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Halftime Report
The Markets, the Middle East, and your Money 6/23/25
00:47:20
Scott Wapner and the Investment Committee debate the busy week for your money with investors watching the Middle East and the Fed Chair on the Hill over the next two days. Plus, we discuss the latest Calls of the Day. And later, the desk reacts to breaking news out of Qatar. Investment Committee Disclosures
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- [00:00]
Scott Wapner
What does it mean to live a rich life?
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Joe Terranova
It means brave first leaps, tearful goodbyes, and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find.
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Amy Raskin
Your rich, we'll do all we can.
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Joe Terranova
To help you keep enjoying it. EDWARD jones, Member, SIPC.
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Scott Wapner
As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn more@bankofamerica.com LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025, bank of America Corporation. All rights reserved. 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, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the busy week for your money investors watching the Middle east, the Fed chair on the Hill over the next couple days, any developments, of course, on trade are trading all of that with the investment committee. As always. Joining me for the hour today, Joe Terranova, Steve Weiss, Amy Raskin and Bryn Talkington. We will check the markets here as we continue to watch almost everything. We're green still across the board. Feels, Joe, like we're a little bit of wait and see what happens in the Middle east. Retaliation by Iran, what our next move might be. Thought it was interesting, the move in oil up a little bit. Now it's down. The dollar was up against the the euro and the pound last check, the dollar index was down. Rates were down. What do you make of all that?
- [02:05]
Amy Raskin
6Pm last evening, if you watch the opening of the market, you had the expectation based on where everything that was markets were opening that ultimately this could be a moment. Maybe the black swan event was unfolding for 2025. Oil up near $78s and p futures down about 60 handles and everything quickly reversed. It quickly reversed. And I think the follow through since then is signaling some form of a message from the market which emphasizes the resiliency of the market. Now you don't have to embrace that. You don't have to embrace the resiliency. You could push up against the resiliency, but you can't ignore the resiliency. One thing I think is remarkable and has to be shown. If we could show the chart of the EIS, that's the Israeli ETF which I purchased on that down day of Friday, June 13th. If we could throw that up, that has now reached all time highs today. And I think that just speaks to this message in the market that you can't ignore that there is remarkable resiliency. And then by the way, today you get a little bit of a pullback in yields on the chatter that the Federal Reserve might be facing a little bit more pressure to act quicker than they expected.
- [03:15]
Scott Wapner
Bowman made some comments regarding what sounded pretty dovish today. Raymond James Weiss tries to game this whole thing out. They say increased escalation short term, higher oil rates, the US dollar and mentions of stagflation in the media won't be good for equities. Decreased escalation or a resolution is likely to mean the reverse and reward again the buy the dip crowd. The market maybe is making a bit of a statement today, as Joe said. How do you see it?
- [03:45]
Steve Weiss
I don't know where the dip is from. What's happened in the Middle east. There really hasn't been one. It's been trading as us but it is the kind of market where if things are put to bed and everybody, you know, steps back from their position, then the market will rally because this is a market that only knows one direction basically. And that's up. And that's what concerns me now. I'm fully invested and I'll address positionings. We are close to earnings. I'm not as optimistic as others but you know, I was at an event this weekend and a number of investors there and I got to tell you, this really didn't come up in conversation. You know, we talked about oil for maybe a heartbeat and that was it. Keep in mind with the US being in such a strong position as an exporter of energy.
- [04:30]
Scott Wapner
Yeah. Producer of oil.
- [04:32]
Steve Weiss
Right. That we can cut off. You really want to. You can cut off the exports and just use them here. Right. In order to keep oil down. Saudis, they may also be willing to produce more. Nobody wants Iran to have a nuclear nuclear bomb. And it's in the interest of every Middle east country as well. So they may say that they disagree with the US strike but it was the right thing to do. And I got to believe behind closed doors they're all giddy about it. So I think that this is much do about nothing.
- [05:03]
Scott Wapner
So then we're. The new highs are just back in view and they are 3% on the essence right away they are in view.
- [05:10]
Steve Weiss
Because hopefully you'll have some, some room, you'll make some ground up on the tariffs which have not been and then we'll get turnings that'll be a different story.
- [05:19]
Scott Wapner
Rethink.
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Joe Terranova
I think that, I think that's the tariff issue is the big issue three weeks away, less than three weeks from July 9th. The longer we don't talk about tariffs, the better it is for the market. So actually, you know, all of the, all of the emails that I got this weekend was report after report after by the war. You know, wars tend to be inflationary. This tend to be better for equities at least over the last few year, last few decades. But I do think we still have July 9th looming out there and there needs to be a resolution about that. I think it's going to be hard to get a new high before that or really a sustainable, durable new high before we get resolution on that because it's just, just the out the range of outcomes is so wide.
- [06:00]
Scott Wapner
A couple of pretty dovish Fed comments of the last 48 hours. If you only count, you know, the trading days as those 48 hours. Bowman today, Brin and then Waller the other day saying look through tariff inflation, I'd be willing to cut in July if all things are equal. And you don't have a, you know, a big issue between now and then on the inflation front. So you got that. And then the market clearly seems today to be trying to look through whatever's happening in the Middle east unless of course something takes a bad turn and then it'll have to assess that in real time. But for now, what do you see?
