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Halftime Report
Navigating the "Everything Rally" 11/12/25
00:43:42
Scott Wapner and the Investment Committee debate how to trade the "Everything Rally" as stocks rebound. Plus, we discuss the AI Spending Frenzy, whether it will it be a boom or a bust for the sector and how you should trade it. CNBC's Seema Mody joins us with the latest on hyperscaler outlook. And later, the desk share their latest portfolio moves.
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- [00:01]
A
Introducing Fidelity Trader plus, the next generation of advanced trading from Fidelity. Customize your tools and charts and access them seamlessly across desktop, web and mobile. For faster trades anywhere you go. Try the all new Fidelity Trader Plus. Learn more about our most powerful trading platform yet@fidelity.com TraderPlus investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC Member NYSE, SIPC hey there. It's Dr. Sanjay Gupta with some exciting news to share. CNN is now streaming. That means you can read, watch and stream everything in one subscription. You can watch news live 24. 7. You can also explore catch up videos and explainer videos. And you can also watch the library of CNN's originals, including my latest documentary, it doesn't have to hurt, just go to CNN.com AllAccess.
- [01:01]
B
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. All right, Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the latest milestone for the Dow on track to close above 48,000 for the first time ever. So does it signal the official start of the everything rally into year end? We will discuss, we will debate, we'll do it with the investment committee. Joe Terranova, Liz Thomas, Carrie Firestone, Steve Weiss joining me for the hour as we check the markets. We do have the Dow above that level, 48,200. So we shall see over the next three hours or four hours what exactly takes place. S and P is a bit of a negative, as is the nasdaq. Joe, is that, is that what this is here? If you look at the sectors this week, healthcare is up 4.5%, materials are up 3, financials are up 2.5%. Comm services and tech doing just fine. Doing just fine. But they're not the best two or three.
- [02:04]
A
They are not. So today we have 30 new S&P 550 two week highs. Of those 30 highs, 27 of them are non technology. Goldman Sachs, Morgan Stanley, JP Morgan, Gilead, these are the names, American Express, Amgen. You do have your Crowdstrike, your IBM and your Seagate. So the battleship of momentum, as I've identified a couple of weeks ago, continues to turn. It began the turn with what were the real VIP macro assets when you think about momentum. And that's the dollar, which has been lower on 2025 and September is making the turn higher. It is crypto, which in early October found its Peak thereafter, it was gold that found its peak. So that momentum factor continues to turn more towards quality and it's represented in the type of performance that you are describing.
- [02:58]
B
Liz, is this the beginning of the chase into year end?
- [03:01]
C
I do think it's, it's part of the chase that's ongoing. The chase began with people chasing mega cap tech continuously.
- [03:08]
B
Yeah, I mean like people who, you know, missed out a little bit on that PM's underperforming because it can only get so big in those areas. Now it's the makeup or breakup but with these markets.
- [03:18]
C
That's right. It's the beginning of the chase of, of everything that might now try to catch up with mega cap tech. So what's happening and what we're seeing and this is a lot of why I have been pounding the table about health care. It was so unloved for most of the year that now investors are looking for other opportunities for growth because they can't convince themselves to put a lot of new money to work in tech. So you look at things like pharma and biotech and here we are, the chase and that catch up trade is happening. I would expect we expect the catch up trade to also benefit small caps, the equal weighted S and P. Now I don't think they close the gap entirely because the gap is wide, but I think there probably will be some narrowing of the gap. The one risk that I want to point out is that we're headed for probably a government reopen today. So we're likely to start to get the data that we missed. Now we may not get any October data whatsoever out of some of those big releases, but we'll start to get some of the delayed data if the market has to digest that and if some of the private labor data has been any indication of what's to come, there might be some bumps in the road and some different things that we have to expect out of the Fed come December.
- [04:22]
B
Yeah, I just think that we would put the Fed back in the, you know, we start creeping up closer Weiss to 100% for December if the, if the labor data gets any squarely but squirrelier. But you know, health care highest close since October of 24. Financials hitting new highs today. Everything rally. Is that what we're on the cusp of here?
- [04:41]
D
I think we're really on a pause now. What's interesting is.
- [04:44]
B
Pause.
- [04:45]
D
Yeah, it wasn't a rally in terms of the upside. That's my view. I think volatility is still going to be the watchword. Going forward until we get through the Fed. So right now we've got two events, major events. We've got in video next week, a week from today, and then we've got the Fed decision due on December 10th. So typically, you know, the game's known that, you know, the pull forward of a January fact. We've seen year after year getting earlier and earlier. We're not seeing that this year. I think we will see it. But once we get through that again, those two dates, look, we're not seeing it this year.
- [05:19]
B
I mean, in one month, one month, the NASDAQ's up 5% S&P is up 4.3. The Russell 2000 is up two and a half and the Dow is up 6% in a month.
- [05:33]
C
True.
