Energy.
- [46:01]
Shannon Saccocia
It was my final trade on Wednesday. I'm not clairvoyant, but on the long term basis if OPEC has to put some more supply on the market, that actually eases some of the supply considerations for next year.
- [46:11]
Rob Seachin
Slumber Jay I mean I still think you want to own the stocks really cheap.
- [46:15]
Scott Wapner
Twice.
- [46:16]
Steve Weiss
Unh. I think it's a good trade from here. Not a big position, but I think you make money.
- [46:20]
Scott Wapner
All right, good stuff. You guys have a good weekend. I'll see you at three o' clock. We have Dan Greenhouse today, Warren Pies, Cameron Dawson, Kevin Simpson and Jeremy Cotter. Pre IPO Facebook employee. Can't wait to talk to him about who's going to win the air race. He has some strong views on that and he'll share them with you at 3 o' clock exchanges. Now you've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 2012 Eastern only on CNBC.
- [46:49]
Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer Courage.
- [47:29]
Scott Wapner
I learned it from my adoptive mom. Hold my hand.
- [47:32]
Shannon Saccocia
You hold my hand.
- [47:35]
Narrator
Learn about adopting a teen from foster care at Adopt you. You can't imagine the reward brought to you by Adopt Us Kids, the U Department of Health and Human Services and the AD Council.