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Halftime Report
The Mega-Cap Bounce Back: How to Trade it 7/15/26
00:44:01
Scott Wapner and the Investment Committee debate how to trade the bounce back in Mega-Cap names and which ones are best positioned in this environment. Plus, SpaceX falls below its $135 IPO price for the first time. The desk discusses what it means for the stock and how they are navigating the space. And later, the Committee share their latest portfolio moves. Investment Committee Disclosures
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- [00:01]
Edward Jones Financial Advisor
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- [01:01]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, money into the mega caps. Just as Carl was saying, it's Apple. All of the hyperscalers ramping as we come on the air. We're trading the markets with the investment community committee. Joining us for the hour today, Joe Terranova, Steve Weiss, Bill Baruch, Rob Seatson. Let's go to the scorecard here. I'll tell you what we're we're seeing today. And yes, the NASDAQ's only up by 1/4 of 1% in what is a green across the board tape. But let's look at some of the mega caps. Take a look at Apple, look at Microsoft Meta, Amazon Alphabet, 3% thereabouts for everything in that group. We weren't going to start here today. And then we saw this big move in all these names and said, well, let's start at this place in the market.
- [02:01]
Joe Terranova
This seems to be the pattern for the month of July. We have these rotations that's allowing the overall market to inch its way higher. But every time the momentum factor maybe takes a couple of steps backward. We see capital coming out of memory, semis, semiconductor equipment. They're finding value opportunities in the mega caps. And it's interesting because three weeks ago we were hearing people suggesting that the Mag 7 was the Lag 7. They've certainly defeated that description. And right now they are fighting for leadership once again. You could never count out these trillion dollar corporations with staggering revenue growth. They're breaking out. Apple's breaking out. And I said yesterday, I think in video is going to follow. It's down today. It had a strong afternoon yesterday. It's going to participate as well here in the coming weeks.
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Scott Wapner
Steep. Yeah, I mean they're breaking out now. Let's see, you know, if it's durable because, you know, there have been some head fakes in this group of late, but you know, week to date they're all looking good. Met is up 15% over the last month and it's really a story across the board led by this run that Apple's had.
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Steve Weiss
Yep. And I also think that Met has been positively complicit when they came out and said, we're loading up on all this, you know, extra compute. These data centers have got 33 now. Or when the one in Canada will be finished, I'll be 33. So now the market's saying, hey, let's go from the providers of the AI solutions because we're hearing about price cuts coming from China, you know, in terms of their AI models versus the tokens here. They're very expensive. So let's see now who we can take advantage of. And they're taking that Meta's announcements or what we've heard about better as positive that they're going to generate a return. Now, to me this is like Groundhog Day. One day the market's up and yesterday the headlines were semis are back, Semis are back. And then we're taking a look today and guess what? Semis are gone again. So you see a series of lower highs when this is happening. And to me, that once again signals. And the reason I exit Micron is that we're closer to the end of the trade and not a fundamentals, but I trade. So I think it's going to be
- [04:16]
Scott Wapner
difficult closer to the end of.
- [04:20]
Steve Weiss
Not in terms of the outperformance of the stocks. The fundamentals and the revenues for those companies will continue to grow. That spending is far from over. But I think the market's earlier than anybody expected.
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Bill Baruch
Yeah, price does lean all.
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Steve Weiss
Tudor Jones came out and said, right, got another year or two. Right. But now the market all knows that. So they're getting out earlier.
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Scott Wapner
I mean, you know, David Solomon was talking about early innings of this, just this phenomenon really that we, that we, that we've.
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Steve Weiss
I'm not saying it won't be back. Yeah, I'm saying, right now that markets,
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Scott Wapner
there's, there's the semis trade which seems impossible right now. Like good luck if you're trying to figure out directionally where the semis are going. Because as we've seen, the swings are huge and the swings seem to have no stickiness. What is one day up? Could tomorrow be down as much as we've seen the up? And therein lies the issue with that. I wonder if some of that is why the mega caps are seeing the money come back once again. Viewed as a safety place within the AI orbit. You know, people still think there's a lot of juice to be squeezed from these names. I thought it was really telling and I loved hearing from Warren Buffett today with Becky. I think anytime you get to hear from him, especially these days, is a treat. And the fact that he said he initiated Berkshire Hathaway's investment in Alphabet, as we all wondered, you know, well, was it, was it him? Was it not said he made a mistake not investing in Google. The company is now, quote, more likely to be a winner based on its record. I don't think it's an accident that that revelation came today with Becky, that he made those comments and that the stock is doing what it's doing.
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Bill Baruch
You know, that's our largest, largest overweight in the mega caps. I think that, you know, it has some of the most attractive characteristics. You could go back a year and they were being indicted as being taken over by chat and anthropic and their business being flawed. So you know you're going to have opportunities in these names, especially well capitalized names. I think it's interesting that Apple's the most expensive of all these names right now. All the mega cap names, it's certainly leading the bunch. I think Josh has a great thesis, Josh Brown, that that is the consumer entry into AI. If they want to get to the consumer, they have to go through a device. And that's why you're seeing so much energy being expended by the open eyes in the matters to develop their own type of product in this space. I want to go back to what Steve said because I think it's really important we try to rhyme with history as it relates to the semi names. And what has happened is these volatile reactions that we've seen have been a result of something that might have happened in 2000 where fundamentals didn't deteriorate to a year after price deteriorated. And so every time there's a scare, people run for the exits because they know price leads in that segment so far you should believe that they are going to be innocent until proven guilty and be a buyer of those dips because you have enormous visibility now that you may have not had then multiple years out. And so listen, hyperscalers are viewed as a hedge to that. So you're going to see the hyperscalers rally every time this momentum group sells off. I think you got to own both. I think the David, what David Solomon said is right. This ecosystem is under a long build out. No one is slowing their their jets on that. They're flying full speed into it and the beneficiaries are going to continue to be the beneficiaries for a while.
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Rob Seatson
I think you have to like Apple here a lot. I mean this is, you're getting the best of both worlds and this is a breakout. I think it go to 370.
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Scott Wapner
You know Josh Brown members talk at 400. Right.
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Rob Seatson
You got the range that we've had recently kind of given that 100% extension but you get the consumer dominating front end. I think that's terrific. The best of both worlds because you're also getting the the anti capex trade here and that's why the multip going higher. So I really like what we're seeing here with Apple. It's something that we've leaned into over the last two months. June 12th we added more Apple in our concentrated portfolio. It's our number three name in our main portfolio. We're going to let this thing ride and I think there's we can see in our base, our base house case in the back half of the year is max 7 is going to outperform. I talked about it on the show last week as well. And you know Nvidia is a name too that I like a lot here. It's been kind of consolidating. I mean the free cash flow there is becoming amazing relative to the other mag Sevens. And if it wasn't a $5 trillion company might even think that they take that thing private at some point. But this size, that's obviously not on the table. The one thing I would look to mention what Steve touched on with the memory names is Micron in some of those names. Yeah, maybe they got ahead of their skis. Micron is our largest position here and it's just because we've been cost basis is like $70. But at this point I think that you're seeing it come in a little bit. You're seeing some leverage unwind out of South Korea. You're seeing some of this trade just maybe Kind of get tossed aside and that's fine heading into because a lot of them report the back half of earnings season and I'd like to see them not at the highs going into that because we saw what happened just over the last few weeks. They had these terrific reports and the stocks sell off. So I think. Yeah, Scott, to your point, I think that is right. You're seeing a lot of rotation into the Mag 7 that's coming out of some of these high flyer AI infrastructure names.
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Scott Wapner
How about this? Remember leading into the Space X ipo part of the narrative was while the mega caps were weak pretty substantially into that money's coming out of mega caps and it's readying itself to go into Space X which it did on the open. Well, look at SpaceX because now it has traded below its IPO price for the very first time. Is there a coincidence that money is all of a sudden now going back into the mega caps? It's a role reversal in some respects, don't you think?
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Joe Terranova
Well, it's first of all as it relates to SpaceX, I think a lot of the appreciation in SpaceX was built upon scarcity in the equity market. The debt market really has been the adult in the room for Space X. And the debt offering in the secondary market was not strong. You saw spreads wide and concurrent with that you've seen the equity in Space X collapse. I don't have a position so I'm not going to speak to the fundamental future of where this price goes. But I think it's right to point out what is happening right now as it relates to momentum funds. First of all, you have the seasonality of July. So we're beginning to see see liquidity weaken. We're seeing volumes begin to decline somewhat in while that's going on, you're building momentum in an area of the market that's proven itself over the last several years. The MAG7 from a valuation perspective, for those that care, they were ridiculously cheap. Except for Apple. You saw videos valuation a level it hasn't been in the last seven years. And there's the opportunity to rotate. As you saw the memory names like Micron go parabolic. If you could show a chart of Micron, Micron's out close to 10% today. I think the SK Hynix okay, US listing really exemplified that. Maybe there's just too much supply as it relates to the memory name for the marketplace to digest. You have SK Hynix down 12%. So you broke the fever in memory. It doesn't mean it Eliminates the fundamentals from memory. But it means that capital is going to go to other places. And while this is all occurring, you're in the middle of earnings season and guess what? You have these money center banks reporting historic record quarters.