- [06:41]
Joe Terranova
I see that we could easily have two rate cuts this year. The Fed has been very, it's very tight right now in terms of we'll say the Fed, Fed's financial conditions. The markets aren't tight. But I also think we already had our Black Swan event for the year that was 4-2-post the poster board which caught everybody by surprise. And so I think it's pretty rare to have two Black swan events in the year. I think the market has really digested, anesthetized and somewhat moved on from the trade, the tariffs so far, I think you're going to end up having the bill passed in whatever form that looks like that's a positive. I think you're going to have trade agreements of some sort that'll be a positive. And I will say that in Q1, earnings actually grew 12%. So in that kind of environment, I think that you could punch above an all time high, which were a whisper right now. But I agree with Amy. It just doesn't seem probabilistic that we would do it right now before earnings. And with all of these other, we'll say temporary unknowns that will have, the market will have to climb that wall of worry. But with growth strong, unemployment low, if the Fed cuts one or two times, I think that just continues to be a positive. And there's only been one time to buy the dip and that was the week after April 2nd. Everything else has just rallied or since then. So there hasn't been an opportunity to.
- [08:00]
Scott Wapner
Buy the dip until some interesting technical commentary today. Joe Roth says if there's a fly in the ointment, that's the terminology they use, it's the breath. Broad based New York Stock Exchange shows just 44% of its members are above their 200 day. Hard to have a convincing bull market when over half the stocks are below trend. Jonathan Krinsky at BTIG says risks are elevated heading into month end. You've got some medium term, the bulls have the upper hand above 5,800, but they think there's more risk coming and the level gets tested sooner rather than later. So how do you take. We talked about the fundamentals and there's a lot of unknown baked into that. But what about the technicals on top of it?
- [08:42]
Amy Raskin
Okay, so I'm not going to take issue with either of those perspectives on the levels. I think what that means for the viewers, what it means for me is maybe you're not enthusiastically buying at these levels, but I don't think that means that you're taking the other side and you're aggressively selling either for a larger retreat. I think what we see in front of us is that the third quarter can have many challenges for a variety of the reasons that Amy suggested with tariffs and Steve's concerned about, about a deterioration in earnings. But I do think, think on the other side in the fourth quarter you're going to benefit from the tax bill, the regulatory relief and the potential that the Federal Reserve cut. So don't go too far away from the market. Yes, the market could fall 5750, 800 very easily, but I look at that as a pause that ultimately would refresh.
- [09:29]
Scott Wapner
You think it's, it's, it's dangerous to get too negative.
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Steve Weiss
Yeah.
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Scott Wapner
As this market continues to prove to people who are, who have been more bearish or cautious, it really has been a resilient market in the face of pretty much anything except for moments here and there. Right, agreed.
- [09:46]
Steve Weiss
And five years ago, which was a different market. Forgetting about the pandemic, I'd probably be, you know, 20, 30% deadlock. But this is a market that makes a fool of you if you're not fully invested. But you got to be in the right areas. It's not as if every stock is up. You still have almost half the stocks below their 200 date.
- [10:07]
Scott Wapner
Well, that's what we said. Just 44% are above their 200 day.
- [10:11]
Steve Weiss
Right, right. And I'm emphasizing that. So, look, my positioning is predominantly in the large cap tech that we've talked about that have done pretty well and I'm staying there and that's better. Microsoft, Netflix and then idiocentric, idiosyncratic stories such as FTAI Aviation, you know, and Leidos.
- [10:35]
Scott Wapner
So.
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Steve Weiss
So that's where you make it up. So it's really a question of positioning, as you pointed out before.
- [10:40]
Scott Wapner
So, you know, Tesla's a big story today. Bren, let's address this. The limited launch of Robotaxis in Austin on Sunday. UBS raised their price target to 215 to 15 stocks at 354. They reiterated their sell rating, so they remain negative even if they bump their price target well below where it currently is. Dan Ives was overjoyed by the experience. I mean, how else do you describe it? He says the golden age begins. You know, I'll leave that wherever. The point though, is that Elon Musk has bet the farm on this. He's bet the farm on Autonomous. Are you optimistic as a shareholder that they're going to deliver?
- [11:25]
Joe Terranova
I think when I look out five years, robots, Autonomy licensing, fsd, just not FSD Solar, the collective of the company, I think is very positive. When I look back over the weekend at my returns and my trades, I've actually made more money selling calls on Tesla than on the stock itself. And so I think that's where investors need to understand right now is that I think that 380 to 400 is a cap we saw last week when he with the White House or what have you got down to 280. And so I think that the challenge to me to get above 380 to 400 is that actually the current business, which is cars, those underlying fundamentals are eroding. And so I think there's a lot of premium in the stock. And I do think I would never underestimate Elon and his team, but I still feel like selling Calls against the majority of my position is going to be a way where I can have a better total return than just being long. Only at this point.
- [12:24]
Scott Wapner
It's a really interesting perspective to say that the underlying fundamentals are deteriorating. I mean, that's the bread and butter of how one would typically assess a stock. Phil LeBeau joins us now. Of course, he covers the company. So you have, as Bryn suggests, Phil, fundamentals that don't look good. Okay. Against this moonshot, if you will, that rolled out in a limited fashion. And investors like Brin are trying to figure out if you put all of it into the, the pie, what it's going to taste like at the end of the day. Is it going to be good enough to be what investors are betting on? And nobody knows, Scott, that's, that's the black box of this entire thing. Was it a successful weekend in terms of there was no major disengagement. There was no video that got posted of an autonomous robo taxi doing the wrong thing on the road? No, there was not. All of the videos from the influencers show what appears to be a normal ride. But keep in mind this was extremely limited. When you look at the launch Yesterday, you had 10 to 20 Model Ys with the full self driving technology, autonomous vehicle technology. There was a safety monitor in the front seat, not in the driver's seat, but in the passenger front seat. There was also a remote backup driver monitoring every single ride. If they had to engage or they didn't engage. We don't know, nobody's told us that. And the flat fee for those who took the service, $4.20. Guggenheim out with a note today saying by the end of this year, we believe the pace of expansion needs to be closer to, to a sprint to justify lofty robotaxi expectations that are embedded in the Tesla valuation. As you take a look at shares of Tesla, that's the bottom line here, which is what Britain was talking about, which is you believe in Elon Musk, you believe in autonomous, you believe in Optimus, then you believe that five years down the road they are going to be perfectly positioned. But between now and then, Scott, certainly between now and maybe the next couple of months, you have no idea. I mean, yeah, they will probably come out and say we did X number of rides and everything was fine. But we don't know, we don't know what this is going to look like a year from now. Will it be as widespread as Elon Musk has said it will be, or will it be much more subdued? And if it's much more subdued, then the question becomes, if you're a Tesla investors investor, do you still believe that by 2030 it will be as large as many project it will be? Yeah. Thank you very much for that. I mean there's always been a little bit of built in. We don't know Joe, as it relates, it's Philippeau with that reporting for us. Always a little bit of we don't know. Yes. When it comes to this, this company, you know, we don't know what the sales are going to ultimately be. Do they match the projections that are put out? Will this end up matching the, you know, some of the hype and the hyperbole that's been around all of that? Of course we're doing the 420 thing again too, which I'm sure everybody's taking note of as well.
- [15:34]
Amy Raskin
Yeah, I'm sure Waymo's taking note of that as well because they're charging a much higher price. So there's a very deflationary effect. When you're telling Me this is $4.20, I'm not sure. I think Waymo is somewhere around $15 or $20 for a ride. But, but this comes at a moment where we don't know. But it's critically important that we do know because to Britain's point, you've seen deterioration in the revenue growth for this company. They need something to revive that revenue growth. And a lot of the analyst community is expecting that ultimately this is what it's going to be.
- [16:03]
Scott Wapner
You have, you have a decision to make coming up. You're going to be thinking about your rebalance.
- [16:09]
Amy Raskin
Yes.
- [16:09]
Scott Wapner
In literally a matter of days.
- [16:11]
Amy Raskin
So, so the rules, the rules at the end of July will, will really have this, this, this convergence of two factors, one of which continues to deteriorate. That's the quality factor. The quality factor on Tesla doesn't look good. Now you've had a 38% recovery so far, quarter to date. So the technicals and momentum look a lot better. But you know, it kind of just snuck into the portfolio. 125 holdings was probably ranked right towards the bottom. So it snuck in. I don't know if it can maintain that, but I'll say this. 10 to 20 vehicles, vehicles being monitored. I'm not so sure you get very excited about that until you have the firm evidence that they could scale it, that you're talking about. Thousand of robo taxis in L A San Francisco, not just in Austin.
- [16:58]
Steve Weiss
You know, you know what nobody mentioned and we've heard three people talk about it profitability. This is not going to be profitable for them for a long time. It's not like Uber where the, where the cost for maintenance, the cost for insurance, the cost for the vehicle are absorbed by the driver. So all Uber does is split the cost. Right. They split the fare rather. So with these and I've got this from good sources on Waymo, it's going to be a long, long time before they make money, number one. Number two, Waymo is cheaper than Uber. We reported last week that's when I was just in San Francisco. Rides were under 10 bucks wherever you're going in town. Substantially cheaper but way more expensive. Right. But they're not going to stick with that cost. That's, that was just Media's great at playing the media to me. I appreciate Vince perspective, Britain's perspective and she's been dead right on this and made a lot of money on it. I still think it's the most overhyped stock on a long term basis I've ever come across it.
- [17:58]
Scott Wapner
If you take the Magic seven in total, yes. It's been a huge question mark for the last many months, as we know. And so too is another name that everybody has been thinking about and that's Apple, which is in jeopardy of posting its fourth straight down month. It is the only MAG7 name below its 50 and 200 day moving average, the only MAG7 stock that's negative over the past three months. Wedbush's trading desk notes that Apple's start to the year down 20% year to date, is the second worst start in more than a decade. Now there are some questions as to what this company is going to do about its perceived back of the pack as it relates to AI and the arms race there. Our tech correspondent Steve Kovac joins us now because the name Perplexity is out there again. And Bloomberg reports that Apple executives held internal talks about possibly making a bid for that company, which everybody seems to everybody in quote, seems to want a piece of. Yes, Guy. It's almost as if the M and A team at Apple were watching us two weeks ago on your closing bell at the beginning, reacting to that because perplexity was on everyone's mind. And yeah, you're right, Bloomberg did report last week that there were some internal discussions at Apple to buy Perplexity and those actually come on top of comments from services boss Ed EQ last month where he said Apple is considering a partnership on search with Perplexity. Sort of like it does with ChatGPT already on iOS. Now, what Apple could get from a Perplexity acquisition, obviously improvement on Siri Search, but it wouldn't really help out as much with that delayed personal Siri that uses the data on your iPhone. Now, Perplexity is built on top of AI technology from OpenAI and Anthropic. That means it doesn't need massive capex investment like we see so many hyperscalers doing. But at the same time, Apple almost never makes huge acquisitions like this. Usually small companies will pay tens or a couple hundred million dollars in that range, never really above $1 billion. Except one exception, of course, that $3 billion acquisition of Beats in 2014. That helped them really supercharge their Apple music service. Instead of building it from scratch, they were able to deploy that within about a year or so. Now, as of last month, Perplexity raising more money, CNBC reports, at a $14 billion valuation put a premium on top of that. And that would be Apple's biggest acquisition ever. So the question for you guys to kind of kick around now is can Apple pull off its own AI products after the setback this year, or does it need to make this acquisition to jumpstart it just like it did with music over a decade ago? Scott? Yeah, Steve, thank you. Steve Kobach. I mean, Amy, it's can you, can you do this organically or have they already proven that? Maybe not, and they need to go out and do something big and bold, the likes of which they don't really do. But maybe this time's different.
- [20:52]
Joe Terranova
Yeah, I'm going to be in the minority on this, but I'm actually very happy that Apple has not engaged in this race and spending the billions and billions of dollars for what could be potentially a questionable return. So I'm actually, if they went out and bought Perplexity, it would be nothing to them. I mean, it's, it would be there. They have so much cash flow that it would, would be fine. And I think it would be more of a spoiler for everybody else because if they put Perplexity on their, on their phone, that would be detrimental to chatbots and Microsoft and Facebook and everybody else that is trying to get into this race. So I think it would be more of a negative for others than it would be necessarily a positive for Apple. But I'm actually, I just read a report on Bloomberg. Brock is spending $1 billion, a quarter of a $1 billion a month on equipment. And with $500 million of revenue, like the spending for AI is, is out of control. And we talk about revenue and returns and profits like they're nowhere to be seen.
- [21:53]
Scott Wapner
I would be very surprised. Let's just, in the biggest pipe dream conversation that we could have, this kind of thing gets announced. I'd be shocked if the, if Apple stock didn't go up quite nicely on an acquisition like that.
- [22:07]
Amy Raskin
Absolutely. The question is what are they missing? Are they missing the intellectual capital? Are they missing the technology? I think that's the biggest question right now. What is it that they don't have?
- [22:16]
Scott Wapner
I don't think they're missing the intellectual capital. I mean somehow they just haven't been able to do what the investor community has wanted them to do.
- [22:25]
Steve Weiss
I've been saying for a decade that Apple doesn't innovate. And everybody said oh yeah, it's ridiculous. They copy. They copy. Well guess what, here's where you can't copy. You need your own AI engineering talent which they obviously don't have enough of or spent enough on. Keep in mind Apple, of all the big cap tech companies spends the smallest percentage of their revenue in R and D. So now you can't copy it. Now you have to innovate. And guess what? They can innovate design but they can't innovate functionality.
- [22:55]
Scott Wapner
So maybe they just do an acquisition. Maybe this time is different.
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Amy Raskin
Steve saying they don't have the talent.
- [23:00]
Scott Wapner
And I think that he doesn't know. You don't know?
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Steve Weiss
I don't know.
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Amy Raskin
But they're missing some.
- [23:04]
Steve Weiss
That's a guess because they haven't been able to do it right while others have.
- [23:07]
Amy Raskin
So they're clearly missing something. Perplexity is not a big company. Perplexity is only a couple of 100 employees company.
- [23:13]
Steve Weiss
Right.
- [23:14]
Amy Raskin
So you know, yes, it's low hanging fruit because it's not that expensive. 15, 20 billion gets it done. That's not big of a deal.
- [23:20]
Scott Wapner
But remember 15 is not getting it done because it's raising at 14. 15 and getting it done.
- [23:24]
Amy Raskin
25. Call it 25 30. Right, but they're sitting on nearly 130 billion in cash. But I think, yeah, to your point, they have to do something. They do and I think the stock will.
- [23:33]
Scott Wapner
I'm not saying they have to do something. I'm, I'm posing it to you. You all I believe did something with the stock react. I don't know. Why would investors not like.
- [23:41]
Steve Weiss
Because it's it, because it's the price of admission now. So whether it's profitable enough, Microsoft or for matter or for anybody else. The point is they have it.
- [23:50]
Scott Wapner
So Apple needs the perception of the market's clear brand. The. The market believes that Apple's behind. That's not my point of view. That is not anybody's up here. The facts are the facts. That's what the market believes. The question is, yeah, if they do something bold, does the market view it differently that they can catch up, if not overnight, close to it, rather than try and do this organically like they've been attempting to do to date?
- [24:17]
Joe Terranova
Where Steve is spot on about innovations or where they have innovated so effectively is with hardware. Okay. With the glass, with the center design, with the original iPhone, with Jony. I've. They have never been an innovator as far as I remember in software. And this is a software issue. And so I don't think they have the right people there. That is why media is paying will pay $100 million just signing bonus while they're bringing people. That's why Satya partnered with Sam Altman is because they also did not have the intellectual prowess to be able to do this.
- [24:51]
Scott Wapner
And so is that going so well? Apple not going so well though? Yeah, I mean, it was all going.
- [24:56]
Joe Terranova
Well for Microsoft.
- [24:59]
Steve Weiss
Financially.
- [24:59]
Joe Terranova
It's going great.
- [25:01]
Steve Weiss
Obviously there's divorce.
- [25:02]
Joe Terranova
It's going very well.
- [25:05]
Scott Wapner
Well, I mean, I don't know. Some of the, some of the commentary and the reporting recently might, might suggest otherwise wise so what the future of that relationship truly holds. But Apple obviously needs to do something, whether it's by themselves or, or through an acquisition. I mean, they need to turn the narrative around. It's clear that the market has, has placed its vote.
- [25:27]
Steve Weiss
Yeah, it's clear. Also from what they produce, they've continually pushed back the introduction of real AI features that are frustrating consumers. If you went out and you bought an iPhone, the iPhone 16 and the promise was you will have these AI features and you don't have them yet. So they've got to do for their reputation. Now, for me, my standpoint, I wouldn't buy perplexity. I'd go out and buy a bunch of engineers, make a big splash about that. I think they'll serve you pretty well.
- [25:56]
Amy Raskin
Also, I think the argument that Apple historically doesn't make big acquisitions and the biggest that they made was in Beats with beats for $3 billion. I don't think that works here. Yeah, they were able through Beats to advance the innovation surrounding Apple Music. Remember, everyone wanted to buy Pandora and Spotify.
- [26:14]
Steve Weiss
I wanted to buy Netflix.
- [26:15]
Amy Raskin
Well, that was streaming and now you have Apple tv. But in this case, I think that.
- [26:21]
Scott Wapner
This is what's the difference?
- [26:22]
Amy Raskin
I think it's, I think it's.
- [26:23]
Scott Wapner
No, no, I'm saying if you wanted Apple to buy Netflix for the Apple TV and streaming side, then how could you possibly not saying you are. How could you then make the analogy to this then? I mean, it seems. Because it seems like the same kind of conversation you would have because when.
- [26:37]
Steve Weiss
I was advocating for the purchase of Netflix, the stock was beaten up, it was down versus Perplexity, which is hyped up because there's so much. I was with the vc, large vc and they said the only thing we're investing in is AI. We're going pre seed, we're going concept cap, we're going seed, we're going round day. That is all they're doing. So, so much hype driving those valuation. A company like Perplexity will only return capital they're found to the investors in this round if they do another round and it'll be a liquid or if they sell. So there's no way to get it back on a fundamental basis.
- [27:14]
Joe Terranova
Right, but they can sell and that's why they could do this deal. And again, I don't think it would be any sweat off Apple's back, but I don't actually, actually think anybody's not buying an iPhone because Apple's behind in AI. I don't think people are really switching and saying, I'm going to go to another hardware platform, no switching. I just think this is a stock issue versus a fundamentals issue for Apple.
- [27:35]
Scott Wapner
No, I don't know. Maybe it's a combination of both. We're going to take a break. When we come back, calls of the day. We have five bullish calls on five committee stocks. We'll trade them next. How will you shape the future of the technology sector? With confidence. Tech is at an AI powered inflection point, facing innovation cycles that accelerate every day. EY brings a full spectrum of services that help enterprise giants manage fragmented data, telcos minimize disruption and media companies monetize connected experiences. In a world where every company is a tech company, EY delivers real outcomes to those that build the system on which enterprises run EY shape the future with confidence. Heather is a nurse practitioner from UnitedHealthcare.
- [28:21]
Joe Terranova
We meet patients wherever they live.
- [28:23]
Scott Wapner
During a house call, she found Jack had an issue.
- [28:26]
Joe Terranova
Jack's blood pressure was dangerously high.
- [28:28]
Scott Wapner
It was 217 over 110. So they got Jack to the hospital and got him the help he needed.
- [28:35]
Joe Terranova
He had had a stent placed in his heart, preventing a massive heart attack.
- [28:39]
Scott Wapner
If it wasn't for my guardian angel, I wouldn't be here.
- [28:41]
Joe Terranova
Hear more stories like Jack's at unitedhealthcare.com benefits, features and or devices vary by plan. Area limitation and exclusions apply.
- [28:49]
Scott Wapner
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your card you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report. All right, let's do calls of the day kind of pillar target to 414 from 396. Truist reiterates that as a buy. Weiss, you own the stock.
- [29:40]
Steve Weiss
Yeah, again for me it's a hedge against a heavy, heavy tech portfolio and growth portfolio. We got some good news today on the nuclear plant that's going to be built in New York. They get approvals so so obviously that help Caterpillar. So I think that with the reshoring on of America which has been going on now for a number of years, it'll help them quite a bit. They may lose the Chinese market but they can make it up here.
- [30:05]
Scott Wapner
Joe Constellation very much part of that story that Weiss just mentioned. According to The Journal New York, to build one of the first U.S. nuclear power plants in a generation, it would be on the grounds of the three existing potential sites under review would be to include the grounds that are already operating all owned or majority owned by Constellation. So Vista got their price, Vistra got the price target up today. Constellation got the the price target up today. Both at JP Morgan. How do you see this?
- [30:31]
Amy Raskin
This is all part of a larger allocation within a portfolio where utilities now are being thought of the way oil was thought of 15, 20 years ago. So critically important as it relates to serving data center demand. You're seeing deals with a lot of the mega cap companies like Constellation with Matter and previously with like Microsoft. I think it's secular. I think the momentum is clearly secular. I know Vistra is down today and people on social media is saying oh that's an indication of some form of exhaustion. Yeah, maybe in the near term it is but longer term I think you have to have the exposure. I like Constellation Energy a little bit better than Vistra, a little bit better positioned and it's a longer term holding I think for anyone that gets involved Amy?
- [31:12]
Joe Terranova
Yeah. We own BW X in the nuclear space. It's been a moonshot up 40% in the last few weeks. So I would sort of hold off adding to it here. But longer term, we really like the positioning. They've won a number of contracts recently. Canadian company, about $13 billion market cap.
- [31:28]
Scott Wapner
You get a one month look at that, guys. So we can see what Amy's talking about. The move that the stocks had in the last handful of weeks. There you go.
- [31:39]
Joe Terranova
Exactly.
- [31:39]
Steve Weiss
Looks a little better.
- [31:41]
Scott Wapner
Tells a good story there.
- [31:43]
Joe Terranova
Yeah, it's been a great call.
- [31:45]
Scott Wapner
Okay, EOG target to 1:40. A couple of bucks higher at Wolf.
- [31:49]
Joe Terranova
Yeah. 138. 140. Big move.
- [31:52]
Scott Wapner
You take every dollar.
- [31:53]
Joe Terranova
Exactly. I will. No, we like energy generally. I think the rest of the world is responding to this trade war by stimulating and so we've seen US Production sort of peaking and turning down. So generally speaking, we like energy really cheaply priced and good low cost.
- [32:10]
Scott Wapner
Producer Jordache, 52 week high. Joe upgraded to strong buy from outperform at Raymond James.
- [32:17]
Amy Raskin
Do not stare at the P. E on this one because it's triple digit for sure. This is, this is not growth at a reasonable price. This is growth, though, for sure. It's a. It's a name that's really been rediscovered in the last 12 months. If you remember back to 2021, this was one of those do it yourself type of names. We have still not exceeded the November of 2021 highs. It looks positioned technically to do so. Although I have to tell you, I'd be a little bit cautious about going out and buying it up here.
- [32:46]
Scott Wapner
All right, let's get the headlines now with Savannah now. Hi, Silvana.
- [32:49]
Joe Terranova
Hey, Scott. Good afternoon to you. Amid the growing tension in the Middle east over this weekend's U.S. attacks on nuclear facilities, Qatar said today it is shutting down its airspace temporarily as part of a security measure being taken in the region. Qatar is home to a major US Military base and the shutdown comes after Iran repeated earlier threats to retaliate against the U.S. in the region. Major U.S. health insurers, including UnitedHealthcare, CVS and Cigna say they'll speed up and reduce prior authorizations which make providers get approval from a patient's insurance company before they carry out treatments. The insurer said today the change will affect commercial as well as some Medicare and Medicaid plans, which they say will benefit 257 million Americans. And credit scores will soon take into account buy now, pay later loans. Verizec Corp. Which is better known as fico, announced today that it's rolling out a new model to factor in those loans. Now the short term loans, which often play out with installments over several weeks, are among the fastest growing types of consumer credit in the last few years.
- [34:02]
Scott Wapner
Scott Soviet, thank you so much. Now straight ahead, your ETF badge. Don Chu is standing by with more of today's market action. Halftime's back right after this. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report. Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us we brought in a reverse auctioneer which is a apparently a thing. Mint Mobile Unlimited Premium Wireless get 30.
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Amy Raskin
30, better get 30. Better to get 20, 20, 20. Better get 20, 20.
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Scott Wapner
Everybody get 15, 15, 15, 15.
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Amy Raskin
Just 15 bucks a month.
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Scott Wapner
So give it a try@mintmobile.com Switch upfront.
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Joe Terranova
Payment of $45 for three month plan equivalent to $15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes of network's busy taxes and fees extra. See mint mobile.com.
- [35:17]
Scott Wapner
Just want to call your attention to a few things within the market. Now you can see that the major averages have all turned red and oil has turned green. Remember, oil started the day up a little bit, then it was down and now it is back up. There's your dow approaching a 200 point decline. It's a Wall Street Journal story that moved five minutes or so ago that Iran positions missile launchers for a potential attack on U.S. forces. U.S. officials say so that's the Wall Street Street Journal. Reuters without was out with a story as well. The markets obviously are a little bit on edge trying to figure out what the next move in all of this is going to be, if it's going to be retaliation from Iran. There are reports there, we say there have been credible, credible Iranian threats to US Forces in the Middle east according to those reports. We're going to watch all of that. The market did appear to move on that. Both that and the commodities markets too go to Dom Chu. He has today's ETF Edge. Dom, I'm going to send it over to you with the notion that there's a potential of me taking it back from you if we do get more on this. But for now, please proceed with ETF Edge. Of course, Scott. So we're going to kind of continue that theme. With the geopolitical developments happening with the Middle east, how exactly are ETF investors reacting? So joining us now is Matt Bartolini, head of SPIDER Americas Research at State Street Global Advisors. They're the company that runs many of these sector spider based ETFs. Matt, for one of the things that we want to talk about first, we want to know exactly where you are seeing some of the relative activity within the ETF universe with regard to the geopolitical risks that have been mounting and are seemingly coming to a head over the course of the last couple of days. Yeah, so I think what we've seen heading into this past weekend was a little bit of resiliency being built into portfolios. So you saw allocations into gold, we saw allocations into inflation linked bonds. But also you saw some resiliency added through energy sector ETFs. Obviously with the spot price of oil popping as a result of the conflicts in the Middle east, energy sector ETFs have taken about 1.4 billion so far in June as investors start to position for potential rising oil prices, but I think also ongoing oil volatility. Now also Matt, outside of the normal defense contractor type trade, gold type trade, treasuries type trade, are there other places that you would expect to see some more relative heat or activity? If hypothetically things do escalate in the Middle east, as Scott was just pointing out, with regard to some of the headlines coming out of the Middle east right now? Yeah, I mean we have seen a lot of inflows into aerospace and defense ETFs. Just naturally, you know, if there is likely to be sort of escalated conflicts, but also just increasing defense spending not only at home in the US but outside the US With Europeans coming to bear with some of their budgets, that increase in defense spending could act as a tailwind to some of those defense stocks. So we have seen roughly about 700 million of inflow so far this month into aerospace and defense ETFs. That's one area. Another is just this sort of continuation of trying to buy sort of large cash flows. And so communication services sector ETFs where there's a heavy amount of bias towards quality stocks and cash flow generation have been some areas where investors are trying to sort of ride out this near term volatility. All right, Matt Bartolini at State street, thank you very much for that. We're going to continue this conversation next@etfedge.cnbc.com Matt will be joined by John Davie, CIO at Astoria Portfolio Advisors. Scott will be watching all of this in the context of of the Middle East. I'll send things back over to you. All right, Dom, I appreciate that. Thank you. That's Dominic Chu. We'll take a quick break. When we come back, we'll have more on these reports that I mentioned to you about possible and the potential retaliation by Iran certainly making its way through the markets. You can see the Dow was down by near 200, come off a little bit, but stocks move negative right across the board. We'll have an update from Washington next. Get to the latest now regarding the Middle East. Megan Casella joins us from our Bureau in Washington, D.C. what do we know, Megan?
- [39:43]
Joe Terranova
Hey, Scott. So there are a number of reports right now about credible threat on this idea of an attack against US Forces in the Middle Eastern region. The Wall Street Journal is citing US Officials saying that Iran has moved missile launchers into place for a potential attack retaliation against those strikes on Saturday. Reuters says that threat is specifically aimed at the Al Udid U s run air base based in Qatar. This all comes, of course, as we already know, that Qatar has shut its airspace amid these threats of ongoing reports. Scott, so all of this happening right now, I will say there are early reports that some of these attacks could be in place. There could be explosions. We are monitoring those as we come. What we know for now is that there are credible threats at this point against US Forces in the region. Scott, I'll also flag the president is scheduled to have a national security meeting coming up just in the next 15 minutes at the White House. We'll monitor that as well and bring you more as we we have it.
- [40:39]
Scott Wapner
I think it's important to note too that presumably the United States would be well anticipating this sort of maneuver without, without much question given the base where it is, the proximity and the ease, if you want to use that word for the reach that Iran could do. It is the closest base to that country.
- [41:01]
Joe Terranova
Absolutely. Officials have been braced since these attacks, attacks on Saturday night for something like this to happen. They have long been saying that 48 hours, the first 48 hours after those attacks were going to be the biggest risk for US Forces, especially in the region. Homeland Security has also issued threats about you potential attacks on US Soil saying they're on high alert for that, particularly cyber attacks. But of course, the forces in the region were at most risk here that not only the long range missiles that they have, but even short range missiles, missiles by the Iranians could reach those as well.
- [41:34]
Scott Wapner
All right, Megan, keep us up to date if you would. That's Megan Casella down at our Bureau in Washington D.C. we follow all of that. Let's just throw the market again to folks if we could because now the S and P is back in the, in the green and it's going to be very much headline driven as you know, we can show. Crude oil as well, which is going to be about as headline driven as anything. Obviously concerns about the Straits of Hormuz, the Strait of Hormuz, excuse me, and the movement that we have seen. And look at that move right there in crude oil down about two and a half percent. What do you make of that?
- [42:06]
Amy Raskin
That's obviously, look, this, this is a headline driven market. You have a lot of algorithms, you have a lot of quantitative trading that's going on. Right now. We're talking about crude oil below $72. We were talking 12 minutes ago about oil above $74, the S& P lower. So I guess kind of step back under, understand the environment. Really. I wouldn't be doing very much in this market right now.
- [42:30]
Scott Wapner
This underscore why you own the kinds of stocks you do, Joe, the Jyoti, General Dynamics, How Met, Leidos, Lockheed, Northrop.
- [42:40]
Amy Raskin
Palantir, so the cyber elements. And if you think about the ita, which is the defense and Arrow Spot Aerospace etf, what has worked better is not the defense component of that. It's been cyber, it's been helmet, it's been names like that that have really worked. It's been Palantir, so General Dynamics, Northrop. No, they're not working well in the strategy. The strategy is doing fine, but they're not getting the contribution that we had thought you were going to get from the defense names.
- [43:09]
Scott Wapner
Let me just, let's throw up the move in crude one more time if we could. I'm wondering if the market, Joe, as well as you know, the oil market is trying to suss out the idea that if there is this retaliation by Iran, it's through the actions that they're on high alert for already in the region with U.S. forces in that base in Qatar rather than closing the Strait of Hormones.
- [43:36]
Amy Raskin
Yes, I think that's, you're spot on with that. I think that's exactly what this is. That and Brian Sullivan talked about this before. The Strait of Hormuz has never been closed. It really you can close it because the Chinese are so reliant on that oil. About 50% of their oil comes through the Strait of Horbus. I think for the United States, you're talking about mid single digits at best. So I agree with you. I think that's exactly what this is.
- [44:01]
Joe Terranova
And all the attacks on Iran were at the nuclear facilities rather than any of the oil fields.
- [44:07]
Scott Wapner
All right. So let's take a quick break. We'll come back. Santoli's on the other side with his midday work. We're back. Senior markets commentator Mike Santoli is here with his midday word. Just looking at my computer, afraid to look away because of headlines that are moving along with the markets. What do you make of this? I mean, the market's obviously wanting to see what happens next before it places its next bet.
- [44:39]
Joe Terranova
Sure.
- [44:39]
Scott Wapner
Reserving judgment and being apprehensive and kind.
- [44:42]
Amy Raskin
Of open to the full spectrum of possibilities is kind of the only rational stance.
- [44:47]
Scott Wapner
If you even want to make tactical decisions based on how this plays out. I think you had to have everything.
- [44:53]
Amy Raskin
In mind ranging from this is kind of a stage managed member one and done was it was in the reports last night to even the retaliation just brings you one step closer to whatever the resolution is. And everyone's trying to, you know, kind of save face, do enough to it.
- [45:10]
Scott Wapner
Kind of breaks containment and gets out of control.
- [45:13]
Amy Raskin
I think the equity market smartly defers to the energy markets to decide if we have to be intensely worried in the near term term or if we can start to worry about other things.
- [45:24]
Scott Wapner
I mean, if that chart looked different in crude, if crude was going in the other direction, if the market deemed it more credible than not that the Strait of Hormuz was going to be closed, you'd have a different market picture on all accounts, 100%.
- [45:36]
Amy Raskin
And that's why I feel like there's almost no reason to try and out think or second guess what the crude oil markets do.
- [45:44]
Scott Wapner
Not that it's going to be right, but it's going to be the most.
- [45:46]
Amy Raskin
Sensitive to what is happening most recently that matters for the economy of the US and the world. That being said, I think everyone has in mind to the history of these conflicts where I said this, you know, a couple of times, including on our special last night, these kinds of conflicts don't, don't end bull markets. Okay. So big picture speaking.
- [46:07]
Scott Wapner
Right. In fact, they've ended bear markets a couple of times.
- [46:09]
Amy Raskin
We're not in a bear market.
- [46:10]
Scott Wapner
Right.
- [46:11]
Amy Raskin
We're in this kind of holding pattern, five weeks turning sideways with about a list of about a half dozen things that we know need resolution and we're not sure we're going to get them.
- [46:20]
Scott Wapner
Soon, but it could be, you know, next coming week.
- [46:22]
Amy Raskin
So I think that's why we're stuck.
- [46:24]
Scott Wapner
Okay, I'll see in a couple hours. We'll see where we are and we'll discuss that. And that's Mike Santoli. We'll do finals next. Let's get back to our Megan Pessela down in D.C. with the latest.
- [46:46]
Joe Terranova
Megan, got a few more details to bring you here on the ongoing situation in the Middle East. A source on the ground in Doha has confirmed to CNBC that they hear explosions in the sky over Doha. Again, that's according to a witness on the ground there. To CNBC confirming that there have been explosions. All caution, we do not know if those are from incoming missiles or from outbound air defense systems. It could be either one. But confirming there have been explosions now a senior White House official has also told NBC News that the White House and the Defense Department are aware of these potential threats, specifically again to the Al Udid airbase, the U S run air base in Qatar, and that the President is currently in the Situation Room. Scott. With the Defense Secretary Peak, Pete Hegseth as well as the Chairman of the Joint Chiefs of Staff, Dan Kaine and some other officials currently in the Situation Room monitoring the situation as it develops. So they are still planning a 1pm national security meeting in the Oval Office as well, but for now monitoring all of this from the situation.
- [47:45]
Scott Wapner
Scott okay, thank you for that update. That's Megan Casella down in Washington as we continue to watch all this unfold. You know, the market's reaction to this. This is, well, we expected something was going to happen and maybe it's not the worst of the options and hopefully whatever if this, you know, we're talking about missiles from Iran being launched at our air defense system dealt with that. And that no personnel, no American military personnel was harmed at all.
- [48:18]
Steve Weiss
Yeah. The most interesting thing about this to me is that Qatar has been the home away from home for the heads of Hamas and other terrorist organizations. So they're going into their, their airspace and trying to take out American troops. Look, we were prepared for it. What they're going to fire are missiles that we can defend pretty easily. I think they've got to do something. But I should also think that, that you can't take comfort that it's not to going going to be a bigger retaliation although I personally doubt it. This one's just for show.
- [48:51]
Scott Wapner
Yeah. You know, crude oil is sort of sit in put. How are you thinking about how this might play out and how investors need to be thinking about all of this?
- [49:00]
Joe Terranova
Yeah. I mean again I think if you want to invest in crude which we were overweight energy and we like the space generally but it's from a much longer term perspective. Not not has very little to do. Nothing to do with this computer conflict right now. I do think it's a good sign that they haven't gone after the energy infrastructure in Iran. We're not hearing anything about the Strait of Hormuz. So I think oil is going to probably escape this and and but we're focused on longer term fundamentals.
- [49:28]
Scott Wapner
Brin, I've got 30 seconds left. Why don't you give me a final trade as out of place as that frankly seems. I know our viewers care about the that and I'd like to give them that. Do you have a name?
- [49:43]
Joe Terranova
Yeah, actually the bug etf. I think you have a secular tailwind and a cyclical bull market in cybersecurity up 11 and a half percent year to date. I think it continues to go higher.
- [49:53]
Scott Wapner
Okay. You can obviously see we're talking defense and cyber as you might expect from the final trades. We'll monitor the headlines and I'll see on the closing bell you've been listening to CNBC, NBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC. 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 or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the.
- [50:37]
Joe Terranova
Halftime Report participants consider reliable.
- [50:40]
Scott Wapner
But neither CNBC nor its affiliates and.
- [50:42]
Joe Terranova
Or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such.
- [50:46]
Scott Wapner
To view the full Halftime Report DISCLAIMER.
- [50:48]
Joe Terranova
Please visit cnbc.com halftimereportdisclaimer Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier that comes from making courageous decisions, partnering with local communities to grow programs and services and expanding healthcare access to.
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Scott Wapner
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Joe Terranova
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