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Halftime Report
Navigating the Energy Market Turmoil 3/16/26
00:45:32
David Faber and the Investment Committee debate how to trade oil and the market as turmoil in the energy sector grows. CNBC's Brian Sullivan joins us with the latest comments from Treasury Secretary Scott Bessent. Plus, CNBC’s Kristina Partsinevelos joins us to discuss the latest news out of San Jose, California, where Nvidia is set to kick off its annual GTC event. The Committee debate how to trade the company ahead of the Jensen Huang's keynote speech. And later, the desk debate retail investors abandoning private credit and what it means for the sector.
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This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts. Before we had AT&T business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn, an influencer even livestream the whole thing.
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Not good for business.
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Now with AT&T business Wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53
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new followers though at&t business Wireless connecting changes everything. I'm Scott Wapner and you're listening to
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CNBC's Halftime Report, the podcast the most
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profitable hour of the trading day.
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We record this live weekdays at 12 Eastern. Listen in.
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Welcome to the Halftime Report. I am David Faber for Scott Wapner. We've got a bounce in stocks, of course, that's front and center this hour. Oil retreating from $100 a barrel. Our investment committee standing by, will deb how they're playing it. Joining me for the hour, Joe Turnover, Jim Lee Benthal and Amy Raskin. Let's give you a quick look at the markets, the S and P off the highs, but still up some almost 1%. You can see the NASDAQ posting a nice gain of 1.25%, led by the likes of Metta, up some over 2%. Some stories out of perhaps some significant layoffs at the company. But you know, oil overall certainly seems to be driving things. Joe, let me turn to you and just get your read on sort of where we stand in this market, whether you expected we would see this bounce after of course, that negative action last week.
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A
First of all, it's great to have you here today. Thank you. Experience. It's a unique experience. Jimmy, what was the last Monday that the market opened higher? We haven't had a Monday opening higher since the end of January. So everything kind of feels a little bit weird. But it's pretty much the same as you described it, David. It's binary. It's, it's can you secure the Strait of Hormuz? We feel as though there's a little bit more confidence in that regard. Whether that's valid or not, the marketplace is suggesting that ultimately is the case. And that's somewhat of a punitive environment for investors. So I still believe this is kind of equivalent to a roller coaster. We're kind of experiencing extreme volatility and we're starting and ending up back in the same place after we're experiencing that volatility. Not the best environment overall. Not very much you can do about it as well. The conversations I'm having with hedge fund managers and portfolio managers, everyone's struggling right now. They're not. The volatility is not delivering the alpha generation that maybe you would believe elevated volatility would from past experiences. So let's hope we can build on what we're experiencing here today. I don't think anyone suggesting you want to sell and move out of the market. It's really about patience and time being your best ally.
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C
Yeah, I would completely agree. I don't think this is a time, Joe. I think you said it well just then. To sell out of the market. Now you're speaking to hedge funds and institutional investors. I'm speaking to retail clients, many of whom are probably watching us. And I understand, and Joe understands and Amy understands that you're nervous. We get that the flow of headlines right now is very high and a lot of it is negative. This is the proverbial wall of worry which the stock market climbs. It will climb this wall of worry. It's a question of how long it takes to do so. And answering that question also goes back to what Joe, you just said, really the price of oil. Now, you and I have said for the last week that the Straits of Hormuz, the reopening of the Straits, is vitally important, and it is. However, I think the fact that we're seeing oil come down a bit today while the Straits are still effectively closed shows that there are some mitigating circumstances here. There is the coordinated release of strategic reserves. There are the two pipelines in the Arabian Peninsula that are taking some pressure off of the float through the Straits of Hormuz. And then there's just the simple fact that Chinese and Indian tankers are making their way through the Straits of Hormuz with Iranian permission. So it's not as bad as the 20% of oil being off off of the market, as was initially presumed. That's why oil is down. And this is a major chunk of the wall of worry. If we can get oil to come down, that will allow the stock market to then focus on the other BRICs, which we'll get to private credit, all those sorts.
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B
Yeah, we're going to get to a lot of trouble spots. Certainly get to private credit as well. One of my favorite areas. Amy, let me get to you though as well and just get your sense in terms of the action so far this morning.
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D
Yeah, no I agree with everybody else. It's the stock market's moving up because people are now more optimistic that we're going to get some sort of opening of traffic through the strait. I'm not sure if that's right or not. I don't think anybody really is. You know, again as Joe said, we're sort of on a roller coaster. If you're looking through this though, I do think US investors are more sanguine about what's going to happen here and that it's going to be short and we're through this. If you look at other markets outside the US you've definitely seen more of a hit. And so if you do think that this is going, this is going to be short lived and we're going to get through it. That's where I would be focused for opportunities right now.
