← Halftime Report
Halftime Report
Navigating an "Unfamiliar Market" 5/21/25
00:42:41
Frank Holland and the Investment Committee debate the nest move for stocks as the S&P and Nasdaq snap their 6-day win streaks. Plus, the Committee discuss Tesla after David Faber’s wide-ranging interview with Elon Musk yesterday. And later, the desk shares their latest portfolio moves. Investment Committee Disclosures
Loading summary
Transcript127 lines
- [00:00]
Frank Holland
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, Member, SIPC Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org.
- [01:03]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to the Halftime Report. I am Frank Holland in for the judge. Scott Wapner, front and center for this hour. The next move for stock as the S and P it snaps a six day win streak. The committee making some big moves in this market. We're going to run you through all the trades to get you ready for the rest of this trading day. Joining me for the hour, we have Joe Terranova, Carrie Firestone and Bryn Talkington. But first, we're going to get a quick check on the markets. Right now, bit of a mixed picture right now. Take a look. The Dow looking like it's down about 3/4 of 1%, down more than 300 points. The S and P just fractionally lower. The NASDAQ higher right now, up over 1/3 of 1%. Bond yields a big part of this story, kind of shift in the market influence and the decisions that investors are making. Joe Terranova, I'm going to turn to you, you're calling this, this mixed picture we're seeing right now kind of an unfamiliar market. Why do you say so?
- [02:03]
Joe Terranova
All right, here we are of a 10 year at 4.54. What should have happened coming into Monday after the news that we got over the weekend? Bond yields spiked. Bond yields are staying higher. This is the best that the bears can do. The market is basically pausing. It's basically consolidating. I'm not really sure what people are afraid of. I think what we are really trying to identify is that 2025 is a different market and it's an unfamiliar market. To investors over the last several years. I say that because if you study the 52 week highs, if you look at momentum, and by the way, momentum is a leading factor year to date. Generally when momentum is a leading factor, markets don't go lower. Momentum being a leading factor is indicative of a confident good market. But the momentum names are not the names that you think of. They're not the 20, 21 names with astronomical ps and do it yourself type of names. They're not the names of 23 and 24 related to AI software and semis, their industrials, their financials, their health cares. You have finally dispersion in terms of performance. I was looking at my holdings this week in Jyoti and personally in Jyoti we have 16 names that are making 52 week highs this week. Frank, not one of those names is a technology name.
- [03:26]
Scott Wapner
Nomad 7.
- [03:27]
Joe Terranova
Nomad, Nomad 7. All right, so you have Netflix keeping us in suspense.
- [03:31]
Scott Wapner
Here's some of the components right here. Axon, Monster Train, Insulet, Republican Services. Give us a sense. Is there a common theme when we're talking about these names?
- [03:39]
Joe Terranova
The common theme is that the last two years you had narrow concentrated revenue growth and it was all about. I was all about technology. So let's pick one of the names. Monday bank of New York makes a new 52 week high. Bank of New York is giving you double digit revenue and earnings growth. Think about that. A regional bank, a super regional giving you that type of growth. So the point on all of this is this is not a bad market. This is not, not a market to be afraid of. This is a market that is just rewarding investors in different places. How about utilities? Utilities are up 9% so far year to date. When you have bond yields ticking higher, look overseas. Germany making a new all time high. Europe very strong. So the unfamiliar places of the last several years is what is leading the market higher. They're becoming the momentum names and that's indicative of a confident environment.
- [04:37]
Scott Wapner
All right, so I want to bounce a few things. You're saying it's not a bad market. You're saying it's a healthy market. Just a bit of a change of leadership. Piper Sandler said something very similar. They called it a healthy pause. They said the upward momentum, your word is low in the s and P500 is the near 6000. But a healthy pause seems more likely than a significant pullback. I want to kick this around everybody else. Let's show Joe's stocks one more time. We're showing the statement here From Piper first. But some of these names. Are you guys seeing anything? One thing that kind of popped up in my mind is some, some protection from tariffs. Talking Exxon, they produce mostly in Arizona. Trane Technologies had Dave Regneri on my show. Worldwide Exchange, they produce most of what they sell here in the U.S. here in the U.S. you know beverages are made here obviously Republic Services, they're picking up trash here in the US Are you guys seeing anything else when it comes to these names?
- [05:21]
Carrie Firestone
Well if you look at some of the names again that are hitting new highs. Schwab for example, so financial services brokers where I don't think they've come up with a tariff on brokerage services yet when you're trading on your phone. But you know, who knows, let's hope. But most of them are at all time highs or close to it. Waste Connection, that's a name that we own all time. Again it's local. They're not putting a tariff on your local municipalities garbage, you know, service. So you can go through a list and, and see, see that there's, there is a theme. However, however the market remember started the year at about this level. You know we're right where we were. You know we had a drop of 20% overall. I'm talking about the S&P 500. We've started the year at a certain level 30 times for the Mag 7. Can we pull up the little chart any. Let's pull up that chart on multiples so far this year you started the year with multiples on the max 7 formula at 30 times. Went to 22.8 times. Now we're back to2027 almost 28 times. Meaning that the overall market in these are still a big component despite what's going on underneath is sort of rotating on started a level, fell 20% has come back. So you've got two tails. Tales of two markets. One where underneath there's a lot of names that, where you can make money on hitting all time high tariff related, sustainable growth related. And then you've got these big, big names, the mag names and some of the other huge components in the S and P that are sort of doing this, you know, revolution somersaulting over each other now kind of back, back closer to where they were.
- [07:10]
Joe Terranova
But that's a better market because you could generate alpha in that environment. You don't have to worry about the Max 7 outperforming. And now you've got to chase beta.
- [07:16]
Scott Wapner
Right to your point. Valuations obviously lower than they were to start the year they dipped, the second one you showed was about 22. That was the April 8 lows. And so we had a lot of uncertainty. We've gotten I guess a bit more certainty now. The other thing, Kerry, you know, you're doing my job. I'm supposed to call for the full screens and, and let's pull up Jyoti's holdings when we're talking about some of these momentum names. Brent, we don't leave you out this conversation right now. What do you make of Jyoti's list? These are components in the Jyoti ETF hitting 52 week highs. Any of these names that you like right now that you see as a potential buy or maybe some names you don't like?
- [07:51]
Frank Holland
Well, no, I think, I think Joe makes, makes a great point that you're having this broadening out across multiple sectors. If you look, Trane and Monster have nothing to do with each other. And so I think that you do have this broadening out. At the same time though, you know, where are you getting the best margin and earnings growth? You're still getting them from the max seven. And so I think, you know, this narrative that these companies are left for dead, the US Is not exceptional. I just think that was garbage and that you continue to see. I think these big companies are really inexpensive. Not all of them, but most of them are very inexpensive relative to their growth rate and also, you know, their margins. I think at the S and P level though, to punch through around 6150 around the highs where we started the year, you're going to need a catalyst. And I think just because we have this unknown tariff overhang that isn't remotely resolved, by the way, not even remotely resolved. I think to punch through or go much higher seems not to be something that's going to happen, I think until later this summer, until we get past that 90 days or get more clarity coupled with, you know, what's going to happen in Congress with the big beautiful bill. And I think that's where yields come into play. And I think that the probability of the tax bill, you know, approving is very correlated with bond yields going higher. And so, you know, Joe mentioned the 10 year, the market not really doing anything with that. I think we definitely need to continue that because if the Fed doesn't cut rates, then we are going to have really big interest, interest on the debt which is going to eat more and more into gdp. And so I think there's, there's reasons why we're at the higher end of the range for the S and P. And we're going to rest for a bit until we get more clarity on yields, taxes and tariffs.
- [09:39]
Joe Terranova
I don't disagree with, with any of that. Look, I think we're going to make a run at the all time highs and what happens from there, I think it's up in the air. I think it potentially could be a trap when you're just basically allocating to the the market. But there, there's more than just the names that we're showing there in the last several days that have made 52 week highs. How about Uber making a 52 week high. TJX, Visa, MasterCard in the insurance industry, Travelers, Hartford. How about ADP? ADP making a 52 week high. Helmet making a 52 week high. So I think again, if you're looking at the market, yeah, I agree with everything that Brin is saying and I agree with you you in terms of valuation. So there's challenges ahead but that's not what you're supposed to be doing, just buying the index. You're supposed to be looking for alpha opportunities in individual names. And the momentum factor is telling you right now that there are a variety of different names and they have reasonable valuations as well. It's not as if it's an astronomical P. Yeah.
- [10:39]
Scott Wapner
To your point, two things here at CNBC, we track momentum with the MTU ETF. What do you do about 20% over last month. This guy, comedian. Also, you know, bond yields obviously a big part of the story. So the tax bill you just mentioned, it has the potential to raise those bond yields. So we have to continue to watch that. One thing we want to talk about also is Tesla or David Faber. He did an outstanding interview with CEO Elon Musk yesterday, sitting down, wide ranging on a number of topics. One of them of course was self driving and the outlook for self driving for Tesla. Just take a listen. My prediction is that probably by the end of next year will have probably hundreds of thousands, if not hundreds of.
- [11:17]
Joe Terranova
Thousands, if not, if not over a.
- [11:20]
Scott Wapner
Million Teslas doing self driving in the US and just to clarify, because we can't play the whole interview, once again, that includes people who own Teslas and also Robotaxis. Brent, you're kind of our resident Tesla expert here. What did you make of that interview and the idea there might be a million Teslas out on the road doing full self driving. Right.
- [11:39]
Frank Holland
Well right now it's supervised. I have a Tesla, I can drive it my house to the airport, never touch it until I'm going to valet two years ago. Two years ago it drove like a 16 year old learning how to drive for the first time. Very herky jerky now it's so smooth, it's so intuitive. I know they David talked about some report that said it ran through a red light. I drive it all the time. It's been exceptional. And I think that all of a sudden when we as Tesla car owners can just rely on that, that is pay $99 a month, people are going to all flip that switch and pay the $99 a month. And then where the second half of the interview really came when Elon came back is with Optimus. And so between Autonomy and Optimus, which Tesla is going to build on that manufacturing plant already in existence and then use them on their own plant at their own gigafactories to begin with is a whole new vertical. And so I feel like in the next few years people are really going to understand this is not just a car company. They're doing so many other things. And I said, I said yesterday on closing bell, it is underestimated the manufacturing expertise of Elon and team and what they're able to do from a manufacturing efficiency. It's just like never been seen before. And so I think people will continue to buy the dip. I do think the stock around 3 to 4400 has a, has a top there and so you can sell calls. But I think this is continue to be a stock that investors will and should buy the dip.
