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Halftime Report
The Pivotal Week Ahead 1/23/26
00:44:10
Scott Wapner and the Investment Committee debate the huge week ahead for the markets with Mega Cap Earnings reporting next week. Plus, the desk shares their latest portfolio moves. And later, we dive into Tesla Earnings next week, shareholder Bryn Talkington gives her take on the stock and how to trade it. Investment Committee Disclosures
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- [00:00]
Scott Wapner
ABC's David Muir, the most trusted anchor.
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Kevin Simpson
In America, the most watched anchor in America. Thank you for making World News Tonight.
- [00:08]
Jimmy
With David Muir the number one newscast in America.
- [00:11]
Kevin Simpson
Most trusted, most watched David Muir on ABC.
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Bryn
Not every sale happens at the register before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
- [00:40]
Scott Wapner
AT&T business Wireless connecting changes everything. I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the turbulent week for stocks and all that lies ahead as mega cap earnings loom large. Of course, the Fed meeting, as Carl just mentioned, we trade it all with the investment committee as usual. Joining me for the hour today, Stephen Weiss, Jim Laventhal, Kevin Simpson and Brian talking to check the markets. We are trying for three straight up days and right now we have it. At least if you look at the S&P 500, which is holding on to 6900, albeit slightly, I guess. But here's what looms. Let's go to the wall because mega cap earnings are looming large starting on Wednesday. Meta, Microsoft, Tesla, Thursday brings us Apple. You all know by now you got to wait a while for Nvidia. But these are the ones right now, Brin, that matter. They always matter. I feel like maybe they matter even more. Why? Because tech has lagged so much to start the year. Nowhere to be seen on the best performing sectors list where energy leads the way and materials is next and industrials follow that and then on and on and on. And then you finally get to tech, which is down 1.25% to start the year. What do you think?
- [02:16]
Bryn
Well, it's been a great one, three, five and ten years for tech. So it's nice that some other sectors are actually starting to perform and pull up the weight. No, I own all. I own all the stock except Metta. I agree with you. I think next week is going to be incredibly important. Metta does not have a cloud, so they have advertising. So we're going to need to hear how they're going to monetize all of that spend. I Mean, is this going to be a Metaverse 2.0? You have Microsoft, which is in the software space, which everyone's like, software is dead because of client cloud of Claude. And so with Apple looks terrible technically. And so I think you have this very distinct set of circumstances with these companies next week. And I think investors want to know, do I want to keep these heavy positions or do I want to continue to diversify? And so the jury's still out. But I do agree this is going to be really important for all three of those. I feel Tesla is less important because we're more interested in like what's happening with Robo Taxis. With we know that earnings won't, I don't think are going to be great from car sales, but investors have been more than happy to discount that and say we will give this stock a high multiple because of the future earnings of Optimus, Robotaxis and Cybercap.
- [03:32]
Scott Wapner
Let's show you once again the Mega Cap performance year to date. Just to give you a scorecard on what we're talking about here. You know about this huge run in Alphabet which is up five and a half percent year to date. It's picked up right where it left off in 2025. Amazon has it woken up maybe up 4%. You could make the case, I think Bren's right that Metta is the most important next week just because of that big slide last quarter. Weiss, you take a look at that. Could you make the case it's Met. Remember the stock, what it did after earnings last time because you know, Mark Zuckerberg, they talked about all the spending that they're going to do. Could you make the case? It's Apple which is off for eight straight weeks. They have a lot to say. Could you make the case? It's Amazon which did not next to nothing last year, but is off to a good start. Maybe Microsoft stock up 5% or so in the last 12 months. There's a lot going on here, a lot to prove and I think Apple.
- [04:32]
Stephen Weiss
Apple's completely different bet because the bet there is will they be in AI or will they not be in AI? So you need an announcement like that in the call. I don't think you're going to get it. But you know, Britain makes great points on Meta and I've been thinking about it recently and I'll just, you know, double click on what she said about Met. Met is building and putting all that capex into their own products right now. So versus Microsoft spending similar amounts roughly that can leverage that cost eventually across their cloud, as well as their own products. So they're also the tool. Tool belt, which I like. So it wouldn't surprise me. I know this is, this is a way out there. Thought it wouldn't surprise me if matter one day goes into the cloud business. I mean, they've got the capital to do it and we know there's a shortage of cloud capacity with all the AI, so. But this is a critical quarter for Metta.
- [05:27]
Scott Wapner
I actually, there's the chart, right, that you see before, you know, you go down the slope on the far left side of the screen. That's exactly when the earnings report last happened and that's exactly the slide that followed suit.
- [05:40]
Stephen Weiss
Now, that was good, by the way. It was just the, the commentary, which.