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B
Yeah, well energy of course is the key. Let's, let's stay there right now. Treasury Secretary Scott Bessant sat down with our Brian Sullivan in Paris. That was earlier this morning. He did make some headlines about the oil market and of course the Strait of Hormuz. Brian has more for us and can recap exactly what we know as of this very moment. Brian? Well thanks David. I think it goes right to what you all are talking about but also to the financial markets in general because some stuff, rumors, Internet chatter, whatever. Okay, let's start with actually just the number of barrels that the market may be short because everybody you guys talk about, we talked about it earlier. David has a different number.
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So one of my first questions to
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the Treasury Secretary this morning here in Paris, France following the China trade talks
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by the way, was sort of by
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his estimation, how many barrels of oil per day is the market likely missing? Short in the market every day. Here's what he said.
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It looks like the deficit is about 10 or 14 and that's before any
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of the ships are coming out of the straits.
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So if you think about the Russian
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oil, oil that is somewhere between 9 to 11 days, 12 days of supply without the market moving. There's Iranian oil that's out in the
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A
water right now, about 140 million barrels. The Saudis have supplies stored around the world that they can release and then the global SPR release largest ever was 400 million barrels.
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B
Alright, so 10 to 14 million barrels a day, guys. That's bigger than some numbers that we've seen from some Wall street analysts. So the question is, oil's down right now, but it's still at 95. It's still $35 a barrel higher than it was two weeks ago. So why is oil not at 110 or 125? And you can see there is the aforementioned Hormuz straight. If we play drinking straight up Hormuz, it might not go so well, guys. So there's been a lot of chatter on the interwebs about is the treasury, is Scott Bessett in team? Is the White House, is somebody kind of intervening, for lack of a better term, in the market? I know it's just Internet chatter, but
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D
I had to address it goes right
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to the halftime report. So I asked the Treasury Secretary, are you guys basically in the market of
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D
oil futures or other contracts?
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Here's what he said.
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When there's big dynamic price action, that always happens. We haven't done that. Would you do it? So I'm not sure under what authority or what auspices.
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But you have not. I want to be clear because you know that that's, that that's out there.
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D
Don't worry.
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The Treasuries and the plunge Protection team is in focus.
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Yeah, you know, people, people used to
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say, like the treasury was buying S&P's.
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I think that's usually an excuse for people who got too short and got squeezed.
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B
So he said, they're not in the market, guys. They're not trading oil futures. They're not trading S&P 500 futures as well. And oil, you can see Brent's about $102 a barrel, but again, not at 1:22, not at 1:32 bucks. We'll see what happens. And by the way, we have Dan Jurgen on power lunch today. So we'll run some of those comments, then get, of course, the great Dan Jurgen's take on all of it. Brian, thank you. Yeah, looking forward to hearing from Jurgen as well. Brian Sullivan, though, in Paris. Joe, let me just turn to you on that. I mean, do we move up when oil's down and vice versa? Is that the market we're going to be living with for, for some time now?
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A
Without question. We're in an environment right now where on a daily basis, if you're trying to put together the puzzle, the first piece of the puzzle is the oil market. And that's an unfortunate environment to be in now to hear that the Treasury Secretary say that they're not participating in the futures market, that gives me comfort. I think that's a good thing. Let the markets play out accordingly. Counting barrels is interesting. You know, maybe over a very short term period that has an effect on the market. But I think ultimately, David, this comes down to the ability to restore security in that strait and have the flow of oil return to it were where it was prior to this conflict. And that's when you'll get the most significant drop in oil. And I don't think anyone has an inclination without being a military expert. How you get to that endgame.
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B
No. Right. Which is why I would just take risk off. Are we still in that mode then?
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I believe. I believe that we are. It's very difficult to step towards risk right now and to take a position and say we're going to go overweight in a particular position. If you want to take a position from an underweight back up to market weight, that's responsible. But to say right now you have the degree of confidence where you're going to go overweight, a particular asset class or a sector or an individual equity name, I think that's challenging.
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C
Yeah. I just want to point out that with regards to today's move lower in West Texas Intermediate and Brent, that may seem like there's some sort of, hey, maybe the straits are not as bad as we think. I don't think that's what the case is. I think there was a premium built in on Friday. This is a phenomenon that I know we all know is when you're in a news cycle like we're in right now and there's just a plethora of potential bad news, people going into the weekend assume the worst. And when you get to Monday and the worst hasn't happened, things haven't deteriorated, then that little weekend premium comes off. But make no mistake, $95 on West Texas Intermediate is still very high. This is a market that was trading in the mid-50s at the beginning of the year. This is a market, the oil market in general, that had a gross oversupply condition before all this happened. So to be at 95 is pricing in a lot of damage in terms of flows coming through the streets.
