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Halftime Report
The Final Stretch Setup 11/11/25
00:44:27
Scott Wapner and the Investment Committee debate how to trade the final stretch of the year as the market opens mixed today. Plus, Stephanie Link shares her latest portfolio moves in the consumer space. And later, Josh Brown spotlights Aerospace & Defense in his "Best Stocks in the Market." Investment Committee Disclosures
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- [00:01]
Joe Terranova
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- [00:30]
AT&T Business Announcer
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- [01:01]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. After last week's dip in yesterday's rip, where does that leave this record setting rally? We will ask the committee, of course we will. We'll debate it as well with Joe Terranova, Stephanie Link, Shannon Sokosha, Josh Brown, take you to the markets here. We're trying to figure some stuff out today. Obviously Dow's green, everything else is in the red. Steph, I'll come to you first. So we had the big decline, we had the big bounce. Goldman's Tony Pascarello says when down 3% constitutes, constitutes, excuse me, the worst week in seven months. You know, the getting has been very good and some consolidation was perhaps to be expected in the time since market behavior is encouraging in textbook fashion. The 50 day moving average was tested and held. I'd argue the technical setup is better today than it was a few weeks back. Feel the same way?
- [02:06]
Stephanie Link
Yeah, I do actually. The S&P 500 is up 36% from the April 8 lows. Liberation Day, we're up 16% year to date. We were supposed to have volatility in September and October and said we had 3% growth in September, 2% growth in October. November is our volatile month. High expectations, right? Volatility is expected when you have this kind of expectation level. That being said, the economy is growing at 4% it is not all AI. It is also supported by some parts of the consumer which is hanging in.
- [02:38]
Scott Wapner
Tiny, tiny high.
- [02:42]
Stephanie Link
Which part of the high end is the ball?
- [02:44]
Scott Wapner
Hold on, let's see if I can see through which part.
- [02:46]
Stephanie Link
Stop, stop. Okay, so we're going to get to the consumer in a little bit, but consumers hanging in because they do have jobs and wages. Inflation is down, all of that. That also being said, productivity growth is running up 3%. We haven't seen 3% productivity growth, Scott, and I don't even know how long that is Very, very bullish, not only for productivity itself, but also inflation. And the Fed is cutting. We don't know how much more they're going to cut, but they're cutting. Kutty is ending. Earnings are growing 12.3%. Historical average is 5%. Revenues are growing 8%. Historical average is 5%. So things are pretty good. We should be up this much. We should have rallied from the lows. But I think seasonality plays a very big important part right now. Between now and the end of the year, on average, fourth quarter gross, eight and a half percent. Cumulatively you want to be long, you want to be buying the dips. And that's what I was doing last week.
- [03:37]
Scott Wapner
All right, how's that?
- [03:39]
Joe Terranova
That was pretty good.
- [03:41]
Scott Wapner
Mic drop. That was.
- [03:42]
Joe Terranova
That was good.
- [03:42]
Scott Wapner
Is it, Is she dead on?
- [03:44]
Joe Terranova
Well, for sure, the market has very strong tailwinds. It's had these tailwinds ranging from global central banks being accommodative to the degree of which we haven't seen in decades, disinflationary trends in the earnings growth. Maybe the earnings growth for 2026 is a little bit aggressive. We've had four consecutive quarters of double digit revenue growth. You haven't seen that since 21. And now the estimates for 26 look like we're going to get that double digit revenue growth. Again, I'm not necessarily sure that we do that or that we get the double digit earnings growth. But I think where we are right now with the market really is about two things. Number one, we're skating towards the end of the year. Everyone's going to chase. We've talked about that. Everyone knows secondarily it's a technology story. And what do you do with your technology positions? And also thinking about your technology positions, how important is it to understand that what you hold in your technology positions has the potential to be a source of liquidity in 2026 if markets feel as though they need to? Correct. And I think that's the single most important Exercise you could be doing with your portfolio right now is understanding am I maybe a little bit too overweight or too long in the direction of technology?
- [05:02]
Scott Wapner
I mean, so Yesterday we added $600 billion, $618 billion in market cap to the mega caps, most of the mega caps, and you can include Oracle and Palantir, Broadcom in that. In that cohort of stocks I'm talking about, those eight stocks lost 800 billion in last week. So when the market had its upset, it, you know, dropped all that market cap, it gained it back. You have reasonably mixed performance over the last month for these names, though. You know, Alphabet, Amazon, Apple and Nvidia, of course, higher. Shan, Microsoft and Metta are lower. And we're going to get to a big story of a big seller of Nvidia in just a second. But we feel like Steph laid out a really bullish case.
- [05:48]
Shannon Sokosha
Very bullish.
- [05:49]
Scott Wapner
Do you agree with it?
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AT&T Business Announcer
I.