- [05:45]
Scott Wapner
Was not now when they've gotten a smackdown right from either the market or a shareholder, Brad Gerstner. They've listened. They've listened. Will they take that to heart, so to speak, this time around, and tell you something else about the amount of money that they're willing to spend so that the market can be soothed somewhat about the time frame for the return on all that invested capital?
- [06:11]
Stephen Weiss
And the answer is, I think they will. I think they will because he has done that. If you go back to when the stocks trade in the 30s and the issue was they have a mobile app or do they not? And they. They rose to the challenge. It had already been planned. So I think what he's going to do, he's not spending money recklessly. He doesn't do that.
- [06:30]
Scott Wapner
They see, well, no way Market. What do you mean he doesn't do that? That's the whole point that the stock, I think it was in 2023 had looks like his worst year ever because it was deemed that he was spending money recklessly on this metaverse and all that other nonsense that was away from the core of who they are. And that's why Brad Gerstner had to write the letter.
- [06:49]
Stephen Weiss
Right? And. And they're not doing that. I don't think they've done that since because lesson learned. So I think it'd be very difficult. So I think that he will come out and talk to about it. He will come back and talk to an ROI on those spending dollars. But again, again, it's wildly out there. It wouldn't surprise me if they go into the cloud business. They should.
- [07:09]
Scott Wapner
All right, Jimmy, like I said, you can make the case for a lot of, a lot of these names. Which one stands out there with all of the spotlights on you think It's Amazon I do.
- [07:20]
Jimmy
And look, part of this is just pattern recognition. For the last more than a year these stocks have not been moving monolithically. The so called seven have not been moving together. We know that. And what we have seen with basically all of these names is that at unsynchronized times they go into the doldrums and then they rally. Right. We saw that Scott, with Apple last year after a long rally period, you just shot to the moon. We saw it with Google. I think Amazon is due. When I look at the valuation of the stock, yeah, it's a little bit, a little bit pricier than the rest of them. But we know that's at least in part because they're sinking so much into their business development, whether it's Amazon Web Services, whether it's logistics. I think that, I think that the valuation, if you adjusted for that, is a lot cheaper. And that's the one that I think money is going to start to flock to. I don't think that something like Microsoft is in the hurt locker, but I will be interested next week to see how it responds to earnings. And here's why, Scott. I would expect the earnings are great, but when we see a stock that is down year to date, I wonder if any pop on good earnings is used as an excuse for shareholders to actually take money out. I think that share price reaction to what I expect to be good earnings from Microsoft will be a big tell. And what I expect Microsoft probably comes down even despite good.
- [08:34]
Scott Wapner
Microsoft has kind of been in the Hurt Locker. Can you pull that chart out a.
- [08:37]
Jimmy
Little longer than 15% from exactly what.
- [08:40]
Scott Wapner
We'Re talking about, either from the high or. I mean that that's not a really impressive chart that says Hurt Locker to me.
- [08:46]
Jimmy
I hear you, I hear you. And that's why just to be clear, I think that they will have good earnings, Scott, but I do think that shareholders will be looking at that as a potential exit ramp. So I wouldn't expect to.
- [08:58]
Stephen Weiss
The questions I've met at Microsoft, have they pulled forward a disappointment in the quarter and the reason the stocks are up today is they think the stocks have fully absorbed that news. And moving up is my guess.
- [09:08]
Scott Wapner
It's good that we'll go to Kevin now because he owns all three of of Metta, Apple and Amazon. You own Microsoft too. So you've heard what everybody has to say and now you can tell us what you think about who your your own spotlight is on the most the brightest for next week.
- [09:25]
Kevin Simpson
Well, I will say that Amazon was my number one pick this year. And I, like you, agree that these numbers should be very positive and constructive next week. So I don't think they have the most to prove. They had a horrible year last year. In the light of all the tech stocks rallying, I think the company that's really most under the microscope is Apple. You talked about eight weeks of a downtrend, Scott, which is important, but the deal that they made with Google, Apple, excuse me, Google and Apple specifically for the AI. The pressure is on them for Siri because if they can get that right, you have the ability to have another super cycle of sales or maybe the first super cycle that's actually driven by AI, the support of the service business. We kind of know what we're going to get there. But I think everything boils down to what they say in guidance, how they talk about artificial intelligence and Siri. And if they don't get it right this time, I think they have more riding on a problem than anybody else.
- [10:18]
Scott Wapner
I mean, we, we every time these earnings come around, we act like it's the super bowl is on the other side of what you know, when we say the week ahead, it's like this is the super bowl. And we always suggest that it's important. Do you think it holds more or less importance now that the group has underperformed? I could make the case before, and I probably did several times that well because it was sort of like a monolith and it was almost holding up the market that it mattered more than anything else. Like these need to deliver now that you can't have one of the legs of the stool fall out. But if you look at the performance of the market now, the market, the other legs of this market look pretty darn sturdy. So maybe they don't hold the same importance next week as they otherwise might.
- [11:06]
Kevin Simpson
To me they do only because of the weighting and how much of an impact these earnings have on the Overall S&P 500. So if you have expectations that the S and P can deliver in excess of $300 a share, you need the big boys to come to the table and deliver just like we'll need in video later.
- [11:21]
Jimmy
And I'll take the other side. I mean, I think the numbers actually show that whether you're looking at the equal weight S&P 500 or small caps that those sectors have rallied despite, as Scott's pointing out, the lackluster performance at best from the Mag 7. And this was a question a year or so ago, could those stocks catch up with the rest of with Mag7 not performing and I think the answer is in front of us is yes, the market can do well. Those other stocks can catch up even if Mag7 doesn't perform as well. But I will say this one thing quickly. You know the one thing we're not talking about because I think we all take it for granted and I do is that capex plans are going to be confirmed. There's no reason to think that they will disappoint on any capex plans. But that is the thing that if you wanted to worry me one of these companies coming out and saying ah maybe we've rethought this a little bit, we're not going to, I don't know about that.
- [12:09]
Scott Wapner
We just made the whole case about Meta. Meta is the one that comes out and says you know what, you know maybe we're going to try and be a little more targeted. We're not going to spend the numbers not going to be as large. I think maybe the market cheers that.
- [12:21]
Jimmy
That honestly that would worry me.
- [12:24]
Scott Wapner
Why would it worry you? Because look what happened last quarter because.
- [12:28]
Jimmy
A lot of what I see in the other 493 stocks in the equal weight Scott, a lot of what I see is the what I'll call auxiliary sectors like industrials, materials, transportations, energy that is going into building all this capex financials for financing all of these capital expenditures. If suddenly one of the key players says maybe we're just going to tap the brakes here. I don't think the market will like that in the other 493 stocks that I'm talking about.
- [12:53]
Scott Wapner
Bryn, why don't you weigh in I mean you on the RSP which is the equal weight obviously you don't have like real small cap exposure which by the way the Russell 2000 has outperformed the S&P for the past 14 consecutive days. That's the longest streak since a 16 day stretch all the way back to 96.
- [13:15]
Bryn
Yeah, I mean small caps definitely even with rates rising, albeit today but small caps have done very well. I we've chosen to play it with rsp. I also bought Apollo, kkr, other financials that are exposed but I think it's important just going back to tech for a second. If you look at tech earnings are looking to grow like the Mag 7 around 26% this year but if you actually break that down and you take Nvidia and Broadcom out of that Google, Metta, Amazon and Apple those companies together are looking to grow earnings about 13% and so is 13% enough to get multiple expansion. And I think what's going to happen especially with Metta, Metta and Amazon is let's talk about margins because to your point if they continue to do the capex and margins start to continue to come down, I think that's really where you have a multiple issue because one of the main reasons these companies have enjoyed incredible returns the last decade is the margin story. And to me that's where you have to have capex spending, thoughtful capex spending but also keep that margins. Otherwise I think this market will continue to penalize these companies these, these companies discreetly.
- [14:31]
Scott Wapner
I feel like the, the committee, we have a run it hot investment committee because that, that's the theme of what's worked in the market to start the year. The so called run it hot stocks, energy materials, industrials, a lot of cyclical plays. Obviously you're leaning in to that. Mr. Simpson, you have a new buy. It is Eagle Materials Exp. Let's show the chart.
- [14:59]
Kevin Simpson
So this is a building manufacturing company Scott. So from a material standpoint, we've had Home Depot for a long time. That's more I think residential. This is something where we're thinking about branching out into multifamily commercial. It does have some residential for sure but also when you think of the data centers talking about concrete, there's so much in the way of the supply business that we like this 17 times forward earnings, lots of free cash flow. I don't know that we're late to the party because I think really to your point earlier about all these companies that are beneficiaries adjacent, I think these material companies can really benefit from that spend.
- [15:37]
Scott Wapner
Yeah, this is about a $7 billion market cap. A US focused company. So you know we'll watch that. There's another one too Top Build Corp. Same thing theme.
- [15:51]
Kevin Simpson
This is the same theme. They focus more on insulation multiples a little bit higher. Very, very strong from our opinion. Just a very strong opportunity set in the building sector. I know these guys have exposure in some of the competitors. I like the space a lot and we'll see what happens if the build out over the next few years happens. The suppliers are going to be tremendous beneficiaries.