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B
Amy, I'll turn to you as well. You know, I know you own eog, Shell Schlumberger, I think as well. But anything else you want to think about owning? Exxon Mobil's target was raised, no surprise, over at Jefferies this morning as well. You know, does that become attractive here?
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D
Yeah, we came into this overweight energy and we're still Overweight energy, I think where I would add to, or I'm looking to add to, I haven't done it yet though, is oil field services. Schlumberger has actually been down because of the war because they have a big business in the Middle east and that's sort of on hold right now. But coming out of this, there's going to be a lot of opportunity for oil field services companies, particularly if they have to rebuild the infrastructure in the Middle east. And if the Middle east is totally shut forever, which I don't think is going to be the case, but obviously that's a scenario that people are talking about. We're going to have to explore and drill for oil and a lot of other places. So I think actually coming out of this, the oil field services names are going to be sort of best positioned.
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A
You could also look for alternative sources of oil geographically. Obviously that takes you to regions like Brazil, Petrobras, maybe Mexico, or turn up north and you could find Canadian Natural Resources or Suncorp. All of those names are working particularly well right now. The fertilizer names, they're pulling back. I did on March 2nd by CF Industries, bought that at around 104. I think it's trading currently around 122. There's a lot of volatility embedded in that name. The fertilizer names are very challenged in this environment because the Iranians are significant exposure borders of urea, which is incredibly important for corn planting.
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B
Yeah, of course, all the inputs which we only tend to consider when we suddenly watch the price of oil shooting higher. You do own some Exxon, I think
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C
I own some Exxon. And I think, look, for many years there's been this debate about is energy even relevant. I mean, if we go back to 2023 through 2025, it was really a lackluster sector. I think we would all agree on that. However, I do think you should own energy, David. And I think the e easiest place to start is ExxonMobil. Some people want to say Chevron, Texaco. That's fine. I look at them both as the super super majors. And here's the thing. These stocks, Exxon in particular, were doing very well before the Iranian crisis developed. Because in these companies you get not just the exploration and production, but you get the refining, you get the transportation and distribution. And so to the question of should you be buying these now, I think if you own them, you don't necessarily have to add to them. However, if you have gone through the last few years saying, I don't want to own any energy whatsoever, you're realizing that was a mistake. The easiest place to start is to take a toehold position in Exxon. Even at this level, it plugs a
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small hole though, in the portfolio. Its energy is just not big enough to make you feel good about the moves that you're making as an active hedge against the volatility and the supply challenges. And just a market right now that really doesn't look particularly good and for the better part of 26, probably has not been good because of things like
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B
when you say the market doesn't look particularly good. I'm curious as to what beyond oil is going through your mind.
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I think it's the, the way in which there's no established trend. So far in 2026 it was about S and P equal weight. The beginning of the year it was about the financial sector. That's where the overweight positioning in the
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financial sentiment rush lately, that's been reversed.
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Yeah.
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So you can't really find any particular area where you have a high degree of confidence. For me, that's not a good environment. So to be, you know, thinking about putting added risk on, I think you
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C
and I, we will both admit we look at it through a different perspective. I think you would agree you're a little bit more shorter term trading tactical fine than I am. And what my point is in all of this is if you're a long term investor, this is exactly the year where you wanted to have a diversified portfolio across many sectors. Thank God I've got ExxonMobil and Cheniere and Transocean. I mean otherwise this, this downturn that we're going through would look a lot more ugly. And the point being in a diversified portfolio, you never know when that sector, which is, as you've pointed out, out of favor, suddenly really helps.
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B
And also a really small percentage of the overall 3%.
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It's not much, which perversely means, and Amy may have been alluding to this, that you can go to 6%, be twice the market weight, but still not feel on an absolute level like, hey, you're betting the whole farm on Exxon and Cheniere.
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B
Yeah.
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A
To further answer your question, if you think about the places that you were rewarded in the last several years, the places where you find comfort, those places just haven't worked so far year to date, the Mag 7, each of them, they're so far they have negative performance. Year to date, you've had obvious struggles in software names and even some of the semiconductors and other areas of the market that perform particularly well in 24 and 25. They're just not delivering so far.
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B
If you wanted to be in memory, that would have been a good place to have been. Yeah. If everybody put that Memo out on SanDisk right into 2026. Amy, I don't want to forget about you out there of course as well, you know. Any thoughts especially in terms of overweighting energy and whether you want to continue to do that?
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D
Yeah, no, Jim was right. We were about double weight energy coming into this year and through the end of last year. And I think just because we weren't expecting a war in Iran, we just thought that there's global growth was going to be strong just because of almost all the central banks around the world were easing. There was a lot of fiscal stimulus coming from everywhere. I still think that's going to be the case coming out of this. So I think you can be 6, 7% energy and feel fine about it. I think that's, that's a really good place to be be. We, I know we're going to get to this but we are very underweight tech and I think, you know, I do think this broadening out trade, this, you know, sort of more even trade, both from a geographic and a sector perspective is going to continue to play out.