- [05:51]
Shannon Sokosha
We're bullish. I think that the bullish case around technology, though, I think that the challenges and why we continue to see, whenever we see weakness in these large names, I think why we see this bounce back is that investors, they're not quite sure yet where that broadening out of the AI trade is going to come. So we look at stock selection and you look at the basket that you've been able to put purchase historically over the last couple of years, that's given you access to this Megatrend, which I think we think is is going to persist in terms of momentum and the excitement and enthusiasm around it, it's been pretty easy to play that trade. Scott, I think what becomes much more difficult is if you're calling for this broadening out into other industries and sectors, if you're looking at areas like financials, industrials, health care, which we're going to talk about, if you're thinking about the companies that are going to be able to implement this innovation, deliver productivity, not just deliver productivity, but deliver growth because of the creative use of technology in their business. It becomes a lot more difficult to find those names in these sectors. And so I think whenever we get a pullback, Scott, the challenge is, to Joe's point, where do I want to put that liquidity? Where do I want to take it out of these names and put it into. It's a much more difficult decision. And I think that's why we still have investors going back to the same till. That's right, because this has been an easier trade.
- [07:04]
Scott Wapner
That is, Josh, when you lose 800 billion in market cap in these Names the trend is still very much with these stocks and that's why you add more than 600 billion back. Nvidia yesterday, the best day since April 9th. Alphabet best day since September 15th. Palantir best day since April 9th as well. Any big drawdown in these names and you could put big in quotes. I mean you can, you can quantify what you think that that is, is going to be bought. We, we've seen it time and time and time again.
- [07:37]
Josh Brown
Yes. What's different now is that the market is separating the companies whose AI Capex strategy is explicable from those where it's a little bit murkier how this is all going to pay off. And last week we spent a little bit of time on the show talking about that dichotomy between Alphabet and Microsoft and Amazon now where there is a concrete understanding of hyper, hyperscaler spend and the payback that you're getting on the other side from the enterprise customer versus a matter which I know we just talked about where people aren't quite sure where that payback is going to be. They sort of understand that the Reels product and some of their ad units are becoming more and more efficient and that's great but like the overarching strategy is, is just less obvious or maybe now in doubt and so it gets a little bit tougher. And I think in the case of the Nvidia, the Microsoft's like we all sort of understand, okay, this is the opportunity and this is why there's future earnings attached to it. So that's one component of this and I think it's really important the second component of this and when we think about that broadening, it's either AI or not, it almost doesn't matter. You're going to see this continued melt up, you will see the Capex darlings continue to work. But you're also going to see things that really we don't talk about on a daily basis. But like I'm looking at my best stocks in the market. This right now I have Estee Lauder on my list. Their strategy is nonexistent. It's not important. This is a stock that's growing earnings. You look at Amgen, you look at CVS Health, Archer Daniels Midland, Rocket companies, which I'm long. 3m which I'm long. These, these names, they're not, they're not. I trade. We're in a bull market and there are just so many different ways to play. Of note, the commodities trade is starting to have a resurgence. Look at Anglo Gold, Ashanti which we talked about as a buy on the dip candidate. Take a look at the energy stocks. ExxonMobil got kicked off the list in September. Looks like it's about to pop back on Phillips 66 which I'm long that stocks breaking out as we speak so it's not AI or not I and there's only one thing worth doing. There are a lot of stocks in uptrends with great technical setups and I think the most important thing is not doubling down on the names that are falling apart the draftkings of the world. I think it's really important that we're using stops and we're riding the best stocks in the market and we get into this year end melt up period they should continue to work well Softbank.
- [10:18]
Scott Wapner
Road what you know what certainly has been one of the best stocks in the market? Nvidia selling it the entire stake they had for near $6 billion. They're going all in on open air. That's the whole point. They they use the sale to fund the all in bet on on open air. Jerbosa joins us now in what's been a colorful history between SoftBank I think you could say and this company called Nvidia.
- [10:46]
Kate Rogers
Yes, I thought you were saying softbank as a whole when you think about the vision fund we work but in video. Yes, a particularly interesting chapter of Masa San. So he's selling now this stake for $5.8 billion. Not a bad return but you know what's cooler than $6 billion? 210 billion. That is what SoftBank's Nvidia stake would be worth today had Masterson held on to it in 2019. He has lamented that since. So instead of holding on he did sell early. This time though he is cashing out entirely to help fund what he has been calling his AI revolution. $30 billion to OpenAI a $5.4 billion acquisition of ABB's robotics arm. And don't forget those plans for a half a trillion dollar AI data center project with open AI in the US So Masa San is essentially cashing in to to diversify his AI bets not just in video but in true masses on fashion. He is unlikely to be done raising the question of where else he could find liquidity. Remember that SoftBank is this massive Japanese conglomerate and this graph from their quarterly earnings last night it hints at where he could look. SoftBank still has a majority stake in AAM though liquidating that in public markets could be difficult. He's also never been Shy of taking on debt. Another option available to him to an extent.
- [12:01]
Stephanie Link
But.
- [12:02]
Kate Rogers
But perhaps guys, just as compelling question might be where he's going to place those future bets during the Vision Fund era. Masa spread them all across the startup ecosystem this time around. And Scott alluded to this. He's a lot more focused. He is making a huge bet on open air. He's not dabbling in other ones. But of course Masasan is master sign. He is armed with so much capital and so much ambition, he could again shape the field and some might argue further inflate bubble. We saw what happened Scott in the WeWork days. He brought that company way up just for it to crash. He makes big risky bets and he's doing the same thing here.
