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Halftime Report
The Markets React to President Trump's Speech Last Night: Your Next Move 4/2/26
00:47:48
Scott Wapner and the Investment Committee debate President Trump's speech last night and what it means for the market and your money. Plus, the desk share their latest portfolio moves. And later, Josh Brown spotlights Restaurant Brands in his "Best Stocks in the Market." Investment Committee Disclosures
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- [00:00]
Edward Jones Narrator
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- [00:32]
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- [00:59]
Scott Wapner
Try it@8sleep.com 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, this very volatile market. Again, we'll discuss and debate the road ahead for stocks with the investment committee. And joining me for the hour today, Josh Brown, Malcolm Etheridge and Jim Lebenthal. A little bit of a different, different picture, obviously, than what we opened with today. Still down for the NASDAQ and the S and P and the Dow, but we had gone into positive territory even with that spike in crude oil. Interesting stat today from Bespoke. Could be the record 10th consecutive Thursday decline for the S and P. Weird as it is, we'll watch that. Happy Liberation Day anniversary to all of you. I thought we were going to have escalation day today.
- [02:03]
Josh Brown
That was a year ago already.
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Scott Wapner
I can't believe it's been a year ago. But it looked like we were going to run it back in a different way today after that speech last night, which I'm not exactly sure what the intent was, but if it was to calm the markets, it obviously had a reverse effect. But there's been some headlines this morning that have moved the market. I'm trying to figure out what to do a day after. I was asking all of you who are on the show, is it time to think about your post war playbooks now? What, what do you do with all that?
- [02:36]
Josh Brown
So the way the stock market operates, it's already been thinking about its post war playbook and I think that's that burst of enthusiasm that you saw the other day, particularly in technology stocks. I think today's reversal is interesting and obviously not to minimize the fact that there are servicemen and women whose lives are at risk right now. And there's the fog of war. We really have no idea how this will resolve. It sort of reminded me remember the days where we used to talk about a Fed meeting and we would say, okay, it might be a hike, but it'll be a dovish hike. In other words, okay, they're going to do another 25 basis points, but they're going to use their remarks or the release to signal the fact that this could be it. And they're already thinking about the other side of the hiking cycle. And as silly as it sounds to have a dovish hike, the markets took that stuff seriously in the way that they would price the following month or six months later where they thought interest rates ultimately would land. And that's what you're seeing in the crude oil markets. You are not seeing the market pricing in some sort of a year long sustained oil price spike. In fact, it's the opposite. And Trump's remark about we're going to hit them hard in the next four weeks, or however he phrased it, the market took that literally. And so you got a crude price spike front month and then in the out months it's less severe. And I think that's why you got the rebound that you got ultimately in the S and P. Who knows if that holds? But I think it's important that when we're talking about crude oil spikes, what we're not saying is 110 is the new floor and everyone's got to learn to live with that. And we now have to take our 27 earnings expectations down to account for that sustained level. Nobody's doing that in Stockland right now. And they're not doing that in the crude oil market either.
- [04:25]
Scott Wapner
Yeah, Malcolm, you know, this president's style is obviously at times harsh rhetoric. We saw that again last night. I think the market at this stage is looking to be pacified in some way that this really isn't going to last all that long. So maybe it was freaked out for a bit. And as we saw already this morning, you know, any headline that moves about the Strait of Hormuzzi and an end to the effective closure being close is going to move the market so dramatically it's going to be hard to anticipate that, as we saw when, when, you know, we're looking earlier this morning after the market opened for an hour or so and you see it just an immediate move higher, like what's going on? What's going on? What, what happened? What happened? And it was, you know, something about the strait. So we just got to be on guard. It's a reminder too that it's, it's, it's potentially painful to get too negative this market.
- [05:19]
Malcolm Etheridge
What a good time to be a trader right now. Right. You mentioned the fact initially that this is the however many, I guess fifth in a row now since we've been in this conflict. Thursday, where we're down to start the day, even though we started the week in positive territory because we felt really good coming out of the weekend. But we don't want to go into the next weekend with whatever the headlines could be because two days is a very long time with this particular, particular president and the messaging that could come to your point. But I think to take it a step further, we've at least seen the playbook for what does come next. Right. When we do get the all clear. I think Tuesday was a really good dress rehearsal, if you will, for what that looks like with tech being up 4%. It shows that that is probably where investors are looking to pile into the moment we do get that all clear. I think we also have to consider that that's a sector that's been the most beat up coming into this whole thing where it's gotten a lot cheaper, pricing looks a lot better. You had multiples that were somewhere above 32 times, I think back in October at the highs. They're now in line with the S and p at about 19 to 20 times forward earnings. So, yes, we're still kind of in this holding pattern to the point I think both of you guys have been making so far. But we do kind of know where we go the moment we get the all clear.
- [06:37]
Jim Lebenthal
So I'll be more of the Debbie Downer in our group today. I would expect a sell off into the close today. And look, you guys know me. I'm not one for short term prognostications, but I just think the pattern to me at least is too obvious that you're going into three days of the market being closed with a lot of unknowns. We've talked about the fog of war and that is an unknown. But what we do know is there's a lot of boots ready to go into, whether it's islands or actual mainland Iran. We're got a president that as of 12 hours ago was very, very belligerent in his speech. We've got Iran not backing down at all which we see from the Strait of Hormuz being closed, etc. Etc. Now there's offsets to this in the long run, right? I mean we just got another week of jobless claims being extraordinarily low. None of this seems to upset the Apple card as far as data center build out. So there are positives and I'm not giving in that the full year 2026 will be good for equity markets. But I would expect with three, three days off and the markets as we go into the afternoon is going to start biting its nails about what could happen, what could happen with boots on the grounds as a potentiality over the next three days. That's, that's where I am. I'm sorry to be negative.
