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Halftime Report
President Trump's Deadline to Iran Looms over Stocks 4/7/26
00:44:24
Scott Wapner and the Investment Committee debate how to position your portfolio ahead of the looming deadline President Trump placed on Iran tonight. Plus, we hit the latest Calls of the Day in the homebuilders. And later, Josh Brown spotlights the travel sector in his "Best Stocks in the Market." Investment Committee Disclosures
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- [00:00]
Stephanie Link
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC before we had
- [00:31]
Sarat Sethi
AT&T business wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn, an influencer even livestream the whole thing. Not good for business. Now with AT&T business wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
- [00:55]
Josh Brown
AT&T business Wireless connecting changes everything.
- [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. Carl, thank you very much. Welcome to the Halftime Report of Scott Wapner. Front and center this hour, the Trump deadline hanging over these markets today. Investors left to figure out where all this is heading. We'll discuss and debate all of it with the investment committee as well. Always joining me for the hour, Joe Terranova, Stephanie Link, Sarat Sethi and Josh Brown take you to the markets. Here we are, red across the board, about 1%, three quarters of 1% losses for the Dow in the S and P. You can see NASDAQ is down that amount. WTI ticking up today just shy of $115 a barrel. So, Steph, you know, we say we're on edge a bit in the market ahead of the deadline tonight. These really unprecedented social media posts from the president. Oil's up. The Vix is above 25. What are we to do?
- [02:04]
Stephanie Link
I mean, it feels binary, doesn't it, about tonight. We're all going to be watching 8 o' clock tonight or listening or whatever it is that we're going to hear about. We don't even know if we're going to hear anything in general. So what do we do? We have to just lean on what we're seeing from the economy because the economy even in my opinion, it has held up remarkably well. Scott, you know, I always cite a lot of various different data points, but they're still pretty good. And thankfully. So that just speaks to the tailwind that we had before the war and that had a lot to do with the administration's pro growth policies. Deregulation, the one big beautiful bill is kicking in. I thought it's interesting. The tax receipts year to date are up 4%. That's a little bit better than expected. And all the labor market data points last week came in better than expected. We got an ISM manufacturing that's north of 50. Three months in a row we had an ISM services up north of 50. So it's hard to ignore that the economy is still hanging in. Yes, if the war lasts longer, then it's going to slow materially. But for now, what I think is very interesting, even though strategists are lowering their targets on the s and P500, they're actually increasing their earnings. Even yesterday we got more numbers that were revised higher and that speaks to the economy, which is why I always fall back on that. So it's a scary moment. I don't feel good. It's binary tonight. Let's see what happens. But I'm leaning on the economy and I'm leaning on corporate America to do what's best for the companies to deliver on earnings. Cautious guidance likely, but I think that should be enough to be a catalyst for the market.
- [03:39]
Scott Wapner
Atlanta Fed revises down Q1 growth to 1.3. You, you mentioned that. You mentioned it when it's, when it's positive. So let's mention it. When it gets a little negative.
- [03:49]
Stephanie Link
No question, it's not good. It's the direction though that we really care about. And obviously the direction is south.
- [03:55]
Scott Wapner
That's not a low trend. I mean, to your, to your Steph's point, it's hard to argue against the idea that in the here and now the economy's hanging in. I mean, the jobs report was better than expected. Noisy revisions, we get it. But nonetheless, on the surface, the number was better than expected. Steph's right. Earnings expectations are still projected to grow 14 and a half nearly percent. It's a matter of if this goes on and on and on and who knows whether it gets escalated. This evening you just have a whole different batch of questions that need to be asked and then try to answer.
- [04:33]
Joe Terranova
So here's what I think. First of all, if we are going to get good news and I'm prohibited from trading zero dated options, I would actually buy zero dated options calls for today. Because if you're going to get good news from the President, he loves to deliver the good news in the middle of the trading session and deliver the bad news when the markets close. That's been the pattern going all the way back to coal. So I think that when I look at overall the environment, institutions are defensive in their positioning. Retail had a bearish turn. Systematic is kind of neutral. And then to Steph's point, I know earnings are going to be strong. We know that the economy is hanging in there. There's resiliency. I don't think the Federal Reserve is going to get on our way. So there's.
- [05:18]
Sarat Sethi
It.
- [05:18]
Joe Terranova
By no measure is there an inflection point in front of us. I think what's in front of us is the possibility that if you get that good news, you are going to have a powerful rally. What do you do with that? If you've had edges in place, whether it be oil or fertilizer or defensive positioning, I think you pare that back at some point today.
- [05:37]
Scott Wapner
Yeah, you're. You're just going to be, for the lack of a better description, at the mercy of, you know, headlines that are likely to be volatile throughout the day. Like, I'm sure every investor, every person watching the show is looking at these intraday moves. You see the Russell spike tire S and P comes up and they're like, what happened? What happened? What happened? Is there a headline? What happened? That's the kind of day that it's going to be for, you know, certainly for the rest of the day and who knows thereafter.
- [06:06]
Sarat Sethi
And to Joe's point, if something positive happens, it's going to happen in the next four hours. So when you see these things go on, it's well, did we miss something or was something said? Was something not said? And I think, you know, to invest around this is very hard, other than sticking with your core positions and understanding that, yeah, we're going to have good earnings, but we're going to have caution as well. So where do we go with that and who are we going to listen to? And I think the earnings calls, you know, they're always important, but they're going to be very important now considering what companies input, prices and demands are going to be.
