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Halftime Report
Nvidia roars back 12/18/24
00:44:22
Scott Wapner and the Investment Committee debate if Nvidia can regain its momentum. The experts detail their latest portfolio moves ahead of the Fed decision. Our Calls of the Day are on Tesla, Uber, Citizens Financial, and Netflix. CNBC Senior Markets Commentator Michael Santoli joins with is Midday Word. The Setup ahead of earnings includes Lennar, Accenture, and Cintas. Investment Committee Disclosures
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- [00:00]
Joe Terranova
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report what's your boldest.
- [00:31]
Steve Weiss
Truly ambitious life goal?
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Joe Terranova
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Steve Weiss
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Wherever you're heading, getting there starts here with State Street. Before investing, consider the fund's investment objectives, risks, charges and expenses. Visit ssga.com for perspectives containing this and other information. Read it carefully. DIA is subject to risk similar to those of stocks. All ETFs are subject to risk, including possible loss of principal Alps Distributors, Inc. Distributor.
- [01:01]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.
- [01:17]
Steve Weiss
Carl, thanks so much.
- [01:18]
Scott Wapner
Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour out of Correction Nvidia pacing for its best day in a month. One of our committee members making a move in that name as well. So we're going to trade that the other big movers and of course the looming Fed decision. Joining me for the hour today, Joe Terranova, Shannon Sokotia, Bill Baruch and Steve Weiss. Let's go to the markets. Let's check out the action ahead of this afternoon's Fed decision. We are green across the board. Dow is trying to get off the Schneide, the longest losing streak since the 70s. And we mentioned Nvidia, Nvidia, Disney, UNH, Cat and 3M all helping the Dow with that bounce back today. So Nvidia Bill out of correction, right? That's like the important thing because it has been slipping a little deeper and a little deeper and a little deeper in Barron's headline today says Nvidia stock looks dead in the water. How it comes back to life. You don't seem to be waiting around. You trimmed it by some 20%. Why?
- [02:16]
Joe Terranova
Listen, it has nothing to do with me disliking Nvidia it did trigger some levels that worried us. But I want to remind you that the last time we bought Nvidia was at $100. And last time we sold it was was before it fell to 100 at this level. It's really portfolio management here. It triggered that sell and ultimately with the move in Broadcom that we've had, we own more chips than we did say a week ago. So it's not about us disliking Nvidia, it's managing the position. It's still a 5% position in our portfolio. And in our concentrated portfolio where we own no more than 10 names, it's 9 to 10%. I still want this thing to go higher and I think it can.
- [02:51]
Scott Wapner
Okay, so you watch the technicals and you just alluded to it when you talked about breaking some. Some levels. The Barron's article that I read today, I thought with the commentary about the stock was pretty interesting. 135 is the level to watch. It's sitting right there. It had broken below that. It was back above it today. It's sitting right about there. Keep your eye on. It's a 3.5% gain now. It's sitting right below 135. It's below its 20 day, which gives a good read in near term momentum. The 200 day is 115, which the commentary today suggested. It's not going to go below that. And if it goes down to that, you're still talking at a stock that's 27 times its forward earnings, the low end of the range from when this whole thing started. But you are watching the technicals closely.
- [03:36]
Joe Terranova
At 130 to 135. That's sort of that balance area. We start closing, especially on a weekly basis. The last thing I wanted to see is a negative move in the market broadly post Fed. We closed the week at 127 in Nvidia. And I think the technicals become broken if we finish the week back above 135. I'm very excited now. We put every single ounce of cash to work over the last 45 days and we've leaned into big tech. This is us just getting a little bit of cash to keep some flexibility.
- [04:03]
Scott Wapner
Okay. Why is you own it too? I do. Big event looming that I was reading about today that I didn't even know was happening. And I think it's worth mentioning for sure. Jensen huang speaking at CES on January 6. So not that far from now. You really want to get all bared up ahead of, you know, the leather jacket on the stage. Really?
- [04:24]
Bill Baruch
Well, look, I mean, I think Jensen Wong's. His speeches have had basically decreasing impact on shares. They may pop it for a moment after the speech, but you can guess what he's going to say. He's going to talk about its strength has never been more apparent than it is now.
- [04:46]
Scott Wapner
The last time he's done. I don't know about this, Weiss, the last couple of times he's done this, he made the rounds in New York. Not that time ago, stock took off. He spoke at the Goldman Communicopia conference that I was at and he talked about demand being, you know, I forgot the word that he used, but basically was suggesting. It's unbelievable. And the stock was up after that event quite substantially too. He has had a unique ability to move his up.
- [05:13]
Bill Baruch
You talk from a trading move. You can play it. The shares aren't going to trade down after he speaks unless it moves up markedly into January six in expectation of a speech. My point is, is that if you own the stock, that it's going to have a negligible impact on it because as you see, the stock's traded down since those events. So that's not a reason to buy it. Look, I grapple with this because given what they charge for their chips and given the pocketbook that Met, Microsoft, Google, et cetera, all have, and how they're all targeting the manufacturing of their own chips, by the way, using the same fabs that Jensen Huang uses, which is largely Taiwan semi. You know, there's a big incentive there. It's not like they have to build their own fabs to produce these chips. All they have to do is find capacity elsewhere and they build a competitive chip.
- [06:09]
Scott Wapner
They're not really doing that.
- [06:10]
Bill Baruch
They are doing that.
