President Trump’s Tariff Rollout Looms Large 4/1/25

Summary

Halftime Report: President Trump’s Tariff Rollout Looms Large (April 1, 2025) Hosted by Scott Wapner on CNBC

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Introduction and Market Overview

In the April 1, 2025 episode of CNBC’s Halftime Report, host Scott Wapner engages with top investors Josh Brown, Stephanie Link, and Jim Leventhal to dissect the imminent tariff announcements from President Trump and their potential impact on the financial markets. Airing live from 12-1 PM ET, the discussion provides an in-depth analysis of current market conditions, investor sentiment, and strategic stock movements amid economic uncertainties.

Current Market Status

Scott Wapner opens the conversation by highlighting the mixed early-day market performance juxtaposed with the anticipation surrounding the President’s tariff decisions. He notes, “We are down early, but we see a different picture. We are in the green as we await news tomorrow from the president on what the latest move in tariffs is going to be” (00:59).

Jim Leventhal adds perspective on the market’s technical state, emphasizing the oversold conditions: “We have this very oversold condition in the market... Dow Transport 17% below highs. NASDAQ 112% off its highs” (02:17). Despite some positive movement with 57% of the S&P 500 advancing, the overall sentiment remains cautious.

Impact of President Trump’s Tariff Rollout

The core of the discussion revolves around whether the upcoming tariffs will serve as a clearing event—a pivotal moment that could reset market expectations and potentially lead to a rally. Josh Brown expresses skepticism, stating, “It would be foolish for anyone to say that they know it will be a clearing event because of the way policy has gone back and forth from this president” (07:17). However, he remains cautiously optimistic that if the administration transitions from tariffs to tax cuts and deregulation, it could indeed act as a clearing event.

Stephanie Link counters by emphasizing the resilience of the consumer economy: “The consumer has been really strong over the last five years... I think the consumer can handle higher tariffs” (04:53). She highlights key economic indicators underpinning her optimism, such as low weekly jobless claims (230,000) and a solid savings rate (4.5%).

Josh Brown underscores the risks if tariffs continue, warning of potential layoffs and economic slowdown: “If next Sunday night I'm reading another Wall Street Journal article about a change to what tariffs may be, then I may have to start selling” (07:55).

Consumer Economy and Sentiment

A significant portion of the conversation focuses on whether the consumer economy can withstand ongoing tariff pressures. Stephanie Link argues that despite slowing growth, the American consumer remains a robust driver of the economy: “There are haves and have nots in retail... I do believe that we are a nation of spenders and to bet against them has been the wrong move for 50 years” (12:54).

Jim Leventhal adds that the first quarter might highlight a fall in household net worth, suggesting a nuanced view of consumer strength: “We need to live with them [tariffs]. And we don't know for how long is that? Three months. So it's hard, it's hard to say it's a clearing event when you don't know what's in the mind of the sole person who has the ability to prolong this or put an end to it” (10:15).

Stock Picks and Portfolio Strategies

The panelists share their strategic moves in response to the market volatility and tariff uncertainties. Stephanie Link discusses her shift from CrowdStrike to Palo Alto, citing valuation and growth prospects: “CrowdStrike is expensive, but deservedly so. 32% earnings growth expected next year... I just thought that there was more upside here at Palo Alto” (28:07).

Josh Brown reveals his full investment stance, emphasizing his reluctance to sell unless tariff policies exacerbate economic downturns: “I'm fully invested... what you're not seeing me do is sell” (18:11). He expresses readiness to adjust his portfolio if further negative developments arise.

Specific Sector and Stock Analysis

The discussion delves into various sectors and individual stocks, evaluating their performance and future potential:

• Airlines: Jim Leventhal voices concern over the heavily downed airline stocks, pointing out Delta's 30% drawdown: “What you're seeing is Delta, it's in a 30% drawdown” (10:15).

• Retail Giants: Stephanie Link highlights value opportunities in companies like Target, noting its 33% decline from highs and attractive valuation metrics: “They have traffic... trades at 11 times. It yields 4.3%. They have traffic 2% and that's been very consistent” (04:55).

• Tech and Growth Stocks: The episode examines valuations in the tech sector, with Stephanie commenting on Meta’s decline and future prospects: “Meta is down 21% from its highs... They are spending a ton of money on Capex... one of the only MAG7 that really is” (20:29).

AI Valuations and Private Market Trends

In a segment discussing broader market trends, the panel touches on the rapid valuation increases in AI companies. Stephanie Link points out the colossal funding rounds for OpenAI, emphasizing the shift from public to private megadeals in the AI sector: “OpenAI did break a record here announcing this $40 billion deal. It values the giant at $300 billion at this point” (43:38). Jim Leventhal adds skepticism regarding the sustainability of such valuations amid market volatility: “SoftBank is not worried about recent market volatility... Wish them luck” (46:30).

Economic Indicators and Future Projections

The panelists analyze key economic indicators, including job growth, consumer spending, and sentiment data. Josh Brown warns against prolonged policy uncertainty, suggesting it could lead to recessionary pressures: “If we have to continue, if next Sunday night I'm reading another Wall Street Journal article about a change to what tariffs may be, then I may have to start selling” (19:45).

Stephanie Link maintains that despite some negative sentiments, the overall consumer base remains resilient: “There are haves and have nots in retail... but I still believe that we are a nation of spenders” (13:08).