- [06:39]
Scott Wapner
You know, Josh, the big dilemma, I suppose, if it even is a dilemma, is, you know, as an investor, do you take risk down even further? Because it's already we've seen institutions and hedge funds de risk significantly. Do you as an investor take your risk or your exposure down even more because you're worried about a bad outcome this evening, or do you do what Step's doing? Do you focus on what you perceive to be still a good, incredible story around the macro? And until that changes, it's Foolish to make any bigger decisions that might skew negative around either your positioning or your outlook.
- [07:24]
Josh Brown
Yeah. So can I, can I have a third choice? Can I have choice C?
- [07:27]
Scott Wapner
Yeah.
- [07:28]
Josh Brown
I don't actually think or do nothing. I don't actually think. Well, no, no, no, no, no. I'm going to, I'm going to say something very productive here. And I think the macro is right at this very moment less important than the micro. We're going into earnings season tomorrow. We're going to hear from Delta stock, I own. Very important, the commentary because they serve the corporate customer, they serve the middle income, they serve the high end, they're international. So we're going to start getting earnings as the focus. I can't tell you what happens in the Gulf. Nobody else can either. Mutual fund managers in Boston don't know. Hedge fund managers in New York don't know. Private equity does. Nobody really knows. But the earnings picture is bright and we've already received the discount thanks to geopolitical turmoil. We already have it. Think about this. We now have. We now have 110s and P500 companies that have issued quarterly earnings per share guidance for the quarter. We're about to get reports on 51 negative, 59 positive. This is the lowest number of companies issuing negative guidance since 2021. On the other hand, the number of companies with positive earnings per share guidance for this set of reports we're about to get is way over the five year average and over the 10 year average as well. So we have the highest number of S and P companies issuing positive guidance in five years. Very few negative pre announcements. Too late now. Even at the sector level you have tech leading, leading with positive guidance. In the meanwhile, you're getting that benefit of the geopolitical turmoil in the multiple that you're forced to pay for these earnings. We hit a 23.1 forward earnings this time last year. You know what that is today? It's 19 year to date. The S&P is down 3%. Dividends added point three to the two returns of the index. Earnings added 5.7% which means multiple contraction has already reduced what the S and P return would have been by 9%. So I don't know that I care about the macro because I can't control it. What I care about is that earnings are going to be great. And I think whatever resolution we get in the Gulf, whether it's tonight or tomorrow or next week, earnings will become the story. And there's nothing not to like about that story.
- [09:57]
Stephanie Link
But you have to care about, you have to care about them.
- [10:01]
Josh Brown
But I can't, I can't bet it.
- [10:02]
Stephanie Link
But I'm not saying you have to bet it, but you have to actually focus on it because that's what's going to lead to better than expected earnings. Especially the cyclical companies that have actually outperformed the growth companies year to date. It's because of the economy having the momentum that those sectors, financials and industrials, materials, even energy, have done pretty well relative to technology. And it's because the economy, economy has so much momentum and a lot of that is the food.
- [10:28]
Josh Brown
Not for everyone.
- [10:29]
Stephanie Link
Not for everyone.
- [10:31]
Josh Brown
I got homebuilders making 52 week lows. So that's the macro.
- [10:35]
Stephanie Link
That's the macro I can't even grow. That's been horrible because mortgage rates are at six and a half percent. That absolutely has not benefited from the macro. But all of these other sectors that I'm talking about, especially the food chain, which is data center, grid power and led by, I mean those stocks, they're green.
- [10:54]
Scott Wapner
Here's the problem. The question is, and this was brought up by somebody yesterday, one firm who had a note because we mentioned it at near the top of our program. Yes, of course, that's true. The question is, does now the war and oil and all of the risks put heavy risk on that? Continuing what you said, that that has been a place to sort of hang out these, the value stocks which have outperformed growth. But have we introduced enough risk now that that's not going to work anymore? Which is one of the reasons why money's gone back into the growth trade and why tech has come off the bottom of the war harder than everything else.
- [11:28]
Stephanie Link
And you know what? I'm buying and I am buying technology because some of those stocks are awfully cheap and some of the sectors, cyclical sectors will not benefit if, if the economy rolls hard. But I do not think that that whole food chain is the benefit of just the macro being good. I mean, $761 billion being spent by Mag 7 is incredibly important. Important. And again, it's incredibly important for all the other industries that are benefiting from that. And I don't think the war is going to change that.
- [11:55]
Scott Wapner
No, but the macro, I think that the macro is a little more, the picture is a little more fragile, it's a little more muddied up, which is why you can't make as credible a case right now, I don't think for the cyclical areas and the broadening trade and the alleged value stocks in the market because now you have greater unknowns introduced into where you were pretty good and you had pretty good visibility. Now it's foggy.
- [12:20]
Stephanie Link
And that's why I've said all along if it's a short war, I think we can get through it because there's enough tailwinds and there was enough momentum in the economy pre war that we can, we'll have a blip, definitely. We have one six in Atlanta Fed tracker. I mean that could even go even lower. So I have no question about that. But I think if it's a short war, we can get past it, get passed through earnings. Earnings should be the catalyst and we can get through it. If it's a longer war, I'm no, but that's wrong.
