Halftime Report: Navigating an "Unfamiliar Market" (May 21, 2025)

Presented by CNBC's Halftime Report with Host Scott Wapner

Market Overview

At the onset of the episode, Scott Wapner sets the stage by discussing the mixed performance of major stock indices. As of the recording time, the Dow Jones Industrial Average is down approximately 0.75%, translating to a drop of over 300 points. In contrast, the S&P 500 is slightly lower, while the NASDAQ has risen by over 0.33%. Bond yields are highlighted as a significant factor influencing market dynamics.

Scott Wapner [01:02]: "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%."

Unfamiliar Market and Momentum Stocks

Joe Terranova introduces the concept of an "unfamiliar market," emphasizing that 2025 presents a different landscape for investors. He points out that momentum is currently a leading factor, indicating market confidence, but the nature of momentum stocks has shifted away from traditional tech giants to sectors like financials, industrials, and healthcare.

Joe Terranova [02:03]: "I think what we are really trying to identify is that 2025 is a different market and it's an unfamiliar market."

Frank Holland adds that while momentum is present across diverse sectors, the most significant growth still emanates from the "Mag 7"—the seven largest tech companies—which remain undervalued relative to their growth potential.

Frank Holland [07:50]: "I think the narrative that these companies are left for dead, the US Is not exceptional. I think the big companies are really inexpensive... Relative to their growth rate and their margins."

Tesla and Autonomous Driving

The discussion shifts to Tesla, where Elon Musk's recent interview about the company's advancements in self-driving technology is a focal point. Musk predicts that by the end of the next year, there could be hundreds of thousands, if not up to a million, Teslas operating with full self-driving capabilities in the U.S., including robotaxis.

Scott Wapner [11:17]: "My prediction is that probably by the end of next year will have probably hundreds of thousands, if not hundreds of million Teslas doing self driving in the US..."

Frank Holland shares his positive experience with Tesla's supervised self-driving feature, noting significant improvements in the system's performance over the past two years.

Frank Holland [13:03]: "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."

Nvidia and Chip Supply

Nvidia's role in the AI and semiconductor markets is explored, especially in light of Elon Musk's comments on sourcing chips from Nvidia and AMD. Joe Terranova remains optimistic about Nvidia's supply capabilities despite ongoing tariff challenges and praises CEO Jensen Huang's confident outlook.

Joe Terranova [20:17]: "It just seems as though he speaks, he exudes the confidence and as a shareholder that has to make you feel well."

Frank Holland emphasizes the critical importance of China to Nvidia's revenue, highlighting potential risks if new U.S. tariffs are imposed.

Frank Holland [21:45]: "China is incredibly important to their revenues and so I think that we have this like existential threat if the, you know, tariffs..."

Amazon Shareholder Meeting

The episode covers Amazon's annual shareholder meeting, where key topics include AI advancements, cloud demand, semiconductor strategy, and the integration of their partner Anthropic. Investors are particularly interested in how Amazon plans to maintain margins amidst tariff pressures and the company's expansion into areas like satellite technology and autonomous vehicles through Zoox.

Frank Holland [22:58]: "Investors are especially focused on AI right now... We do expect CEO Andy Jassy to talk about cloud demand."

Earnings Watch: Target and UnitedHealth

Target's recent earnings report reveals a revenue miss and a downward revision of its full-year sales outlook, causing its shares to drop over 4%.

Frank Holland [25:46]: "The quarter was very disappointing... stock down about 4%."

Conversely, UnitedHealth faces a 5% drop in share price following an investigation by The Guardian into allegations of unethical payments to nursing homes. Despite the company's defense citing a Department of Justice decision recognizing inaccuracies in the report, investor sentiment remains cautious.

Carrie Firestone [30:22]: "We're betting a little bit more on the company. This is the time you buy."

Trades and Stock Picks

Frank Holland discusses recent trades, including increased positions in Dell and a small stake in Quantum Computing firm IonQ, citing strong growth prospects and industry positioning.

Frank Holland [32:50]: "Dell is taking share from SMCI. They announced the stock buyback... continues to be a good long term holding."

Carrie Firestone highlights Paycom and Autodesk as recommended buys, citing strong earnings and growth potential despite minor integration challenges.

Carrie Firestone [44:34]: "Paycom is an employment and benefits software company... So we like that one."

Cryptocurrency and Bitcoin

The podcast delves into Bitcoin's surge towards a new all-time high of nearly $110,000, attributing the rise to a more favorable regulatory environment and the potential impact of a significant tax bill. Frank Holland advocates for both direct investment in Bitcoin and ETFs, emphasizing its role as a hedge against dollar debasement.

Frank Holland [36:54]: "It's just like everything's lining up. And I think the momentum... continue to move higher."

Bond Yields and Economic Outlook

Bond yields remain a central theme, with discussions around the potential impact of a new tax bill on Treasury debt. Joe Terranova expresses uncertainty about the exact trajectory but acknowledges the bond market's sensitivity to supply issues and global economic factors.

Joe Terranova [40:34]: "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."

Final Trades and Market Highlights

In the closing segments, Frank Holland and Carrie Firestone share their latest trades, including positions in silver as a potential catch-up trade and UnitedHealth amidst its ongoing challenges. The team also touches on the importance of monitoring stock valuations and momentum trends.

Frank Holland [44:21]: "Silver's only up 3. Breaking out of a one year base. Could be a good old fashioned catch up trade."

Headlines and Brief Updates

The episode concludes with brief updates on major headlines:

• IRS Workers Union: A federal judge rejects the Treasury Department's attempt to cancel the union contract, citing legal standing issues.

• Andrew Cuomo Investigation: The Department of Justice investigates allegations against the New York City mayoral frontrunner related to decisions during the COVID-19 pandemic.

• Measles Exposure: New Jersey officials warn of a possible measles exposure linked to a concertgoer from a Shakira event, with monitoring advised until June 6th.

Frank Holland [34:47]: "The Department of Justice investigated those allegations and decided not to pursue the matter due to significant factual inaccuracies."

Conclusion

The Halftime Report on May 21, 2025, provides a comprehensive analysis of an evolving and "unfamiliar" market landscape. With momentum shifting towards diverse sectors and established tech giants remaining pivotal yet undervalued, investors are advised to seek alpha opportunities in individual stocks rather than relying solely on broad market indices. The discussions around Tesla's advancements in autonomous driving, Nvidia's critical role in the semiconductor industry, and the strategic moves of Amazon offer valuable insights into potential growth areas. Additionally, the segments on cryptocurrency, bond yields, and key earnings reports underscore the multifaceted nature of the current financial environment.

For those seeking to navigate these complexities, the Halftime Report serves as an essential guide, blending expert opinions with actionable strategies to capitalize on emerging market trends.

Notable Quotes:

• Joe Terranova [02:03]: "I think what we are really trying to identify is that 2025 is a different market and it's an unfamiliar market."

• Frank Holland [07:50]: "I think the narrative that these companies are left for dead, the US Is not exceptional. I think the big companies are really inexpensive..."

• Frank Holland [13:03]: "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."

• Joe Terranova [20:17]: "It just seems as though he speaks, he exudes the confidence and as a shareholder that has to make you feel well."

• Frank Holland [22:58]: "Investors are especially focused on AI right now..."

• Frank Holland [25:46]: "The quarter was very disappointing... stock down about 4%."

• Joe Terranova [40:34]: "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."

This summary encapsulates the key discussions and insights from the Halftime Report episode, providing a clear and detailed overview for listeners and those who wish to stay informed without tuning in directly.