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Halftime Report
Stocks, Inflation and the Fed 8/12/25
00:44:25
Scott Wapner and the Investment Committee what the Fed's next move is and what it will mean for stocks, the market and your money. Plus, the desk share their latest portfolio moves. And later, we discuss the latest Calls of the Day. Investment Committee Disclosures
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- [00:00]
Scott Wapner
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 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@mycare.org I'm Scott Wapner and you're.
- [00:49]
Joe Terranova
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 so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the markets, of course, they're higher following the latest inflation print. We'll ask the committee how to play stocks from here. Joining me for the hour, Joe Terranova, Stephanie Link, Jim Leventhal and Brian Belsky. We'll take you to the markets. Right now we have hit the S and P and the NASDAQ have hit new all time highs. In fact, the S and P is looking to close above 6400 for the very first time. So it could be a momentous day in these markets yet again after the cpi. CPI was a little lighter than expected. The market obviously Joe, seems to be hanging on the idea that a September cut is now a lock. If you look at what rates are doing long end up the two year yield down. At least it was. And that seems to be where the bet is today. Is that the right read?
- [01:50]
Stephanie Link
Yep. To your trading, 373 down 3 basis points, market fully pricing in that you will get a rate cut in September. If you analyze the report, you'll see that you had the uptick in services. But the concern for last month was about the good side of the report and that has moderated. Look, overall for me it's simple. When we're thinking about inflation and tariffs, there's enough revenue growth stuff in the earnings that the companies are able to absorb it. Obviously it's a little bit of a hit to profit margins, but that's okay because the revenue growth is there and that's what we're seeing today.
- [02:28]
Joe Terranova
I mean, it's not a lock. According to Richmond's bargain, he's neutral. His take is balance between jobs and inflation risks are still unclear. And then Schmidt of Kansas City, he's a full blown hold this morning. Maintaining restrictive policy stance seems appropriate, but the market is speaking stuff and speaking loudly, as is the President. And he's going after Powell again today, calling him too late. And then he went all phonetic on us too. I think that's what that is attempting to be about. Mnuchin, unless it's a dig of sorts, I'm not really sure. Sure, Motion Gate really gave me a beauty in quotes when he pushed this loser. The President says about the Fed chair and he goes on of course to make the case that he needs to cut rates. What say you, Stephanie Link?
- [03:19]
Scott Wapner
So a couple of weeks ago we were at a 38% chance that the Fed would cut in September and Now we're at 96% or 25 basis points. And now there's chatter about 50 basis points. I think 50 basis points is a stretch in a big, big way in my mind. But it's all going to depend on Jackson Hole and tone from Fed Powell. I think he will be a little bit more dovish, but not the 50 basis points dovish. But there's no question the Fed is changing. You're seeing a shift right before our eyes from being really, really hawkish and almost blind to the macro data to a little bit more easy. So this is a kind of buy the dip market. If we get volatility off of Jackson Hole, September volatility because of seasonality, you buy the dips. I have been buying the dip since February at every chance that I have been able to get. And I was certainly early February, no question about that. But I was buying in April as well. And then on the earnings I have pounded the table that good companies bad action is a buying opportunity for the long term. So names like Wells Fargo, Eaton Freeport, McMoRan, IBM, Uber, Vertiv, I've all of them I added to you can't wait, Scott. For certainty you have to buy in uncertain times. But what gave me confidence in terms of buying on the Diplomat is the economy and we've talked about it, the resiliency of it.
- [04:40]
Joe Terranova
Okay, Brian Belsky. So question one, is September a lock? Let's pass that and go to question two because I feel like it's more relevant to the market and our viewers. Does the market need rate cuts to go meaningfully higher?
- [04:57]
Jim Leventhal
I don't think it does, especially considering how strong the sales growth has been in the quarterlies. If you look back and really dig into the 500 company, the majority of them that did report earnings. We saw very strong revenue growth. Margins actually held in there. And all of this was forecasted and foretold by very strong and steady earnings revisions coming into it. Now obviously the market will be disappointed given the fact that we're at 96%. I don't think there's a chance and you know what, that we get 50. But I think that's more chatter that people want something. But I think 25, I don't think it's completely baked in, especially considering that spending is good, inflation steady on a employment steady. I mean if we started to see maybe wages go down a little bit or even inflation go down a little bit more, Scott, I think we can bake in the 25. But let's just take a deep breath.
- [05:50]
Joe Terranova
I mean if the market gets the idea, Jimmy, from Jackson Hole, that it's not going to get the cut at all in September, which direction does the S&P 500 go, which we said hits a new record high today and is trending over 6400 as a close for the first time ever?
- [06:07]
Brian Belsky
Let me take the easy answer to your question. The equal weight S&P 500 goes down unequivocally. If that happens, if he does not if he's hawkish at Jacksonville, well, you're.
- [06:17]
Joe Terranova
Seeing evidence of that kind of today with things like that. And the Russell, the flip side, Russell's up 2%.
- [06:22]
Jim Leventhal
Right again.
- [06:23]
Joe Terranova
So that's the rate cut barometer right now.
- [06:27]
Brian Belsky
That's exactly right. So you know, sometimes we say, geez, even if I had the news yesterday, I wouldn't know how to trade it. If you knew that he was going to come out hawkish in Jackson Hole, you would short small caps, you would short the equal weight S&P 500. You probably would go long the QS just because in a bad time, even though the economy's good, it's the mega cap techs that do well. So again, I think you're seeing today that the 25 basis points is baked in. I think it would be politically unwise at this point. Now this is counterintuitive for him to not cut or for the board not to cut. Here's why. If that happens, I think that's the point at which Trump goes nuclear on trying to fire Powell, etc. Etc. So look, he Powell drew his line in the sand and held to it in July. Fine. There are multiple reasons including a softening labor market to cut in September. And I do want to just not go rogue here, but I want to say something. I think the lambasting of Powell is misconstrued. Remember three years ago at Jackson Hole when he came out and basically said expect pain. Mike Drops of pain.
- [07:31]
Julia Boorstin
Right.
- [07:31]
Joe Terranova
It was an eight minute.
- [07:32]
Brian Belsky
I mean it was a hell of a speech. And we haven't had a recession. He stuck the soft landing. He just. Look, he made mistakes. We know that he deserves credit for that.
- [07:41]
Joe Terranova
And I want, I don't, I don't want to have a debate about that. I want to stay focused on the market. You sat up in your chair, kind of leaned forward as Jimmy was talking. You just want to say something.
- [07:49]
Jim Leventhal
No, I like it when you go rogue, man. That was awesome. No, I think too that I don't think the market needs 25. I really don't think about the 25.
- [07:59]
Joe Terranova
Does the market need cuts? Because we know that if there's 25, there's more after.
- [08:03]
Jim Leventhal
Yes, I do. Down the line. Yes they do fundamentally do. Because we've had this period now and I do think there's going to be some uncertainty with respect to how growth is in the fourth quarter. So I think September could make sense. But I think ultimately we're going to get a cut in the fourth quarter versus now.
- [08:18]
Joe Terranova
So yesterday we told you that 91% of respondents in the latest B of a fund manager survey thought stocks were overvalued, but that the results were still the most bullish in the fund manager survey since the beginning of the year. Here's more B of A today, their flow show the biggest single stock inflows in two years. In two years, US clients bought US equities for the second consecutive week with big inflows into single stocks, 4.3 billion inflows chiefly into large caps. That stays with the trend. Right? And tech saw the largest of the inflows where industrials saw the biggest outflows. Industrials have been trading near a record high. So maybe not a surprise that some profits are being taken there and maybe those proceeds are just being put back into the tried and true mega caps. Which leads me to Brian Belsky. You bought more Alphabet.
- [09:09]
Jim Leventhal
We did.
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Joe Terranova
That's an interesting one. Why so why now?
- [09:13]
Jim Leventhal
We continue to build our position, especially considering the stock went down dramatically when this whole notion of search is dead forever. We doubled our position. We added it in our value portfolio. Portfolio. It's now our largest communication services stock in all our tactical money. So from the cash perspective and the AI growth that we continue to see in Google and again the reality that search is not going away this is a company that we like. And by the way, from a portfolio construction standpoint, we think it has a lot of room to catch up. Especially with respect to Meta, what did.
- [09:44]
Joe Terranova
You make of the way the stock traded post earnings, which wasn't great?
- [09:48]
Jim Leventhal
No, I mean, Steph was talking about it. You get great companies that trip a little bit. That's when you add. And I think given the fact that Meta has been so powerful and all the numbers have been perfect, we think that stock is actually priced to perfection. And Google has been given an opportunity to get an ad on a relative basis with respect to performance.
- [10:06]
Joe Terranova
By the way, how about this? The Journal reporting a little while ago, Perplexity made a bid for Google's Chrome browser, values it at 34 and a half billion dollars. They're thinking of, you know, potential breakup scenarios, I suppose, and thinking about which parts could be out there that would be the most valuable for what it's trying to do. What do you make of that?
- [10:24]
Jim Leventhal
I think that's positive with respect to just being able to value that part of the business. We've long talked about how important YouTube is, and if you pull out YouTube out of Google, it's actually bigger than Netflix. So, I mean, this is a company that I think has been undervalued for a while and that's why we added to our value portfolio.
- [10:42]
Joe Terranova
Joe, you have Alphabet.
- [10:43]
Stephanie Link
I do. Look, I think first of all, Perplexity seems to be pretty aggressive in a lot of what they're doing and looking to. To invest further in the business, diversifying the business. I know that Open Air had expressed an interest here as well. So you like to see this type of activity. And I think, just look, it's indicative. You're asking the question, you know, where. Where does the market need? What does the market need? You have the AI Catalyst, and the AI Catalyst is real. And you're citing the largest inflow into technology companies. Well, guess what? It's because in the last earnings report, it looks like the AI Catalyst is back once again. It looks like semiconductors which were asleep, which were being punished because of the potential tariffs, it looks like they have come back once again. So that part of the market, it doesn't need the rate cut. It's the other area of the market that maybe needs the rate cut to get the dispersion. But if AI is back and Jimmy, what has fueled the market over the last three years, you could credit Jay Powell. I'm not going to debate that. But it's been AI, it has been all about AI. And I really believe this AI thesis is in the early innings.
- [11:51]
Joe Terranova
Well, we have a news alert regarding matter speaking of as that was just mentioned as part of this conversation. Julia Boorstin has that. What are we learning here?
- [12:00]
Scott Wapner
CEO Mark Zuckerberg announcing that Threads has passed 400 million monthly active users. That's up from 350 million which it announced this past April. Now this comes after Metta rolled out global access to ads on Threads in May and said in its most recent earnings call that they are optimistic about the longer term opportunity with Threads as community and engagement grow and monetization scale. This also shows Meta making gains on X, which Elon Musk has said has 600 million monthly active users. That comes after TechCrunch reported in July that Threads is closing in on X's daily active user numbers. All of this comes as Meta stock hit an all time high today, its first new high since the end of July. Back over to you, Julia.
- [12:42]
Joe Terranova
Thank you very much. As a perfect segue to get some more news into the program. Thank you very much for that. Now I get that the trade looks like it might be back and we're thinking about what could happen between now and the end of the year. Bernstein says we recommend a market weight, a market weight in tech for the second half. So maybe dial back the overweight.
- [13:01]
Stephanie Link
I disagree with that. I disagree with that. For the very first time in five quarters. What we witnessed in the quality momentum strategy was that we had an uptick in our exposure to technology. Technology had been on the decline since January of 2024. We see that semiconductors right now are giving you the earnings growth. We're seeing that software has been consistent.
- [13:24]
Joe Terranova
We're talking about, I don't know, has it?
- [13:26]
Stephanie Link
Well, there's one tech, there's one software name that we spoke about yesterday that maybe is not delivering, but other companies are, like Oracle, which is delivering, like Microsoft, which is delivering.
- [13:36]
Joe Terranova
Yeah, but that leaves a whole universe of ones that seem to be questioned right now as to whether AI is killing software, that that's how people have framed it over the last week or so. You don't, you don't believe any of that.
- [13:51]
Stephanie Link
I think that, I think overall the software sub industry is benefiting from the AI thesis. I do think there are certain names which are clearly underperforming in the IGV.
- [14:06]
Joe Terranova
Is up, that's software ETF, it's up 8% year to date. All right. Microsoft's up 24, Oracle's up 53 and Palantir is up 142, you want to talk about top heavy returns to show what maybe not all the software stocks are doing those that I just mentioned except account for roughly 30% of the ETF. Do we have to start worrying about software as it relates to this whole AI conversation?
- [14:34]
Jim Leventhal
It's a great question. I think that it's Wolf is interesting because they say we're neutral but we're slightly overweight. So if you're talking about a sector that's over 30% of the market, Scott, I mean once you start to get 30% of the market in the US you start to get a little bit worried. Top heavy number one, with respect to Joe's comment, I think that quality is technology and software. Your specific question with respect to software. You're on it. You nailed it. There's a lot of software companies that don't look awesome. I mean that's why we're massively overweight. Microsoft, Palantir, Oracle and this new small mid cap name that we just bought, MongoDB. I just think that there's going to be more of these emerging strong AI driven software companies versus some of the old legacy companies like Adobe or Salesforce, I think which are names that we've stayed away from.
- [15:23]
Joe Terranova
Jimmy?
- [15:24]
Brian Belsky
Yeah. I think there's two questions that you've asked. One is what about software and what about, you know, whoever it was that said market cap, market weight on technology?
- [15:33]
Joe Terranova
Well, I mean Adobe is the poster stock for the conversation in and of itself.
- [15:39]
Brian Belsky
The reason that I'm bringing those two things together is because I do think there is room for this rally to broaden into unloved names including software names like Adobe. You mentioned Salesforce. I don't think these companies are going out of business. I mean when I see the multiple we did this yesterday, we'll do it again on Adobe down at literally 15 times forward earnings. For a software company that is distressed that's beyond a value valuation that is distressed. I just don't think that we're either done with PDF or importantly that Adobe is not working on and actually has had some success with Firefly and other things getting AI into their products.
- [16:16]
Stephanie Link
Products.
- [16:17]
Brian Belsky
But you know, I think said this a couple days ago, you do have to have or you can have somewhat of a barbell approach to the portfolio. I own Oracle, I own Microsoft, I own Apple, I own Alphabet. Great. But there are some names that are unloved in my portfolio that I own as well and I'm playing for the catch up trade. You know, I've added a little bit today to Cisco, which if we were talking about Cisco a year ago, I promise you we would be talking about it in the same context, the same tone that we're talking about.
- [16:45]
Joe Terranova
When they invent that, when they invent the automobile, do you still buy the scooter or do you convince yourself, well, that one day they're going to put, they're going to put a motor on the scooter. So I'm going to buy it.
- [16:54]
Brian Belsky
It's going to catch you. I don't think Adobe is a scooter. I hear you. Maybe it is, maybe it is, but I don't think that it is. And what I'm trying to display here is as we often talk about, we have different styles of investing momentum obviously working really well. Joe, I am extraordinarily happy for you.
- [17:10]
Joe Terranova
This is an important conversation about what's going to happen with the future of software stocks that have seen many of them. I'm not talking about the Oracles, I'm not talking about the Microsoft, I'm not talking about the Palantir. And you could find many, many others. But many others have had their multiples compress. Why? Because they're not in the game. Not nearly to a degree where they can skate with the puck and score of goal.
- [17:34]
Scott Wapner
I don't disagree with that. I actually think the opportunity is in cybersecurity because some of those stocks have really fallen out of bed. Fortinet for one, which I do not own but it's very interesting to me now down 18% for the year. They have some firewall issues for sure, but it's growing pains. So I have my eye on that. You know I own Palo Alto. That got hit when they made the Cyber Arc deal. And I mean it felt. It's down 18, 18% since they announced that deal and it's going to increase their total addressable market in their annualized recurring revenue. Their annualized recurring revenue is 5 billion. Cyber is at 1 billion and that so therefore. And it's growing 20% so it's going to be accretive. So I think there are pockets within software, not necessarily the legacy players.
- [18:20]
Joe Terranova
Well, do I got anybody in Salesforce?
- [18:22]
Stephanie Link
Well, that is the one that's, that is the one name that is most baffling. It is puzzling.
- [18:28]
Joe Terranova
The stocks down 30% year to date.
- [18:30]
Scott Wapner
They haven't been able to monetize the whole problem.
- [18:33]
Stephanie Link
Think about this for a second. Trading at a Forward multiple of 20 times it no long. This is a company that used to give you 20% revenue growth consistently on an annual basis, they're giving you less than 10% revenue growth. It's baffling to me. With all the acquisitions that they have done that they have not been able to participate in, deliver in what we're seeing. Right.
- [18:54]
Joe Terranova
When you own the stock, you wanted them to do fewer acquisitions.
- [18:58]
Stephanie Link
And there was a period that they did. There was a period where they stayed anchored and they have stayed anchored since then. I can't cite the problems of today because they're overextending themselves in deals and some of the deals that they've done have actually worked out okay. I don't know or understand why they have not been able to participate because.
- [19:17]
Scott Wapner
They can't monetize AI and they're.
- [19:20]
Stephanie Link
That's the question. We're asking the same question, why not? I don't understand.
- [19:24]
Brian Belsky
Let me take a different take on this. I think the oxygen in the room, this room is being sucked up by the mega cap tech. I think that's what has happened for the last few weeks. There's only so many dollars in the world. There really are.
- [19:34]
Joe Terranova
So you're.
- [19:35]
Brian Belsky
Let me just finish. What you're seeing today is the rally broadening after narrowing for the last three months. You look at the last three months, it was absolutely a QS dominated rally. We know that, we've talked about it ad nauseum. It is broadening today on the back of the potential for more rate cuts than were expected yesterday. As that continues, as the economy continues to grow. There is room for, for the unloved stocks as long as they're not going out of business. I don't think Salesforce or Adobe are going out of business.
- [20:02]
Joe Terranova
Why does it have to be a binary thing?
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Brian Belsky
What I'm saying is these are trading. These are trading like they're going out of business.
- [20:10]
Joe Terranova
No, they're just trading like you're losing the race.
- [20:12]
Stephanie Link
But Jimmy, why are people buying.
- [20:13]
Brian Belsky
Well, that's, that's a terminal. I mean, losing the race. I mean, that's. This again. And I did this yesterday. But if you look at Alphabet, we were. Or talking about existential, that word was being talked about two months ago.
- [20:24]
Stephanie Link
But if the mega caps are sucking the oxygen out of the room, why are people buying Oracle? It's a software company. It's in the.
- [20:31]
Brian Belsky
Building data centers. Building data centers. That's what's promoted it.
- [20:34]
Stephanie Link
So idiosyncratic. Salesforce. Idiosyncratic to Adobe, even idiosyncratic to ServiceNow. They're not participating recently. There's a problem. There's a challenge in front of them. That needs to be resolved.
- [20:45]
Joe Terranova
We mentioned chips. I want to hit that quick because Brian, you bought more Broadcom, Nvidia and amd.
- [20:50]
Jim Leventhal
I did.
- [20:51]
Joe Terranova
Tell me why you did that.
- [20:52]
Jim Leventhal
Well, I think Broadcom and Nvidia are Coke and Pepsi. Nvidia is obviously the clear leader. Given the fact that the stock had run a little bit too much. We needed to kind of right size our position. We still love, love, love that company longer term. But we're making a bet on AMD and Broadcom to be sub A and sub B under Nvidia. Those are our three biggest chip companies positions.
- [21:15]
Joe Terranova
What do you think of the deal that was struck with Nvidia and AMD just to sell their chips into China. China saying, well, maybe we don't want your chips or maybe we don't want our companies to buy your chips. So maybe it's not going to be all that it was cracked up to be on day one.
- [21:34]
Jim Leventhal
Yeah, I think some of that is kind of peripheral and marketing and obviously it could be positive if it all works out. I mean we're still betting on leadership at amd. We'd love that. The stock, the stock was down another point in terms of what Steph was talking about. A great leader that was down on earnings but revenue was really good. So I think that's provided an opportunity to add to the stock a little bit more.
- [21:57]
Joe Terranova
We'll take a quick break, come back. We're going to talk some retail names, your retail rundown. We'll debate the fate of one big retailer plus Brian Belsky adding to his position in a key consumer stock. Now we're back in two.
- [22:10]
Scott Wapner
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- [23:12]
Stephanie Link
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- [23:19]
Jim Leventhal
There's no time like now to start building your personal brand.
- [23:22]
Stephanie Link
Register now@cnbcmakeit.com Personal brand.
- [23:27]
Joe Terranova
All right, welcome back. Ahead of retail sales which are going to come out later this week, Bernstein's asking a question today of Stephanie Link. Is Target the next Best Buy? They say they reiterate underperform of that stock and they say whether Target's slew of management changes can lead to a turnaround story similar to best buys between 2012 and 2019. I don't know if it's the greatest comparison that you really want to have happen right now, but that's neither here nor there. A new management, especially one with an outside perspective, could be a positive catalyst.
- [24:00]
Scott Wapner
Oh, that was the rumor. Yes. Yesterday, right in the Wall Street Journal. They came out and said that they're looking for a replacement for Brian Cornell, the CEO, which if it is an outside person and even if it's true, if it's an outside person, I do think that would boost the stock. I do think they need a whole refresh now. They do have an enterprise acceleration office manager like a CEO kind of role that they announced last quarter. That's what we want to see in terms of results. Are they seeing any kind of change at all? I think second quarter will be better than first. First quarter, it couldn't be any worse. Scott, first quarter was horrific. Question I have is is traffic going to be negative again? Tickets likely up because they're raising some prices, but is traffic going to be down again? And that's the thing that bothered me last quarter. All that being said, I still think they can$7 in earnings power this year. There's a lot of moving parts on this, but I still think there's enterprise value. I still think they are a brand name that a lot of people do shop at and want to shop at. They just need better execution. Dividend at a 15 times earnings, 7 times EBITDA 3.4.3% dividend yield. I mean that to me is sort of interesting. You know, it's up 20, 20% since the lows in April. So it's still down 22%. So you're kind of in that no man's land.
- [25:10]
Joe Terranova
You don't own that. Right.
- [25:12]
Jim Leventhal
Hey, listen, Target, Best Buy Minnesota company.
- [25:15]
Joe Terranova
I was just going to, that's where I was going to go.
- [25:17]
Jim Leventhal
I own Target in my value portfolio for exactly the reason what the market is thinking. We think that there's a very good chance that the CEO gets pushed out. The company's paying a big dividend. They got lots of catch up to Walmart. I think there's operationally some major challenges there. We've held out in our value portfolio.
- [25:34]
Joe Terranova
Only you bought more Lulu.
- [25:38]
Jim Leventhal
Whenever I do this, I was like 13 times trailing.
- [25:41]
Joe Terranova
Here's what I'm doing. I need to listen to you talk about it.
- [25:44]
Jim Leventhal
13 times trailing earnings sub 10 PE for next year. This company has not operated very well. We took it out of all of our tactical portfolios and added double down on the value. We think this is going to be a major turnaround. If you take a look what's happening in the apparel area, we had Nike.
- [26:01]
Joe Terranova
We sold you want to put this near Nike? It was going to look equally as ugly.
- [26:05]
Jim Leventhal
Yeah, we sold Nike after the big bounce and then we moved into Lulu for our Nike Nike position. So we think there's going to be, this is going to be a turnaround situation. But we really like the product, we like the management, we like the new person that's doing all the apparel research and buying there. So we think that this is a big turnaround.
- [26:24]
Joe Terranova
Well, it's down 50% year to date is Lulu. We shall see. Still ahead, calls today including a pair of upgrades for two big food stocks. We'll have more next.
- [26:38]
Stephanie Link
CNBC make it's online course how to build a standout personal brand. Three industry experts will show you how to create and grow your brand step by step.
- [26:47]
Jim Leventhal
There's no time like now to start building your personal brand.
- [26:50]
Stephanie Link
Register now@cnbcmakeit.com Personal Brand.
- [27:19]
Joe Terranova
Welcome back to the Halftime Report and a very big welcome to our friends at the Golf Channel as well. As we make a major announcement today. NBCUniversal Versant and the United States States Golf association are extending their media rights agreement through 2032, a deal thought to be valued around $95 million annually. Mike Wan is CEO of the USGA. He joins us now live. Welcome. This is a very big day.
- [27:44]
Julia Boorstin
Hey Scott. This is a good day. I know you're, I know you're a golfer and a golf fan and so it's exciting to be able to say to Our fans, everybody who follows the United States Golf association championships, that 11 of our championships will continue to be televised by one of the best TV production crews in the world. When it comes to golf, we put a high value on the fact that this isn't just content for the peacock. This is, this is in their DNA. This is what they do. We're proud of how they deliver our championships and we're proud of how they showcase the game. We're excited to do it all the way until 2032 at a minimum.
- [28:16]
Joe Terranova
It's a big day for everybody involved. It's also Versant's first ever sports media rights deal, which is a very big deal. Congrats to Mark Lazarus, of course, and his team. Can you tell us beyond all of these events that we are going to continue to watch on the networks of NBC and of course, Aversa, what it's really going to mean for golf fans?
- [28:35]
Julia Boorstin
Yeah, what it really means is you'll obviously get the most network hours of any major in the US Open or the best in women's golf in the US Women's Open or US Senior Open. But you also get some of the greatest amateur championships, US Amateur, Women's Amateur, Junior and girls, Junior am, the, the Walker cup, the Curtis Cup. You really get to see golfer, golfers at every stage of their journey. I used to say, I always say that at the USGA. We, we have 15 national championships. We don't care if you're a pro or an amateur with your woman or man, if you're youth or old, if you're disabled or full bodied. We've got a championship that you can aspire to be to. And to know that NBC Universal and Versant are going to bring those championships to life for the viewers, especially. This last weekend is a great example. Prime time Saturday and Sunday night, all of us on the east coast watching Bandon Dunes and the US Women's Amateur happening on the West Coast. That's, it's what makes the game so great. A lot of sports are viewed by fans. This is a sport that's played by fans, over 47 million of them here in the US and they want to, they want to play it in the morning and watch it in the afternoon. And that's what we get with NBCU and Versa.
- [29:42]
Joe Terranova
There's some speculation in the weeks leading up to all this that the USGA might split the rights. Was there consideration in doing that?
- [29:50]
Julia Boorstin
Yeah, when we went to the marketplace, Scott, we, we walked in with our full ensemble of championships and we also said at the time that we're open to looking at this. However, it could work best for the partner. I think the good news when it came to NBCU and Versant is they really wanted the whole package. They really wanted to make sure that, that they were covering the United States Golf Association Championships, whether we were talking about a girls junior or whether we're talking about the US Women's Open or the US Senior Women's Open. And, and it really made it nice for us because when you think about Live from Golf's Longest day, which is the Monday, you know, the week of the US of the US Open, it's, it's really a special part. And for me to think that we're going to come back from commercial and Mike Tirico will throw it over to Dan Hicks and Tommy Roy will be in both of their ears, that just, that just means we're going to give the fans the best possible showcase of the events we can deliver.
- [30:41]
Joe Terranova
We look forward to that. Obviously, Peacock is a big part of this. Netflix, which was suggested to have made a bid according to recent reports. Can you confirm that? And also how are you thinking about so called legacy media properties versus the streamers in the years ahead?
- [30:59]
Julia Boorstin
Well, I got to tell you, I mean one thing I think that came out of this process for us as we were enthused and honored by the breadth of interest, whether we're talking about other networks, other channel networks, other cable networks or streamers. I mean there was interest across the board and that was, that was exciting for us. And it's a tough process to go through. But as I said in the beginning, we, we probably put a little extra value on those. We know and we know nbcu, we know the Golf Channel, we know USA Network and we know the team, we consider them not only partners in the business, but friends in the business. I know it's part of their very DNA, how they deliver that deliver golf. And I said this throughout the process, I said this to Brian Roberts four or five times. My goal is to keep the band together. If we can't do it, we can't do it. But I really believe to your part about legacy, I believe we're creating legacy and how we, and how we communicate and, and to bring the drama out of these great athletes in the greatest moment of their, of their golf journey. So, so I don't know what's going to happen to the full TV landscape in the long, long run. But I do know between now and 2032, I feel like I couldn't be in better hands than I am right now.
- [32:03]
Joe Terranova
You mentioned the Women's Amateur and there are many women's events that are part of this landmark deal. I mean, you used to be the LPGA commissioner, so this is near and dear obviously to you. You've made it a huge priority to grow the game, to find the next, next generation of young girls and young women who are going to be the golf leaders of the future. How do you intend to continue to do that?
- [32:27]
Julia Boorstin
Well, we're going to give them the biggest stages we can possibly give them. And Bandon Dunes was a great example last week. Primetime coverage to watch two of the greatest female golfers in amateur golf come down to the end and battle it out. If you watch the, the, the semifinals, those come with some of the greatest match play events we've seen in a long, long time. And so, so for me, when I got here, the goal was just to continue to create the stage for women's golf bigger and bigger. We doubled the size of the US Women's Open purse. We provide more TV hours at the US Women's Open, the other championship you know, they play that year. We put the US Senior Women's into a major status. To your point, you know, we televise women's adaptive golf. Disabled players playing at the top of their, at the top of their game. So I think most importantly, we just want to make sure that no matter where you are in your journey, young, old, professional, amateur, team, individual, we want a championship you can aspire to achieve. And while you're trying to aspire to achieve, that's something you can watch and get excited about. So there's not many sports where you can be a 60 year old former athlete and say, you know what, I want to play against the best in the world right now as a washed up quarterback. There's no place for me to go play my quarterback am but there is for me in golf and there's a championship I, I can aspire to. And if I can reach that level, I can play one of the greatest championships in the game. And so we're excited about our national championships. We're excited about what it means to the players and we're really excited about our partner in terms of how we cover them.
- [33:52]
Joe Terranova
Generally speaking. Do you feel like we've hit an inflection point in terms of participation? I feel like there are more options than ever now, whether it's topgolf or simulators in whatever town near you that are involved, inviting young people to come in and experience the game. Maybe for the Very first time. And then you are developing the golfers of the future.
- [34:16]
Julia Boorstin
You know what? You know what's kind of interesting, Scott, is you went back five years ago, we would tell you that there's about 30 million people playing the game in America. And the stat we used to love is what we called latent demand. There was 6 million people that said, I really want to start playing the game in the next year. And we used to latch onto that six. If we could just figure out a way to tap into that six, jump forward five years, 30 million has now become 47.2 million, 47.2 million people playing the game versus 30, you know, just five years ago. And really, the growth of the game has come in three segments. Women, juniors, and people of color. If you took those three segments out, we'd have pretty modest growth. So the game is blowing up with demographics that in the past we've had a hard time reaching. What's really cool is now, if you ask about that latent demand, how many people after all this growth say they want to start the next year? The number is 24 million. So after all the growth we've experienced, all the new demographics rushing into the game, we now have an audience that says they want to start the game in the next year. That's essentially the size of the audience that we had in the whole game just five years ago.
- [35:18]
Joe Terranova
Mike, I appreciate your time so very much. I know I speak for everybody in saying that we're proud to continue this partnership. We wish you the very best.
- [35:26]
Julia Boorstin
Thanks for the coverage. We appreciate it.
- [35:28]
Joe Terranova
All right, Our thanks to our friends at the Golf Channel as well. Be sure to sign up, by the way, for the CNBC sport newsletter. This week, Alex Sherman will speak with Matt Hong. He's Versant Sports president about this very deal. And, of course, so much more. The headlines now with Contessa Brewer. Hi, Contessa.
- [35:45]
Scott Wapner
Hey there, Scott. Ukrainian President Volodymyr Zelenskyy is asking the country's government to lift foreign travel restrictions for men aged 18, 18 to 21. Right now, the men who are between 18 and 60 are barred from traveling overseas because they're considered eligible to fight in the war against Russia. The Texas State House closed its session shortly after opening this morning after once again failing to meet quorum to consider redistricting. Backed by Republicans, Governor Greg Abbott tells CBS News that not only is he planning to call another session, state, Republicans are also considering adding at least three more additional seats to the redistricting plan. And South Korea's former first lady will be arrested. Korean news outlets reporting a court issued a warrant for former President Yoon's wife today. She's facing several charges including stock fraud and trading political influence for Chanel bags. She has denied wrongdoing. Her husband who was impeached earlier this year is also facing criminal charges related to his brief imposition of martial law. That's the news and halftime will be right back.
- [36:56]
Joe Terranova
All right, calls the day. Let's do Chipotle. It was upgraded today to overweight. Price target though was trimmed by a few bucks to 50 from 53. It's at Piper Sandler. They like the risk reward. Stephanie Link I think agrees.
- [37:10]
Scott Wapner
I like the risk reward.
- [37:11]
Joe Terranova
You upgraded it about two weeks ago.
- [37:15]
Scott Wapner
And last week I think we spent 20 minutes on the A block on it. So look at the expectations are very low. They have very easy comparisons. It's a good franchise. They have products that are coming down the pike which will lead to better growth. And most importantly they have high single digit unit growth. I can't say many restaurant companies have that. And it's great management team. So I think it's just a matter of patience. But wait for those easy comps. I think they're in the second half of the year.
- [37:38]
Joe Terranova
All right. Starbucks got upgraded Belsky to outperform at Baird. They have high conviction that turnaround strategies under new leadership will be effective. You agree?
- [37:49]
Jim Leventhal
We do. We think they're probably 50, 60% of the way through their turnaround. We bought in our value portfolio well over a year ago. I think it's got probably at least another four to six quarters left to go.
- [37:59]
Joe Terranova
Oklo's price target got bumped by five bucks up to 80. Outperform at Wedbush. That's Dan Ives. Solid results with significant tailwinds from the federal side. And you bought more of that stock.
- [38:11]
Jim Leventhal
Not a value stock clearly, but a big momentum name in terms of our small mid cap universe. We love the nuclear trade. We love that tailwind. Also this whole notion of these small modular reactors that they're building with help of OpenAI in 2027 is really going to be a strong recurring revenue theme for them for several years.
- [38:30]
Joe Terranova
ConocoPhillips buy 111 is the price target at Goldman Sachs. What do you think? You own that name too?
- [38:37]
Jim Leventhal
Another one of those just dividend juggernauts for us. I mean for all intents and purposes we like these bigger integrated oil companies but that's why we focus more on Chevron and Exxon. But Conoco has been a name that.
- [38:48]
Joe Terranova
Has been really Delivering Steph, look at private equity. Goldman Sachs reiterates KKR as their top pick. They continue to favor stocks position to see accelerating growth still trading at reasonable multiples.
- [39:01]
Scott Wapner
Yeah, it's still down 11% from its highs and fee related earnings are expected to grow 15% compounded annually over the next several years as well as margin expansion. Capital markets is an obvious choice as well. I just think this is a nice diversification to Morgan Stanley that I own which is on the public side.
- [39:18]
Joe Terranova
All right. Ulta beauty price Target target goes to 600 from 510. Oppenheimer does that. The bull run still in the early to middle innings.
- [39:26]
Stephanie Link
Joe T. It's about restimulating the growth, the revenue growth which used to give you 20%. It's interesting because you mentioned this company and people automatically assign a high valuation to this company. This has a Forward multiple of 20 times. It's currently trading about 19 times. And it was added to the ETF at the end of July.
- [39:45]
Joe Terranova
Buying the turnaround story American Express by B of A. What do you think that that's ahead of their platinum card refresh?
- [39:53]
Stephanie Link
Yeah, this is, this has been one of the stronger winners in the ETF. We purchased this in July of 23 at 168. It's been consistently delivering rather on the revenue growth. The challenge so far this year it's only up about 2% year to date. So the momentum is kind of flattening out. We'll see where it goes over the coming quarters. But clearly the affluent consumers out there spending their benefiting.
- [40:14]
Joe Terranova
All right, midday word Santoli. That's next. Senior markets commentator Mike Santoli is here with his midday word. It's good enough cpi. The words of the day.
- [40:48]
Stephanie Link
I would say good enough. I would say that the market is feels it's free to play right now because there was not enough of an adverse surprise from CPI to really complicate the overall picture of okay, the Fed probably has clearance to cut in September. The rate sensitive stuff is flying. You see the volatility index collapse below 15. That kind of gives you this green light. I mean there's not really a known catalyst between now and Labor Day where you'd say wow, that could really throw a wrench into the system. We've had this internal consolidation in the market that I think has set us up for this little mini melt to the upside as people prepare for another maybe wild ipo and then you know, the M and A stuff is circulating. What I think you also have to be alert to is, you know, the Market is starting to act as if rate cuts, if we get them starting in September will be not medicinal but recreational. I mean that's where we're kind of on a fine line there, you know. And I think that that's, that's how bull markets take things.
- [41:45]
Joe Terranova
Well put the usual suspects on that idea are the ones that are rallying. So I take what I get. What you're going with that I'll see on closing. Go. That's Mike sent only. Still ahead we have a some more moves from Brian Belsky, some bank stocks that he has added.
- [42:17]
Jim Leventhal
All right, welcome back.
- [42:18]
Joe Terranova
Let's talk about these other moves from Belsky. So you added to Goldman Sachs, clearly after President Trump posted on Truth Social about David and their economists. Clearly that was your buy signal. US Bancorp and MetLife. Tell me more.
- [42:34]
Jim Leventhal
Yeah, we took out BlackRock and these are all positions within our value portfolio. BlackRock to us isn't so much a value stock anymore. We still own it in our dividend growth portfolio. But stocks at 28 times earnings hitting all time highs. We've only for 13 years. So it's time to kind of diversify out I think a little bit. And we think the banking cycle in Goldman is going to be amazing second half of the year. But don't also underestimate how important the wealth management business has become for Goldman. It's a goldmine for them. On the MetLife side, we'd like to diversify out in financials to have a little bit more on the insurance side. And then finally US Bancorp is a name that's been underwhelming. But we think in terms of the Midwest growth that we're seeing from the economic perspective. Perspective, US bank will do very well.
- [43:15]
Joe Terranova
Is US Bancorp one of yours? You had a lot of, a lot of regionals. You have that, right?
- [43:20]
Stephanie Link
Yes, it's one of our holdings.
- [43:21]
Joe Terranova
What do you think about buying more of it here?
- [43:24]
Stephanie Link
I'd like buying more. Goldman Sachs, I think. Goldman Sachs, Morgan Stanley, J.P. morgan. Those are the names to own right here. Regional banks. Okay. Relying on that rate cut.
- [43:34]
Joe Terranova
All right, Airline stocks ripping today. Are we doing this? Are we doing that? Okay. Airline stocks are ripping today. I just rewound myself. Phil labeau says the primary driver is the expected collapse of Spirit. And when that finally happens, it will take capacity out of the domestic route system. Jimmy Delta is one of those moving.
- [43:54]
Brian Belsky
Yeah, well, they're all moving and frankly the ones that have higher debt are moving the most. So Americans up more than Delta. And that's because not just rate cuts, but the idea that inflation is not going to to promote rate hikes down the line has these more indebted, more leveraged companies moving higher. Spirit coming out of the system definitely helps. And this on the back of the CPI in which you saw airfares going higher for the first time in four months has this enthusiasm coming back to the sector.
- [44:21]
Joe Terranova
Let me use one more. FedEx is a new buy for you.
- [44:24]
Jim Leventhal
Yeah, it is.
- [44:25]
Joe Terranova
Why did you add that?
- [44:26]
Jim Leventhal
Parker Hannifin is. We took the Parker Hannifin position, blew it out. Again, not a value stock. FedEx clearly one of those turnarounds, having a lot of problems. But given the fact that we do believe the economy is going to remain strong, fuel prices are low, we think that's a great turnaround.
- [44:39]
Joe Terranova
We'll do finals next. Well, we've stacked the deck again at 3 o' clock because we have Blackrock's Rick Reeder and I can't wait for that conversation. Also former Dallas Fed prez Robert Kaplan. Lots to talk to those two gentlemen about. Warren Pies, Kerry Firestone, Liz Thomas and hopefully all of you at 3:00 clock Eastern Time. Let's do final trades. Mr. Belsky, what you got?
- [45:07]
Jim Leventhal
BLD top build.
- [45:09]
Joe Terranova
Thank you very much.
- [45:10]
Jim Leventhal
Thank you. Great to be here.
- [45:12]
Joe Terranova
It's great having you humbled, honored.
- [45:14]
Jim Leventhal
I'm very humbled.
- [45:14]
Joe Terranova
Thanks, Farmer Jim.
- [45:16]
Brian Belsky
I too am humbled and honored to be here. Pacific Gas and Electric. This stock got hit hard after the California wildfires even though they weren't culpable for it. But as the situation with the insurance fund becomes clearer, it looks like they're not going to be having to spend too much on it.
- [45:30]
Scott Wapner
Stephanie Link continue to like housing. Dr. Horton acting very well, but it's still down 9% in the past year. Trades at 13 times earnings for the best operator in the industry.
- [45:41]
Stephanie Link
Joe T. Let's see if Apple could settle above Friday's 231high. If it does, it goes to 240.
- [45:45]
Joe Terranova
And let's see if the S and P can close above 6400 for the first time ever soon. 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.
- [46:03]
Scott Wapner
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 in other mediums. 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 cnbc make.
- [46:43]
Stephanie Link
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Jim Leventhal
There's no time like now to start building your personal brand.
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Stephanie Link
Register now@cnbcmakeit.com Personal Brand.