- [12:44]
Scott Wapner
But that's why the S and P is only down, only down four and a half percent right, since, since the war started. Because people are trying to keep their eye on the same ball that Steph's looking at and saying we came into this in a pretty good place. We're still in a pretty good place. And heaven forbid we don't get into a really bad place because the market's going to look a lot different if we do and the earnings outlook is going to completely change if we do.
- [13:08]
Joe Terranova
Well, I think it's growth overvalue and I think as you move towards the end of the year, the earnings estimates might be a little bit too high in the regard of seeing Q3 and Q4 near 20%. That requires that the broadening out thesis remains intact. I don't know that you're going to get that, especially if oil prices remain elevated. So what I'm seeing in the near term kind of validates my view that I think more than anything else. It's the Mag 7. It's technology that's participating in the infrastructure build out. It's the industrial names that lead the market higher. I don't know if you're going to get the participation that we anticipated coming into 2020.
- [13:46]
Scott Wapner
That's the best.
- [13:46]
Joe Terranova
The point that I was just making was bad. And you had at the end of 2025, look at a day like today. I mean, where did health care go?
- [13:54]
Scott Wapner
What?
- [13:55]
Joe Terranova
Why is health care making this, this turn lower? Should it not be participating as a defensive play? No, it's not participating. So I just don't see moving forward that you're going to have the value resurgence that we anticipated earlier.
- [14:10]
Scott Wapner
I mean Surat Wells today upgrades tech and downgrades energy. So it sort of plays a little bit into the conversation that we're having here. Yeah, on all fronts, war not lasting too long. If you think the war is going to last much longer than people even today expect. Expect you're not going to downgrade energy.
- [14:26]
Sarat Sethi
No. But you could also take the effect that if the war goes longer than we expect, the earnings of energy are going to come down because the demand for energy is going to get reduced. Right. So then you get that cyclicality coming in, the degradation of earnings. So I think that's the right call to start taking some money off energy at these levels because pretty much the right discount rate's been priced in there. And I think to the point of tech, it's been so beaten up, their cash flow positive and they've got strong kind of earnings momentum. So the valuations have come down and it's the time to buy some of the good tech stock.
- [14:58]
Scott Wapner
Steph's moves today could not be a better representation of this, not only this conversation, but of. Of her overall views. You sold, sold, not trim. Sold Chevron and you bought a couple of tech names. Okay, bought. Bought a new tech name and bought more of another one. But tell me about the sell of Chevron.
- [15:23]
Stephanie Link
Well, I've been selling slb. I've been trimming that. I still own a big chunk there. I'm still overweight energy, but I've made 33% in the year to date in Chevron. It trades at 21 times forward estimates. When I was buying it in the beginning of the year, it was trading at 14 times. So it's a great company. I just think that energy is overexposed, extended and I would encourage people to take some profits. You don't to sell everything. Like I say, I own slb, but I have been trimming that as well.
- [15:53]
Scott Wapner
You bought Marvell and you bought more service now.
- [15:56]
Stephanie Link
Yeah, I've never owned Marvell and up until about three weeks ago, I've never owned service. Now I'm trying to look for bargains. Right. So Marvell is trading at 15 times fiscal 28 estimates for 40% growth. It's an AI infrastructure beneficiary. They're optimized. Physical business is growing like a weed, up 50% and their custom ASIC business is growing 20%. Really strong cash free cash flow of $3 billion. Operating margins and gross margins also above plan. And Nvidia is actually investing 2 billion in this company. And by the way, I think they can do something like $5 plus in earnings power by the end of fiscal 27 ServiceNow 25 times for 27% RPO growth. We talked about last week how Palo Alto CEO bought 10, $10 million in stock. Well, this CEO just bought $3 million, increased his stake by 22% and they have RPO growth, as I mentioned, of 27%, free cash flow, margins of 36%, a buyback of six and a half billion and a 2 billion accelerated program and they have an analyst meeting in May. So I think that there's a catalyst. So I don't know if these are going to work in the short term. I don't. I mean software is like in no man's land. But I do think that there's a bargain there. And Marvell, I think it's a great way to continue to play the AI trade. And you know, I was taking some money off the table from Broadcom because I've made so much money there. So I was looking for other places to put within the semi world.
- [17:17]
Scott Wapner
Josh Chevron, I think it probably still on the best stocks in the market list. But this idea, maybe it's going to, you know, maybe it's so binary, the, the outcome of this evening that this is a classic stock at risk of a binary outcome tonight. Whether, you know, as we're talking with Steph, is it time to at least, at the very least lighten up on some of these energy names that have run up for the last five weeks since the war started.
- [17:47]
Josh Brown
So I actually, I like what Stephanie's doing. I would do it slightly differently but the rationale is the same. These are the big winners this year. The sector as a whole is up 40%. These are gigantic companies that have had like some of the biggest short term runs we've ever seen. And quite frankly the fundamentals really haven't changed that much. It's a re rate because I think the sector, energy sector judge got to 1% of the S&P 500. Think of how crazy that is. So as large as the tech sector has grown and communication services, where did all that market cap come from? It came from the energy sector which was about.
- [18:26]
Scott Wapner
And I guess it just collapsed.
