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Halftime Report
Micron Surges to New Highs on Blockbuster Earnings 6/25/26
00:43:58
Scott Wapner and the Investment Committee discuss Micron's rise and what it means for the rotation and how you should trade it. Jim Lebenthal explains why he's buying it here. Plus, Netflix hits a new 52-week low, it's our Call of the Day. The Committee debate how to trade the stock now. And later, Josh Brown spotlights Citizens Financial in his "Best Stocks in the Market." Investment Committee Disclosures
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- [00:00]
Commercial Narrator
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- [00:56]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to the Halftime Report. Scott Wapner, front and center this hour. Micron's moment that stock is surging after earnings. We will discuss in debate what all of it means for the trade, for the markets in general because we do, as Carl said, have a very interesting session shaping up during. Joining us for the hour, Josh Brown, Joe Terranova, Stephanie Link, Jim Leventhal. So Micron's moment is a good one obviously for that stock. But it's really interesting, this price action and some of these other names today. I'm wondering, Josh, what you make. I mean, it's a continued rotation, there's no doubt about that. But if you thought that Micron was just going to, you know, relaunch the entire AI space with their blowout quarter not happening today.
- [02:01]
Josh Brown
Oh, I disagree.
- [02:03]
Scott Wapner
Well, look at the hyperscalers.
- [02:05]
Josh Brown
That's not the trade we've been through. The trade is not the hyperscalers. The hyperscalers are the people that are facilitating it with their spending. The trade is working really well today. Eight of the top 10s and P500 stocks on the day today are all a huge part of the AI build out. They're just not hyperscalers. And this is what the market's been doing all year. It's not even new. Look at, look at our stocks today. Corning, Flex, Applied Materials, Teradyne Caterpillar, Western Digital is the top 10. DRAM ETF is up 9% today. The XLR is up 2%. Today and I promise you, the leaders in the industrials are all AI infrastructure stocks, Caterpillar cats on the day. You also have other areas that are up. You have XPI doing well. You have the home builders doing well. That's interesting. The transports are up 2% today. But the Capex theme has swallowed the market this year. Unfortunately for the hyperscalers, they're in the position of being the spenders on AI equipment and they're not getting the benefit from their shareholders any longer. As a matter of fact, the Mag 7 as a group are dragging down the returns of the S&P 500 year to date. So that is the first time I've been able to say that in a very long time. Those stocks are net detractors, especially Metta and Microsoft, very big in the index and very negative on the year. So we've got the AI trend in full force. Micron made everyone feel even better than they did yesterday. We just don't have the participation of the companies who are footing the bill.
- [03:40]
Scott Wapner
Okay, obviously that's, that's a fair assessment. I think that there were some out there who were thinking that this was a critical moment for the AI trade at large. That if micro. Because the mega caps have traded squarely lately. Right. And you had a NASDAQ surge in the pre market surge and that's all but gone for a variety of reasons. Sandisk is up. Speaking of things that are winning, the power players in part to Josh's point, Steph right here alone is, is a great place to look of the stocks that are getting a big bump off of Micron.
- [04:21]
Stephanie Link
And the industrial companies are definitely the winners for sure. And I've talked about the Food Chain or you want to talk about Jensen Huang and Five Layer Cake, it's the same thing. It's the Hyperscalers are spending $800 billion this year. They're on capex. They're going to spend 1.6 trillion next year. This is not going to end anytime soon. So you want to own the companies that are building out the data centers. And we know Data Centers takes three years to build 40 billion for one gigawatt plant. So there's a lot that goes inside of data centers and those are the winners too. We've talked about the grid and how old the grid is that needs to be upgraded. And then of course you also need power and we simply just don't have enough power. So the one thing that Micron said yesterday, and I'm sure Joe owns the stock so he. I'm sure you're going to go through it. But they announced 14 strategic customer agreements securing $100 billion in contracted revenue, 22 billion in cash just to secure capacity, and they're sold out until at least 2027. So this is going to go on for a long period of time. Ge, Vernova, Quanta Services, Vertiv, all of these names we've been talking about for three to four years. But the point being is you want to stick with them because the backlogs have never been larger. I have been covering industrials for 35 years. On average. Backlogs are growing at any given take 5, 10% a quarter, year over year. You're on average up 35 to 40% in backlog growth. And it's only going higher. And I just say one last thing because it's really powerful and pun intended, Quantus Services, their total addressable market has gone from 960 billion between now and 2030 to $2.4 trillion. Is a very conservative management team. They have 70% of their customers are utility companies. And so they are benefiting and all these other companies are as well. But just listen to what the management teams are saying. You don't have to listen to any of us. But we have been investing in this theme for quite some time and I will continue to be overweight this space.