- [07:46]
Scott Wapner
Well, I would, I just want to
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Josh Brown
ask is it possible, is it possible that that spike in crude that we see today if there is no ground force invasion over the weekend gets erased and maybe we're only, maybe we already are pre panicking into an event that may not happen.
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Scott Wapner
That's the risk. That's how I frame it at the top. That's why it is very dangerous potentially to get too negative.
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Jim Lebenthal
I hear you Scott.
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Scott Wapner
Headline away from a market rip.
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Jim Lebenthal
Here's where I did by the way. I agree it is dangerous to be too negative. I'm not comfortable being one of them.
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Josh Brown
But your middle name is danger.
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Jim Lebenthal
I don't think it's one headline though. That's what you know when we talk about the fog of war. This is not Trump saying I'm going to pause reciprocal tariffs just in honor of the one year anniversary of when he started that this is not just up to him. There are a lot of more forces at play. There are also the secondary effects that we've talked about but things like helium shortage and what that can mean can semi semiconductor supplies and prices which goes into those data centers. There's fertilizer issues that will have effects in the spring and summer on crop yields and food prices. So unfortunately I'd like you to be right, Scott, when you say hey, it's a headline away. I just think it's more than a headline to turn this thing.
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Scott Wapner
I guess that's why you made a move in your portfolio that frankly surprised me when I saw it. And I said to our executive producers like really, really selling that because he's worried about gas prices. It's on holdings, a stock you love and you're selling it. You know, even just trimming it, you're selling out of it. And the reason you gave to our production team is because you're worried about gas prices. So you're selling this name.
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Jim Lebenthal
You know, you phrase that in a way that seems a little bit incredulous, but to me it makes perfect sense. Right? If you've got a consumer that is now a month into gas prices and maybe it's finally getting worn out a little bit, do they say, hey, wait a second, this weekend let's go buy a new $150 pair of running shoes? Or do they say, you know what, it's going to be raining in spring the next few weeks, maybe I'll stretch what I've got a little bit longer. I think the latter. I also have to take note of the Nike earnings call which said that the athleisure market is not exactly great. And also, you know, I'll just put this together with that management change which would weird. The stock response, we talked about it, Scott. The stock response when they changed CEOs last week was way outsized and it's had me wondering, scratching my head, is there something bigger afoot is on more aware that there is a overall demand problem than me holding the shares would otherwise believe.
- [10:14]
Scott Wapner
Nike's issues seem to be idiosyncratic to Nike because the analyst community read the earnings report and said that the read through was positive for names like Dick's Sporting Goods. So it's not like all of a sudden people are stopping to buy athletic gear, footwear, you know, what have you. It's, it's, it's I think a little bit difficult to look at what Nike did and with their guidance and the issues that they have specifically to China and say, oh, now if I'm exposed to this area at all, I got to be worried.
- [10:46]
Jim Lebenthal
Yeah, I mean, look, if I'm wrong, I'm going to buy something else. I'm not going to buy it today for the reasons that I spoke about. I'm just not so sure that that's right. I mean, I don't hate the stock, I don't hate the company and I love the shoes. But there was that Jefferies article or excuse me, research report a week ago that really was quite damning in terms of everything from their build out in the apparel side to demand really waning for what has otherwise been a hot product. You know, two quarters ago they came out with an earnings report that was jaw dropping and it was fabulous and I loved it. The last quarter in between now and then was not so good. And the negative news, Scott, has just been piling up on this name. So I'm out.
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Scott Wapner
We guys think about that.
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Josh Brown
I think New Balance is beating up, beating up on Nike. And like Nike has so much competition.
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Jim Lebenthal
Who owns New Balance? Honestly, right now, who know? I mean, what is it?
- [11:36]
Josh Brown
A public company must be private. It must be private equity owned because I don't think there's a ticker. But I just, I think this whole market is, I think ON is like an automatic awesome company. Look what they've done to this stock.
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Jim Lebenthal
Look at the stock. Exactly.
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Josh Brown
Unbelievable.
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Malcolm Etheridge
Like you just said, Nike included, they have an Instagram problem. The problem is that I can go online and buy whatever apparel I want directly from the vendor. And so now where Nike used to be able to use its competitive advantage in the 80s and the 90s, on was kind of following that playbook. I can just go direct to my customers, sell the same number of shoes as they do, and reap a lot more of the rewards. And so that magic that they used to have in their marketing channels that kept their customer so loyal for so long, I think is what's being eaten.
- [12:19]
Josh Brown
It's also a creatively bankrupt brand. They want to turn it around, but it's still Nike. Yeah, Very much reliant on it. Like still $110 Air Force Ones. The Jordan line is aging. Not like fine wine on the apparel side. Nike tech, the fleece. It's basically for British drug dealers. Like they don't have like China doesn't care.
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Jim Lebenthal
China doesn't care about Nike or any other brand. That was pretty funny.
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Josh Brown
Well, no, it is.
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Scott Wapner
Yeah.
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Jim Lebenthal
No China, look, China wants to grow its own brands. It doesn't want Nike. It doesn't want On. It doesn't want.
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Josh Brown
So I'd stay out of all these names I like on fundamentally, but that is a falling knife. The market, to your point, the market's not asking like, oh, maybe the Nike is not a good read through. They're just saying, you know what, get rid of it.