- [18:28]
Josh Brown
Yeah, but, but it was 12% when I started this business, so it's incredible. So it got down to like 2, 3%. Nobody owned these stocks and so that we rate higher this year. Stephanie was in first, so she's right. To win the register I would do it slightly differently. So I talk about, I have like 40 energy stocks on my best stocks in the market list. Can't own them all, but if I'm in some of them and I am. What I'm doing is I'm trailing them and I'm looking at a weekly close every Friday. This is not the same as trying to nail the top and I know that's not what she's doing but it's this idea of well wait a minute, these are the best stocks in the market, these are in uptrends and yeah, maybe I'm overweight, maybe I own more than I want to but let me let the market tell me it's over rather than me just decide now if I have something better to buy. Like a marvel that's different. So I'm on the same side as Stephanie. I'm just talking about a different approach to how to manage huge winners. Which Chevron is for her, Exxon is for me.
- [19:29]
Scott Wapner
Seurat, you own Chevron?
- [19:30]
Sarat Sethi
Yeah, I do. I mean we've been trimming a little bit of Schlumberger too. We bought it around the same time. But I still like having the Chevron's and Exxon's both in my portfolio Again they're 4% in total. Just as a hedge and you know as they go up I'll probably take some of it but it's just a hedge in there. When things go bad it kind of, that's where the money flows to.
- [19:51]
Scott Wapner
We need to talk about Apple today for obvious reasons. When I show you the chart, if you haven't seen it yet, it's going to make you certainly sit back and look up. Stock was actually down 5%. That's the worst day in about two months and you just don't see it that often. Would be the worst day since April of 25 if it in fact is down at least 5% or more. There was a story out of Japan that the foldable iPhone hits engineering snags and delays shipments. It was expected in the second half of the year. Now who knows that? That's one of the stories even as Evercore out here today reiterates Apple outperform with a $330 price target. Now you own this personally, you thought this thing was about to take off because I think you said it as much yesterday.
- [20:36]
Joe Terranova
I said yesterday if it closed above 260 I was going to buy more.
- [20:39]
Scott Wapner
That's right.
- [20:40]
Joe Terranova
What I see is what all momentum funds see. And if you're trying to be tactile within the market, it looked like you had an all clear signal where Apple had gone down. At the end of March it had tested the 200 day moving average and potentially had held. My purchase was on March 24th at 2052-½ so it looked like, okay, it's going my way. Let's build to what will be a winning position. Remember, there's been a degree of resiliency throughout the year and Apple as it's viewed as somewhat as a safe haven. So I still think residing there, embedded into the name was a degree of bullish positioning. I think what has happened today and why you're seeing this significant reversal is you're quickly neutralizing that belief that the all clear potentially had happened. You got below the 200 day moving average earlier in the session. Look, that's not enough for anyone in my opinion to take action. You need multi day settlements below there. And I also think you could lean against the 243 and a half low or 2 4,342 rather from late January that sits there for Apple. That's another critical point of reference. I'm going to maintain the positioning here.
- [21:46]
Scott Wapner
Josh, you said, if I recall correctly,
- [21:49]
Josh Brown
close your eyes and buy it.
- [21:51]
Scott Wapner
Your exact words were this is the one, this is the one name was going to going to take off.
- [21:57]
Josh Brown
Close your eyes and buy it. It's a stupid headline. It doesn't mean anything. It has nothing to do with the earnings outlook. The foldable phone is delayed according to Nikkei News. Seriously, it's not people selling it who use their wake up and think this is machines, oh, negative Apple headline, therefore sell X, you know, amount maybe, maybe with leverage, blah blah blah. And then look the buyers come and clean them up. Can I have an intraday chart guys? Let me point to what Joe is talking about. You have overhead resistance in the form of the 50 day moving average which has rejected the stock twice including on Friday. That overhead resistance has been in force since January. But now you've got this sort of upwardly sloping, gently upwardly sloping 200 day which actually has served as support. And you see the stock coming to a decision, decision point and to 60 is the trigger, that is the 50 day. But I think if, if you see this stock recover most of the foldable iPhone crash of 2026 between now and the close you just need to be long. This name, it is digesting sellers very rapidly, right at a very key level of support and once the sellers run out of ammunition, it's going to lift like a beach ball you're trying to hold underwater. This is my opinion, not stating fact. I can't see the future. But gun to my head, this stock ends the year closer to 300 than 200 and you want to be long?
- [23:28]
Scott Wapner
Okay, Microsoft. Is anybody going to come to its defense as vociferously as Josh Brown just did? With Apple stocks down 24% year to date, the multiple has compressed from 27 and a half times to 21. 27 and a half times at the high to 21 times now. Well, bank of America is answering the call today. They add Microsoft to the US one list Surat Seti of the RBC top 30 global ideas for 2026. You know what names on there as well? Microsoft. So here come the defenders, here comes the cavalry to try and save this name before it gets worse.
- [24:04]
Sarat Sethi
Yeah, look, I like it at these levels. I mean Microsoft's been put in the same category as the servicenows workdays, the SaaS accomplice because of copilot. Are they going to have the same seats to sell down the future? This is a company that throws off so much cash flow. They are in the game. They're in every enterprise possible. I think it's just a multiple compression story and is this an execution story of earnings? So wait till earnings come out and then you'll kind of see the trajectory of the earnings.
- [24:29]
Scott Wapner
What about with Microsoft?
- [24:30]
Joe Terranova
I mean obviously when you're looking at momentum, it does not look good is the biggest drag out of the Mag 7. I also think there's been a negative effect related to Open I, I think
- [24:41]
Scott Wapner
you see no doubt about that.
- [24:42]
Joe Terranova
If we, if we think that you show a chart of Softbank, you'll see the same type of price formation. So there's been that negativity. So surrounding Open AI, we know that potentially you are going to see an IPO at some point myself personally and we'll talk about this. I'm more excited about Anthropic and anyone that has that relationship with Anthropic itself. So if we continue to see this kind of shift in sentiment where it's okay, let's revalue Anthropic higher and let's kind of take Open air and lower that valuation. I think that acts as a continued dragon on Microsoft.
- [25:17]
Scott Wapner
All right, let's hit Broadcom before we take a break. We'll do it quickly because shares are up sharply today. It agreed to expand its chip deals with. Since you're talking about Anthropic, that company and Alphabet. Steph, about 10 days ago you trimmed it.
- [25:29]
Stephanie Link
Yeah.
- [25:29]
Scott Wapner
To some surprise on the desk by me primarily the stock's up a lot. I know. You made a lot of money. I know, I know, I know, I know, I know. I know. So I'm saying when you say when you make a bullish case on a stock stock for like the last 365 plus days and then you sell it, I'm like, wow, okay, I was flabbergasted.
- [25:50]
Stephanie Link
My God, I trimmed it. Now this is a really good deal. Two deals today with Alphabet. It's a five year lockup deal for their supply equipment. That's great and anthropic. Actually. They're increasing their capacity. That's also very positive. Could be 10 to 20 billion in additional revenue for Broadcom. So I'm not selling at all. I'm still overweight. But I thought it was prudent just to take some money off the table so that I could buy some of these other stocks that are down a lot here today.
- [26:14]
Scott Wapner
All right, so it's up. And we'll follow that obviously up just shy of 5%. Still ahead, calls the day. We have a big call on the homebuilders today. We're just talking about those. Plus Josh's best stocks in the market is coming up. And later, yes, we do have a new twist in the battle between Sam Altman and Elon Musk. Details ahead.
- [26:34]
Stephanie Link
Foreign.
- [26:38]
Josh Brown
Now is your time to get into a new Dr. Horton home by taking advantage of its national red tag sales event. This Friday, April 10th through Sunday, May 3rd. Stop by any of its participating communities and find select red tag homes at incredible pricing. So whether you're buying your first home or looking for an upgrade, you don't want to miss the red tag sales event starting this Friday. Discover the Dr. Horton Difference. Tap your screen now or visit Dr. Horton.com Dr. Horton American America's Builder an equal housing opportunity builder.
- [27:09]
Scott Wapner
Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.
- [27:39]
Stephanie Link
Not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on on the task at hand and make an Extra sail or two. Sometimes I do miss the bonding time.
- [28:03]
Josh Brown
Sometimes at and T Business Wireless Connecting changes everything.
- [28:23]
Scott Wapner
All right, let's talk some home builders today because as our one of our calls of the day, Seaport securities has downgraded a number of the names. They're lowering the ratings on everybody. Okay. 15% downside expected for sell rated names which they have as Lennar, KB Pulte and NVR. They're neutral on Dr. Horton and Toll Brothers. Steph, I'll begin with you because you have, you've liked these names for a long time.
- [28:47]
Stephanie Link
Yeah, I have.
- [28:48]
Scott Wapner
Mortgage rates are just not your friend.
- [28:50]
Stephanie Link
They are not.
- [28:51]
Scott Wapner
Not your friend.
- [28:52]
Stephanie Link
Not at six and a half percent and I've said that all along. It's interesting though that Dr. Horton recently was at a conference and they said when mortgage rates dipped below 6% that brief period like for like a day or two, they said they didn't see a rush for the doors in terms of wanting to buy homes. But they did say that overall demand is running in line with what they had expected. They reiterated fiscal 26 estimates. The stock trades at 13 times times. It's not very commanding. Believe it or not, the Stock's only down 5%. I mean the overall S&P down is 4%. You would think that if things were so horrible it would be down double digits. And so I just think we have, we have time. We have to wait for time. We have to wait for rates. But this is one of the best. Toll Brothers is actually flat on the year, beating the S and P. And that one is high end. So there are more, more insulated and trades at 11 times forward estimates. So when we get mortgage rates to be our friend, that's when these stocks are going to do well. In the meantime, they're just going to be flattish to whatever they're going to be sideways.
- [29:48]
Scott Wapner
I mean that's a. Yeah, that's a sideways flattish. Now it could be worse. I mean those are neutral. At Seaport, Toll and doctor which are your stock. You could have Polti Group, which they have as a sell. Oh, you have Pulte. I do, yeah, Joe, I do.
- [30:09]
Joe Terranova
So that position is now not looking so good. And everything that Steph said is, is accurate. We need a better. As you move into the spring selling season, you need a better rate environment. Just not seeing that currently they have cleaned up the balance sheet remarkably well over the last several years. That's one of the reasons why we own that homebuilder over the others. But the momentum is broken down and is really you move along in the spring selling season if you don't see the drop in rates. This is not going to look good at all.
