Halftime Report: The Market Pullback – August 1, 2025

Host: Mike Santoli
Guests: Jim Leventhal, Jason Snipe, Bill Baruch, Steve Liesman
Release Date: August 1, 2025
Duration: Approximately 45 minutes

1. Introduction

In this episode of CNBC’s Halftime Report, host Mike Santoli delves into the recent market pullback triggered by escalating trade tensions and a disappointing jobs report. Joined by financial experts Jim Leventhal, Jason Snipe, Bill Baruch, and CNBC’s senior economics reporter Steve Liesman, the discussion navigates through the immediate market reactions, broader economic implications, and strategic investment insights as we transition into a new trading month.

2. Market Pullback Overview

a. Weak Jobs Report Impact

Steve Liesman kicks off the conversation by highlighting the major decline in the S&P 500 by 1.25%, noting a partial recovery from earlier drops of over 1.5%. He underscores the significance of the latest jobs report, which revealed weaker-than-expected job creation and upward revisions in unemployment rates. This report has notably altered the bond market’s expectations regarding the Federal Reserve’s next moves.

Steve Liesman [02:14]: "We went into this meeting with below 50% probability of a rate cut. Look, we didn't have this data. Now you have a 91% probability of a rate cut in September."

b. Emerging Trade Tensions

The increase in tariffs from an average of 15% to 16% has sparked renewed uncertainty among investors. The discussion emphasizes how these tariffs are affecting corporate strategies, particularly in the tech sector, and altering perceptions of future economic growth.

3. Economic Resilience vs. New Risks

a. Jim Leventhal on Economic Resilience

Jim Leventhal shares his perspective on the economy's resilience despite recent setbacks. He compares the current situation to last year's similar scenario where a weak labor report followed a non-cutting Fed meeting, leading to initial panic that eventually subsided.

Jim Leventhal [03:50]: "The economy is and has been quite resilient. We are going to build a new wall of worry, perhaps fears of stagflation."

b. Political Uncertainty and Tariffs

Leventhal also discusses the administration's approach to tariffs, suggesting that the increasing uncertainty is a result of President Trump's penchant for creating drama, which has added volatility to the market.

Leventhal [05:13]: "This is a president who likes to create drama. There is not going to be a calm day or a calm moment that lasts longer than a day in this administration."

c. Inflation and Stagflation Concerns

The panel debates the potential for stagflation, where stagnant economic growth coincides with high inflation, fueled by ongoing tariff impasses and their impact on consumer prices.

4. Impact of Tariffs on Major Corporations

a. Apple's Tariff-Related Costs

Bill Baruch provides an in-depth analysis of how tariffs are affecting Apple’s financials. For the June quarter, Apple incurred $800 million in tariff-related costs, lower than the initially expected $900 million. However, forecasts indicate an increase to $1.1 billion in the September quarter due to higher sales volumes, especially in the December quarter.

Bill Baruch [15:28]: "Apple is estimating a $1.1 billion hit in costs because of these tariffs. The question becomes, do they raise prices or absorb the costs on their margins?"

b. Amazon's Cloud Competition

Mackenzie Seagall discusses Amazon's underperformance despite strong revenues, attributing this to stiff competition in the cloud sector from Microsoft and Google. Amazon’s share of operating income is shrinking, and its backlog of cloud contracts is not growing as robustly as competitors.

Mackenzie Seagall [21:07]: "Cloud contracts not yet fulfilled rose 25% to $195 billion, while Microsoft's Azure jumped 37% to $368 billion."

5. Sector Analysis

a. Energy Sector: ExxonMobil’s Resilience

Jim Leventhal advocates for maintaining exposure to the energy sector, particularly ExxonMobil, citing its ability to generate steady cash flow and return value to shareholders through dividends and buybacks, even in a down market.

Jim Leventhal [27:37]: "ExxonMobil can produce results and return cash to shareholders regardless of oil prices. It’s the one energy stock you have to own in the space."

b. Health Care Sector: Thermo Fisher’s Growth Prospects

The panel shifts focus to the health care sector, highlighting Thermo Fisher's strategic positioning amidst slashed research budgets. Despite a recent underperformance, Thermo Fisher remains a key investment due to its strong pipeline and potential rate cuts that could benefit the biotech industry.

Scott Wapner [33:58]: "Thermo Fisher is well-positioned to hold long-term as rates come down, providing tailwinds to the biotech space."

6. Stock-Specific Insights

a. Apple’s Strategic AI Investments

Scott Wapner discusses Apple's plans to ramp up AI efforts, suggesting that these investments could drive significant growth in the latter half of the year.

Scott Wapner [17:08]: "Apple is ramping up AI efforts, which we expect to start showing in the back half of the year."

b. Amazon’s Cloud Business and Competitive Edge

Jason Snipe emphasizes Amazon’s focus on M&A activities to accelerate growth in its cloud division, despite current margin pressures.

Jason Snipe [18:23]: "Apple needs to look externally to accelerate AI, and their partnerships are key to doubling volumes in regions like Abu Dhabi."

c. ExxonMobil’s Market Position

Jim Leventhal reiterates ExxonMobil's importance in a balanced portfolio, noting its resilience and strategic investments aligning with US energy policies.

Jim Leventhal [27:37]: "ExxonMobil is essential for portfolio stability, especially as energy remains a critical sector."

d. Thermo Fisher’s Long-Term Potential

Scott Wapner highlights Thermo Fisher’s underweight position as an opportunity to acquire at favorable prices amidst sector-wide challenges.

Scott Wapner [35:03]: "Thermo Fisher has experienced a pullback, presenting a buying opportunity as rates begin to decline."

e. Cryptocurrency Market Dynamics

Discussions touch on Bitcoin’s recent performance, with insights into its consolidation phase and potential for future growth.

Scott Wapner [30:43]: "Bitcoin is consolidating at the upper end of its range, poised for the next leg higher."

7. Final Trades and Tactical Calls

a. Oracle and Nvidia Investments

The panel discusses bullish positions on Oracle and Nvidia, citing their strong performance and strategic advancements in AI and data centers.

Scott Wapner [38:55]: "Oracle has performed tremendously year-to-date, pushing into multiple high-growth areas."

b. Qualcomm’s Diversification Strategy

Jim Leventhal praises Qualcomm’s efforts to diversify beyond smartphones into automotive and IoT, advocating for increased share repurchases given the stock’s undervaluation.

Jim Leventhal [40:44]: "Qualcomm is executing well on diversifying its portfolio, making its current valuation an attractive entry point."

c. Netflix’s Defensive Performance

Jason Snipe remarks on Netflix’s resilience in the market, attributing its stability to strong consumer demand and effective advertising strategies.

Jason Snipe [41:52]: "Netflix continues to perform defensively, supported by solid consumer demand and advertising growth."

8. Conclusion

As the episode wraps up, the committee reflects on the mixed signals from the market, emphasizing the importance of selective investing amidst ongoing economic uncertainties. Looking ahead, they anticipate key earnings reports and potential policy shifts that could further influence market dynamics.

Mike Santoli [44:54]: "That's it for Halftime Report. Join us again for the Closing Bell where we’ll analyze the market’s end of week performance."

Key Takeaways

• Federal Reserve Policy: A significant likelihood of a rate cut in September (91% probability), influenced by recent weak jobs data.

• Tariff Impacts: Increased tariffs are affecting major tech companies like Apple and Amazon, with varying strategies to mitigate costs.

• Sector Resilience: The energy sector, particularly ExxonMobil, remains a stable investment despite market volatility, while the health care sector offers selective opportunities.

• Investment Strategies: Focus on high-quality, growth-oriented stocks such as Apple, Oracle, Nvidia, and selective health care companies like Thermo Fisher.

• Cryptocurrency Outlook: Bitcoin is in a consolidation phase, with potential for upward movement as market conditions stabilize.

Notable Quotes

• Steve Liesman [02:43]: "We went into this meeting with below 50% probability of a rate cut. Now you have a 91% probability of a rate cut in September."

• Jim Leventhal [03:50]: "The economy is and has been quite resilient. We are going to build a new wall of worry, perhaps fears of stagflation."

• Bill Baruch [15:28]: "Apple is estimating a $1.1 billion hit in costs because of these tariffs."

• Scott Wapner [17:08]: "Apple is ramping up AI efforts, which we expect to start showing in the back half of the year."

• Jason Snipe [18:23]: "Apple needs to look externally to accelerate AI, and their partnerships are key to doubling volumes in regions like Abu Dhabi."

This comprehensive summary captures the essence of the Halftime Report episode, providing clear insights into the current market dynamics, economic factors influencing investor sentiment, and strategic stock recommendations. Whether you're an active trader or a casual investor, this report equips you with the knowledge to navigate the evolving financial landscape confidently.