Halftime Report: The Outlook for the Rally (July 7, 2025) Hosted by CNBC's Scott Wapner
1. Introduction and Market Overview
Timestamp: [01:02]
Scott Wapner kicks off the episode by setting the stage for the midday market analysis. He highlights the key factors influencing the market at the halfway mark of the trading day:
- Stocks at Record Highs: The market is trading above previously troubled valuation areas.
- Tariffs Looming: Ongoing trade tensions continue to cast uncertainty.
- Earnings Season Approaches: Companies are poised to release their quarterly earnings, adding another layer of complexity.
- End of Holiday Weekend: The transition marks the beginning of the second half of the year.
Quote:
"With stocks at highs, tariffs still looming and earnings about to kick off, we will ask the committee what trades make the most sense right now."
— Scott Wapner [01:02]
2. Earnings Season and Tariffs Impact
Timestamp: [01:51] - [05:30]
Steve Weiss provides an optimistic near-term outlook, noting momentum in key stocks like Axon, Palantir, and Amazon. However, he expresses caution for the third quarter, anticipating flat to lower performance due to:
- Earnings Estimates Lowered: Tariff costs may lead to margin compression.
- Inflation Concerns: Tariffs are expected to affect inflation, not yet reflected in recent CPI reports.
Quote:
"I think we're going to learn that corporations have absorbed the tariff cost and that is going to see significant margin compression."
— Steve Weiss [02:45]
Joe Terranova counters with a more bearish perspective, arguing that inflation will take hold and demand will weaken as pre-tariff buying subsides. He also points to wage inflation and workforce reductions as potential dampeners.
Quote:
"I do think inflation takes a foothold. I do think that we're going to run out of time on delays."
— Joe Terranova [05:09]
3. Diverging Views on Market Outlook
Timestamp: [05:30] - [08:20]
The discussion shifts to divergent opinions on the market's future:
- Morgan Stanley's Mike Wilson remains bullish on a 6 to 12-month horizon, expecting earnings tailwinds to expand.
- Joe Terranova disagrees, predicting a softer earnings period and muted guidance due to unresolved tariff issues.
Jim Lebenthal supports Joe's view by linking the absence of tariff impacts in CPI figures to expected future margin pressures.
Quote:
"The biggest challenge we have in front of us is going to be earnings."
— Steve Weiss [03:00]
4. Retail Investor Trends
Timestamp: [15:11] - [16:33]
Christina Parts, from Evolos, discusses the evolving landscape of retail investors:
- Record Inflows: Over $155 billion pumped into U.S. stocks and ETFs in the first half of 2025.
- Shift in Sentiment: Recent data shows a slowdown in retail inflows and a dip into negative sentiment scores.
- Sustained Interest in Big Tech: Despite cooling enthusiasm, retail investors remain bullish on major technology names like Nvidia, Tesla, and Palantir.
Quote:
"Retail investors, no doubt to your point, Scott, at the beginning, remain a major force in this market."
— Christina Parts [16:33]
5. Stock Highlights
a. Tesla
Timestamp: [17:12] - [21:27]
Bryn, a Tesla shareholder, shares her outlook amidst the ongoing feud between Elon Musk and President Trump. Despite short-term volatility, she remains optimistic about Tesla's long-term prospects.
Quote:
"I think today a little is a little bit of an overreaction. But I think when you have someone that runs six companies, very successful..."
— Bryn [17:38]
Steve Weiss echoes the bullish sentiment, highlighting Tesla's strong market position and potential for substantial growth over the next five years.
Quote:
"This is a stock that I think will have a market cap that can double, maybe triple over the next five years."
— Steve Weiss [20:30]
b. Uber
Timestamp: [21:27] - [23:29]
The conversation shifts to Uber, discussing its recent stock movements and strategic positioning in the autonomous driving space through its partnership with Waymo. Steve Weiss emphasizes Uber's competitive edge and technological advancements.
Quote:
"Without Waymo has been phenomenal in what they have done in autonomous driving. And now for Uber to have that affiliation with them, why do I need to worry about what Tesla."
— Steve Weiss [22:41]
c. Netflix
Timestamp: [24:30] - [27:00]
Joe Terranova and Steve Weiss touch upon Netflix's recent downgrade to neutral by Piper Sandler. Despite short-term uncertainties, they view Netflix as a long-term compounder, advocating for holding or even buying on dips.
Quote:
"This is still a long term compounder. And why take the tax hit if I believe over time still going to create value?"
— Joe Terranova [24:50]
d. CrowdStrike and Spotify
Timestamp: [25:00] - [26:21]
Steve Weiss discusses CrowdStrike's recent downgrade and how it pairs with other momentum-driven stocks like Spotify. He highlights the importance of technical support levels and the potential for recovery post-correction.
Quote:
"They could pull back to their 50 day moving average very easily. They're both sitting relatively comfortably above each of them."
— Steve Weiss [25:13]
e. Delta Air Lines
Timestamp: [40:00] - [44:14]
Analysis of Delta Air Lines reveals mixed signals:
- Softness in Domestic Bookings: Cirium data indicates a decline compared to last year.
- Steady Demand in Premium Cabins: Higher-end bookings remain robust despite overall booking softness.
Quote:
"We're still seeing solid demand despite this narrative that is out there."
— Philippeau [15:11]
f. Wynn Resorts
Timestamp: [33:17] - [35:18]
Jim Lebenthal and Steve Weiss delve into Wynn Resorts, debating its reliance on Macau revenues versus its domestic strength and upcoming expansions in Dubai. They acknowledge the stock's recent rally and potential for future growth.
Quote:
"This is about far more than Macau, but for the last couple of years, maybe three years, this is... The stock has only moved on Macau."
— Jim Lebenthal [35:07]
6. Tariffs Update and Government Actions
Timestamp: [26:42] - [29:44]
Megan Cassell reports on President Trump's announcement to impose 25% tariffs on imports from Japan and South Korea starting August 1st. This move is aimed at pressuring these countries while seeking reciprocal tariff deals.
Key Points:
- Tariff Implementation: 25% tariffs on all exports from Japan and South Korea to the U.S.
- Retention of Existing Tariffs: Separate from any sectoral tariffs already in place.
- Deadline: August 1st enactment provides room for negotiation.
- Market Reaction: Anticipated to spook the markets due to increased trade tensions.
Quote:
"All of their exports now to the US will be hit with a 25% tariff beginning on August 1st."
— Megan Cassell [28:03]
Joe Terranova cautions that while these tariffs may be temporary, they pose significant short-term risks to the market.
Quote:
"We're going to see because of higher prices and we see... that all the good news from Trump administration has already been seen and discounted in the market."
— Joe Terranova [05:30]
7. Bond Market Insights
Timestamp: [30:06] - [37:45]
Roger Hallam, Global Head of Rates at Vanguard, discusses Vanguard's new actively managed bond ETF tied to Treasuries. This initiative aims to enhance returns through active management strategies, including:
- Treasury Relative Value: Leveraging systematic trading strategies.
- Dynamic Allocation: Shifting between Treasuries and mortgages based on market conditions.
Quote:
"We think it will provide investors with the safety liquidity that investors would expect from a government ETF, but Vanguard will be using their active capabilities to enhance returns."
— Roger Hallam [31:10]
8. Airline Industry Analysis
Timestamp: [42:30] - [44:14]
Phil LeBeau provides an update on the struggling airline industry amid weak summer travel demand:
- Declining Bookings: Cirium data shows a year-over-year decrease in summer bookings.
- Mixed Signals: Jefferies reports a slight uptick in passenger levels, while weather-related delays continue to pose challenges.
- Premium vs. Economy: A bifurcation exists where premium cabins maintain strong demand, whereas economy fares see softness.
Quote:
"It could be that we're noticing perhaps a bifurcation where the general bookings, the lower end of the plane, that might be a little bit soft and the higher end, the premium cabin, that might be a little Bit stronger."
— Phil LeBeau [42:30]
Jim Lebenthal and Steve Weiss reinforce these observations, noting flat TSA numbers and strong premium demand despite overall booking declines.
9. Closing Remarks and Final Thoughts
Timestamp: [44:34] - [46:58]
As the episode concludes, the hosts reflect on the day's market movements:
- Market Reaction to Tariffs: Dow closes down significantly following tariff announcements.
- Investor Sentiment: Concerns over renewed trade tensions and their impact on market stability.
- Looking Ahead: Anticipation of additional earnings reports and further government actions influencing market direction.
Quote:
"We're going to watch all of it. Dow's down 470 plus calls the day next."
— Scott Wapner [30:06]
Scott Wapner wraps up the episode by previewing upcoming segments and encouraging listeners to stay tuned for further analysis.
Notable Excluded Content:
- Advertisements and promotional segments for LinkedIn Sales Navigator, EY services, WhatsApp, Capella University, and other sponsors.
- Introductory and closing disclaimers emphasizing personal opinions and investment advice.
This comprehensive summary captures the essence of the July 7, 2025 episode of CNBC's Halftime Report, providing insights into market dynamics, investor sentiment, specific stock analyses, and the impact of governmental policies on the financial landscape. Whether you're a seasoned investor or new to market analysis, this summary offers a clear and detailed overview of the key discussions and expert opinions presented during the episode.