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Halftime Report
Stocks and the Fed 6/18/25
00:44:22
Scott Wapner and the Investment Committee debate the outlook for stocks ahead of Chair Powell’s Fed meeting today. Plus, the Investment Committee share their latest portfolio moves. And later, the desk discuss what the GENIUS act passage means for the crypto sector. Investment Committee Disclosures
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- [00:00]
Ryan Reynolds
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones Member SIPC Ryan Reynolds here from Mint Mobile.
- [00:33]
Bill Baruch
With the price of just about everything going up, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a.
- [00:41]
Scott Wapner
Thing Mint Mobile unlimited premium wireless.
- [00:44]
Steve Liesman
30, 30.
- [00:45]
Joe Terranova
Better get 30. Better get 20. 20, 20 better get 20. 20 better get 15.
- [00:48]
Steve Weiss
15, 15, 15.
- [00:49]
Joe Terranova
Just 15 bucks a month.
- [00:50]
Steve Weiss
Sold.
- [00:50]
Bill Baruch
Give it a try. @mintmobile.com SW upfront payment of $45 for three months.
- [00:55]
Scott Wapner
Plan equivalent to $15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes of networks busy.
- [01:00]
Ryan Reynolds
Taxes and fees extra.
- [01:00]
Scott Wapner
See mint mobile.com 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, thanks very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the outlook for stocks on this very important Fed day. We' what investors would most like to hear from Chair Powell this afternoon. Joining me for the hour today, Joe Terranova, Bill Baruch, Kevin Simpson, Steve Weiss. And also with us from Washington as he gets ready for the big Fed meeting today and the news conference, is Steve Liesman. There he is. He's ready. He's ready. Trust me. Let's check the markets here. We're green across the board as we look here, Joe BTIG's Jonathan Krinsky says the potential for a pullback is elevated. Tom Lee says stocks are going to rally post fomc. What do you think?
- [01:56]
Joe Terranova
So I think as we move towards the end of the second quarter and mid year, you have this looming battle between resiliency and complacency. Do we have a resilient market or is there too much complacency in the market?
- [02:09]
Scott Wapner
Well, I'm in the we do have a resilient market. You could still have complacency.
- [02:13]
Joe Terranova
Well, but think about from the perspective of positioning, if you're in the resilience, I don't think you could be in both camps in terms of positioning. I'm in the resiliency camp. I think this is a resilient market and we continue to march higher towards the all time highs. The problem and the challenge is I see it when I do the analysis for myself is now we're heading into a moment in the calendar where you lose the buybacks. You know that the 90 day extension on the tariffs that's coming to ultimately an end. And then you have this FOMC meeting this afternoon. And I think that everyone is really treating this meeting with a degree of oh, okay, it's just going to be a boring meeting. Nothing's really going to happen. If Chairman Powell really has a hawkish position and I can't see why he would move towards a dovish position if he remains hawkish. I just don't see that being good for market.
- [03:05]
Scott Wapner
I don't even know. I don't know why he would remain hawkish. Bill, you know you get jobless claims are elevated. You've had some data points that are weak retail sales, biggest drop since March 23rd. Now you could say, well that's all pull forward and maybe it is. We get it. Homebuilder sentiment is bad. It remains such even as rates have started to come down a little bit. What do you, what do you want to hear today?
- [03:30]
Steve Liesman
I think he has a reason to go dovish. I think the city surprise index has continued to come down low since 2023. But more importantly for me is the Michigan consumer one year inflation expectations. Now it is a politically divided survey and, and it was leading with the Democrats. It was, it was very high, elevated to 7.3% and I called that a cycle high. I've been calling that a cycle high for a bit. That was Revised down to 6.6. The June number just came in at 5.3. And this is important because the Fed believes inflation, consumer inflation expectations are a self fulfilling prophecy. And I think they do believe that amidst tariffs that inflation could become unhinged because of those expectations. And it's coming down.
- [04:10]
Scott Wapner
Yeah, I don't see how, how he now maybe he does, I don't know. But the economic surprise index, the most negative so far this year. I mentioned the data points. Agreed. Inflation readings of late have been pretty good. Okay, so why do you think he would be hawkish in the face of all of that?
- [04:27]
Joe Terranova
Because we still have looming tariffs and now we have a conflict in the Middle east in which we don't know the result. We don't know where oil price is ultimately going to go. So he has that uncertainty in front of him. I'm not sure his disposition can move towards being dovish. I think that the eco data is suggesting that he should make that pivot towards being dovish. I see that we have an economy that is beginning to slow from a higher level, but I think there is too much uncertainty in terms of the policy in front of him for him to move in that.
- [05:02]
Scott Wapner
I don't even know if uncertainty equates to being hawkish. It just is what it is. What do you think?
- [05:07]
Kevin Simpson
I mean, I can make a case that we're already too restrictive and that we should be cutting this week. Now, that's not going to happen. And I in no way, shape or form, I'm expecting that because of the tariffs, because of the bump in oil. But if not for that, you look at this market and you can make a great case that we should at least be having the conversation about rate cuts. We also get a dot plot this week which will be super exciting for those of you at home that pay attention. And if that's only one cut in the dot plot, I think the market's going to be very, very negative. If it's two, I doubt it would be a positive catalyst. I think that's already priced in.
- [05:39]
Scott Wapner
Yeah, well, we are going to get the outlook, so that that's going to be key. Steve Weiss joining us today from the hole in Alcatraz. Obviously nice backdrop. What did you do to get put in there, Weiss?
- [05:53]
Carl Quintanilla
You know, I'm actually sitting in the offices of one of our portfolio companies, Nibble Robotics, that's fully automated.
- [06:00]
Scott Wapner
They make bricks.
- [06:03]
Carl Quintanilla
They don't make bricks, but they have very austere, which we like to see from companies not building monuments, but working out of austere surroundings. So what you don't see is 100 engineers working here, but here's.
- [06:16]
Scott Wapner
We'll take your word for it.
- [06:18]
Carl Quintanilla
Yeah, Here's a data point that hasn't come through. Nimble's costs for aluminum, which they used to source from China, went up 50%. So they now source completely from the US what they're able to do is save a little bit. So their costs are still up on aluminum, forgetting about all the other tools, 35% year over year. Now, this is just one company. So I would go back to what Joe said, and there's another category and the other categories which I'm in is resilient but very nervous because of where we are, where elevated valuations on the market. I don't think that inflation. I think we're market's been very sanguine about inflation based on the last to reports. But I think that's coming to an end and quickly because inventories that were not tariffs are petering out and now you have to pay the higher prices going forward. And you're right Scott, there's no basis for Powell to be hawkish in this report and he they do have a very very tough situation not going to predict war. So I don't think they're going to talk about war in terms of what it would do to oil prices would just spike them up. Nor will oil prices rising be a demand factor so it won't be indicative of a stronger economy. So I think basically it's status quo. I think the dot plots don't really change and I think the market sells off because of one dot instead of two instead of two cuts that you'll see isn't snapback rally. This is a market that just has pure momentum. It's got momentum in basically every sector. We're seeing the appetite for IPOs and I think remains strong until we get to second quarter earnings report. And I think that's going to be the tell on the market will continue to be resilient or is going to give back some of the gains. I'm sort of in the latter camp but then again with my with the companies I own I'm not really positioning differently because they're permanent compounders for the most part on the edges I may make some changes but otherwise I'm staying where I am.
- [08:22]
Scott Wapner
The status quo comment implies that we could hear uncertainty and patience a lot today as Steve Liesman sitting in the room later listening to Chair Powell. So what is the over under do you think on the number of times we're going to hear uncertainty or patient today?
- [08:40]
Steve Weiss
Steve I think it was nine in the last one but I just love this conversation. You got just engineered a perfect stagflationary conversation which is almost precisely what's probably going on around the table at the Fed right now. You have guys like you Wapner who said hey look at the claims number, look at the housing number, how can we not be cutting? And then other people come back and say yeah but you have the inflation problem, the tariff issue coming potentially down the road which should we address? Interesting to go back and look at both the number and the change in the March forecast Scott and that was that initial stab or step towards stagflation. Look at that. The core PC went up by.03, real GDP went down by.04 and what they do with the funds rate well they kept it unchanged, 3.9%. One other thing that I'm going to be looking at today, Scott, we don't talk a lot about this. We talked about this a little bit yesterday. But how certain or confident is the Fed? If you look at their own measure of what they say they don't know, or their own measure of confidence in their, for example, their core PC number, take a look here, the number is 0.89. That's their uncertainty. Where one is maximum uncertainty, one means that every official is more uncertain than usual. Where are they? They're just a tick below they were with the pandemic. They're a tick above where they were during the great financial crisis. When do you think the Fed's going to cut? Well, watch when that number comes down, when the Fed gets more clear about the outlook. So I would say if the President wants the Fed chair to cut, maybe call him stupid less and create more clarity in the tariff outlook and the regime more.
- [10:19]
Scott Wapner
Well, just that what you showed, that chart just underscores why some think that the dot plot in and of itself or even right now is comical because it virtually means nothing. Like what difference does it make that you have the median Fed person saying, well, we have two cuts coming this year, while at the same time you've got Powell saying 4,000 times uncertainty, uncertainty, patients, patients, patients, how can you have, how can both coexist?
- [10:47]
Steve Weiss
Well, I think what you want to know, Scott, and that's why we are able to do interviews with Fed officials, why they talk publicly is what underlies that outlook when they say two rate cuts. Is it, is it expecting that the tariff inflation will pass through the economy, be a one time event? Is it an expectation that the job market will weaken? Is it an expectation that they need to get back to neutral or will there be something more that they need to do here? And that's why I think what's been interesting is to watch the job market, which did have a decent number the last time around, but you had those big downward revisions. You've had claims tick up 2,4000,250. That's a higher number, but it's not an especially worrisome number. When I look back at the history, Scott, 300,000 seems to be a number that is more concerning and indicative of the employment market about to roll over.
- [11:37]
Scott Wapner
Yeah. All right, Steve, we'll see in a bit in the room where it all happens and we'll talk afterwards. Of course, as we always do is Gundlock's going to join us on Fed day as usual. Now the economy, yes, concerns, sure, but it has been resilient, the market's been resilient, the economy's been resilient, consumers have been resilient. One of the reasons why industrials by the way are the best sector year to date. We talk about the tech resurgence and how it's carried the market within 2% of a new all time high. Look no further than industrials though. I do that because Kevin bought more Caterpillar which I want to hear about why now for an industrial name like.
- [12:12]
Kevin Simpson
This, it's surprising that you see industrials perform as well as they have this year, surpassing my expectations certainly. But I look at Caterpillar as almost like a stealthy play within the datacenter space because you need the industrials caterpillar specifically to do this type of heavy construction. It's trading at only a 17p E 25% discount to John Deere which is pretty historically wide for those two names. 2% dividend and lots and lots of free cash flow. I think this is a name that's going to perform really well for the next few years.
- [12:43]
Bill Baruch
Years.
- [12:44]
Scott Wapner
You own it too?
- [12:44]
Steve Liesman
Yeah, we like it. I think industrials broadly, you know, if you look at Caterpillar itself, that's right in the mix of one of the largest names in the space. But it's been very secular across the space. Defense, energy production, energy grid storage, data center, build outs, potential reshoring. There's a lot of tailwinds within here and not only that, it's all happening in industrials with manufacturing, PMIs and contraction territory. So this is maybe a bigger, longer term bottom here in industrials that could see larger tailwinds as things build.
- [13:14]
Scott Wapner
Kev Honeywell today, price target, speaking of industrials to 58 from 243 overweight at Barclays. You own that stock too?
- [13:21]
Kevin Simpson
Yeah, I like the price hike. I think the, the sum of the parts is going to be far greater when they break this company up. Now you have some time to get into it. This is an imminent, it's not going to happen tomorrow. I think that this is like one of Steve Weiss's perpetual compounders and I think it's a name you can own long term.
- [13:36]
Scott Wapner
Yeah. Rollins buy at Argus. 68 bucks. Joe is the price target which you own that name to pest control.
- [13:41]
Joe Terranova
Great example of a mid cap company that right now is in the sweet spot as are some of these other industrial names. The industrial sector itself, look, you've got Uber in there. We always talk about that. You have Axon, those are, to Steve's point, clear momentum winners. And there's also earnings strength visible as it relates to. But there's names we don't talk about, about a lot that are performing remarkably well. We talk about how the ita, the Aerospace and Defense ETF is doing well. Well, it's not so much the defense names that are doing well. It's the aerospace names. It is Helmet, which is doing well. It's Heico, it's Republic Services, it's Roland's, it's Cintas. So I think the industrial sector so far is capturing a lot of capital that over the last several years has found that sector unappealing. Now that you have the earnings growth visibility, there's a lot of room to rebuild positioning in a multitude of these names and it's represented in the performance.
- [14:35]
Scott Wapner
What do you do, Weiss, if you think like you do that maybe we're going to still have that slowdown in the economy as a result of the tariffs and some other issues with, I mean, you own Caterpillar as well with the industrial space.
- [14:49]
Carl Quintanilla
Yeah, so I own Caterpillar also on the xli, which gives me the experience, exposure, as Joe mentioned, to aerospace and to Defense. So to me that that's a great holding. Now, I did it in case I'm wrong. Frankly, if I'm right on the economy and I agree with Steve, even though he didn't make the prediction, he pointed out stagflation is the conversation. I've been saying that for a couple of months now, then I'll be wrong Caterpillar and I'll be wrong in the xli, candidly. But if, if I'm wrong on what the economy is doing, doing, and I'm wrong on how investors regard the economy, this resilience has no end to it, then I want to participate through Caterpillar. And my preference was Deere. But to Kevin's point, Deere was trading at too high a level and disparity and the width of the discount from Caterpillar deer drove me to Caterpillar. I also believe that you buy the tool belt, which is another reason. So I agree with Kevin on that. In terms of data centers, data centers themselves, the cap rates are too low and you know, I think there's going to be some overcrowding in the data center bill, but that'll be good for cac. So. So that's why I own it. Fundamentally, I think it's work. It's working well.
- [16:03]
Scott Wapner
We pay attention to today, to what interest rates are going to do and then see what growth stocks do. Nasdaq's been great, as you know. It's green today. It's up 10% over the last 12 months. Year to date, 1 1/3%. But it's really carried stocks back. I bring it up because we have moves. Jabil, Kevin Simpson, your newest move. That's a fresh buy.
- [16:24]
Kevin Simpson
It is, Scott. We made this our final trade on Thursday, bought it on Friday. It's up $20 since then. If you complete that. And this is in our growth portfolio. We bought it before earnings. Earnings were great. They beat on the top line. They beat on the bottom line. 16% year over year, revenue jump. But what I like most about the earnings report was that management increased the year over year. Top line, bottom line, they're not taking away earnings. They're not downplaying them, they're increasing them. That's a stock you probably want to own. It's up a lot, so be careful.
- [16:54]
Scott Wapner
Yeah, but a lot of people on the street like it. So price target raises four of them in front of me. Ray J to 230, Barclays to 223, Goldman to 215 and JP Morgan at 214. So what looks like a pretty good chart they think is going to look even better. You sold a covered call on Apple, the worst performing MAG7 stock year to date.
- [17:15]
Kevin Simpson
Yes, Steve, what you do, if you go into a range bound market and we believe fervently in hedging positions that aren't doing a whole heck of a lot. Apple being a great example. About 11 days ago, we sold a covered call, brought a few dollars in, bought that back yesterday basically for nothing. Wrote another call expiring out another week and a half when you total it all up. If we collect all the premium, which I think we will, we'd effectively be out at 20610 if we get called away. And if not, we brought in $5 of premium literally in three weeks.
- [17:45]
Scott Wapner
Let's check out shares of Metta today as well. That's an interesting story. I'm sure most of you have seen these headlines already. The stock's up a third of a percent. Not a huge mover. It's having a decent week, though. Sam Altman says Metta offered Open Air staff $100 million bonuses to move. Our Steve Kovac joins us now with extraordinary attempt at poaching.
- [18:10]
Bill Baruch
Yeah, if you believe these numbers, Scott. So Altman went on his brother's podcast this week and he was claiming Metta is trying to poach his top talent at OpenAI with bonuses worth up to $100 million. Now this comes after Metta invested last week $14 billion in that startup scale AI and poached away and its CEO. On top of that, OpenAI, Google and likely others are now canceling their business with Scale AI. And our Deirdre Bosa has been reporting today some skepticism. Altman is telling the full story here about this poaching effort from Metta. He said this on his brother's podcast. After all, Metta. For its part, they're not commenting on Altman's claims. Here's what we do know though, Scott. All of these companies continue to spend like crazy to achieve artificial general intelligence. That's of course the AI that can match humans. Bloomberg this week, for example, Elon Musk XAI is trying to raise more money as it burns through. $1 billion per month plus all the capex spending on data centers from the hyperscalers that we talk about all the time. Apple though, the only one in the big tech space not spending those enormous amounts of cash on AI or those splashy hires. Still no clue when any of this is going to pay off there, Scott. Just spend, spend, spend and see what happens.
- [19:23]
Scott Wapner
The poaching headline was interesting enough. This next item is arguably much more important than any of that. And that is according to the information that OpenAI has started selling chatbots at a discount, which is hurting Microsoft because of the relationship that they have.
- [19:41]
Bill Baruch
Yeah, there are two ways to look at this, Scott. So on the one hand, yes, OpenAI is getting more competitive on pricing. We talked to OpenAI about this this morning. Morning. Some of that is credits to use towards their API is not necessarily, you know, a full discount. And then on the Microsoft side, I spoke to them today and they're telling me, you know, they are competitive on pricing and where appropriate, they might actually match OpenAI or other competitors at the same time. The second thing to consider though, Scott, is any benefit to OpenAI is still a benefit to Microsoft. Microsoft provides the Azure cloud service for Open Air. Yes, they're no longer the exclusive provider. We got that Google Cloud deal last week, for example, so that could chip away. But Most of Microsoft's AI revenue is coming from OpenAI. And don't forget, Scott, Microsoft owns 49% of that company. So any, any benefit there is still going to benefit Microsoft. At the same time, we're still expecting these companies, the relationship to get further and further apart as they start competing more and more.
- [20:40]
Scott Wapner
Yeah, no, no doubt, Steve, thanks for that reporting for us. Everybody owns Microsoft Weiss, you have a thought here on what you think this means in the big picture?
- [20:50]
Carl Quintanilla
Yeah, so. So I am in San Francisco right now and the talk at dinner last night was how expensive AI engine.
- [20:56]
Scott Wapner
Everybody knows where Alcatraz is. You don't need to tell them again, all right? I didn't even know you were out there. But now it's even more obvious. So just continue. You don't, you don't even tell everybody. You don't see the location, see the.
- [21:07]
Carl Quintanilla
Bars around the room, but they don't.
- [21:10]
Scott Wapner
Have bars in the hall.
- [21:13]
Carl Quintanilla
It costs a fortune to get engineers. You can't bring them on for, for less than a million bucks, which is about four times what it was just a couple of years ago. The, the environment of AI products is ballooning. I was with one large VC fund yesterday and they're just investing. All they're investing is that AI and companies are getting valuations without even having more than an idea that are ridiculous. So at some point it all comes home to roots. Microsoft, yes, you do have to see where they're going to make money off. They already are and they're still in my view the best position to capitalize on the trends. And the last thing is I sincerely doubt that there are a lot of, there's a of lot, lot of talent that Metta is paying $100 million for. Maybe want to come and run a business, but otherwise it makes no economic sense whatsoever.
- [22:05]
Scott Wapner
I don't know. I mean these companies have never been shy about paying massive amounts of money for the best engineers that they could find. The engineers. I mean there's a lifeblood of any one of these organizations in many respects. So they're writing the software. Meta target to 807.
- [22:21]
Carl Quintanilla
My resume over to, I sent my resume over to Metta and they sent back and said 50,000 over a 10 year period.
- [22:28]
Scott Wapner
Yeah, they said who, who are you? Price target 790@ Argus, everybody owns this. What do you think about that?
- [22:36]
Joe Terranova
Nvidia, Microsoft. And coming up behind them is Amazon. That's where the clear momentum is right now. What's interesting is I think there's a message in what is going on with these companies and it plays into the resiliency camp for the market. These companies don't care this afternoon whether the dot plot show one cut or two cuts. These companies are going to do what they're going to do, which is continue to spend on the innovation. And I think the other side of the conversation about potentially poaching $100 million talent is I think you're going to see significant headcount reduction at these companies over the coming years because I think this innovation is a massive deflationary force that is going to be emanating for years to come.
- [23:19]
Scott Wapner
We do have a news alert out in San Francisco. Our Deirdre Bosa has. It's pretty interesting stuff to do.
- [23:26]
Ryan Reynolds
Well, Scott, Waymo is coming for New York City next month, at first with a manual driver to collect data and test. But they have applied for a permit to operate autonomously, and if granted, that could get them closer to operating in one of America's largest and most complex cities. Now, they tested in New York back in 2021. But what is different now is that Waymo is operating in four major cities, including here in San Francisco, with a fifth to come this summer. Now, advances in technology and vehicles, 71 million miles of safety of safety, drivers, safety data, excuse me, and more than 10 million paid robo taxi rides. Now, the expansion, of course, has been aggressive. It's only going to get more aggressive in New York. Testing comes just down days before Tesla's Robotaxi launch next week in Austin at a much smaller scale. Last thing I want to leave you with, Scott, is this Wells Fargo note this morning that says but that by 2030, Waymo will have expanded its addressable US footprint to 57% from less than 10% and taken 10% of the rideshare market. And so that certainly helps explain why Uber and Lyft took a leg lower on the news.
- [24:30]
Scott Wapner
Yeah, no doubt. I'm glad you mentioned that. I was just looking at Uber and it's. Let's look at the intraday, because Uber is at the lows of the session. It's not a huge decline. But if you think of the major players, D as I know you, you do Tesla, Uber, Waymo, I mean, we're talking about the players who have the biggest aspirations in all of this.
- [24:49]
Ryan Reynolds
And it's not just them. Zoox from Amazon is coming online. I mean, Tesla has been seen as sort of the bigger threat, providing this existential question for Uber and Lyft. But Waymo has just been quite quietly expanding and expanding. And to think that they could take up 60% of the total addressable market by 2030, that really puts it in perspective. And just speaking from experience here in San Francisco, I no longer take Ubers. I take Waymos. People are willing to spend more for them also because the experience is better. So if you see that in a place like New York City and even internationally, where they're going, that could be a very big deal.
- [25:25]
Scott Wapner
Yeah. And as they do this mapping and data collect, it's certainly worth noting that human drivers are going to be operating the cars here in New York City. Just a first step which I imagine would be critical in a city like this with the traffic that it has. Thanks. It's George Bosa. You want to comment on Uber here?
- [25:42]
Joe Terranova
Well, look, the competition is coming. It's clear Waymo already has a presence in Austin and Phoenix and they will be moving into areas like Miami and into Washington. I do think the regulatory climate in New York York is somewhat challenging. This is a unique environment to navigate through, so I wonder exactly the commercial aspect of it, how viable and how quickly they will be able to bring that to market.
- [26:06]
Scott Wapner
All right, up next, we have more committee moves to get to. We have our top calls of the day as well. We're back in just two minutes with all of that. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [26:45]
Bill Baruch
Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us we brought in a reverse auctioneer, which is apparently a thing thing.
- [26:56]
Steve Liesman
Mint Mobile Unlimited premium wireless get 3030.
- [26:59]
Joe Terranova
Better get 30 better get 202020 better get 2020 better get 151515 15. Just 15 bucks a month.
- [27:04]
Steve Weiss
Sold.
- [27:04]
Bill Baruch
Give it a try at mintmobile.com Switch.
- [27:08]
Scott Wapner
Upfront payment of 45 for three month plan equivalent to 15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes of network's.
- [27:13]
Ryan Reynolds
Busy taxes and fees extra. See mint mobile.com Imagine what's possible in your business career when learning doesn't get in the way of life at Capella University. Our game changing Flexpath learning format is available in select business programs and lets you learn at a time and pace that works for you. That means you don't have to put your life on hold while earning your business degree. Instead, enjoy learning your way and earn your degree without missing a beat. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo.
- [28:01]
Scott Wapner
Let'S get some moves in Here Bill, you bought T Mobile. Tmusy it's falling out now.
- [28:06]
Steve Liesman
So earlier this year we sold it and I look back after the kind of run it took place throughout the year I was, I was regretting it. Now I think this is an opportunity back to nearly unchanged on the year. They have a lot, you know, high speed, the high speed Internet business is accelerating. The telecom space has done really well this year. I think it bounces back from here. But the really the customer growth they're leading in that space with the customer growth, the T satellite, I think their niche business within telecom is going to continue to accelerate. And we really like the free cash flow growth. 167%.
- [28:37]
Scott Wapner
Six days down out of seven we've got. We're on pace for four negative months in a row. That sounds different from the story you're painting for me.
- [28:46]
Steve Liesman
I mean it took off to start the year so it's unchanged on the year at this level. I see a lot of support in where we're buying it. We're starting with it about a 1 1/2% position. We have some cash to get to work. We own AT&T in the space as well and that's been underperforming recently. We haven't touched that in a long time. It's number 10 holding a bar that's.
- [29:04]
Scott Wapner
Coming off five down days in a row by the way. That's worst streaks since mid January.
- [29:08]
Steve Liesman
You know what I would tie some of this to here is we're leaning heavily into communications, owning Microsoft, Alphabet, Netflix as well as these telecoms. And we think this, the space continues to outperform. We look at the flows that are going to come into this space I think as the year develops. But with you seeing the telecoms underperforming relative to some of the, some of the others, the larger names as tech and tech driven names. So I think that's telling you the risk appetite that's taking place in the market right now too. And so we want to hold these names, the T Mobile and the AT&T if that risk appetite sort of curls up a bit at some point over the summer.