Closing Thoughts and Final Trades

As the episode draws to a close, Scott Wapner summarizes the divergent views on the impending tariff rollout and its ramifications for the markets. The guests finalize their trading positions, emphasizing a cautious yet opportunistic approach:

• Josh Brown: Continues to hold his positions but remains vigilant against further economic deterioration.
• Stephanie Link: Focuses on undervalued, high-quality large-cap stocks while trimming exposure to oversold sectors like small caps.
• Jim Leventhal: Advocates for best-of-breed investments in sectors like cybersecurity, endorsing companies like Palo Alto and CrowdStrike despite their volatility.

Scott Wapner concludes by teasing the upcoming market close analysis and the quarterly report segment, promising further insights into what strategies worked and what didn’t in Q1.

Notable Quotes

• Scott Wapner: “We are in the green as we await news tomorrow from the president on what the latest move in tariffs is going to be.” (00:59)

• Jim Leventhal: “The consumer has to hold up. A lot of economists are now pointing to a deterioration in the consumer metrics.” (02:17)

• Stephanie Link: “I think the consumer can handle higher tariffs... I have said it's because of the labor market.” (04:53)

• Josh Brown: “If next Sunday night I'm reading another Wall Street Journal article about a change to what tariffs may be, then I may have to start selling.” (07:55)

• Stephanie Link: “If you just have 5% earnings growth versus where the earnings projections were... you can't have a deterioration to that degree in earnings and then say, well, the market deserves to be trading high.” (15:03)

• Jim Leventhal: “I think there's massive consolidation. And, and CrowdStrike is the number one player.” (28:52)

• Stephanie Link: “There are haves and have nots in retail... I still believe that we are a nation of spenders.” (13:19)

• Josh Brown: “I'm fully invested... what you're not seeing me do is sell.” (18:11)

• Stephanie Link: “Meta is down 21% from its highs... They are spending a ton of money on Capex.” (20:58)

• Jim Leventhal: “We need to live with them [tariffs]. And we don't know for how long is that? Three months.” (10:15)

• Stephanie Link: “If the discretionary group would rally in a hard way and the consumer would maybe feel better...” (12:54)

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This comprehensive summary encapsulates the key discussions from the Halftime Report episode, offering insights into market dynamics, tariff implications, consumer resilience, and strategic investment decisions. Whether you're a seasoned investor or new to the financial landscape, this analysis provides valuable takeaways to navigate the evolving economic environment.

Transcript

[Stephanie Link]

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[Josh Brown]

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?

[Scott Wapner]

If this sounds like you, you're stuck in the past.

[Josh Brown]

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 [e-mail] credit card based on the February 2024 Nelson Report.

[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. All right, Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wobner. Front and center this hour, the latest in the markets, the President's so called liberation day looming large. We'll ask the committee how to trade all of that. Joining me for the hour, Josh Brown, Stephanie Link, Jim Leventhal, we'll take you to the markets. We're down early, but you see here different picture. We are in the green as we await news tomorrow from the president on what the latest move in tariffs is going to be. Josh, I think it's constructive just to talk about where we are. I mean, we're coming off the worst quarter since 2022. We know what's happened since the beginning of the year. Nasdaq's down 10% in that quarter. Bonds have rallied, gold has rallied. We may get more tariffs tomorrow. I guess the most important conversation I think that's being had is is that a clearing event? Can you get past that? And then we get to the historical nature of April, which is typically good for stocks. Or is there just too much that's changed?

[Jim Leventhal]

I think it's a short term clearing event and clearly people are taking advantage of the fact that everyone got really bearish. You see 57% of the S&P 500 advancing today. You see some of the risk on stocks acting better than they have in about 10 days. And you've got these deeply oversold pockets all over the market. Dow Transport 17% below highs. NASDAQ 112% off its highs. Some of the biggest Nasdaq, names like Nvidia and Tesla, double digit losses from, from their highs. Even the S and P is 8% below its high. So you have this very oversold condition in the market. But judge, to answer the second part of your question, yeah there might be a tactical trading opportunity but I think something technically is broken here and I think one green day or two green days in the case of the Dow is not enough to say we're out of the woods or we've had the definitive clearing event. I want you to keep in mind the consumer economy is the only thing that matters, not this air noise and not necessarily cross border tariffs on autos. The consumer has to hold up. A lot of economists are now pointing to a deterioration in the consumer metrics. We got a taste of it during the last round of earnings calls. This round of earnings calls which start in about 10 days, probably going to be a little bit worse. The labor market is holding up, not as good as it was, but it's not bad. But that is the only game in town, the only thing worth watching. Will the consumer white knuckle its way through tariff spring? We don't have the answer yet. So I can't give you a definitive answer that this is it, we've cleared. I just don't think so.

[Scott Wapner]

Some are placing their bets though that the answer to your question is going to be yes, that the consumer is in fact going to hold up. That that a consumption based economy, two thirds of which driven by consumers is going to hold up. Like someone to my left, Stephanie Link, Big part of your bet is there you lose that you lose, you lose your view. I mean you're a big part of your view is that the economy is going to hold up, the job market is going to hold up, the consumer is going to hold up. You bought more Target. You bought more Target. Come on.

[Stephanie Link]

I bought more Target, I bought more Amazon.

[Scott Wapner]

I didn't overplay that. That's your view for sure.

[Stephanie Link]

You argue that and it's been right. The consumer has been really strong over the last five years to be honest. Right.

[Scott Wapner]

We're not talking about five years, we're talking about year.

[Stephanie Link]

I don't recently but, but I've been right in terms of. The consumer has held up remarkably well. And I have said it's because of the labor market. I cite the weekly jobless claims all the time. The 46 month moving average. We're nowhere near a recession at about 230,000 weekly claims. Initial jobless claims, a recession is 350 to 375. That remains fine. Wages are good, 4%, 4 to 5, depending on the metric. And the savings rate, Scott, is now four and a half percent. And so what I would say is, yes, we're slowing. Yes, the consumer might pause, but they're in a better position to handle a slowdown and they're in a better position to actually handle the staggering, sticky, stubborn inflation. Even though it's still high and it's still elevated, it's certainly down from 9%. And yeah, I'm buying Target because the Stock is down 33% from its highs. It has done nothing in the past year, down 40% in the past year, trades at 11 times. It yields 4.3%. They have traffic. If they didn't have traffic, Scott, I would be worried. They have traffic 2% and that's been very consistent. They have had bad execution, they have had inconsistent margins. And I think they're on the right track. I think the, the, the guide has been very conservative for the full year. The first quarter is not going to be good. We all know February was crummy for everyone, weather, etc. We know tariffs are a problem, but I think the consumer can handle higher tariffs. And by the way, I think people are so overdone on this tariff thing. I mean, I think we're absolutely pricing in universal tariffs of 20%. You get anything less than that tomorrow, I do think it's a event. And then we're all going to go back to figuring out what the economy is doing, what it's growing at, how much we're slowing down, and what does that mean for earnings. And I believe earnings are going to be fine.

[Scott Wapner]

Tom Lee has this view that it's going to be a clearing event, that it's going to be Liberation day. All right, for the uncertainty, that that's going to be liberated, if nothing else. Others disagree. CHRIS Harvey, Wells Fargo no liberation from the uncertainty. Now, this is someone who's got a 7,007 target on the S&P 500 for this year. He hasn't brought that in.

[Josh Brown]

What do you think it could be a clearing event? I think it would be foolish for anyone to say that they know it will be a clearing event because of the way policy has gone back and forth from this president. But I do believe that it probably will be a clearing event. Here's what I mean by that. I don't think that this presidential administration is out to wreck the economy just for the sake of wrecking the economy. I think that trying to rebuild it in Fact, they've been clear. That's what they're trying to do. And I think that what comes next after tariffs is tax cuts and deregulation. If tomorrow we're done with the tariffs, that's a big if. But if we're done with the tariffs and now we move to the part that the markets are going to like, which are tax cuts and deregulation, then it's a clearing event.

[Scott Wapner]

What if they. What if they do, in fact, think that you have to break it to fix it?

[Josh Brown]

Then we got a problem. I mean, we. Okay, so to be more specific, besides we just have a problem, then somebody with a portfolio like mine has to do what he has not done to date, which is sell small caps, sell travel and leisure stocks. Because then I'm just taking your question. The implication is, is that companies are going to look at a continuing tariff morass and start laying people off. And what Josh said about consumption and you said, and Steph said is absolutely right. Consumption is the hard. And if we start getting layoffs, then it becomes a problem.

[Scott Wapner]

Tell me how you think, think that they're not breaking it now. They are breaking the reliance on public spending. They want to get the deficit down. They are breaking the trade alliances, trade agreements that we've had, trade policy that we've had for many years, and they're breaking the global alliances that we've had for decades. That's not a matter of opinion. It's simply a matter of fact. They're trying to change trade, they're trying to change global relationships, and they're trying to change where the deficit currently is and where it's going from here. So, and that's the detox, the disturbance, all these words that the administration has used to sort of telegraph to you and you, the collective investor out there, what might happen before it gets better.

[Josh Brown]

Scott, I completely agree with your characterization. Breaking, disturbance. There were a couple of other words that you use, but I completely agree. Thank you. Also agree that the impact is negative. There's complete agreement. My point is that if we keep doing that, then you're going to have an effect. All right. We've had weekly jobless claims hovering around at this incredibly low level of 220,000 a week. We've had the unemployment rate at 4.4.1% for months. That's not going to continue. Those numbers are going to get bad if we continue with all the words that we just used. If, however, just let me finish it real quick, Josh. If, however, we finish with the tariffs and we move to the Parts that companies are going to like. You start cutting corporate tax rate, companies are going to like that. They want to lean into it. That's going to mean their profits are growing. They're going to feel good about retaining and even expanding their workforce.

[Scott Wapner]

Josh.

[Jim Leventhal]

It'S the first quarter now that, now that it's in the books, I think when we see the report come from the Federal Reserve. So be the first quarter to feature a fall in household net worth. The historical data is very clear on this point. When stock prices and home prices aren't rising, savings rates are, people get more conservative. The number of job openings has been falling. We know this. It's empirical data. It's not my feelings on the topic. I wish it weren't true. But the labor market while holding up, and Stephanie is correct, it's held up better than most people had thought it would over the last five years. That's not going to be forever. It's, it's about more than just the tariffs. So this idea that we tomorrow we're quote unquote, done with the tariff, I don't even know how that's possible. They're going to put the tariffs on. We're not done with them. Then we have to live with them. And we don't know for how long is that Three months. Then he says, I won, I made my point and takes them off. Okay, that would be good. Is it till the end of the year? Because that's a different story. So it's hard, it's hard to say it's a clearing event when you don't know what's in the mind of the sole person who has the ability to prolong this or put an end to it. Now you're in a situation where you have the 10 year falling. The tenure is saying, don't believe in this clearing event narrative. Look at the airline stocks. They have been absolutely crushed. Absolutely crushed. You take a look at Delta, it's in a 30% drawdown. Like, I don't think it's like, I don't think it's like some capricious thing that just happened.

[Scott Wapner]

No down, by the way.

[Jim Leventhal]

So that's what I'm most worried about.

[Scott Wapner]

Downgraded today the airlines at Jefferies, Delta to hold. The sector is now, quote, in a holding pattern. And the downgrades include Delta, American, United and Southwest. Why? Because exactly what Josh is talking about. Consumer sentiment to remain soft on continued swelling. That's their word, macro uncertainty. Right. I mean, how about that? Now you can win the argument today by saying, well, look at the labor market. The labor market is still strong even if hiring slows. Firings outside of the government firings haven't risen to a not at all. No, but not yet. Right? You could say that if the labor market is already slowing, job growth is slowing.

[Stephanie Link]

Of course it is.

[Scott Wapner]

So if job growth slowing morphs into job firings picking up, that's an issue. And we do know from sentiment reads, by the way, the so called soft data that the consumer is had about had it with all the tariff stuff.

[Stephanie Link]

Well, sentiment has been negative for getting negative for a while now it's been getting more negative but it doesn't necessarily translate into spending. It just there's not a big correlation, believe it or not.

[Scott Wapner]

No, I'm so you'd have to say believe it or not. The Federal Reserve chair who was sitting at the desk would tell, he said that at the last meeting.

[Stephanie Link]

There are haves and have nots in retail. I wouldn't touch an airline. Even in the good times. The halves, you're going to tell me Costco is seeing a pressure on the consumer or Wal Mart is seeing pressure on the consumer with the comps that they just put up or by the way, let's get back to target at 1.5% comps in a tough environment. So Amazon, let's just, I mean that's just a jug or not. We all know that. We all own it because of that. So to me, like there are haves and have nots. I'm not saying the consumer is perfect. I'm not saying that it's not slowing. I'm not saying job market isn't slowing. It is. But I still believe that we are a nation of spenders and to bet against them has been the wrong move for 50 years. So to me maybe we get a soft patch in the first quarter. Like I said, February was really crummy. A lot of the retailers told us that. But who's to say that maybe we get through this, Maybe that the, the tariffs aren't as onerous as expected. That's why I say I think the market's pricing in 20% universal. If we were to get something much less. Well, I think the discretionary group would rally in a hard way and the consumer would maybe feel better, I don't know. But my point being is Scott, the market is down 10% from its highs. But MAG7 not only airlines are down max 7 they are down 25% from their highs. The growth index is down 11% versus value which is up 1 and no one is in value. Some. I mean, Jimmy and I have some value, but we have some growth too and we feel it. So I'm just saying there's a lot of negativity here. Let's get the news. We can figure it out. And wait. Maybe earnings go from 10% overall to 5. I don't think they're going to zero because I don't think the economy is in a recession.

[Scott Wapner]

You just, you, you nailed the point that matters the most. If earnings go to 5, then you're not putting a 20 multiple on the market. You're not.

[Stephanie Link]

I'm not putting a 20 multiple on the market. Some of these stocks are not that I'm buying or not near.

[Scott Wapner]

I'm saying the level of where stocks are. If you only have 5% earnings growth versus where the earnings projections were and at that point, even at those levels, people were saying, well, the market's kind of rich. Come on, you can't have a deterioration to that degree in earnings and then say, well, the market deserves to be trading high.

[Stephanie Link]

Because I'm not saying, I'm saying the sectors and the stocks that I'm buying are not close to 20% times earnings. They have fallen. Their earnings have not fallen. Look at technology. Look at max 7. Now those numbers have come down, but I think they're stabilizing actually here. And I think they're, they're quite cheap relative. I've seen such deep ratings in something like a Broadcom. We talked about this a month ago when it was at 34 times earnings. It's now at 24 times earnings. That's not cheap. But guess what? They have a great revenue mix and they are going to grow double digit earnings and they are going to see margin expansion and they have world class margins in general and they have exposure. And I do believe that is just as big as the consumer. So I don't agree with what Josh said because it actually has so much to do with the overall economy. So I think that there are plays that you can be buying. I went from 9% cash six weeks ago in my portfolio. I'm now at 1%. I could be wrong, but I just see opportunities in stocks all over the place.

[Scott Wapner]

I mean, when you lose your Denny, you know you've done it. Ed Yardeni takes his target down to 6,000 from 6,400. That's just a couple of weeks after lowering it to 6,400 from 7,000. He still thinks you're going to have a roaring 20s, which he has talked about for a while now. But you have too many stagflationary risks to deal with. And he raises the odds of that from 35 to 45%. Maybe you should have a drink. You okay, Josh?

[Jim Leventhal]

I'm great.

[Josh Brown]

It would be foolish not to increase your risks of a recession, stagflation, everything. With the news that's come out over the last two months, and particularly on tariffs, the problem is clear. So is the solution. I do not know. And Josh was making this point. I do not know if tomorrow. Tomorrow will be a clearing event. Nobody does. It's not a knowable fact. It's not knowable in advance. What I do believe, and you can disagree with me, is that this president is neither stupid nor crazy. And you'd have to be both of those to continue on this tack of policy uncertainty. I'm not talking about tariffs. We already know that's coming. But the uncertainty about them, if he sets them, companies can adjust to them. If he sets them, investors, consumers can adjust to them, and they will, because that's what Americans do. Whether you're a company or you're taking.

[Scott Wapner]

Why aren't you taking advantage of the weakness that we've had in the market, down 10%? Because I only see one person who's really doing that, and that's the lady sitting next to me here.

[Josh Brown]

Well, the answer your question is I am fully invested and you know that. And over the last two, three weeks, you've seen me invest. You've also, I mean, whether it's in Microsoft, whether it's been in video, I added to win not that long ago. You know what you're not seeing me do? Because I'm fully invested, I can't buy more. But what you're not seeing me do, and this is important, important is you're not seeing me sell. Now, if we have to continue, if next Sunday night I'm reading another Wall Street Journal article about a change to what tariffs may be, then I may have to start selling. And I may have to start selling the things that right now I think are money. Good. If we get through this tariff thing. I'm talking about travel and leisure. I'm talking about Delta, talking about small caps. If we keep doing this, we are going to run the economy into a recession. And I can't hold small caps or Delta in that, in that sort of situation. Situation.