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Jim Lebenthal
Look, maybe I'll come back to it. I really do like the company. It's just the stock's telling me something and the fundamentals are kind of backing.
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Scott Wapner
So it, it, it's a good way, I think, of leading into the movie you have, right. You bought American Express today at the, at the Open. Tell me more.
- [13:20]
Malcolm Etheridge
Yes. So you're looking for a stock to buy. I have one for Talk to me. So talk to me. Ironically, you're giving up on the consumer and I'm making a bet on the consumer because we've been talking non stop for the last couple of years about how the consumer, consumer has been so resilient and we can't figure out why, but it's really the higher end consumer that's been so resilient, right? Like 10% of households make up for 50% of consumer spending. That is American Express's core customer base. The Platinum card itself generates something like 10, 10% the level of spending on their blue cash card, which is the base level card. And that's where the opportunity really is. So them leaning into their hiring through the consumer, to me looks like a huge opportunity. We keep talking about, like when we have days like today, we come on and Scott says, what should, what should you be buying right now? We always say, go find quality at a reasonable price. Go find cheap quality stocks.
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Josh Brown
Look at the beating, look at the beating in this stock. What is this pricing in American express
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Malcolm Etheridge
being down 20% right now, year to date, to me, looked like a huge opportunity to grab a quality company at a great price. And so I'm making a bet, I'm making a bet that the consumer really is as resilient as we say, especially at the higher end. And they don't really care that gas prices are $4 at the pump right now. That's really what this is a bet on.
- [14:36]
Jim Lebenthal
So when you look at Amex and you had a choice that versus Visa and MasterCard, the big difference is the balance sheet.
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Scott Wapner
So Amex, those are also kind of more in the paint. They're kind of payments companies in more.
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Jim Lebenthal
This is actually what I'm going at
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Scott Wapner
way than American Express.
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Jim Lebenthal
This is the point I'm going at, which is that American Express has a balance sheet. You're absolutely right, Scott. It's more of a technology company. When you look at Visa, MasterCard, American Express has a balance sheet. So, you know, with what's going on with interest rates, is that a plus or a minus for Amex?
- [15:08]
Malcolm Etheridge
There's a K shaped economy that we keep talking about that's more important, I think, to this conversation. And the reason I say that is because you brought up Visa. So Visa, bottom end of the K. Every single debit card in America has the Visa logo on it. Amex is at the top end of that K. And that K is K ing harder and harder. And so I own Visa already. I think American Express presents an opportunity being down 20% right now because their gross margins are something like 20 versus a visa with gross margins at about 60. They have a huge opportunity to grow into it and actually capture that simply because they're leaning harder into that Higher end and leaving everybody else.
- [15:46]
Jim Lebenthal
So one, one more quick question. Did you look at Capital One? I want your knowledge. That's why I'm asking. How about Capital One versus I get, I get it's not the upper end of the cave, but it's an upper cover in terms of a new network and using its balance.
- [15:57]
Malcolm Etheridge
Capital One's digesting an acquisition right now. That's a little bit of a distraction. Again, I really want to own the top end of this consumer space because I don't love exposure to, to the consumer at the moment. But this to me looks like an opportunity where this is a mispriced stock. It should not be down 20% year to date.
- [16:14]
Scott Wapner
All right, the which brings us to Josh because you know, with oil up, anything kind of consumer facing today was going to have a struggle. You had to figure that travel names, cruises, airlines for, you know, jet fuel reasons, etc. So you bought Delta Airlines. Yeah, that's a potentially tricky one right here too. Like give me more.
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Josh Brown
So I 100% agree with Malcolm. If you're going to take consumer exposure, you want exposure to the upper end of decay. You do not want to buy stocks where they're coming on conference calls and talking about the consumer that's having trouble filling their gas tank up at the pump. That's not what we want to do here. And Delta epitomizes that. It is the American Express of the airline business. They have doubled and tripled down on the high end consumer. This is a stock that has doubled since the liberation day low. It was 35 bucks, now it's 66. But that doesn't even come close to matching the growth in the earnings outlook for this business. They've done an unbelievable job. They're going to report next Wednesday 6% expected revenue growth, 18% EBITDA growth, 30% earnings per share growth. Those are all year over year numbers and that's pretty extraordinary for an eight or nine times earnings stock. Revenue guidance was already raised for this quarter. So we already know it's a good quarter. We just don't know how good demand growth is. Been insane. And just look at the chaos at the nation's airports. People are flying almost regardless. No tsa, no problem going anyway. The desire to get on a plane has not been diminished whatsoever. We're talking about basically corporate, premium, leisure, main cabin, domestic, international across the board they're citing strength. The thing to know about Delta relative to the other airlines. In addition to that bet on the American Express customer, they own their own refinery and they basically have a built in hedge on crack spreads. So that when we do have the type of episode that we're living through now, Delta is better positioned to weather it financially than the others. So this was the best stock in the market judge. A few weeks back it fell with the spike in oil prices. Now it's been recovering. I do think it'll make another attempt in the mid-70s and if it breaks through there are, there are probably no sellers at those levels.
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Scott Wapner
I mean you make by the way, Delta over the last month I have it green at three and a half percent.
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Podcast Narrator/Julia Boorstin Promo
Right.
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Scott Wapner
So through the entirety of this conflict and you know, obviously it's gone on now almost five weeks. But nonetheless for a stock like that to be up three and a half, I feel like it's because the issue in part that Josh mentioned that I completely forgot about because we haven't talked about it hardly at all. And that's the refinery.
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Josh Brown
Yeah.
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Scott Wapner
And we, I mentioned when they, I mean I remember when they bought it feels like almost eight, 10 years ago.
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Josh Brown
It's called Monroe Energy and probably more. Yes. So that, so the refinery's profitability actually goes up in, in a time like this which if you're long Delta, that's not what you're rooting for. Like any other hedge, rooting for the hedge to make money. But it exists. And I judge to your point, the stock did not get anywhere near its 200 day. It's 7% above its 200 day. You can't really say that for many of the other airlines.
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Scott Wapner
Oh look, over the last month, month United and American are each down 11 and 14% respectively.
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Jim Lebenthal
Americans got its own problem, I know that.
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Scott Wapner
But Delta sticks out like a sore thumb for the right reasons because it's, it's been green.
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Josh Brown
This is why we focus on the best stocks in the market. There might be more money to be made buying an airline that's down 15%. Sure.
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Jim Lebenthal
No, don't, that's not what I, Delta, I roll just, just by Delta. Because you guys have covered the fundamentals and what it shows up in is the financial statements. If you look at the balance sheet over the last five years they've cut their net debt in half and they're currently generating free cash flow. Depending on where it comes in. For this year, somewhere between 8 and 10% of the market cap. Long story short, it's been six years since we've had a recession. That's six years in which they've been piling up retained earnings and cleaning up their balance sheet. Eventually they're going to get to the point of increasing dividends and buying back shares.
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Scott Wapner
Right. I mean, there's been so much moving in the market today and it's been volatile. It's taken us almost 20 minutes to get to a huge story of the day and it's these continued redemption issues with Blue Owl. Leslie Picker joins us today on news of more and what it all means. Can you now give us the news here and what you think it means to this overall conversation that frankly we've been having, you know, war notwithstanding, almost every day for many, many weeks now?
- [20:57]
Leslie Picker
Yeah, you're right. This is a big, big deal. Blue Owl is experiencing elevated redemption requests for two of its private credit funds. According to letters to shareholders this morning, the firm's flagship ocic with about $36 billion in assets. So that's their flagship fund, receiving redemption requests of about 21.9% of shares outstanding during the first quarter. Blue Owl's smaller tech oriented fund known as OTIC received redemption requests through of 40.7% during the same period. So Blue Owl attributes this to heightened market concerns around AI related disruption to software companies. In both of these funds, Blue Owl opted to cap, as you mentioned, these requests at 5%, meaning in OCIC investors could redeem one fourth of what they wanted. In an otic, it was about 1, 8. Blue Owl, which is unique in having two of these non traded private credit funds, is also among the last to report redemption numbers. The firm's percentage of redemptions is, you can see from that graphic, there is multiples higher than their peers. These two Blue Owl funds are also two of the funds that hedge funds Saba and Cox have offered tender offers to locked up holders at a steep discount. Also worth noting, Scott, that both funds actually saw gross inflows, which combined with the 5% gates means that net outflows were somewhat modest. And this is what technically matters for the firm. Stock price, which you can see is down 2.4%. It was down much more when this was first announced earlier this morning and of course still down by about 45% this year. Scott?
- [22:33]
Scott Wapner
Yeah, Leslie, good stuff. I appreciate that very much. Thank you. That's Leslie Picker. I know you have a lot of thoughts on this, Mr. Brown.
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Josh Brown
I do. We, we as a, as a registered Investment Advisory have 0% exposure to private credit. We are not in any of these funds. I have no horse in the race. I'm not trading any of the equities currently. But I just think the story here, it runs along three vectors and I'd love to get you got your take on it. The first factor is the obvious one which is it's been a while since we've had a financial crisis. I wouldn't say that this is quite a crisis. It seems right now is more of a PR marketing problem where people are redeeming because other people are redeeming and they're worried that if they don't redeem today they will look bad six months from now as the Navy's come down. We also in the publicly traded BDCs have nominal yields of 12, 13, 14%. Everybody knows those are not being paid out and those are going to have to come down. So there seems to be a race to beat that. The other two vectors though are equally important. There is a financial sector concern here. A lot of the banks are involved with a lot of these funds and it's not sorted. This is just the way the financial system works. If these go really bad the way that it appears the holders think they could, we don't know what the fallout is for publicly traded banks, especially of the capital markets and Wall street variety. The third vector of this is the financial. Our viewers are people that probably have wealth managers. They manage a lot of their own money, whatever the case may be. Is there opportunity here? Is the. Is the panic overdone? What. What should they think about their own holdings in private credit? Why were they put into these funds in the first place? Does it still make sense if they were recommended private credit fund in 2024, 2025? Should they be on this redemption waiting list or not? I'd love to hear what you guys think.
- [24:30]
Malcolm Etheridge
I think we were expecting to have a financial crisis in 2023, right with Silicon Valley bank, but the FDIC stepped in and made sure that that didn't go as bad as we thought it could. There's no FDIC coming to the rescue here. So I think that is going to play a meaningful role here. And I think it is reasonable that people are saying I don't want to be in these things to see exactly where the bottom is and how the story plays out just in case because there is no safety net here. And so I think it's reasonable for people to want their money back and want these redemptions. I think the challenge is to a point that I think I heard one of you guys make on a previous show. The funds are operating the way they're expected to, right? Putting up these gates at 5% is actually contractually how they're supposed to function. It's just that the retail investor that's not used to this space maybe was sold into this particular type of vehicle and doesn't understand that a gate.
- [25:20]
Josh Brown
Do you think that's the fundamental problem? That the. The entryway is as wide as a football field. 100% but the exit is the size of a phone booth.
- [25:28]
Jim Lebenthal
Well, by design too.
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Malcolm Etheridge
Right? I mean that's, that's what it's supposed to.
- [25:31]
Jim Lebenthal
You know, it's designed to avoid a fire sale of underlying assets. So you know, for the 5% who
- [25:35]
Malcolm Etheridge
are getting out underlying assets because you got to sell your best stuff to meet the redemption.
- [25:39]
Jim Lebenthal
Exactly. And you know, full disclosure, I've said this before. At Sarity Partners we are in the Blue Owl Credit Income fund which is one of the funds that's talked about today. Now Seema said this. I'm sorry, was it seem.
- [25:49]
Josh Brown
I forget who was Leslie Picker.
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Jim Lebenthal
Sorry, Leslie. That there were gross inflows. So if you look. I'm looking at the release right now. The 5% tender offer was 988 million on the fund. I'm talking about gross inflows were 872 million which resulted in a modest net outflow of 116 million. Less than 1% of the fund. Now of course for the people who wanted to get out, they're angry. I understand that. That's why you had to have the right advisor going into this with humility. I think we did a good job of educating clients that these gates were real and that they were a feature, not a bug. Because this leaves the fund in a position where they don't have to go out and fire sale assets. They can actually. They're going to get more in maturity. What do you think?
- [26:31]
Josh Brown
What do you think?
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Jim Lebenthal
Net redemption 41%.
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Josh Brown
41% redemption request is crazy.
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Jim Lebenthal
I think it was 21.
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Josh Brown
No, no. The Blue Owl Technology Income fund.
- [26:40]
Julia Boorstin
Okay.
- [26:40]
Josh Brown
What are they doing wrong in their communication with either financial advisors or the public crosshairs are.
- [26:46]
Scott Wapner
That's the one where you have no investors.
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Jim Lebenthal
No, no, I'm sorry but we're talking about different funds. He said the technology fund which has. I don't know what the number is and I don't want to put a false number out there but has a much higher than the rest of the industry average exposure to.
- [26:58]
Scott Wapner
So there are a couple of different technology related ones. One is the technology funds which is separate from the Technology Income Corp. Remember Brin is in one of the blue L BDC technology ones. Not the one subject in part to the reporting today.
- [27:15]
Malcolm Etheridge
See how confusing. It is for those of us who actually know what the heck is going on here to have a conversation about it. Imagine the viewer who just sees the name Blue Owl on their statement and says get me the heck out of there. Because I don't trust the point of
- [27:27]
Jim Lebenthal
which you have to have a good advisor, but you have to have an advisor.
- [27:31]
Malcolm Etheridge
All of these are up against you.
- [27:32]
Jim Lebenthal
Absolutely right. I agree with you. And by the way, this is going to continue this these gates are going
- [27:36]
Josh Brown
to I think this is is it definitely the right thing for the advisor to have the client stay calm or is it possible the right thing is it depends. Get all our money out.
- [27:47]
Jim Lebenthal
If somebody was inadvertently led into this thinking that there is liquidity and they can get out immediately, that was the wrong thing. If somebody was told, hey, this is part of your long term strategic asset allocation that's going to last literally decades, then staying in is probably the right thing.
- [28:02]
Scott Wapner
All right, let's take a break. But we come back. We have much more coming up on the upcoming SpaceX IPO. Will how will Elon Musk? He isn't just selling shares, he's selling loyalty. Our dear Jebosa is following the money and Josh Brown's best stocks in the market lies ahead as well.
- [28:23]
Malcolm Etheridge
When I lost my sight, I found
- [28:25]
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Josh Brown
Wireless connecting changes everything.
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- [29:35]
Jim Lebenthal
Good prices and participation may vary.
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Josh Brown
Tax tips and fees extra.
- [29:52]
Scott Wapner
Elon Musk, SpaceX filing to go public in what could be one the of the largest IPOs, if not the biggest ever. It's the structure though, not just the sale, that has retail investors watching this especially closely. Deirdre Bosa is too, and joins us now with more. Hi there.
- [30:09]
Deirdre Bosa
Hey Scott. So here's the big number that you want to watch. 30%. That is how much of this IPO Musk reportedly wants to allocate for retail investors. The norm, it's 5 to 10%. This comes at a time when retail has a bigger and bigger force in this market. More than 300 billion into U.S. stocks last year, which is more than during the entire meme stock era. But GameStop, AMC and others, that was bottom up. Retail organized itself for a shareholder base that was already public. What Musk may do here with Space X could be the first time we see it work the other way. An issuer engineering a retail base into the deal from the top down. Now Musk wants his following in this stock for good reason. Not just because they will buy, but because they will stay and plausibly vote the way that he wants. He saw this at Tesla where retail owns about 30%. They backed his $56 billion pay package after a court struck it down and then approved a new one worth up to a trillion. Now Musk is trying to build this shareholder base from the jump and if it works, Scott, it could become the playbook for open air and anthropic expected listings and the biggest IPOs of a generation. They would have been priced on retail faith and loyalty. And that is a really interesting proposition, not just for retail investors, but for institutions, institutional investors to watch, to make.
- [31:24]
Scott Wapner
Really good point. D thank you. Dear Jerbosa. What do you guys think about this? I mean you can understand why. I mean there's also a different quality about Musk compared to the leadership of either Open or Anthropic. Just based on who, who Elon is and the kind of gosh, almost Pied Piper like status he, he can have with a retail cohort.
- [31:49]
Jim Lebenthal
Yeah, I mean I think more than anything he just believes the retail owner is going to be a sticky handed owner and stick with him. You know, I'm thinking about in both
- [31:58]
Scott Wapner
ownership and voting, two key things.
- [32:02]
Jim Lebenthal
Absolutely true. Thank you for bringing that point up. But you know, at the same time I'm thinking about all those Twitter or X fights he's gotten into with institutional shareholders or Analysts over the years when they cross him, as he's perceived, remember not that long ago, I forget what it was. Dan, I've said something and you know, Elon Musk says, shut up, Dan. Something like that. Like, I think Elon doesn't want to actually be engaged in those sort of Twitter fights. He wants to be engaged in discussions with sticky handed retail investors who believe in him, who frankly love him. And you can see that from Tesla's.
- [32:34]
Scott Wapner
But that's what I'm saying with the, with the, the voting on the trillion dollar pay package he is, it'll be reflected. That's the loyalty that I think we're potentially talking about.
- [32:45]
Josh Brown
I actually, as much, I actually think there'll be multiple share classes and I doubt any investor, whether institutional or retail, will have any say whatsoever. They're not going to make, they're not going to make the same mistake with who they're giving access to decision making. And if you actually look at the Silicon Valley giant companies, they were way ahead of Elon in this. Alphabet did this, Facebook did this before it became Metta. They made sure that if you were investing in these companies, you were investing in what the ownership and leadership and visionary founder CEOs felt would be the right course. Nobody wants to replay the thing where Carl Icahn goes up against Marc Andreessen or over the soul of ebay, but I think nobody in techland wants to watch that happen again.
- [33:35]
Malcolm Etheridge
I think investors learn their, institutional investors learn their lesson with those. I think especially with Mark Zuckerberg going all in on the Metaverse and he could basically do whatever he wanted.
- [33:45]
Josh Brown
Right?
- [33:45]
Malcolm Etheridge
And that's part of the reason Elon needs the retail investor class, because they are more willing to vote their proxy over to him basically and allow him to kind of do whatever he wants to do.
- [33:55]
Josh Brown
If I were him, if I were him, I would do the same thing. I think he doesn't want to be distracted with the establishment and ICI and you know, all these committees. I think he wants to focus on the tech and not have disputes over board members.
- [34:09]
Scott Wapner
All right, let's get the headlines now from Angelica Peebles.
- [34:12]
Deirdre Bosa
Hi there.
- [34:13]
Julia Boorstin
Hey, Scott. South Korea's president is warning citizens to, quote, save every drop of fuel as the war in Iran continues. The president noted that the current crisis is not a passing shower, but rather a massive storm whose duration is uncertain. He encouraged people to limit their energy use by taking public transportation and conserving electricity. Maine is on track to become the first state to pause construction on large data centers in the state legislation could be passed as early as this spring to freeze projects until November 2027. Supporters of the bill say that the pause will help them assess the impact of data center development on the environment and electricity grid. And Sam's Club is raising its annual membership fees for the first time since 2022. The Walmart owned warehouse club will soon charge $60 per year for the basic membership, up from $50 today. And that will bring the club's fees closer to Costco, which charges $65 for its basic membership. So big news, of course, for suburbanites like me. Scott, back over to you.
- [35:12]
Scott Wapner
All right, Angelica. Thank you, Angelica Peoples. Coming up, Josh Brown's best stocks in the market. He's got a new name on his list. We'll tell you the reveal next.
- [35:32]
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- [36:00]
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- [36:32]
Leslie Picker
What made you confident that you could do something that hadn't been done before?
- [36:37]
Deirdre Bosa
I have no fear of failure.
- [36:39]
Podcast Narrator/Julia Boorstin Promo
Trailblazing women, changing the game.
- [36:41]
Julia Boorstin
One of my favorite pieces of advice, think about what your boss's boss needs.
- [36:46]
Deirdre Bosa
Leadership can look in many, many different forms.
- [36:49]
Josh Brown
It really does come down to just trusting yourself.
- [36:51]
Podcast Narrator/Julia Boorstin Promo
Life is short and you just gotta
- [36:52]
Deirdre Bosa
think big to accomplish big things.
- [36:55]
Podcast Narrator/Julia Boorstin Promo
Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts,
- [37:18]
Scott Wapner
That stock's in the market. According to the men in my left, that's Josh Brown. The stock the spotlight today is on qsr.
- [37:25]
Josh Brown
Yeah, we're going to talk about Restaurant Brands international. So on March 19, I talked about this, but we hadn't gotten around to writing it up. We were talking about Casey's General Store C asy. If you guys want to pull that up over the last let's say month stocks done very well. And I was saying that QSR has a similar situation in place where it's the, it's a sector that we'll just get to the point. Patrick Doyle turned Domino's around from 2010 to 2018. A $10,000 investment would have been worth almost half a million dollars. And he did it in a very simple way. He focused on the product, he focused on the app and digital ordering and he made the franchisees money. The same thing could happen here with qsr. You take a look at the stock right now. It is breaking out as we speak. 75 was overhead resistance. We have broken through. And I think what's interesting about QSR is how much, much potential there is. This is a company where the average price that they're selling food at, whether it's Popeyes or Tim Hortons or Burger King, is much lower than the competitors. In a high gasoline price environment, that works in their favor and it's a growth story. They think there'll be 1800 net new restaurants by 2028 and 1400 of those will come from outside the country. Interestingly enough, those are royalty businesses, the outside the country restaurants and they actually make more money there. So I think the breakout is for real. It absolutely could retest. If you read the column at CNBC Pro, we lay out all of the levels, but you are betting the jockey and you're betting that Patrick Doyle coming to this company fresh off turning around Domino's is the right chairman to oversee the CEO and make it happen.
- [39:13]
Scott Wapner
Comments, questions, complaints.
- [39:16]
Jim Lebenthal
It's a spot that I'm out of. I have learned to respect when Josh comes up with the technical reasons why a stock is going to go higher and then has the fundamentals behind it. I'm sorry, though. I'm not in the restaurant space, Malcolm.
- [39:29]
Malcolm Etheridge
I don't want to be in the restaurant space. I'm skittish about the consumer, especially right now. But I don't disagree with the technicals to your point.
- [39:36]
Scott Wapner
One part of the consumer space, because obviously the Amex buy says you're still bullish.
- [39:40]
Malcolm Etheridge
That's the one.
- [39:41]
Scott Wapner
Top of the case.
- [39:42]
Malcolm Etheridge
Well, it's also the dislocation stock.
- [39:45]
Josh Brown
So you're. I agree with you. You're right to be skittish about the consumer, but people have to eat. Yeah, it's. It's a $3 burger at Burger King. I think it's recession proof and these people are going to, I think, turn it to where we're talking about it as more of a Growth name and look, give me like a one year chart, then I'll shut up. This is what technical analysis is for.
- [40:07]
Scott Wapner
What if we gave you a bacon double cheeseburger?
- [40:09]
Josh Brown
I'll definitely shut up, guys. Very clearly, 70 to 75 was resistance. 1, 2, 3, 4 times. Now it's broken through. So what happens is psychologically, that level of resistance converts and becomes a support level. So I think you can, you can realistically risk 3 or 4 points and upside for potentially 25 points and downside, potentially 25 points and upset. That's what we're using the technicals for. The fundamentals tell you what you want to be invested in, but the technicals tell you. Okay, now I'll go eat a Burger
- [40:41]
Jim Lebenthal
King today just to support you.
- [40:42]
Scott Wapner
Okay, we will take a break. We'll come back calls the day next. That stock's in the market according to the man in my left. That's Josh Brown. The spotlight Today is on QSR.
- [41:11]
Josh Brown
Yeah, we're talking about Restaurant Brands International. So on March 19, I talked about this, but we hadn't gotten around to writing it up. We were talking about Casey's General Store, csy. If you guys want to pull that up over the last, let's say month, stock's done very well. And I was saying that QSR has a similar situation in place where it's the. It's a sector that we'll just get to the point. Patrick Doyle turned Domino's around from 2010 to 2018. A $10,000 investment would have been worth almost half a million dollars. And he did it in a very simple way. He focused on the product, he focused on the app and digital ordering, and he made the franchisees money. The same thing could happen here with qsr. You take a look at the stock right now. It is breaking out as we speak. 75 was overhead resistance. We have broken through. And I think what's interesting about QSR is how much potential there is. This is a company where the average price that they're selling food at, whether it's Popeyes or Tim Hortons or Burger King, is much lower than the competitors. In a high gasoline price environment, that works in their favor. And it's a growth story. They think there'll be 1800 net new restaurants by 2028, and 1400 of those will come from outside the country. Interestingly enough, those are royalty businesses, the outside the country restaurants, and they actually make more money there. So I think the breakout is for real. It absolutely could retest. If you read the column at cnbc, Pro, we lay out all of the levels. But you are betting the jockey and you're betting that Patrick Doyle coming to this company fresh off turning around Domino's, is the right chairman to oversee the CEO and make it happen.
- [42:58]
Scott Wapner
Comments, questions, complaints.
- [43:01]
Jim Lebenthal
It's a spot that I'm out of. I have learned to respect when Josh comes up with the technical reasons why a stock is going to go higher and then has the fundamentals behind it. I'm sorry, though. I'm not in the restaurant space, Malcolm.
- [43:14]
Malcolm Etheridge
I don't want to be in the restaurant space. I'm skittish about the consumer, especially right now. But I don't disagree with the technicals to your point.
- [43:21]
Scott Wapner
One part of the consumer space, because obviously the Amex buy says you're still bullish.
- [43:25]
Malcolm Etheridge
That's the one. Well, it's also the dislocation stock.
- [43:30]
Josh Brown
So you're, I agree with you. You're right to be skittish about the consumer. But people have to eat. Yeah, it's, it's a $3 burger at Burger King. I think it's recession proof. And these people are going to, I think, turn it to where we're talking about it as more of a growth name. And look, give me like a one year chart, then I'll shut up. This is what technical analysis is for.
- [43:52]
Scott Wapner
What if we gave you a bacon double cheeseburger?
- [43:54]
Josh Brown
I'll definitely shut up. Guys, guys. It's very clearly 70 to 75 was resistance 1, 2, 3, 4 times. Now it's broken through. So what happens is psychologically, that level of resistance converts and becomes a support level. So I think you can, you can realistically risk 3 or 4 points in upside for potentially 25 points and downside. Potentially 25 points and upset. That's what we're using the technicals for. The fundamentals tell you what you want to be invested in, but the technicals tell you. Okay, now I'll go eat at Burger
- [44:26]
Jim Lebenthal
King today just to support you.
- [44:28]
Scott Wapner
Okay. We will take a break. We'll come back. Calls of the day. Next. There's some calls of the day. AstraZeneca assumed by Goldman Sachs price target to 20. Positive phase three data for its lung disease drug. They say, quote, significantly changes the setup for shares through 2026. Farmer Jim agreed.
- [45:05]
Jim Lebenthal
Just first, I have to say this is a dream stock. It's helped outperform the market over basically any time period you look at with a beta of about 0.5. So much less the risk. That's, that's what you want. But also if you look the last month's worth of press releases, there's a lot of new drugs that are coming, lung cancer, breast cancer. So I think the setup is for outperformance in earnings which is what the Goldman Sachs report is pointing to. And we do kind of need that. It's a little pricey at 19 times earnings dividend yield just below 2%. But again I think it's going to outperform on all these new products coming I think think you can own it here.
- [45:40]
Scott Wapner
Stifel cut Malcolm ServiceNow's price target to 135. It was 180. They still have buy on there. They point to a seasonal rebuilding of pipelines after an aggressive year end push. The data they suggest points to a very weak US federal spending environment. What do you think?
- [45:58]
Malcolm Etheridge
So I can remember all the way back before this war when we were debating whether AI was actually going to transform form companies and help them become more productive or if it was just a money pit. And I think that ServiceNow is one of the first companies showing how it could turn itself into a company that streamlines things and gets more productive using AI first starting with itself. So for example, they've got a new product they just released, I think it was in February that's basically an automated AI help desk for it. So supposedly it handles about 90% of all the IT tasks that normally would flow through something like that on an automated basis and does it a lot faster than a human can. Those are the kinds of things that I think you deploy across enterprise companies that suddenly show them how they can become more profitable and more productive with keeping the same headcount or fewer people. This to me looks like an opportunity to be owning a company that is to their point I think rebuilding itself in the world of AI.
- [46:55]
Scott Wapner
Renaissance Macro's Jeff DeGraff took a look at the market today and he says, quote in a new note, we're convinced that those names breaking out on a relative and absolute basis, particularly those not tied directly to the war with Iran, should be bought. He gave a list of several names including csx. We highlight that because it was on Josh's best stocks in the market in December.
- [47:19]
Josh Brown
Is it still CSX at the moment? I'll tell you in an instant. Yes it is. Okay, look, you, you think about the areas of this market that have been resilient this year and it's a very small list, like not. There are not many categories of stocks that have been able to weather all of the things that are being thrown at us. Every day, whether it's recession concerns or oil price spikes or geopolitical or war. It's, it's, it's a short list. But these are the types of stocks that have held up. So.
- [47:52]
Scott Wapner
All right, we'll take a break. We'll come back. Sentoli, he's on the other side with his midday work. All right. Welcome back. Senior markets commentator overtime co anchor Michael Santoli is here now at post nine for his midday word. Markets were obviously rattled by the speech last night, but we have a different picture now than we did at the open. I don't know what you make of it or how you take this into a now long week.
- [48:33]
Michael Santoli
Sometimes it's just the market's way of saying kind of how it got, how oversold it got and when it oversold. Another definition of that is it's going to be more sensitive to less bad news than to bad news. And you know, I am interested that we're making new highs in crude. We're not nearly making new lows in equities. Yields are not at their highs that they were around four and a half on tens. All of it Vix is 25, not 35. So all of it is suggesting that the market is trying to put on a brave face in the face of what, what's happening with crude. I don't know if that means as oil prices go up, the likelihood or the pressure for some kind of de escalation also rises and therefore brings forward in time. Don't know. What I do know is at the lows this morning, the S and P had only given up about like 40% of the rally. We got off the Friday Monday lows. So it's telling you that at least it's willing to look on a little bit the bright side. I'm interested in all the talk about like you know, Josh and, and Jeff DeGraff and Christopher and we who have highlighted the relative strength leaders and a lot of them are the same types of stocks working before. A corollary to that though is it's not max seven time. I mean in theory it could be right. In theory you could say these are defensive. They're not petroleum dependent. All the rest, they're not really as a group working. So I'm a little interested in that and whether that in fact is going to change.
- [49:53]
Scott Wapner
Yeah. Jobs report tomorrow. Right. With no market open, which is just adding to the digestive phase over the weekend, it's interesting.
- [50:02]
Michael Santoli
I think the market might look at it as a little bit stale anyway. But yeah, I mean. By the way, the claims number was very good today. It hasn't shown up in the numbers, although Atlanta fed GDP just out first quarter 14 is the current number. We'll see how that adjusts but obviously people who are positioned for running it hot the first part of this year that's not been the trade.
- [50:23]
Scott Wapner
All right, I'll see you later this afternoon. That's Mike Santoli. Finals are next.
- [50:30]
Jim Lebenthal
Finals Farmer Cisco Systems continues to outperform Malcolm Digital Realty.
- [50:36]
Malcolm Etheridge
Better place to get your exposure to the data center buildup.
- [50:39]
Josh Brown
Happy 52 week high sienna. Maybe an all time high. I don't know. I can't go back that far. The stock is screaming into the close.
- [50:47]
Scott Wapner
I'll see you on the closing bell. 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.
- [51:02]
Podcast Narrator/Julia Boorstin Promo
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the 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 what made
- [51:37]
Leslie Picker
you confident that you could do something that hadn't been done before?
- [51:40]
Deirdre Bosa
I have no fear of failure.
- [51:43]
Podcast Narrator/Julia Boorstin Promo
Trailblazing women, changing the game One of
- [51:45]
Julia Boorstin
my favorite pieces of advice Think about what your boss's boss needs.
- [51:50]
Josh Brown
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta
- [51:56]
Deirdre Bosa
think big to accomplish big things.
- [51:58]
Podcast Narrator/Julia Boorstin Promo
Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts.