A (3:18)

So can I stop you for two seconds?

C (3:20)

Yeah.

A (3:21)

Momentum.

D (3:22)

Okay.

A (3:23)

Momentum's having its worst month in nearly four years.

B (3:28)

It is four years. Well, it feels like 22. So if you think about this, quarterly performance will be negative. We haven't seen that since Q3 of 23. But really before that, the period where you saw that progression of consistent quarters of negative performance was back in 2022. And it was the unwind of the momentum factor that contributed significantly along with the fundamental stuff with historic raising of interest rates as well. But what has happened here with momentum is it came into 26 with really strong performance. And we're seeing that the trends right now are just flattening out. If you talk to the systematic community, they'll tell you their bias right now is basically they're neutral, they're not sure which way to go right here. And I think that's the right way to look at this right now. I don't think you want to be short. I don't know that necessarily. You're, you're looking at being continue to be long, but that's really what's unfolded Momentum. And the sectors that embodied the momentum funds were financials, health care, which were semis, which had worked well. And there you're seeing a recalibration in terms of positioning incentive. It's warranted and I think it just takes everything back to neutral.

A (4:40)

All right, Steph, we set the table with the headlines. The quarter is going to end. Wolf today says we expect the near term trend in markets to be biased to the downside. We just don't know really where this is all going. Is, is the president going to leave with the strait still closed and the region in some form of chaos? What does that mean for the global economy? What does it mean for anything else? So there are still many Questions as we try and figure out as investors what to make of it all and how to position ourselves into now a new quarter.

D (5:13)

Yeah, but if we wait for certainty, Scott, the market's going to run away from us. On the upside, I actually do think that it all depends on, well, hope is not a way to invest for sure, But I think I'm trying to think a little bit longer term. And, you know, I have been buying throughout this entire downdraft, and that is because I'm finding really great quality companies that are trading at discounts to their historical multiples or just downright cheap. What is very encouraging to me, I saw yesterday three different strategists raise their earnings estimates higher in the face of all of this. And that is because the economic momentum that we have pre war, even during war, we're running above trend, and that is very positive. At the same time time, the multiples for The S&P 500 is down 17% to 19 times. So it's not super duper cheap, but it's getting cheaper.

A (6:07)

Yeah, multiples have compressed. I saw you post something yesterday on social media and that. We did it on the program, in fact, yesterday, because, yeah, the multiple has compressed a fair amount.

D (6:17)

It has. And there are certain sectors that are even cheaper though. Financials, some parts of industrials for sure, discretionary. And I get that. But I think that that's opportunity for the long term. In terms of earnings revisions, though, it's coming from two sectors, Scott, just technology and energy. That's, to me, if. If earnings are going higher for both these sectors, you still want to be involved. Technology. You know, I've been adding to some new positions. We'll talk about them later, and all that sort of stuff. But I think there's opportunity here. You just got to see through this. What I'm going to try and say, it is noise. It is big picture noise. It's serious. But I'm trying to think as an investor.

A (6:53)

Okay, so the greatest point of contention is part of what Steph was talking about with earnings. Okay. Estimates have keep going up. Are they going to really be able to produce that? That's a question mark. You just don't really know. Wells Fargo today trims its target, by the way, to 70, 300 from 78. They're tactically cautious, even though they're structurally bullish. I think Steph is structurally bullish also. Right. I don't think you can be anything but tactically cautious. Right. I mean, how could you be definitive in any real way? But as they point out. They think the oil shock is likely. More mitigated valuations as we're talking about with Steph have reset us is greater than international on energy independence. That's an un doubted plus. And hyperscaler free cash flow is inflecting. Higher restocking is accelerating amid lower tariffs and supply disruption. So I got all of those things which are enabling people like Steph and some analysts to try and look through what's happening now and see to the other side. As opaque and foggy as the war has made the environment.

E (8:09)

What's going on right now is exactly what happens in an earnings driven market. We've been driven primarily by momentum and multiple expansion. 2026 is about earnings driven markets. Historically, earnings driven markets can still be positive, but their year over year rate of return is actually half of what momentum driven markets are now. I love it when strategists say that they're bullish and drop their target. I mean, we used to have to do that on the sell side as well. But at the end of the day, this is about investing. This is about being tactically, I would say convicted. Tactically convicted and structurally bullish. Longer term, the 25 year secular bull market in our view, is still very much alive. Scott. But we've had these eras where we have this right now, where we have sentiment at all time lows in terms of bearishness. Bearishness high, bullishness low. And then given that everybody hates tech stocks, we love oil, we love gold. I think this is a fantastic time to be convicted in your stock picks.

A (9:10)

All right, Josh, what are, what are your own thoughts here? Is it, is it time to remain cautious? Is it time to be opportunistic? What do we think?

F (9:21)

I think, look, a lot of long only managers point out all the opportunities here, but they were fully invested. 9% higher in the S&P12, 11% higher in the NASDAQ. So it's like, all right, so with new money, you like the same stocks that you liked 20% higher. Okay, I don't know. I don't know how helpful that is. I think the best, the best comment to make here, which Stephanie made, and I agree with this, they reset the table for us with a significantly lower starting valuation, not just across the board, but in some of the best stocks in the world. And I can't see how you could be negative on that. That's not the same thing as saying they can't go lower. But I do like the momentum washout that Joe pointed out. I do think that's Helpful. Helpful to the market. And if you think about like, all right, so what's the most important thing going forward? Let's say hypothetically, Trump says, okay, we're, we're tactically pulling back. We did all the damage that we wanted to do. They'll learn their lesson. Go get your own oil. I like it. It's like a buffet for oil now. Fine. Let's say the market digests that, accepts it. I think that's a really interesting situation to be in because the number one thing that has not accompanied all of this trouble with high gas prices and inflation worries. You have not seen earnings revisions lower. You've seen earnings actually revised higher. So you're telling me, basically, I have this valuation reset. I could buy the biggest, most liquid stocks in the world. Half. Half of which people are super bearish on. And so I think, like, the balance here is you want to be tactical, you want to be opportunistic, and you do want to be a buyer. I know we're going to get to something that I did last week shortly, but I think it's the right look, it's consensus, but I also think it's right.

A (11:18)

Well, the quarter is going to end with tech having some major questions being asked about it. And it, to me, is the epicenter of the valuation reset that everybody has just mentioned on the program. The forward P E of the spread between the Mag 7 and the S and P is nearing the lower end of its range going back to 2015. Right. That's an important and identifying statistic of just how much the Mag7, the biggest tech companies in the world, have reset their valuations more in line with where the overall S and P is trading. Talk about judge.

F (12:00)

Can I just, Can I add something to that? It's.

A (12:02)

Yeah.

F (12:03)

I don't even think people understand. I don't even think people understand the extent to which this, this reset could play into our. Going to.

A (12:10)

I'm going to hang on two seconds because I'm going to. I'm going to give you a little more data, then I'll throw it right back to you, I promise. So let's just take Meta, for example. Okay. Meta's high for 20, 26. Its forward PE was 24 times. It's now 18. Okay. You want more evidence? Alphabet was 30, it's 24. Microsoft was 27 and a half. Now it's 20 and a half. Amazon from 31 to 26. Nvidia 25 to 20. I mean, Nvidia is like the cheapest it's been to the Square be like 10 years. Apple was 32, now it's 29. Josh.

F (12:48)

So the point that I wanted to make is if you think the earnings power of these companies just vanishes or falls off a cliff, then these lower valuations aren't going to help you. They're not going to, they're not going to do much to protect you. I don't think that most people think that. So if you think this will be a decent year for overall earnings growth and that these companies have preserved their earnings power through similar market moments and they will again. Now they're screaming buys. So Nvidia at a 15 forward earnings. They're supposed to do 74% earnings growth in 2026 and then another 34% next year. Once again 15 times. I understand all of the competitive threads and is the China business, but I get it. Still. You mentioned matter. 27% earnings growth this year, 16 next year. Microsoft 21% earnings growth, 15 next year. And by the way, all those next year numbers, the weird thing that's been going on over the last few years is we keep having to raise them as we get to the halfway point of the preceding year. So unless you think it's a complete Mirage and the 75 sell side analysts covering those three names have to have their heads in the sand. These stocks are probably buys and they're way easier buys than sells. And there are more. We're just using those three. But it's not just the valuation reset. It's the valuation reset relative to the future earnings growth that, that the street is looking at.

A (14:27)

When you get Steph, the kind of valuation reset that you've had in these names and the prices have come in the way that they have, you're going to have stats like Meta having its worst quarter since 3Q22. Microsoft is set for its worst quarter since 2008. You got to go all the way back to 08 to see a period of time of three months that Microsoft had a worst quarter than it's having now. To Josh's point. You look at these and they've come way in. You've got matter.

D (14:57)

Yeah, we talked about the other day in terms of it trading as you know where it is, right. It's at 17 times forward estimates. And this is a company that last quarter, Scott raised their revenues by $3 billion and they're going to grow something like 26, 27% in total revenues. It's an acceleration story, a growth story. I'm really shocked that it has pulled back as much as it has. I do think that there's a lot on the table that they have in terms of AI options, in terms of new products and customer apps and tools. And they are seeing monetization. We talk about this a lot. I know that we're all waiting for it for a lot from a lot of these companies, but we are seeing monetization. This is a company that has pricing power of 10 to 12% in their ad business. And what they're doing in terms of AI, they're using it so that people are spending more time on the sites. And I just think like this is an opportunity certainly for the long term. But I don't know what the catalyst is other than maybe earnings. I hope that that's what's going to drive it. It didn't do it last quarter though.

E (16:00)

I love going back and looking at these types of companies in the past. Think about this. Meta wasn't even meta in 2015. It was Facebook. They were in a completely different business. Google was talking about search. Microsoft was trying to put amalgamation of their business together. Amazon was more of a consumer company. Apple was focusing on their phones. So you think about the consistency of earnings. Look at the E. There's a valuation, there's a P and an E. Look where the E is going next year versus where the E was going to go in 2016. That's what everybody's missing on this. And I think these stocks are exemplary cheap.

A (16:32)

So Nvidia is, is a really great example of this by the way. We're at 170. Remember, remember Christina Parzonevolos came on the other day and made the point that 170 was this line in the sand for the stock. It hadn't been able to see that for a minute. And here we are with this gain today. It's still around an eight month low coming into today. It's down 9% year to date. Well, Jensen Huang was on CNBC earlier today. He said the market's been just getting it wrong. Listen,

B (17:03)

the market misses several things about, about Nvidia. I think of course because we are such a large company and we have such a large position of AI computing and all the AI infrastructure, a lot of people might think that all of our growth is all priced in. However, what is very clear is several things happened this last several months. In fact maybe the last six months we gained share. How is it possible that we're gaining share at a position that we're so large we didn't have anthropic exposure previously to this year. And now we're scaling with anthropic. Our growth in AWS is accelerating. We just announced they're going to buy a million GPUs from Nvidia in just about a year and a half or so. And so that's an enormous number of new GPUs. The number of customers outside of the clouds, the top five cloud service providers has now grown to 40% of our company's business. Most people think that most of our business is in the cloud, but in fact the fast one of the fastest growing segments is outside of the enterprise, the industrial.

A (18:11)

I mean he. Joe, by the way, that gentleman, they invested $2 billion in Marvell and they launched an AI partnership. In case you're wondering who's the other guy sitting there? Why are you sitting there? That's what that was about. But nonetheless, Jensen has had an incredible ability to refocus people on what they do and what they do better than everybody else. Right. He did it when he and I sat down ahead of the Super Bowl. Remember the stock had been down like almost 10% in like a week to date. He came on, he sort of retold part of the story, refocused people and the stock went up from there. And I feel like this is another one of those moments. Whether it's lasting, who knows. But it certainly calmed people and got people to refocus on what this company is doing and where they're investing and how they believe it's going to continue to pay off for the investors who continue to believe in it.

B (19:14)

He has an ability to communicate very eloquently, very elegantly and simplistically in a way that individuals are able to understand, however they might be trained in the financial services industry. What he did with you was he defeated the premise that was out there that competition was coming. He assured everyone that no, they still had the control of market share. Look, I've spoken about this all year and people have kind of questioned me on it. I don't see what the issue is with in video. The stock is basically, from my perspective, running in place. It's outperforming the rest of its Max7 peers. It hasn't been below 160 since last July. And really all you're seeing is what you should have expected. Moderation in the triple digit revenue growth. You can't expect that this company was going to continue to grow at that pace. So it's been a core holding. It ranked as number one for the ETF strategy. We own that a lot along with Alphabet. And I think if you're looking at the max seven and you're saying to yourself, okay, where else do you go? We'll talk in a little bit. But I think it's about Apple. I also think the relationship today that was announced with Nvidia and Marvell speaks very strongly about the AI data center testing equipment market. And that goes to Teradyne. I think Teradyne is in an excellent spot right here. Short interest is built up. If we could show to Teradyne, it's pulled back. Short interest is built up to 3%. The company is growing its revenue at a pace that it has never seen. It's historic and it's been part of this semi pullback that we're seeing. I think it's a great entry point right here for a fundamental business that's accelerating. Piggybacking on what we heard from Nvidia

A (21:05)

and Marvell today, you mentioned Apple. Tomorrow's the company's 50th and the stocks held up reasonably well.

B (21:12)

Very well.

A (21:12)

I thought it was interesting that Warren Buffett was on with Becky earlier today and anytime that he continues to speak publicly or do interviews, it's worth a listen. He lamented the fact that they sold Apple too soon and they would consider buying more of it. Not necessarily in this market, he said, but if it did get to more attractive levels, they would still was obviously a great investment for them. Josh, and you have told us, you know, I don't know, maybe it was a month ago to really keep your eye on, on this, this stock.

F (21:49)

Yeah, this is the one. So if you just understand how important the iOS ecosystem is to the vast majority of people in the global middle, upper middle and upper class, the spending power of that cohort, in this case shaped economy that exists all over the world. These are people that will most likely spend the majority of their time experiencing AI doing so within this ecosystem. And Apple will extract the tax. This is just the reality. I don't care if CRUD wins. I don't care if chat chat, GPT wins. Perplexity doesn't matter which image creation, app people, editing films, whatever they want to do. They're giving Apple a third in year one and 15% thereafter. Everybody knows it. And Apple does not need to spend 110% of its free cash flow like its brethren in the mag 7 in order to be there. All they need to do is figure out Agent Xeri, which I think will happen this year at one of the three scheduled meetings that they have right now. And when they do that people will understand. Oh I see all of these AI bets in the venture backed market, all these startups that we hear about, this one's worth 4 billion, this one's getting acquired by Meadow just for the engineering talent, blah blah, blah blah blah. They're all paying Apple. Oh that's how this is going to go. I can't believe it. And once that becomes apparent people will understand why this is the best acting stock in the entire Mag7 world and probably remains so between now and the end of the year. So this is the one to watch, this is the one that deviated when, when the rest of the hyperscalers were forced to do all this spending on on data centers. Apple really just doesn't have to do that.

A (23:41)

And you don't have it in the ETF because it didn't. It lost the parameters to be in there. But you bought it recently, personally lost the revenue growth.

B (23:49)

That was the reason for it. And I will tell you at the upcoming rebalance what we've seen now is a resurgence in the revenue growth. So you're looking at in the most recent quarter double digit revenue growth. Go back and find when was the last time Apple did that. You're looking at Q1 of 2022. So we haven't seen since fiscal year 21 where Apple did double digit revenue growth. They're on pace to do it this year. That's the reason that it was removed from the ETF personally. There are certain names you're comfortable trading. There are certain names you're not comfortable trading. Apple's one of the names I'm comfortable trading. I bought it at 252. I talked about it last week. You have a great point of reference. But I'm also buying it because I like what I see from the business. I like what Josh is describing. I like the fact that I think you're going to see a reacceleration in the business in China and yes I believe it's the most expensive back seven but for my strategy that's something that I actually and more inclined to allocate towards is where I see the premium being paid in terms of valuation itself. So I do think Apple's probably of the Max 7 in the perfect spot right now to where you look over the next 12 to 18 months and you want the outperformance relative to others.

A (24:56)

How about the NAS? NAS is better than 2% gainer right now. We've talked a lot about it obviously in the first 24 minutes of the program good for better than 400 points. It's a 2% gain. Were highs of the day basically for the Nasdaq. One of the key questions for tech, I think it's fair to say is going to be in software in the new quarter. Cyber SaaS in general, there are so many questions. Microsoft just seems to be one of the poster stocks of the question marks. Which leads me to a move that Josh made before we take our first break of the program today. You bought the IGV on Friday, which I find a pretty interesting move I want you to tell our viewers more about.

F (25:41)

So I just thought by Friday afternoon what we were watching was just a wholesale vomit and it really had nothing to do with the fundamentals. And maybe in the early days of the software sell off, you said to yourself, all right, I get it, you have a couple of things going on here. You have anthropic launching into all these verticals, new products that are obviously going to at least start off, be cheaper and lighter for both individuals and corporations to bring into the fold. But if you just continue to extrapolate that and watch these stocks fall between 30 and 50%, which is what the names in the CTF look like circa Friday. You act, you're acting as though the companies themselves are just going to sit there and not do anything about it. Like as if they don't have a capex budget where they're not working on AI solutions that will be better than whatever, you know, people vibe code on their own. And of course that's not going to be the way this plays out. And I'm doing this almost 30 years. And they told me the credit cards were dead when Blockchain came along. Credit card companies are bigger than ever. They told me the banks would recover in the wake of Dodd Frank and Basel 3. The banks are bigger than they ever were, especially the big ones. I think they all tripled in size. So every time there's just this like big obvious story that everybody seems to be able to recite on command and it becomes that consensus. I just, it's almost like a personality flaw I have, I have to lean the other way. And you guys know I don't troll the 52 week low list. That's not my steez. But I'm looking at Palantir, Microsoft, CrowdStrike, Palo Alto Networks. These are some of the biggest, best growth stories in the country with the best unit economics, the most profitable companies. They're not sitting back and waiting for Claude to come along and just replicate what they've done. They will have their own versions that are better and that the user base that all these corporations are comfortable with. So that's the bet here. It's a trade. I don't know that I'll be in the IGV for the rest of my life, but I think I bought it right. And my plan is to trail it with stops. I might, I might have several trading opportunities in this thing if the disruption freak out, you know, comes back in a week or a month or six months. But I think at this point, it's gotten so absurd, you almost have to lean the other way.

A (28:09)

Well, I mean, maybe Palo Alto's Nikesh Arora was one of those because he, he did that $10 million personal buy of Palo Alto in the midst of some of this carnage that we've seen in this space. And he obviously is going to talk more about that when he joins Kramer tonight exclusively on mad money at 6 o' clock Eastern. So he's going to give you a real, real world view of how he sees not only his company, but that critical space and why he decided to do that. And then you just heard what Josh had to say, too. So let's, let's squeeze in a break. We got the NASDAQ at the highs of the session. We're good for about, we were just like 2.2%. The Dow's gotten a little bit of a lift, too. We'll take a break. We'll come back. We're going to talk about Netflix. Netflix wants more sports. Should you want more Netflix stock, we debate it next.

B (29:06)

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Reserve, now even more rewarding. Learn more@chase.com Sapphire Reserve cards issued by JPMorgan Chase bank and a member FDIC, subject to credit approval. Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desktop. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com trading men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need. And, and that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts. All right, welcome back. Netflix reportedly wants more NFL. Julia Boorstin joins us now with those details. Hi, Julia.

D (30:54)

Well, Scott, the NFL mini package of games that is currently talking to the marketplace about is attracting a lot of interest from many companies, including Netflix, according to a source close to the situation. Now this confirming the Wall Street Journal's report that Netflix is looking to expand from its current package of two Christmas Day games, that package ends this Christmas. To a package which includes a new Thanksgiving Eve game along with an international game likely in the first week of the season. No comment from Netflix. Now, this comes as the NFL has reclaimed the right to sell these games as part of its deal with ESPN and as Netflix has increased its investment in sports events, including its first MLB game last week. Now, other potential buyers for these NFL games include Google's YouTube, which of course course has the rights to NFL Sunday ticket package and last season streamed an international game along with Amazon, which has those NFL Thursday night games. The NFL's broader rights deals can be renegotiated after the 2029, 2030 season, but the NFL can renegotiate its deal with CBS sooner because of CBS parent Paramount's sale to Skydance. Scott?

A (32:04)

All right, Julia, thank you. Got us talking, obviously, because we have ownership on the desk. The NFL has been incredibly successful for Netflix. They just did their MLB opening night game, Belski. They just raised their prices again. They're in such a unique position and now they want more of a foothold into your living room with the greatest ratings grab that there is on television anywhere.

E (32:31)

The NFL, this company is the king of content. They have been for a while. I think it was a very, very good thing they didn't get the Warner Brothers. We bought the stock in our value portfolio a couple of weeks before that. We had long term holders, as you know. And we really believe, and we've said this on air, that that it's going to come down to Alphabet and Netflix with respect to sports and so I assume in the next four or five years, they're going to be really aggressive. I think this is very good news for Netflix, Josh.

F (32:59)

Yeah, I agree. I don't understand why this stock is still below 100. Now that they called off this merger, we can focus on Netflix's growth opportunities. They are able to raise prices. They are solidifying the power of the tears. And, and I think adding sports, adding live events, and adding the types of things that make everybody want to tune in all at once is the thing that they spent 15 years playing coy about. Maybe we'll do it. Maybe now they're saying like, yeah, this is what we do. We're doing boxing, we're doing major professional sports, we're doing award shows, we're doing it all. And I think the stock deserves more of a premium multiple than what it's getting stuff.

D (33:41)

I mean, I've never owned it until recently. It's one of the names that I've recently bought because it is still down 32% from its high. I mean, these guys have 3,325 million subscribers. I mean, they are just the absolute ginormous company in this space. And they're going to spend $727 million in capex alone just this year. So I love this news about the NFL and adding on to their subscribers, adding on to market share so that they can continue to grow a compounder at like 20% in terms of earnings, revenue growth, 12 to 14% and margin expansion. So. So, yeah, I too, don't know why the stock hasn't recovered, but I hope that it will, and I think it will, given the strong fundamentals.

A (34:20)

Yeah, you take a look at this thing you have to write against.

B (34:24)

I'm always paying attention to it. Remember something? I bought this stock in May of 2024 at $66. I sold it out at 80 in February to protect the. The gain that I had. I didn't want to take a loss on it, but no, you're always paying attention to it. I think what they're doing with sports is really important. When they're telling you that their content budget is going to expand 10% in 26, $20 billion. Well, the offset to that is the ad revenue that we all know the NFL brings. That's tremendous ad revenue. They did baseball last week. That speaks to their ability to gain international subscribers. They have a focus on that as well. So it's about engagement, it's about ad revenue.

F (35:04)

And that's.

B (35:05)

Yes, it's about some point I will be back in this stock as I have been in the last several years.

A (35:09)

Well, right now it's about the news update. We go to Christina Parts and Nevilles for that.

D (35:12)

Hi there, Scott. Well, Defense Secretary Hegseth said at a briefing that negotiations with the Iranian regime are ongoing and gaining momentum as the war enters its second month. Hegseth said the number of missiles and drones launched by Iran over the past 24 hours marks the lowest of the conflict. He actually declined to answer questions about the number of remaining weeks of war, saying they would never reveal it. Britain's King Charles is planning a state visit to the United States next month. According to a statement from Buckingham Palace. Charles and his wife, Queen Camilla, will visit to mark the 250th anniversary of American independence from Britain. It'll be Charles's first state visit to the US since he was crowned king in 2022. And Sunin Zion announced her return to the stage. The music Legend will headline 10 concerts in Paris later this year. In the announcement, the singer thanked her fans for their support as she managed her health. Dion took a break from performing after she revealed her diagnosis with stiff person syndrome back in 2022. As a deep Montrealer, I was disappointed there were no Montreal shows, given she is a Canadian, but. Oh, well. Scott, back to you.

A (36:17)

You sure gonna be okay?

D (36:18)

No, no. I was actually talking about this last night. I'm very disappointed.

A (36:22)

It's carried over into day two. Well, we'll check in tomorrow. We'll see how you're doing.

D (36:26)

Okay. Okay.

A (36:27)

It's Christina Parts and Nebulous. Coming up, Josh Brown's best stocks in the market. The two names that just hit the list. We'll tell you what they are next. Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before. Like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance? No problem. Get 24. 7 professional answers and live help and access support by phone, email and in platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more@schwab.com Trading Thy Ticket Lady, Jennifer of Coolidge.

D (37:08)

Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance fairs? Yeah, they do here. Discover is accepted at the places I love to shop.

G (37:20)

Get it with the Times.

D (37:22)

With the Times.

F (37:23)

You're playing the loot.

G (37:26)

Yeah, and it sounds pretty good, right?

A (37:28)

Discover is accepted at 99% of places

C (37:30)

that take Credit cards nationwide.

A (37:32)

Based on the February 2025 Nielsen report.

B (37:35)

Before we had AT&T business wireless coverage, our delivery GPS wasn't the most reliable.

A (37:40)

Once our driver had to do a

B (37:42)

full a 14 point turn to get back on route. A 14 point turn, an influencer, even live stream the whole thing.

D (37:49)

Not good for business.

B (37:51)

Now with AT&T business wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.

A (38:00)

AT&T business Wireless connecting changes everything. All right, welcome back. We're at the highs of the day for the session. There's the Nasdaq, which had been steadily moving higher over the last 40 minutes or so, now good for nearly a two and a half percent gain, better than 500 points. The Dow is now good for almost 640. So, you know, the administration has tried to project this message today that maybe this is not going to last that much longer. It's been received well, obviously by the market. Thus far, yields had come down a bit. That helped oil stabilize. That helped. But there's your current market picture now, some 40 minutes after noon. All right, Josh Brown's best stocks in the market. The spotlight is on two stocks. They are.

F (38:49)

Yeah. So today is a risk on day in the markets. These stocks are not running because they're actually providing the opposite for investor portfolios. They are Verizon and AT&T. Go back five years ago, they would announce these M and A deals and analysts on the street would refer to these two companies as literally, this is their nicknames, Dumb and dumber. Verizon bought AOL and Yahoo. Literally, I'm not even joking. And AT&T bought Time Warner for like $85 billion. It was just crazy. They've spent the last five years unwinding all of those deals, all of that debt, and now these stocks look really good. In the case of Verizon, see that big move? That's them shocking the street with a better than expected churn number on on subscribers for for mobile. The board authorized a $25 billion share repurchase over the next three years. And they've raised their dividend for the 20th to zero consecutive year. It's now a 5.62% yield, which is one of the 20 highest yields in the S and P. This is a textbook earnings reset. It made the big move, now it's digesting. I think your risk is the 200 day at 43. I think the stock continues to digest that move and then launches again. Let's do AT&T very quickly. All right, this is another turnaround story. You can see here we are looking at a potential breakout in progress. $30 is the trigger. This one is black and white, very simple. A cool, clean break above 30 gives this stock room to move another 20%. There should be no sellers there as far as risk management.

A (40:35)

Hey, Josh.

F (40:36)

Yeah, Josh, forgive me.

A (40:38)

I'm going to interrupt you because there's, I'm looking at it. First of all. Look, there's the Dow, which is up now better than what I. Forgive me, but there's a headline that's, that's moved. And we'll obviously try and get more detail around it, apparently from Iran's president who says we're ready to end the war but want guarantees. So as that has moved from another news organization and we continue to, you know, try and get you more information on it, it has undoubtedly factored into the trade at this moment. I'll send it, I'll send it back to you. Let's just move away from the best stocks and just focus on this because if this conflict does wrap up, put oil up. Yeah, of course.

F (41:26)

Give us food. Come on.

A (41:28)

If this conflict does, that's the whole ballgame. Yeah, that's the story, too. If the conflict wraps up rather quickly, are we just to assume that things go back to some degree of normal in the markets as fast?

D (41:46)

Yes.

F (41:46)

Well, I think, I think it's, I think it's as simple. It's oil versus stocks. So if you think that there's some legitimacy behind these comments from the regime, and now we're going to enter into a period of talks and headlines about, you know, which points we can get along, like the market is going to start to ignore the noise of $100 plus crude and focus back on the fact that we have an earnings season coming up and it might even benefit the consumer stocks more so than tech. So I know the first stocks to move are always going to be tech because that's where the active traders are. But focus on the XL Y names, focus on the retailers because to me, that's really where things could get exciting.

A (42:29)

Well, I mean, throw up the Nasdaq, which, you know, guys, Steph, as we were talking, Mike Santoli set down here, too. We'll bring him into the conversation momentarily. But, you know, we were just two seconds ago saying, well, hey, NASDAQ's good for about 2%, like 500 points. Now it's 700 points and almost, you know, three and a third percent. So as to Josh's point, you know, these stocks have been beaten up. This is where a lot of money is going into right now.

D (42:52)

But a lot of the sectors have been beaten up. So I don't, I don't see why we can't see a melt up in all the sectors. Financials are horrible. They've been the worst performing sector year to date. They can certainly bounce earnings. They're going to have really good earnings. Josh has mentioned discretionary. I think discretion consumer is much better off than people think that they are. The job market still is okay. The jolts revisions today actually proves that. And I think you also have some of these industrial companies because the data center build out is not going away anytime soon. So I think you can see a lot of sectors participate.

A (43:21)

Just to remind you too, it's an unconfirmed headline that we have gotten that has moved the market. Right. Market moves on anything like this and then the chase begins to try and get more detail on it. But it's moved the oil market. Mike Sentoli, our senior markets commentator, overtime co anchor, has joined us too. This will get you to a good place if this is legit, of course.

H (43:45)

Yeah, I think it's in the category of don't jump to any conclusions. Nothing's been proven. It's a just don't stay too negative type of reaction is the way I reminder and a reminder that we were absolutely primed. I mean, I think we were talking like 3 to 5% is the magnitude of what constitutes a dead cap bounce from where we closed yesterday. All right, we're down like 250s and P points in three days. So just keep that in mind. We're getting back to levels, not even to last week's highs. But I do think it is important that, and I agree with Josh that the market will not get caught up in the nuance if it has convincing tangible evidence that there is a process in, you know, in train to actually de escalate and reopen the Strait.

B (44:31)

That's a lot of ifs.

H (44:32)

I do think it's helpful that oil has a response here because all morning S and P was ripping and oil was not moving lower. And that was kind of like a what's going on? It was definitely shadowing this move. So I think that's how you keep it all in context. Everybody knows if this is a normal kind of corrective process, we did a lot of work. If it's something more than maybe not.

A (44:54)

I'll go back, Brian, to the question that I posed to Josh, which I'd like to discuss with Everybody on the desk anyway, if this conflict does come to an end reasonably soon, do we just go back to the way it was thinking that, hey, earnings are expected to be double digits and they haven't come down. Oh, by the way, the markets come in from a valuation standpoint, so now it's even perhaps more attractive in a still elevated earnings expectation environment. So we just sort of play that game.

E (45:28)

I think that's 100% accurate. Plus, think about this. During this malaise in the market, the problems or issues that people had with the AI companies, we've answered a lot of those questions, questions with respect to matching revenues and expenses, what's happening in private credit? The companies that have been more consistent in terms of earnings delivery, they've obviously shown themselves. And so we believe that this is the opportunity that we've been waiting for. Plus, the key thing on this news is that this is really the first thing supposedly, hopefully that we've heard out of Iran. And so that's a major, major difference. And that's probably why the market did what it did.

A (46:03)

So according to Quickly, again, it's, it's an unconfirmed to this point report, but the, the market, Joe, is just.

H (46:10)

Even the unconfirmed report says if conditions are met.

F (46:12)

Yeah, of course they've had these conditions

H (46:14)

out there, including reparations and everything else. So who knows what really is behind it? That's. I think we have to keep that.

A (46:20)

Well, there's always a healthy dose of skepticism, which is why what was a thousand points right off the bat is now 750 and say, okay, now the work begins to not only get more information to find out if this in fact is a legit report, if it's a legit statement from somebody with that level of authority within Iran to even make that kind of a deal. Remember, that was one of the questions over the last 24 hours. Who exactly are we negotiating with over there or who are we talking about having talks with, as we're not even sure, according to many reports of who is even in a position within Iran to negotiate on that country's behalf and perhaps give what we want? It's a critical question that hangs in the fog of this whole conflict. But at least at this moment, you have had a market reaction of some now 700 and there about 50 points on this one headline that everybody is now going to be chasing for more details.

B (47:20)

Yields lower, which is obviously something the administration would applaud. This rally today, the formation of it to me is Mag 7 oriented. The S& P equal Weight is lagging, the S and P overall and you had wanted the Mag 7 to take control of the leadership. You're getting that today. So I think that's incredibly important. Also, as we speak, momentum is up well over 3%. So what we talked about at the top of the show, the washout from yesterday down greater than two and a half percent. It reverses it all in a 24 hour period, which kind of speaks to what Josh is saying, where the market's looking past a lot of all the nuances of this and just kind of reacting positively.

A (48:00)

I mean, this is a look, this is a hope, you know, and hopefully not a prayer that, that it's going to, you know, wrap up sometime soon and then we're going to have to pick up the pieces and figure out what's what.

D (48:12)

That's why we've been talking about the length of the war. That's what matters. If it is really four to six weeks, which is what the Trump administration has been saying all along, then we can resume the momentum that the economy has been seeing. We are, we are running about 2, 2 and a half percent GDP growth without the one big beautiful bill. We have a consumer, as I mentioned, that has jobs and they're spending, they are consuming. We see that in retail sales, we see that in credit card data. You have the tailwinds. That's what we're going to get back to focusing on if we can get away from this war. And yeah, sure, there's going to be a lot of details we don't know know that we have to iron out, but if it's over, it's over. And that is a very big deal, especially since we are so oversold.

A (48:50)

I don't know, Mike. I mean, some 50, 50 minutes ago as we came on the air, we were reciting an alleged report from state media within Iran that the Revolutionary Guard was threatening to attack major American tech companies based in the region as of tomorrow evening.

H (49:08)

Right.

A (49:08)

And here we are, are 50 minutes later with another headline talking about the apparent openness to ending the conflict, which has moved the market.

H (49:16)

Yeah, and that's why I think the market isn't telling you a tremendous amount unless we get above certain thresholds. I mean, let's, let's get back to last week's high before we start talking about whether the overall story has changed. And so because the market has been straight down and so oversold, I think you have to raise the bar for what is a material move or what has a lot of information, content and as opposed to just sloshing around and moving quickly in response to hoped for headlines that have to move far in price to find somebody with conviction to sell it in this moment. That's all I think is happening right here. Look, I agree that things are lining up including the biggest company in the world deciding they wanted to come on and goose the Stock Back to 170 Nvidia with some news today and it's actually getting traction. So that's.

A (50:06)

Oh, it is.

H (50:06)

You know, that's important when the market actually responds to it.

A (50:10)

I was going to go there next and I'm glad you did. Let's look at in video on an intraday basis. It's at the highs of the session. So they, they make this $2 billion investment today into Marvell. They have an AI partnership. And then Jensen Huang comes on the network this morning and essentially says the market's been getting it wrong. And what happens? Well, you see right from this morning's appearance, the stock is steadily moved higher. This is an area that just so desperately needs some level of stability.

H (50:41)

Sure. And look, I think Joe, you know, coming into this week, what was the, what was the textbook play? It was the trains have been damaged, the burden of proof on rallies is high and we might be in a sell rallies mode. Right. And so it isn't just Iran and oil because it seems like the market has been consumed with other issues for six months now. Sometimes when the market has been struggling with these underlying issues and then you have this kind of focal point crisis, I think of Brexit in 2016 that came after almost a year of Chinese devaluation of energy, credit concerns of an industrial recession. Earnings took a hit. And then by the end of it it was actually Brexit, which was kind of a bad news thing, kind of released the market higher. And of course you had the election after that. My point is sometimes it can be that the clearing event and sometimes it can be actually the problem was actually a festering rolling over of, of you know, the leading group in the market which is AI Yeah.

B (51:41)

And I also think it speaks to positioning and that we were, look, we were oversold coming into today. We worked off a lot of extreme positioning in different areas of the market where people perceive the safety ultimately to be. If I could point one thing out that I think is really interesting and if you have the ability to show it, if you go out on the curve in crude oil, can we show, let's call it September or October crude oil? And if we can, I'll just speak to it, the spot month is actually down the least of the first 12 months. So if you go go out five or six months in crude oil, you're looking at losses of about two and a half dollars to $3. You're looking at debt being down 3%. So that's telling you that the market does not perceive this to be a long duration event, that ultimately if the if it can be resolved, the way to hedge against it is in the spot month. But going out longer in the curve, you're seeing significant selling, selling pressure and bigger losses there.

A (52:37)

And Pippa Stevens is with us, I believe now too. Who who watches this area of the market so closely? If you want to react or build on what what Joe has said is we're, you know, anxiously watching that chart as much as we are the stock charts these days.

G (52:53)

PIPPA that's right. SCOTT so we haven't seen the same type of response in those longer dated curves as Joe was talking about, but they still have come up. And it's notable that even with today's decline WTI and is at 101 before the war started, we were around 65, 67. So we're still up more than 30 bucks since then. And also today's movement is fundamentally different from what we saw at the beginning of the war when there were big swings in either direction. Based on the latest headlines, the fact that we're not down more right now does speak to the fact that there is some skepticism about the extent to which traffic can resume in the Strait of Hormuz. We have seen more ships getting through through, but it's still about 95% below pre war levels. And also there is now growing concern in the market that we might not ever be able to get back to the pre war production levels thanks to some reservoir damage, especially in countries like Iraq and Kuwait. And so the consensus is that while we probably might not have 101 going out further down the curve, this is not going to be, you know, the strait is open and everything is back to normal and it's going to take a while for ships to be repositioned, for product flows to get back to usual. And so this is no by no means a kind of, you know, once the strait is open, things get back to normal. Tight market for right now, sure.

A (54:10)

We can at least start to, you know, game out when some degree of whatever the new normal is going to be can actually be more firmly in place. JOSH if you, you know, played this conflict for a lack of a better wording in terms of buying energy stocks that you thought were going to be lifting off as a result of this. And it's no shock to anybody that over the last month energy, I think is the best performing group. What do you do now? Because there are many people within our orbit who do own a fair amount of these names.

F (54:45)

Yeah, and I'm in that camp and we've been talking about a lot of energy stocks this year as part of best stocks in the market. I'm personally long ExxonMobil. I think what's interesting is how small energy still is in the context of S&P 500 waiting. Like nobody really has so much energy that they would look at a headline like this and say, oh cool, let me get rid of all my exposure. Because the reality is, let's say crude does fall back a bit and truce negotiations start. Which by the way, who, like, who literally knows how long that'll go on for, whether it'll be successful. We might be bombing something tomorrow, but let's say that was your intention is to say, all right, made a lot of money. These stocks are up 39% as a sector year to date. Let me take some off. Does anyone really own these in size where it would even matter? So I actually don't think you're going to get a huge stock sell off in the energy stocks. And I think if anything, this episode that we're living through now is a reminder, something that my friend Nicolas has been saying for a very long time. You never sell your energy stocks. I have in an equity portfolio. They are your only hedge against unforeseen things like this conflict. And so I think it's a better reminder than it is a sign to take profits.

A (56:08)

Hey, Pips, I heard you. You got something you want to get in on?

G (56:11)

Yes. Just talking about the record run we've seen for the energy sector. When you look under the hood, the divergence between the subsector is interesting over the past month here because it is the services names, they've lagged. Names like Kinder, Morgan, SLB really only up 1%. And the gains are heavily concentrated in those upstream players that do have that direct exposure to oil prices as well as the refiners. Of course, they've been benefiting from the, from the surge we've seen in the crack spreads. Name like Valero, Philips 66, Marathon Petroleum. So when we do talk about this winning streak for energy, it is kind of important to look under the hood to see which names are really outperforming and which are just kind of, you know at the middle of the road.

A (56:48)

Yeah, that's, that's great insight stuff.

D (56:51)

I've been selling energy to be honest with you. SLB is up 34% and you know it went from 11 times forward estimates to now it's at 18 times. And, and I think they're going to have some issues with infrastructure in the Middle East. Chevron. I'm actually also thinking about pulling back. Yeah, it's only 3% of the benchmark weighting but it has created alpha for me being double weight this sector into this move. But I just think the time has come. You take your profits and you go elsewhere fertilizer names.

B (57:20)

I mean it's almost the final trade.

A (57:21)

Oh yeah, it must be down CFC down a bunch. Right.

B (57:25)

5% right now. So that is a position that I established on the very first day of this conflict on March 2nd. I've identified an area, it's 119 to 120 where I think you want to put in a stop loss. You're certainly going to need it if, if this news builds momentum.

A (57:40)

I mean there. That is one of many idiosyncratic stories that.

B (57:44)

Yeah, I wouldn't own the stock if it.

A (57:46)

Yeah, well of course, I mean you bought it because during the early stages of, of this conflict really anticipating that it would be one of the areas within the market that would get. It would get a bump. Michael, thank you for being here. I'll see you later this afternoon and then of course everybody will see Mike on overtime with Melissa at 4:00 and we'll discuss what you guys have coming up there a little bit later today. Josh, you have a final trade.

F (58:11)

Oh man, let's reiterate. Netflix, I bought more recently and I like it.

A (58:15)

Okay, good stuff.

E (58:16)

Belska, Berkshire Hathaway, BRK and stock hasn't

A (58:21)

traded all that well lately either. So we'll see what it does from here. All right.

D (58:23)

Stephanie Link ServiceNow fairly new position for me. Down 32% 25 times earnings for 27% RPO growth.

A (58:31)

All right. Is software going to have a better quarter? We shall see.

B (58:34)

Jyoti, Apple mentioned already what I would do in CF industries, but I'll go back to Apple. This is a Mag 7 driven rally.

A (58:42)

Okay. So we're having hanging on every market move as I know all of you are as well right now The Dow's up 850 points. It's come back off the member. Right, right off the unconfirmed headline. It was up better than a thousand. But we shall continue to follow it. On the Exchange. Now you've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

D (59:09)

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the half time report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer Snoring, gasping during sleep?

C (59:45)

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