← Halftime Report
Halftime Report
Stocks Rally on CPI Print 12/18/25
00:43:53
Scott Wapner and the Investment Committee discuss the rally in stocks after a lighter than expected inflation print. The experts detail their latest portfolio moves and debate the trades in energy, and Joby. Josh Brown adds Nasdaq, Inc. to his list of Best Stocks in the Market. Michael Santoli joins the desk with his Midday Word. Investment Committee Disclosures
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- [00:01]
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- [00:30]
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- [00:44]
Scott Wapner
Edu I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 1212 Eastern. Listen in. Carl, thanks. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the rally in stocks after a lighter than expected inflation. Print tech getting a much needed boost. We'll trade it with the investment committee. Joining me for the hour today, Josh Brown, Stephanie Link and Bill Baruch will take you to the markets and show you where we're at. 12 noon in the east, we got green across the board. As I said, it's a much needed boost, especially for the tech trade. NASDAQ's good for nearly 2%, just what the doctor ordered.
- [01:28]
Josh Brown
Oh yeah.
- [01:29]
Scott Wapner
So what's the deal now? Jonathan Krinsky says while it's still premature to say this is the top for AI, evidence is growing that it's more than just a speed bump, what this market has been going through. So what do you think they think about where we are here?
- [01:44]
Josh Brown
I'm sort of on Team Krinski, but with a very, very big and important caveat. When I look at the AI trade and the distance below the 52 week highs of some of the most important names in this them, it's kind of breathtaking and I don't even think people realize the extent of it. We're all aware Oracle's in almost a 50% drawdown. I know that's on, on, on everyone's minds, but Even Broadcom at 21% drawdown, AMD 19, Nvidia 17, Meta 16, Microsoft 12, Amazon 12 like this for the bubble crowd, for the people who are shouting from the rooftops about how we've all lost our minds again and it's Tulip mania or it's 1999. Very hard to make that case right now. Basically what we've got is big dispersion judge amongst the most important names in the group and all of them trading on company specific news. Many of them are only down because they've been up so much. And I would put in video and Broadcom in that camp and some of them are down for very specific reasons and real concerns. And the point is in a true bubble, that's just not the case. In a true bubble, everything goes up every day, all the time for no apparent reason other than people are chasing. That's just not what's going on here. And I would tell you as an investor in the theme and somebody that thinks the theme has legs into the end of the decade, I think that's really bullish. I think it's constructive that you get opportunities to buy different stocks for a variety of reasons. And that's where I am on this trade. And I still think there's a lot of opportunity.
- [03:16]
Scott Wapner
You know, over a month Steph Metta is the only one of the the right in the sweet spot stocks that is higher. It's up 3%. Everything else has had decent pullbacks. Core weave down 7 and a half, Oracle down 10. We've been saying that this trade is going to be difficult to see stabilization without Oracle and Core Weave stabilizing. Right. Because they're the ones that are in the eye of the the whole storm. I'm reminded what Apollo's Mark Rowan said in an interview last week about what's happening with some of the data center stocks and companies that have been loading up on debt. Quote hyperscalers are pretty safe intermediaries that are taking up the debt and the balance sheet risk, not so much. So it's sort of to Josh's point, dispersion hyperscalers versus others on the notion that Oracle and Core Weave need to get their mojo back for this trade to stabilize for a longer period of time.
- [04:24]
Stephanie Link
I think you're getting looks, I think you're getting really good looks at some stocks. High quality companies that have fallen even though they've put up really good numbers. You mentioned matter that's things fell 26% from its high after they reported earnings because they were going to spend more on capex. I get it. But they were still able to grow 26% revenues, 20% earnings margin expansion, free cash flow generation. You know, I was adding to it. I don't know. I didn't know when the where the bottom was and I'm not even sure we've seen the bottom. But I do think the fundamentals are very, very strong. The Same thing with Broadcom.
- [05:01]
Scott Wapner
Yeah, broadcom is down 19%. Josh was referencing it. You've been defending it every day.
- [05:06]
Stephanie Link
Well I have and especially I look at it. To lose that multiple so quickly at 40 times forward estimates to 32 in a week is crazy. When you have the growth that they have in terms of AI growth, 70% last quarter, expected to be 100% this next coming quarter. So that's a look. So met as a look. Broadcom is a look. I'll tell you what's not a look. Oracle is not a look. Not a look, Not a look because they are not generating free cash flow. That's the biggest problem. And the debt market, that's the CDS spreads are telling you that they're worried, they're losing confidence. I just think you avoid that one. The other area I would be adding to and I'm looking are all of the industrial companies that I own like.
- [05:52]
Scott Wapner
The Vernovas and the Novas and services.
- [05:55]
Stephanie Link
And the reason Scott is because the backlogs are so incredibly strong and backlogs matter. That's the revenue in hand. I don't care about the orders. Orders can get canceled. Vertiv backlog of 30% book to bill of 1.4 quanta services backlog up 15% to all time highs. Eaton global backlogs up 20%. These, this is visibility and so this is why if you get weakness like we did yesterday and pockets of weakness all around the, you know, throughout the year, you want to be adding to it.
- [06:28]
Scott Wapner
So can we take the Rowan comments from about a week or so ago and extrapolate from that that that's where the, the yes, you can buy and the no maybe you can't just comes down to the line in the sand. The hyperscalers are pretty safe he says the intermediaries that are taking up the debt and the balance sheet risk not so much. Now I, I don't want to put words in Mr. Rowan's mouth obviously but one could surmise that, you know, it's the Oracle's, it's the core weaves, it's some of the other stocks that have been in the eye of that whole conversation. And you have Oracle, right?
- [07:02]
Bill Baruch
Yeah, we haven't had to add into it at all yet. We trimmed it above 300. Kind of watching it here. I don't love the price action. Thought we might use 180 as a bottoming. Hasn't happened. Watching it closely. It's in the bottom half of our portfolio. Portfolio when it was at 300 and we trimmed it, it was, it was a much higher weight. It really comes down to again, these are the companies that are, that are investing in building these data centers, the construction of it. And really they need the end user to broaden and they need that demand to come from the end user. And that's, that's falling short of those expectations right now. And so I think that is the difference.
- [07:36]
Scott Wapner
Are you worried about this position that you have in that name?
- [07:39]
Bill Baruch
Not right now. I mean it's about a 1.2% position.
- [07:42]
Scott Wapner
I don't care about the size of it, honestly. We always try and do that on this show. I don't, I don't.
- [07:47]
Bill Baruch
That's risk management.
- [07:48]
Scott Wapner
I understand that. But are you worried about the position whether it's a candy bar size or the whole thing?
- [07:54]
Bill Baruch
I mean really, honestly, Fun size below, below 180. You know, if we can't bounce this week with all the negativity, you know, as a commodity trader and a risk manager, you have to look at how the news impacts, you know, what an asset is doing. And if all that news is really flow flushed out, we've had so much negativity. So if the next bad news or if we don't see if the bad news starts to wane, we need to see positive price action, you know, counterintuitive to what, what you would think. And that will tell you that it's bottoming. 180 is that area and it's been kind of flirty with it all week.
- [08:29]
Scott Wapner
Right. So the other big story today, without question is Micron. Okay. They had the beat obviously on the earnings. What's this yours too?
- [08:40]
Bill Baruch
Absolutely.
- [08:40]
Scott Wapner
What's really interesting to me on this one is that for the last two weeks we probably had four or five or six positive calls from sell side firms on this name leading into the print. And boy did those pay off. So they did. 5.28 billion in cloud memory sales doubled on an annual basis. Best day since April 9th. Upgraded it B of A to a buy target's 300. Target to 320 at Wedbush. B of A trading desk today says quote, Micron stellar earnings last night have provided a bit of a support for the recently rudderless trade. And for today at least this catalyst looks to look set to halt the bleeding in AI and adjacent themes. Is that how you see it? Because a lot of these chip stocks, if you look down the list today and we can throw up any number of them, they're I think, all green. All green.
- [09:31]
Bill Baruch
I, this is, as Dan Ives would say, this has been a double, double table pounder of mine. I mean I have been really pushing this name on the show quite a bit. I mean to put it relative to Oracle, it's a more than 3% holding of ours. We also hold Micron in our concentrated portfolio of no more than 10 names. This, I mean this is now with, with this earnings report and the numbers it's put up it's now trading at nine times forward. I've been talking about this name going through a repricing and it's gotten a tailwind of, of repricing here. So they pushed away the consumer business and that's going to end in February. They are full focused on this high bandwidth memory to supply to data centers. And you could see it in the numbers. This is not a, I mean it could double and still be a value stock at this point. I think Micro could go through repricing. You could see this at 15 to 20 times earnings. And I love this name right now 57% growth this year on revenues year over year and as well as next year. Mean these numbers are eye popping. The margins are tremendous. And then you look at free cash flow growth over, over trailing 12 months, 740%. I mean the numbers here are, this, is this, these are Nvidia like numbers from a couple of years ago.
- [10:38]
Scott Wapner
So they're, they're the Ronaldo of AI. Now do you want to play, play the role of Dan Ives today Because you have to got the godfather of AI and Jensen Wong, the messy of AI I think is Palantir.
- [10:49]
Bill Baruch
So Ronaldo, Ronaldo, you know it's been around, it's been around for a little while. It's going to show up and be.
- [10:55]
Josh Brown
There I think with my Micron. And this is a really important concept just for all of our viewers no matter what stage of investing you're at. One of the hallmarks of a healthy bull market is that it takes out its own trash. And when it builds conviction in a strong powerful company that it really believes in, you can see the divergence in price. Very early Micron has been a strong stock but it's actually building in strength. And as it reports numbers it doesn't always go up following each report but you see how quickly it recovers. And look at this chart. The story tells itself. Contrast that with SMCI. The market decided this was trash, was $118 stock in March of 2024. And look how it is spent the last, I don't know, 20 months or so just continuously declining. It is now a $330 stock both of these are suppliers to this AI data center build out theme. But the market has decided Micron is gold and SMCI is not. And that's where you get that divergence. And it's not that there aren't trading opportunities to buy a stock that declines from 120 to 30 along the way. If that's really the game that you want to play. The better game, and I think the game that Bill would prefer to play and I would prefer to play is to add the stocks on strength provided the fundamentals continue to come in in your favor. A healthy bull market sorts out trash from, from the winners and that's what we continue to see. And I think again that's what keeps this from being some sort of a speculative hype bubble. It's just not what's going on right now.
- [12:35]
Scott Wapner
Ubs they say today we believe the overall story remains intact. Investors seem to believe that too. In the private markets. OpenAI, according to reports, has discussed raising tens of billions of dollars at a $750 billion valuation.
- [12:53]
Josh Brown
That's like, that's like when your friend calls you and says we're I'm discussing going to Hawaii with Sydney Sweeney. Really? Who are you discussing? Who are you discussing it with? The mirror.
- [13:04]
Scott Wapner
I don't know.
- [13:04]
Josh Brown
I don't know if I'd believe that one.
- [13:06]
Scott Wapner
Well, if SpaceX is going to be at 800 billion, you've had to figure that it was only a matter of time before open had to come out and say they're they're going to raise. Sure, someone would say that.
- [13:16]
Bob Evans Announcer
Do it.
- [13:17]
Scott Wapner
750 do it. So it's the, the arms race in the private market in terms of funding. As you know, we look for one potential IPO in 26 and who knows when the next one. Let's talk about Meta Real quick step. You mentioned it before reiterated by today at B of a favorable risk reward set up and they list a number of different positives for, for 2026. You want to just comment on that real quick?
- [13:43]
Stephanie Link
I mean 23 times earnings. 23 times earnings and earnings are growing 20% so you're almost at a one peg ratio. Revenues are growing 26%. They are seeing return on their investments. If you look at impression growth of 14% time spent up 5%, video time spent up 30% so they are investing a lot but they're seeing good results as a result. Oh by the way, they have a $31 billion buyback. I bet you're there in there right now because the stock is cheap relative to the growth that you're getting.
- [14:12]
Scott Wapner
Yeah, it's been a really interesting chart to look at this year. You know, we, we have talked about cyber on so many occasions. Haven't really done it much lately because I felt like, you know what, we talk about these stocks all the time and you know, when there's news, we'll talk about it. When there's a street call, which seems to be all the time, maybe not so much you do get. You'll understand why I'm bringing this up. JP Morgan today calls Palo Alto a top tech pick. Also named a top picket, Morgan Stanley, where the target goes to 245. So Steph, you have that. The reason I bring all this up is because you, Bill, bought more CrowdStrike, which is why it is relevant today.
- [14:54]
Bill Baruch
Yeah, it traded down to 460 area. We're looking at going into getting more software exposure earlier in the week. Software really outperformed. I think that was two years Tuesday. I saw a little bit rotation started to take place back into tech before yesterday's news. And we wanted to, wanted to lean into software. You know, the backlog, the recurring revenue is terrific. Limited debt, limited CapEx. It has us a little more comfortable with the valuations that it's looking at at the elevated level. So we're leaning into support here. And I think software non AI names is something that you want to be looking at next year too.
- [15:27]
Scott Wapner
Let's kick it.
- [15:28]
Josh Brown
CrowdStrike's growing revenue at 52% over the last five years. That may be unsustainable just given the law of large numbers and how large this company has gotten. But I challenge you to find another company in the space or outside the space that's not only growing at the rates that CrowdStrike is, but profitably to the degree that they are. The company's just on fire. And the number one thing with AI to remember is more AI means more cybersecurity risk.
- [15:57]
Stephanie Link
100%.
- [15:57]
Josh Brown
It's like it's on a. It's unavoidable.
- [15:59]
Stephanie Link
I think cyber is bigger than I.
- [16:01]
Josh Brown
Because of AI, because of AI. So you can't, you can't tell me that it's worth investing $1 trillion in data centers globally over the next couple of years and that all of that's not going to mean more demand for cybersecurity for the end users, for the enterprises, for every player in between as more workloads are generated by companies that are using AI in their businesses, it's a guarantee that they have to spend more so the real question is the horse race. Which quarter is Palo Alto doing better than CrowdStrike or vice versa? That's a tougher part of the game to figure out. Obviously all of these companies have their great quarters and their stumbles, but the tailwind is at your back almost no matter who you invest.
- [16:43]
Scott Wapner
Well, I mean if that is the case, why is Palo Alto and nothing this year? Maybe, maybe there is an actual reason to win. CrowdStrike is up almost 40% year to date. Palos is up five years though. I know, I get you. But if AI is is the principal story of the year. Yeah. And Palo Alto is a nothing burger compared to a crowdstrike, then it's markets trying to figure something out here.
- [17:12]
Stephanie Link
It's because they made two very large transactions cyber for in a four month period, almost $30 billion. And investors are like, oh gosh, they have to digest that. These things have to close. And so maybe the push out of growth or the expectation of better results is maybe second half of the 2026. I don't buy that because in the meantime product revenue growth Last quarter grew 23%. Next gen security grew 29% gross margins. 77% in gross margins. And so to me this is an opportunity. It trades at 14 times price to sales.