- [13:04]
Scott Wapner
All right, two things I want to correct myself. Supervised self driving is what he was talking about, not full self driving. We can just go in the back seat and take a nap or anything like that. But our David Faber, you actually brought up a really great point. Currently BYD that supervised self driving is included in the price of the car where Tesla's planning a subscription. Now of course Chinese EVs aren't sold here in the US but what about the global, global business? How big of a threat is a BYD or other competitors not asking for a subscription but including it in the original price tag to this business model? And this idea when we're talking about.
- [13:32]
Frank Holland
Tesla, I don't think it's an issue globally. But the country that matters the most for Tesla is China. That's where you're seeing, you know, they probably hit peak oil a few years ago. I mean they have EVs all over the place. And so I think that, you know, it seems like Elon is very good relationship with the Chinese government of having somewhat of a Fair playing field. And they talked about it yesterday. They need to execute in China and be able to have that full self driving to be able to, I think have broad mass adoption. So. So we'll see. I think that they'll go get there. But BYD in China is 100% a massive competitor.
- [14:13]
Joe Terranova
I think what was accomplished yesterday in that excellent an interview with David was Elon Musk was able to successfully alleviate, maybe temporarily, some of the fears that you have. First of all, I mean, obviously next five years CEO, but beyond that, to Brin's point, you, you began to question over the last several months, is this a car company or is this a car company with really good technology? So kind of a little bit of a hybrid of the two. I think yesterday we stepped more towards, okay, this is a technology company. But I also thought the words where he said we will be extremely paranoid about deployment, I actually think that's comforting to shareholders. I think it's comforting that they're taking a very conservative approach and that they're going to supervise the rides and that in fact they're not going to go places that they're not familiar with in Austin. I think that's the right approach and I think as a shareholder or that kind of made you feel good about the strategy.
- [15:10]
Scott Wapner
It made you feel good. But what about the other side of the coin where Waymo seems to be well ahead of them doing about 5 million autonomous rides just in the last five months. This cautious approach by Elon Musk, it might be prudent, but are you worried that they're going to get behind when it comes to this autonomous driving race?
- [15:25]
Joe Terranova
I mean, that's, that's a next level of thinking about your ownership of the equity. That's not wrong. But I don't think in the near term it really affects the price as much as the words we heard yesterday, which were comforting, were able to positively affect price. You're not wrong in what you're suggesting, but that's something that evolves, I think, further down the line. I think he was able to really reverse or, or steady some of the concerns that the marketplace had.
- [15:53]
Scott Wapner
Terry, I want to ask you, do you agree with Brin's thesis that China is actually the most important market to get about 20% of revenues out of China? And they're facing a lot of competition there from BYD and other EV makers who again, seem to be folding this autonomous driving service into the product price, not asking for a subscription. And let's also keep in mind the Chinese economy is not in great shape by any means.
- [16:12]
Carrie Firestone
Yeah, that's definitely true. I would say that Tesla is a complicated story. And there are times, for example, the last month where investors gravitate toward all of the good news and excitement and technology and the stock is up I think 55% from, from April 8th. And then there are times when investors are going to worry and they'll just focus on what could go wrong and what's happening in China and who's the competitor and who else is competing with them on the autonomous side. So you know, you can have these wild swings. It's a very expensive stock on a multiple basis and therefore it's going to be subject to swings. This recent market and you know, highlighted in part by what he said to David Favor about the future and the concepts which are, you know, kind of mind blowing, is just another example of, you know, how dominant and how important these companies are, such as Nvidia or Google. I mean look, just quickly look at Google today. Everybody was saying, oh, you know they're going to lose out on search. They're losing. Let's you know, take those numbers way down. The stock got hit very hard. And do you think they've been sitting around doing nothing related to AI? Of course not. They've been waiting to introduce something which they're doing.
- [17:31]
Scott Wapner
To your point, Alphabet shares up almost 5% right now. Very quickly. We want to move on. But you were mentioning how expensive the Tesla is. I'm looking at it right now trading at about 163 times forward earnings. Just really quick around the horn. Joe, does which is what you heard yesterday, is it justify a valuation of 163 times forward earnings?
- [17:48]
Joe Terranova
Frank value, I mean, but valuation is something that generally I don't believe is really an accurate predictor of where the future price action is going to go. There's, there's a multitude of examples of stocks that have single digit valuations and have gone nowhere for years. And then there's triple digit valuations where you see very strong price of appreciation.
- [18:11]
Scott Wapner
So is this the.
- [18:12]
Joe Terranova
Obviously everything that we do is anchored in studying momentum. So as long as something presents itself as having the momentum and gives us the revenue growth along with it, then we're comfortable with that.
- [18:25]
Scott Wapner
Brian Kerry brought it up, but I saw you nodding your head a bit. 163 times forward earnings. Is that justified based on what you heard yesterday?