- [06:11]
Scott Wapner
According to a technology consultancy firm called Dia om Dia, Microsoft acquires twice as many Nvidia AI chips as the tech rivals. That is. According to today's Financial Times, Microsoft bought 485,000 of Nvidia's Hopper chips this year. That put Microsoft far ahead of Nvidia's next biggest US customer, which is Metta, which bought about half that amount.
- [06:37]
Bill Baruch
Right. I'm not saying they're not buying now. I'm not saying their chips right now are competitive with Nvidia. I'm saying they're usually incented to build chips, design chips that are competitive, and that in fact, is what they're doing. So when will that start hitting in videos, demand?
- [06:54]
Scott Wapner
Not any question, not, I think within.
- [06:56]
Bill Baruch
The next year is extremely possible, particularly when you've got Taiwan semi, opening up a new facility in Japan that's going to provide them capacity. That is a real issue. Okay, so and by the way, semis in video too, with their gaming chips that nobody could touch, that became sort of like an albatross on because they're slowing every growth. So semis don't have this type of advancement. Staying in front of others forever, even.
- [07:21]
Joe Terranova
Though we saw every wave is going to be and bring more capacity. But let's also not forget the software to run these GPUs is really the moat that Nvidia also has.
- [07:31]
Steve Weiss
Joe, look, last six months, the momentum for Nvidia is basically flat. You score it a zero, that's what it is. You pull the lens back over the last 12 months on a scale of 1 to 10, it still scores as an 8.
- [07:43]
Bill Baruch
So it's because the marginal buyer is already in there as well. You can make that argument, whatever the.
- [07:48]
Steve Weiss
Argument might be, that is the actual momentum score in the near term. To your point, the 20 day, I'd call it a negative two at this point. So in reality, what's going on? You have heavy speculation over the last month. You have the options market driving the actual stock price. There has really not been very much in terms of a fundamental deterioration been reported in any of the earnings reports over the last eight quarters. At the end of February, you'll hear the next report. Could the stock move lower from here? Without question. Again, I think it's right now in a range where it's basically $10 up, $10 down. And keep your eye on the options market because that's going to tell you the direction they're going to try and pin it.
- [08:28]
Scott Wapner
By the way, last week, Shan, there was a story out that suggested because because of the stock's decline, which has certainly outpaced to the downside any of the other mega caps people are going to wake up in 2025 and realize that they were accidentally underweight the stock because it's gone down a bunch, which is going to lead to loading up yet again to get to the right size of position.
- [08:51]
Shannon Sokotia
Well, I think we continue to focus on this idea of concentration and risk mitigation in your portfolio. We've talked a lot about portfolio construction over the last few months as it relates to this stock in particular. I think that you go back to early August on Nvidia, Scott, and you saw really an interesting opportunity if you weren't in the stock at that time to be able to add to it. I would agree with you. I think what people are going to be looking at is is this a position that I want to make sure that I have my full weight in? And if so, you know, do you add to it or do you do what we've been seeing, which is adding some of these other semi names looking for that next wave. We've seen what Broadcom has done more recently. So I guess the question is do you want to, you know, move your position higher based on that math or do you want to actually take this as an opportunity to get some more diversification in the semis given the pressure.
- [09:36]
Scott Wapner
That some of the performance of Broadcom vs. Nvidia since last Friday. And you're going to see a tale of two stocks and the chart line is going to tell a very distinct story. What's happened of late to both of those names? Broadcom has been out of control. Look at that. Up 29% since last Friday relative to in video. Broadcom's help, the smh. By the way, the smh, the semis are having their best month since June after doing nothing. Bill.
- [10:05]
Joe Terranova
I mean Broadcom's had good news. They've had an earnings beats. They've leaned into their infrastructure development. But look at Nvidia's move here today. It is responding of this, this Jetson Orion developer kit that was announced at half a cost. Now you get news and the market's responding to news. I mean Broadcom I think was undervalued at the time. And this multiple extrapolation we've seen in Broadcom I think is something that can't go unnoticed. But it's also why I'm on the move with this. I'm letting Broadcom run and I'm kind of managing the overall semiconductor.
- [10:36]
Scott Wapner
You're trimming micron? Yes, by 20% as well. That company reports earnings today after the bell.
- [10:42]
Joe Terranova
Yeah, and I love Micron. I do think though that that there's some risk here in the earnings report. Now it comes back to again, portfolio management. This was a name in our portfolio at number six or number seven. It was about a three and a half to four percent size. We've trimmed it down to two and a half percent. In the case that this thing does miss, then we have a little more flexibility. But it's nothing more than that. The high bandwidth memory, I think that's a household name that you have to keep picking up. The CEO when he talks, the industry listens. So I think that's going to be very, very important. Listen, I still love the name. I may yolo some calls for myself personally. At the end of the day, before the close. But I think right now this is all portfolio management for us.
- [11:21]
Scott Wapner
All right, how are we watching bitcoin which is down almost 3% today? Weiss, we know about your ownership. You bought more on Monday. You got the Bitcoin trust, you got the Bitcoin trust etf. So you have increased your exposure to bitcoin, which got I think as high, what was it, 108 yesterday or about that. And here we are back under 104k.
- [11:42]
Bill Baruch
Look, there's been volatility over the last few weeks. I mean we broke 100 on the upside and we traded down to about 96. That's the way it's going to be. Look, people look and take profits. I do wonder if there'll be even more profit taking after the first of the year. But at the end of the day I'm staying there. I said it a month ago, a month and a half ago, safest trade that I see on the board. And that remains the case because it's got no fundamentals to value it on. So it's purely momentum. The momentum will continue into next year with Paul Akers coming on as SEC chair and with the President who we know has some self personality.
