The Momentum Rebound: How to Trade it 7/6/26

Summary

CNBC Halftime Report Podcast Summary

Episode: The Momentum Rebound: How to Trade it

Date: July 6, 2026
Host: Scott Wapner
Panelists: Joe Terranova, Jim Lebenthal, Steve Weiss, Rob Sechen
Main Theme:
A deep dive into the resurgence of the momentum trade in equity markets, especially within tech and semiconductors, following a sharp correction. The episode breaks down whether investors should "buy the bounce" in momentum stocks, analyzes the underlying drivers, discusses sector rotations, and provides actionable perspectives on key names—including commentary on SpaceX’s entry into the NASDAQ 100 and shifting tides in sports betting markets.

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1. Episode Overview

• Central Focus: Examination of the momentum rebound in markets, recent volatility in semiconductors, implications for systematic and quant funds, sector rotations, and tactical recommendations on whether to engage with this bounce or wait for further confirmation.
• Special Topics: SpaceX joins the NASDAQ 100; the interplay between sports betting and trading volumes; and final trade ideas from the committee.

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2. Key Discussion Points & Insights

The Market’s Momentum Rebound

[01:45 - 09:47]

• Backdrop: After a sharp multi-day sell-off in momentum names (esp. chips/semis), Friday saw a robust rebound.

• Joe Terranova ("JT"):

  • “What you’re seeing today is nothing more than a rebound. It has to prove itself out, specifically as it relates to semiconductors and memory names. … It validated the resiliency of the market.” ([02:01])
  • Raises concern that systematic and quant funds have been deleveraging, which could mean more volatility ahead.
  • “We're going to continue to see very wild swings in the NASDAQ, in names like Marvell, Corning, and Micron.” ([02:43])

• Scott Wapner ("SW"):

  • Cites a Goldman Sachs note: Momentum is down 24% from its peak, compared to a typical drawdown of 12%.
  • "Buying the dip in momentum has historically paid off… Summer fatigue and low liquidity likely exaggerated the move." ([03:13])

• Rob Sechen:

  • “We’re buying into weakness in the group and historically that’s been rewarded.” ([03:52])
  • Points out semi corrections often produce strong annualized returns (>30% over last five years).

• Steve Weiss:

  • Skeptical that the marginal buyer is ready to return. Looks to buy “severely dislocated” stocks versus pure momentum.
  • “I struggle with these moves. Who’s the marginal buyer? Have they corrected enough?” ([05:29])
  • Prefers adding to selectively undervalued names (e.g., Broadcom, Meta).

Rotation, Regime Change, and Sector Flows

[04:36 - 10:47]

• Concerns debated:

  • Is this a mere reset (pullback and consolidation), or the beginning of a regime change (a more durable rotation out of tech/momentum)?
  • Bank of America frames the recent chip pullback as a "reset, not a reversal."
  • Other sectors—e.g., health care, which was up 5.3% last week—show evidence of bottom-fishing and diversification.

• Jim Lebenthal:

  • Hasn’t added to Micron yet; expects continued broadening of the rally but sees opportunity to scale into positions over time.
  • "I don't have to do it today." ([08:19])

• Panel Consensus:

  • The next 5–10 days (earnings season) will be critical for clarifying leadership in semis and momentum.
  • Parabolic moves in semis don’t necessarily mean a cycle top; could be setting up for consolidation.
  • CapEx spend among hyperscalers is a key catalyst for these names; until that slows, “buy-the-dip” remains a viable mentality. ([10:17])
  • “I’d much rather be early calling the peak than late in calling it.” – Steve Weiss ([12:01])

Valuations and The Case for Selectivity

[13:56 - 18:20]

• Weiss: Sold out of Micron to avoid being the "last one out." Acknowledges likely potential for further upside, but risk-reward is less favorable after such large gains.

• Discussion on Semi Equipment Names (AMAT, Lam, KLA):

  • “Every analyst that follows these names… you’re seeing raises quarter-on-quarter in earnings expectations. The momentum is decelerating slightly but not materially breaking." – Rob Sechen ([15:26])
  • Trimmed KLA due to frothy valuation, but kept a core position.

• Broad Themes:

  • “When everyone’s on one side of the boat, it can capsize.” ([13:56])
  • Rising supply in memory (Micron/Apple/Chinese suppliers) could blunt the bullish case.
  • Ed Yardeni remains resolutely bullish, raising S&P target to 8,250, driven by "Fabulous Earnings Momentum" (FOMO), not just fear of missing out. ([18:49 - 20:06])

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3. Notable Quotes & Memorable Moments

• Joe Terranova:

  • “If your timeframe is greater than 3 months, you add to Micron.” ([09:00])

• Steve Weiss:

  • “I'd much rather be early calling the peak than late in calling it.” ([12:01])
  • “When everybody’s on one side of the boat, it can capsize and you can come to a decline sooner than reaching the peak.” ([13:56])

• Rob Sechen:

  • “Every dip's been bought. What’s the catalyzer? Spend.” ([10:17])
  • “We have risk sides, seasonality, and midterms ahead. You have to be in an athletic stance and be a buyer of dips in what you want to own.” ([22:11])

• Scott Wapner:

  • “Calling the end of the cycle early is like calling the game in the third inning.” ([11:43])