- [29:42]
Scott Wapner
Okay, Kevin, you sold a covered call on T Mobile.
- [29:44]
Kevin Simpson
Yeah, I believe in Bill's thesis we own the stock in our growth portfolio. We sold a call literally like a week ago and brought in three, four dollars a share. We saw what happened with Softbank sale drove the stock down. I think you're entering it at a good play. We bought that back for basically zero run. Another covered call for about a week and A half. If it does get called away from us, we're essentially $11 above this price point. Exact same trade that we did with Apple. Can do this all summer long. In range bound positions.
- [30:10]
Scott Wapner
Joe T. Zoetis today downgraded to hold at Stifel 160 is the price target. Not a massive decline, obviously a pullback, but they feel like it's almost out of gas here. 157.
- [30:22]
Joe Terranova
Well look, we added this at the end of April. We saw something in the revenue growth that we thought looked good. I'll tell you, looking at it today, it doesn't look like that's going to be anything more than a swing and a miss. We will find out obviously at the end of July. I'd like Capital Capital rather moving towards McKesson instead of Zoetis. Zoetis right now has been unable to reverse what's been a very punishing downtrend since September.
- [30:48]
Scott Wapner
Okay, Roblox Target to what? 125 from 80. That's a nice bump. Let's take a look at the chart, see where it is today. There it is. Well, it's at 102 so they go 125. They reiterate outperform at Oppy 52 week high today up 77%. Kevin Simpson in just three months.
- [31:04]
Kevin Simpson
Yeah, a little late on the upgrade, but I agree with the price target. This isn't just a gaming stock. It's an infrastructure play to own eyeballs. The advertising that they can do with the young people down the road, the way they can control that infrastructure. We love this stock similarly to the same way that we do with Robinhood Vistra.
- [31:21]
Scott Wapner
Joe, we could have had this in, you know, around data center. We do it here. Either way, the Target goes to 186 from 178. Reiterated overweight at Morgan Stanley. I mean a lot of these firms, and not singling out this one by any stretch, but a lot of these stocks have gone up. You've been forced, if nothing else, to chase everything. But again, the, the price targets that are going up on many of these names, as you've noticed, aren't that much higher than where the stock is currently trading.
- [31:46]
Joe Terranova
No, because I think everyone's skeptical when you're looking at whether it's Vistra or Constellation Energy or all of these utility names that really are rising on strong momentum.
- [31:58]
Scott Wapner
Who doesn't know that already?
- [31:59]
Joe Terranova
Right, but. And also the fact of this fundamental tailwind from artificial intelligence. But I think the skepticism, optimism comes from just the bias of where utilities have been in portfolios for several years now. And people look at it and say, okay, you've got this cyclical tailwind. It's nothing more than that. I'm going to push against that. I think this is a secular tailwind. I think this is a moment where if you are an investor, you have to think about capturing more exposure to the utilities sector than you have in prior years. I think utilities today are important to portfolios like energy was important to portfolios 15, 20 years ago.
- [32:37]
Scott Wapner
You got a comment on Norwegian cruise Line downgraded today at Argus as well. You got that in the T. Royal.
- [32:42]
Joe Terranova
Caribbean is the one that you want to own. Royal Caribbean has had.
- [32:46]
Scott Wapner
That's what you own.
- [32:47]
Carl Quintanilla
Yeah.
- [32:47]
Joe Terranova
Royal Caribbean has had a remarkable turnaround in reducing their debt obligations.
- [32:52]
Scott Wapner
All right. The headlines with Silvana Hanau. Hi, Silvana.
- [32:55]
Ryan Reynolds
Hey, Scott. Good afternoon. Israel has moved some troops from the Gaza Strip to the country's borders with Lebanon and Jordan as the country increasingly focuses on its conflict with Iran. The Israeli military said troops from one of the main divisions operating in Gaza were pulled out after Israel started a series of strikes against Iran on Friday, though troops from four other divisions will remain in the Palestinian territory. A federal judge has upheld the FDA's decision to remove Novo Nordisk Blockbuster weight loss and diabetes drugs Ozempic and Wegovy from the shortage list. The judge's ruling today rejected a challenge from compounding pharmacies that were looking to continue making cheaper copies of the drugs. And a National Academy of Sciences report found the FAA hired just two thirds of the air traffic controllers its staffing models recommended from 2013 to 2023. The report added controllers logged 2.2 million hours of overtime last year, which cost the FAA $200 million because of, quote, inefficient scheduling. Scott, I'll send it back to you.
- [34:06]
Scott Wapner
Right, Sylvana. Thank you very much for that, Silvana. Now coming up next, committee stocks on a hot streak. There are many. We'll debate our big list when we come back. You probably own some of these, so you don't want to miss that.
- [34:30]
Ryan Reynolds
On WhatsApp, your personal messages stay private between you and whoever you send them to. So things like the passport numbers for your honeymoon stay between you and your fiance and that video call for your gran's 80th stays in the family. Even your streaming password stays between you and your college roommates who still ask for it every week in your group chat because on WhatsApp, your personal messages are yours. No one else can see or hear them, not even us. WhatsApp message privately.
- [35:01]
Scott Wapner
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com creditcard Based on the February 2024 Nelson Report, we got some hot streaks to talk about. Cameco 60% gain in three months, 35% year to date. Why is the stock up so much in the last three months?
- [35:53]
Steve Liesman
It's a nuclear renaissance. I mean President Trump did sign some executive orders about a month, two months ago encouraging a nuclear. They've been well positioned. And this isn't a new trend. The stock has done well. If you look back out three years, it's been a trend. I think this can continue. I think we'll see new highs this year.
- [36:09]
Scott Wapner
I'm not going to go through every name because some of them are obvious and we talk about them a lot, but Amphenol 45% in three months.
- [36:16]
Joe Terranova
Remarkable, remarkable name. We've owned this name now for the better part of five years since inception, benefiting from the tailwind of a 20 plus percent revenue growth.
- [36:26]
Scott Wapner
Quanta Services 34% think we know the story there, but is there something else beyond the powering of data center and everything else?
- [36:34]
Joe Terranova
Again, when you have the ability to grow your revenue at rates that are exceeding what your average is over the last five to 10 years and positioning in that sector is underserved, you're going to see a lot of capital flow into that. And that's exactly what we're seeing here. The momentum remains remarkably Strong.
- [36:51]
Scott Wapner
Amber sports 27% bill in three months.
- [36:53]
Steve Liesman
Why a couple of tailwinds. China in September. Really? You're starting to see that movement of consumption. Retail sales in China this week just was a blowout number. But their diversification of revenue streams, everything from Louisville Slugger to Arch' Teryx to Salomon to Paddle Sports, I mean they got it going on.
- [37:13]
Scott Wapner
DoorDash up 15%.
- [37:15]
Kevin Simpson
Kevin first quarter revenue jumped 21% to a record $3 billion with total order quarter is up 18%.
- [37:21]
Scott Wapner
How about IBM? So called old tech? All that's old is new. Again with this one, I mean how.
- [37:28]
Kevin Simpson
Many years did we sit there and watch it languish and do nothing? I think there's a quantum play here where the young generation's getting involved with it. We've got the Watson AI, which is legitimate. And finally, Red Hat is something that is not only monetizing but making them a leader in AI.
- [37:42]
Scott Wapner
Joe. EQT 14% over the past three months.
- [37:45]
Joe Terranova
So they two names that we've read off so far that score remarkably high. And it was surprising to me, one of the names actually is IBM to see such strength exceeding Palantir, exceeding Aphenol and CrowdStrike. But the other name is EQT. EQT has remarkable strength right now and a lot of it is because there appears to be this awakening in natural gas. Now remember, you had relative outperformance in EQT versus the spot price of natural gas. Natural gas was sliding towards $3 and equity was moving from the upper 40s into the low 50s. Now it's approaching $60 and it's benefiting from this additional tailwind when natural gas prices are going to $4. I would say stay with the position because the momentum here looks really strong.
- [38:28]
Steve Liesman
Natural gas. I'm buying natural gas. I bought some call spreads out to October today. I've also bought some August call spreads in natural gas. It's back above the 54 day moving average on a daily chart. It's breaking out. I think there's some weight tailwinds here.
- [38:39]
Scott Wapner
All right. Good stuff. Thanks for that. We'll take a break. We come back, Santola. He's waiting. His midday word is next, just ahead of the Fed decision. There's clock one hour, 19 minutes and just shy of 30 seconds. All right, we're back. Our friends at Golf Channel following the PGA Tour's next stop this week. It's at the Travelers Championship. Golf Channel reporter George Savarikis joins us live from Cromwell, Connecticut with what to expect. You have some big news on the corporate side of all this and some big names on the golf course this week.
- [39:32]
Kevin Simpson
Yeah, very much so, Scott. The big announcement, the PGA Tour naming new CEO Brian Roll Up. Roll up was just introduced earlier this week at the Travelers Championship. The PGA Tour search committee started with 50 names before really honing in their focus on Roll up, who most recently served as the NFL chief media and business officer. For the past couple decades, he was the de facto number two to NFL Commissioner Roger Goodell. He'll begin later this summer. In talking with an NFL team executive, they told me Roloff is a dynamic thinker who's very well respected. This is a quote, great hire for the PGA Tour. He was on hand at TPC River Islands meeting some of the players in the field. This is the final PGA Tour signature event, headlined, of course, by world number one, Scotty Shepler. Defending champion already has three wins this season. He's tied for the most wins on the year with world number two, Rory McIlroy. McIlroy has fallen a bit flat since winning the Masters. His victory lap has seemed exhausting at times. McElroy told me earlier today that he's finally feeling excited to return to the golf course. So we'll see if that's the case this week. Scott?
- [40:36]
Scott Wapner
Yeah, George, we'll be looking forward to the coverage watching. Of course we will. And Stuart Severikis at the Travelers. We'll talk to you soon. Thank you. By the way, be sure to follow Golf Channel's coverage of the Travelers Championship. It begins to tomorrow, round one, three o' clock Eastern time. And looking forward to that great event. Plus, check out the new CNBC sport videocast. It also has a golf angle to it. Alex Sherman speaking with U.S. open champion J.J. spahn. What a thrilling win that was. I hope everybody saw that because that was an incredible ending. Now you can hear from J.J. i think he's in the field at the Travelers as well. Click on the QR code or go to go to cnbc.com sport for more there. Up next, Santoli with his midday word. Our senior markets commentator Mike's Santola here at the desk. So how are you thinking about this afternoon's event? Like, what do you think investors, what do you think would make them just feel just fine where we are?
- [41:47]
I
Yeah, I was trying to think just how high the stakes are for how it breaks down in terms of the outlook, what the dots look like. I think if it's purely exactly the same as what we got last meeting, it's going to read to investors as net hawkish because I think people are more sensitized to a little bit of the softness in the inflation and growth growth picture since then. So I think that Powell is going to have to acknowledge the downside risk of the economy. I don't know if that means an outright change in their bias or anything like that. Look, we're talking about, you know, kind of nuances in a wait and see Fed.
- [42:20]
Scott Wapner
Well, you know how the market, I mean, yeah, that's exactly why the initial move is not necessarily the right one because it's all nuanced.
- [42:27]
I
You know, a couple of days ago, the market always wants to get into a neutral spot, which is to 6,000, give or take. It's 6,001 right now. 6,005 is the 10 day average of the S&P5. I mean we're just sitting right there ready to pivot either direction. So yeah, I do think you might have the, the first move, false move thing. But also, you know, the bond market has started to get a little bit of a bit into it and the 10 year is right at that threshold level of maybe it's going to be a breakdown, maybe it's going to stay within the, the range for 35. So I guess it could be consequential based on how the market decides to read it. I just don't know if it's going to really give us a roadmap to say, you know, the late July meeting is live for a move or not.
- [43:10]
Scott Wapner
Yeah, I mean it's too much uncertainty to get a full roadmap.
- [43:13]
Carl Quintanilla
Yeah.
- [43:13]
Scott Wapner
Obviously you may get one from one at one exit or two exits.
- [43:16]
I
It really is an eye to behold beholder economy.
- [43:18]
Kevin Simpson
Right.
- [43:19]
I
Because you could say it's been very resilient. We haven't had much of a change. Or you could say, you know, you're seeing obvious signs of deceleration.
- [43:26]
Scott Wapner
Yeah. All right, good stuff. I'll see you in a bit. That's Mike Santoli. Up next, a big win for the crypto industry. We'll get the committee's take coming up. Stablecoin issuer circle surging again today as the Senate passes its stablecoin bill. The stock up more than 400% from its IPO just two weeks ago. Bitcoin itself not seeing much of a lift. It's basically flat month to date, but we're keeping an eye on everything. As is Bill Baruch, correct?
- [44:10]
Steve Liesman
Absolutely. It's sideways. I mean consolidating as the stock market's consolidated, I do expect to see to get out above 110. I do have it in portfolios, about three quarters of a percent exposure there some diversification. I do have some calls on in the commodity fund, but it hasn't done anything for us. You know, one thing to keep in mind is we've been talking about this in the office is Bitcoin's use case really as fungibility. And I mean the reality is it has underperformed if bombs are being dropped or invasions are taking place going back to Ukraine. So if this war heats up, I don't necessarily expect expect Bitcoin to perform well and that's coming down to power usage and the fungibility of being able to access it.
- [44:48]
Scott Wapner
Weiss, what about you? You own the ETF as well? The. I bet I do.
- [44:52]
Carl Quintanilla
And there are a few factors. First of all, corporations are going to more and more raising money by bitcoin. I think just past week 800 million was raised by by a few public corporations to buy it. But with the genius bill which is may pass the House, may not. Some are taking the view that stablecoins which are don't have the volatility of Bitcoin because they're, they're tethered to the dollar or other currency will hurt bitcoin for its use case. Others are saying this provides a pathway to using Bitcoin for the same purposes such as buying of things, etc. You know, I'm, I'm in it for the momentum. I think the momentum re accelerates as we get to specific legislation based on bitcoin and we show an appetite for that. So I'm staying there for now. But it's clearly a risk asset.
- [45:42]
Scott Wapner
All right, we'll do finals next.
- [45:49]
Joe Terranova
Are you following the Halftime Report podcast? What are you waiting for?
- [45:53]
Scott Wapner
Look for us in your favorite podcasting app.
- [45:56]
Joe Terranova
Follow the Halftime podcast now.
- [46:01]
Scott Wapner
All right, well, you know what's on tap today. Fed decision, Powell news conference, Gundlock exclusive. Three o' clock right after that. Great time to catch up with him once again. I hope to join us for that during closing Bell. Weiss, what do you got?
- [46:16]
Carl Quintanilla
I got Goldman Sachs as my final trade. Look, if the Fed is status quo, I believe the stocks can do well. But with the IPO window open at this point, they benefit from a major standpoint.
- [46:29]
Scott Wapner
All right, safe travels back east if they let you out. Kevin Simpson.
- [46:34]
Kevin Simpson
I feel like we've forgotten about Nvidia lately. They're not just chips anymore. They're cuda. Their software, their networking. They think it's time for the AIOG to make a new high.
- [46:43]
Steve Liesman
All right, Bill Baruch, NASDAQ industrial name their power delivery up 58% year over year.
- [46:50]
Joe Terranova
Jyoti JP Morgan up 35% from its April low. It's going to make a run at the February all time high end. A trillion dollars in the coming year.
- [46:59]
Scott Wapner
Alrighty, we'll see you on closing bell. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:15]
Ryan Reynolds
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities, and expanding access to care. Together, we're building a healthier future. Learn more at multicare. Org.