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B
All right, let's get to the White House now. The President had been making remarks involving the Kennedy center. But as is often the case, he's now moved on to other topics including of course the war in Iran
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E
regime continued in full force over the past few days they have been literally obliterated. The Air Force is gone, the Navy is gone. Many, many ships have been sunk. They're war fighting ships, but I guess they didn't know how to use them. And anti aircraft is decimated. Their radar is gone and their leaders are gone. Other than that, they're doing quite well. They've been a terror for 47 years. And now I guess the world through the United States, with the help of Israel is doing what should have been done many years ago. Should have been done many years ago. Since the beginning of the conflict, we've struck more than 7,000 targets across Iran. And these have been mostly commercial and military targets. We've achieved a 90% reduction in their ballistic missile launches and a 95% reduction in drone attacks. The missiles are trickling in now at very low levels because they don't have too many missiles left. We've also attacked the manufacturing plants where the places where they manufacture the missiles and the drones and that's going on today. We just hit three of them today. It's getting very hard for them to manufacture. More than 100 Iranian naval vessels have been sunk or destroyed over the last week and a half. That has to be some kind of a record. Additional strikes continue to launch from all directions every single hour. As you know, we attacked Carg island and knocked it, knocked it literally destroyed everything on the island except for the area where the oil is. I call it the pipes. We left the pipes. We didn't want to do that, but that we will do that. We can do that on five minutes notice. It'll be over. But for purposes of someday rebuilding that country, I guess we did the right thing. But it's, it may not stay that way. Just one simple word and the pipes will be gone too. But it'll take a long time to rebuild that. We are aggressively dismantling Iran's defense industrial base and ability to rebuild its missiles and drone capability is getting down to close to zero. And we're hammering their capacity to threaten commercial shipping in the Strait of Hormuz. With more than 30 mine laying ships destroyed. We hit to the best of our knowledge, all of their mine laying ships. Now they can put them on other types of ships I guess and drop them in. But we don't know that any have even been dropped in. We're not sure that any have been. That's a big negative for them. If they do, it's a form of suicide. But we don't know that they have dropped any in. But we've, we've hit all 30 of their ships and destroyed them. They're all at the bottom of the sea. We strongly encourage other nations whose economies depend on the Strait far more than ours. You know, we get less than 1% of our oil from the strait and some countries get much more. Japan gets 95%, China gets 90%. Many of the Europeans get quite a, quite a bit. South Korea gets 35%. So we want them to come and help us with the Strait. We have it in very good shape. The countries. I said we've already taken care of Iran. But now because of the fact that literally a single terrorist can put something in the water or shoot something or shoot a missile, a small missile, and it's fairly close range because it is a tight area and which is one of the reasons they've always used that as a weapon. Iran has always used that as an economic weapon and it's not going to be able to be used very long. Numerous countries have told me they're on the way. Some are very enthusiastic about it and some aren't. Some are countries that we've helped for many, many years. We've protected them from horrible outside sources and they weren't that enthusiastic. And the level of enthusiasm matters to me. We have some countries where we have 45,000 soldiers, great soldiers, protecting them from harm's way. And we have done a great job. And when we want to know, do you have any minesweepers? Well, would rather not get involved, sir. I said, for. You mean for 40 years we're protecting you and you don't want to get involved in something that is very minor, very few shots going to be taken because they don't have many shots left. But they said we'd rather not get involved. I just want the fake news media and everybody else to remember that. That was sad because when. And I've been a big critic of all of the protecting of countries because I know that we'll protect them and if ever needed, if we ever needed help, they won't be there for us. I've just known that for a long period of time, just like I knew about the strait, that it would be a weapon, which I predicted a long time ago, predicted all of this stuff. You guys were very generous and that. I predicted all of it. I predicted Osama bin Laden would knock out the World Trade Center. I made that prediction a year before he did. I said, you better get him, he's a bad guy. I watched him be interviewed one time and I said, that's a bad guy. You better get him. One year before. Exactly. I wrote it in a book you can even check. About a year before the World Trade center came down, President Clinton actually had a shot at him and he didn't take it. Unfortunately, I'm not blaming him for that, but he didn't take it and he ended up knocking down the World Trade Center. But I predicted that too. I predicted a lot of things. We strongly encourage other nations whose economies depend on the strait for blood. I mean, you know, these, these people literally need it. 90, 95% of their energy or their oil comes out of the strait and they should be in here very happily helping us. And it's incredible. We have such great. We're number one in oil by double now. We drill, baby, drill. We're double any other nation and it's going to be soon. Triple any other nation and that doesn't include Venezuela, who's been great, by the way. The relationship with Venezuela has been fantastic. Millions, literally millions of barrels of oil are being taken out and it's been a great help and it's been to their great benefit. The president has done a really good job. We get along with them really well. But we've taken out millions of barrels of oil and brought to Houston and other places for to the refineries. We have refineries set up specifically for that. And it's been a great, it's been a great relationship and more and more is happening. It's a tremendous oil source and we're getting, we're stepping it up very rapidly. The big companies are going in and they will actually numbers in a pretty short period of time, numbers that they've never been able to do, we'll be doing. There's a lot of oil under that land. We strongly encourage the other nations to get involved with us and get involved quickly and with great enthusiasm. I have that from a number of them and I'd like to say their names, but frankly, I don't know if they would want me to or not because maybe they don't want to be targeted. But I say wouldn't matter if you're targeted or not, because this is a paper tiger that we're dealing with now. It wasn't a paper tiger two weeks ago. It's a paper tiger now. So now we're going to get down to the reason. We'll take a couple of questions in a moment, but we're going to get down to the reason we're here today. Actually, this was set up a long time ago. It's the Trump Kennedy Center. Over the past year, we've made incredible strides to restore the true purpose and prestige of this revered.