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4. Important Timestamps & Segments

| Segment | Timestamp | |-------------------------------------------------------------------------------|----------------| | Market and momentum scene-setting / semis rebound | 01:45 - 05:30 | | Investor debate: Reset versus regime change | 06:30 - 11:00 | | Fund flows, deleveraging, and volatility risks | 02:30 - 03:15 | | Sector rotation and broadening rally (Health Care, Financials, Russell) | 07:00 - 10:00 | | Parabolic moves in momentum names – discussion of risk/reward | 11:57 - 13:56 | | Semi equipment stocks: valuation discussion, strategy | 15:06 - 18:20 | | S&P 8250 – Yardeni’s bullish case, sector earnings contribution | 18:49 - 22:06 | | Software sector (Palantir, CrowdStrike, ServiceNow debate) | 22:53 - 25:32 | | Oracle, Zoom, Datadog, tactical software trades | 25:13 - 27:32 | | SpaceX joins NASDAQ 100 – mechanics and implications | 30:01 - 35:54 | | Michael Santoli: macro factors and structural themes in market action | 36:38 - 37:54 | | Final trades and wrap-up | 45:11 - 45:57 |

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5. SpaceX Joins the NASDAQ 100

[30:01 - 35:54]

• Leslie Picker provides a breakdown of the mechanics:

  • $800bn+ track the NASDAQ 100; index funds must now buy SpaceX at a <1% initial weighting.
  • Changes in NASDAQ rules allow new mega-caps into the index just 15 trading days post-IPO with minimal float.
  • Forced index-buying could be blunted by sellers eager to monetize early, limited float keeps impact moderate.
  • "Real price discovery comes as lock-ups come off, probably next month." ([32:06])

• Panel Takeaways:

  • Some panelists highlight “evangelistic” support due to Musk’s track record, but stress that fundamental investors have little basis for assigning valuation at this stage.
  • Potential benchmark risk for underweights, as happened previously with Tesla.

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6. Trading & Earnings Guidance

• Delta Airlines (earnings preview): Stock has run up ahead of Friday's earnings; committee urges patience ([39:35]).
• Netflix: Recent target cuts, lost its “momentum story” status for now, but might regain footing ([39:54]).
• Final trades: Meta, Alphabet, Apollo, and Apple get bullish nods for continued fundamental growth ([45:27]).

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7. Sports Betting Markets Surging (World Cup Angle)

[41:47 - 44:32]

• Contessa Brewer:
  • Reversal of a red card for a U.S. player swings betting odds and drives record volume on prediction and sportsbook platforms.
  • Bet volume for the World Cup finals market surpasses $1 billion, with notable interest from both retail and institutional players.

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8. Tone and Takeaways

• The vibe among panelists is simultaneously constructive and cautious:
  • Valuations and parabolic moves warrant trimming or selective adds, not blanket buying.
  • Broadening of the rally is welcomed, but proof is required in earnings—particularly in non-tech sectors.
  • Big, structural moves (like SpaceX’s index inclusion) are exciting, but valuation remains a sticking point for fundamental investors.

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9. Final Memorable Quote

Steve Weiss:
"I'd much rather be early calling the peak than late in calling it... When everyone's on one side of the boat, it can capsize." ([12:01], [13:56])

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Summary for Listeners:
This episode delivers a rigorous debate on the sustainability of the recent bounce in momentum names, with panelists urging tactical selectivity based on valuation and future catalysts (especially earnings and CapEx spend). SpaceX's rapid inclusion into the NASDAQ 100 is dissected as both a technical and narrative event. In closing, market participants are advised to stay “in an athletic stance”—ready to buy dips in their favorite names but always aware of risks when consensus becomes too extreme.

For deep-dive timestamps, see section 4.

Transcript

[A]

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[B]

I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. The mic is hot. That's what we learned over the last 15 minutes or so. It's nice to be with all of you front and center this hour. The state of momentum, that part of the market staging a nice rally today. We discuss and debate whether you should buy the bounce. We have SpaceX set to join the NAS100. We're all over all of it with the committee. As always, Joe Chernova, Jim Leventhal, Steve Weiss, Rob Seechen in the house here at Post 9. We'll check the markets. We did have the Dow above 53,000 first time ever, albeit briefly this morning. But Russell 2000 having a nice day. It is the NASDAQ that is the winner and the big story is clearly the momentum rebound. It is up sharply. The chips are rallying. I turn to our expert in the momentum factor. He is Joe Terranova sitting right to my left. What do you make of this today

[C]

from the perspective of what is the effect on the market overall? I think we had this unwind in momentum over the last several days and the resiliency of the broad market was very powerful. So that's a good condition. I think what you're seeing today is nothing more than a rebound. I think it has to prove itself out, this momentum rebound, specifically as it relates to semiconductors and memory names. As we get through the week, we will Have Samsung's earnings, we will have sk, Hynix IPO probably on Friday and then next week you have ASML and tsmc. So it has to prove itself in the interim. It really validated the resiliency of the market. The last thing I will say though, it is leading to a deleveraging in particular for systematic funds and quant funds. They are beginning to reduce exposure significantly as it relates to technology. The effect of that brings elevated volatility on the other side. So keep that in mind. I think we're going to continue to see very wild swings in the nasdaq, very wild swings in the names like Marvell, Corning and Micron.

[B]

Okay, Goldman's trading desk. Rob has an interesting note about momentum. It's now down 24% since the peak worst sell off since the first quarter of 2023 versus an average drawdown of roughly 12% barring a regime change. Buying the dip in momentum has historically paid off and the magnitude of the current move is likely a function of lower liquidity and a bit of summer fatigue. In other words, don't get too caught up with a real dramatic shift in how momentum was trading. It's going to reverse itself and you would be wise to buy the reversal. What do you think?

[D]

I think we agree with that. There's some out there that are saying price leads, price sell off leads, a business sell off and a rerating in the group. But we're buying into the weakness in the group and historically that's been been rewarded. If you look at the, the last corrections and we've seen 10 double digit corrections Scott, in the semi industry over the last five years and still that has generated more than 30% annualized returns. So, so we maintain our modest overweight to the group roughly 20 versus 18 and it's been long standing. It served us well and I don't think we have any intention of reducing it.

[B]

Why is this the biggest story in the market? I think because it had people thinking that you had a regime change going on here, that these stocks which had led you in many respects on the way up, were going to lead you on the way down. Unless there was a significant, you know, rotation into other areas of the market. If you look at all of these names today, the microns, the marvells, 3%, Intel's up 3AMD's up 9. You get the idea of where these stocks had gone over a one week period of time leading that factor to the downside. Significant losses. Micron in a week down 10.5%. KLA 10 core down 11.5% and so on and so forth. Were we too quick to think that that trade was finished for a while, that the rotation was going to lead us elsewhere? We back like, how would you assess it?

[E]

You know, I think jury's still out. I think we're really at will be in an extended inflection point. And so if you take a look, take a look at Bitcoin, for example. You know, when people got in, when Trump got elected and he was pushing towards Bitcoin, then trade up to 125. But it's always that last group that comes in at the end that causes the biggest drawdown because they are impatient, they're immediately losing money, so they're selling it down. So what I struggle with in these moves is now who's the marginal buyer? Have they corrected enough now? 10% a week is a big correction, but we've also seen it up 10 or 20% in a week as well. So I don't know they've correct enough to bring that marginal buyer back in. So for me, what I look at, rather than buying momentum per se, I look at buying stocks that have been severely dislocated like a Broadcom, by initiated that position or adding to the metal last week. Those are the opportunities I look for and I'm tending to fade. And I guess we'll discuss later some of the other names that I'm involved in.

[B]

So B of A today takes a look at the semis. They call it a pullback being a reset, not a reversal. That's the central question because last week it looked like a significant reversal to where we're like, okay, if money's going to come out of chips, it's got to find a home either in the mega caps or it has to find a home in all these other areas of the market like you had been playing for. And I wonder if you were too quick to think that that was going to be the thing. And now we're reminded today that, you know what, maybe it's not.

[F]

Well, I mean, that is the question. Is this a return to the old trend or is there a new regime in place? And frankly, as Steve just said, the jury's still out. You can't answer it in a day.

[B]

Is it still out? I mean, that's the thing. I think maybe you needed more proof for the former, not the latter.

[F]

Okay, I mean, the question. I do know what you mean. And the question, I don't have the answer to the question, but let me frame how we might answer Last week. If you just look at last week, the first were last, last in terms of sectors, right. Health care was up 5.3% last week. I will out on a limb here and say that has nothing to do with AI. So clearly there was some bottom fishing or some bargain hunting going on out there. Does that continue? Was last week a blip or a trend? We have to determine. And Scott, I think I'm getting your point, which is that if you look at today, no the first or first and it's technology.

[B]

I was going to take issue with your statement right at the top of. I think we can all agree that the health care move has nothing to do with AI. I would suggest to you that it has everything to do with AI. It just has moved from the, the payers, the hyperscalers to those that are going to reap the benefits and the rewards of AI. I thought like health care, people started to look in other areas of the market.

[F]

I, I hear you. I thought about that as I was saying that and as I was framing the sentence I thought, well, maybe health care rallied last week on the idea that AI is going to help new molecule discovery. I just personally think it's a little premature to state that. But okay, we can have that argument. Let me make my point a little bit clearer by saying a couple weeks ago I initiated a position in Micron. I'm voting so far with my feet, which is to say I haven't added to it. I'm thinking about it. I'm wondering if today I should be adding to Micron. My position is, Scott, as it was last week, that I think the second half is going to see a continued broadening of the rally on a broadening of earnings and that I will continue to have opportunities to add to Micron. I don't have to do it today.

[C]

Is your timeframe greater than 3 months? If it is, then yeah, you add to Micron.

[F]

I hear you.

[C]

I think we're having a conversation where I agree with Steve. If you are questioning whether the semis and memory and momentum will maintain the leadership role that has had so far in 2026 in the coming quarter, that's a fair question and the answer to that will be determined probably over the next five to 10 days as earnings come out. Do I think that the high is in for the year in semis, in memory, in momentum? Absolutely not.

[B]

Well, because the SOX has had some six straight sessions with at least a 3.9% move. This is from BTIG, this sort of extreme volatility near a High at best suggests a long period of consolidation and at worst a more meaningful top 100%

[C]

and I studied most of the weekend that I wasn't shooting 120 on the golf course. I studied what I was seeing in our portfolio with momentum and everything suggests exactly what that says that you are going through a multi week period that's going to trap a lot of people. It's going to look as if momentum is breaking down. It was an inflection point. It's going to look as if maybe the restart is occurring. Time is going to heal and provide the answer for you.

[D]

Doesn't the breakdown have to occur with capex news that's not as positive out of the hyperscalers before. You're not going to see a buy the dip mentality here in my mind until that happens, you are not seeing that. I'm Sorry. We've had 10 double digits corrections in this space. 10 every dip spot. And what's the catalyzer? Spend. If you think spend is going to change, I agree with you. If you don't think spend is going to change, I don't.

[C]

Well that's why you do agree with me because I just said I don't think this is the highest.

[D]

Okay, okay, I'm with you.

[B]

But he's making the reset. Rob's making the reset not reversal argument. Like B of A. Is this just. It was a reset if he's right.