- [05:33]
D
But it's a continuation of what we've seen throughout the year. Year has been a pretty good year. We don't see every 5% month. But we came off, don't forget a few rotten weeks. Very rotten. And particularly in technology. So look, health care, there's a rotation into it. I get it. But I think that depending where you are in health care, it's a landmine. So I don't know who owns.
- [05:56]
B
Well, that's because. That's because you're walking in the field of unh, which is. Which has been a landmine. That's the bulk of your exposure. Maybe it's the only exposure you have. People are making money. People are making money six ways to Sunday.
- [06:10]
D
I made a lot of money in unh. I sold it. I didn't sell at the top anywhere near it, but I bought it pretty damn close to the bottom and it's done amazingly well since then. But what's happening in health care is the government's going to cut back on their spending. We know that. Right. And we know that insurance companies now are looking to increase their margins. And what do they do in that?
- [06:31]
E
Right.
- [06:31]
D
They cut back on benefits, everything else.
- [06:33]
B
But you're focused on the largest of the health care. I mean the biotech. Focus on the biotechs have been ripping. Lower rates are a boon for that carry. You know this story. Well, we don't have to have a whole health care conversation, but the point is that this is what the bulls would, would have wanted. If you're going to have a little bit of a sleep for a couple of days in tech, could something else pick up the slack? The Dow over the last couple of days and if we close over 48,000 today would suggest you're darn right we can.
- [07:03]
F
Well, Health care is a place to put money for sure because it's underperformed for years, not multiple years in a row. If you put up just a chart of Amgen because it's one of the names that you guys mentioned as hitting a new high, right? Okay, so this is a stock that is so underperformed and it's had this big rally. But you know, look at the chart for the year. I mean it's not nothing like the way the S and P looked. So to make a new high, to make a 12 month high doesn't take a whole lot. And there are many health care stocks just like it who have suffered all year, had a good quarter, is showing growth and if we listen to what's gone on in the last couple of weeks, talking about who can make a deal, Novo made a deal, Lilly made a deal, that deal brings the price down. But the margin on these drugs is so high that they still come out winners. And winning in this environment is what the market's about. The tech and the comm serve companies have been the winners, the sole winners. Now you can add other companies such as these, maybe financials will be winners too because they figure out we said.
- [08:07]
B
How to work this, they're up 1%, financials are today, health care is up 1 1/4%. As, as a group, do we collectively think that we're set up for a nice run into the end of the year and that this would be, I'm trying to think of what would be a sign for the market than what's happening over the last couple of days.
- [08:24]
A
This is the chase for performance. This is exactly what it looks like. This is what we've been speaking towards. Last week we talked about not going short the market because we thought the government shutdown was going to end early this week and thereafter you'd get a rally and you get the recognition that opportunity exists in other areas of the market. That's exactly what has unfolded. So why should it discontinue? It will continue into the end of the year. Once the calendar flips, you turn the page, it's a clean slate. You take it from there and just be clear.
- [08:53]
D
For the rally, it's the timing of the rally, number one. Number two, I'm not anti all health care. There are certain areas of health care where I'm definitively negative on.
- [09:02]
B
I mean, but this market is answering a question that was going to be asked of it. If tech doesn't go up every single day, can the market go up without it? Can the market have A rally into year end. If tech, let's say, doesn't outperform between.
- [09:17]
F
Now and the end, if it doesn't have a good quarter, then the market wouldn't be able to really move. But we know that they're going to have a good quarter and they've signaled that.
- [09:25]
B
Right.
- [09:26]
F
So they told us they telegraphed by.
- [09:28]
B
The spending of others. Normally you have to wait to hear from the company itself. Now all you got to do is listen to everybody else, right? Yeah.
- [09:34]
E
Right.
- [09:34]
D
So that helps AMD today, you listen to them. Their enormous growth that they're projecting comes at what comes at the expense. It's no accident that Matter traded down this morning based upon amd, because one person's, you know, good news is another's bad, allegedly. But I think these are great opportunities to buy those hyperscalers.
- [09:55]
A
I think lastly, what we're benefiting from here in particular for a portfolio manager is that quality quote, unquote. That's always where you want to be, right? Well, quality didn't work going into the third quarter for 2025 was dramatically underperformed, performing well. That works to your favor. Now if you're going to see this rotation away from technology, you have somewhere to go. And from a valuation perspective, except for energy, it looks really attractive.
- [10:19]
B
Well, you said amd. I mean, we made it our chart of the day for obvious reasons. If you take a look at the stock coming off of the first investor day that they've had in some three years, Lisa Su, the CEO says the data center market will be worth $1 trillion by 2030. Stocks up near 9%. I thought Melius had an interesting note today. I'll quote from it. Interestingly, AMD was the first to issue what seemed at the time to be a cartoonish 2027 TAM for AI semis networking. We know now that it was too low as AMD seems to be conservative even now in forecasting a $1 trillion plus TAM for, as I said, 2030. Joe, you own the stock.
- [11:01]
A
We do. And this is interesting and this is going to sound somewhat controversial. Controversial, but from a momentum perspective, this is a new addition. And AMD kind of sat out on the sidelines chat. CPT entered the conversation in 2023 in video along with its other AI friends began to rally.
- [11:22]
B
AMD was your right left out. AMD was completely the technology.
- [11:26]
A
Hold on, but let me statistically give you this. This is remarkable. From March of, of 24 to April of 25, AMD fell 67%. So now we're getting the realization that, yes, AMD is going to participate and you actually have a building of positions. Once again, you look at the valuation, you say, wait, you're probably crazy to say that, right? But no, this is actually a new entry into the momentum category and therefore I think it has room to go further.
- [11:58]
B
You, you had already owned Nvidia in your charitable trust, right. And now you've added it in your broader portfolio. Exactly. Why was now the time to do that? We had a conversation yesterday which was if you don't own these names now, don't buy them here. But you did. Why?
- [12:18]
F
Okay, well, I wasn't in the conversation yesterday.
- [12:21]
B
I'm just. Which is why I'm telling you. I was just telling you what the outcome. That was the outcome of the conversation. Thank. All right, so. So why do you say to heck with that?
- [12:30]
F
Well, the stock is down, right? Nvidia was down from recent peak to 1217%, and we've been waiting to buy it. At the time when we bought Broadcom, it was trading at 25 times next year's earnings. And then Nvidia was at 31 times. And we saw more potential to the Broadcom story, moving into a broader range of chips at high level abilities. But now you've got Nvidia, which is selling at 36 times and. Sorry, 31 times. And Broadcom selling it 36 times. It's, it's moved 160% Broadcom and Nvidia has gone up 60%. Decent move, of course, but it's more attractive and we wanted exposure to it. We didn't have any. And for the Aureus accounts broadly. And so we thought this is the time to make that investment when the stock has given us the opportunity to buy it at a more attractive price.
- [13:30]
B
I'm going to come back to you in two seconds because there's a related move that I want to get to, but there's a lot of Fed speak today, including from Raphael Bostic, and we've actually gotten them earlier than we anticipated. Steve Liesman, correct?
- [13:43]
A
Yeah.
- [13:44]
E
Raphael Bostick, the Atlanta Fed president who announced this morning he's retiring in February but making a speech on monetary policy, says he favors keeping rates steady until inflation is convincingly moving towards the 2% target. He says the clear and urgent risk is still price stability, admits it's a close call, but he's weighed all of the evidence out there, noting that inflation has exceeded the Fed's target for what will be nearly five years and doesn't really seeing it moving until sometime next year. And his Concern is that the public will doubt the Fed's commitment to the 2% target. Bostick's not a voter this year, not a voter next year, he'll be leaving. But I think what he's doing here is really laying out the position of those hawks on the committee, pointing out that core service inflation remains above the pre pandemic level and is the main contributor to inflation right now. In other words, he's really dismissing this argument that it's all tariffs and we shouldn't worry about it. He says there's little to suggest that price pressure will ease before mid or even late 2026 at the earliest. The Fed cannot assume that inflationary pressures will quickly dissipate as some on the committee have suggested, and then on the job market a little more inflationary. Says the evidence from the surveys that he's reading suggest continued upward pressure on prices. So he's looking at several surveys of businesses saying they're going to continue raising rates. Rate cuts, he's concerned, could heighten the risk to inflation and would fuel it also vice versa. And the indicators show a shifting rather than a weakening of the labor market. Talks about reduced immigration, aging population technology and low population growth. SCOTT I'll leave it there something to consider as part of your conversation there, but there is one very committed Fed official who does not support raising, sorry, cutting interest rates at the December meeting.
- [15:35]
B
But let me, let me ask you just quickly before I let you go because you said he's a non voter. So how much weight does a non voters view have in the room? Is it how relevant is it?
- [15:50]
E
Well look, if it's a really close call, then Powell would focus on corralling the votes towards the place where he thinks it ought to go. But you know, Bostic is a not an ideologue in terms of, you know, him being a dove or a hog or committed dove or hawk and everybody gets to talk and everybody shares opinions and I think what we should do is take this as a meaningful contribution to the understanding of a why Powell pushed back so heavily at the last meeting and be a pretty good insight and window and very, very methodical with charts and graphs if you want to check out the speech. A very methodical laying out of the position of those who think the Fed should hold rates in December.
- [16:36]
B
Good stuff, Steve. Thanks as always. Steve Liesman the latest comments from the Atlanta Fed president RAFAEL Boston Market not doing a whole heck of a lot, but it sure sounds like if he was a voter in December it would be a no in terms of a Cut back to the conversation at hand again. So buying in video in your Aria's portfolio and trimming Broadcom.
- [16:59]
F
Yeah, that's why it's, I would say, portfolio management. What we were supposed to do is buy low, sell high. And we bought a Vago Broadcom in June of 2024. The stock is up 160% since we bought it. So it's long term. It's become a big position. We've added to it some along the way, but we have big gains. We didn't own in video. We are holding our chip position. We're increasing it overall, but it makes sense to have both. We think that there's more opportunities in video with GPUs than Broadcom. It's got a broader base. Broadcom mostly serves the hyperscale scaler and Nvidia serves everyone.
- [17:44]
B
Okay, Joe, so I know you own Broadcom. Cowan is out with an earnings preview for both. Broadcom's target is $405. So a nice upside. From here, they maintain a buy ahead of earnings, which are on December 11th. We're a week out from Nvidia maintained buy over there at 235 bucks.
- [18:02]
A
Okay, so I would imagine that price target is 12 months out. And I would say 12 months from now, I could reasonably see Broadcom being at that level. I think 12 months out, Carrie is going to be totally fine in her Nvidia buy. All I could see is what's in front of me right now as it relates specifically to Broadcom in video, Microsoft, Metta and Tesla. And in each one of these stocks, I'm looking at momentum. That's my strategy. And over the last month, you have seen a breakdown in their momentum score. Their momentum score is lower than it is for a name like Apple or Alphabet or Amazon. And that's why for me, as I said to you yesterday, I would just sit and observe right now. If you're long, fine. Stay long. You're going to be fine in 12 months. If you want to buy these names, I would just wait a little bit further, let the market prove itself. And I'd rather see the reversal. I'd rather buy Nvidia at a new alternative time high above whatever it is, 208 to, oh, nine. Then actually buy it here as I see momentum weakening and price concurrently.
- [19:08]
B
Buy high and sell higher investor.
- [19:11]
A
Absolutely. That's the strategy process I live by.
- [19:15]
B
Wrote the book on it. Hyperscaler, debt, it remains a big story. What can I tell you? I mean, there are more people who are putting out notes about it today and making comments on social media. I'm going to go through a couple because we always cite Michael Hartnett of Bank of America when he puts out notes related to the market. He says that being short hyperscaler bonds is a top trade for 2026 as their spreads have widened while cash flow has become insufficient to finance the AI buildout. He looks at the flow show note from Friday to make that assessment. Does Michael Hartnett how about this? This is more from from that In September and October alone, debt issuance from three firms was larger than the preceding three years combined for big tech issuance. And here we go with Michael Burry again who posts once again on social media. Me then, Me now. We have this. I think we do. There it is. Me then, Me now. Oh well it worked out. It will work out that of course Christian Bale playing Michael Burry in the big short. He was right then. Will he be right now? Who knows. Jim Chanos joined the party. He wants a little action too because he posts on social media talking about coreweave specifically and again this idea of depreciation, whether it is being accurately assessed. So Chanos is in the mix. Burry is in the mix. There's a lot of concern about what's been happening with Oracle. Credit default swaps spiking there. Meta CDS just came to market and Seema Modi is following all of that because we want to know more. Seema.
- [21:07]
C
It's got all of this focus on artificial intelligence depth that is being used to build out the infrastructure. Investors are starting to buy some protection or hedge their bets. Here's Oracle's five year credit default swap now at a two year high. Volumes also notably rising in the past week. Barclays analyst Andrew Keaches in a note to clients writes oracle's negative free cash flow and aggressive capex explains what we're seeing here. He also calls out Metta and its recent dip into the debt market to find fund its data center expansion, though notes that its use of off balance debt facilities is unique and worth noting. Of the major hyperscalers, Amazon and Microsoft have not taken out any new debt and analysts say they carry a much stronger free cash flow outlook and therefore have less pressure to do so. And that's really showing up in the credit rating. Scott of all the companies they're all investment grade. Oracle notably at Triple B.
- [22:01]
B
So one to watch and want to discuss. Seema, thank you very much. That's Seema Modi. You have a take?
- [22:08]
A
I do.
- [22:08]
B
I want a take from everybody on.
- [22:09]
A
This this is the battleground stock Oracle. Oracle, absolutely. As it relates to AI and the conversation that we've been having on the network for the last several years where we have confidently stated it is different than 99 and I believe it is different than 99. But the reason that we've cited the justification was because the innovation fund funding was coming from cash from operations, not from debt like it was in 99. The market is sensitive to any form of debt funding the innovation and that is the problem that we see with Oracle. The parabolic high at 345 on September 10, the day after that announcement is completely washed away. The stock is actually now lower than the day of that announcement. That's right, September 9th it was 250. It's now 2, 228. So the market is saying we don't want that kind of behavior. And Oracle in maybe in this name.
- [23:01]
B
Well, in this name.
- [23:02]
A
Well why is justified in this name? Because the debt to equity ratio on this company is nearly 550%. That's not something you should be comfortable with.
- [23:11]
B
You made the argument yesterday with labenthal that farmer Jim that this was much ado about nothing. All this borrowing and debt issuance from the hyperscalers to fund the build out.
- [23:21]
D
In some issues the hyperscale is thinking of matter in particular I don't think it is anything get worked up about. They've got the cash flow, they can turn it on or off with core weave. It's a name I never liked. I was surprised at the move it had host the IPO given their concentration of one client and it really is a dead end.
- [23:39]
B
Hot. It's a hot market. Neo cloud is like a hot thing, right?
- [23:43]
D
So now you're taking the excess out and now you're going under the hood to see what are those deals they've made with OpenAI or whoever. What are the real finances that are underpinning that the financial plan. And by the way they don't pass a smell test. So that's true of Oracle. So you can rifle shot shorts but I think that if you're going after Metta and I don't know who is, I think, I think you're crazy because there's no there there, there's no trigger you can identify. It's going to say wow, they've defaulted on a payment. Now keep in mind also it's been pretty slow in the high yield market, the credit market for all these funds over the last few years. So they're glomming on to some but.
- [24:23]
B
We'Re going to work it out.
- [24:24]
D
Helps.
- [24:24]
B
This is not a today problem.
- [24:26]
D
No, it's not.
- [24:27]
E
Right, it's not.
- [24:28]
B
But at some point down the road you may look back and say I should have paid more attention to Burry, you know, Burry's Storm on certain names.
- [24:38]
D
Correct. But what I'm saying is not the ones I own and that's not coincident.
- [24:43]
C
Okay, so I'm going to speak with a broad brush, right? To just the AI trade in general, tech companies in general. The entire premise of this run up and the defense that has been made for a lot of these companies and all the spending that they're doing is that they had these enormous cash positions. They have now drained a lot of those cash positions. And again I'm speaking with a broad brush. I, I know that there are idiosyncrasies.
- [25:06]
B
Well, they haven't really drained them.
- [25:09]
C
They've come down because they've spent.
- [25:12]
B
Hyperscalers are still sitting on mountains of money. They spend it all the way down.
- [25:17]
C
Agreed.
- [25:17]
B
All the hyperscalers sitting on it.
- [25:19]
C
Yes. But then why do they need debt if they're sitting on the cash?
- [25:23]
F
It's cheap enough for them.
- [25:24]
C
Okay, so moving forward, if there is, this is not even necessarily just a warning sign that there's more debt. If we start having more debt in the system in these stocks, in these particular names that the entire economy is looking at, that the entire stock market is looking at, then we have to pay more attention going forward. Scott, to your point, this isn't a today problem going forward on credit spreads, on cdx, on everything that the debt market will tell us about when and where the stress may begin.
- [25:51]
B
Well, spreads have widened by like 80 basis points.
- [25:53]
C
But because of the regional bank stress, not because of this.
- [25:56]
B
No, no, no spread. The hyperscaler, hyperscaler spreads have widened by about 80 basis points. If you look at the chart, it tells a story. I mean yes, they're, they're issuing a lot of debt, but they also have the best balance sheets around. They're the most resilient companies around. Which is why people look at even the widening, which is small relative to historical standards and say it's not the big deal that people would like to, would like to make it out to be.
- [26:25]
D
Let's put in.
- [26:27]
F
We on Oracle, we bought it before September 9, had the big run up, now it's down 31%. To say that it's the poster child for this question about when is too much debt going to really hit the stocks hard. It's Hit this stock because Oracle was new to the party, right?
- [26:46]
B
New.
- [26:46]
F
As a member of this elite group, they have a huge backlog in sales and if that comes through to them, they're going to be just fine. The big issue in our opinion is whether the economy is holding up enough so that there's business for everybody to go around. If the employment numbers continue to weaken and we don't know what to believe or not to believe about the labor market because we don't have any numbers, we're going to start to get those numbers again. And that to me is the issue with whether the debt on these companies is totally fine or whether we have a problem.
- [27:20]
A
I'm not saying they're not there. I'm not saying they're not going to be fine. What I'm saying is if, first of all, if you're a CFO right now from a hyperscaler, I don't think you're using debt. I think you're using the cash because you learned your lesson with Oracle. What I'm saying is it blunts the sentiment and confidence surrounding the story that's been told for the better part of the last two years that you don't have to about worry, worry about this. This is the hyperscalers are innovation.
- [27:43]
B
What do you mean? It's not designed Oracle, you know, it's.
- [27:45]
A
Not to the degree that Oracle.
- [27:47]
B
No, no, no. But I mean, we're still talking about tens of billions of dollars worth of, worth of, of paper. We are.
- [27:53]
A
Oracle was by far the leading issuer in terms of overall supply.
- [27:59]
B
Yeah, but you're saying, well, CFOs of hyperscalers are using the cash. I mean, they're, they're raising debt.
- [28:04]
A
I think.
- [28:06]
B
Give me a chance.
- [28:06]
A
I would think from, from after seeing the effect on Oracle moving forward, I think you'd be hesitant as a CFO to continue.
- [28:13]
D
I think you'd be irresponsible CFO not to take out debt if you're a matter because your cost of that is fine. Your cost of debt is around 2%. Their bonds go up to 5% or so and versus the cost of equity to use, it's much higher. So you're supposed to take out debt when you're CFO used company.
- [28:33]
B
All right, coming up, we do our call. The day a top firm says buy the pullback in this struggling stock, we'll tell you which one. Joe and Weiss, they know which one. We'll debate it next.
- [28:46]
A
Hey there, it's Dr. Sanjay Gupta with some exciting news to share. CNN is now streaming. That means you can read, watch and stream everything in one subscription. You can watch News Live 24.
- [28:59]
E
7.
- [28:59]
A
You can also explore catch up videos and explainer videos. And you can also watch the library of CNN's originals, including my latest documentary, it doesn't have to hurt. Just go to CNN.com AllAccess For 140.
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G
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- [29:35]
D
In just 30 seconds, there are likely to be an average of over 30,000 cyber threats to all businesses. Since I've been talking, more than 10,000 likely just happened. Hey, cyber threats don't wait and neither should you. With advanced security solutions, Comcast Business can help keep your network and data secure and your business reliably up and running. Get threat ready with Comcast Business. Learn how@comcastbusiness.com cybersecurity.
- [30:05]
B
Let'S talk about Netflix. It's our call. The day today the stock has not traded well since earnings. The chart you're looking at there reflects that accurately. It's down 8% since reporting on October 21st. The stock's down six and a half percent in a month, down 7% in 23 months. Moffitt Nathanson today says enough looks just right for the next leg of growth. They talked about the bearish narratives that have emerged. Among them engagement growth slowing, more exposure to third party pressures, and a couple other things. Are they right, Joe, as this pullback look, quote, just right for the next leg of growth.
- [30:45]
A
So as I'm speaking, if we could show an actual 6 month chart, what you'll see is the stock has done nothing. It's up 3.3percent since June 30th. That was your actual peak. So it's been a very challenging environment for the last five months. I think most of us know the fundamental catalyst behind why you want to own Netflix, why Steve and I have been longtime owners of it. But for those who don't share that, I think it's going through a period. I think it's going through a period right now more than anything else where it's consolidating the gains and it's marking time and it's looking ultimately for what that next catalyst could be. So the catalysts have ranged from balance sheet improvement, free cash flow generation, the content creation, moving more towards live sports, the return of programing that people have been excited about in the past and Then obviously the ad tier pricing from years prior, those have been all the catalysts. Now the question, question becomes okay, while you sit and wait, what the next catalyst is ultimately going to be. And candidly, I'm not sure I'm willing to wait and I will wait. It's the stock is moving sideways. It hasn't broken down a challenge. A 200 day moving average, it failed to break down below there. So I think it's a classic consolidation.
- [31:58]
D
Right. What I'm surprised you mentioned giving you your technical underpinnings is day moving average. It retook the 200 day.
- [32:05]
C
That's right.
- [32:06]
D
So that's now support again. But here's what I'd say. The company since it's come public has gone through these periods of consolidation. What's hitting it now is the thought that Paramount's going to acquire Warner, they'll be a much more formidable competitor. But what I'd say is that Amazon, that Netflix, in addition to the levers you mentioned, always has a lever of price. I still think they're grossly underpriced price relative to what the market will bear and that they could raise at any point in time. But in the interim, look, this is just normal trading on a long term basis for Netflix. It's a permanent compounder. And I would argue they also got the succession planning out of the way now with the co presidents or co CEOs. So, so I continue to like it.
- [32:51]
B
Okay, let's get the headlines now with Christina Parts and novelist. Hi Christina.
- [32:55]
C
Hi Scott. Well, we have a bipartisan effort to compel the release of the Epstein files which could come up to the floor for a vote soon. Representatives Thomas Massive and Ro Khanna are on the cusp of enough signatures to bypass GOP leaders and bring the discharge petition to the House. Representative Adelita Grijalvu, a Democrat from Arizona, has pledged to be the deciding signature on the petition when she is sworn into office. Later today, President Trump officially requested a pardon for Israeli Prime Minister Benjamin Netanyahu. The Israeli President's office says the request calls Netanyahu's long running corruption trial, quote, unjustified prosecution. Netanyahu denies the charges and has pleaded not guilty. And Google is suing a China based cybercrime group allegedly behind the spammy text posing as Easy Pass. And the Postal Service, the tech giant claims the group Lighthouse makes a Phishing for Dummies kit to allow criminals to send fake messages with malicious links that can steal personal information. The lawsuit seeks to disband or disband I should say the group.
- [34:02]
B
SCOTT Christina, thank you. See you later. Christina parzonopoulos, Coming up next, a new kind of proxy fight brewing. The Trump administration reportedly exploring big changes that could upend shareholder voting. Leslie Picker with the details. She joins us next.
- [34:21]
C
Hey friends, this is Audie Cornish, host of CNN this Morning. And the assignment. And guess what, every story you care about, every angle you want unpacked is now streaming on cnn. That means you can catch my show or other CNN programming whenever you want on your favorite device. And a subscription also gets you access to exclusive video series and unlike articles, so subscribe to CNN@CNN.com subscription.
- [34:51]
F
Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella. Edu.
- [35:23]
B
Welcome back. The Trump administration reportedly exploring big changes to shareholder voting. Leslie Picker following this for us today. Hi, Les.
- [35:30]
G
Hey, Scott. Yeah, these reforms reportedly target so called proxy advisory firms, think institutional shareholder services and Glass Lewis. These are firms that research and advise shareholders on corporate governance matters such as director nominations and executive compensation. Citing people familiar with the matter, the Wall Street Journal reporting that these reforms, reforms could include banning shareholder recommendations or blocking recommendations on companies that paid proxy advisory firms for consulting work. CNBC's Eamonn Javors reached out to the White House on this and was told by a source on background that until officially announced by the White House, discussion about potential executive orders is speculation. JP Morgan's Jamie Dimon has long been critical of these firms, saying in March that they are, quote, incompetent and they should be gone and dead. Done with. Elon Musk has called them, quote, corporate terrorists. And in response to a request for comment, Glass Lewis said, quote, while we respect the administration's authority to issue executive orders, Glass Lewis believes this is more effectively handled through constructive engagement of a regulatory process. The firm added that it does believe corporate consulting on proxy voting related issues creates conflicts of interest and undermines trust in the proxy process. ISS said it's quote, committed to fulfilling its fiduciary duties to clients and operating in a transparent and ethical manner.
- [36:51]
B
Scott, you know, I heard you say earlier to a question of whether these, these proxy services make a difference. Evidence for Shareholders. You said the empirical evidence is mixed. Some would suggest it does, some would suggest it doesn't.
- [37:05]
G
Exactly. So there are studies that support the case that these are better for shareholder value. There are studies on the other side that say they actually detract from shareholder value. Now, in defense of these firms, you have pension funds and other smaller investors on the record basically saying, look, we hold a lot of positions. It's more efficient and cost effective for us to be able to rely on the research of these firms while making our voting decisions and undergoing our fiduciary duties. On the other hand, corporate America will say that a lot of the research is riddled with errors. They have no mechanism to correct those errors. There's conflicts of interest. And so there are various arguments on both side of the aisle here. And as it pertains to actual shareholder value, the empirical research that's out there is perhaps pretty mixed.
- [37:51]
B
Yeah, Les, thank you. Leslie Picker, Weiss, what do you think here?
- [37:55]
D
I don't know why they exist. They exist for insurance policies for mutual funds and other large institutional investors. So they make a decision they've got to cover. Oh, ISIS recommended it. I've come across them. I've actually litigated companies that are going through mergers or large corporate actions, where one example was the company had no process commerce. The buyer of the company literally picked the banker for the company that they were, that they were acquiring and they sold it for 3.7 billion less than it was worth. ISIS said, this is a great deal for shareholders. So you do have the conflicts, which I believe are real. I don't think the quality of the work is they're not going to be analysts at hedge funds or other private.
- [38:38]
B
Some don't listen anyway. I mean, look at the most recent Tesla vote on Musk's pay package, right? The proxy services came out and said, no, don't. Don't vote yes on this. And Schwab did their own thing. They voted yes.
- [38:50]
D
Agreed.
- [38:51]
B
They're a large institutional holder based on their retail base that they have, which owns a lot of stock.
- [38:56]
D
Right. And think of what they're doing. Think of what mutual funds are doing when they subscribe to iss. They're outsourcing what they should be doing in terms of knowing the fundamentals and recommending the vote. So they really shouldn't exist.
- [39:10]
B
All right, so we're gonna take a break. We'll come back. Farmer Jim is on hold, quite literally actually on holding for a long time. I didn't even mean to do that. Look at what happened. He'll join us next. All right, take a look at on holdings. These shares are surging today near 20% which I said get me Jim Laventhal. And the team obliged. He's been on hold waiting for this segment to come about. And he joins us now all giddy off his tractor. He put his sneakers back on. Jimmy, what do you make of this because the stock was down a bunch prior to earnings year to date.
- [39:49]
H
Well, my, my favorite shoes are really my on hiking boots. I mean they're beautiful, too beautiful to wear on the tractor. But look, here's the thing. The stock should be up. The growth rate of this company is just stellar $34% top line growth this year over last, looking at mid 20s next year. And next year the earnings per share look like they're going to literally double. So at 27 times next year's earnings, I think it's priced to go higher. Let me point out though that when you get a Stock that's up 20% on a day like today and you see that the first 30 minutes you had three times the average daily trading volume, there's clearly some short covering going on. So the stock should go higher. But just bear in mind that today is at least some short covering going on still and all.
- [40:35]
E
Yep.
- [40:36]
H
Go ahead, Scott.
- [40:36]
B
Well, hang on, hang on, hang on, hang on. Take a breath, take a breath. We're looking at a two day, let's do a year to date now, guys, if we could. Why was this stock, I mean if you're so bullish on it and the stock, the market's reacting the way it is now to it, why was the stock down 36% on the year coming into this print like you can see it from let's call it May, late, late spring, into the summer. What's with that slide that we're looking at on this on the screen?
- [41:05]
H
Two things. One, it simply got too expensive. And you may recall I was in this previously, but I sold it back in February. The Forward multiple was 66. Zero. That was simply too expensive. You combine that with concerns which have been brewed over the last month, few months about the health of the consumer, particularly with the shutdown. And there were concerns that maybe people are not going to be opening up boxes of on running shoes on, on the holidays. Well, the commentary from the CEO and the rest of management is clearly that there is a lot of momentum to their sales. And what I take away from that is that this holiday season is likely to be another case of the haves and the have nots. I don't think this is a time to go out and buy all of retail. But if you're selecting which retail stocks to buy, this is clearly one of them. This is clearly one of them with what management is saying about the demand they're seeing.
- [41:58]
A
Hey, Jimmy, be a little bit more specific when you say haves and have nots, because my understanding of this company is they're selling really expensive products. And to me, that means they are not selling to the have nots, they're selling to the haves.
- [42:11]
H
Well, thanks, Joe. When I said the haves and the have nots, I really, I really meant the companies as opposed to the consumers. And yes, you are correct that a typical on pair of running shoes costs about 150 bucks. Now, in the grand scheme of things, that apparently is where consumers are willing to splurge. According to what the management comments are today, they're seeing tremendous Demand in this fourth quarter. So $150 may be expensive for a pair of running shoes, but they're not expensive in the overall consuming power of the general consumer. And frankly, these are really good running shoes. I mean, I don't know if you guys are runners. These are really good running shoes. The hiking boots are awesome.
- [42:52]
B
We didn't realize you were either.
- [42:54]
D
Yeah, that charter's uglier than a pair.
- [42:57]
B
Lieutenant Lebenthal, we gotta go. We didn't get a chance to salute you for Veterans Day because you weren't with us yesterday. But I don't want to get out of here without doing that. So thank you for everything you've done for this country, Jimmy.
- [43:08]
H
You're always marvelous, judge. And I just have to say it was a privilege and an honor. Thank you.
- [43:13]
B
All right. Of course. It's our naval officer Jim. All right, up next, Mike Santoli. He joins us with his midday work. Michael Santoli, our senior markets commentator, joining us right now for his midday word on the markets. What do you think here?
- [43:31]
A
I mean, I'll continue to give credit to the market for its ability to rotate away from this downside reset. We're getting in a lot of the names, obviously a rush of money into things like health care. It's looking a little bit grabby. There's a desperation to grab the laggards. So it's all to the good. And we're holding the s and P500 around these levels, 6850 where we first got to a couple of weeks ago. So I guess there has been a sort of an underneath consolidation going on right here. I'll just throw out the reminder though, a broader market is not always a safer or more stable market. You are relying on on groups that maybe are a little bit more finicky. And so, you know, I think it's fine for now. Let's see how it, how it develops from here. Brokers flying is usually a good news.
- [44:15]
B
48K on the Dow is a nice signal that yeah, we can do this without AI if we if we have.
- [44:19]
A
To for a little Goldman Sachs, by far the biggest weight in the Dow is accounting for almost half to these games.
- [44:25]
B
Yeah, good point. I'll see you in a little bit on closing bell. Michael. Thank you. Mike Santoli. We'll do finals after this.
- [44:40]
A
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the halftime podcast now.
- [44:53]
B
3:00 clock Eastern, we're going to see if we close on the Dow above 48,000 for the very first time. Brian Belsky, Cameron Dawson, low Tony among the gang joining me in just a couple hours and I hope you will be there as well. Final trade Stephen Weiss, Taiwan semi Taiwan.
- [45:09]
D
Semi should be higher today based upon.
- [45:12]
B
Will it hire amd.
- [45:14]
D
I'm trying my best. It is. Well, come on. That's not higher. I'm talking up 20%.
- [45:19]
B
20%.
- [45:20]
D
I'm only saying. But it will trade higher into the Nvidia call and if it's going lower.
- [45:26]
B
As you're talking it was.
- [45:31]
D
You make a good point.
- [45:32]
F
But yes, Health equity HQ Y it's the largest health savings plan company.
- [45:38]
B
All right.
- [45:39]
C
Liz Thomas, Biotech I think it's a good corner of health care. I know it's seen a good run but I think there's more to come next year.
- [45:45]
B
You made a good call here. Better to be early than never, Joe.
- [45:51]
C
That's true.
- [45:52]
A
I personally long CBOE staying with the trade by high sell higher new all time high keeps going up a new all time high.
- [46:00]
B
If it goes up while we're talking about all right. I will see you on the closing bell at 3 o'.
- [46:03]
A
Clock.
- [46:03]
B
We'll track the final trade. See if we get that 48k on the Dow the exchange. You've been listening to CNBC's halftime report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [46:20]
G
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- [46:22]
F
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- [46:24]
G
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F
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C
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F
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G
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F
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G
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F
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C
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G
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C
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G
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- [47:00]
F
Time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals, like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.