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B
All right, you've been listening to the president talk about the military campaign in Iran, specific to many targets. Let me turn to Eamon Javers, because, Eamon, you know, importantly, you listen to him a lot more than we do. Perhaps. Anything new there that we may have learned in terms of the duration of the conflict or anything else?
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A
No, David, I mean, the president's reiterating this request that he's made for countries around the world, including China, to provide naval assets to help the United States in the Persian Gulf to clear the Strait of Hormuz.
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C
It is just striking to sit here
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A
and listen to a president of the United States requesting military aid from the Chinese in the Persian Gulf. One of the objectives of U.S. diplomacy and military activity for decades has been to try to sort of contain China's global ambitions, not to encourage the Chinese navy to globalize and play a role in all these areas where the US Navy has played a role in the past. Now that script has flipped. Also, the president here is saying that numerous countries have told me they're on the way to help, but not offering any names, saying that if he did offer those names, perhaps those countries would be targeted. So those countries don't want to be named publicly. But he says that they exist and saying overall here that some countries that the United States has provided Support for
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C
for 45 years or more have told
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A
him they don't want to be involved in this military activity, saying they're not going to provide support in terms of minesweepers. And that squares with what we know about the public commitments of countries around the world really reluctant to get involved in this US Military operation given the
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B
scale stakes and the strained relations, frankly,
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A
between the United States and its allies during the Trump administration.
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B
David? Yeah, Eamon, thank you. Eamon Jabbers, by the way, just because like to sort of correct things or set the record, we're not double production. We are the biggest producer of oil in the world at about 13, 13.6 million barrels a day. I believe right now the Saudis come in around 10 million. So while we are significantly more, we are certainly not, not double. All right, let's take a look at crude. They're down. Coming off the low. Coming off the lows. We should point out we're less than two hours away from Jensen Wong's keynote. That's it in Videos GTC event. It will take place in San Jose. Christina Parts Nebulous is standing by. She's got a set up for us. Tap times back in two minutes.
- [29:01]
A
Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help. And access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading thy ticket lady, Jennifer of Coolidge.
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D
Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Getth with the times, with the tines.
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B
You're playing the loot.
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D
Yeah, and it sounds pretty good, right?
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B
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.
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A
Before we had AT&T business wireless coverage. Our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn, an influencer, even livestream the whole thing.
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E
Not good for business.
- [30:15]
A
Now with AT&T business, wireless routes are updating on the fly and deliveries are on time.
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B
And the influencer did get us 53 new followers though. AT&T business wireless connecting changes everything. All right. About an hour and a half from now, Jensen Huang will give the keynote at Nvidia's GTC event that's taking place in San Jose, California. Christina Parsonavilis is there and she joins us now with a look at what we can expect. Christina,
- [30:57]
D
taking place, it's literally taking over the entire city. Nvidia built its empire. One idea, one chip for everything. You have so many people here lining up just to listen to what he has to say. But the AI industry, industry has moved into a new phase and rivals are circling. Google, Amazon, Metta and startups like Cerebus are all pushing chips designed specifically for inference, the process of generating responses to your AI questions. It's where the money is going and it's where Nvidia's flagship chips have faced the most criticism. Today. Jensen Huang is going to be in the building right behind me and he's going to respond. He's going to. He's expected to unveil a new inference chip built on Groq technology, which is memory baked directly onto the chip, designed to generate AI responses faster and at a fraction of the energy cost of today's GPUs. He's also expected to launch Nemo Cloud, which is an open source platform for AI agents already pitched to Salesforce, Cisco, Google, etc. There's also potential tie up with intel on custom CPUs for enterprise data centers and definitely a major push into optical networking, the high speed connections that link thousands of chips and increasingly determine how fast an AI system can think. The stock though, if you just look at it on a five month or six month timeframe, it's really only climbed about 5% and Wall street is expecting these products. The real question is whether Jensen Huang gives investors something they didn't expect. An update to Nvidia's five month old $500 billion order backlog or any new demand visibility into 2027. If it gets that, that will move the stock.