[E]

Yeah.

[B]

Not a full reversal of what was a straight up trade. You don't want it to be a straight ahead of me. Isn't Rob right like until the spending dynamic changes from the spenders.

[E]

I think he's right in terms of obviously that would cause a major decline. The shares however that doesn't have to be the catalyst for the decline. The catalyst for the decline could be particularly. They move so fast and so quickly that's it could be that people see they don't want to be the last ones out and they're willing to call the peak of the cycle before a company comes across.

[B]

Just seems like based on what we've. We hear from so many people that calling the end of the cycle or the top is early. Like are you going to call it in the. You're going to come run out of the dugout and try and call the game in the third inning? No, that's what people are saying.

[E]

Right, but I don't think it's third inning.

[B]

No, I know you don't but I'm saying generally speaking.

[G]

But I.

[E]

Here's what I think. I think that I'd much rather be early calling the peak than late in calling it. And when you have so many gains, like I've initially bought micron at 350 in April after the prior quarter the company got hit. So when you have such huge gains in it, you hang around and try to squeeze the last dollar out of the trade.

[B]

And maybe even the more definitive tell isn't so much on the hyperscaler spend and maybe one plays into the other, it's on the dram price increases. Like the dram prices are still going up because demand is outstripping supply. Everybody who talks on the topic says you're not going to get a slowdown in demand anytime soon for over more than another year.

[F]

I agree with that. I mean, that is exactly why I initiated Micron two weeks ago, immediately after their earnings. And many people said, boy, you missed out on a 600% rise. That's factually true. But I think it's equally factually true, rather opinion here that this is like buying in video three years ago. Yes, a lot of gains had been had, but more were coming. And in this case on the back of prices. I think just this, this, whether we call it a reset or a regime, I think it's short term in nature and I think it has a lot to do with Brad Gerstner said to you last week, he said, after whatever the gains are, microns up 600%, Steve, in what, a year, whatever it is, you know, a lot of people should be thinking about taking their foot off the throttle. And maybe that's exactly what's happening here. It's not a cycle call. If I thought the cycle was ending,

[B]

I wouldn't have been thought. If the cycle was ending, we'd have bigger problems. Yeah, I don't think the market doesn't feel like it's sniffing anything out other than these stocks went parabolic and maybe we got a little ahead of ourselves and maybe the valuations on some of the names got a little too rich for our liking and now maybe we need to just take a pause.

[F]

Exactly. A lot of parabolas. That's exactly what Brad said. A lot of parabolas. Let's take a pause. Go ahead, Go ahead.

[E]

So I'll talk about it now. So I sold Micron. You know, I exited and I sent a note on Thursday morning, exit near the open. And the reason is, there are many reasons for it. Number one, I don't want to be the last one out. I'd rather be the first one out. What you just said and I know what you just said everybody's saying this when everybody's one side of the boat it can capsize and you can come to a decline sooner than reaching the peak. Now there's really little doubt in my mind the stock will trade up from here. But so what I'm giving up another 10% 20%.

[F]

So that.

[D]

And then.

[E]

Hold on, let me.

[D]

Yeah, go ahead, go ahead.

[E]

So then you've got Nvidia and I think in video is not that been a poor performing stock.

[B]

It has you know.

[E]

Exactly.

[C]

Over a solid period of time.

[E]

So. So what you cited that in video in three years. Right. I think that that's no longer the case. People looking at referring to now is in video this year and can catch a bid.

[F]

Right.

[E]

So despite continuing to have great great news. So so that that informed my thinking on, on exiting Micron now it'll go up, that's fine. I've made enough money in the trade. I don't want to be there at the end.

[B]

The chip equipment names are getting a lot of love continually on Wall Street. Morgan Stanley bumps the targets up on several names today. KLA to 274. Lamb to 404. Amat to 647. Rob, I'll give you those. I mean I'll come to Joe too but you go first because you own amat Lamb and KLA as Joe does.

[D]

Yeah, these are. So start with AMAT is you know it's obviously up a boatload. I think it's up 140% trades at 41 times forward P so to to speak about the magnitude of these moves. I think something you have to pay attention to. But yet every single analyst that follows these names, you're not just seeing tremendous growth year on year in earnings, you're seeing raises quarter on quarter in earnings expectations. And you know from my lens when you look at this part of the market, one of the most powerful forces has been momentum. And the momentum is while maybe decelerating slightly it is not material enough for me to say there's a break in that trade.

[B]

Right. Yeah right. It's a. Yeah question. Goldman. Same same amount of, of love for a lot of these names. AMD goes to 640 over there. Applied Materials. 645. So remember we just had 647 at Morgan Stanley. 645 at Goldman. They see downside for KLA though, if you want to, if you want to take, take that side of it. What do you think about that? Because I mean.

[C]

That's A valuation more than anything else. If you looked back over the last couple of years, it was basically a three horse race with Lam, KLA Corp and Applied Materials. And it was always Applied Materials was kind of running in the back as third to KLA Corp and Lam Research, I think with KLA Corp. Trading at somewhere in the mid-60s.

[B]

Rob.

[C]

Correct. Okay, so, so the valuation is a little bit rich there, but I don't think I've heard anything to your point, Scott. Fundamentally that changes this story for memory, for semis, for semi equipment. I think what I heard from Micron was fundamentally long term bullish.

[D]

It was the worst performer semi last week.

[C]

We're securing pricing.

[D]

Yeah.

[C]

Going out over the next 5:40. So let's.

