D (3:41)

Well, anytime you have an asset like that, which is three or four times the average standard deviation of its performance, typically historically you're going to have some sort of a pullback, number one. Number two, I think what January showed two things that we are definitely seeing a broadening out with small caps that did what they did and value disciplines that did what they did and technology underperforming. But I think more importantly it dovetails to the overall theme we think for 2026, Scott, is that we're transitioning from a momentum multiple expansion market to more of an earnings driven market which historically, if you go back over the 70 or 80 years, it's typically half the return relative to a momentum driven market slash. Multiple driven market doesn't mean that we're not going to be positive. We're still going to be positive, but not as positive as we've seen Steph.

B (4:32)

Okay, so we got, we got this new month now. Bitcoin is obviously making some people a little nervous about certain aspects of the market. You see it is rising now, but it was below 75 overnight. Certain things within that complex have not traded well. Coinbase down nine straight days. That's, that's you. Right, right. You own that longest week since 24. Robinhood, last I checked was down sharply today as well. Anything too close to the sun?

A (4:58)

Yeah.

B (4:58)

In crypto is obviously getting hit pretty well. This doesn't even take into consideration that we start a week that's pretty critical with some mega caps coming. But before we even get there, how do you, how do you see this?

A (5:09)

I mean like the precious metals and the memory market, DRAM pricing and crypto, they all trade kind of the same. It's risk on. And last week it certainly wasn't risk on. So I think the volume volatility in those particular segments of the market are going to continue. There's no question about it. But the Vix is only 16. Like it's not terrible. So I don't worry about the overall market, especially because earnings are coming in better than expected. Earnings are running up 15%, Scott. Revenues are up 7 point. And so here's another interesting thing to me. The data, the economic data. Chicago PMI on Friday at 54. The expectations were 43. Today we got two manufacturing series, ISM and PMI, both also in the 50s. And that's really good news. And so that's a big part of it is driving a lot of it. And then the Chase Card spending data that comes out every month is running up 5% so far in Jack. Well, we get backward looking. January 5% versus 2.8% in December. So all of this is the reason why the economy is growing above trend, but it's also helping the earnings picture. And I think that's really, at the end of the day, what we care about. Yeah, I don't like to see Coinbase down a million months in a row. It's a very volatile series. But I do want to have participation, a very small participation participation in crypto currencies because I do think a whole new different generation is buying crypto a lot younger than me. And I think that they would rather own crypto, by the way, than stocks, which is not appropriate in my opinion. But the point being is it is for real. I don't know the price of bitcoin, I don't know the price of crypto, but I like the exchanges because all I need is a buyer and a seller.

B (6:46)

There's just a lot of things competing for maybe the same dollars I think is one of the stories around all of these different assets, you know, not to mention in the private markets where you have more access to prediction markets which are taking up some oxygen as well. And I don't think Anastasia, anybody doubts the near term earnings story, the near term economic story, and even those who are super bullish, generally speaking, like a Tom Lee says middle year could get a little squirrely. You could have stocks roll into a bear market before you have a nice pickup and be much higher into the year end. But it's not going to be linear. There are just too many variables at play. Not to mention that you're going to have, if he's confirmed Wash as the new Fed chair, who knows what the trajectory of all of that is going to end up being.

A (7:35)

Well, that's true. And maybe to come back to the volatility point, you know, we are during Trump administration 2.0, so we know historically volatility has been higher during the first administration. So I think there are a lot of factors battling it out. I think, Scott, one of the reasons why maybe people make the case for this being a more volatile year is because it's the midterm elections. And stocks typically have not performed a midterm elections here. But we have to have some context here. We have to be discerning because if you had a midterm elections year in which the Fed was either staying pat or easing policy, you actually did have an average of 5 or 6% performance versus negative if the Fed was actually hiking rates. So I think we have the Fed on our side, which is positive. And then I do want to circle back to kind of the extent extension of Stephanie's point, which is the earnings season. To me, one of the biggest stories for this year is that not only will earnings go up, but the margins are getting better and better. I think that is proof in the pudding that AI is being adopted and it is driving margins for corporate America. 13.2% is expected to accelerate to 13.9% or 13.6% by the end of the year. So that's a big deal. And then of course, the economy, you know, it's just Stephanie's point. It is accelerating, I would say, and I would add the labor market to it. I think the labor market may stabilize and we see that on Friday. And productivity, productivity has picked up a lot, a lot. 2.3% average since the launch of Chad GPT, which is 2x.

C (9:00)

Let me just, let me just offer how I think my feeling on elevated volatility does not mean the market goes lower. It means you need position size accordingly. What has gone on in gold and silver is more about engagement and traditionalizing an asset class that previously was not traded by the retail community. Over the last several years, we've done that with cryptocurrency, we've done that with private credit. Commodity futures are the last asset class that is becoming traditionalized by retail. Back in 2020, during the pandemic, people weren't trading commodity futures they're trading it now. The engagement is the reason for the extreme volatility.