- [30:40]
Scott Wapner
That's about as good put can you put the chart back to where you just had it? I think it was a year to date that feels like the best psychology chart for the outlook for rate cuts
- [30:52]
Joe Terranova
100% it's there by the way earlier
- [30:55]
Scott Wapner
in the year everybody thought well the Fed's definitely going to cut rates. Stocks comes off the map looks like a mountaintop. Then all of a sudden that dynamic completely changed. Bye bye.
- [31:05]
Josh Brown
We have and if judge we have some we have some bigger problems in this space. Hunter Brooke Media Sam Koppelman they have a piece out a couple of days ago talking about how what these companies have done while the housing market is depressed. They're not building a lot of homes and putting them into the into the system. They're still they're taking their land sending them to a land bank, getting them off of the balance sheet and in exchange paying a very high interest rate in some cases in the form of will owe it to you when we take the land back and build the home. This has been building up. I think Hunter Brook was writing specifically about Lennar. Give me this Lian chart. This is beyond the problem with interest rates. This is a way bigger problem and you longer than this. You can see this thing is basically for the last year been a falling knife. The land banks are charging these companies a fortune but the companies need to offload so that they can make their near term earnings look better. The problem is even if rates come down and they start selling new homes at a brisker pace and even if they don't have to do it with these incentives they are still borrowing from future earnings in order to make the numbers look more decent today. And so I think it's a secular problem for the homebuilders that we've been in this depressed housing market. So if you want to play falling rates I'm long rocket to me that's the better play than owning the construction companies themselves.
- [32:37]
Joe Terranova
So the chart that you referenced for Pulte year to date if we could put that back up again you will see where the peak is. And now put up that's peak rate cut peak rate cut peak optimism on the broadening out narrative. Now show me the S P value because you will see it's the exact same chart and that's when value their S and P value if you could that's when S P value top Very moment.
- [33:07]
Scott Wapner
Well, that's why we say that the dynamic potentially around value has changed with the war.
- [33:17]
Joe Terranova
More towards growth 100%.
- [33:20]
Stephanie Link
But it's interesting. Today growth is actually massively underperforming value.
- [33:24]
Scott Wapner
I don't think you can judge today's trade, but you could also judge equal
- [33:28]
Stephanie Link
weight year to date versus the S&P 500. You sure can. And the equal weight is still outperforming the Overall S&P5 market cap.
- [33:34]
Joe Terranova
It is not since the war started. Right.
- [33:37]
Stephanie Link
Year to date it is.
- [33:39]
Joe Terranova
I understand. No, I know. I listen, I get that. But something. There's a. There was a dynamic change at the. As we moved into March.
- [33:47]
Scott Wapner
Well, obviously, I mean, you can see.
- [33:49]
Joe Terranova
Well, that's why you. That's why Steph is saying year to date, the S and P equal weight is outperforming. She's 100% correct. But since we've introduced this conflict, there's been a dynamic change in the way
- [34:02]
Sarat Sethi
the various factors show the interest rates at that peak over there started going up and the value started going down.
- [34:07]
Joe Terranova
Absolutely validating my point.
- [34:11]
Scott Wapner
If a football team wins their first eight games and then loses the next five, you don't, you can't say, well, hey, the first eight were great. You, Your record is what it says. Record is what it says it is.
- [34:21]
Stephanie Link
Equal weight outperformed at its peak 600 basis points to the square S&P 500 market cap weight. It is now still outperforming by 400 basis points. If, if I'm fine. If it has lagged the, the, the overall market cap basis, well, that's fine. But it's still outperforming, hasn't totally collapsed. And that's.
- [34:42]
Scott Wapner
No, I know, but if I won the first eight games and I lost the next five, I'm still above 500. I've got a winning record. But my.
- [34:48]
Stephanie Link
If it was so terrible.
- [34:49]
Scott Wapner
Seasons change.
- [34:49]
Stephanie Link
If everything was changing and it was so terrible, then, then the equals weight would be worse than the S and
- [34:54]
Scott Wapner
P. Well, I don't have a losing record.
- [34:55]
Stephanie Link
The problem is you don't have the Mag 7 participating. That's your biggest problem.
- [34:59]
Scott Wapner
Well, now you do. Over the last week.
- [35:01]
Stephanie Link
You do a couple of them. Not all.
- [35:04]
Scott Wapner
Almost all of them are green for the last week.
- [35:06]
Stephanie Link
Well, the whole. Every, Every index was up last week.
- [35:08]
Scott Wapner
No, but the NASDAQ has had the biggest jump off of the war, bottom than any of the other major averages
- [35:13]
Stephanie Link
by 100 basis points.
- [35:14]
Scott Wapner
But it doesn't matter. It still has.
- [35:16]
Stephanie Link
Okay, we'll see if it lasts. I hope it does. I had plenty of names in that, in that index.
- [35:21]
Scott Wapner
Well, I guess.
- [35:22]
Joe Terranova
Respect.
- [35:23]
Josh Brown
Respect. Respectfully, you had a rebalance.
- [35:26]
Scott Wapner
Yeah. I got to go to the news. Sorry.
- [35:29]
Joe Terranova
Is it this thing?
- [35:30]
Scott Wapner
Now this. Angelica Peoples has the news. Seeing the news update. Hey, Scott.