- [12:40]
Scott Wapner
Yeah, thank you for that. That perfect setup. Time for everybody to kind of take a look at their Nvidia position, see how big it is, see where other diversifying efforts may be lucrative in the months if not years ahead. What do you think here?
- [12:58]
Joe Terranova
Well, the one word that I heard was liquidity. I have no problem with the fact that he's selling. They, they had their best quarter in the third quarter since December of 2005. I think they're up on the year about 200% or rather up in the last six months. 200% up about 140% year to date. So no problem that he's ringing the register, but he's doing that to raise liquidity. And that goes back to my initial remarks. I think when you look at your technology positioning, you have to say to yourself, am I over levered? Am I extended in a position where it could be potentially a source of liquidity? So yes, in fact, I think that's absolutely the exercise that you should be undertaking. Do I think right now you reach for an Nvidia? Do I think you reach for Amazon and the Mag 7? If you don't own them, I don't. I don't think this is the moment to buy them. I think if you own them, you stay with the position and underneath the market, you manage your risk with some form of a stop. I think that's the right way to think about it. And Josh has identified, Steph, has spoken about it over the last several weeks. There are other places that you could go in the market with that capital.
- [14:02]
Scott Wapner
You feel like it's a reach to go after these stocks now?
- [14:05]
Joe Terranova
Yes, I do. I think right here, right now there's no reason, look, if you're, if you've missed in video and it's trading 1-9290. Really this is the moment, moment you're going to get into it. You don't think in the next six months or the next nine months you're going to get a pullback and a better opportunity.
- [14:21]
Scott Wapner
I mean you got it in your past.
- [14:23]
Joe Terranova
No, I would, I would not chase it. I would not chase these stocks here. I think it's important to understand what they have done in the last six months in terms of earnings and price appreciation. Right. And I think at a certain point, Scott, you have to be a little bit judicious.
- [14:39]
Stephanie Link
Well, maybe not in video, but I think something like Metta, that's down 16% but that's correct. Weeks.
- [14:45]
Joe Terranova
That's correct.
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Stephanie Link
And so that is the one last one I've been buying. I actually added a new position in Microsoft. It wasn't even fairly even down after they reported earnings but I mean they knocked the COVID off the ball. They had commercial bookings up 111%. They beat across the board. They had better than expected cloud revenue in terms of sequential. So I think there are places where you can add, maybe not in video, by the way, maybe not Broadcom, which you know, I own, right, that's had a really nice run. It's barely corrected.
- [15:12]
Scott Wapner
Maybe you get your chance in Nvidia in eight days. Who knows, right? The earnings, earnings report, you got to wait and see what happens.
- [15:18]
Stephanie Link
You could. But then there's other ways to play AI too. We've talked about the industrial companies, the Quantum Services, the Eatons, the Rockwell's, the verdicts.
- [15:25]
Scott Wapner
I know, I feel like everybody knows about those though. You don't think those are in some ways as stretched as, as some of these other names in the hyperscale thing. It's not like we're discovering this, you know, as new.
- [15:35]
Stephanie Link
Retail does not know these names. I go out on the road all the time and talk to advisors and their clients and they're like well what Quanta, what so Eaton, what Vertive maybe because Dave Cody has done such a brilliant job. But I think that's the places where their numbers and the estimates are still much more inflecting higher. And I think Softbank is an absolute, the move to the move today is an absolute endorsement of AI and you absolutely want to find other ways to play it. Maybe less obvious ways. And I don't think the industrials are obvious.
- [16:04]
Scott Wapner
You know, there's the other idea. Josh, I'd like your take on this on what Michael Burry has posted. Again, not posting the same thing again, but just the Fact that he's posting again. And I say that because, you know, you hear from him occasionally, of course, from 08 housing crisis fame. But he's been on a run lately of posting about, you know, potential bubbles in the whole AI stratosphere. And he has another one today where he essentially says that the hyperscalers are overstating their earnings and they're there and you need to understand this through depreciation. I'm not going to read the whole post. You can go find it if you want. But he just calls into question where we are in this particular trade. I don't think we need to go through the forensic accounting of how these companies are, are you're working out their numbers, but the idea that he's back in a big way calling out what he clearly sees as overextended stocks.
- [17:12]
Josh Brown
So what I would say is that the conversation is now shifting from these stocks are in a bubble because they're expensive to these businesses are doing something that is deceptive to investors. I think for most people that's a bridge too far. They're not hiding their numbers. They're just accounting for depreciation of some of the CapEx spending that they're doing. I think the most important thing for investors to consider is the fact that what Burry is pointing out are all public data points. Everyone is looking at the same numbers now. Does he have something planned that maybe nobody is aware of or he says.
- [17:52]
Scott Wapner
More detail coming November 25th. Stay tuned. I don't, I don't know what that means, but you know, we'll have to wait a couple weeks.
- [17:59]
Josh Brown
The bears would say we're in this toxic stew of companies that are deliberately misleading investors via the ways for which they're accounting for their, their CapEx spending and, and combined with elevated valuations, the bulls would say, we understand the spending that they're doing, how they're paying for it, how they're expensing it. And not only are these companies not expensive, if these earnings streams come through as a result of the investments that they're making now, two years from now, three years from now, some of them might actually be too cheap. That's the battleground. And it's very difficult to convince somebody on one side to switch over to the other. There is, however, the potential for current AI bulls to become afraid. It's not going to be based on news. It'll be based on price action. So if you see these stocks start to break down technically, then all of a sudden these nightmare tales that are being told will Gain more adherence and more belief. But like to me, the technicals will signal if and when that's going to happen. I think for the most part most investors understand that we're in sort of a new paradigm. And new paradigms do get people nervous. And the new paradigm that we're in right now is for 10 years we've celebrated these companies as being two things. Low debt, like very huge cash positions and asset light. That's been like the buzzword. Oh, they're asset light. You can't compare them to the conglomerates of the 70s and the 80s. I don't think the bulls could say either of those two things anymore. I think the bulls now have to admit it is a new paradigm. These are no longer asset light companies. Now you might say with good reason, they should be building all of these facilities and all this infrastructure. Okay, that's an argument. You also can't say that they're low debt because they're anything but. The amount of debt capital coming into the system to finance these projects is unprecedented. So it is a little bit of a turn in the way that we think about these companies. I'm looking forward like everyone else to see, see what Dr. Berry will be revealing.
- [20:12]
Scott Wapner
Yeah, I mean the, the whole idea of raising debt to help finance the build out is definitely getting more attention. We, we've now been hearing about it almost every day, whether a news story or a note from the street. Which is why we asked Leslie Picker to come on and have a look at exactly who is raising what and from whom and what the ultimate fallout might be less.
- [20:37]
Leslie Picker
Yes, Scott, the numbers are really eye popping. US investment grade tech issuance has more than doubled to $211 billion year to date according to UBS. Just in the last few weeks, hyperscalers such as Oracle, Metta and Alphabet each issuing more than $18 billion of debt to fund AI driven capex. And if forecasts prove out, UBS estimates as much as 175 billion in public credit markets and another 125 billion in private market financing next year. So yes, these are staggering figures. But so far the markets are relatively open to it for now. A basket of hyperscaler bonds compiled by B of A has seen its spreads widen a bit amid the hyperscalers debt binge in recent months. But they're not signaling major concerns or stress yet. In the meantime, as you all noted Friday, B of A strategist did suggest shorting hyperscaler bonds, noting that the cash flow was insufficient to fight the air arms race. Credit Rating agencies so far are increasingly concerned just in idiosyncratic situations. Moody's, for example, recently warning that Oracle's CapEx plans could cause debt to increase faster than Ebitda, which could create negative free cash flow. But Moody stopped short of taking any type of ratings action. Scott?
- [21:59]
Scott Wapner
Yeah, so to be continued. I'm sure we're going to have many more conversations about this. Less. Thank you. Leslie Picker, Anything to see here?
- [22:05]
Shannon Sokosha
Yeah, I think tech issuance around investment grade corporates, that's been a big part of corporate investment grade portfolios the last number of years. It's been a high free cash flow, strong balance sheets. To Josh's point, I think our concern is that credit investors actually push the scrutiny on some of this investment maybe faster than equity investors do. Because now we're starting to look at things like weighted average cost of capital return on invested capital. These aren't things that these companies were ever asked to do.
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Scott Wapner
Kind of like Josh is talking about, the way you look at these maybe has to change and the aperture has to be open a little bit wider to see more of the picture.
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Shannon Sokosha
Right. And the overarching quality of tech issuance is, is, could come into question over the next year as there's just so much of it and there's so much capex going into the ground.
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Josh Brown
I actually think it's, I actually think it's more, I actually think it's more dangerous than just the impact on how we rate these stocks. I think there is a large and growing segment within my industry, the wealth management industry, where a lot of financial advisers have been rallied to be this flag of the new 6040 is 60, 20, 20. And a lot of them have been incentivized to start retailing private credit products that perhaps they don't fully understand or are so new that we have not seen them through an actual economic cycle. Remember, it's been 15 years or so since we've actually had a traditional recession or economic cycle and now what ends up happening is you think you're diversified because you're 60% stocks and it's not all mag seven and blah blah blah. But then within the fixed income piece, you've bought so much product that your branch manager or your complex manager told you to buy and then you realize, oh my God, I have equity risk on the max seven and this whole air theme, fine, but look, now a decent sized portion of my corporate bonds or my fixed income is also at risk based on the same premise of this AI buildout. I'm not suggesting like people put 20% of their clients into private credit products that are building data centers. But it's definitely more than it's ever been before. So I actually think that there, there are some risks being taken out there by people who are supposedly fiduciaries. And maybe not all of those risks were wise in the, in the context of a retirees investment portfolio.
- [24:43]
Joe Terranova
Here's what I think is interesting. We've heard a lot in the last several weeks about a stocks using the debt market. What's the, what's the response to that? What's the market reaction to that? Perfect example obviously is Oracle. Now you could make the argument, and it's factual to say that the demand for the investment grade bonds that they offered was remarkably strong. You could also say that it's a small amount of capital that they're raising relative to their overall size. But what it does is it blunts the sentiment. And that's always important. You always look at positioning and sentiment. It blunts the sentiment because we're so sensitive to what happened in the 90s. And immediately you say to yourself, here's a company who has a debt to equity ratio of 525%. I'm looking at that in front of me and now what does that mean? That means potentially they're going to be utilizing more debt. That's damaging to the story that we've heard for the last several years that said, no, these companies, companies are using cash from operations to fund the innovation. The story changes and so does sentiment.
- [25:54]
Scott Wapner
You know what the reaction is?
- [25:55]
Joe Terranova
A sell off in the stock.
- [25:57]
Scott Wapner
Like if you look at last week, what else? Dense sentiment. Potentially talking about bailouts and backstops.
- [26:04]
Joe Terranova
Absolutely.
- [26:05]
Scott Wapner
Okay, so that you put all of that into the mix and that probably led to some of the volatility and the unease in this space last week.
- [26:12]
Joe Terranova
I think there's fatigue, I think there's a degree of exhaustion surrounding all of these agreements we're hearing with open. I, I kind of wish that open AI maybe for the next month or so become closed.
- [26:26]
Scott Wapner
Yeah, right, Become close.
- [26:27]
Joe Terranova
Exactly. Just perfectly stated.
- [26:30]
Scott Wapner
Just like dial it back. Yeah, we're fatigued.
- [26:33]
Stephanie Link
All right.
- [26:34]
Scott Wapner
So we're going to, we're going to take a quick break. Stephanie, Link's got some moves that you're going to want to hear about because we think they're pretty interesting. And we are also going to talk about the biotech breakout. It looks legit and you have more believers in it. Find out what the committee thinks next.
- [26:53]
Joe Terranova
Hey there, it's Dr. Sanjay Gupta. With some exciting news to share. CNN is now streaming. That means you can read, watch and stream everything in one subscription. You can watch News Live 24. 7. You can also explore catch up videos and explainer videos. And you can also watch the library of CNN's originals, including my latest documentary.
- [27:16]
Josh Brown
It doesn't have to hurt.
- [27:18]
Joe Terranova
Just go to CNN.com AllAccess and now.
- [27:24]
AT&T Business Announcer
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- [27:53]
Shannon Sokosha
Clorox Toilet Wand.
- [27:55]
Scott Wapner
It'S all in one. Clorox Toilet Wand It'S all in one.
- [28:01]
Stephanie Link
Hey, what does all in one mean?
- [28:03]
Scott Wapner
The Caddy, the wand, the preloaded pad. There's a cleaner in there inside the pad.
- [28:10]
Audie Cornish
So Clorox Toilet Wand is all I.
- [28:12]
Stephanie Link
Need to clean a toilet.
- [28:14]
Shannon Sokosha
You don't need a bottle of solution.
- [28:18]
Scott Wapner
To get into the revolution.
- [28:20]
Shannon Sokosha
Clorox Clean feels good.
- [28:22]
Scott Wapner
Use as directed. All right. Pretty nice day at least for the Dow 370 as you saw. And Stephanie link, let's get to these moves. The linkster looked at Starbucks down 26% from its March high and said I want some lattes. Yes, he bought it.
- [28:56]
Stephanie Link
A little caffeine for the portfolio. Okay, so when Brian Niccol was announced to be the new CEO from Chipotle to this company, the stock went up 49%. It has round tripped. It's given it all back. And we know what Brian Niccol did at Chipotle stock when he was out there went up over 700%. He's an excellent operator and I think this is a great opportunity to get in now because they saw the first, first positive same store sales number this past quarter. The first one in two years. And even on TV on cnbc he was on and he said the turnaround is happening faster than I saw.
- [29:36]
Scott Wapner
I saw that interview.
- [29:37]
Stephanie Link
Yeah. And so he's revamping. He's revamping the store experience, the mobile operations, the menu changes and he's simplifying and I think you're starting to see better traffic trends as a result.
- [29:51]
Scott Wapner
So what happened? Let me ask you let me stop you. I'll come right back to you. Why did the stock round trip? Was it the euphoria of nickel? Well, and then it was like, wow, this is going to be a lift. So we come all the way back around and now it's like, let's see what you got.
- [30:05]
Stephanie Link
Like, show me 100%. That's why I thought it was interesting that comps inflected positively for the first time under his leadership. That's pretty fast. Turnarounds take a lot of time and I think everyone got very euphoric and then he delivered kind of so, so quarters. But this was the first one that I thought was the most interesting. And not only that, but his body language was better, the tone was better. And so I just think this is a great setup for 2026. And I know you're going to ask me why I sold Target or some of Target. Most of Target, by the way.
- [30:34]
Scott Wapner
Yeah, I was going to ask you why you own any of it.
- [30:36]
Stephanie Link
Well, I don't know. We'll have to see next week when they report earnings.
- [30:40]
Scott Wapner
You didn't anticipate that?
- [30:41]
Stephanie Link
I'm not.
- [30:41]
Scott Wapner
I thought I was going to ask you something. I to. Was going going to ask something else.