B (9:38)

They traded this for, okay, like a minute or two, you know what I'm saying? To suggest that all of a sudden there's some new. More retail engagement.

C (9:50)

Absolutely.

B (9:50)

This was meme ish. Was there more. Was there. Was there more engagement in AMC and GameStop? Yeah, of course there was. Traditionally we've seen. But you're acting as if that, that's some now new trend where, oh, hey, retail finally woke up and realized that silver can be traded. And now they're trading it, which. Which did what it did and that's just going to be a lasting thing.

C (10:11)

And I think that's questionable on, on their platform. I'm on interactive brokers trading silver futures, trading gold futures. You're looking and you're actually seeing what is they're delivering to you the largest moves intraday and what's popping up on a daily basis. SLV gld.

B (10:28)

Yeah.

C (10:28)

So you have people that are.

B (10:29)

You're making my. Chasing that move. They're chasing the momentum in it like they chase the meme stocks. You're telling me that this is some newfound asset that they're going to all of a sudden.

C (10:39)

They have not done. They have not done that in commodity futures up until the last six months. Silver and gold made the breakout and that's the reason why you're seeing the elevated volatility. And you have to learn what commodity futures are. Did we forget what happened in April of 2020 when crude oil went down 300%? They're trading an asset class that.

B (11:00)

For what that was. You know what that was like. What? This may be a moment in time. Did crude oil continue to trade as volatile since that day?

C (11:08)

No. No. But commodity futures are way more volatile than stocks are and they're being introduced to a new asset class. And all I'm saying is you have to understand that. And what the appeal is is the momentum.

B (11:21)

I think people do understand it, which is why, Steph, you looked at some of these moves, which were outrageous in many respects.

A (11:28)

Incredible.

B (11:29)

And it brought all of the meme ish type stuff back. Like, are we really talking about the fundamentals of silver here?

C (11:36)

No, no, but that validates my point. That's exactly what I'm saying. This has nothing to do with fundamentals.

A (11:42)

Let the speculators leave. They're not leaving, by the way. They left on Friday. That's for darn sure. Right? I mean, that's the long ways to go.

B (11:50)

You're saying they're Not, I say they're.

A (11:51)

Going to Totally silver up 250% in the past year. Not on fundamentals. And I'll give you that silver, half of it is industrial metal. Right. I get that. Copper, same drill. But these moves are outrageous and is absolutely speculation. I say let the speculators get out. They'll get hurt, they'll get burned. And then by the way, corporate America benefits because the pricing comes down, because input costs will come down. Not, we're not there yet, but that's what I'm watching.

C (12:19)

As long as you have a strong market, the engagement is not going away today. Natural gas is down 22%.

B (12:25)

Find its way somewhere else. This is the flavor of the moment.

C (12:28)

Okay, So I think there are some.

A (12:29)

Fundamentals to some of these trades, though I agree with Stephanie. Some of the moves as of late are completely, you know, not the right size. But at the same time, you do have equity investors that I think figured out that you can stay invested in equities and you can hedge volatility by going long gold. So that's one factor. And the retail exposure I think rose to about 3.2%. There's probably scope for it to rise to 5% of the portfolios. And then the other side of that is central banks and the central bank reserve managers cannot trust the US dollar. So they've been diversifying into gold.

B (13:01)

So you're talking about two different things too. Yes. Could you make a fundamental case around the move in gold? For certain. Can you make as easy a fundamental case around the moves in silver? Come on, get out of here.

D (13:13)

No way, B, no way, man. So I think I'm going to disagree with you on the head.

A (13:19)

Go ahead.

D (13:19)

So you're actually adding to your volume, volatility and risk by adding gold here. I think that's, that's the wrong time, dude. If you look back historically and anytime gold's been three standard deviations about long term average price performance, you look over the next year, it gets dramatically underperforms. That's number one. Number two, let's call it what it is, man. From mid-2022 till Liberation Day, we had a very steady uptrend in gold. Then it started spiking as you hear more about the, about the tariffs, more about central banks buying. Then it became a momentum trade. Second half of the year. Last year, institutional accounts were massively underweight. Gold and materials, they played the game. Now we're buying them because they're going up. Now on a near term basis, people are more comfortable. I'm going to buy gold because it's up, just like they bought tech because it was going up. But it's not the same asset class. It's not the same fundamental driven. So that's why I think that, I mean, you know, we do a lot of Canadian business. I'm sorry for Canada. I'm going to make you mad right now. But at the end of the day, I think the majority of the gold trade's over.