- [06:20]
Scott Wapner
So yesterday, maybe not so much on this program, but I think a little bit and certainly on closing bell in the conversations that I had leading into the earnings report really centered around Micron. The, the fact that traditionally these have been highly cyclical businesses. Chips. Right. And that this time was in fact not different from the past and that was giving people pause at the run in Micron. And I think you can make an argument today that Micron's earnings report suggests no, in fact this time is different and that this is a more secular idea around these types of chips specifically. And investors have had a hard time getting their arms around what they know historically to be true versus what is happening now. Not that the PE on this name is exceptionally large, because it is not. Maybe from a historical standpoint you could make an argument that maybe it's a little more pricey than normal, but this to me just opens the door. It's almost 10 times opens the door wide open to the conversation of this time is different as it relates to memory. It certainly feels that way.
- [07:37]
Joe Terranova
I think yesterday there was a paradigm shift. I think there was fundamental validation that this is not a cyclical commodity moment for Micron. This is something more powerful. This is Secular. This is not to be thought of as purely a commodity. This is a irreplaceable resource. Think about the difference for a second. An irreplaceable resource, that the speed of AI accelerators, they basically get frozen without the memory component. If you think about a commodity for a second, which I called it yesterday, okay, and I'll share with you where I was wrong. If you think about a commodity for a second, there's a list. There's the elasticity as it relates to price, right? As price goes higher for oil, what ultimately happens to demand? People say, okay, I'm going to drive less. Right? There's price elasticity. With an irreplaceable resource, there's not. And the ability to sign 16 strategic customer agreements going out to 2029 to secure pricing and your revenue. That's a very powerful force. And that's the paradigm shift.
- [08:54]
Scott Wapner
But you said yesterday, ahead of the number, you wouldn't initiate a new position. You thought the stock could trade lower. I feel like you were, you know, maybe inching more into the, well, we better be careful with this thing now, given the price action in the name. But again, I think I made the point yesterday. The, the biggest tell to me heading into this print had nothing to do with Micron directly, but a derivative of it, Apple raising its prices. The report of a week ago suggesting that Tim Cook suggested there was no other choice. But you raise prices because of what they saw happening with memory stock price
- [09:39]
Josh Brown
on that news, too. You're right.
- [09:41]
Scott Wapner
So, so look, look, wasn't that a great tell? It's like you think that they will raise their prices.
- [09:48]
Joe Terranova
You made an excellent point yesterday and you're making obviously the same point today, which is the right one. I took the perspective yesterday from a risk to reward standpoint. I didn't like the setup. I didn't like the setup. I didn't like, technically, the distance that price was from its moving averages how much it had rallied. And I advised the viewers who didn't own it not to rush in and buy it today. I would say this to those viewers today.
- [10:17]
Scott Wapner
Look to your left as you start.
- [10:19]
Joe Terranova
Here's, here's what I would do to design a strategy. I would buy 25%. Let's say you're going to buy 100 shares. I'd buy 25 shares at some point this week. Get it out of the way below the market. I'd put an order in for 50 shares at 950 and another 25 shares at 750. If you never get those 75 shares at least you're participating. You have to understand that there are people that are in this stock from $100, $200 RTF bought this stock at 223. It's very difficult to discuss one day moves and I was incorrect in doing so yesterday. But this is very clear. This is a fundamental shift where they literally are controlling pricing on their own because they have, and I'll use these two words again, the irreplaceable resource
- [11:06]
Oliver Renick
that
- [11:07]
Jim Leventhal
actually fits many boxes. Okay. Because I'm in it as of today. I initiated not a huge position, Joe, because obviously as you say, it has appreciated quite a bit. But I'll take the other side of the narrative that you laid out. Not to be provocative, but because what I believe is this is a cyclical stock. It's just a question of where we are in the cycle. And I would say at worst we're in middle innings. At some point a replacement will come along. At some point supply will pick up. But it's not, not anytime soon. And to the multiple that Scott, I think you said it was nine times whatever, almost ten. Yeah, okay, but that is using yesterday's earnings estimates. The current earnings estimates are going to go much, much higher. We see that from the guidance that they give. Stephanie pointed out the strategic customer agreements which again just extends this cycle. This is a stock that when the estimates come in it's probably trading around seven times forward earnings. So. So if you're a value investor like me, this checks the box and I don't even have to get into a, you know, narrow or wide moat competition or moat to competition about whether this is the bear case.
- [12:12]
Josh Brown
The bear case on Micron is not about competition because you're not going to have a competitor who's not already in this market show up and stand up.
- [12:20]
Jim Leventhal
The supply comes on. That's the only bear case.
- [12:23]
Stephanie Link
And that's what I was going to mention. As for our DRAM are up 60% and NAND up 80%. And this is why Apple has to raise prices. And if Apple has to raise prices, everybody else but, but I would. And that's why.
- [12:38]
Scott Wapner
Why do you think that all of the mega caps are down today? Because Micron's gain is a lot of pain now. It's more acute for Apple than some of the other hyperscalers. But I do think there's a reason that they're down. I think as a group, I think
- [12:53]
Stephanie Link
it's always challenging when companies are in an investment cycle to own them because you don't get the operating leverage you don't get, the earnings growth that you
- [13:00]
Josh Brown
can eventually put the bear case.