[Scott Wapner]

What about small caps? They're underperforming the S and P by the widest margin in like 20 years. Literally.

[Josh Brown]

Yeah, I mean, it's, it's. Forget whether it's frustrating or not the question is what to do. Okay. If this economy is going to come back, if we're just having a growth slowdown and we come back to meaningful expansion. And by the way, we're on shoring production that in yours to the benefit of small cap companies which tend to be domestically oriented. If we're, and I know I'm repeating myself, but the point is clear. If we're going to continue doing what we've done over the last two months of every Sunday we're biting our nails on what the tariff situation is going to be, then as I've just said, I've got to start trimming or maybe selling entirely small caps now. Now, the Tuesday before what? I don't know if it's a liberation day or not.

[Scott Wapner]

Well, you.

[Josh Brown]

But I'm not going to do it today.

[Scott Wapner]

You're going to start trimming the small. Small caps down 10%.

[Josh Brown]

Oh, are you kidding me? Yes. If we're going to continue, if we're going into a recession, we ain't done with the decline on small caps. And I mean, look, I get it, they're down 10%. A lot of things are down. I'm not trying to excuse it, but a lot of things are down. If you're going to be clear, to be clear, if you're going into a recession from here it's sell stock.

[Scott Wapner]

I'm just saying the writing on this has been on the wall for everybody to see. See for, for some time those who have tried to double down or justify the small cap trade hasn't worked. Right. Steph has made the other count the counter argument so many times. So many times.

[Stephanie Link]

I've never, I've never made money in small caps. I think they're kind of trades. Right. I just don't think that there's transparency, liquidity. Just think that large cap companies, they give you more information to analyze things from. But it's also the macro as well. You know, I just think that this environment sets up really well for best in breed high quality companies, blue chip large cap to them for the most part that are on sale, wait, that are down 10, 15, 20%.

[Scott Wapner]

Meta's down 21% from its highs. And you bought Meta?

[Stephanie Link]

I did, I did, I did. You know, I regret it. I regretted selling it. You know, I mean I made a lot of money. I was buying it in the 90s, right? Scott, I sold it at 350, then it goes all the way up. Right. I miss it. So now it's down 20% from 21% from its highest rates at 20 times earnings. They're going to grow earnings at 20%, operating margins at 40%. That's a great combination. And by the way, they are spending a ton of money on Capex. Can you imagine when they start? When they take their foot off the accelerator and put it on the brakes in terms of their spend. But they have the best moat. 3.3 billion daily average users across all of their, their businesses. And they're monetizing AI. They're one of the only MAG7 that really is. And so they all, by the way, have a $57 billion buyback. And they didn't even buy any stock back last quarter, thankfully, because it was at highs. So I bet you they're in there now. And so I started a small position. If I'm wrong and these and the market goes down and Max 7 continues to fall, I will buy more. But this is exactly what I'm talking about. This is a high quality company on sale.

[Scott Wapner]

Josh, what do you think about this move here? I remember, boy, I remember a debate that you and Steph had regarding matter and Alphabet, I think. Right. That was years ago. What about that? I mean, the broader point that Steph's making is like, look, these stocks are down too much and now the valuations make more sense than maybe they did before.

[Jim Leventhal]

You know, I think this is a good move. And I think Metta, very interestingly, if things deteriorate in the economy, the narrative is going to be well met as an advertising company and advertising budgets are the first thing to go in a recession and blah, blah, blah, that ends up always being a bad call. And Metta ends up being kind of like an arc where you can, you can get some safety. It's, it's going to be a huge cash flow business. It's going to be way more consistent cyclically than other areas of the market. And similar to Apple, like, people flock to these stocks when they're worried about the rest of the tape. So I actually think Stephanie's making a move on two fronts. Number one, there have been long stretches of time where these Mag seven names have acted defensively. And we've all come on the show and be like, my God, they're trading like bonds. They're acting so well. So that's one. And then two, Met, his growth story is probably least impacted by manufacturing slowdowns or trade wars. They're not in China. They have no business there. He would do anything to get there. He would name a child after President Xi. It just doesn't work. He's not there. So you don't have that contamination of the macro trade problems with Meta stock. So I think Stephanie is taking advantage of a weak market and picking up a good one. I think it's going to work.

[Scott Wapner]

You know, Jimmy, Deutsche bank today on the Mag 7 might be stabilizing. You have had a lot of outflows. Tech, in many respects has led those outflows. That's what bank of America's client equity flows continue to show. Six of 11 sectors sold, led by tech for a second consecutive week. But as Steph has mentioned, names that you own, like Nvidia down almost 30% from the high. Alphabet, you own that, down 24% from the high. Amazon, down 21% from its high. Microsoft, down 19% from its high. And then of course, Apple with some, maybe some more idiosyncratic issues related to its own ambitions, dragging that stock lower. But these stocks come down too much.

[Josh Brown]

I really think so. I mean, let me just go to the most egregious example, which is Alphabet. I just looked a second ago. It's trading at this year's multiple, 17.6. I don't. I mean, that's really okay. This is, I mean, yes, I understand they're building a lot of capex on the data centers. I got it. I understand there's competition, too. But throughout it all, you know, quarter after quarter, they keep defying these expectations that competition is going to eat into their earnings. They've got a lot of moonshots, some of which will pay off. I mean, Waymo seems to be gathering more traction. You know, got YouTube, we got the web services that they put together. I really think 17.6 is overdone by a lot on Alphabet. We say the same thing about Nvidia. 24 times forward earnings. I get deep seek. I get it. But it's clear that data centers are still being built. I mean, Satya, Nadella, everybody else is leaning into their capex. I just don't see 23, 24 times forward earnings on Nvidia as being right. I think it's way too cheap.