A (14:17)

It's over.

D (14:18)

So I think there's more risk in the next 12 months in gold than there is in equities over the next 12 months.

B (14:24)

The other story that I think we need to get to, which I know people are, they see at the headline and they're like, what? Well, what's going on with this story? If you look at Nvidia shares, which are now only down fractionally, maybe down 2% earlier, but less than 1% now, after the Wall Street Journal ran a story that said, quote, the $100 billion megadeal between OpenAI and Nvidia is on ice. And then Jensen Huang, of course, the CEO, telling reporters in Taipei over the weekend that the commitment, my word, not his, was never a commitment. And that is important to make the discrepancy of commitment and memorandum of understanding and stuff like that. Christina Parts and Nevillos is following the story for us and can give us some more of an idea of what exactly is going on here.

A (15:12)

Yeah, there's a lot of back and forth, but Nvidia CEO, like you said, Jensen Huang spent the weekend in Taipei really just doing damage control, reassuring investors that the company will make, quote, a huge investment in OpenAI and participate in its latest funding round, calling it potentially, quote, the largest investment we've ever made. But he also clarified that the $100 billion figure that's been floating around was, quote, never a commitment. Those comments came after the Wall Street Journal, like you said, reported on Friday that Nvidia's proposed investment, which could to $100 billion to help OpenAI run its latest AI models, has stalled. This is the same deal, Scott, that Jensen announced on your show back in September.

C (15:52)

Listen, this partnership is about building an AI infrastructure that enables AI to go from the labs into the world. This is about the AI industrial revolution arriving. It's a very big deal.

A (16:08)

We know Jensen or Nvidia has the cash. The investment was designed to roll out in phases. 10 billion in funding released at each 1 gigawatt data center. Capacity comes online, 10 tranches. But cracks really started to show in November when in video's quarterly filing disclosed, quote, there is no assurance that we will enter a definitive agreement with respect to the Open Air opportunity. Then in December, Nvidia CFO confirmed at a UBS conference that no definitive agreement has been signed and that projected revenue from OpenAI was wasn't even included in the company's forward guidance. So potentially the largest investment ever for Nvidia but never a commitment right now.

B (16:49)

Yeah, it's an important story and it's important for you to sort of get a little deeper like you just did for us to try and help us and investors and those who are watching understand it better. I appreciate you for that, Christina. Thank you. The other side of the story obviously is the Open Air story and what this means there is Kate Rooney joins us now with that angle because you as you read deeper into this Wall Street Journal story, it says, and I quote, I'm quoting directly from the story here of Jensen Huang, quote, he's also privately criticized what he has described as a lack of discipline in OpenAI's business approach and expressed concern about the competition it faces from the likes of Google and Anthropic. What do we make of that?

A (17:33)

Scott? I would say that is the key point of reporting in the story that's at least getting the most attention. There's been a lot of back and forth between the details of the deal. So I've been talking to folks close to OpenAI. They're really pushing back on that headline, the idea that the deal is on ice, as the Journal headline says, that the source telling me that the Nvidia Open Air deal is quote still being actively discussed as Christina laid out $100 billion commitment from Nvidia. We'll see what happens there. But it is meant to happen in tranches of $10 billion is tied to that gigawatt deployment and that the first tranche was set to be completed this year. We don't really have an update on that. Some interesting math though that I'm told by a Source it's around $50 billion per gigawatt. Of that $35 billion or so is going to go to Nvidia and their infrastructure. So clearly their interests are still aligned here. We have reported that OpenAI is in the midst of raising that record setting funding round. It's supposed to be about $100 billion from Amazon. You got SoftBank. Nvidia, as Jensen said, is still set to invest in this. So it's separate than that deal and that's in the fall. We don't know how much they're actually going to be putting up. But that really does the sources here underlining that it's very much separate from the fall announcement and some sort of commitment, at least in the near term. The line you mentioned, Scott, we pulled it up here. This is the one getting the attention out in Silicon Valley, especially from investors that I'm talking to Jensen, he read it, quote, privately has criticized what he describes as a lack of discipline in OpenAI's business approach and expressed concern about the competition it faces from the likes of Google and anthropic discipline. They're referring to OpenAI's spending, some of the commitments. Altman has said it's around 1.4 trillion competition when he mentions that one threat is to open. We have reported looking to go public as soon as this year. Competition here is really, you know, part of the bear case. If you look at, you know, what has changed since September when this deal was announced. Google, of course, made major inroads with the capabilities of Gemini Anthropic. Meanwhile, coding capabilities with cloud are getting a ton of buzz. Those are the things that have really changed since that initial announcement I would say are getting by far the most attention.