- [18:33]
Frank Holland
Ps are you just can't ignore Pen. So go with what Joe just said. It's arbitrary, right? It's completely arbitrary. It's like never going to make you money. Looking at a P. E. Whether it's two or 2,000, there's roadblocks. Doesn't even have an E. Right. And so how do you put a price on a million robots five years from now? And so I mean the robots are coming. Jensen has said multiple times this is a multi trillion. Like a trillion is a very big number. And there's many companies that are making them. But if you think about as a publicly traded company, they already have the manufacturing to build the robots. They're putting them on their floor. That is a whole new vertical which today is zero revenue. And I think the market is sniffing that out and doing math, math around the potential growth of just Optimus over the next three to five years. And that's where like an Amazon used to have a 1,000 p. E and now it has what, a 30? So ignore P.S.
- [19:24]
Scott Wapner
Okay, Carrie, you brought it up. Just a yes or a no because we got to move on. You're the one that brought us. You can't say it's nothing.
- [19:29]
Carrie Firestone
I didn't say it was nothing. I think, I think it matters less in the case of Tesla. How's that?
- [19:34]
Scott Wapner
All right, we're going to move on. Elon Musk also talking about where Tesla will buy chips from. Naming two very notable chip companies, Nvidia and amd. Take a listen.
- [19:43]
Frank Holland
We expect to still buy a lot.
- [19:45]
Scott Wapner
Of GPUs from Nvidia, some from AMD and maybe from others. And as long as Nvidia is better than what we make, we'll keep buying from Nvidia. Is that the case right now?
- [19:56]
Joe Terranova
It is, yeah.
- [19:56]
Scott Wapner
Yeah. And what timing of the earnings coming up next week? Joe, I'm going to come back over to you hearing that from Elon Musk after what we saw over in the Middle east, we were hearing from the hyperscalers maintaining their capex investments. I mean a lot of bullish signs when it comes to this stock. Are there any, you know, potholes, landmines, whatever you want to talk about in this next road ahead for Nvidia.
- [20:17]
Joe Terranova
I mean it seems as though there's very strong, consistent in demand and yes, we heard that Yesterday with X AI and we heard that in the Middle East, 18,000 chips being bought, Abu Dhabi data centers. And I also think the, the disposition of Jensen Huang has not changed at all while we've gone through this tariff challenge.
- [20:39]
Scott Wapner
We've got a suit on the jack.
- [20:40]
Joe Terranova
But one day, one day he seems to continue to have a very confident outlook. Outlook on his Business and not only on the business but the ability of the business to deliver and meet the demand. It seems as though a lot of people had concerns surrounding would he be able to give enough supply to meet the demand. And it just seems as though he speaks, he exudes the confidence and as a shareholder that has to make you feel well. So in the near term the momentum has clearly turned towards the upside. I think the January all time high is somewhere around 153. I wouldn't be surprised to see the stock make a move towards there. We'll see what happens with next week's earnings.
- [21:24]
Scott Wapner
Britain, your take on Nvidia also very important to note Jetsuang has been very vocal about export controls, especially to China. I believe he said a few years ago Nvidia was about 95% of the China AI chip business. Now is just 50% worried about the US being involved in the AI build out. Is China a consumer concern center when it comes to Nvidia in any way similar to Tesla?
- [21:45]
Frank Holland
Well it's similar to Tesla that both Elon and Jensen have been able to thread I think a really small needle hole between working with the CCP and China and Trump and so kudos to both of them. China is incredibly important to their revenues and so I think that we have this like existential threat if the you know the tariffs will which you know best and probably said, probably said were embargo type type tariffs doesn't make any sense and so I think we'll wait and see. And I do think that what happens with the export controls, you know are very, very important to in video in the short and long term we're not going to have to worry about that this quarter. They're going to be great numbers. This continues to be you know I think a cheap stock. If you look at like a peg ratio which is the P E growth rate, the P E versus the growth rate, very cheap name. But China is I think continues to be existential for this company. Especially if Trump goes back and puts some type of real ban on on those chips.
- [22:48]
Scott Wapner
All right, speaking of big tech, let's move on to Amazon. Amazon is holding its annual shareholder meeting today. Kate Rooney joins us now with more on what we can expect.
- [22:58]
Frank Holland
Frank? Yeah, so this just kicked off all the shareholder proposals were just getting news that those were all rejected. Executive compensation was approved. But the big real focus today for Amazon investors is going to be around the long term strategy. Investors I'm talking to are especially focused on AI right now, especially coming off of Google IO this week. And Amazon doesn't always give out the numbers around this playbook, but any sort of peek behind the curtain, as one investor put it, would be huge today. And that's what a lot of folks are looking for. It could include some numbers. You might see AI run rate, revenue run rate. Expect to hear a lot more about their partner Anthropic as well and how they play into the entire picture. On AI. More broadly on us though, expect CEO Andy Jassy to talk about cloud demand. So that opportunity to shift from on premise Amazon semiconductor strategy as well is going to be key. We do expect Jassy to address tariffs, but it's likely going to be cautious after some of the blowback we heard around Walmart after they talked about raising prices on the E Commerce side of the business, investors are going to be looking for any details. Sales about maintaining margins, what levers do they have to pull here? The prime business as well, subscriptions there plus advertising. Finally you got some moonshots in there. Balancing bets like satellites. You guys have been talking about self driving cars. They've got Zoox rolling out. How does that all square with the larger business? So we'll get more details, Frank, and they'll let you know if we get any big news. Back over to you.
- [24:18]
Scott Wapner
Yeah, definitely expecting more details. By the way, I don't know if he's looking at Wal Mart. He got a call from the President himself about tariffs and, and pricing. So I imagine that would be on his mind.