- [12:22]
Scott Wapner
It's the irony is you're calling what has been considered arguably the most speculative trade within the market itself. Itself for all the reasons you said being the safest trade in the market now.
- [12:33]
Bill Baruch
Yeah, and I'll tell you why. Because speculation is coming to a reality in terms of pro bitcoin, pro crypto policies and next administration. So that's one thing you could bet on for sure. When the Trump family owns a crypto business, which way do you think the regulation is going to go?
- [12:53]
Scott Wapner
I mean, I know it's a rhetorical question because I think yes, obviously if.
- [12:57]
Bill Baruch
You look at the most questions I ask you are rhetorical.
- [13:00]
Scott Wapner
Yeah, whatever. If you look at the price move from the election until now, it obviously tells a story of newfound momentum.
- [13:09]
Bill Baruch
Now that's without regulation in place now. Right. Regulations yet to come which will open it to more institutions. So you could put a small out party. Look, every time, every portfolio I have momentum since I've been doing this has a speculative aspect to it. This is part of that speculative aspect to it. So I respect that.
- [13:31]
Joe Terranova
I like momentum. I think Joe would appreciate this too. Is, is that the, the monthly low in ibit is about $53. As long as we hold out above there, the momentum in my mind is very strong. And then that's bitcoin futures right around 100,000. So I mean I'm playing this long speculating in the commodity fund I have with bitcoin futures calls. We own IBIT and portfolios, but if we start making new lows, I would probably, I want to be buying more IBIT at a lower level for portfolios over the long term.
- [13:59]
Bill Baruch
And that's the way to play. That's where, that's where I own most of it.
- [14:02]
Scott Wapner
So we have this Fed decision looming today.
- [14:04]
Bill Baruch
Yep.
- [14:05]
Scott Wapner
As you sort of think about the way that certain stocks and asset classes have been trading, whether it is bitcoin, you've had negative breath on the S and P for 12 straight days. By the way, only 91 of the 500s and P stocks are positive month to date. Shan, some say it just doesn't matter that much. You obviously have had a top heavy market again. So it's not like that statistic that I read you has caused the market to have some tremendous upset. I don't know to what degree a hawkish pause might mean for market breadth. Doesn't suggest to me that that would be necessarily something that reverses the bad breadth of the market. How much do you think Chair Powell today holds the the key to the year end and beyond rally?
- [14:55]
Shannon Sokotia
So it's really interesting what you're seeing in terms of expectations in the equity market and what you're seeing in the bond market. So in the equity market, I do think that there is starting to be priced in this expectation of this pause in January and, and you know, I think it really comes down to the guidance and if they're continuing to guide to two to three cuts next year, which is I think what the market is sort of anticipating, I think what you're seeing is, although that may not be as supportive an environment for more rate sensitive equities such as small caps or REITs or real estate in general, I think that two to three cuts is really what had coupled with the anticipation of above trend economic growth next year is probably enough to support the broadening out as we move into the first part of the year. Now Scott, the interesting thing is the bond market's actually sort of pricing that they could be even perhaps more dovish than the market is anticipating. And I would argue with you that if they come out more dovish, that actually could really be a catalyst as we move into January for some of this broadening out to accelerate.
- [15:54]
Scott Wapner
Oh, I don't think there's any doubt.
- [15:56]
Shannon Sokotia
About that, but I don't think anyone's talking about them. Being more dovish. So I just.
- [16:00]
Scott Wapner
No, I, I feel like that's right. I feel like that's right.
- [16:03]
Shannon Sokotia
I'm just saying that's, I don't think that's the, that's the consensus that they could come out more.
- [16:07]
Scott Wapner
Is that the outlier thing today?
- [16:08]
Steve Weiss
Of course.
- [16:09]
Scott Wapner
Come out more dovish than we think.
- [16:10]
Steve Weiss
From my perspective, the hawkish cut is priced into the market right now. So we expect that we're going to get a cut and we're going to get a hawkish cut. You're going to get movement on the dot plot where the Fed's going to kind of take their expectation for rate cuts in 25 to meet the market. Was the market see two rate cuts. The Fed thinks you're going to get four right now. So, yeah, without, without question, that is the outlier, I think.
- [16:34]
Shannon Sokotia
But driving some of this activity right now.
- [16:36]
Steve Weiss
Well, I think what you first have to think about is going into this afternoon, what does positioning look like? And positioning is still leaning in favor of the broadening out theme that was in place around the election.
- [16:50]
Scott Wapner
How do you say that? Because values had 12 straight down days. Sector performance is over one month. Energy down 10, utilities down four and a half. Materials down four and a half, real estate down three. Industrials down to health care down two. Financials down one and a half. If anything, it's the exact opposite of what you just said, actually, that positioning is.
- [17:09]
Steve Weiss
It's not when you look at fund flows. So if you look at fund flows, you have seen a reduction in holdings in financials, in industrials, in, in value in some of the areas that supported the broadening out theme. But fund flows are not confirming, both for mutual funds and ETFs, that you have completed that process. The market is still a little bit offsides. The market still today, okay, wants equal weighted to make its mean reversion rebound. It wants to see financials come back once again. It wants to see Alphabet and Apple and Amazon take a pause in the dramatic outperformance. If in fact today you don't get that outlier outcome where the Federal Reserve gives you a little bit more of a dovish communication, then I think positioning is in trouble. Further extenuating what you have cited, we've seen over the last several weeks, Bill.