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Scott Wapner
Let's go back to Space X. What do you, what do you make of that move? Now below for the first time, the 135ipo price. Remember, this was a set price. There's no range. It was a set price of 135, 20% on the opening day, what was deemed to be a sweet spot. Right. And here we go. It's been on almost steady decline since, give or take, but here we find ourselves. What do you make of that?
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Bill Baruch
So you had asked me that day, the day of the offering, because we were investors privately at various levels across time. We even had some investors participate in the lbo. Our advice to them and our advice that day was there's likely to be an opportunity to be a better buyer. We didn't think it would come this quickly. We thought it would come a little more after their inclusion into the indices and as lockups started to release because we understand the characteristics of those lockups coming off or how some of the special purpose vehicles that were set up were going to be paid. Their economics now, what supported that and we weren't sure how far it would drop below the price is A, it's an unbelievable business. Right. B, there's an evangelistic following of this, this entrepreneur.
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Scott Wapner
Let me stop you real quick. When you said you didn't think it would be this quickly that it would drop like this, why do you think it is?
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Bill Baruch
I don't know if it's a rotation. I think it's caught up in the moment. Let me take a step back on that. There is a lot of hot money in this market. You have levered ETFs on micron, you have levered ETFs on SK Hynix. You have tons of people pay playing fast money moves and they're in and they're out quickly. So when something you know isn't working, you're going to see it re rate much more quickly in those spaces where you've seen parabolic moves. And this was, this was parabolic. So I think that might have something to do with it. I don't know that I lend too much to the supply of this, these issues because we're not, there's not an extraordinary amount of supply in the market. You realize that companies are being taken out. There's much less public Float broadly than there was years ago.
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Steve Weiss
So it's a different sector.
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Scott Wapner
So are we gaming out like lock up stuff which is trying to get ahead at the market, trying to get ahead of all that.
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Steve Weiss
I think it's kind of simple, systematic of the market and short termism. So the weakest holders of any company, of any stock are the new holders because they have no history with it. So this is all new money that came into this and a lot of money as we saw came in on the IPO day. So they don't want to be underwater. A lot of those that came in that day sold as it moved up we start to see it over 200. I traded, lost a little money but not a lot and I just think it's the unwind of the momentum names that we're continuing to see. So I don't know if anything to space x of them. SpaceX is a faith stock. Yes, tremendous business but you can't value it. There's no valuation you could put on this and yet we know they're spending a lot of money and we don't know when they'll be profitable in terms
- [15:19]
Joe Terranova
of the overall market.
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Steve Weiss
I think you see short term, short termism as well because we have real issues with Iran that will take a look at the numbers today. PPI came down nicely. All the inputs that drove it lower were oil. Those have already reversed.
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Rob Seatson
Well oil back to where it was the middle of June. So it's not like it's gasoline is back above.
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Steve Weiss
You're missing the point. It was down today because oil is lower.
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Mike Santoli
Right?
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Scott Wapner
Oil was lower.
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Steve Weiss
That influenced the number. What I'm saying is momentum to oil is higher and with everything that's going on in Iran it's going to drive it higher as well and that will reverse the decline inflation we saw today and tomorrow. It's not where oil was a month ago or even three months ago.
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Bill Baruch
Steve. All the core, all the core PPI was softer too. So I don't, I don't buy that narrative. I don't buy that narrative. If you look at all the, you just look at the core number X energy.
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Joe Terranova
What leads into cpi?
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Steve Weiss
What's the leading indicator of cpi?
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Bill Baruch
One of them is the PPI we're talking about today which is the market.
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Scott Wapner
I want to talk about ASML rather than go deeper into that. What are we to make of, of Rob, you own the stock, this price action today. So it was a nice gainer, wasn't it? There's the intraday which sort of gives you, you know, Some green on the screen. They hiked their forecast. They have strong chip demand. Stock goes down by 2%. Is that just because as Wolf talks about today, semis in general have gone from parabolic to chaotic. And this is a, an evidence point of the chaos in this group.
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Bill Baruch
I mean the key takeaway to me is it seems like the markets want to, want to sell this group because they increased full year guidance, raised it by 15% and now they're expecting 30% year on year revenue growth for years to come. The company has incredible pricing power. There's virtually no way that you can make a chip without this advanced etching that they do, the photography. So they are the ultimate bottleneck. Maybe it's the stocks a little pricey relative to history. Maybe it's that it's up 70% year to date and some people are taking money off the table. But, but this is a good earnings report that we saw today.
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Joe Terranova
Nothing wrong with the earnings report for asml. Nothing was wrong with the earnings report for Micron. What is wrong?
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Scott Wapner
Nothing was wrong with Broadcom. Remember that?
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Steve Weiss
Correct.
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Scott Wapner
Arguably the first sort of rumble in the space, right?
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Steve Weiss
Yes.
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Joe Terranova
And you know what was wrong? The expectations. And that's basically what Price is reacting to. Very lofty expectations across the board for semis and memory. And despite really good earnings, there's just not enough incremental room to advance the stock higher based on those high expectations.
- [18:14]
Scott Wapner
So we hit IBM. You've had a chance to sleep on this now and sort of digest what happened to that stock yesterday. The worst day ever. It's worth another check in as it gets downgraded at Oppenheimer today to perform. That's after the pre announcement. If you were looking for a rebound today, you're not getting it. Is there a statement that? Down 25% or whatever it was? I think the narrative's changed a bit, at least near term.
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Bill Baruch
Well, there's no question they're seeing a reset because you know, it's clear that their ability to leverage AI versus being disrupted by it is, is being challenged. I still think it has to do with redirection of corporate spending into other areas, which is why you've seen the, the, the, the cybersecurity companies do so well. And so who knows, maybe this quarter you can see, see more of a pickup. I, you know, the spillover into things like now has not been too traumatic. So I don't think this is a whole sell every part of the software ecosystem. I think what it's done is created haves and have Nots and IBM admittedly said they stubbed their toe here and so I think they can get back on track. Remember, we're still up 60% even after this even.
- [19:38]
Scott Wapner
No, I know, but you don't want to come back a month from now and say hey, we're still up 40%. Yeah, hey, we're still up 30%. Therein lies issues like this, you know what I'm saying? Fair, fair.
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Bill Baruch
And we continue to be, we continue to be patient with it because all the metrics meet except the one it's up the, the disruption that we had this quarter where they met.
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Rob Seatson
I think we really are in this environment now. If there is a winner, it does start to come at the expense of others. And we're seeing that with the cyber yesterday and IBM and that was the implication and Sarah Eisenh hit on that with Arvind Krishna. The other thing too is it's holding back this a lot of story is the computer, I mean we are constrained on compute and the hyperscalers are trying to spend on to raise compute. But there needs to be a clear path to more compute, not headwinds. And until that happens, we could be going through this up and down phase where there's good days and then the next day is a bad day. That's kind of how I see it right now.
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Steve Weiss
We'll see how it turns out in earnings. So what's really happening as they point out.
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Scott Wapner
Yeah, right. There's a, there's a sort of dearth of information.
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Steve Weiss
Exactly. We just don't know like how spending patterns change. So our companies allocated their finite technology budgets. Where are they transitioning those budgets? I think it's pretty clear they've been going away from software to what's going to drive their performance.
- [20:51]
Scott Wapner
Can we go? So I just want to mention you guys mentioned cyber crowdstrike, new record high today. I mean that's been obviously in the spotlight even more so perhaps after IBM. But to what we were going to begin with today until we saw these mega caps starting to ramp into the program is the near record buying in financials. Okay. It's the best performing group over the past month. So let's take a look at those. That's according to B of A's flow show you have had the biggest buying in that group according to that flow since 2020. It was a record high. Goldman was ripping yesterday on its earnings. That was a blowout report and a blowout statement. Stock move given a smidge back today, but it's insignificant really considering what the Stock has done jpm, bank of America record highs. Morgan Stanley the latest to knock it out of the park with their own earnings report. The shares a little underwhelming. It was red, turned green. Look at Ms. If you could, for me because I'm not sure where it is now. It gives you an idea, a little bit of the volatility in here. So it's negative again. What do you think of this money movement into the financials?
- [21:59]
Joe Terranova
I think it's going to continue. I focus on position, I focus on sentiment. Sentiment was depressed coming into the second quarter for financials. There was disappointment, there was high expectations at the beginning of the year and they didn't meet the expectations. If you remember, we were sitting here in April talking about really strong quarters across the board for MoneyCenter banks. The reaction was negative to that. So you have a tremendous opportunity to rebuild that sentiment, to rebuild positioning. That's exactly what's going on. It's one of the reasons why I tried to get in front when we were out at the U.S. open of buying J.P. morgan. On the anticipation that this in fact could happen, I think it continues. I think it spreads throughout the financial sector into the regional banks. It's not just isolated to money central
- [22:42]
Scott Wapner
banks, just a group now to own.
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Steve Weiss
I think selectively.
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Scott Wapner
Yeah, you still have to be selective of the. Of the big banks.
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Steve Weiss
Yeah, I prefer. I mean, I prefer gold, obviously. That's what I own. I think they're the most leveraged, the underwriting to the M and A cycle. And I think the market's basically okay here and it being okay, you see a lot more that look, you've got open air, you got anthropic. At some point they're not going to be able to raise the capital they've been raising nonstop. So they need the IPO market now. They may think have second thoughts about it after looking at Space X. I don't think they will. So that's going to continue. That's going to drive that. It's going to drive more M and A when they have a public company stock. So to me, Goldman and humility that they have. I mean. Yeah, well, I'm not talking about email change, but the humility they have where they're saying that the battle's ahead of us still and that it's one day at a time. I think it's impressive given the quarter they put on.
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Rob Seatson
I would add that rate volatility is a tailwind. I think the deepening yield curve under war is what we're going to See, that's also going to be a tailwind. But in the near term, I would add that when these banks come out with terrific earnings reports, we see them higher for a day or two. A week later, they are typically lower. So if you were looking to be buying banks right here, be patient. I think you'll find some better spots.
- [24:00]
Scott Wapner
No one's even mentioned equities trading in Morgan Stanley's case, up 69%. I don't remember off the top of my head what it was for the others that have already reported, but it was 80%. As much of a wow factor in many of the other names too. You own Morgan Stanley?
- [24:16]
Bill Baruch
Yeah, we added it on the show not long ago because we wanted to go overweight financials coming into this. We, we actually trimmed a little WFC kind of going into it because of the more capital markets exposure you have with Morgan Stanley. In addition their, their banking franchise and that wealth management franchise. 14% year on year growth. And I think what was the number on net new, net new money? It was, it was blindingly impressive. 150% year on year. Net new money and that strong environment
- [24:51]
Joe Terranova
is good for the asset managers. Take a look at BlackRock. If we could show that chart date nicely. BlackRock's only up 2% year to date. So the move that I was talking about anticipating for J.P. morgan, you're the same moment where you're beginning to the initial stages to build momentum. I like blackrock. I don't know if anyone's willing to step out and take a chance on the private equity names. I said last week I think Blackstone would be the one name that's up about 10% here so far in the month of July. I think Blackstone's probably seen the worst target moves today.
- [25:22]
Scott Wapner
Just real quick, Goldman 1325. That's the high on my list of many calls to today on that name in terms of price. As Wells goes there, that's Mike Mayo, which is noteworthy in and of itself. JP Morgan from Mayo also goes to 375. The highest I have in front of me is barclays going to 420. So there is some renewed bullishness. There's no doubt about that out of the financial space. Coming up, we have committee moves. Steve Weiss selling one stock reports earnings this week. So he's doing that ahead of that. Tell you what it is. And later, big news out of our parent company. Verse into the today, a new sports media rights deal to tell you about. USA Sports president Matt Hong joins us with those details. Coming Up.
- [26:10]
Commercial Break Announcer
Thursday, July 16 CNBC Sport and Boardroom
- [26:14]
Joe Terranova
join Fanatics Fest for Game Plan. Groundbreaking ideas shaping the future of sports and entertainment. Request your invite at cnbc events.com/game plan.
- [26:41]
Scott Wapner
Welcome back. A new committee move to tell you about. You've been negative on this name. I think for a while. It's Netflix.
- [26:47]
Steve Weiss
Yeah.
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Scott Wapner
Which now you're finally just out of, right?
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Steve Weiss
I'm just out of. I sold a lot of it down as I've mentioned on the show. And here are my concerns that when streaming has gotten more competitive, not just from Paramount Time Warner, but you see product being offered everywhere and they seem to be trying to find a lever for growth. First of all time the Warner Brothers acquisition. Get then the rumors of Lionsgate and now reselling other streaming subscriptions on their site is the talk. So you only do that when. When you see growth slowing down. It's not expensive, but the growth is not going to be there. So I do have concerns going to the quarter. I didn't sell it for this quarter because I think the stock's pretty depressed and it. And if you look at at the odds, the odds are more that it'll trade up because after they miss a quarter, usually bounce back the next. But it was more. Look, it's small enough position now. Not been a great position for me lately versus when I owned it last year and got out and came back. And I'm just, you know, hoarding capital. Cash.
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OpportunityAtWork Ad Narrator
Right.
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Scott Wapner
Give me a couple of years. Two, three years on this, guys, please. Sentiment, it's incredible.
- [27:52]
Steve Weiss
Yeah.
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Scott Wapner
How sentiment has turned. You own it.
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Bill Baruch
We do. We bought it recently on the latest dip. You've been paid to buy these dips in this name. As Steve said, it is cheap. There's valid concerns around saturation, competition, stickiness of their content, slowing subscriber growth. But let's not forget this company is expected to generate 15 billion in free cash flow this year. Okay. They have the lowest content spend per subscriber, which means they can dive into sports. They have the optionality to do that and drive more growth. They have been incredible at engineering that. And I'm willing to be patient to wait for that.
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Scott Wapner
This is a number. Give me that chart back, guys, please. The three year. Because this is to your example. I forgot which one we were talking about before. But the lower, high risk, right. Trending lower, you get a little bit of a move up and then you start moving lower again.
- [28:53]
Bill Baruch
300 million users still growing, driving more users, driving more content. I think they're going to be fine.
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Steve Weiss
If you take a look at the bounce after last quarter and when they did not get Warner stock moved up, I don't know why it didn't hold there. Frankly. It should have.
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Scott Wapner
Well, that's the, the biggest I guess mystery in some respects given what the narrative was when the bidding war was happening that there was I think a better view from at least those in our orbit on this program that if they don't get the asset, it's better for the stock.
- [29:27]
Steve Weiss
Exactly.
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Scott Wapner
And it did jump and then it was wiped.
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Steve Weiss
Yeah. And one of the reasons why I bought it was because you've got a debt constrained competitor in Paramount. Right, we're seeing that. So their leverage is significant, too significant for this industry. And by the way, content can they buy?
- [29:48]
Scott Wapner
Who was it yesterday? I can't remember either who had the call that know asking the question whether Disney should get out of the streaming business altogether. It used to be, you know, Disney can't compete if maybe nobody can compete with what Netflix has built. Yeah, they have the pricing power in the way that others don't.
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Rob Seatson
Right.
- [30:09]
Scott Wapner
They, they raise their prices. It has had no impact on the stock at that moment. When the new, when the news hits. There's, there's no negative move in Netflix when they, when they raise prices. In fact, the stock generally goes up because we say on this program, in other words. Well, they're one of the few who has pricing power.
- [30:24]
Steve Weiss
Yeah, I mean my market on the earnings report is 6870 on downside, 85 on the upside. Slightly more on the upside but I just still got out.
- [30:36]
Joe Terranova
Netflix has lost market share over the last several years. The likes of Amazon to likes of Apple TV to likes of Paramount. That's just statistically factual.
- [30:46]
Bill Baruch
People who are all, not all, but who many as was just pointed out, are going to struggle with the investments in new content that they can make.
- [30:55]
Steve Weiss
Okay.
- [30:56]
Joe Terranova
It's a lot of, a lot of
- [30:57]
Steve Weiss
spending, a lot of sports.
- [30:59]
Bill Baruch
I mean they have the free cash flow to do it.
- [31:02]
EY Parthenon Representative
All right.
- [31:02]
Scott Wapner
Well speaking of buying sports rights, big money on the pitch. Our parent company Versant inking a new style sports media rights deal. USA Sports president Matt Hong is standing by with those details. He joins us next.
- [31:19]
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Joe Terranova
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- [32:24]
Mackenzie Togales
We're back on Halftime Report. I'm Mackenzie Togales with a CNBC news update. President Trump has overturned a new directive suspending most ice vehicle stops, according to a White House official who confirmed the move to Ms. Now. The directive to pause the stops came after two deadly ice shootings within a week. But the president pushed back Wednesday on Truth Social, writing that ice cannot give up what he called one of its most important crime fighting tools. Acting Attorney General Todd Blanche is facing tough questions today at his Senate confirmation here hearing. Blanche, President Trump's former personal attorney, says he is restoring trust in the Justice Department, but senators are pressing him on whether he has politicized the doj, including investigations into Trump's perceived enemies. Blanche likely needs every Republican on the committee to advance. And the House voted to make daylight savings time permanent and end the twice a year clock change for most of the country. Supporters, including the president, say it would give Americans more ease evening daylight and reduce disruption. But its critics warn that it could mean darker, more dangerous winter mornings. The bill still needs Senate approval. Scott, Back to you.
- [33:28]
Scott Wapner
Mack, thank you. It's Mackenzie Segalus, the parent company of CNBC reaching a deal to carry the US Media rights to Germany's premier football league, the Bundesliga version, to air more than 300 live games in a deal said to be worth $100 million over five years. Matt Hong is the the president of USA Sports, the sports division of Versant joins us now live. It's good to see you. Welcome to our program.
- [33:50]
Matt Hong
Good to see you. Scott. Hello from Royal Brookdale.
- [33:52]
Scott Wapner
Yeah, it's nice to have you today. Can you first address for us why this deal makes sense for the company?
- [33:59]
Matt Hong
Yeah, so I think it's, it's no secret that one of the assets that we, we utilize across our portfolio, Versant is live sports. So live sports and live news, 62% of our programing on our TV networks is, falls into one of those two categories. So this deal with Bundesliga is a great addition to our portfolio of live sports that includes nascar, the PGA Tour, Premier League, WWE and others. And so really it's, it's more live sports, which is good for our company. And then strategically we're spreading out the Bundesliga matches across both USA Network and our newly Relaunched Fandango Avon service. So the highly accessible, free to consumers Fandango, which, which I think our company is announcing the new strategy for or you know, the new offering as we speak.
- [34:54]
Scott Wapner
Scott, that then that's a really interesting part of this too. And just to underscore what you just said, you know, don't need a paid Fandango account to stream these games.
- [35:08]
Matt Hong
That's 100% correct. So Fandango, you know, most people currently know Fandango is what I would describe as the predominant way to buy movie tickets. But, but Fandango has, has a history and a legacy in streaming content as well. And so the newly relaunched Fandango is an AVOD service, so supposed to supported by advertising, highly ubiquitous, highly accessible. You don't need a credit card, you don't even need a username and password. So you'll be able to watch multiple hundreds of Bundesliga matches on Fandango. And I can't imagine in any sort of easier way.
- [35:44]
Scott Wapner
You've talked about the portfolio. It is certainly rich with, with sports properties. Now you've also talked, as I've read about all of this being part of what you, you've described as an Omni platform strategy. Can you elaborate on that?
- [35:58]
Matt Hong
That's right. So we've talked about the strength of live sports and so live sports transcends whether that, whether it furthers our core business, which is pay television, or whether it furthers now a newly relaunched platform like Fandango. So whether it's across our core business or whether it's the new direct to consumer businesses, live sports transcends and is an asset that will deploy across various of our platforms. Hence the, hence the Omni platform strategy.
- [36:26]
Scott Wapner
Stocks reacting positively to the news, the streets talking about it as well. Goldman Sachs today. Pretty complimentary, Matt on this deal. They say the deal quotes should support future USA carriage agreements given continued investment in the network as well as create synergies in existing soccer rights. Wondering if you can speak a little bit to that because soccer is already obviously near and dear to what USA does.
- [36:52]
Rob Seatson
Yeah.
- [36:52]
Matt Hong
So going back to our heritage as part of nbcu. But, but newly. So as part of Versant USA Sports, we have a multi year super strategic relationship with Premier League. So you know that that's been a mutually beneficial relationship between us and the Premier League. We think Bundesliga is complementary to that. So it's maybe premature to call us the home of soccer in the United States or the home of European football in the United States. But, but this is a good start and like you Noted. You know, Premier League has been an amazing partner for us and an amazing asset for us on USA Network will continue to be. But there'll be some great synergies between Premier League programing and Bundesliga programming starting. Starting in a few short. In a few short weeks. So August 21st and 22nd will kick off both the Premier League season on USA, but it will also have the Bundesliga super cup match on. On Saturday the 22nd. So even a few weeks from now, you can begin to see how from a programming standpoint, these two preeminent soccer leagues, European soccer leagues, will complement one another.
- [37:56]
Scott Wapner
I mean, the timing of all this isn't lost really on anybody. I don't think you're going to be able to capitalize in many respects on the World cup momentum. And because we're talking about the Bundesliga and a star like Harry Kane, who has probably become more of a household name in this country than he has ever been before, of course, a star for England, he will be part of all of that. The league itself also notes that in the US the number of Bundesliga fans is up 43% over the past five years. So you're going to get a bit of a running start on all of this.
- [38:37]
Matt Hong
Yeah. So obviously, you know, World cup has been a huge hit, not only globally, but, but also here in the United States. It's a European soccer and soccer generally is up and to the right in the United States. So whether it's luck or great timing, we'll take it. It's a great jumping off point. World cup will be a great jumping off point for our existing Premier League package, but the timing is also great for this new Bundesliga package.
- [39:04]
Scott Wapner
Before I let you go, you know, the other part of the Goldman note today that I thought was interesting and very timely is they make the case that smaller sports rights deals are being crowded out by the bigger ones. There's so much emphasis these days on, you know, the NFL wanting to open its deal early, the NBA rights deal, and what the Big Four has been able to do. And because of that, it's created an opportunity like the one that you and Versant have now seized upon.
- [39:37]
Matt Hong
Yeah, I think it's important for us as Versant to, to know who we are and who we are. We've said publicly that as amazing as the NFL is and as. As amazing as the NBA is in terms of properties, those given our balance sheet are properties that it's tough for us to get ROI from, I think most everything else is fair game. And I think, you know, we will continue to look for and be on the front foot and add properties that can drive our core business. But then, you know, then as we talked about, that can also help us as we launch new businesses across across new platforms.
- [40:12]
Scott Wapner
Appreciate you coming on. Congrats on this deal. Enjoy the open championship out at Royal Birkdale.
- [40:16]
Matt Hong
Matt Hong, good to see you, Scott. Thanks.
- [40:18]
Kate Rooney
All right.
- [40:19]
Scott Wapner
We'll see you soon. Want to call your attention while we're at it to a big event happening tomorrow right here in New York City. It's the CNBC and Boardroom Game Plan Summit. It's at Fanatics Fest. And we're bringing together athletes, investors and innovators to discuss the future of the sports industry. You can scan the QR code or visit cnbc events.com gameplan for more details. Maybe I'll see you there. Do have a news alert on Anthropic. Kate Rooney has it for us. What do we learn here, Kate?
- [40:43]
Kate Rooney
Hey, Scott. We are learning that Anthropic is now in the process of starting to line up meetings with investors ahead of its ipo. This from what we're hearing is coming in the next couple of weeks here. It's according to one person familiar with the company's plans are Houston with some of this reporting. Bloomberg was first out with this news. But it does signal a step towards what could be $1 trillion IPO when it comes to to Anthropic. Also reporting here from Bloomberg that the listing could come as soon as October. It does signal that Anthropic is likely to get a rival open air here. If you remember, both of these labs have filed confidentially with the sec. It was about six weeks ago that we did get that filing. So it could be in the next few weeks, weeks here that we get the flipping of the S1 where we get more of the financials. But again, this is a pivotal step in moving towards an ipo. And it would mark the first of these pure play labs when we do see the numbers for Anthropic. But a little bit of IP IPO news there for you, Scott.
- [41:41]
Scott Wapner
All right. Well, an exciting news at that. Thanks, Kate Rooney. Coming up next, Mike Santoli, his midday word after this break. Back on the halftime report, senior markets commentator overtime co anchor Mike Santoli. There he is for his midday word. Mega caps go up, chips go down. I mean, I guess that's where we're at, right?
- [42:02]
Mike Santoli
And how many times in the last couple of weeks got have we talked about? You never quite know when the momentum trade is flushed out really, except in Retrospect and today momentum down like 4% on an unlevered basis. So it does show you that the bar was incredibly high. You know we've had this series of pretty poor market reactions to pretty phenomenal AI hardware type reaction results going back to Micron obviously TSM and then ASML today. And then I think the IBM warning is kind of filtering through. Perhaps a little bit of caution in that trade. The rest of the market, as has often been the case, is managing to hang in there. The majority of stocks are up, banks are still firm, banks breaking out are a positive thing. The S&P 500 was within 1% of its all time high coming into today. That's all net positive but it does show you that you just can't overcome necessarily this kind of dedicated selling in the kind of lead dog of this phase of the bull market. So you know, we'll see where it settles out. Yields are having a pretty friendly day today in terms of backing off a little bit on the cool CPI news. That means broadening can work in a vacuum when the macro cooperates. We'll see if that's the way it continues.
- [43:13]
Scott Wapner
And I'll see you at three o' clock Michael. Thank you Mike Santoli. We'll do the setup next. Let's do the setup. We do have United Airlines after the bell. Joe T owns United. What do you think?
- [43:29]
Joe Terranova
Well I mentioned earlier in the show expectations and I think they benefit here from Delta reporting last week and the expectations being lower but for A$76.88 rather EPS 17.6 billion as it relates to to revenue. The capacity outlook is going to be important and also the commentary on the recent spike. Keep in mind you have jet fuel and oil prices up double digits this month and you've seen United decline double digits accordingly.
- [43:55]
Scott Wapner
Did you say expectations are lower after Delta?
- [43:58]
Joe Terranova
I think they are.
- [43:59]
Scott Wapner
Why?
- [43:59]
Joe Terranova
So I think the expectations are lower because of what we've seen with crude oil. You've already seen the price reaction to Delta not really favorable to what is really strong demand, higher fares and capacity in the favor of the airlines. So prices corrected somewhat.
- [44:17]
Scott Wapner
Okay, we'll do final trades right after this break down. Closing bell, three o'.
- [44:24]
Rob Seatson
Clock.
- [44:24]
Scott Wapner
Dan Greenhouse, Brian Belsky, Brian Levitt, Mike Mayo, Dan Ives, Jonathan Krinski, Alex Lazari. He's heading up the New York, New Jersey World cup effort as we reach the the culmination of that amazing tournament. I hope you'll join me then. Final trades. Who's going to go first today?
- [44:41]
Rob Seatson
Bill Baruch, Lilly. It's back testing its breakout on the downslope of a capex cycle. Real exciting here.
- [44:49]
Scott Wapner
Alrighty. Thank you.
- [44:50]
Bill Baruch
Robert Bistra, bst It's done nothing for the year but woke up this past month. I think energy can be a trade in the center second half.
- [44:59]
Scott Wapner
All right, Mega Caps, as we said, are having a good day across the board today. So who's Meta?
- [45:04]
Steve Weiss
Meta would be me.
- [45:05]
Scott Wapner
Scott okay, Weiss so it may be
- [45:07]
Steve Weiss
slightly ahead of itself, but I still like it. I still think it's reasonably valued.
- [45:11]
Joe Terranova
Joey T. Rowe Price all right, I'll
- [45:13]
Scott Wapner
see you on the 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.
- [45:27]
EY Parthenon Representative
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 halftimereportdisclaimer Real talent is
- [46:02]
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