- [17:46]
Scott Wapner
That's a frustrating chart to look at, isn't? It's like it's going to 200. It's going to 200. Now it's back. Oh, it's going back towards 200. Now it's going back. Now it's coming back to 183.
- [17:57]
Stephanie Link
And then I'm going to Josh's playbook and it's an RSI of 34. So to me, 14 times price to sales is not cheap. But crowdstrikes at 30 times price to sales, not saying that that's not right for CrowdStrike given the results, but I think it's too cheap for Palo Alto.
- [18:11]
Josh Brown
One thing that's worth discussing, give me the one year on Palo Alto. So it's like not the worst thing in the world, but it's just not a winner this year. And a lot of people probably bought it higher and are down in it. You still, this time of year you still have retail selling pressure, tax related selling pressure. You have to understand something. The S And P did 17% this year. Some of the Nasdaq names have done 100% this year. People have huge gains and they need to offset those gains by locking in some losses. And unfortunately there are certain stocks and I own one of them. I think Toast has been part of this. Where Toast did nothing this year. People are using those for tax losses. When that pressure comes off and you could make a whole basket, I know Goldman Sachs does, you can make a whole list of tax law selling candidates. It's like a beach ball you're trying to hold underwater when that selling pressure abates. Because all of that tax law selling has been, the losses have been harvested for the year. All of a sudden it's like, why is this thing up 8%? Oh, no reason. Other than a lot of artificial selling has come out of the office, out of the tape. So this would be one of those names where I would play a catch up, trade Palo Alto rather than sell it to Stephanie's point at a 30 something RSI when the momentum's already been completely.
- [19:28]
Stephanie Link
And I like that they're doing M and A. I know people are nervous about it, but I like it. And I think you're going to see a lot of M and A in this industry. There are 4,000 companies out there in the cybersecurity arena and some of them are private, some of them are public. But what, what Palo Alto is doing, they're trying to offer more to their customers. So that's the strategy and I like that strategy. So that they can capture more revenue from their customers.
- [19:53]
Scott Wapner
Right. Wasn't it service the other day?
- [19:55]
Josh Brown
Yes.
- [19:55]
Scott Wapner
That was talking about buying this cyber startup.
- [19:58]
Josh Brown
Yes.
- [19:59]
Scott Wapner
The market maybe didn't like it because, you know, obviously stock was down. I think on that report it also got a downgrade. But it is obviously where the action is now. I want to move and talk about. So you did have a lighter than expected CPI today. He's still at 2.7. Okay. But Steph has been just pounding, pounding the table kind of on the consumer hanging in there. I think that's fair.
- [20:22]
Stephanie Link
That's where we're going, right?
- [20:24]
Scott Wapner
Yeah, we are, we are. I think we have to. Because you, you said you were looking at this name and you were so tempted on this name and you didn't buy this name but now you did and it's a gap. It's a gap.
- [20:36]
Stephanie Link
It's the word kept secret. I've been talking about it for four weeks. I can't believe I didn't pull the trigger after they reported earnings.
- [20:41]
Scott Wapner
All right, well you did. Now it's up 16% over the past month. So maybe you needed a little confirmation that something was going on.
- [20:46]
Stephanie Link
I don't know. I mean, I've owned it in the past and I sold it because I was up 20%, and I thought that was great. But you know what? The results are just amazing at this company. This CEO is really hitting his stride. Very, very good results in terms of the same store sales, 5%, same store sales numbers last quarter versus 1% a year ago. That just tells you the product momentum that they're seeing. And they're seeing it from all different cohorts, low, medium, and high. And so I like that very much. Gross margins also have been very impressive, and operating margins were raised as well. So you're looking at a stock trading at 13 times earnings. And I think they're just beginning to see the momentum and the market share that they're taking. We talk about haves and have nots in retail. These are now becoming. This one is now becoming a have because they are getting the traffic. And they're actually.
- [21:33]
Josh Brown
You got a denim cycle. The Gen Zs are wearing the baggy jeans. They're a throwback to the mid-90s.
- [21:39]
Stephanie Link
So ugly.
- [21:40]
Josh Brown
But they're working that as it may. I was in Zara two nights ago with. With my kid who just came home from college, and I know that's not Gap, but same customer. Yeah, I've never seen it. They were hanging from the rafters in this place.
- [21:52]
Stephanie Link
Oh, yeah.
- [21:54]
Josh Brown
But when you get a denim cycle, it's. It's almost like the eye of apparel retailers. It gets kids into the store because the stuff they have is no good anymore. And you get that like every, I don't know, five years, seven years, there's a huge change. So we're going from skinny to baggy. And I think these stocks continue to work.
- [22:11]
Stephanie Link
And the one problem that this company is to fix still is athletic. But I would say that athleisure in general is really the pain in retail. There's a lot of competition, and everyone's having problems with it. They hired someone from Nike actually, though, to fix this business. I mean, they had a negative nine comp. It was terrible.
- [22:28]
Scott Wapner
But just because you went there. Anybody tempted by the Lulu story? Elliot?
- [22:33]
Stephanie Link
Interesting.
- [22:34]
Scott Wapner
Building over $1 billion stake. So, you know, Lulu obviously has changed CEO. Now you have an activist. The stock's been a disappointment. You're going to get Nike today. Market likes this news. Clearly nobody interested in it.
- [22:48]
Bill Baruch
Never got competition.
- [22:49]
Josh Brown
It never got cheap either. Yeah, like, it never became a value stock. Really. It fell a lot. But it's.
- [22:55]
Stephanie Link
It's like, I think the product is in decline. I think that has to get fixed to be on the quality of the product in addition to the Competition.
- [23:03]
Scott Wapner
Is it or is just as you said with Athleta. It's just, you know, that much was such a huge trend from COVID until, you know, from following that for a bit is just now moved on to Josh's point. Maybe it's now from athleisure to denim.
- [23:17]
Bill Baruch
And whatever Cindy Sweeney effect.
- [23:19]
Josh Brown
But this is also another tax law selling candidate. And I want to show you one more. It's not apparel, but it's the same kind of story. Chipotle. So I know this is the universal reaction when you bring it up, but it's the same chart as Lulu. It's been in a downtrend the whole year and now it looks like it wants to snap the downtrend. And I don't trust it. They rolled out snacks for the first time. So obviously the meal day parts are what they are now they want you to come in and buy 4 ounces of Adobe Adobo chicken or whatever in a bowl. Maybe it works. But it's like these companies are making an attempt to turn things around after a year. And these are the types of stocks where the tax law selling comes to an end.
- [23:59]
Bill Baruch
I like that.
- [24:02]
Josh Brown
So Starbucks, same thing. Nike's in this group.
- [24:04]
Stephanie Link
I made it.
- [24:05]
Josh Brown
These are the stocks that are for sale this year.
- [24:06]
Stephanie Link
2026 is my stock of the year. I made it because I think that Brian Nichols doing a really good job. You're seeing the turnaround happening earlier than expected. First positive comp in two years. By the way. He's a rock star. And since he was announced as a CEO, the stock's down 3%.
- [24:21]
Bill Baruch
Don't underestimate even just a McDonald's. I mean, McDonald's right here chart is breaking out. Multiples are, you know, on the historical average there's some room and McDonald's can run if this especially the space gets it.
- [24:33]
Josh Brown
I like that. I don't believe in treble tops. I think this one's going to go to. This one looks meaty.
- [24:39]
Scott Wapner
Is it? Is Estee breaking out? It's up 45% year to date. I bring it up because you bought it the other day and now you bought more. That was quick.
- [24:50]
Stephanie Link
Yeah, I know. Well, I like it. I wanted to make it a bigger position because all the channel checks that I'm doing, all the people I'm talking to and things that I'm reading is the US and China actually are seeing an increase in revenues and an increase in traffic. And I do think this new CEO has a great game plan to grow these two regions which is 48% of the total business. This thing was left for dead a year ago. Four or five years ago, they were really mismanaged, which was surprising. And now you have a new person coming in and they're focusing not only on growth but also on margins. And so I wanted to make it a bigger position, so I've got a full position at this point.
- [25:26]
Scott Wapner
All right, we'll take a break. We'll come back. I got a move from Josh Brown to tell you about. We have our calls of the day as well. Another Josh stock is on the move big time today. We will discuss when we come back.
- [25:43]
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- [26:12]
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- [26:44]
Capella University Announcer
Welcome to Walgreens.
- [26:45]
Josh Brown
Looking for a holiday gift?
- [26:46]
Scott Wapner
Sort of. My cousin Freddie showed up to surprise us. Oh, so.
- [26:51]
Podcast Disclaimer Narrator
Sounds like a real nice surprise.
- [26:53]
Scott Wapner
Exactly. So now I have to get him a gift, but I haven't gotten my bonus yet. So if we can make it something really nice but also not break the bank, that'd be perfect.
- [27:00]
Stephanie Link
How about a keurig for 50% off?
- [27:03]
Scott Wapner
Bingo.
- [27:04]
Bob Evans Announcer
Savings all season. The holiday road is long. We're with you all the way. Walgreens offer valid November 26 through December 27. Exclusions apply.
- [27:26]
Scott Wapner
All right, we're back. I told you Josh had a move. It's Phillips 66, which you sold. You got stopped out.
- [27:31]
Josh Brown
Yeah, but you kind of, sort of.
- [27:33]
Scott Wapner
I mean, you bought Exxon recently.
- [27:35]
Josh Brown
Yeah?
- [27:35]
Scott Wapner
Right.
- [27:36]
Josh Brown
Yeah.
- [27:36]
Scott Wapner
So maybe you placed your bet that way.
- [27:38]
Josh Brown
Well, these are trades, so what I typically will do is as a stock is moving in the right direction. For me, that was a trade at a specific entry. I will roll the stop higher. And so as the stock continues to move up, up, I'm not working with the same level of risk, the same risk levels that I was working with at the purchase. So that's the case with Phillips. I'm out of it. In the mid-130s, it continued to sell off. And this is why we use stops. Because when we're looking at technicals as a. So we look at fundamentals like what to buy technicals when. But we also have to respect that to the downside, too. And not every trade we puts on ends up being a big winner, of course. And we definitely don't want to get stuck in stocks that we like technically, that we no longer like technically. Why is it still on the sheets? So that's, that's the methodology there. And that's why I'm no longer in Philips. It may set up again, I may get back in. But at the time that we're talking right now, looks terrible.
- [28:31]
Scott Wapner
Yeah. But again, the ExxonMobil thing that you're long is you're long Exxon. Yeah, a believer in that. Just remind our viewers why.
- [28:39]
Josh Brown
Look, I think that energy is the forsaken sector of the year. And I typically like to explore that space this time of year to think about everything that went wrong this year, what could go right next year. In the case of ExxonMobil, it's been trending back toward its old high. In the meanwhile, it's gotten zero help from crude oil. But natural gas looks better than crude does. And this company is also in the marketing business, referring to refinery business. So I think this will eventually work. If you do get any kind of rally in crude early next year, obviously this will be one of the main beneficiaries.
- [29:14]
Scott Wapner
I mean, JP Morgan is out with their top plays in Energy for. For 26 Devon Energy. Exxon is on the list. Lumberger is.
- [29:22]
Josh Brown
They'll all go up for the same. Actually, we did this. We did this research in house and I don't know if we published it. It turns out out of all 11 sectors in the S and P stock picking matters the least in the energy sector. They have the highest correlation coefficients in both bull and bear markets with each other. So, yes, one might go up 8%, the other goes up 4%. Of course, there's some disposal dispersion, but the truth is they all go up or they all go down or they all do nothing. And that tends to be a family affair.
- [29:55]
Bill Baruch
I mean, for energy and Exxon in general. I, I like it going in next year quite a bit. The crack spreads have been favorable and that's what's really helped these integrated names and some of the drillers. One thing to keep an eye on next year is this level of 55 bucks here. And crude oil, if it starts going much lower, you start seeing some production come off. Now there's some better efficiencies within these names now than say a decade ago. And that could mean, mean they're break even a little bit lower. But natural gas has been crushed too in recent days.
- [30:23]
Josh Brown
Give me that one year, give me that one year chart on Exxon real quick. This is a teachable moment. This is. No, that's crude.
- [30:31]
Stephanie Link
Well, I'm just going to by the way and get the thing up. But I would just say that the stocks are extremely cheap. Well, Exxon, Exxon and Chevron, the industry leaders. SLB is also an industry leader trading at 13 times with a 3% dividend yield. It's flat year on the date and the company has done a really good job in terms of executing. And they have this digital business which is really the kicker to the company with margins of 35%. They have pricing power and it's, and again it's a real differentiator. They've done M and A and those are going to be very synergistic. Synergistic as well. And I think that's going to help next year even if oil prices stay where they are. So I think you can pick and choose whichever one you want. Exxon and Chevron are more diversified. Slb. I just prefer the services players versus the, you know, the integrated. But they, this is where there is value. I mean you talk about a market that's at 22 times earnings. These things are not even close.
- [31:23]
Josh Brown
Yeah, I just, I wanted to point out the price action here. This has not been a winner this year and you see it's repeatedly hit its head against 120. Clearly the sellers come out every time it gets there. But what you can also see is this pattern of higher lows. And this is the first step in any stock turning around from a bear market to a bull market. You see the buyers coming in at ever increasing prices. When it dips, they don't let it get as far down each successive time. Ultimately it'll challenge that 120 level and break through. The tell is the rate of accumulation on the down weeks, not the, not the up weeks that really matters here.
- [32:01]
Scott Wapner
Let's hit a stock of yours. I mentioned it in the tease that's rallying today. Maybe on the back of this new that they had yesterday. It's Joby announced plans to double their air taxi output by 2027. The founder, I think it was the founder CEO was on the prior hour talking about what's happening at the company. Even a big, big fan of this.
- [32:22]
Josh Brown
I am. So this is a. Basically not a. I shouldn't call it pre revenue because they bought Blade. So they do have 100 something million dollars in revenue from the helicopter taxi. But that's not the eventual business. The way to think about that is that's Netflix mailing out DVDs before they got the streaming service online. The real story here is that Joby is building out the infrastructure necessary to not just get these flying taxis in the sky, but to actually have there be a service that people will be willing to pay for. And they're using the Blade model as the arcade architecture. So the news this week is they signed a deal with a company called Metropolis which has like 3,000 parking garage facilities. They want to have 25 more vertiports. Right now. They're starting with the original Blade ones, which are on the west side highway here in Manhattan and on the east river off the fdr. That's where people get into helicopters, go to the Hamptons, go to the airport. They want to repeat that in cities all over the country to make the vertiports kind of the ground zero for these air taxis. And Joby is very wisely investing in infrastructure now. And I think that's what the market's reacting to.
- [33:33]
Scott Wapner
Guys, let's have. You probably have noticed too, just, just like we have the market softening within the last 15, 20 minutes or so. That was good for a few hundred, wasn't it? Not anymore. Bitcoin, throw that up intraday if you would, please, because you're going to see what looks to be a fairly good.
- [33:55]
Josh Brown
Rollover there going on the naughty list, Judge.
- [33:58]
Scott Wapner
I mean, the market, bitcoin has been a story in that it has, I think represented where sentiment has been in this market of late, where risk is. Bitcoin was looking pretty good. And then here you go. The rollover and the S and P chart look, look similar to that. As I said, the S and P was up double what it is now largely because of this nice move that you had in the NASDAQ too. So we'll just watch that. We'll get the headlines now with Bertha Coombs. Hi, Bertha.
- [34:28]
Stephanie Link
Hi, Scott.
- [34:29]
Bertha Coombs
Health Secretary Robert F. Kennedy Jr. Announcing today that the Trump administration will take steps to reduce transition related care for transgender minors nationwide. The proposals include cutting off federal funds to hospitals that provide the care, such as puberty blockers, hormone therapies and surgeries. A key pretrial hearing for the man accused of murdering UnitedHealthcare CEO Brian Thompson last December in Manhattan came to a close today. The judge says he will rule in May on what evidence prosecutors can use to build their case against Luigi Mangione. His defense team argued in court that items found on Manjoni before his arrest in Pennsylvania should be excluded because there was no warrant. It includes a gun and a notebook found in his backpack that allegedly tie him to the shooting. And the House Transportation and Infrastructure Committee advanced a bill today that would ensure air traffic controllers are paid during future government shutdowns. It comes after staff shortages snarled the nation's airports during the historic 43 day shutdown earlier this year. The measure now heads to the full house.
- [35:44]
Scott Wapner
Scott. All right, Bertha, thank you, Bertha Coombs. Coming up next, Josh Brown, his best stocks in the market list. He says this name is setting up for a big breakout. I'll tell you which one next.
- [35:57]
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- [37:26]
Scott Wapner
We go best stocks in the market right now with Josh Brown. And the spotlight today is on the nasdaq.
- [37:32]
Josh Brown
Yeah, yeah. So I, I've talked about this stock before and I've been in and out of it myself. And I just, I really think that we should be tipping our caps to this company and, and this chart in particular because the setup here in my opinion is a great risk reward. And this company has really got things done for investors all year long. It's the best way to think about NASDAQ. It's three companies in one. The Capital Access Platforms is a great business. 60% operating margins, it's index licensing, a lot of intellectual property, a lot of data. It's a great business. Financial technology. That's their fintech business. They kind of brought that in to supplement the cyclicality of an exchange business. So they're making money, recurring revenues for cybersecurity, risk management products, etcetera, etcetera. And then the market services, which is the exchanges themselves and more importantly the thing that drives it, the return of IPOs, the return of capital formation. Nasdaq's been racking up wins all year. Most recently Wal Mart has switched from the New York Stock Exchange over to the Nasdaq. And there's just a lot of positive things going on here. The chart corroborates that. Look at that 200 day moving average I have there in yellow. You see how the buyers came in. That is textbook support level. That's what I would use if I were going along the name right now. I would ride that 200 day as my risk management. Check it every Friday at the close so we don't get whipsawed intraday. So long as it's above, I think you can ride it. I think you want to stay long here. This is a triple digit stock.
- [39:06]
Scott Wapner
Okay. We're looking at it. Get it, get a little move here. What do you make of this? You know, reports of pursuing the 23 hour trading.
- [39:15]
Josh Brown
Yeah, it's a nightmare for me. I'm a financial advisor. But I knew it would happen. I knew it was inevitable. And there's nothing really we can do about it other than get used to it. This is the new world. It'll be very interesting to see how 24 hour trading may or may not play havoc with things like good till canceled stop losses by limit orders and the like. But I'm sure we'll all, we'll all grow accustomed to it.
- [39:38]
Scott Wapner
You own ICE is the way you play it.
- [39:40]
Bill Baruch
Another great place. Yeah, they own New York Stock Exchange. It's below the 20 moving average. It sold off through October like, like NASDAQ did. And it's in the rebound mode. The interesting thing you talk about business segments. They, they're an undercover play on, on a rebound in the housing market. They own and operate software for trading and packaging mortgages. So I think that's these business segment segments within these companies. You know, they can really be a catalyst in the longer run as well.
- [40:05]
Josh Brown
So I think they're both global and what's really important to both Intercontinental and NASDAQ. NASDAQ operates 19 exchanges around the world. Intercontinental is doing as much business overseas. They do here. Markets all over the world have had a banner year. People don't even understand the extent to which markets are back everywhere. Europe, Latin America, Asia. And these companies are benefiting from that.
- [40:29]
Bill Baruch
Well, energy is, I mean, ICE does a ton of energy and through the Europe, that's a great place to look.
- [40:34]
Scott Wapner
All right, let's, let's take a break. Santoli is on the other side and we'll get his thoughts on what's happening in the market because now we're rallying back. Okay, S and P is good for about 1%. Dow was dipping negative as we were talking earlier. It's now it's up 176 or 70.
- [40:49]
Josh Brown
So I didn't even have a chance to paddock yet.
- [40:51]
Scott Wapner
Yeah, right.
- [40:51]
Josh Brown
Oh, well, give it a.
- [40:53]
Scott Wapner
Take a breath. Give it a moment. We're back after this. All right, we're back. Senior markets commentator Mike says sent totally here post 9. What are your thoughts on, on this market today?
- [41:19]
Mike Santoli
You know, it doesn't seem like it's completely isolated to any incremental news item in terms of this. Back off from the highs and now a little bit of a bounce. Obviously relief around both the food chain with Micron and then CPI allows for the market to kind of regain a little bit of footing all morning, though The S&P 500 was not really able to get a bit of yesterday's high. Kind of lent us to this idea of maybe being a little bit stuck. Market cracked below 6,800, the S& P, and then it just was a whoosh lower along with Bitcoin. Again, just having this twitch sell off 1400 bucks. Now it's stabilizing and we are around this round number level that seems important for the expiration tomorrow. So I think the bigger picture is we're kind of apprehensive and twitchy around these levels. I don't think people really have fundamental reasons to start selling here. The bond market is undisturbed. You still probably have a net dovish Fed, but you have exposures that were really high coming into this period. And everyone expecting the late December rally.
- [42:22]
Scott Wapner
That hasn't Quite taken hold and expiration tomorrow. Right.
- [42:26]
Mike Santoli
So that's, that's a piece of it where you get these jockeying and these fast moves within a range and around a certain level and, and that could be part of what we're seeing.
- [42:34]
Scott Wapner
I knew you would help us understand it better. As always, Mike Santoli. I'll see you on closing bell. Coming up, we'll have more on what's been happening in bitcoin prediction markets. Is there a tie in between that and what's been happening in the markets we discuss next. All right, we're back. Take a look at shares of Coinbase. Today they're adding prediction markets to stock trading. Trying to be a one stop shop like so many others are doing as well. You guys have Coinbase, both of you stuff.
- [43:04]
Stephanie Link
Yeah. They want to be the everything exchange. So it's not just this news today, it's other products that they announced as well. Equities, custom stablecoins, also AI advisors and advice which I thought was kind of interesting. But this is the whole strategy of diversifying their business mix and increasing market share. And they are following Robin Robinhood obviously on the predictions piece of it. But I think they want to be more, I think they want to be everything to everyone.
- [43:29]
Josh Brown
Feels very me too. To me we, well look, we have equity trading. Oh great. Like the Robinhood. I think Robinhood beat them to this, this everything market. And Coinbase is a strong competitor. But Robinhood's customer acquisition funnel is more powerful because it's not purely driven by crypto. Whereas historically you went to Coinbase for crypto though can they turn the corner and bring on prediction market only clients? Maybe. But that's a lot of TV commercials.
- [43:57]
Bill Baruch
I like the diversification, diversification of revenue streams. And you did hit on the stablecoin. So we bought bitcoin last summer in portfolio is like 75 basis points and 1 to 1%. And then we thought about we're going to buy more bitcoin in portfolios a couple months ago. Instead we bought Coinbase. I think it's a call option on the stablecoin legislation and the momentum that could be behind it. And, and now you throw in the prediction markets in the stock trading.
- [44:20]
Josh Brown
Let me ask you about, let me ask you about. So Dan Dolev who covers the space for Mizuho, he's saying not so fast on prediction markets, quote, increasingly becoming commoditized. Our survey showed Coinbase Robinhood customers are nine times more likely to try prediction markets. The question is every prediction market trade how much of that is cannibalizing crypto trading, which is their real bread and butter, where their real profit margins are. I don't know the answer, but it's not zero.
- [44:47]
Scott Wapner
Do you think that the weakness in bitcoin has to do with prediction markets taking some capital, stealing the thunder, stealing the capital. You said in the earlier you, I mean same customer in your, in your mind, right?
- [45:05]
Bill Baruch
Yes, I think it's more of a, more of a check on the risk sentiment that's taking place right now. I also think that a lot of people were very excited above 110,000. Bitcoin chased it to the highs. We're heading into the end of the year. Get some tax laws selling. Tap me out. This has been painful and on, on the bitcoin. I think that's what's keeping it down.
- [45:24]
Scott Wapner
All right, we'll do final trades next. All right, welcome back. How about this for three o' clock, Big technologies, Alex Cancer Witz. He sat down with Sam Altman for his podcast. Hasn't even dropped yet. It will soon and he'll talk about it first on our show at 3 o'. Clock. So you don't want to miss that. Jan Hatzia Sanastasia Amoroso, Courtney Garcia and Robin Hood. Stephanie Gill too. So we got a good one and I hope you'll join us at 3 Eastern Time for that. Bill Baruch, what you got?
- [45:58]
Bill Baruch
Intuitive surgical multi year compounder. It's been consolidating this year. Stable revenues, great margins and I think we're have a great one.
- [46:06]
Scott Wapner
The Linkster.
- [46:07]
Stephanie Link
I continue to like the consumer Dick's. It's down 11% from its highs. It trades at 11 times earnings. Strong franchise, excellent same store sales. And they will fix Foot Locker.
- [46:17]
Scott Wapner
Okay. All right.
- [46:19]
Stephanie Link
They will.
- [46:20]
Scott Wapner
You know it ahead of plan.
- [46:23]
Josh Brown
Josh Brown Toast looks like it wants to snap. Snap a shorter term downtrend, longer term. The stock looks great.
- [46:31]
Scott Wapner
All right, good stuff. See you at 3. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [46:45]
Podcast Disclaimer Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer is it.
- [47:25]
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