- [32:35]
B
David, Christina, thank you. Christina. Parts and novelists, let's turn to our panel. Amy, let me start with you. I mean, everybody owns in video. Meanwhile, it's not that long ago, I can remember earnings that were incredible. Guidance that was amazing. Margins that were astounding. Stock didn't do anything. Does this get things moving?
- [32:57]
D
I don't think so, actually. I think Nvidia is sort of stuck here for a little while. Unfortunately. It's been, it's been stuck. And I don't, I think you need something really monumental to sort of get us out of above the sort of $200 level. And I'm not sure we get that anytime soon. I mean, I mean he's throwing out this $3 trillion TAM out there and I think investors just have a hard time if, like, if the hyperscalers are going to spend $3 trillion a year on chips, how are they going to make a return on AI? And I think that's a very valid question that we just don't have the answer to. Until that answer becomes clearer. I don't think Nvidia really sort of takes off from here, but the spending
- [33:41]
B
is not stopping, guys, at all. I mean, this morning we were covering nebulous. Dutch based company signs a deal with Metta, another 12 billion. In fact, they're buying the Rubin chip, which is the newer chip. You know, if that's not enough to sort of solidify confidence that for the next number of years Nvidia is going to earn more money than we've ever seen a company earn. I'm not sure what is. Meanwhile, think trades at what, 20, what, I don't even know, 21 times.
- [34:07]
A
I think the only max have that is cheaper is Metta. It's cheaper than, than all its other peers. It's Apple, it's Microsoft, it's, it's Alphabet. Listen, we live in a world of instant gratification. I don't know if either of you watched the World Baseball Classic last night. Aaron Judge, early in the game met on second and third. He strikes out. Someone sends me a text message. They know I'm a Yankee fan. They said Aaron Judge isn't going to hit 50 home runs this year. I said, well, if he hits the 30, is that a good season?
- [34:35]
C
Yes.
- [34:36]
A
And I think that's what Nvidia is. Okay, so we went through a period from the end of 22 through 24 where in video was up 800%. David. Right, okay, that's, that's Aaron Judge hitting your, you know, 60 home runs over the last six months. If we could show a chart while I'm speaking about this, everyone's saying that Nvidia is basically dead money. It's moving sideways. Not Going anywhere. The S and P over the last six months is up I think 1% and video is up 5%. That's not so bad. So look, the reality is you have to adjust your expectations surrounding this stock. It is Jensen Huang. We know he's going to be blue skies today. That's his personality. Doubt he should be. He's got the world's most valuable company. They are delivering. And it comes down to at a certain point everyone owns Nvidia. We know that the analyst community, 93% buy rating, the 12 month price target 50% higher than today. Okay, I understand that type of expectation. They're lofty expectations. Maybe you need to moderate. But that doesn't mean that the stock is not good and that you should know.
- [35:43]
C
But Joe, also, I mean if we're looking at that chart right there, we just had the six month chart up and you were pointing out that it's basically flat. What's not flat during that time frame, as you know, is the, the multiple which has gone from the low 30s to now 21. As you pointed out, David, this is a question of whether that multiple is right or does it need to go lower or can it go higher. Relative in particular to the fact that competition has crept up over the last couple of years. To which I say, okay, competition was inevitably going to creep up. I think the whole ecosystem would be a lot worse off if we didn't have Google putting out its TPUs, or Amazon coming up with this chips or Broadcom AMD trying to compete. Ultimately the ecosystem to me looks very healthy. And I point to things like the current fundraising that's gone on from open air raising around $100 billion. I mean that sort of trips off the tongue. $100 billion. Guess what, that's a lot of money. And likely later this summer you're going to see IPOs, whether it's open air, anthropic, which is going to get more money from which the funds to buy GPUs from Nvidia are going to continue. So I put this all together and I say 21 times forward earnings, very cheap. Like Amy, I don't know what the catalyst is. I do think it's kind of a hop, skip and a jump to get to 200 from here. But maybe Amy's right though.
- [37:01]
B
If everybody owns it, then where's the new.
- [37:05]
C
I don't think everybody owns it. I know, yeah. I mean we've got some of our colleagues here on the show who are like, you know, not going to own it and honestly think about some of those colleagues not going to name. I love everybody, frankly, but they tend to be more like me, more value oriented. And if you look at in video now at 21 times, that's the market multiple one just one second with growth rate well ahead of the market multiple. This is a PEG ratio of about one. That's a value stock.
