Halftime Report: Stocks in the Second Half (July 1, 2025)
Host: Scott Wapner
Guests: Josh Brown, Joe Terranova, Stephanie Link, Jim Laventhal
Release Date: July 1, 2025
Air Time: Weekdays 12-1 PM ET on CNBC TV
1. Market Overview
Scott Wapner opens the episode by highlighting the mixed performance in the markets as the second half of the year begins. The Dow Jones Industrial Average is up by approximately 1%, while the NASDAQ experiences a slight pullback. The group discusses the current market dynamics, emphasizing the selling pressure on high-flying momentum stocks.
Key Points:
- Dow vs. NASDAQ Performance: Dow up ~1%, NASDAQ pulling back.
- Momentum Unwind: High momentum and AI-driven stocks like Netflix are down around 4%, indicating a possible shift towards laggards.
Notable Quote:
"It really seems to be pretty distinct today the selling in those high flying names."
— Scott Wapner [01:31]
2. Sector Rotation and Portfolio Dynamics
Stephanie Link explains the rotation from leading stocks to laggards as the market transitions into the new quarter. She cites end-of-quarter portfolio adjustments as a contributing factor, with sectors like healthcare and financials showing resilience despite overall market declines.
Key Points:
- End-of-Quarter Window Dressing: Shift from momentum leaders to lagging sectors.
- Healthcare and Financials: Companies like Merck and USB show positive movements despite being down year-to-date.
- Russell 2000 Performance: Russell index up over 1%, indicating broader market participation.
Notable Quotes:
"At the end of the second quarter, there was a very strong push in the direction of the leaders... now it's all about the laggards."
— Stephanie Link [02:34]
"You have the Russell up over 1%."
— Stephanie Link [03:13]
3. Legislative Developments: Trump Mega Bill
Emily Wilkins provides a live update from Capitol Hill regarding the progress of the Trump Mega Bill. The Senate has passed the bill with a tight vote of 51 to 50, aided by J.D. Vance. The bill now moves to the House, with expectations for a vote by July 4th, though completion remains uncertain due to potential House opposition.
Key Points:
- Senate Approval: 51-50 vote with key support from J.D. Vance.
- House Considerations: Potential delays and concerns from fiscal hawks.
- Bill Provisions: Removal of excise taxes on solar and wind energy.
Notable Quotes:
"The Trump mega bill has passed in the Senate... [it] heads to the House."
— Emily Wilkins [08:19]
"We are now getting very, very close to that final vote taking place."
— Emily Wilkins [04:19]
4. Bond Market and Interest Rates
The discussion shifts to the bond market, focusing on the 10-year Treasury yield, which stands at 4.27%. Jim Laventhal expresses satisfaction with the current yield, interpreting it as a balance between anticipated economic growth and controlled inflation. The group also touches on the Federal Reserve’s stance on interest rates, with expectations of potential rate cuts in September.
Key Points:
- 10-Year Treasury Yield: Stable at 4.27%, indicating balanced economic expectations.
- Fed Rate Cuts: Potential cuts expected in September, contingent on economic indicators.
- Dollar Weakness: A declining dollar is seen as a positive for international stock exposure.
Notable Quotes:
"That could be [bond vigilantes]... but I really don't think that's the main thing."
— Jim Laventhal [09:51]
"I think September is a real possibility."
— Joe Terranova [15:30]
5. Technology Sector Spotlight: Apple’s AI Strategy
A significant portion of the discussion centers on Apple’s strategic pivot to integrate AI technologies from Anthropic and OpenAI into Siri. Steve Kovach analyzes this move as a pragmatic solution to accelerate AI capabilities without the heavy investment required to develop in-house systems.
Key Points:
- Apple’s AI Integration: Partnering with Anthropic/OpenAI to enhance Siri.
- Market Reaction: Mixed sentiments among analysts and investors.
- Strategic Implications: Balancing innovation with cost-efficiency and timely product launches.
Notable Quotes:
"This is good news for Apple... they’re going to be running in that private cloud as well."
— Steve Kovach [21:06]
"It's a cheaper way to do it."
— Steve Kovach [20:21]
6. Financial Sector Analysis
Joe Terranova and Stephanie Link discuss their bullish stance on the financial sector, citing deregulation and strong earnings growth as key drivers. They highlight banks like USB as undervalued and poised for growth, especially in the context of a resilient economy.
Key Points:
- Financials Overlap with Discretionary: Financials constitute about 23% of the S&P 500, offering substantial growth opportunities.
- Earnings Growth: Anticipated double-digit earnings surprises.
- Regulatory Environment: Ongoing deregulation fosters a favorable landscape for financial institutions.
Notable Quotes:
"Because they are in every passive index in large size and they buy back shares like crazy."
— Steve Kovach [24:08]
"Financials to me are my favorite sector right now because they're the cheapest."
— Joe Terranova [05:53]
7. Housing and Construction Sector Moves
Stephanie Link notes the positive movement in the housing sector, specifically highlighting Dr. Horton and Win as notable performers despite broader market skepticism. The group discusses the potential for rate cuts to further propel housing stocks.
Key Points:
- Dr. Horton and Win Investments: Both stocks are experiencing upward momentum based on strong guidance and market positioning.
- Market Sentiment: Despite skepticism from analysts about a housing recovery, bullish investors see value due to low valuations.
- Interest Rate Impact: Anticipated rate cuts could drive further gains in the housing sector.
Notable Quotes:
"They're at six week lows. The 30-year fixed is still high at 6.8% for mortgage. That has to come down."
— Joe Terranova [30:34]
8. Gaming and Casino Sector Update
Contessa Brewer provides an update on the gaming and casino sector, focusing on increased gross gaming revenues in Macao and the mixed performance in international markets. The group debates the sustainability of these gains and the potential for broader sector growth.
Key Points:
- Macao Revenue Surge: June gross gaming revenues up by 19% versus expected 2-5%.
- Visitor Dynamics: Increase in day-trippers but a decline in per-visitor spending by 13%.
- Stock Performances: Melco, Las Vegas Sands, and MGM Resorts see significant stock price jumps amidst gaming revenue reports.
Notable Quotes:
"We are now seeing back-to-back month-over-month gross gaming revenues coming in much higher than expectations."
— Contessa Brewer [36:15]
"Las Vegas Sands is buying Las Vegas Sands."
— Joe Terranova [40:25]
9. Stock Recommendations and Analysis
The panel discusses top stock picks for the second half of the year, including Hilton (HLT), Capital One, and Snowflake. Each stock is analyzed based on technical indicators, earnings performance, and sector trends.
Key Points:
- Hilton (HLT): Potential breakout with a golden cross and strong earnings data.
- Capital One: Favored within the financial sector due to low valuations and strong execution.
- Snowflake: Impressive year-to-date performance but considered expensive relative to growth.
Notable Quotes:
"If it can get through the 270s on convincing volume, I think it's a pretty good setup."
— Mike Mayo on Hilton [33:09]
"Capital One is the one name I would look at."
— Stephanie Link [43:37]
10. Headlines and Closing Remarks
Kate Rogers delivers headlines covering President Trump's upcoming discussions on Gaza, Heather Gerken’s appointment at the Ford Foundation, and the passing of preacher Jimmy Swaggart. Contessa Brewer follows up with insights on the casino sector's recent performance.
Key Points:
- Political Developments: President Trump's efforts to negotiate a ceasefire in Gaza.
- Philanthropic Leadership: Heather Gerken to lead the Ford Foundation.
- Industry News: Significant stock movements in the casino sector tied to Macao revenues.
Notable Quotes:
"President Trump says he'll discuss Gaza when he meets with Israeli Prime Minister Benjamin Netanyahu at the White House next week."
— Kate Rogers [33:31]
Conclusion
Scott Wapner wraps up the episode by previewing upcoming topics, including regulatory updates from SEC Chairman Paul Atkins and more in-depth market analysis from guests like Adam Parker and Gene Munster. The panel emphasizes staying informed on legislative changes, sector rotations, and key stock movements to navigate the second half of the trading year successfully.
Notable Final Quote:
"All right, we're back. Farmer Jim had a jump in his step today when he saw shares of Win which were up. Contessa Brewer had to make an appearance here with that news to tell us exactly why Jim had a jump in his step today."
— Scott Wapner [35:53]
Disclaimer: Opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, or affiliated companies. Investing involves risk, including the risk of loss.
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