B (19:34)

SCOTT okay, Kate, thank you very much for that. Now, that's Kate Rooney. Back to this in just a moment. I do want to get to Washington where we have breaking news from Eamon Javers who's at the White House. EAMON yeah, Scott, that's right.

C (19:47)

President Trump posting on social media just a short time ago that he has spoken to Prime Minister Modi of India.

B (19:53)

He says they came up with a.

C (19:54)

Number of agreements in that conversation. The first one is that the president says that India will stop buying Russian oil. That's according to the president's social media post just a short time ago. He's also saying here in this lengthy social media post that he's cut a trade deal with India in which he will bring tariffs down on India from 25 to 18% and the Indian side will have zero tariffs and trade barriers against the United States for their part. So we'll wait and see if the Indian government confirms the terms of this deal. But according to the president just a few moments ago, the deal involves India stopping purchases of Russian oil, lowering trade barriers to the United States and the United States in return lowering those tariffs from 25 to 18% on India.

B (20:40)

Eamon Thanks. Eamon Javors, we'll watch the markets, obviously, but it's an interesting report. Thank you for that. Let's get back to what we were discussing earlier with Christina and KATE which brings up, Brian, the if nothing else, take all of the specific numbers and the, you know, the gigawatts and all.

A (21:01)

This.

B (21:04)

Money pledged on paper is not necessarily show me the money in practice.

A (21:11)

Correct.

B (21:12)

The market looks at all of these commitments, if you want to call them that, whether it is, you know, commitments that it thinks the hyperscalers have made or commitments that it thinks that OpenAI, OpenAI has made, you know, $1.4 trillion or whatever the number is. And we assume that everybody's good for the numbers that are thrown around that have, on occasion impacted stock prices in real time. When the event that Christina was referencing unfolded on our program, the $100 billion number that was thrown out, Nvidia shares went up, I think, a couple of percentage points that day. The fear, if you will, among the greater investing community is that is everybody good for all the money, whether it's what you're pledging to spend or what you're pledging to commit elsewhere. How do we think about that in the context of where we think we are in the trade?

D (22:12)

That was an amazing setup.

A (22:15)

Thank you.

D (22:15)

Just fantastic.

B (22:16)

Thank you.

D (22:17)

No, I think the market, I know the market is transitioning from a talk, the talk, walk, the walk type situation. We saw that last week, Scott, in terms of the AI spending versus the AI revenue that we're generating from AI, that's number one. Number two, if you go back to last year in the open air reaction, anything that had anything to do with OpenAI binary decision, let's go buy it now. I think the reality is that it's not going to be as clear cut and concise in terms of the money generated by OpenAI as everybody thought and acted on last year. That's why we bought Google in April last year and doubled our position because of the overreaction in Google. And Google, from a fundamental perspective, had much different pieces to that, not all OpenAI. So I think all this is still early going. I'm so happy that Christina dug into that November piece because that's talking the talk and walking the walk because it's in writing and that's what we need to see more of in terms of going forward with respect to exactly how much revenue is going to be driven from that.

B (23:17)

I think we all are trying to get our arms around very large numbers, the kind of numbers that maybe we've never seen before in their Volume X company Today investing, you know, so and so is raising $100 billion and these three companies are participating and it just, the numbers all blur together after Some period of time. And so, and so company is now valued at, you know, more than three quarters of a trillion dollars based on some of the projections that have been made on what the spending could be.

A (23:49)

That's right. I think relying on projections, the big macro projections in something that is yet to be fully proven and something that is really subject to technological disruption, I think that's really flawed thinking. And so that's why when we think about investing in, let's say, data centers, it's not the hope of this contract or that contract, but it's actually a signed contract. Negotiate a contract that maybe has price escalators, maybe has terms for renewals. I think it's really important to your point, Scott, not just to rely on the projections, but to, to see what the contracted revenues actually are. You know, the other thing I would say back to in video and OpenAI, you know, I remember when that deal first got announced, I think there was a fair bit of investment or scrutiny about the circularity of the deal and the kind of the grandeur of the deal. But maybe the fact that Jensen Huang is being a little bit more cautious, is being a little bit measured on their approach and perhaps trying to match up, you know, the commitment to, to the revenue trajectory, maybe that is a good thing. So I think that actually is not a bad outcome. But that's why monetization is so important, Scott. That's why we're all obsessed about it. I don't a problem with companies that are going to invest and invest a ton. You know, I have suffered with Meta, for example. They're going to spend 162 or 67 billion dollars this year alone. They say, they say, they say even.

B (25:08)

That's the point.

A (25:08)

Even if they don't. Even if they don't know. Let me get there. Because the reason I don't care as much is because they are already seeing monetization. Ad impressions are up 18%, pricing up 6%. And that's been continued consistent time spent up 5, video time spent up 30. Those are things that I like to see. It's not all they can do. They've got to do more and other companies do as well.

B (25:32)

When you're spending the kind of money they are, they see a lot more than that one quarter.

A (25:36)

My point is, you said these are huge numbers. They are. It's hard to get your hand your head around it. But I would say the only way I can is if I start to see pieces, that it's starting to work.

B (25:45)

Well, I know, but it has to Be more than pieces. I think that's the thing, Joe. And this leads me to Joe, who just did his rebalance. As many of you know, his quarterly rebalance for the Jyoti ETF in which you sold Amazon, Metta and Apple. You want to take me through that? I mean, everybody knows Amazon did nothing last year, but I don't know, it feels like the stock has kind of woken up. It's up five and a half percent year to date. Now you have to, I suppose, make your decisions based on how it ended the prior quarter. Quarter and risk missing a some newfound momentum to start the current one.

C (26:23)

Well, the rules are the rules and you're looking at momentum over a longer time frame, that being 12 months. And when you take 500 stocks and narrow it down to 250 based on a momentum screen, unfortunately in the case of Amazon, it falls at 254. Unfortunately the case of Metta, it falls at 259. Metta was very difficult to lose that position. We had been in Meta since October of 2023 at $240. That's a difficult one to move to the sidelines and see that go away. So they fall just right outside the threshold from a momentum perspective. Apple actually qualifies from a momentum perspective. But a three year sales growth rate at 1.8% just does not get it done. Where the three of them sit in terms of the screening, I'm not that troubled by it because I could see them coming right back in on the next quarterly rebalance.

B (27:15)

Yeah, just make. It's just difficult when, as I said, if you look at the last. Forget the beginning of January, okay, the last 12 months, Amazon did nothing.

C (27:25)

Right.

B (27:26)

So by all the metrics that you have to judge these stocks or the model judges these stocks by, you have no choice but to sell it. Your rules based.

C (27:35)

Right.

B (27:36)

You could make an argument. Now it depends on what time frame one looks at momentum to try and ascribe that there is newfound momentum and maybe the earnings this week justify the 5 1/2% early move. You're kind of stuck.

C (27:51)

Maybe, maybe it does. And I wouldn't be surprised if, if in fact that happens, I buy it. Personally, I'm not. Look, you know, this rebalance that just occurred on Friday, I had leading up to it, a lot of anticipation for it because I felt like I said to someone, it was almost like we took out the trash on Friday. There were a lot of names within the portfolio they could not wait to get rid of. You were for the last 90 days asking me about certain stocks and saying, well, we'll see what happens at the end of the quarter. I don't feel that way about any of these names. Whether it's Metta, Amazon, Apple, I'm somewhat indifferent. And the beauty of what I think the strategy is is that on a quarterly basis we rebalance and reconstitute. So we could go right back in now. If they have a huge move in the interim, okay, so be it. But I'm not that upset by the moves in Megacapp. I'm more excited about some of the other moves that we made where I felt it really was time to get rid of these losing positions.

B (28:44)

Okay, so let's take a break. We'll come back. I have more moves in front of me that we have to get to, including a new buy from Stephanie Link. Some of the other, as Joe is alluding to here, some very interesting moves that he's made in his tea etf. We're back after this. Comcast business helps retailers become seamlessly restocking frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business, powering possibilities. Restriction.

A (29:31)

Supply thy ticket, Lady Jennifer of Coolidge. 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 times.

D (29:51)

You're playing the lute.

A (29:53)

Yeah, and it sounds pretty good, right?

B (29:55)

Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report. A KFC tale in the pursuit of flavor. The Colonel made his ten dollar Tuesday.

C (30:07)

Bucket so full with eight pieces of.

B (30:10)

Juicy crispy chicken or tenders that it.

A (30:12)

Might just last you till Wednesday if you've got that kind of self control.

B (30:17)

I mean some people want leftovers, others are more into right nowers.

A (30:21)

The Colonel lived so we could chicken. 10 bucks, 8 pieces. One big deal with KFC.

B (30:28)

$10 Tuesdays prices and participation may vary.

D (30:31)

Taxes, tips and fees extra.

B (30:45)

All right, got a new buy from Stephanie Link and it is Synopsys. Why'd you buy this one?

A (30:50)

And it was my final trade last week.

B (30:52)

All right, so you followed through on your final trade?

A (30:54)

Yes, I did. The stock's down 27%. This is a mission critical software company that they provide software to the semiconductor industry. The more complex semiconductors become, the more they need mission critical software. That's what these guys do. They have a 41% market market share. They also have done a really good job in terms of positioning themselves for growth. Meaning they've done divestitures, 600 million or so. They did a really big deal with Ansys. That's going to be $1 billion accretive over the long term. They're delivering the balance sheet. So I like all the things that the management is doing. The stock is trading at 23 times EBITDA. Not cheap, but historical average is 27 times. So I'm just taking advantage of the pullback, the overall software pullback to buy this one. This one. Mission critical is different than just other software companies in my mind.

B (31:42)

Okay, so we'll follow that. I mean most of the time we talk about software, it is not in a good way as all of you know, buying low. I like low. And hope it goes on. We'll follow it. All right, good, good stuff. So I just want to get to a few other things from the rebalance that we thought. I thought was especially interesting. Amphenol is the only, the only name. When was the ETF?

C (32:06)

November of 2020.

B (32:07)

Okay, November 2020. So Amphenol is the only original holding still there.

C (32:13)

Correct.

B (32:15)

Can we do a five year, guys? Better than. I think what that's going to tell. Better than this since it's back to.

C (32:22)

The inception and It's a top 25 name. If we actually look at the holdings and say, ok, how would you like to rank these from a perspective of momentum, From a perspective of return on equity debt to equity and sales growth. Sales growth, remarkably strong. This has just been a unbelievable holding for us. And what's great about it? Look, we're in at 31. Okay. It's not like, wow, it's not. But it's not like we're talking about, oh, it's Palantir and at one point we're up 900%. This is just a steady company. It's a steady company that delivers on all the important metrics that we're looking at. When you're thinking about quality, do they give you the revenue growth? Yes. What's their relationship to debt? It's very strong and it continually on a quarterly basis delivers and the performance respects.

B (33:08)

Yeah, well, you crush that. You sold Netflix and Disney.

C (33:11)

Are you surprised by Netflix?

B (33:13)

Not really. Because what's happened, you know, in the last, if you were judging it by taking, if take the last three months out of it, I'd be like, yeah, what are you doing?

A (33:24)

Yeah.

B (33:25)

But now it's, everybody knows the story. It's kind of a wait and see. So it doesn't surprise me. You sold Disney, you know, they beat on their earnings report propelled by the theme parks. You take whichever one you want here. Disney notable because they're, you know, they're popular stocks. We talk about Netflix all the time. And now you no longer have it.

C (33:43)

Yeah, so, so basically Disney was a one quarter trade. We had never ever added Disney to the ETF in the five years since inception. Basically a scratch. Didn't score very high on the most recent screen. In terms of sales growth, which most of you know, and obviously momentum Netflix, I'm still maintaining the position. Personally, I'm probably disrespecting the strategy which generally is right above myself when I, when I tend to think of these things, I tend to be wrong.

A (34:12)

Wrong.

C (34:12)

But from a perspective of momentum Netflix, without question it has broken down.

B (34:17)

Brian, you got a thought on either of these? Netflix or dis.

D (34:20)

Yeah, we haven't changed our opinion on either one of those based on the last three months. You know, Disney's, what was your opinion.

B (34:26)

Prior, good or bad?

D (34:27)

Good. I mean Netflix, we own in four different portfolios, Scott. We, I mean, I think that's a core name in any communication services sector portfolio for large cap money in the US and we were more inclined to buy more down here because we think operationally there's nothing wrong with the company. I think the company from a perspective of this Warner Brothers stuff is in the penalty box a little bit. And I do like the case they're using cash to buy that asset on Disney. It's a value play. We've been playing the turnaround for a year. We like the theme park business, we like the Disney plus business.

B (35:02)

And you're waiting on the CEO like everybody else.

D (35:05)

Like everybody else.

B (35:06)

How does that factor in? If in any way you think about the future of this company?

D (35:10)

Well, let's see what kind of vision they have in terms of where the drivers are with respect to growth going forward. If they're going to continue to throw money at non performing assets, then we have to worry about that. But Disney again, we'll see where the new lead. We bought it originally because Bob came back and then we've stuck with it. We've been stubborn on that, but it's more of a value play and we want to see what we, what we hear from the new leader.

B (35:34)

All right, let's get the headlines with Leslie Picker. Hi, Leslie.

A (35:37)

Hey, Scott. US Envoy Steve Witkoff will reportedly hold talks with Iran's foreign minister later this week to discuss a possible nuclear deal. A US Official says the two will meet in Turkey on Friday. Tensions with Iran are running high as the US Builds up its military presence in the Middle east in the wake of Iran's deadly crackdown on anti government protesters, the sheriff in Pima County, Arizona said today. Authorities are investigating the disappearance of today's show co host Savannah Guthrie's mother as a crime. The sheriff says investigators found some things at Nancy Guthrie's Tucson, Arizona home that suggest she did not leave on her own. The 84 year old was last seen Saturday night and organizers of the Milano Cortina Winter Olympics and Paralympics said more than 1 million tickets have been sold so far. So far, or about 75% capacity. The most popular ticket, ice hockey. This will be the first time since 2014 that NHL players will compete. The opening ceremony will be held on Friday. Countdown begins.

B (36:39)

Scott all right, looking forward to that.

A (36:40)

Me too.

B (36:41)

Can't wait for the hockey part of it too less. Thanks. Leslie Cooker. I still ahead set up on some key committee names reporting earnings over the next 24 hours. First though, Don Chu as today's ETF Edge and that is next. DoWs go for about 470. Comcast business helps retailers become seamlessly restocking frictionless paying favorite shopping destinations. It's how nationwide restaurants become touch screen ordering quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business powering possibilities. Restrictions apply. Ugh.

A (37:27)

Could this vintage store be any cuter? Right. And the best part? They accept Discover. Except Discover in a little place like this? I don't think so. Jennifer.

B (37:37)

Oh yeah, huh?

A (37:38)

Discover's accepted where I like to shop. Come on baby, get with the time.

B (37:43)

Right.

A (37:44)

So we shouldn't get the parachute pants. These are making a comeback, I think.

B (37:50)

Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.

A (37:57)

Hi, I'm Katie Duke and I've been a nurse for over 20 years. Listen, I think style and confidence only get better with age. And that is why I love figs. These scrubs are built to last. They fit perfectly, they feel amazing and the quality is just wow. My favorite color, burgundy. It's chic, it's timeless, and it's even the same color as My apartment. So there's that. Get 15% off your first order at Wear figs.com with the code FIGS RX.

B (38:31)

Welcome back to the Halftime Report. I'm Dominic Chu with today's ETF Edge.

A (38:34)

Now we've got a new Fed nominee for the chairman. Key jobs data on tap, risk off.

B (38:39)

Trading in some areas of the market. So is this a setup to start playing a new kind of long game?

A (38:44)

Joining me now is Joanna Gallegos, the co founder and CEO of Bond Blocks.

B (38:48)

You guys specialize in a lot of.

A (38:50)

Different option strategies with regard to how.

B (38:52)

The fixed income markets move, right? How exactly is the current environment vis.

A (38:57)

A vis Kevin Morse is our new Fed nominee.

B (38:59)

The interest rate environment and macroeconomics shaping.

A (39:03)

Up for the bond market right now? Well, I would think we would say it's more of the same when you look at it through the lens of the bond market. And what you need to be focused on is sort of what's going to be happening over the near term and the long term. And in the near term, what we're seeing is we don't see that rate cuts are going to come to us quite quickly. So you're not looking at a rate cut in say March or April. We still have a lot to do to get the new Fed chair on board through May. So probably in the first half of the year, probably more of the same, a little bit more of a temperate approach to rates. So in that case, we still recommend that the long term horizon for rates is that they will go down, maybe not as fast as some want them to come down. So you should be focusing on intermediate credit right now.

B (39:40)

All right, so what kinds of picks are you focusing most on?

A (39:44)

We think you should be more precise in investment grade. So there's the triple B section of investment grade is the last stop before you go on to high yield. So there's, there's a, there's an interest, there's a yield pickup if you're in triple B and if you stay triple B intermediate, that was a great trade in the fourth quarter. It still looks like a good trade for this quarter last month. There's a little bit of a risk off in the intermediate and long term rates. So the shorter end of BBB was the best performing spot in investment grade. But we really like BBBS and our recommendation for 2026 is stay intermediate.

B (40:17)

All right, we're going to delve a lot more into that conversation.

A (40:19)

We're going to continue it over@etfedge.cnbc.com Joanna.

B (40:23)

Is going to be joined by Todd Sohn, technical strategist over at Certiga Securities.

A (40:27)

And Scott, we're going to explore even more other opportunities in that bond market.

B (40:31)

And we look forward to that. Dom Chu, thanks. Mike Santoli, he's next with his midday work. Welcome back. We do have some news related to the partial government shutdown. The BLS says it will delay the January jobs report due to that shutdown. The report due out, of course, this Friday. Senior markets commentator and overtime co anchor Mike Santoli joins us now with his midday word. We don't have to really discuss something that may have been expected due to the shutdown. I don't know. It's disappointing not to get it. Certainly when we're thinking about the context of what the Fed may do and where the economy truly is. It matter to you relative to everything else going on this week, more and.

C (41:27)

More timely data are better than not. But I do think that the stakes are not super high around this number where, you know, the Fed is projected to be on hold for a little bit. We've already kind of made our piece with some version of a jobless boom. For now, we'd love to see that change, but I think in general that's okay. And part of the reason it's okay. Okay is that if you look at the US Economic surprise index, we're kind of close to a two year high. The numbers have been coming in better than anticipated. That includes ESM today. So that to me is a as a buffer or an offset to all these other excuses why you might see the market get stopped or pull back a little bit, such as the volatility eruptions in currencies and metals and memory stocks and all the rest. You come in today, dollar index up another half a percent and you have to ask the question is that going to destabilize something else along the chain? It's not really doing that. So I do think that's one of the reasons that stocks can kind of take heart in the earnings picture, the economic path. At least for now though, we're still working under that 7,000 cap on the.

B (42:24)

S and P. Yeah. Dow is good for about 500. We try and work our way back closer to 50K. Mike, thank you. I'll see you a little later on this afternoon. The setup is next. Got another move from Joe T. Who just bought Merc in the latest rebalance. You personally sold. Hold it. I did.

C (43:03)

I didn't want it in both places. I don't want.

B (43:05)

You have had some stuff in both.

C (43:06)

Yeah. And I want to kind of move away from that because it puts me in an uncomfortable position. Just look at DocuSign, which was liquidated recently. I had said on air I didn't want to hold on to it. I wanted to hold on to it rather. I didn't want to liquidate what was a losing position. So I believe in Merck. Let's talk about Merck. They report tomorrow morning along with Pfizer. We're going to hear a lot about how the agreements with the president on lowering the cost of pricing, how that's affecting them. The diabetes medication taken from $330 down to $100 and looking for $2 EPS, $16 billion in revenue overall, by the way, on the rebalance. Health care is now up to 12%. We added some really interesting names like Gilead, like Abbott Labs, like Eli Lilly, Regeneron, Vertex Pharmaceuticals, to name a few.

B (43:51)

Okay. So we said Pfizer also replaced reports tomorrow along with Merck. You own that one? We do own that. Why don't you own Merck?

D (43:59)

I do both.

B (44:00)

Yeah.

D (44:00)

I own both.

B (44:01)

Oh, you do. I'm sorry, I missed.

D (44:03)

We sold Pfizer and came back to it late last year because of the rebound back into health care. Merck's recovery last year, this fourth quarter of the year completely wiped out the loss. But here's the deal on Merck. 40% return on equity, 1418 times earnings. $20 billion in cash. I think what you're going to see in some of these big pharma stocks, Merck and Pfizer, Scott, is that you're going to see more acquisitions and more investment into the biotech space.

B (44:29)

You warm enough over there?

C (44:31)

It's cold in here.

D (44:33)

It is cold.

A (44:34)

It is not cold.

B (44:35)

I mean, you walk in here with the kind of tan that you have and then you're wrapped in a Snuggie under your laser.

D (44:41)

The blood has changed, man. The blood has changed.

A (44:45)

All right.

B (44:46)

Just making sure you get a lot of layers.

D (44:50)

Yeah.

B (44:51)

We'll do finals next. We wanted to show you shares of Doordash today. Up better than 3% as it was added to the conviction list at Goldman Sachs. It's at the Nexus, Goldman says, of blurring the lines between advertising and E Commerce. Joe, you own the name in the Jyoti. What do you think?

C (45:18)

I would agree with that. In April, we purchased it at 192. Had a significant run up through the fall. Bad quarterly earnings report thereafter. Stock's been under pressure since the middle of February. They're going to report have to kind of reverse a little bit of that negative momentum. The fundamental story, though, as you cited is still very much in place.

B (45:37)

Steph, you have Target and Wal Mart CEOs, the new ones taking the helm over this past weekend.

A (45:42)

Target, very low expectations, Very low expectations, down 27% in the past year. There's a lot to do here, Scott, and they have a capex cycle budget of $5 billion, but they also have a $9 billion buyback program which is 19% of the float. So it's kind of interesting to me down here, but very low expectations.

B (46:02)

Okay, I'll see a closing bell, of course. Three o'. Clock, Greenhouse, Bryn Talkington, Alex Cancer, which we'll have the latest on the Nvidia Open Air thing and all that. Michelle Ross, Biotech Investor so we're going to get her new names as well. What she's been buying, she'll tell us. All right. Brian Belsky, man who's nice and warm. It's like a human sleeping bag over there. What do you got? What's your pick?

D (46:21)

I'm not going to ask you. I was going to go somewhere.

B (46:24)

What's your pick?

D (46:25)

Raymond James, Financial Good Florida based.

C (46:29)

Defense.

A (46:29)

This is a multi year theme you could do in private markets.

C (46:32)

Also Brazil, ewz, Volcan materials added to Jyoti.

B (46:35)

All right, I'll see you. Dow's good for about 500 and I'll see you on the Bell. The exchanges. Now, you've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

A (46:52)

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 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 Comcast business helps.

B (47:27)

Retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data, managing healthcare facilities that we all depend on with leading networking and connectivity, advanced cybersecurity and expert partnership. Comcast business is powering the engine of modern business, powering possibilities, restriction supply.