- [18:06]
Joe Terranova
Now if you go back to September, rates were falling and they cut rates and that was really the bottom that week. I mean, I think rates have risen as it is pricing in the hawkish cut, the real outlier, though, kind of thinking two, three steps ahead, is Is the market or rates also rising on the fact that these cuts are going to. Are stoking inflation. And if the fact that the thieves threads the needle really well today, that's maybe not as hawkish as the market might be pricing, but it's also saying that data dependence could lead to a pause threading that needle. We could really get everything. We could get sort of that everything rally into the end of the year. And that's the green light, I think, on both sides of here. I'm fearful, I'm fearful of, of them being, of them being too dovish and rates not coming down. And I'm fearful of them being too hawkish. That's over. It's not.
- [18:51]
Scott Wapner
Imagine that they're going to be too dovish today. You may in fact even, you may in fact get a dissent.
- [18:56]
Bill Baruch
Yeah, yeah. I don't view this as the base case being the hawkish cut. To me, hawkish is you're saying, okay, we're doing 25 now and then we're, we're troubled about inflation going forward. That's too inconsistent. You can't say we're troubled by inflation and still cut that.
- [19:17]
Scott Wapner
That's ridiculous to use the word troubled.
- [19:20]
Joe Terranova
I mean, you're.
- [19:20]
Bill Baruch
Well, I'm paraphrasing. He never uses that word. He'll say we're watching inflation. It seems to.
- [19:28]
Scott Wapner
They could certainly do that. They could certainly.
- [19:30]
Bill Baruch
I'm not saying they won't. But that's not the, that's not the hawkish cut. The hawkish cut.
- [19:34]
Scott Wapner
What do you mean?
- [19:35]
Bill Baruch
Yeah, I'm saying what they're say. The base case I'm saying is not the hawkish cut. The base case is saying we're going 25 and we're going to see how things play out. We can be patient because the economy is still doing well.
- [19:48]
Scott Wapner
That would be forward as a hawkish cut, a hawkish policy, however you want to characterize it.
- [19:55]
Bill Baruch
Me, a hawkish cut here doesn't happen.
- [19:56]
Joe Terranova
The problem with hawkish.
- [19:58]
Bill Baruch
Let me just finish. To me, they don't cut rates and.
- [20:01]
Scott Wapner
They don't think they cut today.
- [20:03]
Bill Baruch
No, I'm not saying that. I'm saying what's hawkish. I think you're being too worked up about what is hawkish, Steve.
- [20:09]
Steve Weiss
But the expectation was you were going to get four rate cuts in 2025 long. You're not going to get those anymore.
- [20:16]
Bill Baruch
No longer. That hasn't been the expectation for the.
- [20:19]
Steve Weiss
Federal Reserve is the expectation, Steve, The Federal Reserve leave. Look at the dot plots. The dot plot show that you're going to get four.
- [20:26]
Bill Baruch
That's a meaningless point of the Federal.
- [20:28]
Steve Weiss
Reserve if the dot plots are meaningless.
- [20:31]
Bill Baruch
If anybody traded on the dot plots, they've been driving an Uber. Now, okay, that's just not the case 100%.
- [20:37]
Steve Weiss
But now you go to a larger issue. You have a Federal Reserve that's going to say we're data dependent, insulting Uber. And we're. And we're also looking at the forward guidance which is reflected in the dot plot. So which is it? Are you going to predict the future and tell us how many cuts are coming in? 25. Or are you going to tell us you're going to look back on the economic data to determine what you're actually going to do? There's.
- [21:02]
Bill Baruch
Raise your hand.
- [21:03]
Joe Terranova
There's an inconsistency going to change. Yes, of course they're going to fund futures appraisal.
- [21:08]
Steve Weiss
So that's always saying the same thing. We are saying the same thing.
- [21:12]
Joe Terranova
End of the year, three cuts. The real issue, look at small businesses, look at the manufacturing sector. They have to thread this needle properly. Maybe the market has priced out too many cuts. That's where the needle can be threaded and I think that's where we can get it. Get the everything.
- [21:24]
Scott Wapner
Let's hit some names that I wanted to hit before we finished our A block. See, I did that. MasterCard, MasterCard buyback, 12 billion. They raise their dividend. Joe, you own MasterCard.
- [21:37]
Steve Weiss
I do. I'm going to warm Steve up a little bit. We've owned it in the Joe Telephone ETF since July of 2022. So Steve's happy about that. This is about payments, is about processing. They also talk about Visa sharing the same type of positive momentum. They also mentioned Global Payments Networks. I'm not so excited about that name. Fiserv is another name that you could play. But really you're looking towards having the regulatory relief that's really the center of why 2020, 2025 could be an extremely positive year for the payment processors, in particular Visa and MasterCard. And when they're giving you a $12 billion buyback and a 15% dividend growth in the case of MasterCard, that's something as a shareholder you're going to applaud.
- [22:19]
Scott Wapner
Why is Palo Alto down more than 3% today? CrowdStrike's following suit. The only thing we could find is a price target that was cut, I think late in the day on Friday at one firm. But the stock's down more than 3% today day. You have that?
- [22:34]
Steve Weiss
I do. Momentum. So look at the momentum factor today. The momentum factor is struggling. The momentum factor has heavy allocation towards the cybersecurity names. You could pull up the Jyoti ETF today. It's down. You'll see that again. It's because of it. You show it the momentum. The momentum factor has been struggling over the last several weeks and even in a positive 10 tape today that continues.