- [30:44]
Stephanie Link
Well, the point being is that I don't have a lot of cash and I much prefer this management team. I much prefer the story, this valuation versus versus Target. Now I didn't sell all of Target because it's still so incredibly cheap. But, and it's, but it's been a disappointment.
- [31:00]
Scott Wapner
And you have not liked this stock for a long time.
- [31:02]
Stephanie Link
I know. And I know. And I probably should have sold it when they announced the new CEO because he was an operations guy. But I thought an operations guy at the company for 25 years could make a turn quicker at Target. We'll see what they do. But I would, I just prefer having a much smaller position here. And I'm going to slowly add to Starbucks over time.
- [31:22]
Scott Wapner
Okay. I mean the consumer, let, let's be clear. It's like the, the high, high end is doing well. Those who have made a good amount of money in the stock market are feeling great and they're spending their money kind of. Everybody else, not so much. Right. If you look at the commentary from earnings season from consumer related companies, it's kind of startling how many have been kind of bad. I mean, I don't, I can't read the whole list because it'll literally take me too long to do it. But Cheesecake Factory, their comps missed Kava the comps missed. They cut their guidance. Chipotle comp missed. Carter's Guide was soft. What else? Kraft, Heinz, Mondelez. They both cut their, their outlooks. What do we, what do we do with that? Restaurants aren't great, right? I mean they haven't been great.
- [32:13]
Stephanie Link
No, they haven't been great at all. I sold Chipotle. It was horrible. Three quarters in a row. This new CEO is supposed to turn around the story and he's not turning around.
- [32:21]
Scott Wapner
Well, he can't put money in people's pockets.
- [32:22]
Stephanie Link
This is the point, this is the point that you go with the best of the best and Brian Nichols, the best of the best. And I'd rather put my eggs in that basket than, than the Chipotle basket. I disagree with one of the names on this list and I'll tell you why. Deckers while I sold it.
- [32:37]
Scott Wapner
Well, Hoka missed.
- [32:38]
Stephanie Link
Hoka missed. But they didn't miss actually. And they're growing double digit and Uggs are growing double digits. It was their guidance that was conservative. I sold it to be able to fund some of the other things that I was adding to at the time. I would absolutely, absolutely revisit that.
- [32:52]
Scott Wapner
Oh, you have sellers remark 26.
- [32:54]
Stephanie Link
I do actually, to be honest with you, I really do. But I don't think it's going anywhere between now and the end of the year. I think it could be another good 2026 story like I think Starbucks can now in terms of the small, the low end consumer. The low end consumer always feels the pinch, unfortunately, one way or the other, inflation, wages, job availability, etc. It's the middle tier and the upper tier that does the maximum amount of supply spend here in this country. And we spend and I have a stat for you. National Retail Federation came out, came out and said they expect holiday spend this year to be $1 trillion and the average consumer is going to spend $900. That's the second highest in 23 years.
- [33:35]
Scott Wapner
How much of that comes from having to spend more because of tariff tariffs?
- [33:40]
Stephanie Link
No, I don't believe that at all. I think it's actually that the pent up demand in terms of wanting to buy for sure you don't think you'd.
- [33:46]
Scott Wapner
Have to pay more for the Barbie doll because it's Harris?
- [33:49]
Stephanie Link
I don't know. We haven't seen massive price increases though.
- [33:51]
Scott Wapner
We've seen someone like stuff like that.
- [33:53]
Stephanie Link
Some, but not massive price increases. No, I think this is going to be a good demand story because I think again the consumer has jobs, they have wages. Inflation has come down, interest rates are coming down. You mentioned that they have investments in the market. They also have higher home prices if they own a home. So the confidence levels I kind of just put to the side, I know they haven't been good. But it's the action that we're seeing. And our consumers of the United States, they spend. We are a nation of spenders. Whether we have the money or we take on the debt, we just do.
- [34:23]
Scott Wapner
Steph's got the deflection dome around. Everything I try and throw at her, she's ready to throw it right back.
- [34:28]
Shannon Sokosha
Can I, can I, can I turn it around on consumer businesses for real quick? Tariffs are going to come down. They're going to be more prescriptive. This is going to be better for earnings on the consumer side. It doesn't have to be just demand story, a supply story.
- [34:39]
Scott Wapner
Kate Rogers has the headlines. Hi, Kate.
- [34:42]
Audie Cornish
Hi there, Scott. The Pentagon's largest aircraft carrier, the US Gerald Ford and its strike group arrived today in the Latin American region, dramatically escalating a military buildup in the Caribbean amid tensions with Venezuela. The Navy says the deployment is in line with President Trump's directive to dismantle criminal organizations and counter narco terrorism. It comes after 19 strikes on alleged drug carrying vessels in the Caribbean and eastern Pacific that have killed nearly 80 people. Organic baby formula maker By Heart recalled all of its products sold across the US Today after some batches were linked to an outbreak of infant botulism. Federal health officials say at least 15 babies in 12 states have been hospitalized since August with more cases pending. No deaths have been reported. And President Trump saluted the nation's veterans today during a wreath laying ceremony at Arlington National Cemetery's Tomb of the Unknown Soldier. In remarks after the ceremony, he said he wanted to rename Veterans Day to Victory Day, similar to other countries. Scott, back over to you.