- [24:25]
Frank Holland
Just the Middle East.
- [24:27]
Scott Wapner
Yeah. All right, Kate Rooney, keep us up to date. Thank you very much. All right, Kate Rooney, excuse me, Kerry Firestone talking to K. Rooney. Your take on Amazon shareholder meeting coming up today. What just kind of laid out what we can expect.
- [24:40]
Carrie Firestone
Yeah, I think tariffs obviously are on everybody's mind but he can't speak to what's going to happen for sure. He can just try to be confident in his approach that they, they supply an enormous network. They have suppliers everywhere, they have the best prices, they have the best delivery systems. He can emphasize that it's not going to relieve people's fear about tariffs. He can talk about us and what is going on with sort of increased demand for storage because of all of the development and that's definitely going to be a positive. You know, it feels this Stock is up 20% from its low. It's down still 15% from its all time high. So we think there's room left in Amazon for upward trade.
- [25:23]
Scott Wapner
We were saying earlier it's not all about big tech. In fact it's not as one other stock that we are following very closely today. That's Target. The shares are actually falling. You see them right now they're down more than 4% after reporting a revenue miss and cutting its full year sales outlook. Halftime committee member Stephanie Link owns the stock and joins us now on the phone. Link, what do you make of the quarter again? Shares down about 4% right now and a big drop to that full year guidance.
- [25:47]
Frank Holland
Hey Frank, there. There was not much good to say about the quarter. Expectations were very low with the stock down 30%. But the quarter was very disappointing. I think the same store sales number was in line with Whisper numbers down minus 3.8% but higher inventories, lower operating margins. It's the same old story with that. The big disappointment to me and the change on the margin is the traffic was fell 2.4%. For the past one and a half years I've been able to tell you that it hasn't been a traffic problem, it's been an execution problem. Well now we've got a traffic problem. So it's an obvious watch point. On the constructive side. Gross margins were in line. They're seeing less shrink. That is good. And the fact that they gave guidance versus polling guidance because I think that's what people were nervous about. They gave guidance. It's a wide range but let's just take the low end of that. At $7 you're talking about 13.5 times forward estimate. I do think PE matter by the way to your conversation before. You also have a 4.7% dividend yield. That's crazy good. I think not for the right reasons by the way. We know the stocks fall and that's why the yield is going higher. But nevertheless that's a support to me. And they've got a new growth restructuring in place. I don't think the long term story has changed in that they're going to add 15 billion to revenues over the next five years. They do expect to get back to operating margin expansion and mid single digit earnings. But it's going to take time. I mean this is something that has been disappointing. I thought the expectations were low enough and the stock price reflected enough of the bad news. But I also thought they would execute better. So it's certainly something that I'm thinking about. I'm not sure. I'm not taking action today either way. Stock down way too much for me to sell it but I'm not so eager to be buying it here.
- [27:32]
Scott Wapner
Yeah, a number of issues for this company getting shares down about 4%. Important to note it's actually missed EPS and 2 out of last 3/4 of this problem actually a little bit deeper than just tariffs and some other pressure there. Stephanie Lake, thank you very much. All right, coming up here on Halftime Report, we're tracking the trades carrying Brin. They're ready with their latest moves. Halftime is back in just two minutes. Are you still quoting 30 year old movies?
- [27:57]
Frank Holland
Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted?
- [28:02]
Scott Wapner
If this sounds like you, you're stuck in the past.
- [28:05]
Frank Holland
Discover is accepted at 99 of places that take credit cards nationwide and every time you make a purchase with your card you automatically earn cash back.
- [28:14]
Joe Terranova
Welcome to the now it pays to Discover.
- [28:16]
Frank Holland
Learn more@discover.com credit card based on the February 2024 Nelson Report as a salesperson, the search for the right buyer or buying groups can feel like you're endlessly sifting through leads and hoping they're ready to buy. Thankfully, LinkedIn Sales Navigator is more than just a tool, it's your strategic sales partner. LinkedIn Sales Navigator is a sales intelligence platform that helps professionals effectively prospect and engage high value customers, drive higher revenue and increase sales performance. Sales Navigator helps you target the right buyers, surface key signals such as job changes or which accounts you should prioritize, and shows you hidden allies so you can find those buyers that are most likely to convert. Whether you're looking for new clients or strengthening relationships of current accounts, LinkedIn Sales Navigator has new AI features designed to help sellers find the right people and get right to the right conversations, all at scale. Fueled by LinkedIn's 1 billion-member platform, Sales Navigator gives you the most up to date first party data enabling you to unlock conversations with the people that matter. Ready to get right to the right conversations? Try LinkedIn Sales Navigator now with a 60 day free trial at LinkedIn.com HalftimeReport. That's LinkedIn.com HalftimeReport for a 60 day free trial. Terms and conditions apply.
- [29:24]
Carrie Firestone
Earn a business degree on your terms at Capella University.
- [29:27]
Frank Holland
Our flexpath format is available in select.
- [29:29]
Carrie Firestone
Programs and lets you learn on your schedule. A different future is closer than you think with Capella University. Learn more@capella.edu.