[Scott Wapner]

All right, let's take a break. We got committee moves coming up still to get to from Stephanie Link. She's been very busy in these markets. Calls of the day coming up. And later, the quarterly report. We check on what worked, what didn't in Q1 back after this.

[Stephanie Link]

Ten years from today, Lisa Schneider will train in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as as long as she does and she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills Are you.

[Josh Brown]

Still quoting 30 year old movies?

[Stephanie Link]

Have you said cool beans in the past 90 days?

[Josh Brown]

Do you think Discover isn't widely accepted?

[Scott Wapner]

If this sounds like you, you're stuck in the past.

[Josh Brown]

Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purch with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nelson Report as a salesperson.

[Stephanie Link]

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[Scott Wapner]

All right, let's do committee. Stocks on the move. Crowdstrike was initiated overweight at Stevens today. The price target 450 bucks. That's a big upside from here. The news I want to get to with you Steph, is that you trimmed crowds strike last week and you bought more Palo Alto, correct?

[Stephanie Link]

Yes. I like them both very much. I like cybersecurity very much. I have said this many, many times that AI is bigger. Excuse me? The cyber is bigger than I. If AI is in the second innings, I think it's more than $1 trillion total addressable market. I think the big players are going to get bigger. We have 4,000 cybersecurity companies. So you're going to see massive consolidation. And, and CrowdStrike is the number one player. Palo Alto is the number two player. And it's actually lagged though, right? And it trades at 14 times price to sales versus CrowdStrike at 22 times price to sales. And so it's actually down year to date, 6% and CrowdStrike has actually had a nicer recovery. So I just thought that there was more upside here at Apollo Alto. So I took some gains, but I've been like 90% in the name and CrowdStrike so I think it's prudent.

[Scott Wapner]

Josh, do you have a comment on this? Since you own CrowdStrike, just taking some proud, taking some profits here.

[Jim Leventhal]

Do I have a comment? Come on. I don't disagree with Stephanie on I don't disagree with Stephanie on Palo Alto. My attitude and I shouted out Z scaler the other day just on the technicals now on my best stocks in the market list. I think there are multiple ways to win here, but I'm a best of breed guy. It's just, it's just how I roll. I was always in video, never amd. I don't play this, this, I don't play this game where it's like, oh, this one's up a little bit more than the other. I'll play the catch up trade. It could totally work though. And I think Palo Alto is fine. CrowdStrike is expensive, but deservedly so. 32% earnings growth expected next year and there is a power loss in software and it's coming soon if it hasn't already to this, the cyber area. And Stephanie will be right. Like you will see massive consolidation because I'm going to tell you right now, as a small business owner, the last thing I'm looking for is more vendors. I want less vendors who do more things. And the way that happens is by working. I work with Salesforce. I don't work with 90 other companies because Salesforce has all of what those companies do as features. So I think Cyber Palo Alto is a couple of other names. They're going to own this space over the next 10 years. Multiple ways to win. But I'm sticking with crowd.

[Scott Wapner]

Okay, Live Nation slightly lower today. At least it was the ticket scalpers executive order. The stock is now positive as you see here. What's your take on, on this story? Does it, I mean, I guess the Wall street doesn't really think it's a big issue.

[Jim Leventhal]

No, no, no. That would be backwards. Ticket scalpers are the bane of Ticketmaster's existence. It makes it harder for them to produce an outcome that the fans are happy with. When you have a bot, come on right as somebody's going into like a fan club presale or something and take down 20% of the tickets, everybody hates Live Nation. Everybody hates the artist, everybody hates life. So this is actually going to be a good thing. And I think that's why you're seeing Live Nation hanging in there the way it is. They benefit from more regulation. They don't lose. And I think that's a huge misunderstanding on the part of the media. They don't get it. Live Nation wants these auctions of tickets to go smoothly. They don't want scalpers reselling on Vivid and on StubHub. It doesn't help them at all.

[Scott Wapner]

Let's jump ahead to GE Vernova which was added to Goldman Sachs's conviction buy list for April. Stephanie Link owning that stock and there's a related move that you have to it. So tell us about this call what you think conviction buy because this has been in that momentum. Oh upset unwind, however you want to characterize it. And then you bought more of a name related. So tell us.

[Stephanie Link]

I mean and it's down like 40% from its highs. So I get why they like the stock now but it's still up 100. This is Vernova up 1. It's up 121% in the past year. So it's been a great stock. Power grid, electrification, that whole thing you've heard me talk about. I've been trimming GE Vernova and actually added to next Terra and they have a partnership that they announced and I think that that is going to be very positive for both companies actually. But you have a best in breed utility company that just did a great transaction. They're going to see above average growth as a result. And the stock trades at 14 times EBITDA versus 16 times historical average and it's down 17%. So I just cut from a tie. So I kind of just think that there was a little bit better value on the next terror versus GE Vernova but but even over is going to.

[Scott Wapner]

Absolutely win IBM taken off the conviction by list. Right. So you get a little love with GE Vernova and then they got IBM. Get out of here. What do you think about that one?