- [23:01]
Scott Wapner
Okay, are we not going to pull it up?
- [23:03]
Steve Weiss
You can show it.
- [23:03]
Scott Wapner
There it is.
- [23:04]
Steve Weiss
It's down. Look at that.
- [23:05]
Scott Wapner
It's down today. All right. We'll take a quick break. Coming up, buy any pullback. That is the call today on one stock that's nearly doubled this year. Bill owns it, we debate it and we of course will trade it next.
- [23:24]
Joe Terranova
Foreign Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99 of places.
- [23:43]
Scott Wapner
That take credit cards nationwide.
- [23:45]
Joe Terranova
And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [23:58]
Bill Baruch
Ryan Reynolds here for Mint Mobile.
- [23:59]
Joe Terranova
You know one of the perks about having four kids that you know about.
- [24:03]
Bill Baruch
Is actually getting a direct line to.
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Joe Terranova
The big man up north. And this year he wants you to.
- [24:07]
Bill Baruch
Know the best gift that you can give someone is the gift of Mint Mobile's unlimited wireless for $15 a month.
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Scott Wapner
Now you don't even need to wrap it.
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Joe Terranova
Give it a try. @mintmobile.com $45 upfront payment required equivalent to $15 per month. New customers on first 3 month plan only. Taxes and fees, extra speed slower above 40 gigabytes on unlimited.
- [24:26]
Steve Weiss
See mintmobile.com for details.
- [24:29]
Joe Terranova
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- [25:00]
Scott Wapner
One of the best performing stocks since the election. If not the best individual name, it's certainly got to be up there is Tesla. It's a fractional loser. Today price target gets bumped to right where it is now. Frank 480. At bear they say buy any pullbacks. You agree with that?
- [25:16]
Joe Terranova
I agree especially above 400 above that previous high. Buy any pullbacks. Now we we have owned. This is really one of our top second half of the year plays and really leaning into it at $200, trimmed it at 350. We've been letting it run. It's astonishing to see it really break out. But you know, you're buying a seat close to Trump, obviously with, with Elon Musk here and owning this name, the favorable regulations that are going to come with it, the autonomous vehicles investment, the AI investment. But there's also, we can't ignore the flows. There is some craze in the market right now. Meme stock craze, whether it's Quantum, whether it's Bitcoin, whether it's Tesla making a move, the option flows, the money being owned retail investors here, they're also driving it. There's no some technical barriers. And for us, out of a 400, you got to let this thing run, Joe.
- [25:59]
Scott Wapner
Uber, it seems like these stocks just trade off one another. Uber's up three and a half percent today. Bernstein, though, moves it down its preference list. They say the stock's oversold, but they've cooled on the bull case for now. What do you think?
- [26:15]
Steve Weiss
Well, I think the analyst price target is a little bit too high. The 12 month price target is $91. What's interesting about that is in October, Uber was $87. That's the price of Uber at the time. The 12 month price target was 86. Subsequent to that, Uber's price has now fallen and the price target is actually going higher. So the analyst community remains overwhelmingly bullish on Uber. There's not very much that's going to fundamentally act as a catalyst until earnings reported in February in the stock. So I think the stock is kind of vulnerable to positioning from the perspective of everyone as bullish the stock. But on the, on the downside, I think there's a put underneath the market because this company is fundamentally a strong company that has focused on profitability. And I think what that leads you to is a period from now until February where the stock is just going to vacillate on either side of $65.
- [27:11]
Scott Wapner
You worried about your position here?
- [27:12]
Joe Terranova
I think profitability is key here and that's why we still love the name. But only a technical for a second. There's a trend line go back to October. It's holding the $63 area on a weekly level. I think if it could respond that we may be adding more. I just don't want to pick the bottom here in this type of week. But let's not also ignore the Waymo headwinds. And it's been a bit of a pair trade against Tesla. When Tesla was falling, Uber was rallying. So I think there's definitely some headwinds here. Watching the $63 level on a closing.
- [27:38]
Scott Wapner
Basis, Citizens Financial got upgraded today over at Raymond James. Price targets, 55 bucks. You have this in the team?
- [27:44]
Steve Weiss
Yeah, I did. Look, you know, we've, we've got about eight regional banks in, in the, in the strategy. Citizens Financial is, is one of the better performing ones. Regions Financial, Fifth, Third, Huntington bank, they all now have negative momentum. Bank of New York, M and T, Cincinnati Financial, they maintain positive momentum. And a lot of the analyst community coming around and saying, okay, buy the pullback that's built up the premise that in 2025, the regional banking community is going to get significant regulatory relief and that, in fact might happen. I'm not calling that into question. The, the other tailwind that's being presented for 2025 is that credit conditions are going to continue to improve, such as they have had and supported the rally in the first half of 2024. So I think what's happening now is, is 24 was an environment where all the regional boats lifted at one time. I think it's going to become very idiosyncratic as you move towards 2025. You're going to have to generate alpha in the industry and mine from the bottom up to try and find who the winners are going to be. I think Citizens Financial can be one of those.
- [28:54]
Scott Wapner
Weiss. Netflix has been a monster. The target at Morgan Stanley today goes to 1050 bucks from 830.
- [29:02]
Bill Baruch
It's the only pure play play. It's one of the only plays that's working. Their content is tremendous and they've added sports, so there's no reason why it shouldn't keep going. Now Disney says, hey, you know, this, this password sharing isn't working for us either. So now you got to make a choice. Do you add another family member or somebody's been sharing your password to Disney or do you go to Netflix? You're going to go to Netflix. So to me, it keeps going. And you know, unlike some of the others where you sort of talk about the momentum to justify the way, way, way overvaluation and to me, that's a Tesla. No way should you pay a car, a multiple car company like this, it's. And that's what's endemic with the market, by the way, sidetracked for a second, is that we seek to justify the momentum and the dollars going into these stocks with fundamentals and ignoring the valuation. Those fundamentals don't exist in any of those stocks, you know, Tesla in particular, because as good as it is, as close as he is to Trump, are you really paying 200 times for a capital intensive company and 100 times EBITDA? It's lunacy, you know. So if you're a technical trader, that's fine. So makes sense if you're thinking of.
- [30:18]
Scott Wapner
It as primarily with auto company.
- [30:20]
Bill Baruch
Sorry.
- [30:21]
Scott Wapner
If you're thinking of it as primarily an auto company, which is where you're talking about it being capital intensive, even.
- [30:28]
Bill Baruch
As an energy company, they've done okay in the energy business. What other energy company are you paying that for? It's still capital intensive, period. And still a multiple. It's unsustainable.
- [30:39]
Scott Wapner
What do you see when you look at Netflix? Chen?
- [30:41]
Shannon Sokotia
I think from, from, from my vantage point, if you think about the amount of capital that Netflix had to put into building their subscriber network and you think about when they did that, they did it when, you know, essentially cash was free. And so I think that, you know, from a streaming competitiveness perspective, I don't see any, any real contender to take their spot at the top over the next three or four years.
- [31:01]
Scott Wapner
Let's get the headlines now. Julia Boorstin. Hi, Julia.
- [31:05]
Joe Terranova
Hey, Scott. The CDC has confirmed the first severe case of bird flu in the U.S. agency officials said the patient has been hospitalized, Louisiana but didn't give more details of the patient's symptoms. The CDC said the patient had been in contact with sick and dead birds and backyard flocks, making it the first case in the US Linked to an exposure to backyard flocks. President Elect Trump has tapped former football player Herschel Walker to serve as a U.S. ambassador to the Bahamas. Trump previously backed walker for the 2022 Senate race in Georgia, which he lost to Democratic Senator Raphael Warnock. Walker, who campaigned for Trump during the presidential race, must be confirmed by the Senate for the post. And at auction house Sotheby's, the oldest inscribed stone Tablet of the Ten Commandments sold for over $5 million today, surpassing its presale estimate of 1 to 2 million dollars. The 115 pound marble slab is about 1500 years old and the commandments are inscribed in Paleo Hebrew script. Back over to you.
- [32:10]
Scott Wapner
All right, Julia, thank you. That's Julia Boorstin. Up next, we go global for today's ETF Edge. Bob Pizzani looking at the biggest opportunities in emerging markets in the year ahead. We're back on the half right after this.
- [32:26]
Joe Terranova
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places.
- [32:40]
Scott Wapner
That take credit cards nationwide.
- [32:42]
Joe Terranova
And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report. 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 Eduardo we are.
- [33:28]
Scott Wapner
Back on the half. Bob Zani has today's ETF Edge. Hi, Bob.
- [33:31]
Steve Weiss
2024 was a great year for US stocks, but what about everywhere else? The rest of the world generally up, but trailing the US 1 sector. Still with strong inflows is India. The largest India ETF, up 12% this year. Let's talk with Kevin Carter. He's the founder and chief investment officer of E M CUC Global, which focuses on India and emerging markets. Kevin, Your India Internet ETF INQ is the symbol, up 25% this year, rivaling the S and P returns. You said to me before, India is the perfect emerging market. Why are you so enthusiastic about India?
- [34:05]
Joe Terranova
Well, emerging markets, you know, the reason people are investing there is because they have large young populations, a lot of growth, and that's driving consumption. And if you look at each of those areas, India is number one. It's the biggest population, it's the youngest population, the fastest growing, and that's driving consumption. And it's also driving an incredible digital consumption story. So it's really perfect on paper, but it's also got the world's best human talent. You know, there's 25s and P, 500 companies that have Indian CEOs, for example.
- [34:38]
Steve Weiss
And you also have, as we've discussed.
- [34:40]
Joe Terranova
This digital public infrastructure, the India stack, which is sort of a digital secret.
- [34:45]
Steve Weiss
Weapon that most people don't understand. Yeah. And here's the list of it. I mean, fastest growing GDP in the world right now. I think it's up 7%. Biggest population bigger than China, 1.45 billion people. The key to a lot of this seems to be technology, particularly this digital identification system India rolled out in 2009. Tell us about that and why that's driving growth in India? Sure.
- [35:08]
Joe Terranova
Well, one of India's big problems, you.
- [35:10]
Steve Weiss
Know, historically was that very few people.
- [35:12]
Joe Terranova
Had an identification card. And so to to handle that in 2010 they launched an ID card program to give everyone a physical card like a driver's license, but you know, with their name and photo and so forth. But they also scanned their fingers and eyes so that people could be instantly verified using biometric information. And this is now spread to the whole country. 800 million people have opened their first bank account in a matter of minutes just with their fingers and looking into a camera. So there's a whole lot of advantages.
- [35:43]
Steve Weiss
That this digital stack brings to India.
- [35:45]
Joe Terranova
In terms of efficiency and growth.
- [35:47]
Steve Weiss
Right. So this, your ETF focus is on E commerce companies in India. What's why the focus on on E commerce? Well, because it's the fastest growing sector.
- [35:57]
Joe Terranova
I mean that's been the case in emerging markets for 10 years.
- [36:00]
Steve Weiss
We saw it in China. We saw Alibaba, Tencent and these other.
- [36:05]
Joe Terranova
Enormous Chinese Internet companies, you know, take a huge percentage of the global market cap for emerging markets. And now we're going to see the same thing in India.
- [36:17]
Steve Weiss
India is a lot like China was.
- [36:19]
Joe Terranova
15 or 20 years ago. But now you have, you know, smartphones that you can get for as little as $12 and this whole digital public infrastructure which is like an operating system for India, that has even led to.
- [36:31]
Steve Weiss
More digitization, $12 smartphones. We're going to talk a lot about that. Much more Coming up on investing in India and emerging markets on ETF Edge. That's at 1pm Eastern Time. Kevin's going to be joined by Todd Sohn from Strategus. We'll talk about China as well and the government's recent attempts to address many of the structural problems that country faces. Etfedge.cnbc.com Scott, back to you.
- [36:54]
Scott Wapner
All right, Bob, appreciate you.
- [36:55]
Joe Terranova
Thank you.
- [36:55]
Scott Wapner
That's Bob Pisani. Coming up, we have our year end report cards. We are grading the investment committee some of their biggest winners and losers next. All right, welcome back. End of the year is near which is why we are giving out our report cards on some of the picks from our committee members. The best and the worst. At least some of interactive brokers. Jyoti up 115% year to date.
- [37:42]
Steve Weiss
Favorite financial name reasonably valued at 27 times. Company has just done a phenomenal job diversifying the product offering. Full disclosure, I am a user personally of Interactive Brokers. It offers you everything you need.
- [37:57]
Scott Wapner
Stocks, commercial commodities, options Crypto arista networks up 92%.
- [38:02]
Steve Weiss
So this is cloud networking obviously benefiting from AI. It's actually been in the ETF since January of 2021. This is one of our better performing holdings. I think we're up to 457% on this stock. Revenues growing near 20% over the coming quarters. It plays into the AI story and for networking it's a critical aspect of it.
- [38:28]
Scott Wapner
I've got Dr. Horton here down 3.5%. This cannot, this cannot be the worst performer in the Jyoti.
- [38:35]
Steve Weiss
No, it's obviously not. I'm troubled.
- [38:39]
Scott Wapner
How'd this get on the list?
- [38:40]
Steve Weiss
Well, let's go wrote it obviously. No, let's talk about the home builders because I'm troubled by the home builders. The home builders. The momentum has broken in the home builders builders. The home builders did remarkably well in 2023 and into the early stages of 24. But it's a challenge environment. They're offering way too many incentives and now understanding that undocumented home builder construction, the industry, 13% of it is undocumented workers. So there's going to be a challenge as we move into 25 and Trump administration tackles the issues surrounding immigration.
- [39:15]
Scott Wapner
Steve Weiss Vertiv up 151%.
- [39:18]
Bill Baruch
Yeah, and look, as I mentioned the other day, I bought more. The upside hasn't ended here. Momentum has taken out some of the marginal buyers but look, they're still perfectly well positioned for data center growth making unique product and they signed a multi billion dollar contract with a data center builder. So. So I think the future remains very bright for them and it's very attractive here.
- [39:41]
Scott Wapner
Taiwan semi up 92. We talked about that. GXO down 23.
- [39:45]
Bill Baruch
Yeah, and as I mentioned a couple of weeks ago, I did cut my position there rather significantly. And look, Malcolm, you know, I thought he did a really good job but growth wasn't there. So they need to reaccelerate growth in what's a very competitive space. So. So I've got really a tag end position there. And keep in mind they work in takeover discussions. As the price goes lower, those discussions coming back become more of a reality. But right now, as you saw with the others that UPS just can't get out of its own way. FedEx has performed but sort of in the same space.
- [40:23]
Scott Wapner
You pass in notes to the six names.
- [40:26]
Steve Weiss
Six names in the Jyoti ETF are down year to date. AMD the worst at 14.
- [40:31]
Scott Wapner
Okay, thank you for your honesty. Your detention has been revoked.
- [40:35]
Bill Baruch
I've given Patty call outs One of our producers.
- [40:38]
Scott Wapner
You know, I'm just wondering, Joe, like that.
- [40:39]
Steve Weiss
There's only six names that are lower.
- [40:41]
Scott Wapner
Okay, well, you have the huge rebalance, right?
- [40:46]
Steve Weiss
Yes.
- [40:46]
Bill Baruch
He gets rid of cumulative total does.
- [40:51]
Scott Wapner
Not account for quarterly rebalance.
- [40:53]
Bill Baruch
Exactly.
- [40:54]
Scott Wapner
All right, bill. Oracle up 61%.
- [40:57]
Joe Terranova
Tremendous strength in the cloud services. I think that's going to be really, as we shift to 2025, can this stock continue that momentum? Are they going to deliver there? We're at a big level. After a poor report, a little underwhelming. Ran up to 190 back and settling in at 170. So it's me interesting.
- [41:12]
Scott Wapner
Next few weeks, Wabtech up 56%.
- [41:14]
Joe Terranova
I love this name. It's been something we've owned in portfolios for years. And I mean up more than 50% year to date. This was as high as our number five name. We when we trimmed industrials, when we started shifting back into the big tech, they do technology based locomotives and the freight and rail space. And if anything really needs infrastructure spending, it's really within that space there.
- [41:34]
Scott Wapner
Amgen down 8%.
- [41:37]
Joe Terranova
This is getting punished because they haven't followed through and delivering a GLP drug here. It's been definitely underwhelming, some lukewarm earnings and just the space in general in health care has slipped. So there's really not a good tailwind here. But this is a level you don't want to see. Really go much lower than here. Okay.
- [41:52]
Scott Wapner
Shan, your contrarian pick for the year was commodities. It's up 10%. They are year to date.
- [41:57]
Shannon Sokotia
You sure it wasn't gold? I thought it was gold.
- [41:59]
Scott Wapner
Scott, was it gold?
- [42:00]
Shannon Sokotia
No, I'm kidding.
- [42:01]
Scott Wapner
I don't know. So you know, I'm going with what's on the paper. Okay.
- [42:05]
Shannon Sokotia
No, it's definitely commodities. So I mean if you look at oil prices, those have clearly been a laggard, as has copper. But if you look at cocoa and coffee, natural gas, gold, silver. So it's really been a mixed bag. But I think if you think about the overweight in the commodity space in oil, that's really been a drag on this play this year.
- [42:20]
Scott Wapner
All right, Santoli, he's coming up next with his midday word. We are back right after this. Welcome back. Our senior markets commentator Mike Santoli joins us with his midday word, which I don't know, I feel like it should be triggered because that's what I hear is happening about Nvidia, whether it's in, correction or out.
- [42:57]
Steve Weiss
Oh, yes.
- [42:58]
Scott Wapner
As far as you are concerned, talk.
- [43:00]
Steve Weiss
To me Look, I'm not, I'm not a fan of this idea that somehow it's a different state of being to be down 9% versus 11% and you're out of a correction. You're not out of a correction till you get to a new high. But beyond that, what I find interesting is with Nvidia bouncing as part of this story, the market seems itchy to try to execute some kind of reversal of these dramatic divergences we've seen recently. Maybe a little bit of tension release, maybe clearing the Fed meeting and press conference out of the way could be a little bit of a catalyst for that. Bonds, the yields are right at the spot where buyers have come in over the last six months, five months or so. So we'll see if that does in fact happen because you have the majority of the market comes into today really oversold even with the S and P sitting near its highs because of these massive split in, in in performance among the few versus the many.
- [43:52]
Scott Wapner
About the Fed, we talked earlier and I thought Shannon made an interesting point. No one's really thinking about a dovish cut today. We've sort of worked ourselves up. This could be a hawkish pause.
- [44:05]
Steve Weiss
That is very true. I don't think anybody is, is expecting Powell to come out and or the committee with their projections to come out and really project determination to bring rates down a lot for sure. So slowing the rate of cuts probably is okay with the market as long as we're still talking about, about cuts. You know, I'm always of the, of the camp that says fewer Fed rate cuts, less Fed accommodation is absolutely fine as long as the economy reassures us that it's in good shape. The 95 soft landing. You only got three cuts over the course of about six or seven months. It wouldn't look that different than today being a one and done for a while. But of course that's because the economy has to then come in and take over along with earnings.
- [44:48]
Scott Wapner
Good stuff. I'll see in a little bit as Mike Santoli straight ahead, the set up. We have three of Jyoti stocks reporting earnings within the next 24 hours. We'll get you set up for those next. All right. Joe T. The set up Lennar after the bell today. It's down 13% month to date.
- [45:08]
Joe Terranova
We talked about.
- [45:09]
Steve Weiss
Dr. Let's talk about Lennar, largest homebuilder by market capitalization. They will set the tone in the terms of what the spring selling season is going to look like in their guidance.
- [45:20]
Scott Wapner
Okay, and what about Accenture which is tomorrow before the bell in the morning.
- [45:23]
Steve Weiss
New generative AI billings came in above $1 billion. That's what everything that this company is going to report. The focus is going to be on what is new Generative AI tomorrow before.
- [45:35]
Scott Wapner
The bell as well.
- [45:36]
Steve Weiss
This is going to be a tough quarter because you had a lot of distortions during the quarter from the election to hurricanes. So there's not going to be very much of a read through in the quarter.
- [45:45]
Scott Wapner
All right, we'll take a quickie, we'll come back, we'll do finals next. Well, you know it's coming 3:00 today. Obviously we're going to be listening to Fed Chair Powell during his news conference and then right when he is done, Jeffrey Gundlach, Double Line Capital joins me exclusively once again on this Fed Day. Get his take and his outlook as well and his best investment ideas, most importantly, certainly for the months ahead. Let's do some final trades though. Stephen Weiss, I'm riding a horse that.
- [46:14]
Bill Baruch
Got me here today and that's bitcoin. Ibit Nice reversal today. I think goes higher.
- [46:20]
Joe Terranova
Okay, Bill Baruch, want to bring something from the energy space. Cheniere LNG regulatory tailwinds and a bullish demand structure for lng. I like this righty.
- [46:28]
Scott Wapner
Thank you. Shannon Reeds.
- [46:30]
Shannon Sokotia
We'll see how hawkish we we come out today. But we think the there's an opportunity here going into the new year.
- [46:35]
Scott Wapner
Thank you very much and Joe T.
- [46:38]
Steve Weiss
E I s that is the ETF for Israel, 37% technology cyber arc check Point Software.
- [46:46]
Scott Wapner
Thank you very much for that. I will see you in a couple hours. The exchange is 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.
- [47:02]
Joe Terranova
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer 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 Eduardo.