- [13:03]
Stephanie Link
I know, wait a second, Josh. But eventually we will. And Jassy has said that time and again and all these CEOs have said it. They have to spend, but therefore you're not going to get the margin expansion. And so on the flip side, look at Micron and look what they're and what their margins were because they have that price.
- [13:21]
Josh Brown
So I agree with everything that you guys are saying, but I have to reiterate here. The thing that ultimately, I don't know if it ends the cycle or brings the cycle to, to a downturn is that ultimately Micron, Micron is achieving all of this on price, not on higher volumes. To your point, asp, I don't have the right. Nobody can replace with, with higher volumes because it is what, what it is. However, there comes a point at which the pricing power becomes so extreme that the people who use the product find workarounds which, and hang on, we had a moment with Deep Seek where all of a sudden it's like, oh, wait a minute, it turns out there are actually going to be competing models that can do this faster, cheaper. Are they cheating? Maybe they stealing technology?
- [14:11]
Mike Santoli
Maybe.
- [14:12]
Josh Brown
But still, at a certain point, that's what ultimately gets to Micron. I'm not suggesting that's going to happen this quarter. This is now a $1.3 trillion company. It's the 9th biggest stock in the country. Bigger than Lilly, Berkshire Hathaway, Wal Mart, JP Morgan, AMD and Visa. And they did the whole thing. They did the whole thing on raising prices. There's got to be a limit. And the customers ultimately will find a way to do what they're doing and use less memory. And when that happens, that's how this.
- [14:42]
Joe Terranova
Let me, let me ask you to answer this.
- [14:44]
Mike Santoli
Okay.
- [14:44]
Joe Terranova
The strategic customer agreement. I want you to think about it this way. The price of oil is currently $130. You're a producer, Jimmy. Okay, you say, okay, I am going to sell you oil through the next three years at $130. I don't care if the price of oil goes to 80. How is that not a good thing in controlling the price environment? You're still self. Why then would you be worried about some form of a cyclical commodity experience?
- [15:09]
Jim Leventhal
Well, I'm not worried about it or else I would have not gotten in the stock. I do think it's cyclical. I think what Josh just described with price eventually killing demand is the part where a cycle Turns down. But to the point both of you are making with your strategic customer agreements, it's a long way away. What I would say though is that the price action in Apple is more telling on a macro basis of how this may play out. Okay. Apple has to raise prices in order to account for the higher dram prices that it's paying.
- [15:37]
Scott Wapner
And I just push back on another thing and maybe I'm off base, but how can you declare yourself a card carrying member of the value investors club when you're buying this where it is and you're sort of doubling down on Oracle the other day? Yeah, how does that.
- [16:02]
Jim Leventhal
Well, so just to go back to what I said a second ago, I will submit that in a week we're going to be looking at this price for Micron and saying this is seven times forward earnings right there. That gets me to the value investors mentality. On top of that, an important point that none of us have spoken about is that in coming months and quarters Micron is going to be buying back tremendous amount of shares. Tremendous amount of shares. Scott, you know how I feel about it. You know how central to my value investors mentality is the return of capital to shareholders. This is different than the hyperscalers in which they are reinvesting in their business. Micron is going to be spinning it. Back to your point though, because I think you would go right here about Oracle. Hey, listen, you know what, in order to get outsized returns sometimes you have to take a risk. I am taking a risk in Oracle. I'm a believer that all of the things that are propelling Micron are also going to be to Oracle's benefit. Yes, there's a risk here that it's a negative free cash flow, that it's an indebted balance sheet. But I strongly believe based on the Capex plans that all the hyperscalers have and how they're saying all of this computer is profitable, that this is going to pay off in the end for Oracle I might be a little early
- [17:10]
Josh Brown
200% above its 200 day moving average. I'm not suggesting that in and of itself is a reason not to buy. Just don't think if you were to do 20 trades and buy all at that level your results a year later.
- [17:24]
Jim Leventhal
I did not load the boat.
- [17:26]
Josh Brown
No colloquially general the colloquial not a great stocks.
- [17:31]
Joe Terranova
This extended the risk to reward setup is poor. That's without question. It was poor yesterday. Again it's poor today. If you're purely looking at price and
- [17:39]
Jim Leventhal
technicals, I think you're going to.
- [17:40]
Scott Wapner
I don't care if you bought $5 worth or $5 million worth. You can't make an argument against that with, well, I didn't load the boat. You were willing to buy it at this price. Therein lies your investment decision as it is. No one expected you to sit there and buy a 5% position in a single day anyway.
- [18:01]
Jim Leventhal
Yeah. The reason that I say that, Scott, is because I think about the viewers who are listening and I think about, oh, because sometimes this happens. I'll talk about a stock and somebody will stop me on the street. Oh, I loaded the boat on this. Seriously, that happens. And I'm telling you to the point that Joe originally made, this is a time to start building your position. You can, you can agree with Joe that maybe the setup isn't great and save some dry powder, as I am in case you buy it lower. I happen to think, Scott, just to be more specific, I'm more likely to be buying more of this higher than I am low.