[Stephanie Link]

I know I'm kind of torn because the multiple has expanded so big time under Arvind Krishna, the CEO. From 14 times to now. It's at 23 times. And the stock has held up remarkably well. It's up about 12% year to date. But I just don't think you want to bet against him. He has done a really good job in terms of M and A and changing the culture of the company, focusing on growth, AI data center, blockchain, etc. And he's done Genomi deals. He's done some 39 deals under his guys when dealmaker. He's, he is a dealmaker in the dealmaker from the dealmaker. But it's working because the growth rate is actually accelerating. So I'm going to hold on to it. Wouldn't add to it here, but I'm going to hold on.

[Scott Wapner]

Okay. Santol is next with his midday word. We're back after this. Actually, look at the headlines. Where are we going? Are we going to Savannah?

[Josh Brown]

Okay.

[Scott Wapner]

Silvana, the news.

[Stephanie Link]

Hey, thanks. Good afternoon. Mass layoffs are underway at the Department of Health and human services. About 10,000 full time jobs are expected to be cut as part of HHS Secretary Robert F. Kennedy Jr's wider plan to remake the nation's public health system. Sources tell NBC News the cuts include teenagers tackling HIV as well as offices overseeing new drug approvals and responding to infectious disease outbreaks. The woman accused in 2022 of killing her Boston police officer boyfriend is back in court today for jury selection in her second trial. The first ended in a hung jury. Prosecutors argued Karen Reed drunkenly backed her SUV into officer John O'Keefe. But her defense claims she was the victim of a conspiracy involving other law enforcement officials. And a volcano began erupting in southwestern Iceland on Tuesday, just hours after authorities evacuated a nearby community and the popular Blue Lagoon tourist destination. According to national broadcaster ruv, flames and smoke shot through the air as a volcanic fissure opened near a town. So far, the eruption has not affected air traffic. Halftime Report. We'll be right back.

[Josh Brown]

CNBC News Update is sponsored by Morgan.

[Stephanie Link]

Stanley, where old school hard work means bold new thinking. Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier that comes from making courageous decisions, partnering with local communities to grow programs and services and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn [e-mail] Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days?

[Scott Wapner]

Do you think Discover isn't widely accepted?

[Stephanie Link]

If this sounds like you, you're stuck in the past.

[Josh Brown]

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 [e-mail] creditcard based on the February 2024 Nelson Report.

[Scott Wapner]

Senior markets commentator Mike Santoli is here now with his midday word, which is what?

[Josh Brown]

Right. Let's not draw grand conclusions out of the action. I think you can go into this with the premise that we've been working with which means if the s and P500 to get much below the recent lows, 5500 seems like you need pretty tangible worse economic news, probably some kind of hard data or maybe maybe a tariff announcement that's at the extremes or something like that. In the absence of that, you know, all the quarter end, beginning of quarter machinations have at least given you a couple of percent cushion above of that. Treasury market is still in growth scare mode. Did not love the ESM report. You still have yields pressing down against some support levels. We need reassurance. The economy's hanging in there. We're probably writing off the first quarter as, as kind of a of a non growth quarter. I think the question is, is sentiment? I think you can say sentiment is negative enough. Seasonal should get better, there should be room for further bounce. And I think the market is mindful of potential upside risks. On a more moderate announcement tomorrow we.

[Scott Wapner]

Need somehow to collectively as, as investors decide whether the detox that is suggested we need to go through a three month phenomenon, a six month phenomenon. Is it more than that and does that period offset some of the things that people are looking forward to, continuation of tax cuts and deregulation and all of those other promises like the, you know, the cookies on the table way down there.

[Josh Brown]

It seems to me any detox that is really worthy of that label would be a lot longer than a few months.

[Stephanie Link]

Right?

[Josh Brown]

I mean if you're talking about rectify kind of bringing the run rate of the deficit back into line. If you're talking about finding a place that for the private sector to absorb hundreds of thousands of public sector work, I mean that's not something that you can do very quickly. I think the jolts numbers today showed a very low turnover labor market that we have right now. It's just kind of sitting there. It's not high metabolism. So I think there's going to be questions about that. And it's also the equal Weight S and P is 16 times earnings. Not terrible, not cheap. You just got to pick your spots within it.

[Scott Wapner]

All right, I'll see you on closing bell. That's Mike Sancholi. Coming up next, the quarterly report. What has worked, what hasn't over the past three months. We'll talk about some of those names next. All right, let's talk about our quarterly report. What worked, what didn't in Q1, highly volatile, as all of you know, Reddit. Josh was one of the big losers. Really caught up as I was talking with Stefan, this downdraft and rerating of momentum, down 36% in Q1. Thoughts?

[Jim Leventhal]

Yeah, it's up 124% over 12 months, but absolutely hammered in Q1. It's part of this group of stocks that includes Palantir and several others that they were pushed up by some of these pod shops that that have momentum traders, a lot of prop traders pile onto that. And some of these stocks just were absolutely levitating in early January. The price that had to be paid was when the market turned, momentum got wiped out. And this is definitely one of the worst names.

[Scott Wapner]

Carlyle Group. You know, if you look back, I what did we call this the other day? The, you know, the rethink trade of what we came into the year thinking was going to work and maybe hasn't like a name like Carlyle Group, for example, private equity was on the this is going to be a good time for private equity trade and it just hasn't worked. Carlyle down 13.5%.

[Jim Leventhal]

Yeah, yeah. Need exits. So no exits. Tough to, tough to put money. Tough to tough to raise money. Tough to put money to work. I would point out, though, private equity firms right now, like have literally a trillion dollars in dry powder. And if this market dislocation continues for much longer, yes, these stocks will trade down with the market. But it also finally opens up much bigger opportunities than what was present in 23 and 24 for more investing. Like I think if you work at a private equity firm right now, you're an executive, you're equal parts rooting for more of this or back to the golden age of IPOs that we thought we were going to have. In either case, these are the smartest people. They know how to put money to work. And if and when they get that IPO window open again or they get a return to M and A, they're going to make a lot of money. So I wouldn't worry too much about it.