- [29:41]
Scott Wapner
As you can as you can see, the dow's down about 350 points right now. Welcome back to Halftime. Take a Look at shares UnitedHealth they are down 25% this month. You can see under pressure once again today. Shares down almost 5% right now. This is after the guardian they published an investigation saying UnitedHealth secretly paid nursing homes to reduce hospital transfers. The company responded to the article saying the Department of Justice investigated those allegations and decided not to pursue the matter due to significant factual inaccuracies. Carrie, I'm coming back over to you. You own this one. You actually bought more after some of the recent traffic troubles. How do you feel about this latest stock move? I can't imagine good. But also these other headlines that are seeming to be coming out about this company.
- [30:22]
Carrie Firestone
So if we put it in perspective, here is a stock that was dominant, has been dominant in its field. It has had earnings growth of 18% compounded over many years. The multiple is down to 10. There's clearly bad news that can't stop coming right now. This has happened with other companies, particularly those that have to do a lot with government and regulations. But on the positive side, there are many companies that have exited the insurance business to get Medicare Advantage anything supplemental on the insurance side for Medicare, you have very few choices left. So UNH is the major player. The government does not want to take over Medicare plus Insurance. It does not want to be the insurance, the insurer of last resort. We're not the U.K. we're not Canada. We have private insurance. They have to come back to UNH and the government has agreed to give them a 5% hike in reimbursements because they see that these costs have become too much for companies, which is why they're exiting. So we think I. Over the next year, we get beyond this news cycle, you're going to start to see things improve. There's been insider buying, the CEO who's come back, and we're betting a little bit more on the company. The stock price has come so far down. Making a bit more of an investment in it seems to make sense to us. This is the time you buy.
- [31:51]
Scott Wapner
I got to be. I feel like you're trying to talk yourself into this. I mean, this company has a number of problems. You're talking about Medicare Advantage, about 30% of revenues or so. The company itself said it was just a lot more expensive than they thought. Do you think that problem has been addressed, that the management of this program is more expensive than they thought with the new patients coming in?
- [32:07]
Carrie Firestone
Oh, it definitely is. And they're going to have to recalibrate what they're going to charge for that. And I think this has been a problem that they acknowledge. So, yeah, I think that they can resolve it. It's not an easy look. Any good decision is uncomfortable in our business.
- [32:23]
Joe Terranova
I Think people are trying to understand though why a stock gets cut in half over a six month period. And a certain point does price loss supersede fundamental analysis?
- [32:35]
Carrie Firestone
Well sometimes it does. If you look at Boeing as an example when the stock was cut in half after that we're getting, we're getting on a tangent.
- [32:41]
Scott Wapner
Some other moves. Shares of you and down about four and a half percent. Moving on, let's get some more moves. Brent, coming over to you. You bought more Dell ahead of earnings next week.
- [32:51]
Frank Holland
Yeah, it was my final trade last week. Dell I think is going to stair step up to the one twenties probably 122. They have a $9 billion backlog. I think they're taking share from SMCI. They announced the stock buyback. Buyback Michael, Dell's one of the best in the business and their infrastructure services group, that isg group is where you get all of the data center, networking and servers. It's a cheap stock that has decent solid growth and I just think going into earnings it trades up around 122 and continues to be a good long term holding.
- [33:23]
Scott Wapner
All right. Shares of Dell right now they're up just over 1%. You also bought some Iron Cuban.
- [33:31]
Frank Holland
On the flip side a very expensive risky name is this is a small position, it's a toehold. I think you can get VC type returns in the public markets. We've seen it with Palantir, Hood, Nvidia, many other names but this is a toehold. So this is a quantum computing the probably the biggest and the best known. This actually was a SPAC that's been successful. One of the few is that you know over the last year they've made some really incredible acquisitions and really quantum computing is potential. It is not, it is not in its end form even remotely but I think with their acquisitions they made over the last year this company, their importance to the US government. China is spending billions on quantum computing. We need to have a good, we need to have a good company here and I think this is the best one. So I took a small position and also I know Joe likes momentum. It is just stair stepping up perfectly on the 10 and 20 day moving average.
- [34:27]
Scott Wapner
Yeah, take on your shares of ionq up about 1 and almost 2% right now. Just move higher just then. Time now for some headlines. Let's toss it over to Christina. Parts the of Christina. Thank you Frank. Well, a federal judge has rejected the Treasury Department's bid to cancel an IRS workers union contract. In his ruling just late yesterday the.
- [34:47]
Carrie Firestone
District judge said the department lacked the legal standing to bring forward a lawsuit against the union. The agency sued the union after President Trump issued an executive order tempting federal agencies from union bargaining. The Justice Department has opened a criminal.
- [35:02]
Scott Wapner
Investigation of Andrew Cuomo, a frontrunner in.
- [35:04]
Carrie Firestone
The New York City mayoral race. The New York Times reporting it comes.
- [35:09]
Frank Holland
After a GOP members accused Cuomo of.
- [35:12]
Scott Wapner
Lying to Congress about decisions he made during the COVID pandemic as governor. And New Jersey officials have issued a.
- [35:19]
Frank Holland
Warning about a possible measles exposure by.
- [35:22]
Joe Terranova
A concertgoer who had the disease during a Shakira concert at MetLife City Stadium on May 15.
- [35:29]
Scott Wapner
So as of Tuesday, no additional cases have been found. But officials recommend those who went to the concert to monitor their health as symptoms could appear as late as June 6th.
- [35:39]
Carrie Firestone
Frank, I heard you're a big Shakira fan.
- [35:41]
Scott Wapner
You weren't there, right? I was not there. But you know, the hips don't lie. Christina. Christina Partisan EC thank you very much. Coming up next, the trade on bitcoin as it hits a new all time high. Halftime is back right after the this. Are you still quoting 30 year old movies?
- [36:00]
Frank Holland
Have you said cool beans in the past 90 days?
- [36:04]
Scott Wapner
Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past.
- [36:09]
Frank Holland
Discover is accepted at 99% of places.
- [36:12]
Scott Wapner
That take credit cards nationwide.
- [36:14]
Frank Holland
And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the.
- [36:23]
Scott Wapner
February 2024 Nelson report introducing CNBC plus the new streaming platform from the number one source in business news.
- [36:32]
Joe Terranova
Watch live or on demand.
- [36:34]
Scott Wapner
Access any market, anytime, anywhere. Start streaming.
- [36:38]
Joe Terranova
Go to cnbc.com stream now.
- [36:43]
Scott Wapner
And we're back on the halftime report. We're taking a look at bitcoin. Take a look at this chart hitting a new record high today. It's nearing the $110,000 level. Bryn, you have quite a bit of crypto exposure.
- [36:55]
Frank Holland
Yeah, Bitcoin and Etherium. You know, I think we just have this much friendlier environment. As soon as Trump came in, obviously the Congress looking to repeal, you know, certain restrictions letting banks be able to hold crypto, etc. And I think pile on top of that, this tax bill which is it may be big and beautiful, but it's going to be very expensive. And so I think for people wanting to have a hedge against dollar debasement, etc. It's just like everything's lining up. And I think the momentum of talent to your hood etc. You just continue to get Bitcoin, be part of that and continue to move higher, just like animal spirits in full force here.
- [37:31]
Scott Wapner
So I think the question always is, do you buy the coin or do you buy the etf, or does it even matter?
- [37:37]
Frank Holland
Well, it depends. I mean, I think I own both. I think it's so easy to go buy ibit, easy for everybody. You don't have to worry about your wallet, etc. So, I mean, it depends. Institutions, I believe are buying. I bet you've had really strong institutional flows over the last month. But it just depends your flavor. They're going to trade right on top of each other.
- [37:56]
Scott Wapner
All right. Look at that chart. Joe, is this one of these momentum trades that people should be looking. You're laughing about.
- [38:00]
Joe Terranova
It's probably the ultimate momentum trade when you think about trades. It trades like a commodity for sure. And you know, it's built upon momentum and it's a reflection really of a reversal in sentiment very quickly. Reversal in sentiment. I think it's the easiest way to capture that reversal in terms of a position.
- [38:22]
Scott Wapner
Yeah. By the way, just looking at the dollar year to date, it's down more than 8% to Brent's point. About dollar degradation. Was that the term about the dollar, the basement. There we go. So kind of moving in inverse directions. We're looking at the dollar and crypto. All right, coming up next, we got Mike Santoli. He's joining us with his midday word. We are back on Halftime. Right back after this. And we're back on halftime. Senior markets commentator Mike Santoli joining us with his midday word. Got two words for you today, Mike. Unfamiliar market. Those are actually Joe's words. I'm just taking his words. Do you agree with his take that we're seeing a bit of an unfamiliar market with momentum taking over? And some names outside of megacap tech. He mentioned an Axon A Trane Technologies monster beverage showing leadership, at least right now.
- [39:14]
Joe Terranova
Yes. Well, one of the themes is rotation, which is happening. And so there's two ways that a market that gets a little bit overheated in the short term and maybe needs to back off. Two ways it can cool off.
- [39:26]
Scott Wapner
You can actually do the cold plunge.
- [39:28]
Joe Terranova
And, you know, pull back hard, or you can kind of just sit in place, turn around, let rotation do the job. You have some parts of the market that really did need to come in, and maybe they are the majority of stocks are down today, but Alphabet's up 5%, literally. The S and P, we'd be down twice as Much as it is right.
- [39:45]
Scott Wapner
Now if Alphabet were flat.
- [39:47]
Joe Terranova
So that's not an indictment of the market. It's saying that it's finding a way. Look, I think we're still a little bit wary of what's going on with bonds. They're hovering.
- [39:55]
Scott Wapner
Those yields are not really, you know.
- [39:56]
Joe Terranova
Taking off and that's okay for the moment. So I think it's much more about market needs to kind of get its feet back under it after sprinting higher by 23% and looking for also the next incremental piece of the puzzle because I think we've priced in further de escalation on trade. We priced in a somewhat resilient economy. Earnings were good. You got to see what takes the baton.
- [40:18]
Scott Wapner
So you mentioned Bonya. We talked way too much about bond yields earlier in the week. But we just want to hit it really quick. Mark Hafley from UBS out with a note saying the Republican bill, obviously the tax bill will likely lead to an increase of treasury debt exerting more pressure on the bond market. I know you don't have a crystal ball. Where does that pressure push yields to in your mind?
- [40:35]
Joe Terranova
Well, we obviously have to see how it shakes out in terms of the numbers. I don't think it's that linear in terms of like oh, if it's x100 billion added to the debt deficit or supply next year, in two years, then it's going to mean this much in yields. But there's no doubt that the bond market is trading as if it's really sensitive to the potential for this becoming a supplier problem. I'll also point out it's global. So you had Japanese yields blew out last two nights. That was in part because of a bad auction. So I think that's why, you know, bond investors are just not eager to kind of lock in these yields.
- [41:08]
Scott Wapner
They're a little bit, you know, on.
- [41:10]
Joe Terranova
The ground, on the defensive.
- [41:11]
Scott Wapner
One more read coming up. Today we got the 20 year auction coming up actually right after the show, one o' clock I believe. So one more read on foreign appetite for Treasuries and also just where bond investors are seeing things that right now. So we're going to get a read.
- [41:22]
Joe Terranova
A little bit of a test. Yeah, I mean the 20 is an oddball one. It's kind of an orphaned maturity. But yes, you definitely want to see if anyone steps up.
- [41:29]
Scott Wapner
Mike Santoli with his midday work. Coming up, more committee stocks on the move. Halftime's going to be back right after this. And welcome back to Halftime. This is some Committee stocks that are on the move. Palo Alto networks under some pressure despite an earnings beat. Joe, you own this one.
- [41:46]
Joe Terranova
There's a lot of tariff and macro disruption in this quarter. A lot of friction in that regard. I still think there is very strong demand for cyber security, whether it's Fortinet Crowdstrike check point or Palo Alto. I think you stay with that trade.
- [42:02]
Scott Wapner
All right. Also, Northrop Grumman increases its quarterly dividend. Joe, you own this one. Also coming on the back of the president talking about the Golden Dome missile defense system.
- [42:10]
Joe Terranova
Quite, quite a few defense names. We own Lockheed Martin, General Dynamics. We talked about how met at the beginning of the show. I think the ITA is pushing towards a 52 week as well as high as well rather. So it's obviously we're seeing very strong fundamental and technical momentum here.
- [42:27]
Scott Wapner
All right. Also we got Capital One price Target raised to 233 at bank of America. Another one you own stock actually down about a half of one and a half percent right now.
- [42:36]
Joe Terranova
Well, it's been, there's been a real good feel to this story. Certainly Warren Buffett is very happy as a holder of Capital One forming the largest US Credit card issuer. With Discovery now on that merger, stock is down a little bit. I take the other side of that. I think they're fine. Looking forward. They're going to present the challenge to Visa and MasterCard at least in terms of trying to capture a little bit of market share.
- [42:58]
Scott Wapner
They were looking at the chart there over the last month up over 15%. All right, coming up next on halftime to set up on a few key earnings that are still ahead. We'll be right back after this. And you can see the Dow bouncing off its lows. We're back here on halftime with the setup on some key earnings that are coming up. Let's start off with Zoom reporting after the bell. Joe, you own this one in the Joe T etf.
- [43:18]
Joe Terranova
Very frustrated with this name. I own this personally as well. When the revenue growth is just not. They're probably coming in somewhere around 2.2%. They really need to diversify the model here. They need to be not Zoom Video but Zoom Communications. Show the other tools that they have because it's very clear teams is capturing market share. It does have a 30 p. E for the referees and judges out there. So that maybe is appealing.
- [43:43]
Scott Wapner
All right, we're going to move on. Autodesk reports reports tomorrow after the bell. Carry you on this one.
- [43:47]
Carrie Firestone
Yeah, we think stock should have a good quarter, probably up about 20% audit does, of course, is design software the leader in its field? Starboard. It's an activist firm. It's in the company. They're on the board. They're looking to pressure them to save money and use it more effectively, increase the margins and we think that's happening.
- [44:08]
Scott Wapner
All right, Shares Auto desk up just about a half, half a percent right now. All right, stay with us. Final trades. They're coming up on halftime. Don't go anywhere. And we're back on halftime with final trades. Brent, talking to your first.
- [44:22]
Frank Holland
Yeah, Silver. Shout out to Jonathan Krinski for his note this morning showing that While gold's up 35% over last year, silver's only up 3. Breaking out of a one year base. Could be a good old fashioned catch up trade.
- [44:34]
Scott Wapner
Carrie, you're up next.
- [44:36]
Carrie Firestone
Paycom. So Paycom is an employment and benefits software company. They had some integration problems with one of their products, but they're beyond that. Company's earnings look to be better. Stock is acting better and employment is, is still strong. So we like that one.
- [44:53]
Scott Wapner
Jyoti, last word.
- [44:54]
Joe Terranova
Two weeks ago, Dash reported strong earnings. They're delivering on the earnings growth. They're delivering on the revenue growth growth. And there is very strong positive near term momentum that's pushing it towards a 52 week high despite a triple digit.
- [45:09]
Scott Wapner
P E. You know, we got P judges and referees, I think you called them, by the way, this one, 80 times forward earnings. Because we got to have the judges and referees, we got to have jobs too. That does it for halftime. The exchange starts right now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekday days at 12 Eastern only on CNBC.
- [45:32]
Frank Holland
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer for life with pets, there's chewy with everything delivered fast at great prices, from food with favorites to fill their bowls and bellies to fun with all the toys, with all the noise, even fashion, with all the looks that'll get second looks at the park or on the couch. And pretty much anything else you can imagine. If a pet is part of your family, Chewy should be, too. With everything you need for life with pets.