- [18:31]
Stephanie Link
So you are thinking about buying some of the derivative plays, like a Vistra or a Vertive or, or some of the companies that have the more. The better visibility. And maybe they're not as popular. They're popular, but they're maybe not as popular and they haven't run nearly as much.
- [18:45]
Jim Leventhal
Well, no, I think those are valid plays as well. I mean, I have enough between my Microsoft, my Oracles as well, of the trade.
- [18:53]
Josh Brown
Nine months ago, we had another version of this Micron debate. Not us specifically, but the street, and it was Palantir. And Palantir put up two quarters in a row where the earnings and revenue growth were so far ahead of what the street expected. The stock had like an overnight re rate, and we effectively watched like a $40 stock run to 200.
- [19:17]
Jim Leventhal
It was 200 times earnings. I mean, you know, I'm going to
- [19:19]
Josh Brown
say that agreed, but conceptually it was like, how could you not own Palantir? It is the AI stock. It is the like. The problem with that is once everybody agrees this is the most owned stock, they can continue to report great earnings reports, but you're not guaranteed the same stock reaction. That stock is down full as of today, 50% from those levels.
- [19:44]
Jim Leventhal
I would respectfully not make this comparison.
- [19:48]
Josh Brown
They're not apples to apples, but the sentiment is.
- [19:50]
Jim Leventhal
No, I get you on the sentiment, but, you know, for a guy who's fundamentally oriented, who's always talking about the numbers, the numbers are just completely, wildly different. There's no way I could ever buy Palantir 200 times forward earnings. What's it now like 75 times forward earnings.
- [20:05]
Josh Brown
It's probably up dirt cheap now.
- [20:06]
Jim Leventhal
Huh?
- [20:07]
Josh Brown
They're cheap now.
- [20:08]
Jim Leventhal
Yeah, I mean I'm not. It could go to, it could go to 30 times earnings. I'm not going to do it.
- [20:12]
Joe Terranova
This information as you wish. Beginning to look momentum is a powerful force, Steph. As we know it's up three and a half percent again today and it's going to different places. Okay. It's going to the value trade which is outperforming growth. So beginning to look at small cap momentum. Here's a name. Memory oriented semiconductor equipment name less than a triple digit valuation. So Jimmy's not going to jump out of his chair for this one. Onto O N T O. Have we ever said that on cnbc? I don't think so. Onto innovation. If you could pull that up. It's about up 121% year to date. That's a need that's participating in this story that Josh spoke about.
- [20:52]
Scott Wapner
So Josh made an interesting point to start the show when I said that you know if you were expecting all these AI plays to, to be higher and I pointed out to the hyperscalers and his point was they're not any longer these pure AI plays.
- [21:09]
Brian Sullivan
Right.
- [21:09]
Scott Wapner
They're the big spenders. Is the market making a statement today and forward about where these stocks are going to go and such as today, Microsoft's having its worst month since December of 2000. Okay. You've had other stocks in that equal
- [21:27]
Josh Brown
weight, the Mag 7 and they're down 8% year to date. The S&P is within 1% of an all time high. Nobody last year who was saying oh it's a concentrated market. The whole thing's being dragged up by this, the hyperscalers. It's unsustainable. When those stocks lose their footing, the S and P is in trouble. It worked in exactly the opposite way. The MAG7 is in trouble. These stocks, three out of the seven are in outright bear markets right now and they're detracting from performance. As I mentioned, The S&P493, that's the whole index ex Mag 7 is up 14% year to date. The Mag 7 are detracting from that performance and that could continue. And the good news is it doesn't harm investors. Investors then go out and explore and find other ways to make money, other ways to win.
- [22:18]
Stephanie Link
Well the reason what we're seeing a rotation is because the economic data continues to surprise to the upside. We got A whole boatload today between even, even the PC which was high. It's peak because oil has peaked. Oil peaked at $112. You're under $70 for WTI now. That's positive. That's very positive for the consumer. That's where I think your value is in this market and that's where I've been adding to and I feel very confident about that. They continue to spend income was actually even better than expected today. Durable goods were good and they're actually benefiting from all of this AI but that's why you want to own industrials, you want to own consumer, you want to own financials. They are acting very well. That's really healthy. Do you 1% of the S&P 500 are Mag 7.
- [23:04]
Scott Wapner
Do you think that the second half of the year is going to be defined by mega cap underperformance and all the areas that you said outperformance?
- [23:14]
Stephanie Link
I do.
- [23:15]
Scott Wapner
Like the banks have woken up over the last month. Capital markets are killing it. They just got through the stress test. The ability to, you know, give money, more money back to shareholders, raise their dividends, buybacks, whatever. This one of the hottest trades in the market, the banks.
- [23:33]
Josh Brown
Yep.
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Stephanie Link
Well, you know that I actually sold matter, right. Recently. Half of it, half of my position after more rumors were that they were going to spend more and more and go to the equity markets. On top of the debt markets, free cash flow is falling. So it's now a small position. I want to hold it for the long term. And I only own Amazon in the MAG7 so those are still going to stay in the portfolio. They'll probably be smaller. But I do think the financials are the cheapest sector in the market right now. I mean you're talking about some companies are trading at 1 to 1.2 times book and you're right, Scott. We have capital markets, you have investment investment banking, you have trading IPOs, you have a lot. You also have wealth management and a higher market will help that business too. So I think there's a lot of ways you can win owning the financials.
- [24:17]
Scott Wapner
The the bank ETF hitting a record high today. Again, I want to underscore the point and have more conversation about it. Whether the second half of the year is going to be defined by what this market looks like today. If this is indicative of what you're going to see. Mega cap underperformance, health care, like biotech. You've been buying more biotech alper outperforming financials, outperforming and whether it's time to actually think about going overweight. Some of those areas relative to the mega caps, the Steph playbook.
- [24:51]
Josh Brown
Yeah.
- [24:52]
Joe Terranova
So I hope my answer doesn't frustrate you. It's going to be a little bit different because I think market structure has changed so much that that's why you're seeing all these rotations. You know, the most profitable company in on what street is Jane Street. You have all of these algorithms and quantitative funds that are chasing where they could build positioning. I think partly to your point. Yeah, the economy is great and the stress tests help, but I think we're seeing a rebuilding of positioning right now that's momentum oriented in financials. And a lot of people question, well, why did you buy JP Morgan last week? It's because I believe that you would see a lot of these funds come in and begin to build positioning. And momentum is becoming more and more of a powerful force as market structure is changing. So the answer to your question, I think it's tbd. I think the market is going to remain stable and good for the remainder of the year. And I think you're going to see this continued rotation where these quant funds can find alpha generation opportunities in a very short period.
- [25:55]
Scott Wapner
But even other cohorts, if you believe that you've squeezed all the juice out of the Mega cap orange, then why would you go to these other places? Please do.
- [26:05]
Josh Brown
Yeah, IWC. Give me IWC. This is iShares micro cap. It's like a billion dollar ETF. None of the components in here can really take on a ton of volume. But when you look at what, what is this? This is made up of, it's technology, industrial and biotech. This is, give me like five year on this. This thing has literally caught fire because people are asking the question Scott just asked. Okay, I understand that the next 10 or 15%, or let's call it a thousand or 1500 basis points above the benchmark that I'm going to get. Probably ain't coming from Microsoft and Tesla. Okay, I understand that. So what else can I do? You're seeing people who are small and nimble enough do things like this. I also want to show you a couple of best stocks in the market. JP Morgan is a new all time high right now, 338. And the only real headline of any consequence is people talking about Jamie Dimon's retirement. Once again, for the, for the 900th time, CVS. Is anyone bullish on CVS that you've, that you've met in Recent months. Anyone talking about this stock, Best stock in the market, breaking a hundo right now as we speak. Pull this back a little bit longer. This is a big enough market cap where a lot of people can make money in this. So to answer your question, judge, there is a whole big market out there playing these breakouts, finding momentum in unexpected places like Microsoft, excuse me, micro caps like health care. And I think that could continue. And we don't need the Mag 7 at the top of the.
- [27:42]
Stephanie Link
That's why I mentioned it's only 31. It's 31% of the S&P 500. Let's hope it's big. But it's.
- [27:47]
Scott Wapner
But let's hope it shrinks.
- [27:49]
Stephanie Link
Right? And there are other things that other sectors that can offset the weakness or the underperformance in Mag 7.
- [27:55]
Joe Terranova
Jyoti's happy if that happens.
- [27:57]
Jim Leventhal
Keep going.
- [27:58]
Commercial Narrator
All right.
- [27:58]
Scott Wapner
We'll take a break. We'll come back, we'll talk about more committee moves that we have. We have our top calls of the day. Best stocks in the market has some new names as well. We will discuss coming up.
- [28:12]
Commercial Narrator
It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover you can get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show see terms@discover.com credit card.
- [28:37]
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- [28:50]
Josh Brown
Make it quick, young man.
- [28:53]
Scott Wapner
Aw.
- [28:53]
Commercial Narrator
See, Pop Pop trusts you.
- [28:56]
Scott Wapner
I think we should call a doctor.
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Commercial Narrator
Connecting homo with skilled pros for over 30 years. Angie, the one you trust to find
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Josh Brown
the ones you trust.
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Find pros for all your home projects@angie.com
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- [29:45]
Stephanie Link
We're back on Halftime.
- [29:47]
Mackenzie Segalos
I'm Mackenzie Segalos with your CNBC news update. Rescue crews in Venezuela are continuing to search for survivors after two bur back to back powerful earthquakes rocked the country last night, killing at least 164 people and injuring nearly 1,000. The 7.2 and 7.5 magnitude quakes were among the strongest in Venezuela in more than a century. The death toll is expected to rise given the extensive damage. The White House reportedly helped Meta CEO Mark Zuckerberg and Google CEO Sundar Pichai avoid testifying in an upcoming Senate hearing about child safety. That's according to Politico, which says that after initially calling on the CEO, Senator Chuck Grassley is now allowing the heads of Instagram and YouTube to testify instead. In exchange, the White House will reportedly support a child safety bill backed by Grassley. And the Supreme Court sided with President Trump today in a ruling that would make it harder for migrants seeking asylum to enter the U.S. the court ruled that the Trump administration can turn away asylum seekers before before they cross the southern border because their legal protections don't kick in until they have physically entered the U.S. scott, sending it to you.
- [30:54]
Scott Wapner
All right, Mac, thanks. It's Mackenzie Segalis. All right, let's talk about some names on the move and calls Netflix guys. 52 week low today. Lowest close since October of 24 is what it's coming off of. Stocks down 23% year to date. Josh, I'll give you this one. What's going on with this name?
- [31:14]
Josh Brown
I think, I think losing the M and a battle to acquire Time Warner Warner Brothers opened up a new conversation about, well, wait a minute, Netflix has gone 20 years without doing deals like this. Why all of a sudden did they think that they needed to. And so you had a little bit of a doubt. And you know, that's that explains the stock coming down. And then why has it not found the bottom or Reed's gone. And the narrative seems to just be lost in the shuffle here about we thought this was the most dominant streamer. Now we're not so sure. And are we not so sure? Well, personally, I think it still is. So I bought the stock into this downturn and I continue to hold it. And I wouldn't be opposed to adding more, but technically, this thing is completely broken. There are very big sellers in this name. This is a $300 billion market cap. It doesn't casually fall from wherever the high was and it was like 120 or 130 down to 70 without there being substantial doubt about that dominance. I don't think the company's done anything to quell those concerns. And I'm not sure what they could do, quite frankly. Maybe the best course of action is continue to execute. The good news is, if you're a shareholder, they've done nothing but execute.
- [32:30]
Scott Wapner
Despite.
- [32:30]
Josh Brown
Despite the drama around M and A over the last nine months.
- [32:33]
Scott Wapner
You sold it earlier this week. The narrative on this and put that same exact chart back up. Thank you. That you see it in, you know, February, March, that Netflix not getting Warner Brothers Discovery was the best thing that could have happened to this, according to investors.
- [32:52]
Josh Brown
And then it was the stock.
- [32:53]
Stephanie Link
That's one of the reasons I bought it.
- [32:55]
Brian Sullivan
Stop.
- [32:55]
Scott Wapner
Climb back up.
- [32:56]
Josh Brown
You like the deal?
- [32:57]
Stephanie Link
I like. I like them not getting the deal blowing. Oh, yeah, yeah, yeah.
- [33:00]
Scott Wapner
That's why I remember, remember Josh's whole point when the deal was announced was like, I don't like this thing now because it's each sold, I think like half the position at the time, if I recall was like, this thing's going to be in purgatory. Okay. So then it gets out of the purgatory. And then at the beginning, at the end of February, March, you see the move up on the no deal street applauds it. Investors love the fact that they didn't. They didn't get distracted by that, they didn't speak, spend the money on it, blah, blah, blah, and then all that's gone.
- [33:24]
Josh Brown
You know, what's after lower than the purgatory is hell.
- [33:27]
Stephanie Link
So I think, I think it's competition. I think the competition has only gotten stronger and this company is going to have to continue to spend, which we want them to do. But I don't know if they have such a compelling slate like they did.
- [33:39]
Scott Wapner
They raised prices.
- [33:40]
Stephanie Link
Right, right, right.
- [33:42]
Scott Wapner
And we declared them as one of the sort of poster stocks of consumer brands that actually had the ability to raise prices.
- [33:48]
Stephanie Link
There's so much to choose choose from nowadays. I can't keep up with how many ideas there are out there and ways.
- [33:53]
Josh Brown
But you know what? They got football. They got football. And I think that puts a lot of the concern about can they raise prices? Can they keep churn down?
- [34:02]
Stephanie Link
They got to get football right. By the way, you watch a game on Netflix, it's not by chance. It's painful. So there's a lot that they have to do on that front.
- [34:10]
Joe Terranova
It's puzzling. And you talk about raising prices. Spotify did the same thing. Spotify chart and Netflix's chart is literally identical. They both found a peak in June of 25, and they've gone straight down ever since as they raise prices.
- [34:24]
Scott Wapner
All right, Josh's best stocks in the market. Get ready for that. We'll do it after the break.
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Josh Brown
Make it quick, young man.
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Scott Wapner
I think we should call a doctor.