[Scott Wapner]

Let's go to Megan Casella now. She has some breaking news, presumably some updates around tariffs. Meghan, what are we learning?

[Stephanie Link]

Hey, Scott. So White House press Secretary Caroline Levitt just finished her press briefing a few minutes ago and the biggest news that we got on the tariff front was that she told us that her understanding is that all of the tariffs that will be announced tomorrow on the reciprocal front, that all of those will be effective immediately. I would expect that means starting to be collected either tomorrow or April 3rd. That's for anything that's announced tomorrow on the reciprocal front. Again, no details just yet on what exactly that would be. Levitt told us that the President is currently in the Oval Office meeting with his trade and tariff team, perfecting tomorrow's plans. Those were her words. I had been told earlier that there are still three options on the table, blanket tariffs, tiered tariffs or country by country customized tariffs. That they were still deciding exactly which way to go, but that the blanket tariff looked less likely than the other options. One other point from Levitt, Scott, I want to mention I got a chance to ask her whether the pause that is set to expire tomorrow on those Canadian and Mexican non compliant with the usmca, whether those goods, whether the tariffs will go back into effect. So that pause was put into effect a month ago. It's set to expire tomorrow. That was the tariffs on the fentanyl front. And I asked her whether the president was considering exposure, extending that pause. She would not answer directly, said she was leaving that to the President. But she also mentioned that fentanyl continues to be the number one killer of young people in the United States, suggesting, Scott, that the White House still has some concerns over fentanyl and that we might see that pause be lifted tomorrow and those tariffs kick back into effect. SCOTT okay.

[Scott Wapner]

Thanks for the update, Meghan. Appreciate that. Megan Casella, we're back after this on AI's eye popping valuation just gets bigger. Open Air gets bigger, bigger. K. Rooney following the Money joins us next. Welcome back. Following the money behind Open Air's mega funding round, its latest one, our Kate Rooney joins us now from one market in San Francisco with the eye popping numbers. Although I don't know, I guess we're used to it by now.

[Stephanie Link]

I know we're becoming immune to these levels, Scott, but OpenAI did break a record here announcing this $40 billion deal. It values the giant at $300 billion at this point. That is just behind Space X and tick tock parent ByteDance. If you look at private markets, SoftBank is the one leading this round putting in $30 billion with a caveat though. So if the company's plans to restructure to a more traditional for profit entity, if that's not wrapped up by the end of this year, SoftBank is going to ratchet down by $10 billion. So it'll be a $20 billion dollar total on their end. Open Air, we should say was founded originally as a nonprofit. It's been attempting to become a full profit company. It wants to spin off the charity as well. But one of the founders, Elon Musk, as you might know, has sued to block that conversion, throwing a wrench in some of those plans. You got Microsoft CO2, altimeter and thrive also investing in this round. We did also get some chat. GPT numbers now has 500 million week weekly active users. That's up from 400 million about a month ago. At these prices though, investors are betting and underwriting that some of that growth can continue. This is by far the largest round we've seen, at least in private markets on record. So for context, it's almost three times as big as the prior high water mark, which was ant Group raising 14 billion. You had Jewel and databricks also in the top five there. And it also tops some historic IPOs. If you look at Saudi Aramco, even if you adjust for inflation, that brought in less than five $30 billion at the time. According to Renaissance Capital, Alibaba and SoftBank itself both raised around 21 billion in their offerings. It does underline the shift we're seeing from public to private megadeals, especially in AI. Scott.

[Scott Wapner]

Thank you Kate Rooney. Josh, I know you have some thoughts about this one.

[Jim Leventhal]

I do. I think if the price was 60 billion valuation rather than 40, sun would written the check. Either way. I think this is somebody who is very, very comfortable making huge gambles and sometimes they pay off spectacularly as in the case of Alibaba and sometimes there we work and this is just the type of investing that that SoftBank does. They bought in early to open AI and according to the reporting at the time, Masayoshi Son was not happy that all he could get was $500 million worth. So these talks have been going on for at least three months. I think what's interesting is the last time we heard that $40 billion number in January, the trade was riding high. Now it's obviously cast in a different light, but that did not change the valuation talk. And I think that's the most interesting part of this. And so SoftBank is not worried about recent market volatility, not worried about core. We've not worried about Nvidia's drawdown. They are plowing ahead as though it's still January 2025, and I wish them luck.

[Scott Wapner]

All right, we'll do finals after this break. All right, I'll see you ON Closing bell. 3:00 today. Adam Parker, Gene Munster, Jason Hunter and Ali Flynn Phillips. We should have an interesting hour, to say the least, as we take you into the close. Josh Brown, your final trades. What?

[Jim Leventhal]

Kinsale Capital continues to move toward record highs. Stock looks great, knsl.

[Scott Wapner]

Thank you.

[Josh Brown]

The farmer, Pacific Gas and Electric. This is a Northern California utility. It got knocked down in the LA fires, but that's outside of its service area.

[Scott Wapner]

Okay, thank you very much for that, Stephanie Link, you must be unh.

[Stephanie Link]

Yes, it's quietly up 14 from the lows, but still cheap at 13 times EBITDA.

[Scott Wapner]

All right, I will see on closing bell and we'll see what this market does between now and then. Green for now. 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.

[Stephanie Link]

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.comhalftimereportdisclaimer. ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills.