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Halftime Report
Mega Cap Earnings In Focus 10/22/25
00:43:22
Scott Wapner and the Investment Committee discuss the big earnings names in focus today. Netflix sinking after an 'underwhelming' report, the desk debates how to trade it. Plus, Steve Weiss trimming a mega cap name, he explains why. And later, we hit the latest Calls of the Day in the financial sector. Investment Committee Disclosures
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- [00:00]
Commercial Narrator
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- [00:32]
Scott Wapner
Next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and device. Coverage not available everywhere. Learn more@att.com 5G Network 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. Welcome to the Halftime Report. I'm Scott Wagner. Front and center this hour, the markets with Netflix, Tesla and other big names. In focus today, we're trading all of it, of course, with the investment committee. And joining me for the hour today, Joe Terranova, Steve Weiss, Surat Sethi, Go to the markets. Got a little bit of work to do here at 12 noon in the east because we are read across the board. The Russell is today's biggest decliner out of the majors. It is the nasdaq underwhelming. That's what they're saying about Netflix and the results. The stock's down a bunch. We'll take a look. So they had the Brazilian tax dispute, which is one of the issues. Core margins were above estimates, record high engagement and viewership. They're all in on leveraging AI, they say in their note to shareholders. So I'll go to a shareholder, Joe Terranova, sitting next to me now. You buying this dip? What do you do?
- [02:11]
Joe Terranova
All right, so here's the challenge with the stock. Fundamentally, when you hear the report, they hit on all of the metrics that you wanted to hear. We talked yesterday. I wanted to know what's the plan with AI? Is it going to have the ability to reduce the spend on content to lift margins? We talked about engagement, global engagement, needing to improve. It did that as well. Then you're throwing the curveball with Brazilian tax dispute. That curveball does not create the environment where you have the catalyst that was needed. We've talked about how the stock since June 30 really has been in a consolidation.
- [02:48]
Scott Wapner
Let's show it. Because it was a. After we. We at periods of time on this program, I have said something to the effect that this was one of the most, if not the most impressive stock in the market for a period of time.
- [03:01]
Joe Terranova
Yes.
- [03:02]
Scott Wapner
It did not go down. Okay. I'm not talking about when it went from 700 to 400. I'm talking about the resurgence that the stock had. Build it out further and you'll see the run that I'm talking about because it was an incredible stock. Even further. It was an incredible stock which we talked about almost every day because so many people decided they were going to buy it on this program. And then it had this. There you go. And then it was. Look at that move. I mean, it was pretty incredible from that big drop down to that big run up and then that sideways move more recently. Let's look at that now as Joe was was just talking about. So I just want to give some context for our viewers to understand the full story.
- [03:44]
Joe Terranova
You have to tell the story of this stock because the journey has been remarkable. And up until June, the stock and the stock after today it's not. But prior to today, it was outperforming the rest of the Mag 7. You needed a catalyst to get you out of the consolidation phase. You don't get that after yesterday's report. So now you ask the question, what do you do with the stock? Okay, here's the context that I'm working with. And I think, Steven Surat, you could respect this. The Jyoti ETF takes a position in April of 2024, takes a position at 550. Okay.
- [04:17]
Commercial Narrator
You could do the math.
- [04:17]
Joe Terranova
You could see what the gain is there. One month later, I take a personal position at 650. You could say that doesn't matter to where it is today, but it does because it gives me a degree of flexibility in terms of my positioning. What am I looking at? I am looking at the response to the 200 day moving average, which sits at 11:13. It's the yellow line on the chart that we're showing. Earlier this morning, the stock went down to 1114. That's probably too perfect, Scott, that it held there. Probably too perfect. So what I am going to do over the coming days is I am going to see the reaction to this 200 day moving average. And despite what I might think fundamentally about the market, it is very clear to me right now that the market is working off some of the speculative excesses and it's working off what has been a really strong year for momentum. And Netflix checks the box in terms of net momentum. So in the next couple of days, I will reduce my personal holdings if this stock does not recover swiftly back towards 1150, if it stays here kind of wallowing around 110011 and a quarter. I'm overexposed at that point because I own it in Jyoti and I've actually owned this, as I've said, since May of 24 personally as well.
- [05:36]
Scott Wapner
All right, so the street is trying to figure out where it wants to be on this name. JPM goes to 1275 from 1300. They're neutral. Wells goes to 1520 from 1560. They obviously still like it. They're overweight. UBS, they raised their target to 1495 from 1450. And they say you should buy it. Weiss, you also own it. What do you want to do with it?
- [06:05]
Steve Weiss
First of all, I'm going to ignore those, those price targets. They sound like big numbers. That's fine, but the moves are insignificant. I'm staying with it. Joe's. The way Joe manages money is a little differently. It's a momentum based model. He's very clear about that. Bottoms up. Fundamental. And what I see here is a company that I believe delivered in the quarter and they still have an amazing amount of levers to pull. Those include price increases. We saw Max increase their prices. They are still the most used streaming service. So for as long as I've owned Netflix and I was out for a time a few years ago, every quarter is a roller coaster. Even when they report good numbers, you could see a 10% collapse in the stock and bad numbers, 10% collapse. Good numbers, better, better. 10% upside. So we're seeing more of the same of that. And if you've gotten out of it because of this or because it's hit, you know, the 200 day and gone through it, you've made a mistake. So the bottom line is they're a market leader, they're a unique business. And I think there should be a premium for that as there is. And the growth is still.