- [37:29]
A
No, they have a different style box. So they're never going to own a name like Nvidia.
- [37:33]
C
But for those you could based on the numbers I just said you could
- [37:36]
A
that for those that are looking for growth in the marketplace, I mean, come on, where else are you going to find it? I'm with you. And if you look at the Mag 7 so far, year to date. Okay, I understand all the mag seven are down year to date. Nvidia is actually the best performer of the Max 7.
- [37:50]
B
It is, it is. And Microsoft the worst, down some 17.6%. All right, we won't talk Microsoft right now. Instead we're going to get a news update. Pippa Stevens has that for us. Pippa.
- [38:00]
D
Hey, David. Susie Wiles, President Trump's chief of staff, has been diagnosed with early stage breast cancer. According to a post by the president on Truth Social, Miles has decided to take on the challenge immediately but will spend virtually full time at the White House. He added that Whiles has an excellent prognosis.
- [38:18]
B
While told the New York Times she
- [38:20]
D
will remain in her job and is not planning to leave. Iran is negotiating a return of three oil tankers India seized in February for safe passage through through the Strait of Hormuz, according to Reuters, who cited three sources with knowledge of the matter. India seized the tankers back in February, alleging they concealed or altered their identities. And the NBA is set to hold a vote next week over adding expansion teams to Las Vegas and Seattle, ESPN reported, citing sources. The vote will be held at the
- [38:50]
B
Board of Governors meeting.
- [38:51]
D
And play for the new franchisees would be targeted for the 2028, 2029 Seattle season. David, back to you.
- [38:58]
B
All right, thank you. Coming up, our ETF Edge, Dominic Chu is live at the ETF Exchange Conference in Las Vegas and he has more for us, Dom. All right. So David, many of the best and brightest folks in the world of exchange traded funds are gathering here in Vegas for this conference. Coming up after the break, we'll talk about some of the investing ideas and themes that are making their way around this conference center. Keep it right here. We'll be back after this break day or night. VRBoCare is here 247 to help make every part of your stay seamless. If anything comes up or you simply need a little guidance, support is ready whenever you reach out. From the moment you book to the moment you head home. We're here to help things run smoothly because a great trip starts with with the right support. And hey, a good playlist doesn't hurt either.
- [39:55]
D
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- [40:55]
A
Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help. And access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading welcome back to the Halftime Report.
- [41:25]
B
I'm Dominic Chu with your ETF Edge. We are live in Las Vegas for the Vetify Exchange Conference where a lot of ETF folks are talking about what's going on in the business.
- [41:34]
D
This we are joined right now by
- [41:36]
B
Sylvia Jablonski over at Defiance ETFs. And Sylvia, thank you very much for being here with us.
- [41:41]
E
Good morning.
- [41:41]
D
Thanks for having me.
- [41:42]
B
Let's talk a little bit about what you've seen so far in terms of the types of conversations about the investing environment. What stands out to you?
- [41:49]
D
Yeah, sure. I mean, it's been an exciting year for ETFs, right? We're bumping up on that 14 trillion mark. And when you walk around the room here, so many of the conversations are around thematic ETFs and specifically and unsurprisingly around everything that has to do with AI and geopolitically, how AI is now factoring into modern warfare and beyond that, the AI powered infrastructure, infrastructure landscape, that's been the hot buzz of the conference.
- [42:14]
B
So in terms of that, how exactly thematically does that play out in terms of investing views? Are there types of funds out there that do it? Are investment advisors, people looking for certain companies in particular that are going to try to capitalize on this kind of AI meets the military, meets geopolitics trade?
- [42:33]
D
Absolutely. And an ETF conference is the right place to be because whenever you have these nascent industries where you're thinking about, for example, drone companies, a lot of the average investors don't know about the new recent IPOs or the drone companies that are out there. And it's hard to pick the right one. So it goes back to why ETFs in the first place. You have this diversity diversification vehicle, so you're getting products that give you access to the, the names, you know. So in the case of modern warfare, like a Jedi, where you have like a Palantir in there, but then you also have, you know, all of the smaller drone companies in there, giving the investors exposure to the whole universe with a ballast of large cap stocks and the opportunity in the small cap up and coming modern, modern types of names in the etf.
- [43:13]
B
And Sylvia, before you go, has it been surprising to you from a market participants perspective just how resistance, resilient the market has been in the face of everything going on?
- [43:22]
D
Yes. You and I were talking about this off camera a little bit. I think it's very, you know, it's very interesting. Here we are in the middle of the heightened volatility geopolitically, but the markets are relatively common, stable. You know, they're kind of trading within a range. We have some volatility, but we're still just a few percentage points off of all time highs in major indices. So investors seem to have faith in the long term resilience of the market.
- [43:43]
B
All right, Silvia Jablonski over at Defiance ETFs, thank you so much. Thank you, David. I'll send things back over to you. We're going to do a lot more kind of talking around here, so we'll have some fun. Back to you. All right, I look forward to it. Yeah, it looks like you've got a lot of different guests coming up there, Dom. On various funds coming up here though. More pain for private credit. This is retail. Investors start trying to head for the exits. Can they actually get out? We're going to talk with the committee about how they're playing it next. Welcome Back. We're continuing to watch what is going on in private credit. The FTSE reporting investors, retail investors, pulled more than 10 billion from some of the private, private credit industry's largest funds. That was in the first quarter. Many of the stocks, the alternative asset managers that make private credit a core strategy, are down yet again. Jim, let me turn to you, because you have some clients who you put into a couple of the funds out there. I'm just curious as to how you're thinking about it, what you're telling them and what you're seeing in terms of their own behavior.
- [44:56]
C
Yeah. So first off, I think overall in the industry, we should expect to see elevated outflows. I mean, that's, that's probably obvious, but the gates are probably going to be in place for the next few quarters. We understand that clients, both of ours and just in general are worried about the state of affairs. So let's put a little perspective to this. While the fears of a negative credit cycle are being talked about all over the place in the Journal today. David, I think you and I were talking about this before. The show is pointing out some concerns that maybe Apollo executives have put out there. The facts that we see on the ground say that the credit cycle has not yet turned down. To anybody who's listening to that, they may say, well, what about First Browns? What about Tricolor? What about mfs? Those are cases of fraud, which is different than business deterioration leading to a negative credit cycle. Fraud is a sign of bad underwriting, which is why at Sarity Partners, we feel very strongly you have to do due diligence of a level that not every firm can do, and we think we're good at it. Sorry, a little. I'm not trying to be promotional, but there's a lot of due diligence that goes into finding the right managers who do things like make sure you have high percentage of senior loans, that you've got good private equity backing before the private credit loans come into place, that you have experienced scalable managers doing these sort of things. So the point being is that these are not all alike, but we haven't yet seen the deterioration in the credit fundamentals outside of fraud, which is an indication of bad underwriting.
- [46:24]
B
But you can't necessarily predict what's going to happen in terms of the impact of AI right now for many of these software companies whose business models could be severely impacted. Now, that may not be today or even tomorrow, but it could happen. And obviously that has been the underlying mechanism by which people that fear has then led to, well, I'm going to take my money out now. So this is a liquidity problem, not necessarily a credit problem near term, but is liquidity a problem in and of itself?
- [46:51]
C
Jim, let me start where you started. And it's appropriate to point out that while credit is not a problem now, things can change. They can change. At some point there will be a credit cycle. I don't know when now to the point that you're also going at, which is liquidity. This is why gates are in place. This has always been known to be a relatively illiquid sector. And I've seen, seen some people, particularly on social media, saying things like, well, there should be no more investing by these funds until all the redemptions are in place. I find that to be patently false. If there are just as announcements have come out, 7, 10, 14% redemption requests, we have to bear in mind that far more investors are staying in these funds and those are the ones to whom the protection is deserved and should be provided. Provided in the form of these gates so that buyer sales don't go on and generate negative returns going forward.
- [47:43]
A
A lot of private credit funds that I'm talking with that have exposure to the infrastructure, they're out there just illuminating and broadcasting the fact that they are not software driven.
- [47:54]
B
Right.
- [47:54]
A
And if you can isolate the narrative to we are investing in the hard assets in the infrastructure, you have a compelling story to tell. I think for your clients and for the retail community, that's challenging to understand where the ultimate exposure is. Because if in fact you are lending to private software, there is literally no transparency on what the real value of those loans are.
- [48:20]
C
That's a, that's a feature of the space. You're absolutely right. And again, goes back to why not only liquidity and illiquidity is important, but the education of our clients has been vital. Humbly, I think we've done a very good job of doing that. I'm not sure everybody, every client has, has really received the message, but nobody should be going into this space thinking that this is as liquid as a stock.
- [48:43]
B
All right, well, speaking of stocks, guys, and unfortunately we're out of time on this, but I would point out Blue Owl has a dividend yield of 10.4%. 10.4%.
- [48:55]
C
Leave it there, David. Coming back, some committee moves.
- [48:59]
B
Amy's ready. She's got her latest trades in the defense space. Halftime's coming right then.
- [49:12]
A
You've been listening to CNBC's Halftime Report,
- [49:14]
B
the podcast you can always catch us
- [49:17]
A
live, weekdays at 12 Eastern. Only on CNBC.
- [49:23]
D
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 Halftime Report participants consider reliable but 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?
- [49:59]
B
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