- [35:46]
Scott Wapner
Okay, Kate, thank you. S.K. rogers. Coming up, Josh Brown ready with his best stocks in the market list. And we still will do biotech, which has been breaking out, I promise.
- [36:00]
Audie Cornish
Hey, friends, this is Audie Cornish, host.
- [36:03]
Stephanie Link
Of CNN this Morning and the Assignment. And guess what?
- [36:06]
Audie Cornish
Every story you care about, every angle.
- [36:09]
Stephanie Link
You want unpacked is now streaming on cnn.
- [36:12]
Audie Cornish
That means you can catch my show.
- [36:13]
Stephanie Link
Or other CNN programming whenever you want on your favorite device. And a subscription also gets you access to exclusive video series and unlimited articles. So subscribe to CNN@CNN.com subscription.
- [36:30]
AT&T Business Announcer
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- [37:13]
Scott Wapner
All right, welcome back. The Josh Brown spotlight is so bright today that it is shining on three, not two. Three stocks on his best stocks list. Tell us more.
- [37:24]
Josh Brown
Yeah, and I'm going to try to keep this concise because I want to make sure we get to all three. Bottom line is this is a tailwind that's probably secular. Countries around the world are arming and rearming like we haven't seen in decades. The United states will spend $900 billion alone this year, which is an alternative time high. And we've got hot wars all over the planet. And it's unfortunate, but this is the world we live in. As a result, these stocks have had an incredible year in the aerospace and defense sector. I don't see that changing anytime soon. So let's talk about three of the names that are on my list. The best stocks in the market. L3Harris. This is probably the weakest chart of the three, but still pretty decent snap. Its downtrend this past May has been a good soldier. Held that rise in 50 day. I think this is the type of name that ultimately could play catch up to the leaders. The leaders here are General Dynamics. Put up GD for me, guys. This chart is pristine. Acted really well throughout the fall. Look at the buyers. They're coming in on every dip. I think this name sees 375 before it sees 325 again. The risk management that we wrote about is the July gap through the low end of that July gap.310 as a pivot point. So long as as it remains above, I think you can ride it. RTX retested the low 1-70s. The buyers did not allow this stock to fall back into its recent gap. Very bullish action. Now it's bouncing off of the retest, picking up momentum. RSI is still in the high 60s, not overbought yet. And that 50 day, I mean you could see it for yourself. You want to be a technician. Every time it gets even close, they come in right where they should and they snap up the stock. I like these three names into year ends. They're In a secular bull market, I don't know what changes it. I just know buyers are coming into these stocks on every red day and they all look pretty good.
- [39:22]
Scott Wapner
Joe, you agree, you have Dynamics, you.
- [39:24]
Joe Terranova
Have Exxon, certainly on General Dynamics. I agree.
- [39:28]
Shannon Sokosha
Agree.
- [39:28]
Joe Terranova
And rtx. The momentum is clearly building. We don't own it, but it certainly looks pretty good at the next rebalance. Axon is the challenging one. We're in exxon July of 2024 at around $300. So we've got some room here. But I've said on air the momentum is lost here. It's broken down. Getting out below the 200 day moving average on Josh's part was prescient. That's the right move. Will rebalance at the end of January. See where we are. If it's sitting where it is right here, I can't see that it survives.
- [40:00]
Scott Wapner
Okay. It certainly feels like the biotech breakout is legit and then there's a lot of momentum behind that trade. I've been hearing that from almost anybody that we have been talking to. Whether it's this program or closing bell. We'll find out the names you need to know next. All right, welcome back. Biotech breaking out. The IBB hitting its highest level since November of 2021. Joe, people believe in the trend, but I think that also shows you how long the underperformance has been because it feels like it's kind of been forever for biotech. It's underperformed for what, the past three years?
- [40:39]
Joe Terranova
Yeah. You greeted my initial purchase with skepticism and then when I bought more, I think they were a little bit more skin skeptical. I think you're warming up to it though. As we continue to move higher. We're about to get above. Don't get over your skis. We're about to. We're about to get above the high for the year at 113 and guess what? If it gets above there, I'm buying more.
- [40:56]
Scott Wapner
Yeah.
- [40:57]
Joe Terranova
Because this is a five year breakout that we are talking about. There's a lot of names underneath the surface that are working remarkably well. Some of those names are in the etf like Insight, which I nc wise working really well. Gilead, the chart looks phenomenal there also. So we're seeing something happening here. So far, quarter to date, health care is up 7.9%. That's the leading sector of the S&P. Eleven and seven of them are actually down.
- [41:26]
Scott Wapner
What's up? Why is it biotech? I mean low rates definitely help M and A prospects definitely help with Aber, you know what? Also yesterday upgraded the space too. She joined me on closing bell.
- [41:38]
Joe Terranova
Let's stay for a second on rates because when you think about bond market volatility 2025, we've been blessed with one of the more benign years as it relates to bond market volatility. The 10 year only has a range of 95 basis points. You go back to 2022, you're talking about close to 250 basis points. So you've had a very tight range. That helps credit markets, that helps the funding in a lot of these biotech hex. It's a very favorable environment. And then you turn to positioning and sentiment which in both cases coming into 2025, you can't characterize as being bullish. Certainly a lot of people were skeptical and held an underweight positioning.
- [42:17]
Scott Wapner
But you were going to have a lot more bond market volatility and fairness when the Fed was hiking interest rates and the market was trying to sort of figure out exactly how dramatic that was going to be.
- [42:28]
Joe Terranova
Yeah, absolutely.
- [42:28]
Scott Wapner
You got to be careful when you go compare it to a period of time that was so acutely impacted by Fed activity.
- [42:36]
Joe Terranova
Of course, 100%. But that describes the environment and that's why you had the challenges of last several years. Now you give me the environment today where it's much calmer, that's beneficial to an industry like biotech.
- [42:49]
Scott Wapner
30 seconds. You like it?
- [42:51]
Shannon Sokosha
Yeah, I think health care broadly. But more importantly, if you think about AI, this is very beneficial for drug development and testing and so biotech could certainly benefit from that longer term. But I agree, I think this is more of a beta trade in this current time period.
- [43:02]
Scott Wapner
All right, Santoli on the other side of this break. We'll be right back. Senior markets commentator Mike Santoli joins us with his midday word. We're leaning on our defense today. We're Denver Bronco Action today.
- [43:31]
Mike Santoli
Yep. And you know it works to kind of hold what the offense gave you yesterday. I mean I think that ideally that's what the market when it's in this kind of orderly rotational pattern will give you, which is you don't get across the board pullbacks even after things like Nvidia overshoot with the 60 point percent gain yesterday, I think you pull back a little bit and say okay, we had a 3% peak to trough intraday decline in October. Three or four weeks later you get a 4% one that lasted for seconds and then it was bought again and now we're within 2% of the all time highs. I think you could argue that maybe you have a slightly higher wall of worry considering how much the market is up and considering how close to the highs, one thing working against it is because where we are in this top time of year and so much of the bull case is about seasonality and people have to buy and there's a positioning argument as opposed to valuations are compelling. And there's just all these unexplored good fundamental stories that when we get a wobble, people say, okay, maybe, maybe people don't have to buy as much. And so it has a little bit of a, of a kind of low conviction but long type of feel in this market which so far has been healthy enough.
- [44:37]
Scott Wapner
Next week will be really interesting with Nvidia. Well, for sure, we need, we need, we kind of need that test of that right now.
- [44:44]
Mike Santoli
Yeah. And even if it's just a test or to even, just clear it out from the, from the next hundred feet of road and have the catalyst out of the way. You look back at the last two quarters, the broad market did not really have a reaction to Nvidia's numbers. We just kind of got beyond it and focused on what the market probably wanted to focus on anyway.
- [45:03]
Scott Wapner
All right, I'll see you at three. And we will focus on the final hour of trade with Mike Santoli. We'll do finals next.
- [45:35]
Joe Terranova
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast. Now.
- [45:54]
Scott Wapner
We got another 450 on the Dow and we'll see what happens over the final stretch on closing bell. I hope you'll join me. Adam Parker, Lauren Goodwin, Jordan Jackson. It is Veterans Day. Of course, Chance Mims and the former New York giant, great Phil McConkie of Academy Securities. They are going to be here. We cooked up a little something too for Kovac and Cancerous, which I think you'll enjoy. And I will see you then. Josh Brown, final trade today is what?
- [46:19]
Josh Brown
Phillips 66. We have a breakout in progress as we discussed a couple weeks back.
- [46:25]
Scott Wapner
All right, thank you, Shannon. What you got?
- [46:27]
Shannon Sokosha
Emerging markets, China on the theme. Everything else on improving global growth.
- [46:32]
Scott Wapner
All right, the Linkster Active Auto Parts.
- [46:35]
Stephanie Link
They have an analyst day on the 18th. We're going to learn more about the spin, which you know I like very much.
- [46:39]
Scott Wapner
You do?
- [46:40]
Stephanie Link
Yes, I do.
- [46:41]
Scott Wapner
Yes, you do.
- [46:42]
Joe Terranova
Joe T. An industrial name breaking out to a new all time high. Parker Hannifin. I don't know if you like that one. They did an acquisition today.
- [46:49]
Scott Wapner
They have a spin.
- [46:51]
Joe Terranova
They know they like it. They bought for $9 billion leading filtration company in the world.
- [46:57]
Stephanie Link
All right, spins work.
- [46:59]
Scott Wapner
So what we got 450? Yeah, we got better than 450 on on the Dow. So we're trying to and then now the S and P is positive too. I'll see at 3 o' clock the exchanges 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.
- [47:19]
Kate Rogers
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 Men need.
- [47:59]
Joe Terranova
A store that has the right thing for their thing. Like a Kenneth Cole suit made with Choflex fabric to keep them cool at their cousin in law's third wedding in the middle of July. Whatever the thing, Men's Wearhouse has the clothes for it. Love the way you look. Men's Wearhouse.