- [07:11]
Scott Wapner
Look at the prior. We just pulled it away. Pull that back, guys. Throw the other chart that you just had up. I was literally just going to, going to reference. I mean, you see the prior peak and then you know you're feeling bad about the position. That you have at that moment. And then look at the run, speaking to the point. I mean, this is a stock where it's had a lot of momentum on either side of the ledger, up or down, has been hard to go against until it has settled in one direction or another. Let's look at Alphabet too, because that's a big story today and what an interesting 24 hours it's been for that name. They have the OpenAI announcement of the browser yesterday, which we. We were going to get. We talked about it yesterday during this program. Right. And then today there's this report that they're in talks with Anthropic to secure more computing power. So, you know, you go down, you go up, you gyrate around, and here's where the stock is today. It's in the green. Everybody owns it. Including. Well, not including. If everybody owns it. Seurat, you're on the list.
- [08:15]
Surat Sethi
Now, look, I think the negative news in Alphabet, probably more of the Mag 7 comes out just because of the search issue. Right. So anytime somebody comes after their search, the stock is going to react negatively. Now, when they do agreements like this, it's just showing that Alphabet management themselves thinks there's free true growth in their businesses, which we like. It's huge cash flow, huge growth. And the stock has kind of reflected that has come back from yesterday.
- [08:41]
Scott Wapner
Are you worried about the dominant position that they have enjoyed in search being eroded by various forces? Some we know about, some have yet.
- [08:51]
Surat Sethi
To come, I think over time, yes, but they're also investing in their other businesses. So that's what I like about Google at this point.
- [08:59]
Scott Wapner
Or Alphabet, you're telling me. So you could tolerate as a shareholder a decline in market share on search, which is their bread and butter, which completely.
- [09:11]
Surat Sethi
Any.
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Scott Wapner
As long as they're investing in these.
- [09:13]
Surat Sethi
Other areas and as long as.
- [09:14]
Scott Wapner
What are these other areas you're talking about?
- [09:16]
Surat Sethi
Well, they are. I mean, you look at in terms of they're competing with us, so they've got all that going on for them as well. And I think that that part's really growing. That's got high margins and search is coming down, but it's not coming down like a cliff. And it might come down over time, but they're still the dominant leader and I think it's going to be a dominant leader for a while.
- [09:37]
Scott Wapner
Weiss, you trim the name today?
- [09:38]
Steve Weiss
I did.
- [09:39]
Scott Wapner
What's up with that move?
- [09:40]
Steve Weiss
And I may be on my way out completely and I am concerned about search. What I'm hearing search could be down this year over about 20, 25%. That's meaningful.
- [09:52]
Scott Wapner
That's what you're hearing.
- [09:52]
Steve Weiss
Yeah. From here nobody knows. But that's the direct. Those are from you running into like.
- [09:57]
Scott Wapner
Sergey Brin at the diner or something like that.
- [09:59]
Steve Weiss
Where are you now? Sergey doesn't.
- [10:01]
Surat Sethi
Right.
- [10:01]
Scott Wapner
All right. So you got sources say.
- [10:04]
Steve Weiss
My sources are pretty informed. You can make light of.
- [10:06]
Scott Wapner
I'm only kidding.
- [10:07]
Steve Weiss
But they're very informed sources.
- [10:08]
Scott Wapner
Don't get all, don't get all in the huff, all in half.
- [10:12]
Steve Weiss
I'm just trying to bring it back.
- [10:13]
Scott Wapner
To the go ahead.
- [10:15]
Steve Weiss
So what I say is that that is the engine that drives it all. That's what supports Waymo, that's what supports more cloud spending. Now the anthropic deal, we don't know what that's going to be. It's being negotiated. Could it be an Oracle type deal where there's circularity, you know exactly. Circularity which the. I think the close, the Empress closed falling off there. So I believe cloud is going to be the biggest beneficiary of AI. But I've already got lots of cloud, I've got Microsoft, I've got us, I've got matter for their own cloud. So I'll continue to benefit from that. I'm just looking to reduce exposure. I think this is the most vulnerable to being disintermediated by AI and other search mechanisms.
- [10:59]
Scott Wapner
Now remember what happened the last time we had the conversation similar to this so called Eddy Q sell off. Right. Comes out in the court hearing. He says well for the first time ever they've dropped, you know, Google search is declining in the, in the browser. We have a conversation that day saying oh my gosh, you know, sky's falling. Labenthal makes the, the case that you guys are overreacting and then the stock goes on this monster run. What if we're in another situation where the reports of the demise of search right. In quotes is greatly exaggerated?
- [11:32]
Steve Weiss
Yeah. So I'm not paying attention to what competitors say because it's in their interest. And Eddie Q does compete with Google right there in wars, you know about that, just about everything. So I don't really care what they say, I take it in, I don't ignore it. Smart guy, legend with Apple. But I'm just looking at what is happening. AI is the most potent force we've ever seen in terms of advancing technology and it's going to basically give the power to individuals to form their own surge. And you've got anthropic plexi, you've got, you know, open AI, you've got so many Target and the resurgence of Microsoft with Copilot as a search engine as well. So it's become much more competitive. It's too important to business, to Google. And I think the risk reward of owning this versus the exposure, I get the others for cloud, I just don't need to have it.
- [12:24]
Joe Terranova
I agree with Stephen. The problem that I have with this is on May 7th, I put my hand on the stove sitting here with Josh and Jimmy and got burned. So I'm afraid to do that again. I was made to look like a fool. You know, Steve mentions that I am utilizing momentum and I am. I'm utilizing momentum as a strategy when to buy, when to sell. But I'm also looking at fundamentals and you have an intuitive take of certain things. And I kind of agree with the premise that I don't know Sarat. I don't know if there's enough there, whether it's YouTube or the Cloud itself to overcome if there is a decline in the market share surrounding search. So I look at a stock that really had strong momentum build late in the summer. It was very late to the Mag seven party. Okay. Now you have people that are getting in somewhat late. Positioning's kind of full and you still have that challenge surrounding search. And I still think it's going to be there. So the valuation argument, people could say it's cheap, I get that. But I still think when you look at this business, if I could get out of the stock, I probably would do what Steve is doing.
- [13:29]
Scott Wapner
Last word to you on that.
- [13:31]
Surat Sethi
Look, I see what you're saying, but I think the valuation reflects it. It's in the 20s, in the low 20s and that and is growing in the high teens. So you are growing into that. But yes, there is that. But what we're looking for is, yeah, if the search kind of comes off a cliff, then I think you reevaluate. But if it's a slow burn, I think they've got so much cash coming in that they can buy back shares and still have higher eps.
- [13:52]
Scott Wapner
Okay. By the way, there was another story that we highlighted earlier this week, week about on the notion of, oh, they have all this cash, they can buy back shares. Whether or not all of the CapEx that these companies like Alphabet are spending, that's taking away from cash that would be freed up to buy back stock. So you have to make a bit of a choice. It's going all towards capex, towards AI and maybe a less, less of a Percentage of that money is going to go towards buybacks.
- [14:20]
Surat Sethi
Yeah. And I think for all these companies they're looking at is the return of invested of capital and they'll make the choice at that point to say is it worth it to buy our shares or that additional CapEx we're spending which then could have ripple effects on that, on the whole AI trade, by the way. So if one of them cuts back.
- [14:36]
Scott Wapner
By the way, there are some interesting moves in AI power related names today. Take a look at GE Vernova. This was a strong report. If you didn't know the report and you just looked at the stock, you'd say like, well, what the heck is happening here? The stock is down some 6% maybe nothing is happening here other than the fact that the stock has been a machine. It's up 63% year to date going into today. A lot of these other names in that universe are down as well. I think in sympathy to what's happening here. Eaton, Vistra, Constellation, they're all lower. Joe, you got a lot of these names.
- [15:18]
Joe Terranova
Well, Momentum, if you throw up the empty etf, you'll see it's down. I have it on my screen, down 1.3%. And I've been talking about the fact that Momentum for the better part of the month of October is experiencing a correction while Quality, which has been underperforming all year, is now making a return. You could look at that and say the market's getting more defensive. It probably is ahead of 2026. But I think the holdings that I have in the Jyoti etf, whether it's Vertiv Vistra or Constellation Energy, all of them associated with the AI story and power generation itself. They were also part of the narrative surrounding very strong momentum. Look at day like today. Each one of those names, it's unavoidable.
- [16:01]
Scott Wapner
Is a great example. Vertiv was a beaten race, a beaten raise and the stock is down near 4%. It hit a record earlier today, in fact, before it reversed Lower Weiss, this is your name and by the way, it's perfect timing. Jim has the CEO on MAD tonight, so you don't want to miss that. I mean the earnings are one thing and then the stock move on top of that. There's a lot to discuss with that man right there and Jim will do that on MAD at six.
- [16:27]
Steve Weiss
Yeah, I mean look further is perplexing. I went through the deck, hadn't listened to the conference call, started 11:00am and the earnings were great. It was solid. But so the question I come to. And I was looking at oclo. Ok, hello.
- [16:41]
Scott Wapner
I'm going to get to that. Yeah, I'm going to get to that.
- [16:43]
Steve Weiss
And some of the others. And I'd say there's too much talk about the AI plays like Meadow and the others being overvalued and not enough focus on the energy plays and utilities. And to put in perspective, utilities can't go out and raise prices. They've got to go to the puc, the public utility companies mission and get permission. But they're trading like growth stocks when they're not. And then you have, you know, the nuclear play.
- [17:10]
Scott Wapner
Well, some of them are.
- [17:12]
Steve Weiss
Well that's not, not all point.
- [17:15]
Scott Wapner
Right. Is that what, you know, utilities are not your father's utilities like we used to look at them, so to speak.
- [17:22]
Surat Sethi
Right, right.
- [17:22]
Scott Wapner
I mean you are playing them as growth stocks for legitimate reasons.
- [17:28]
Steve Weiss
Some, yes, but I don't think if you go into the details of them again, public utility commissions have to grant approval for price increases. Their, their political organizations, what do you think their appetite is to massively give them price increase. But the point is on this whole sector, the bigger question is, the one that I'm grappling with is that usually in the blow off segment of the market, the junk rises. We've been seeing the junk rise for a long time. Not saying it's junk. No, I got you way over the fundamentals. So is that a warning sign or is it just a momentary interruption?
- [18:04]
Scott Wapner
So look at OCLO for, for example, because the Stock is up 500% year to date. It's having its worst week since February. It's down as you see here, another 14% today. The FTSE does a big piece here today inside Oclo, the $20 billion nuclear startup without any revenue quote, nuclear technology company OKLO has no revenues, no license to operate reactors and no binding contracts to supply power. Yet the Stock's up almost 500%.
- [18:37]
Steve Weiss
Yeah, I actually did some work on this last week because I want to know is because I do believe in nuclear, but I believe in it happening in 10 years or so. So we've seen some, some transactions like with Microsoft taking nuclear capacity, etc. But people aren't doing their work. And this is exactly what I mean. There's no reason to own this stock now at these levels. It's too high for a speculative bet.
- [19:02]
Scott Wapner
Well, I get that, but there's a, that's a different question. Whether you would own it, whether you would buy it at these levels.
- [19:07]
Steve Weiss
Right.
- [19:08]
Scott Wapner
Or what you would do if you're in it, like, like Brian Belsky, he. He's been in it for now a while. I mean, I think he bought more not that long ago. Like, if you're Belsky or somebody else who watches the program, who said, you know what? Nuclear is hot. I'm buying the stock. What do you do here?
- [19:22]
Steve Weiss
It's a great trade, what you do here. You have to be informed by your market view. If you think the market's going to go higher and higher, and Brian is somewhat a perennial bull, then maybe you stay with it. Comes back. From fundamental investment standpoint, there's no way I could own this at this valuation. Well, there's. Which is infinity.
- [19:39]
Scott Wapner
There's the week, as we said, the worst since February.
- [19:42]
Joe Terranova
It is absolutely mandatory that you have a risk management strategy. You have to have that process in place. I'm sitting here, I'm talking about Netflix. I believe in the fundamentals, the strong fundamentals of the company. But I'm telling you, at some point this week, I probably have to sell out of my personal holding. Why? Because my feeling doesn't matter at some point. And we are living in a market structure where the most important word is price. Everyone's basically chasing price. That's what the. All these momentum funds are doing. So you're hearing about really strong earnings, but yet price is deteriorating. Okay. Understand the world that you're living in. So if you want to play the OCLO game and there is a strong fundamental thesis behind it, great. You want to ride it up, perfect. But tell me where you're getting out when it goes the other way, because that's the hardest thing to determine. But it's mandatory.
- [20:27]
Surat Sethi
No, I think both of you make really good points because price is dictating companies that have real earnings, companies that don't have real earnings are going to get hurt a lot more if those are coming down.
- [20:35]
Scott Wapner
Okay. Right. Well, if they come down, you know, I go back to the Thorsten Slok note again. It relates to the Russell that unprofitable companies are outperforming in the Russell. Profitable ones. Sure, it's great on the way up, but really painful on the way down. Now, you look at other areas of perceived froth in the markets. Memes. Now what do you do? Memes are. Memes are back. Christina. Parts Navalos is here with that, highlighting some of these crazy moves that we've seen in some of these stocks. Christina?
- [21:07]
Christina Parzone
Yeah. The craze, I could say, like you said, is a comeback. And beyond Meat is really leading the charge. Today, shares of the struggling plant based meat company. I don't know if I can call a meat company, I eat it. I don't think Scott, you do. But have exploded nearly 750% since last Friday. This rally though has nothing to do with fundamentals. It really looks like a classic short squeeze. The surge actually accelerated after Beyond Meat was added to the roundhill meme stock ETF on October 8th. The meme ETF had relaunched that day after closing down in November 2023. Beyond right now is the only positive name in that ETF, which says a lot. Beyond jumped about 127% on Monday, then another 146% just yesterday, its best day ever. Today's shares are all over the place. When I checked it out before pre market trading, it was up 100%, turned negative by a penny. Briefly it was up 30%, then halted. Now it's up 20%. There's over 1.4% billion shares traded. That's nearly 10 times its 30 day average. But a chunk of Beyond Meat's available shares have been sold short, forcing bearish traders to really cover their positions and fueling these massive swings. Of course the retail traders adding to that momentum. Other names, some are catching the meme wave too. Krispy Kreme surged more than 11% today. Smaller names like GoPro 1-800-Flowers are seeing some big swings as retail traders rotate between these speculative trades today. But this could be a warning sign. The original meme ETF launched in December 2021 right at the NASDAQ peak before the 2022 bear market history I know is cheesy to say, doesn't repeat, but it could rhyme in this situation and would signal maybe some froth back in the market.
- [22:47]
Scott Wapner
Scott all right, that was a good look at that, Christina. Thank you. Christina Parzone so from Meme stocks to Colt ones, that's our transition to Tesla earnings after the bell. A lot of questions obviously about where the sales are going, what else is happening, robotics, et cetera. Joe, you are the only one here who owns the stock. How are you thinking about this going into this print?
- [23:11]
Joe Terranova
So why do we own the stock? We own the stock based on momentum. Full hard stop. I've talked about the fact that I almost wish the strategy didn't own the stock because it is so complicated. The 12 month forward earnings on this stock in April was 80. Scott, do you know what it is? Right now it's near 200. Think about how the valuation has grown and guess what? Tonight they're actually going to tell you that their Q3 profitability is down close to 25%. Do with whatever you want with those fundamentals. We are in the stock from a technical perspective, based on momentum. But I can't tell you that I see anything exciting on the fundamental outlook. And I know tonight we're going to hear a lot about autonomous vehicles and the future of AI. And that sounds great.
- [23:58]
Scott Wapner
I like it.
- [23:58]
Surat Sethi
And robots.
- [23:59]
Joe Terranova
And robots. Well, sounds great.
- [24:01]
Scott Wapner
But that's the story that you and Dan Ives and all of these others are betting on. The bulls, you're betting on the robotics, you're. You're betting on AI. That's the principal growth engine, pardon the pun, of what is really happening here if you're an investor.
- [24:16]
Joe Terranova
Can I tell you.
- [24:17]
Scott Wapner
Buying the name? Are you buying the name on. On expected deliveries?
- [24:20]
Steve Weiss
No.
- [24:21]
Joe Terranova
Can I tell you candidly, though, I have no idea why the stock is up. I'm just being candid with you. But the stock is moving up and it's one of the 500 largest US companies, whatever the reason might be. So we have to own. Own it because we utilize momentum.
- [24:36]
Steve Weiss
On Australia.
- [24:36]
Joe Terranova
It's not quality. It's not quality. The revenue is not there. I don't know the reason why it's going up. Let others figure it out. But to me, the only reason I'm admitting it is we own it on momentum.
- [24:48]
Steve Weiss
Discipline prevents me from ever owning the stock. It's got no governance. The earnings have been declining, the tax credits are hitting them, they have massive recalls. And I think it's too early in very competitive spaces such as robotaxis and robotics to give them any sort of real meaningful multiple on that.
- [25:09]
Scott Wapner
I know, but you're buying. You can't put a multiple on somebody's brain power. And you're buying it in part, if not, you know a lot because of that.
- [25:21]
Steve Weiss
Right.
- [25:22]
Scott Wapner
You're buying it for the genius and what you think that brain is going to produce in the years ahead. That's why it gets the multiple it has. The fact that it has cult status is why it gets the multiple that it has.
- [25:37]
Joe Terranova
That's a great point, but just one second. Great point, because if you think about it, when did the stock actually begin to significantly appreciate this year when you had the moment where it appeared as though Elon Musk was back in the seat in full control once again, that's where you saw the buying come in. Once again, that's a great point. Maybe the ultimate catalyst is Elon Musk himself.
- [25:58]
Steve Weiss
Well, the market cap's 1.5 trillion and the businesses definitely don't support the the valuation. Right? The fundamentals don't support the valuation. So what you're suggesting is for a company that's not making much money, I've got to value his brain at 1.3 trillion and I'm unwilling to do that.
- [26:17]
Scott Wapner
Okay, we'll take a break. We come back calls the day one top analyst taking down their price target on this P E stock ahead of earnings tomorrow. Joe and Surat both in it when we debate it Next.
- [26:30]
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- [27:58]
Scott Wapner
Let's talk about our calls of the day. Evercore has taken down the price targets of a couple of private equity names. Blackstone to 180 from 197. They're still outperform on the name. They just reduce their enthusiasm, I guess. Apollo goes to 145 from 160. Also outperform. So they clearly like the stocks. Blackstone, by the way, reports tomorrow morning Surat before the bell. What do you think Here?
- [28:23]
Surat Sethi
Look, I like these companies for the long term. Apollo, Blackstone, kkr, they're all in the alternative space, which we know is getting more and more shelf space as more advisors put their investors into their products. And it doesn't have to be private equity. Could be, it could be real estate, it could be a whole bunch of other things.
- [28:39]
Scott Wapner
And I think like private credit maybe.
- [28:41]
Surat Sethi
Well that's part of it. But remember we went to real estate.
- [28:44]
Scott Wapner
You didn't mention that.
- [28:45]
Surat Sethi
Well, we went through real estate with B REIT also and Blackstone bound. So yes, private credit is a big part of all these guys too. But I do think fundamentally long term, as 401ks get alternatives, globally we get more alternatives. Blackstone is the leader in this space and I think all of them are going to do well in the short term. Probably get some bumpiness. I mean the stock hasn't done well year to date, one month, three months, six months. But I think fundamentally you want to be in the space.
- [29:09]
Scott Wapner
Joe.
- [29:09]
Joe Terranova
I think they're getting oversold. I think clearly the mood has soured in particular for the financial sector itself. Keep in mind in the month of October while we have the shift towards quality health care is up 5%, financials are down 2% of the worst performance forming sector so far month to date, like the private equity space has been somewhat oversold. And also I think we've taken to the extreme the concerns surrounding private credit and specifically applying it to these individual names, we own Apollo. I also like Carlyle also. I will share that in the last week probably had three meetings about private infrastructure. I don't know if you're seeing that. You see more of that world than I do. But it seems as though the new quote unquote alternative is let's go to private infrastructure because the government, the municipalities don't have the money, the private sector does. Let's make the investment there. Let's get the retail community in it as well.
- [30:04]
Surat Sethi
And BlackRock bought a big global infrastructure, you know, a few months ago as well. Yeah, so they're all in there.
- [30:11]
Joe Terranova
They all have their hand in that.
- [30:13]
Surat Sethi
They do and the money gets allocated where there's more demand and they make a lot of money on.
- [30:18]
Steve Weiss
Here's the issue. There are a couple of issues. Number one, the mid tier private equity firms that's gotten so competitive. I just heard a situation on auction. So investment bank runs an auction company. There were 36 bids in the first round. You've never seen that. Now as far as you go with the big firms like Apollo and kkr, I think they're going to do well over time. But right now think of how many industries you've seen where there are IPOs over the last year, particularly this year, they're pretty much all technology. So the old line companies, the manufacturing companies that these come, that these private equity firms typically own, we still haven't seen the IPO market open for those. And that's going to be a big test.
- [31:02]
Scott Wapner
These stocks have had a nice rebound this week. Remember, it's only Wednesday. Okay. Apollo's up three and a half percent almost Aries is up near five. Blue Owl is up more than five. That, that's week to date, obviously. Maybe some soothing, if you, if you want to use that word, from, from some like, you know, David Solomon was on, on Squawk yesterday morning. And I think the prevailing thought from those who are speaking out on it of that stature.
- [31:31]
Contessa Brewer
Right.
- [31:31]
Scott Wapner
Continue to be idiosyncratic, not something of greater concern. And maybe that's helped these stocks have a little bit of a rebound this week. You want to get the headlines now or we won't still do this? Let's get the headlines. Let's do the headlines. Trust me. Sima Modi.
- [31:48]
Seema Modi
Hello, Scott. The final report on US Hunger from the Agriculture Department won't come out as planned because of the government shutdown. The annual survey tracks the numbers of Americans dealing with food insecurity. It was due to come out Thursday for the last time after the Trump administration announced it would cancel it. Calling the report redundant, costly and politicized. Oregon Senator Jeff Merkley. He's now the 18th hour of speaking on the Senate floor in protest of what he calls grave threats to democracy by the Trump administration. He held the chamber all night with occasional breaks for questions from other Democrat senators who have joined him on the floor. The record for the longest continuous flight floor speech was set by Senator Cory Booker in April. He spoke for more than 25 hours. And the Louvre, the museum reopening today just three days after a brazen heist at the Paris cultural institution. Thieves stole eight pieces from France's crown jewels valued at more than $100 million. France's president has called for increased security measures at the museum in response.
- [32:48]
Scott Wapner
Guys, Seema, thanks so much. You know, since we had that time, I decided we were going to do the news. Let's show the market we're at the lows of the day. The Nasdaq is down 350 points. 365. That's more than one and a half percent. Dow is now down 400. Remember, don't forget for context, we got within a whisker of 47k yesterday for a close. We eclipsed that level during the trading day but we weren't able to close above there. But we are sliding. Obviously Netflix is going to weigh on the Nasdaq. There are some other tech. You know, Apple's giving $6 back today. The banks are weak, the airlines are weak. Chips are pretty weak. I told you about the power names. They're among the biggest losers today. What do you see?
- [33:32]
Joe Terranova
I see health care higher. I see Staples higher. I see real estate.
- [33:36]
Scott Wapner
That's been the knock on this market from some is that you've get you're getting your leadership from utilities, health care and Staples.
- [33:42]
Joe Terranova
So the market is clear. Clearly clenching up, getting more defensive. We're in an environment where you've got a blackout window on buybacks. We're waiting to hear from the Mag 7 and we're taking off the excessive speculation that did exist coming into the month of October. I still think we reset into the end of the year, but I think this is messaging you 2026 might look a lot different than 2025. That doesn't mean the performance performance is bad, but I just think the personality of the market's going to change.
- [34:12]
Scott Wapner
Yeah, Robin Hood's down 7.5%. Palantir is off near 6%. We'll stay on top of it. Mike Santoli. He's next. We'll get his perspective too in his Midday Word. The heaviest metal credit card of all time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the International Space Station and wielded at business dinner like a samurai sword. It's a classic corporate power move. But the real power move? Having end to end visibility on your most critical shipments. FedEx the new power Move Ever wonder.
- [34:56]
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- [35:45]
Scott Wapner
He'S sitting down at post. Not well. He's actually sat down already. He's not in the process of sitting. Nice to see you.
- [35:51]
Surat Sethi
Yes.
- [35:51]
Scott Wapner
What do you think about this market?
- [35:53]
Mike Santoli
Obviously we're pretty twitchy here in terms of the rotation you guys are talking about. There's an easy way and a hard way to do it. It tries the easy way first which is everything rebalances and it's out of the momentum stocks and you have some flows into some of the laggards and quality and then usually something gets dropped, the baton gets dropped in the handoff and I think that's what's going on right now. I've been pointing out, you know, ad nauseam for days. We're still in the range from two Fridays ago. We have not settled anything. The market did not perfectly reset or really kind of get to a position where everything got oversold or we can get in there. Plus you have the potential coming in to earnings season of a sell the news effect because stocks are up a lot. I think that's most of what's going on. And then if you add just to the, the air coming out of some of the overheated parts of the market, the speculative stuff and crazy short squeezes. I think tomorrow morning you're going to read a lot of the desk commentary saying oh it was a de risking cycle but everyone had to degrows because there was so much erratic action and you know, basically the market was hunting for crowded positioning. That seems to me what's, what's going on at the moment. So that's kind of tactical stuff. And then you know, we're still in October and and maybe it's only going to last until the next persuasive earnings report and it might change the story.
- [37:14]
Scott Wapner
There's a story that crossed at 12:31pm by way of Reuters, which maybe this is why the market did that, did that move that we just discussed and you could see it at the very end of the screen there that the Trump administration is considering a plan to curb a dizzying array of software powered exports to China from laptops to jet engines, to retaliate against Beijing's latest round of rare earth restrictions. So you know, anytime you get a headline like that, you're going to get.
- [37:43]
Mike Santoli
A market and what always happens is the machines read it before we see.
- [37:47]
Scott Wapner
Right.
- [37:47]
Mike Santoli
And that until you did have a dewy down 1% of the S&P 40 basis points since then. But I think it brings up an interesting issue which is when we got this apparent re escalation against China two Fridays ago and the threat of another round of tariffs. Everyone was like, oh, no, is it April again? And I don't think it's in the, it's in the cards to have another April panic again, but we're having another February. Okay. The February was the momentum unwind and that led you down into this somewhat more fragile tape. And then the trades stuff came and piled on. I don't think that's a rerun, but I think it shows you that you do have this kind of repositioning that can get messy. And that seems to be what's happening.
- [38:26]
Scott Wapner
Okay, I'll see a three and we'll see where this market is then. Mike Sentoli, thank you very much. Coming up next, we're talking sports betting stocks to prediction markets. A big new deal has all of those stocks in play architecture. Brewer is it center ice to follow the money for us next. Welcome back. Watching shares of the digital sports books today. Following news, the NHL has signed licensing deals with prediction markets Kalshee and Polymarket, our contestant Brewer joins us here at post nine.
- [38:57]
Contessa Brewer
I mean, this is a big because it's the first of its kind that National Hockey League announced this deal with predictions markets that allow Kalshi and Polymarket then to go in and use their trademark terms and things like that. I'm just off the phone with the NHL's business president, Keith Wachtel, who told me that the league sees this as a massive opportunity to reach an untapped market of fans. For instance, people who want to wager on who gets killed off on the hit show White Lotus might go on there thinking nothing and then, oh, wait a minute, I could wager on a star hockey player and whether that person is going to make a hat trick or not. NHL says this is about fan engagement, departure, departure though from the other leagues. The NFL said before football kicked off that the prediction markets mimic sports betting and that the potential is here for price distortion or manipulation. Major League Baseball has expressed concerns about the impact on sports integrity, but hockey said, yeah, we're satisfied with the guardrails here. Kalshee CEO Tariq Mansour said today on Squawk Box. He sees this as a kind of a stamp of approval that it's a sign prediction markets are huge here to stay. Certainly Kalshee seeing a boom. Dune analytics reported that Polymarket and Kalshee saw 2 billion bucks in volume last week, which of course was football, baseball, playoffs and hockey's launch. Meanwhile, the NHL has sportsbook partners, I'm told its co exclusive deal with Kalshi and polymarket will not prohibit NHL from working on predictions markets offered by its existing partners like DraftKings or FanDuel or MGM. DraftKings of course, just bought Railbird and will launch DraftKings prediction in the coming months. It's not clear if sports are part of that.
- [40:38]
Scott Wapner
So on the my first look this morning was like, oh, this is big news. DraftKings got to be down. In fact, it's not. So are these view these prediction markets viewed as competitive or complementary or what?
- [40:53]
Contessa Brewer
It depends on who you ask. I mean what you will hear analysts say, in fact, they're writing today about this news and saying, Look, DraftKings goes in and they have pick them and fantasy sports in in 44 states. So their customer base is far superior to what Kalshee's is. Once they launch predictions markets, they already have all of the customers there that they can cross sell into this. So is Kalsheet competition? It depends on who you call. She would say, yeah, we're competition for sure, but we're not gambling and we're offering. They really are now making the argument that this is a financial investment play, not gambling.
- [41:34]
Scott Wapner
Yeah, but it's like Paul Tudor Jones saying if it walks like a duck and talks like a duck, it's probably not a chicken.
- [41:39]
Contessa Brewer
And it depends on what the definition of is is.
- [41:43]
Scott Wapner
We're back to that.
- [41:44]
Contessa Brewer
Yeah, I'm bringing it up. The question is this is in federal court already. A federal judge in Nevada has said they're sports bets, they're not trades. We'll see what happens.
- [41:56]
Scott Wapner
What's Robinhood doing today? I think that stock was down, wasn't it? Down was. Maybe that's on that.
- [42:02]
Joe Terranova
Maybe that's unrelated on the Robinhood is down 7%.
- [42:05]
Scott Wapner
Frothy. Ish.
- [42:06]
Joe Terranova
It's down 7% today. But that's, that's on just momentum and crypto and all of that.
- [42:11]
Scott Wapner
Well, because I think Robinhood did the partnership with Kalshee that we talked about on this program not, not that long ago.
- [42:16]
Contessa Brewer
And Robinhood is giving a lot of that volume to Kalshee. So a lot of that 2 billion bucks I was talking about between polymarket, a lot of that is coming through Robinhood.
- [42:26]
Scott Wapner
Cool story, Contessa.
- [42:27]
Contessa Brewer
Thanks.
- [42:27]
Scott Wapner
That's Contessa Brewer. Up next. We're trading more committee stocks on the move today. We are back right after this.
- [42:36]
Joe Terranova
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast now.
- [42:48]
Scott Wapner
All right, welcome back Intuitive Surgical. Let's look at the stock because it's bouncing big time today. It was up even bigger than that early on. Up $63, almost 14%. Joe, strong demand for their surgical robots. What do you think?
- [43:03]
Joe Terranova
I think it rebuilds confidence in this company. This has been a healthcare VIP name for several years. Even in a environment where health care was underperforming the rest of the market, you could count on Intuitive Surgical to deliver. So the da Vinci procedures appear to be robust. There was concerns that maybe we would see somewhat of a deceleration there. Up 20% for those procedures on the quarter. An improvement from the previous quarter. Reason why you're seeing it up 14%.
- [43:29]
Scott Wapner
You want to stay devices and go thermo. Actually, Seurat owns that. They beat.
- [43:35]
Surat Sethi
They did. And this is on the heels of Danaher beating as well. I mean, what they're seeing is increased growth from pharma and biotech. So that helped the top line. They're cutting expenses. What they haven't seen the growth is from education and government, and I think that could be an additional tailwind down the road. So this is a very high quality company. It's still down from a year ago, but it's up about 20% just in the last three months.
- [43:58]
Scott Wapner
You have Boston Scientific. Absolutely.
- [44:00]
Joe Terranova
Let's stay on that one. Urology strong. Strong. Endoscopy strong. Earnings good today. Stock up.
- [44:05]
Scott Wapner
All right. Speaking of earnings, let's do a little set up. We have some key reports in the next 24 hours. United Rentals after the bell today. Jyoti.
- [44:11]
Joe Terranova
I think there's some muted expectations here. Concerns about cost, inflation and rental softness, but yet the stock continues to just move higher. This is something that you really need to focus on in terms of what the guidance is going to be looking like in an economy that appears to be decelerating.
- [44:28]
Steve Weiss
Rating.
- [44:28]
Scott Wapner
All right, it's gone green. Honeywell tomorrow before the bell. Surratt.
- [44:31]
Surat Sethi
Yeah, Honeywell's gonna be very interesting. They're gonna talk about the breakup into three separate companies, and then I think the sum of the parts is greater than the whole. So we. We own this. And I would keep owning it and buying it.
- [44:40]
Scott Wapner
You want to give me some free something on Freeport?
- [44:42]
Surat Sethi
Yeah, Freeport is interesting tomorrow because it's actually not. It's uncorrelating with copper because they had a big issue in one of their big mines. So it'll be. We want to hear what they're going to be talking about in that mine and seeing what the production is going to Go. Going forward.
- [44:56]
Scott Wapner
Finally, Joe Valero. That's tomorrow before the bell.
- [44:58]
Joe Terranova
Yeah. End of September. That was the peak for this stock. It's been on a pullback ever since. Margins should be very strong in an environment where there's abundant crude oil supply, 13 million barrels per day being produced domestically.
- [45:10]
Scott Wapner
All right, finals after this break. Big one at 3 o'. Clock. Closing bell. Adam Parker, Liz Thomas, Dan Ives, Stephanie Link. Brent talking to. We'll walk you up to Tesla earnings. We'll see what this morning market does as well. Let's do some final trades.
- [45:28]
Surat Sethi
Mr. Say T. I'm sticking with Turbo. I think there's good momentum behind this name. And you want to own it.
- [45:34]
Scott Wapner
Okay. Vertiv. That's got to be Weiss.
- [45:36]
Steve Weiss
Vertiv is Weiss. Could be Joe also. He owns it, but I think that it's oversold at this point. And you have to buy it when it's down, not when it's up.
- [45:44]
Scott Wapner
Who deserves more credit for it, do you think? Joe T or Steve Weiss?
- [45:48]
Steve Weiss
I think I was in a way before hitting momentum. I was in originally in the 40s.
- [45:52]
Scott Wapner
You think you were in it before the Jyoti added it?
- [45:54]
Steve Weiss
Yeah, definitely it was.
- [45:56]
Joe Terranova
I can confirm that.
- [45:57]
Scott Wapner
Okay.
- [45:58]
Joe Terranova
And my final trade is Merck. I mentioned I bought some Merck about a month ago. I think if you're going to take a position here, make sure it's ridiculously small. Let the stock prove itself after earnings on October.
- [46:09]
Scott Wapner
I was trying to stir controversy. I missed.
- [46:11]
Joe Terranova
You would never do that.
- [46:13]
Scott Wapner
I'll see you three. You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.
- [46:28]
Commercial 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 andor 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.
- [47:08]
Scott Wapner
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