[B]

What about Weiss's idea though? Because you could extrapolate that to any of these names, all the parabolic charts, whether it's Marvell or whomever, a willingness to be one of the first out, even if it's early, you'd rather be out, rather take a view from the sidelines that says, okay, you guys can continue to play, you'll probably make more money, but I don't know where the exit's going to be and when it's time to run for the door. So I'm done now. Now he may very well next week

[D]

buy it back, but I do too.

[C]

You guys have different perspectives on the market.

[D]

We trimmed kla. We did because of the valuation concern in the, because of the magnitude of the move, 100% move trade at 51 times forward. It doesn't mean we jettisoned the position. We still like the name, but we certainly trimmed it. That's a move.

[E]

There's another point of Micron which is that there's this massive rush and the CEO said himself that we are trying as hard as we can to add capacity. They've also come out the Apple. Apple's come out and said we want to buy Chinese memory rights.

[B]

Right, right.

[E]

So. So it's not just about the spending ending. Right. And that's often not what it is with memory. It's about supply coming on the market. And it's easy to add supply in memory than it is to add supply in semis, which is why didn't sell Taiwan.

[B]

The none of this. All of these questions which like 18 minutes into the program you see, you know, a decent move back to sort of the way we were in the market. None of what's happened in the last week or so has made someone like Ed Yardeni any, any less bullish on the overall Market says you go another 10% on the S&P this year. 8,250 is the target that he is reiterating again today because of FOMO. Remember what that was not FOMO. FOMO. Fabulous earnings momentum. Okay, so we had a. We have a chart. Did we make this up guys? On what the sector by sector earnings growth is expected to be because everybody knows what tech is going to deliver. Okay, 65 and a half percent is what the earnings growth estimate is for technology. Everything else doesn't look that great. Energy is 116% and you got low to mid single digits for every single just about other sector. Materials is 32%. I'm wondering what you think of 82, 50. I'm wondering what you think of the earnings estimates going up across the board for everything to where you're going to get 24 and a half percent overall earnings growth. What was 15% on January 1st for 8,250.

[C]

The formula would have to look very similar to today where semis and software are both up at the same time. You would need that participation in technology to be very broad. I think overall, as we said at the top of the the show, the resiliency was the powerful message of last week when momentum was correcting and you saw semi and memory roll over. I think looking at the upcoming earnings the market is telling you it is thirsting to begin to build positions based upon earnings growth in health care in a lot of the underappreciated sector is

[B]

expected to have a negative 9.3% earnings growth.

[C]

And I would characterize the positioning there as far less leaning towards bullishness than you would see in technology more recently. We're building positions.

[E]

We.

[C]

I say the financial services industry is returning to the financial sector once again on the anticipation that the earnings will be strong there once again. And I think the market is telling you it wants to broaden out. Give us the earnings and we will build the positions there. The greatest example of it is the Russell right now. If you look at momentum, the strength of momentum for all the major indexes is in the Russell above everything else.

[F]

Scott, can I just hit the target? Ed Yardeni's target is about 20.5 times next year's earnings. Next year's earnings on The S&P 500 are a little bit over $400 a share in terms of the current price of the S&P 500 versus this year's earnings 20.6. So really what this market is trading on and the way you get to Ed's I guess it seems lofty, but not really. Target is the continued earnings growth which at least in the second quarter we're looking at over 22% earnings growth and

[D]

that's driven more than 100% of the gains this year have come from earnings. So if you buy that, where we've,

[B]

where we finished with the multiple expansion market, we're in the earnings driven market

[D]

phase of the bull market, 100% and expectations are for 26% earnings growth. So it's certainly believable that the market continues to pick. Keep up with that. Right. It's a, it's a believable thing. And I do think we have risk side. I think we have seasonality right now. When you get into August in September, historically difficult months. We have the midterm elections coming up. There's going to be some volatility created with that. But I think the earnings trends continue and I think you have to be in an athletic stance and be a buyer of dips and things that you want to own. Much like Steve just talked about what he did with Metta and Micron. I think that's a healthy way to do these things.

[B]

Are you guys looking to do that in somewhere like software? Because the software versus semis, granted it's a short sample size but it's outperformed over the last two weeks. The IGV to the Soxx 6 1/2% up IGV, the socks down 8%. You're not. Yeah. You're not looking for anything when I. You don't have really any. When I look at the list outside of Microsoft, obviously you still have that, right? Yeah, Microsoft.

[E]

Yeah.

[B]

But like the Palantirs, the crowd strikes with the cyber's done incredibly well of late. ServiceNow, IBM, Adobe, Jim, Datadog, Zoom, Synopsys, Cisco, Oracle. There's. Your name's not on any of those.

[E]

Yeah, I mean when I bought more Meta last week and I actually had

[C]

a little bit to it this morning

[E]

as well, I looked at Microsoft as well because I went in there without a bias. Do I want to buy more? Do I want to sell it? Do I want to hold it? I decided I couldn't make the investment case for buying more Microsoft, but I could for better. Now in terms of the rest of software, I mean that's 100% the bullseye of AI and you don't know who's going to, you know, do well, who's not. Now Salesforce particular Salesforce has grown a lot through acquisitions. Now the problem is when you get so big, what's the next acquisition you have to reach to make a really large one to impact your bottom line. So while Bell use AI to their advantage with the ability of AI tools that businesses have with IT departments you can really cut down number seat.

[D]

You can but they're still going to be the, the, the ServiceNow is the, the IBM's that have the consulting businesses, the Fortinet for integrated security.

[E]

These are things that consulting business are. I mean take a look at Booz Allen or take a look at a company that's got consulting business what that stock's done over the last year and a half. So I think it's too early to call you know the bottom in these selectively probably.