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Joe Terranova
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- [36:13]
Scott Wapner
It is Best stocks in the market time According to Josh Brown, the spotlight today is on a financial
- [36:20]
Josh Brown
so we first talked about this stock here on the show in an hour column at CNBC Pro in December. It's had a good run since then. I pulled the trigger on a long position for myself recently. Also want to disclose this is part of our Porterhouse portfolio for client accounts at Ritholtz. The reason it's worth talking about today is the backdrop. Can we do the KRE first, guys? This is the regional bank index etf. It is making a new high. Pull it back please. Thank you. Making a new high here. And I call this the Holy Trinity setup in Citizens Financial. Here you have the tailwind of the the sector being in favor. You've got the chart on your side and you've got the fundamental story. All three working at once. I live for this. Like this is my favorite setup in the entire world. So here you have an obvious breakout taking place as we speak. Again, we started talking about this name earlier and I think it can continue and I think the most important point I want to make here, and we've made it earlier in the show, we're in an environment right now, to quote my partner Sean, where people are screaming about higher rates, inflation, the consumer is weak, oil prices, geopolitics. Regional banks are your number one read through to the real economy. And when the entire sector is breaking out, which is the case right now, I could give you 10 other tickers if you don't believe me. What that's telling you is that by and large things are going well. These companies have balance sheets filter with HELOCs and auto loans and credit cards and mortgages and loans to small businesses and things look pretty good through the prism of the KRE and the charts of its components. I think Citizens is the strongest one. They have a great story about building a wealth management division from scratch that's now growing faster than anything else they do. I would not be surprised to see this name with an eight handle. 35% earnings growth expected over the next year. Stocks trading at a 10 multiple.
- [38:17]
Scott Wapner
Perfect segue to Stephanie. You are. Thank you for being so thoughtful. Stephanie Link bought more truist.
- [38:24]
Stephanie Link
I did.
- [38:25]
Scott Wapner
So you're a believer in this theme.
- [38:27]
Stephanie Link
Yeah. And by the way, loan growth data came out this week and it was great. Up 8%. It was the best in three years. Right. And that speaks to the economy and all the things that we've been talking about Truistrades at one time's book. Very few companies in the bank space are trading at one times book yields 4%. It fell 4% last week because they announced a new CEO who actually think is very positive. Michael Lyons. He comes from Fiserv and he also has been though a traditional bank executive as well. So I think he's going to bring
- [38:55]
Scott Wapner
a balance to the company capital market exposure to.
- [38:58]
Taboola Advertiser
Right.
- [38:58]
Stephanie Link
Yeah. So I kind of. So I kind of. I feel like this new CEO is a positive, not a negative. But I think that was just the knee jerk. So I, I started adding to it last week. I bought it a little bit more this week as well. The ROTC at this company, profitability of this company is 12.7% last quarter. It's expected to go to 15% maybe even 16% by 2027. That's called operating leverage. So I expect a solid quarter and I'll continue to add especially as the CEO starts and we get more of
- [39:25]
Joe Terranova
his vision, stay on the loan growth for a second because there's a dynamic that's happening currently we have fifth Third Bank. It's in an all, all time high. You're seeing lending shift back to the regional banks from private credit. Private lending standards are automatically beginning to tighten because of the stress in the headlines so far in 2026. So you're seeing that shift. Regional banks benefit. That's where you get the loan growth,
- [39:49]
Stephanie Link
deregulation at the banks.
- [39:50]
Scott Wapner
All right. Take a break.
- [39:52]
Josh Brown
Good segment.
- [39:52]
Scott Wapner
Thank you. We'll talk about bitcoin coming up. Oliver Renick is tracking the options action from CBO in Chicago. Don't want to miss that next. All right. Bitcoin today breaking below 60,000, lowest level since 70 September of 2024. Oliver Renick live at CBO in Chicago with today's options action. What do you see there?
- [40:30]
Oliver Renick
It's the sell off that never ends, Scott. Michael Saylor Strategy. MSTR down another 7% today, extending its one year decline to 77%. Bitcoin's down about 45% over that period. My conversations with crypto managers suggest even the bitcoin diehards are losing patience with Saylor's equivocation on whether or not he's to going, buying, selling or at what point his elaborate financial structure starts to stress. Judging by his preferred stock dividend product strc stretch, things are dicey. It's about 23% off par value right now. But for a product that's supposed to stay at 100 options flows are perfectly divided between puts and calls. And in MSTR, puts are dominating 2 to 1 with 50,000 puts plus bought versus 25,000 calls. And Bitcoin ETF ibit, the skew is even bigger with 184,000 puts versus 65,000 calls. But the point for stretch, Scott, is that if you believe Saylor, calls back towards 100 should basically be free money, but people aren't jumping on them.
- [41:31]
Scott Wapner
Yeah, it's good to have that reporting, Oliver. Thank you. It's a big day for us by the way, at CBO in Chicago. Our Brian Sullivan is there right now. We'll, we'll go back to him for a look at what's coming up ahead. Sully, you there?
- [41:45]
Brian Sullivan
Coming to me now. I am right here, Scott. Listen, this is going to be a big couple hours. Kelly and I are live here on the CBOE trading floor where there is a trading floor. It's one of the most important exchanges in the world. I mean, index options, this is all happening right here and we have got a huge lineup. Guys really appreciate the promo. We've got Austan Goolsbee, the Chicago Fed. We've got the CEO of the cbo. We got the CEO of Northern Trust, Diane Swonk will join us as well. We'll talk a little Chicago sports as well. Scott, I know you're a big sports guy. Do we really think the Bears are going to be the Northwest Indiana Bears? We'll talk about that as well. Big move in the markets. Oil is up as well. Micron. We got it all covered live in Chicago. I cannot wait. We'll see you in 10 minutes.
- [42:28]
Scott Wapner
All right, good stuff. We look forward to seeing you then, Brian. Thank you Brian. Sullivan Santoli is next. Mike Santoli joins us now. Senior markets commentator overtime co anchor. It's good to have you here today. What do you make of this market activity on the back of Micron?
- [42:57]
Mike Santoli
Yeah, I mean as you guys have been discussing discussing. So you have, you know, a half dozen companies handing all their free cash flow to like two or three memory makers. I mean that's simplifying it, but that's what's going on. The market recognizes that and actually has been positioned for this. There is a bright side. I mean more stocks are up and down again, you're still having the relatively benign rotation happening because the macro is holding up and, and you got decent personal spending numbers. And so therefore there's plenty of room for catch up for things like, you know, consumer levered, rate sensitive and and things like real estate and airlines. Great. I guess the one thing I would bring up is that the market doesn't always owe you a really attractive place to rotate rotate into the news flow has to be lined up pretty well for many of those themes to offset. Hey, is a spending, you know, a net positive or not? So I think that's kind of where we are. I keep going back to that date a couple of, you know, six weeks ago S&P first goes above 7,500 cerebras, IPO, all of it on the same day. You know, Cisco goes up 14%. The market recognizes most of the easy trades have been exploited and now it's about figuring out winners versus losers. You know, I don't think is alarming market action in that context, but it is definitely a little bit less clear and easy.
- [44:14]
Scott Wapner
Arguably it's not unreasonable to think, as we were discussing here earlier, that the mega caps may very well be underperformers in the second half of the year relative to some other parts of this market and then what the implications of that would be on S and P performance. Of course they're not the only stocks within the S and P. They are however a Large weighting within it.
- [44:37]
Mike Santoli
Yeah, there's certainly there's been some damage to the trend. If you look at max seven in aggregate, you probably need a little bit of a risk off kick trade. And you know, it wouldn't be weird for people to wake up and say these stocks have been de risked, the valuations have compressed, they're less crowded than they used to be and they're somewhat defensive and all they have to do is turn the dial a little bit on spending and all of a sudden you have a spark of a catalyst. So who knows if that's going to happen or not. But I don't think that would be weird. And I think the fact that things have moved so far so fast for the better for something like Microns is great, great. But it tells you we don't know anything about what's happening in six months because we didn't know six months ago that they were going to double and triple the forward going earnings forecast.
- [45:19]
Scott Wapner
I'll see in a little bit. Mike, thanks. See a closing bell. That's Mike Santoli. Take a break. We'll do finals next. On Apple shares. Take a look here. Intraday, please. Stocks at the lows of the day down more than 6%. There we go. Raising prices on a number of different products. Remember, Micron's gain is in some respects Apple's pain. And what they have to pay for those memory chips, what this all means for their margins is their demand destruction. By raising your prices to a certain level. I don't care if you're Apple or anybody else. What do you guys think of this move?
- [45:56]
Josh Brown
It's interesting where, where it seems to have stopped at least intraday. This is pretty much the level in April where the stock finally found its low for the year. Also happens to coincide with a rising 200 day moving average at about 269. If I'm a trader, I'm standing back. If I'm an investor, I think it's a great opportunity. Apple has more pricing power than any other company I could think of.
- [46:21]
Scott Wapner
Okay, well I was thinking of like Netflix in the context of that conversation.
- [46:25]
Josh Brown
Like the two.
- [46:25]
Scott Wapner
Right, the two.
- [46:27]
Stephanie Link
We don't even know what their strategy is for the
- [46:31]
Josh Brown
we made along the
- [46:32]
Scott Wapner
way, but they've made us. They've made us wait. I hear you. What's your final trade?
- [46:36]
Jim Leventhal
Qualcomm.
- [46:37]
Scott Wapner
All right, Nice move today, right?
- [46:39]
Stephanie Link
Rockwell Automation, Merck, my favorite reit.
- [46:43]
Josh Brown
Simon Property Group.
- [46:45]
Scott Wapner
All right, so Dow is still hanging on up near 200 points, but Nasdaq's off S& P off. See you on the bell. You've been Listening listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:06]
Commercial Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the half time 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 Snoring Gasping during sleep?
- [47:43]
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