- [35:35]
Stephanie Link
Bill Gates will appear before the House Oversight Committee for a Transcribe interview on June 10. The billionaire Microsoft co founder will offer testimony as part of the Epstein investigation. Investigation According to the Wall Street Journal, Gates apologized to his staff at his foundation about his relationship with the late sex offender, but said he will he never saw or did anything illicit. Anthropic is reportedly making a bigger play for business customers. The Wall Street Journal reports the company is Planning to invest $200 million in a new initiative with private equity firms designed to get the firm's portfolio companies using anthropic technology. The report says the project could raise $1 billion in total and is backed by General Atlantic, Blackstone and Hellman Friedman. And Netflix is launching a new app for kids featuring games built around popular characters from Sesame street and Peppa Pig. The playground app is designed for children 8 and younger and is included in all levels of Netflix membership. Scott, back over to you.
- [36:31]
Scott Wapner
Okay, Angelica, thank you very much, Angelica. People's coming up, Josh Brown's best stocks in the market. The three travel names that made the list. We will tell you what they are next.
- [36:47]
Josh Brown
Now is your time to get into a new Dr. Horton home by taking advantage of its national red tag sales event. This Friday, April 10th through Sunday, May 3rd. Stop by any of its participating communities and find select red tag homes at incredible pricing. So whether you're buying your first home or looking for an upgrade, you don't want to miss the red tag sales event. Starting this Friday, discover the Dr. Horton Difference. Tap your screen now or visit Dr. Horton.com Dr. Horton, America's builder and equal Housing Opportunity builder.
- [37:17]
Scott Wapner
Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.
- [37:47]
Sarat Sethi
Before we had AT&T business wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route a 14 point turn and Influencer even livestream the whole thing. Not good for business. Now with AT&T business Wireless routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
- [38:12]
Josh Brown
AT&T business Wireless connecting changes everything.
- [38:33]
Scott Wapner
All right, welcome back. Josh Brown's best stocks in the market. That's what time it is. Tell us more.
- [38:39]
Josh Brown
So the one area we have demonstrable evidence the consumer is not pulling back is travel and experiences. Going to F1, you're going to concerts and they will not stay off the airplane. And so I want to talk about three stocks in the travel space. We've talked about two of them before here on the show. Then I have a new one. Hilton is on my list of best stocks in the market. I don't know if you know this judge. Most people probably don't. Over the last 10 years it has a better annualized return than Meta, Amazon and Microsoft. It's tied with Alphabet. So this has been a great stock for a long time. They report later this month 9% top line revenue growth expected, 38% EBIT growth and about 14% earnings per share growth. Pretty darn good. Yes. The stock has lost its 50 day because people freak out over high oil prices. The ETF sell stocks randomly. But I really think it's the 200 day that matters here, which is about 280. I like the risk reward. To me this is like a baby. Marriott is a B minus. The Bonvoy loyalty program expanded by 43 million members to about 271 million members. This is one of the biggest travel businesses in the world. The breakout failed, but the stock is still hanging in there. I think, I think with this one it's a, it's a B minus. You got a 200 day around 290 90. You can see that that's been important in the past. That's probably support. But there's a lot of distance between here and there. So maybe not the best risk reward. The one I like is Viking. I've never talked about this name before. This is Cruises for those who enjoy cruises. I'm not one of those people. This is the fancy river cruises in Europe. Maybe someday before I die. As of mid-2026 they had already booked. Yeah, maybe they had already booked. 86% of 2026 capacity, like the whole year is booked out already. $6 billion in advanced bookings. It's, it's unbelievable fundamentally. I think technically. By the way, bank of America today just put it in their US 1 list. Just added it with Spotify and Microsoft. So I think today it's very simple. 200 days, 65. That's the line below which we're no longer interested in the short term. Above there. I think the stock works. 80 is the trigger. If it breaks 80, it could be $100 stock. So those are my names in travel.
- [41:11]
Scott Wapner
Okay, Check out Josh Brown's best stocks in the market on CNBC Pro. Thank you very much for that. Coming up, new allegations of, quote, harassment, deception and anti competitive behavior. End quote. We got the latest in the battle between Sam Altman and Elon Musk. Full details next. All right, welcome back. It's been a minute since we've heard about Sam Altman versus Elon Musk. Musk. But here's their battles escalating. So says Mackenzie SE Gallos. Hi, Mac.
- [42:00]
Stephanie Link
Hey, Scott. So we got open air trying to turn up the pressure on Elon Musk ahead of their trial that kicks off later this month. Our Kate Rooney got a hold of the letter that OpenAI sent to the attorneys general in California and Delaware where the company urges them to investigate what it calls a improper and anti competitive behavior by Musk and his associates. That letter, written written by OpenAI strategy chief Jason Kwon, alleges that Musk has been trying to undermine the company through a broader campaign of attacks, including legal pressure and coordinating with rivals, specifically singling out Metta and Mark Zuckerberg. Kwan says that that behavior could also hinder OpenAI's efforts to bring about our artificial general intelligence. The letter citing a recent New Yorker report claiming that Musk's intermediaries cond conducted opposition research on Sam Altman, including tracking his flights and circulating false allegations. OpenAI is tying that broader campaign to the competitive stakes here, arguing that if Musk's legal efforts succeed, it could benefit XAI and Grok, which is now part of SpaceX and helping justify that reported $2 trillion valuation target. Scott.
- [43:13]
Scott Wapner
Okay, Mac, thank you very much. How you guys think about this? Are you looking forward to these IPOs? Surat, Douglas C. Lane, Portfolio manager, going to load up, back up the truck.
