Podcast Summary: Halftime Report – "The Great Reassessment Trade" (3/28/25)

Overview In the March 28, 2025 episode of CNBC’s Halftime Report, host Scott Wapner engages with top investors Stephanie Link, Jim Cramer, Kevin Simpson, and Malcolm Etheridge to dissect the current turbulent state of the markets. Titled "The Great Reassessment Trade," the episode delves into the ongoing market downturn, economic indicators, policy uncertainties, and strategic investment moves amidst a shifting financial landscape.

1. Market Overview

Scott Wapner opens the discussion by highlighting the persistent decline in the stock markets, emphasizing that NASDAQ is leading to the downside. He notes the looming significance of April 2nd and its potential impact on market sentiment.

Scott Wapner [00:59]: "Front and center this hour, stocks down again. Investors continuing to reassess where the markets and this economy are heading."

Jim Cramer adds his perspective on the market's trajectory, suggesting that the current correction might be deeper than initially anticipated.

Jim Cramer [02:10]: "It may be dipping into bear market territory. It’s everyone trying to get in front of where it's going, but it's already obvious now."

2. Economic Indicators and Consumer Sentiment

The panel discusses various economic indicators, including consumer sentiment, which is reported as the lowest since November 2022. This decline is pivotal in potentially signaling a recession, though opinions vary among the panelists.

Malcolm Etheridge [13:27]: "My concern is that it could be a self-fulfilling prophecy because we still have GDP growth, a great labor market, and corporate earnings. But if consumer sentiment leads to decreased spending, it could trigger a recession."

3. Investment Committee's Perspectives

Stephanie Link questions whether the recent downgrade of equity targets by several financial institutions signals a need for investors to react impulsively. Scott Wapner counters by advocating for strategic portfolio adjustments rather than knee-jerk reactions.

Stephanie Link [02:44]: "Is it time for all investors to do that, to just react?"

Scott Wapner [03:18]: "Now is the time to actually get your pencils out and make a list of high-quality companies where you can upgrade your portfolios."

4. Sector Analysis: Financials and Big Tech

The discussion pivots to the financial sector, where despite recent downgrades, some banks like Wells Fargo and Bank of America remain attractive due to their strong performance year-to-date.

Stephanie Link [06:13]: "Financials are down 5% this month, but still up 3% for the year."

Jim Cramer expresses skepticism about the anticipated surge in deal-making within the financial sector, suggesting delays may continue.

Jim Cramer [20:27]: "We've lost confidence that we are going to see that in the first half of this year. Like I would have been willing to bet back in January, but I just think that there’s going to be a delay."

In Big Tech, Scott Wapner and other panelists discuss the undervaluation of giants like Microsoft and Amazon, viewing current pullbacks as buying opportunities.

Scott Wapner [19:21]: "I couldn’t believe where a company like Target is trading at 11 times earnings. Those numbers have not even come down."

5. Tariffs and Policy Uncertainty

A significant portion of the episode revolves around the impact of tariffs and Washington's policy uncertainty on the markets. The panelists debate whether the current administration's stance will alleviate or exacerbate market tensions.

Scott Wapner [04:26]: "We have to get through tariffs. There’s a pretty good chance once we find out the news next week we actually could rally because we're so depressed and obsessed about this whole thing."

Kevin Simpson underscores the need for reducing uncertainty as the primary solution to stabilizing the markets.

Kevin Simpson [22:57]: "If that uncertainty comes down, Stephanie’s going to be right. There’s only one cure, which is to lower that uncertainty."

6. Federal Reserve's Dilemma

Steve Liesman joins the conversation to shed light on the Federal Reserve’s challenging position, balancing between controlling inflation and supporting economic growth.

Steve Liesman [14:51]: "We have been waiting to see if the soft data would meet the hard data and it has. Goods inflation now exceeds service inflation, complicating the Fed’s actions."

He highlights that rising goods inflation, partly due to recent tariffs, limits the Fed’s ability to consider rate cuts without addressing inflation first.

7. IPO Spotlight: Core Weave

The panel provides insights into the anticipated Core Weave IPO, discussing its valuation challenges and strategic positioning in the AI sector.

Christina Partsinevelos [24:23]: "The offering price is $40, which is much lower than the original range. They expected to raise about $1.5 billion valuing the company at $23 billion."

Jim Cramer advises caution, questioning the sustainability of Core Weave’s business model.

Jim Cramer [38:23]: "It's a reseller of Nvidia GPUs. Not really a business model I want to be throwing."

8. Notable Trades and Investment Moves

The panelists share their current investment strategies amidst the market reassessment:

• Jim Cramer discusses increasing positions in Cybersecurity stocks like CrowdStrike and Palo Alto, viewing them as defensive against market volatility.

  Jim Cramer [36:34]: "Cybersecurity is a sector within the software space that is defensive against a lot of what we're talking about."

• Scott Wapner mentions adding to positions in Home Depot and Metta, citing attractive valuations and growth opportunities.

  Scott Wapner [22:22]: "Home Depot is down 8% YTD, but with a valuation of 23 times, it’s interesting. They have great operating margins and growth potential."

• Kevin Simpson highlights his investments in Nvidia and Amgen, leveraging their strong fundamentals despite market downturns.

  Kevin Simpson [26:00]: "Growing earnings per share at 50%, that's to me a bargain."

• Malcolm Etheridge shares his tactical moves, including trimming positions in Tesla and increasing stakes in PayPal and Aerospace stocks.

  Malcolm Etheridge [32:06]: "Investing is easy by great companies that have improved profits. That's what we're trying to do."

9. Conclusion and Outlook

As the episode wraps up, the panel reflects on the "Great Reassessment Trade," emphasizing the need for strategic investment in high-quality companies amidst economic uncertainty. They express cautious optimism, suggesting that while the markets are undergoing significant adjustments, opportunities exist for disciplined investors to capitalize on undervalued stocks.

Malcolm Etheridge [31:39]: "If it goes down another 10%, buy more. These are great names and you ride through."

Scott Wapner concludes by reinforcing the theme of strategic reassessment and the importance of adjusting portfolios to navigate the evolving market dynamics.

Scott Wapner [46:38]: "All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC..."

Key Takeaways:

• Market Downturn: Persistent decline with NASDAQ leading; potential bear market territory.
• Economic Indicators: Low consumer sentiment; mixed signals on GDP growth and inflation.
• Policy Uncertainty: Tariffs and Washington's stance are central to market instability.
• Investment Strategy: Focus on high-quality, undervalued companies; defensive sectors like Cybersecurity.
• Federal Reserve: Balancing act between controlling inflation and supporting growth.
• IPO Insights: Core Weave faces valuation and strategic challenges in the AI space.

For listeners seeking to navigate these turbulent times, the episode underscores the importance of strategic reassessment, informed investment choices, and staying informed on economic indicators to make resilient portfolio decisions.