[B]

Selectively. What you mentioned ServiceNow and Fortnite in the same sentence.

[D]

Yeah, I mean different things obviously. One cybersecurity and the other is the platform, enterprise platform that it's kind of an operating ecosystem. Right. And so those are, I think they're tough to switch away from. There is. There's huge switching cost to move away from those things. I don't know what they trade at right now.

[B]

Let me take a look at Oracle too. It's. It's been down for nine sessions in a row. It's the longest since December of 2021. Jim.

[F]

Yeah, the stock is, the stock is just a pinata being beaten by the sentiment about whether AI is a bubble or not.

[B]

There's no candy falling on the floor though, is there?

[F]

An excellent extension of the analogy that I made. I'm still a believer. Look, we already know about the free cash flow going negative. We know about the debt, much of which has been raised already. They did. They do still have some equity to raise and I think that's overhanging the stock right now. I kind of wish they hadn't announced on their last earnings call that they were going to do an equity raise. I don't see any upside into announcing that they should just snap it on the market when they want to. That being said, within the last three months it's traded above $200 a share. It's now down in the 1% 40s. You look at this on a multiple of of out your earnings which are not that far out. This is a fiscal year May 31. So when we look at fiscal year 28 we're looking at a low teens multiple. It's not that far away. We just got to get through the remaining concerns about funding this.

[C]

When you look at Oracle, if you're using a 12 month time frame moment for momentum which is what most momentum players will do. You're now in an area where you've got that yellow and red light going. Believe it or not, in the last quarter, you still had the green light going for Oracle, so it failed at that 240 level. It's rolled back significantly. I've got a 143 right now. It's not looking too good as we go into the rebalance. I agree with Rob in the fact that you can be tactical here. You could find opportunities. I did that with CrowdStrike, recognizing that very powerful rally that we were having in cyber. Datadog is another name. It has a touch of security as it relates to cloud infrastructure. It's been breaking out. I did a horrible job on Twilio. I said the day that I got stopped out it would be the low. Steve, it was the dead low. It has bounced ever since. Twilio is a software name that works here as well. And the last name I think for the viewers they should look at is Zoom Video. We own it in the etf. Remember the relationship that they have with Anthropic? It's a very powerful monetary relationship going back to 2023, when they invested $51 million. That stake could be worth $5 billion today. I'd look at that one.

[B]

All right, we'll take a break. Coming up, SpaceX, it's in the spotlight today. As you know, it's about to join the NASDAQ 100. Our Leslie Picker following that action Force joins us next with what you need to know.

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Thursday, July 16 CNBC Sport and Boardroom join Fanatics Fest for game plan Groundbreaking ideas shaping the future future of sports and entertainment. Request your invite@cnbc events.com gameplan.

[H]

And we're back on the hats on Report. I am Frank Holland with your CNBC News Update. At least 500 people have died out of more than 1500 confirmed cases in Congo's Ebola outbreak. Frontline workers issued a 24 hour notice yesterday threatening to strike if authorities fail to pay them benefits and improve their working conditions. Officials have not yet identified the outbreaks patient zero and they still need to contract trace possibly tens of thousands of people. The White House is out with a 162 page report accusing the Smithsonian's National Museum of American History of quote, extreme political activism. The report is part of President Trump's executive order aimed at eliminating what he calls anti American ideology from the Smithsonian. A museum spokesman person told the Washington Post it remains committed to nonpartisan and independent scholarship. And as the Tour de France kicked off this weekend, a large wildfire in the south of France is preventing fans from viewing the finale of the third stage of the race. With more than 4,000 acres burned, race organizers have limited access to only riders and vehicles essential to the race. Scott, back over to you.

[B]

All right, Frank, appreciate that. Thank you. FRANK COLLINS, SpaceX as we said, joining the NASDAQ 100 after to the close today, Leslie Picker has everything you need to know for us right now. Hi Les.

[I]

Hey, Scott. After the closing bell tonight, index funds tracking the NASDAQ 100 have to start buying SpaceX stock whether they want to or not. There are more than $800 billion in assets that directly track the NASDAQ 100, more than half of which from Invesco's QQQ. JP Morgan estimates there will be about $4.3 billion worth worth of forced purchases flows into Space X by funds that have to reflect its weighting in the composite before it officially appears there tomorrow. Space X's weight in the NASDAQ 100 will be very, very small at first, less than 1%. And these funds will have to sell a little from the other constituents in the index in order to make room. But the impact will be spread out over the other name, so it shouldn't be too noticeable. We've never seen something like this happen at this scale so quickly after an ipo. Remember, Scott, several months ago Nasdaq altered its rules to allow for a fast tracking of mega cap companies into its flagship index. So instead of waiting months with a double digit percent float, companies that would have a top 40 market cap can be included after 15 trading days with just a small sliver of a float. Now Space X is waiting and the index will grow as its float does. We'll see that happen as the company starts to lift its lockups, allowing insiders to sell and that could start as soon as next month. And then Space X may opt to do secondary offerings over time which would also bolster the float size. However, markets tend to front run these rebalancing, especially ones as well telegraphed as the Space X1. So you know, any expected forced buying may already be reflected in the stock price. You could see it's not really doing much ahead of the event today. Scott.

[B]

Okay. All right, Leslie, thank you very much for that. That's, that's Leslie Picker. How is this all going to impact the way this trades? As Leslie said, I mean the, the stocks tend to front run things like this. Has this really front ran that all that much?

[D]

It seems to have because this has been widely talked about. Right. And this is exactly that passive type of buying that we thought would engineer the price support for this along with a limited float relative to the total market cap. And I think real price discovery comes later. There's a lot of people, including us,

[B]

like I want to see from the ipo, in other words, on this chart. Go ahead.

[E]

Sorry.

[D]

Real price discovery starts to come as the lockups come off. But even as I'm talking to clients about this that own this, there is maybe some desire to take some off the table. Again, limited float. So that might have an impact. But there is an evangelistic support for this asset because they have one of the most unreplicable business models that has ever existed. And so, you know, truth is, I don't know it's an expensive name, but you've seen a lot of what Elon has been involved with has always traded expense expensive. So I think you're going to have long term holders. I think you have some come off and I would use that if you don't own it as the opportunity to try to be a better buyer if it ever comes.

[B]

What do you think?

[E]

Yeah, look, I mean you would think that would trade up with Inclusion Index, but I don't think any of that's new news. Actually when it was thought it was going to the S and P that fueled the over, you know, the book being way oversubscribed and S and P came out and said no, not so fast. And I also believe that any pull forward is being met by selling, continual selling. So you just, you can't value it. So yes, if you follow Musk and there's no reason not to make people a lot of money, then you're going to stay here and you're Going to buy on dips. But if you're just a fundamental investor and don't care who's running it, you take a look. I don't know when they're going to make money. They have a great, great business, you know, and it's going to expand that business. But are they going to buy Tesla? What are they going to do with this?

[B]

I think a lot of people are playing for that.

[E]

Exactly.

[B]

Do you think that this story is in any way capital restrained, whether it's on the institutional or retail side, from those who have their eyes on other prizes that are out there lurking, that are very large as well, and if they weren't there, that maybe this chart would even look a little bit different or the prospects in the near term would be different.

[E]

Well, yes and no. So in terms of others, like the idea of anthropic.

[B]

Yeah. You know, there's the obvious one.

[E]

Gearing up in time for it right now with, with this. Because you've still got time to do that. I just think people are still waiting to. Despite what the market's doing, I think people still wait. Take it.

[C]

This is surprising, this.

[E]

You just can't justify valuation. How do you go to your investment committee and say, I want to buy this? And they say, well, what about the valuation? No, it's all about Elon Musk. And they'll say, okay, what's that worth?

[B]

Yeah, but it's not like you're telling that story for the first time. They've seen the, the blueprint. The blueprint and the roadmap in a, in a Tesla. If you tried to make that case before, you don't to make it again.

[E]

No, you do have to make it again because they review everything again.

[B]

But you know what I mean, it's not like they're, they're new to the story.

[E]

But right.

[B]

What you're trying to tell, right, like can you just. Can. Many people can't justify Tesla's.

[E]

They want to see this valuation, they want to see more mature trading history on this.

[D]

If you're a benchmark manager, which many are. I'm not saying we are. Many are. One of the most dangerous things you can do is be massively underweight. A name like this, it carried people out And I think 23 or 20, 24, it was, Tesla did it, was the best performer. Every active manager got vaporized as a result of that decision. I think you have to be fast waiting.

[E]

What's the weight? I don't know. It's not going to be that big.

[B]

No. All Right. We got, we got to bounce. We'll do Santoli next.

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[B]

Senior markets commentator and overtime co anchor Michael Santoli. There he is for his midday week word. But the word is momentum because it's back.

[G]

It is back or, or at least it's bouncing and you know, market making the case that it was a sufficient shakeout tactically of that, of that factor. What I find interesting though is that all anybody can talk about are these structural elements, the factors, the way they manifest in the index. And you know, late last week I was out there saying like everyone wants a broadening market, but be careful because that's dependent on a lot of different things. The macro has to cooperate and that sometimes precedes a more fragile tape. Well, today what you have is the health care sector down 1.4%. Why? Oh, because people got renewed confidence in the hardware capex story. Well, that shouldn't send health care down 1.4% and staples down 1.8% in a vacuum, but it does because that's the market we have. We have a market that is 18%, semis in the S&P, 516%. Is the four hyperscalers spending all the money and they're working against one another. So I think right now it's all kind of fighting to a pretty benign outcome, I guess, but it's pretty sideways in the overall market and it makes, it makes you wonder ultimately what on a given day the market's going to respond to.

[B]

All right, good stuff, Mike. Thanks. I'll see you later. That's Mike Santoli. Still ahead, top calls of the day. And later, a red card reversal and a green light for the prediction markets. We're following the big money pouring into those betting markets ahead of tonight's US World cup match. We're back after this. Committee. Stocks on the move. Delta downgraded to outperform from strong buys. That really a downgrade.

[C]

They report earnings on Friday.

[B]

The targets to 104. Raymond James did it. Target goes to 115 at Morgan Stanley. Jim, you get that one.

[F]

Yeah.

[B]

I'm gonna only gonna outperform, but I wouldn't strongly urge you to buy it.

[F]

Yeah, here's. It's tricky for all, all of us because we like the company, we like the stock, think it's going to go higher over the long run. But look at that chart and I will tell you that doesn't even really show how strong it's been over the last few months. It's punching above its weight class. That's all I can say. They better have extraordinary earnings because the chart, it's just the valuation, it's now in the low teens and I understand stocks will re rate and I've been the one who's been saying the balance sheet cleanups deserves a rerating much less debt. But I'm just saying it's ahead of itself. I would not add new money to Delta here. I'm not selling anything and I'm not trying to talk out of both sides of my mouth. What I'm saying is if you want to start a position in Delta, I'd probably wait until after the earnings on Friday.

[C]

It's a low bar to beat on Friday. Keep that in mind because Q2 was a tough quarter. Weather disruptions, challenges related as fuel going. So it is a low bar for them to beat. Be careful. They could beat, the stock could go higher and then reverse.

[F]

All I'm going to say is it's traditionally a single multiple of earnings stock and now it's around 13.

[B]

What has happened, I'm sorry, Robbie. What has happened to the narrative and the fundamental story around Netflix? Yeah, you know, Goldman lowers the target today. They still like it. Yeah, they cut the target to 110 from 120. It feels like there's a lot of people who still like it but have either figuratively or literally cut their targets. I mean, what is going on? Let's back this out a little bit more also. What's happened with this stock?

[D]

So you know, we just bought it in March when it rerated from a multiple standpoint. You know, we're probably a little down on it even since then, but it's gotten cheaper. It trades at 23 times. Way off the peak premium in our view as this company matures. Content creation, user growth and monetization are keys. Advertising less of a. Less of a key. They don't need it quite as much. So I just think it's kind of a growth at a reasonable price. Business that has been able to execute historically. And any time we've seen these reratings this is a stock that has come roaring back. It's finally from a multiple perspective, kind of gotten into the zip code where we were.

[B]

I know, but the march, you know, that didn't get the WBD thing. That looks like a great head fake for investors in terms of stock. People are like, I don't like it because this is going to be the penalty box until its whole thing's all figured out. Well, it's figured out. They don't get the asset, stock goes back up. There's like a sigh of relief for many and then it's just been a steady stream lower from there.

[D]

Yeah. You know, you could be watching this, this competitive landscape for other assets play out. I just think it's not a momentum story right now. And I think it'll regain a strong foothold risk worth taking, in my opinion.

[B]

Super.

[H]

Yeah.

[E]

It's a show me story, pure and simple. I added very, very small the other day. It's another one I was revisiting. So we'll see what the quarter does. It's bouncing on quarters. Then it goes silent.

[B]

Okay, coming up, we'll have more on that big red card reversal for the US Men's national team. What it means for the betting markets ahead of tonight's World cup match. Contessa Brewer, following that money for us, joins us next. All right, welcome back. President Trump confirming today that he called FIFA's president to review a controversial red card that would have suspended America's top goal scorer ahead of tonight's World cup match against Belgium. That red card reversal is changing the game for the betting markets. Our contestant Brewer, following that money for us, joins us now. Hi. What have you found?

[J]

Well, first of all, FIFA's president says, look, this decision was made independently. But Folarin Boggan has been cleared to play in tonight's game against Belgium. And look what happened when FIFA's decision was made public. The probabilities of who would win switched with USA taking the lead. Fanduel told me as of yesterday, Baligan was bringing in four times the amount of money wagered as the next most popular scorer. Christian Pulisic, Belgium's soccer coach, called the FIFA reversal an April Fool's joke. And we have just learned that FIFA has denied Belgium's appeal of that decision. Doesn't matter. Football fever is just fueling this betting bonanza. Kalshee has just posted its most lucrative market ever. Who will win the finals of the World cup has now surpassed $1 billion in trading volume. And Kalshee, with whom CNBC has a commercial Relationship did more than 5 billion bucks in trading volume this weekend, according to Piper Sandler. That set new records fueled by this soccer mania, 45% higher than last month. And polymarket as well, up 24% over last month. And remember what we had last month, NBA Finals fervor. That's really saying something. The sportsbooks also are raking it in England vs Mexico match last night helped Caesar set new soccer records for most unique visitors, most number of vets on soccer ever and most soccer handle. That's the amount of money wagered. And Fanduel says almost 90% of the world cup handle is coming in on, you might guess it, usa. And when USA wins, it makes customers very happy. Still, we're going to watch for the impact on earnings this quarter because if customers win, Scott, the house loses, sure,

[B]

but it's a, it's a win win, at least in terms of betting volumes. Not, you know, sometimes you see if the prediction markets are taking all the sports action that maybe it's hurting some of the sports books. But as you're reporting here, not, not in this case. It's sort of everybody's just getting in

[J]

on this action and I think they're hoping that the enthusiasm over soccer drives persistent, constant enthusiasm, not just now for World cup, but for what happens next year when MLS takes to the pitch. And maybe that'll be good. One more note. Now you've got say, Flutter and FanDuel being market makers and going in on the B2B side of that predictions business helping with combos and parlays. That's a big deal because they can make money even if the sportsbook ends up holding the the bag when it comes to the outcome of the games.

[B]

All right, good stuff. Contested.

[H]

Thanks.

[B]

Contested Brewer. We'll do finals next. All right, we'll see. On closing bell, three o' clock Eastern. Malcolm Etheridge, Bryn talking. Then Brian Belsky, Jeff Degraff, Kevin Simpson. So I'll look for all you then let's do final trades. What do you got?

[D]

Robbie metta trading at 15 times, growing it 20%. 3 billion active users.

[B]

It's a good day for tech, as you can clearly see. Who's got Alphabet?

[E]

I have Alphabet, Scott, and I like it. I think you could also Steve. Good, but no, I said I like Alpha. I think it also bounce.

[C]

Oh, it's reduced but under pressure.

[B]

I wish I got you.

[C]

Yeah, sorry, Jim Apollo.

[F]

It was 140 a couple of weeks ago. I think it'll get back there in short order.

[C]

Joey Apple about to make a new high.

[B]

All right, good stuff. I will see you at 3:00 clock on closing belly 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.

[A]

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[C]

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