- [43:25]
Sarat Sethi
You know, I'm back up the golf
- [43:27]
Scott Wapner
cart in your case.
- [43:29]
Sarat Sethi
I'm very interested to see the S1, to actually see the details of all these financials and looking at the cash flow before kind of making a decision. Because I think at 2 trillion there's got to be something, something in there to show the next growth for the next five.
- [43:46]
Scott Wapner
If I said you had to buy one of the IPOs either open or anthropic. What would you do?
- [43:52]
Sarat Sethi
Anthropic.
- [43:53]
Joe Terranova
Anthropic all the way.
- [43:54]
Sarat Sethi
All the way. Anthropic has the enterprise, Anthropic has the growth.
- [43:58]
Scott Wapner
Anthropic has $30 billion run rate.
- [44:01]
Joe Terranova
Now better, better experience in Claude, if any. I use Claude.
- [44:07]
Scott Wapner
Max.
- [44:07]
Joe Terranova
It's phenomenal. Rel relative to what you could buy Amazon.
- [44:11]
Scott Wapner
Okay.
- [44:12]
Joe Terranova
Or Zoom.
- [44:13]
Stephanie Link
You buy Morgan Stanley and Goldman Sachs is what you do.
- [44:15]
Sarat Sethi
Well, that wasn't the choice he was asked.
- [44:17]
Stephanie Link
Well, that's my choice. That's my.
- [44:19]
Scott Wapner
Zoom is the one we'll ask Santoli next. What do you think? Welcome back. Senior markets commentator and overtime co anchor Michael Santoli is here as you see very clearly from that nice wide shot at post nine for his midday word. I mean you can't really make any judgments about this market today. I don't think. Not all.
- [44:47]
Joe Terranova
I think what you could say is the market is clearly antsy to move on. It's looking for any excuse why it might be able to do that. Whether it's, you know, delinking a little bit from every tick in oil or, or kind of relying on the stuff that that's held up better to shine through and maybe get past this point when you know, only one story matters. I mean banks look fine. They have for a little while right here corporate risk spreads are down on the bond market. So the market wants to sort of say that the fundamentals are okay if only we could focus on it. We just don't know if we're going to be allowed really to focus on that and to, and to get this essentially this bet on de escalation, redeem.
- [45:28]
Scott Wapner
What do you make of the Apple slide today? Just don't see it that often on, on foldable iPhone delay.
- [45:33]
Joe Terranova
It's funny because you can, we can all think back to these reports where a lot of times there's a supply chain related story coming out of the trades or foreign wire service and the stock sometimes does kind of react to it and then it sort of seems like maybe that wasn't the point. I think it says much more about positioning. I said earlier it built up a lot of this definition defensive bid in, in the stock. It's just unwinding coming back to before. It's right in line with the NASDAQ 100 on a one month period.
- [46:00]
Scott Wapner
All right, Good stuff, Michael. Thanks. I'll see you on the closing bell. That's Mike Santoli. We'll do finals after this break. All right. Welcome back. I would like to call your attention to CNBC's next big event. It is Converged Live, kicks off in just two weeks in Singapore. Look, who's on the board there? Who's on the board there? I will be there.
- [46:37]
Joe Terranova
Morgan.
- [46:38]
Scott Wapner
Morgan Brennan's gonna be there. De's gonna be there. Sedgwick from Europe's gonna be there. We got a great group. It's going to be really exciting. Some of the world's brightest minds are shaping the future of business. Sports and entertainment are also going to be there. And if you want to be there, or at least you want to know what's happening there, you can go to converge live.com Final trades are next. Josh Brown, your final trade, please.
- [47:03]
Josh Brown
Heading to Netflix here. Under 100.
- [47:06]
Scott Wapner
Okay, thank you. Who's got Hershey? Hershey. Hershey, Hershey.
- [47:12]
Joe Terranova
I'll take Hershey. Skinny Pop.
- [47:13]
Josh Brown
For sure.
- [47:14]
Joe Terranova
We own it in the etf. Okay, I think I have two.
- [47:17]
Scott Wapner
Who's got Morgan Stanley?
- [47:18]
Sarat Sethi
That's me. I got.
- [47:20]
Scott Wapner
All right, who's got Pepsi?
- [47:21]
Stephanie Link
I have Pepsi. 18 times forward estimate.
- [47:23]
Scott Wapner
You have that, too?
- [47:23]
Joe Terranova
Yeah, I have two final trades today. Alphabet.
- [47:27]
Scott Wapner
This went off the rails before.
- [47:28]
Joe Terranova
That doesn't make you happy? Yeah, I have Alphabet and Herschel.
- [47:32]
Scott Wapner
Okay, I'll see you on the closing bell with Liz Ann Saunders and Professor Jeremy Siegel. The closing bell. On the closing 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.
- [47:52]
Stephanie Link
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 you turn the wrench.
- [48:27]
Josh Brown
You call the shots. When you want the right parts that
- [48:30]
Scott Wapner
are the right fit, there's Only one choice.
- [48:33]
Joe Terranova
GM Genuine Parts and AC Delco Original Equipment.
- [48:36]
Josh Brown
Visit GMParts.com to get the right parts
- [48:39]
Joe Terranova
for your GM vehicle today.