- [16:14]
Scott Wapner
But you want to these are statements in some respects of what's been happening in the market and what the outlook is for economic growth and the idea of a run it hot economy, a run it hot market. And playing into the broadening theme of the market overall, is it not?
- [16:33]
Kevin Simpson
I think it's even more important than you're stressing it because this isn't our dividend strategy. This isn't our boring flagship old school portfolio. This is our growth strategy. And we're looking at names outside of the mag. 8, 9 or 10. We're going to talk about a few other buys today in the growth strategy that literally have nothing to do with.
- [16:49]
Stephen Weiss
The, I guess qxo, which not only do you get that same element, but you get a consolidation story by a proven compounder that that takes inefficiencies out of the companies that he buys as he did with xbo, with gxo, with United Rentals and Take Stock. Stock hit a new high and I.
- [17:11]
Scott Wapner
Think it's continued to move well because the transports have been crushing it lately, which you know, people like Ed Yardeni have been focused on is, you know, if you want to keep checking off bullish signal boxes. Yeah, that, that plays right into that. Which.
- [17:25]
Jimmy
Well, I just want to say, I mean he said something pretty profound there. That materials company like Top Build or Eagle is in your growth strategy. I mean these are things that are normally found in value portfolios. I totally agree. By the way. I mean it's not just the data center build out. If this administration strategies come to pass, then we're going to see more factories built. You know, all of these factories need to have roads that go to them, need sewer, garage ducts, all these things that are built with concrete, with aggregates. Otherwise this is a very boring sector. But when you get a growth spurt like this and consider what lower interest rates mean in the context of government finance spending on all this stuff, infrastructure, factories that are built with tax breaks, I mean, this is going to be a growth industry if these strategies work.
- [18:10]
Scott Wapner
Covered calls are the name of your game. You sold covered call on cat, you sold a covered call on rtx. You want to tell me more about those?
- [18:18]
Kevin Simpson
I mean, CAT stays right with our theme, right with our adjacent. It was the number one performer in the Dow last year. It's simply us looking to harvest some volatility that's surrounding a very hot sector. Pulled back a little bit since we wrote the call, so we look smart on it, but really it's just harvesting volatility. RTX specifically, you've got single stock risk. When you have a president that's tweeting or posting about individual companies, when that happens, you see extra volatility around it. You can't buy back stock, you can't pay a dividend, you can't pay. Your CEO puts a little pressure around it. So we wrote a covered call on rtx. Love both of the positions. This is not a bearish call by any means, but way to make a little money.
- [18:57]
Scott Wapner
It's been a tricky year in some respects for financials, hasn't it? You know, they kick off earnings season. The stocks look pretty good going into that and now they're pacing for the third negative week of the past four. You can maybe hang on some headlines that have come out. Obviously some of the social media posts and some of the planned executive orders or the like that has weighed on, on names here, some of the credit card ones for obvious reasons. Bryn, speaking of your new buy is Capital One. What's in your wallet is that it's Capital One, right?
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Bernie Rano
Yeah.
- [19:33]
Scott Wapner
All right. Well this one is now.
- [19:34]
Bryn
It sure is. Yep. Yeah. So I actually took an, it was my, it was my final trade the day that President Trump announced that he would like to have 10% caps. And so I thought it was overdone. I've been listening to this call the last three quarters. Rich Fairbanks, the founder CEO, love that. He's a total rock star. They did an acquisition that they announced today of this company called Brex that I wasn't familiar with that really is on the enterprise side of putting together software, applications, all of this great stuff. I believe that Brex was valued around around 12 billion back in 2022. They bought it for 5 billion. They are moving upscale to the consumer. They are moving into the enterprise which Rich says this, you know, the enterprise say going against American Express is a $2 trillion industry. Brexit is really important. I think it's a great company. I'll be buying more Monday. Let's let it settle in here. But if you want to look at a financial that and also they talked about retail auto loans are good. So all this Tri Color and first brands last year that we're talking about that autos are doing terrible, their auto book is actually doing quite well, their consumers doing well. So I think this is an overreaction today and probably we look at it in two months and it's filled this gap that it's loss today.
- [20:53]
Scott Wapner
Do you just not believe this 10% cap is going to happen in any way, shape or form?
- [20:59]
Bryn
I mean just listening to Rich, he did it, he didn't mince words. He said it would cause a recession. You are hearing other companies saying, well we'll issue $1,000 card with a 10% cap so we'll see if it goes somewhere. But I don't, I don't think we're going to have across the board. It just doesn't make any sense in our economy economy that you're going to have across the board a 10% percentage point cap. But there's definitely a non zero risk that that would happen. But I'm going to, I'm going to go with a great founder CEO that's making strong acquisitions. They closed the Discover acquisition already. So I just think this is a neat company to own to buy on weakness right here.
- [21:37]
Scott Wapner
Okay. Speaking of the financials, Kev, bank of America is down 6% year to date. It's a new buy for you. Tell us more.
- [21:45]
Kevin Simpson
And again this is in the growth portfolio which is hard, sometimes hard to swallow when you get so caught up and wrapped up in the tech trade. But like so many companies this earnings season when you post good numbers but have a little bit of a weaker guidance, you're seeing these stocks sell off. So this gave us an opportunity to own a financial name in the growth portfolio. Playing into that breadth theme, we already own Goldman Sachs, JP Morgan, American Express, Visa were fully stacked in the dividend portfolio. But this is a member of the Russell 1000 Growth Index. They have Merrill lynch which we think is a true gem in the portfolio. They've gone through some problems but the earnings number was really good. Low P E single digit single digits, price to sales 3 and a half, 4% solid dividend. Lots and lots of free cash flow and no lawsuit, at least not yet by the president.
- [22:35]
Scott Wapner
Yeah. Why do you think these names that got off to a good start and looked pretty darn good have struggled like they have?
- [22:42]
Stephen Weiss
Well I think that's part of it is that they're in the sights of Trump and you know, you have to understand why the 10% cap isn't going to work because the banks, when they take a look at their whole portfolio of credit card holders having 10% doesn't compensate them for the risk of the credit card holders that are that don't have the good spiker score.
- [23:05]
Scott Wapner
Is it even worth talking about stuff? I mean honestly that the chances of it happening are slim and none and no and slim just left.
- [23:12]
Stephen Weiss
I don't think so.
- [23:13]
Scott Wapner
I agree, you know I'm saying I.
- [23:14]
Stephen Weiss
Agree with you but they're reflecting right now. They moved up. I think the quarters were universally pretty good. J.P. morgan, there's some criticism but I thought was a great quarter. I think it's just a sell off basically on profit taking. For what reason I don't know. But you know, you didn't have all of them report Great numbers and it's always the lowest. You know, water finds its lowest level in earnings situations and that's bringing them.
- [23:37]
Scott Wapner
Let's, let's. I usually like to try and bring things full circle by the end of the A block from where we started with a. With a theme that plays into that. And I think we'll do that with looking internationally for a moment and noting that the emerging markets hit a record high on Thursday in a week in which Sell America has been a topic again, people look at what's happening because of the rhetoric around Europe and Greenland. Whether that is going to be a thing, whether it's durable or not remains to be seen. However, nonetheless, there's a story out from Reuters. Big North European Investors reassess US Exposure. It's worth noting, by the way, that the Nordic region is home to some of Europe's biggest pension funds by assets. So there's the idea of selling Treasuries. Right. That's one thing Jonathan Krinsky of BTIG talks about losing prestige worldwide. What that could mean if it, if it's some sort of durable trend. Last year, you know, international markets outperformed the US by the widest margin in however many years it was. How do we think, Jimmy, about this?
- [24:42]
Jimmy
Look in our strategic asset allocation. So if I take off the hat of being a portfolio portfolio manager and look at a full asset allocation, we do think there should be emerging market and developed international exposure. Having said that, we are not leaning into it, which is mean. Meaning we're not tactically overweighting this sector versus the weightings that we've had for the past several years. That's our way of saying that. Yeah, okay, there are the forces that you're talking about, Scott, but those forces have been talked about for quite some time now. And if we look at actual capital flows, they don't show a mass exodus out of US Market markets and in particular for US Stocks, it shows inflows, Treasuries, little question.
- [25:19]
Scott Wapner
But that's sort of apples and oranges to the broader picture. Yes, it's important to talk about the flow of capital potentially moving out of the US which seems unlikely, right? Biggest deepest markets, etc. Etc. But the performance is another thing. Brazil up 10% this year. China up 8 and a half, Japan up 7, Mexico 6 and a half. Canada 4 and a half, Hong Kong 4 and a half. London to the DAX up 1 and a half and the S and P at the bottom of the barrel up there's one that, that's part of the point.
- [25:51]
Jimmy
Right. So if you're going to overweight these sectors, again, we're at a neutral weight. But if you're going to overweight them, you're kind of buying into what Mark Carney said. I'm not saying he's wrong, but I do think it's premature to make this bet. Mark Carney said that basically the US Led world order is not just undergoing transition, but it's permanently rupturing. And you can see that in things like the European Union having a trade deal over the last couple of weeks signed after many years of negotiation with South American countries. I right now, and we as a firm don't think that the U S Led economy is actually going to rupture permanently. There are some threats right now, but we're not willing to change our investment stance in terms of that being a permanent rupture.
- [26:30]
Scott Wapner
Okay, look, real quick.
- [26:32]
Stephen Weiss
Defense budgets also drive economies and to the extent they bring more of their defense budget spending overseas and spend more, that will help drive their economy.
- [26:40]
Scott Wapner
Okay, so let's squeeze in a break. We come back, you know the story by now. Gold and silver, new record highs yet again. Halftime. Committee member Bill Baruch, he's making some new moves around those and he will join us next and he will reveal exactly what he is doing.
- [27:01]
Julia Boorstin
Oh, could this vintage store be any cuter?
- [27:03]
Jimmy
Right?
- [27:04]
Bryn
And the best part? They accept Discover.
- [27:06]
Julia Boorstin
Except Discover in a little place like this? I don't think so, Jennifer.
- [27:10]
Scott Wapner
Oh yeah, huh?
- [27:11]
Bryn
Discover is accepted where I like to shop.
- [27:14]
Scott Wapner
Come on baby, get with the times.
- [27:16]
Julia Boorstin
Right. So we shouldn't get the parachute pants.
- [27:19]
Bryn
These are making a comeback, I think.
- [27:24]
Scott Wapner
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.
- [27:59]
AT&T Business Wireless Narrator
Before we had AT&T business wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer even livestreamed the whole thing. Not good for business. Now with AT&T business wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53.
- [28:23]
Scott Wapner
New followers though at&t business, wireless connecting changes everything. All right, welcome back. Silver topping $100 for the very first time ever. 5% today. Gold hitting a record high yet again. Predictions are 5,000 could be hit anytime. Right there. Well beyond. We're right there. Obviously, it's kind of the master, the obvious. Right? Well, I took a trick out of your book.
- [29:01]
Stephen Weiss
I was doing that for Kevin.
- [29:03]
Scott Wapner
Yeah, yeah. Bill Baruch, we said he's making some moves in the space. He joins us now to talk to us about this, which is interesting. I guess you're, you're looking nice to have you. Are you looking for this to top out? Because you're selling the physical gold and silver trust. So.
- [29:23]
Bill Baruch
I'm not looking for this to top out. This is, I've been waiting for this to happen for 10 to 15 years. As somebody that cut their teeth trading gold and silver back in 07 and 08. Here's the thing. We own CEF. We did own it. But you go back three, four years ago, this made up about 20% of the Sprott physical gold and silver or the silver made up about 20%. At the end of 2024, it made up 30%. It is now 45%. Silver is now 45% of this ETF. And you look at the silver gold ratio, it's dropped down to gold. Silver ratios dropped down to some support, meaning gold can outperform silver. Now, we've hit this big, massive benchmark at $100. And you know, I have wrote in my investor letter earlier this, earlier this year from our commodity fund that I think 5,000 gold and $130 silver could nearly be the middle innings. But the way we're looking at this in portfolios right now is I want to sell CEF and I want to move that money, swapping it out for OU and Z, which is straight gold. Because I want to just see here, gold does outperform, and I don't want to take that risk off the table in our wealth portfolios at the moment, monetizing that. Because if you think about it as well, CEF has outperformed GLD and OU&Z by 40% over the last year.
- [30:50]
Scott Wapner
Good stuff. I appreciate you joining us, documenting that trade. Bill, we'll talk to you soon. Why she won the gold. What, what do you make of this remarkable run? Is it more durable than it's, than it's been? You know, you tell me. I don't know.
- [31:04]
Stephen Weiss
Yeah, well, first of all, you know, Bill, Bill's done A great job on it. And he was in a long before I was. I think it does still have some legs as long as we have, you know, geopolitical instability. This is a place where something go hide and then you've picked up the momentum players in this trade as well. So I want to see 5000. I hope it doesn't turn into Bitcoin125 when that was the top and then it just kept falling back. And to me that's a very real risk because while there is some tangible value to gold, it's not reflected in the gold price. There's a little fluff in there because we just don't know how to really value it because it's safe haven and it doesn't trade on the under on intrinsic value. So the bottom line is I think it goes through five but it could very fall back, very well fall back from there.
- [31:50]
Kevin Simpson
I'd rather play the miner, Scott. You know, gold's a great commodity for sure. I think there's no comparison into Bitcoin. But when we're looking at stock metals that I was talking about, I don't think so. When we have, we, we, we. There is a use case for gold. I don't know that there's a use case for bitcoin. I know that from you. So that wasn't an insult. But the, the, the AEM, the Agnico Eagle which we own is up over 130% last calendar year, 52 week high. Today you get a dividend, strong dividend growth, great margins. And when labor and energy start cheap, the efficiency is even greater.
- [32:23]
Scott Wapner
The use you all blinged out on the weekend is that.
- [32:28]
Stephen Weiss
He has a gold.
- [32:28]
Scott Wapner
Is that when you put your gold on, that's when you get your gold on.
- [32:32]
Kevin Simpson
I've got a golden shovel.
- [32:35]
Scott Wapner
Yeah, I'm sure you do.
- [32:36]
Stephen Weiss
I'm sure for all the stuff he talks about, that is. That's the shovel.
- [32:41]
Scott Wapner
All right. We get serious for a moment.
- [32:43]
Stephen Weiss
Yeah.
- [32:44]
Scott Wapner
Because we do have a developing story. A major winter storm that is bearing down on a large portion of the US this weekend. Accuweather's Bernie Rano joins us now with the latest. Hi, Bernie.
- [32:55]
Jimmy
Hi, Scott.
- [32:56]
Bernie Rano
You're exactly right. In fact, the biggest snow and ice storm for many Accuweather saying in nearly five years, 200 million are going to be impacted by this storm. And travel we believe will be shut down. Airways shut down across the country Sunday into Monday and there could be lingering impacts until Wednesday. Here's why. A large area of freezing rain that's going to knock off power for over hundreds of thousands of people or thousands of people without power. Heavy snow from the Southern plains toward the Northeast and oh, by the way, widespread cold air that could tax the power grid across the country this weekend, including in the Texas. Let me show you the ice. That's going to be extensive. Look at that. Dark purple or pink, I should say Dallas, Shreveport and into the Carolinas, Huntsville, Tuscaloosa on west. It's Saturday, Saturday night east of that line, it's Saturday night into Sunday. The snow is going to be extensive. A large area of 6 to 12 inches Saturday. Saturday night, Wichita, Kansas, Oklahoma City towards St. Louis and then we zone in on the Mid Atlantic and Northeast Saturday night into Sunday. Note that dark blue shading where we're looking at over a foot of Snow and an AccuWeather Local Storm Max of 2ft within that dark area. Boston around the foot of snow. New York City could see foot there could be a foot in New York from Philadelphia toward Washington D.C. scott, huge storm, impactful storm on the way.
- [34:22]
Scott Wapner
All right, we're, we're going to be waiting for it. Bernie, thank you. Appreciate that. Coming up, we do have more committee moves to get to. Kevin Simpson has yet another one. It's another new buy too, so you don't want to miss that. Plus our call for the day one back into.
- [34:40]
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Scott Wapner
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Scott Wapner
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- [35:54]
Scott Wapner
All right, so intel is if there's a stock of the day, I guess this is it. It's down 16 and a half percent. That's the lows of the day on the weak outlook. Kevin, you own it. You know this story Is I guess complicated by the fundamentals versus the backstop. Okay, declining fundamentals versus a government backstop. Which is why the stock before this move was like the best performing chip name year to date by a lot. I mean it was like parabolic. If you look at. Can we show a year to date on this? Look at that. So how do you assess it knowing that you still have, I believe, or at least the people who are bearish this name, fundamentals that are questioned versus the fact that the government is in it?
- [36:43]
Kevin Simpson
Yeah, I wish we were talking about it yesterday. Would have looked a lot smarter. We bought this about a month ago at $42 a share.
- [36:48]
Scott Wapner
I don't know, you might have been talking it up yesterday and then it would gone down like this. You look like an idiot.
- [36:52]
Kevin Simpson
Either way, I look like an idiot with this. I don't think there's any. So I'll tell you with, with this stock I trade like a meme stock. It's a classic sell, you know, sell the news event here in a very, very big way. We looked at this really as something that was a complement to the AMD's, the Ivago broadcoms, the Nvidia. It's a small position in the growth portfolio. New position ran up way too hot, way too fast. The numbers were good, the guidance was bad. It's a demand story. They have demand, they don't have supply. So maybe that works out. But what I don't like is the single digit growth expectation. So if you're an investor in intel and you're thinking about it as a 2027 story, you know, maybe you're in it. If you're looking for a short term trade or a snapback, you're going to need a tweet or some kind of meme ification to get it to move. So I would not follow me into this on weakness.
- [37:40]
Scott Wapner
Okay, let's get another move from you. It's Medtronic.
- [37:44]
Kevin Simpson
Yeah, we have it.
- [37:45]
Scott Wapner
Health care is the second best sector over the past six months, but obviously that's sort of cooled off by a lot. What's up with this one?
- [37:53]
Kevin Simpson
We haven't owned this in probably close to a decade, Scott. But this is a story of improving margins. Very good dividend, lots of free cash flow, 16 times forward multiple. But the real reason that I want to be in this name is because of the demographic. You think about who's the potential customer base. And this is a baby boomer market where more of us, not, not all of us at the desk, but a lot of us age. Every day we get closer to needing some of these things.
- [38:17]
Scott Wapner
Speak for yourself. But that's okay.
- [38:19]
Kevin Simpson
I get older every day. And Medtronic is a stock that has cutting edge. We also intuitive surgical, which we'll talk about later. But it's the same theme. Tons and tons of potential customers and lots and lots of profit. So $5 billion annually and I expect that to go up. As a side note, they've increased their dividend for 48 years in a row. So not quite a dividend king, but almost there.
- [38:42]
Scott Wapner
Okay, let's look at Disney. There's a regulatory filing that they have reiterated their plans to name a successor to Bob iger in early 26. Early 26 in quotes.
- [38:55]
Jimmy
Jimmy, feel like we're in early 2020.
- [38:59]
Scott Wapner
Any time.
- [39:00]
Jimmy
Yeah. I mean, and it really should. It's one of these things, like, I don't know if it's like Trump with selecting the next Fed chair, but it's like, don't we kind of know who it is? Like, let's just get it out there. This is an unnecessary overhang in my, in my opinion. I'd like to see this announced. Then we just focus on the fundamentals of we've got to run it hot economy. We've got low unemployment at 4.44%. Let's get people on those Disney cruise ships. Let's get people in the movie theaters, which frankly, they are doing. So let's focus on that, not the CEO turnover.
- [39:29]
Scott Wapner
Okay. Let's do slb because they beat and they raise their dividend, too. Which. Right. Is in your wheelhouse, Kevin, which you own that name.
- [39:37]
Kevin Simpson
Yeah. And this is a relatively new name for us, Scott. We didn't get into it because of anything happening in Venezuela, but certainly the stock moved a lot higher after the fact that it's given a lot of that back. But we like it because of the expectation for Energy in 2022. We had Chevron, ConocoPhillips and Marathon Petroleum. They worked really, really well. We got away from the trade. And we're bringing and introducing energy names back into the strategy this year.
- [40:02]
Scott Wapner
All right, let's take a break. We got Santoli on the other side with his middle. All right, we're back. Our senior markets commentator and overtime co anchor Mike Santoli is here for his midday word. It's been obviously a turbulent week and we have a lot in caps, all caps. That lies ahead.
- [40:35]
Mike Santoli
It's true. And you can see the market kind of maneuvering ahead of that in terms of the tech earnings in particular. But you know, yesterday at this time, Scott, I was saying the one thing that kind of was bothering me was how happy everybody was with the nature of this broadening out and the cyclical leadership and the trade that everyone thought should work is actually working. You can't find anybody who doesn't like banks and all the rest of it. Well, today you're seeing a total countertrend move. Banks down two and a half percent. Software is bouncing just when nobody thought it could bounce. Microsoft's the biggest upside contributor. I don't see it as necessarily a trend change, but it's one of those things that's going to take test the conviction of people who said, hey, this is exactly how it should work. We should be owning industrials and banks and everything else. Other erratic action I would point to as well. There was just a huge jump in the yen versus the dollar. People thinking maybe it's intervention, who knows. But it just shows you there's just a little bit of this sort of spring loaded moves out there. You look, look at what's happening in silver and gold. And so that part of the macro market hasn't really calmed down. Even though yields are fine, they're above 4.2 on the tens, but, you know, not far. So I just think we put all those things, you know, on the screens and make sure we're alert to the fact that, you know, even though we bounced off those lows a couple of days ago, to me it wasn't just about, you know, Greenland crisis or no Greenland crisis, because the overall market has remained a little bit kind of stuck and, and just in the, in the, in the throes of these cross currents.
- [41:55]
Scott Wapner
I feel like Fed risk is pretty much off the table because the market doesn't expect anything.
- [41:59]
Mike Santoli
It doesn't expect, it doesn't feel it needs it. I think that's the bottom line because everyone still feels like we have a little bit of fiscal firepower coming. Economy is going to be supported and you know, we're looking at, you know, two cuts for the rest of the year. Any one meeting doesn't have huge stakes in that regard.
- [42:14]
Scott Wapner
All right, I'll see you on the cb. I look forward to. That's Mike Santoli coming up. We'll give you the set. All right, the setup. Bryn, I want to come back to you on Tesla for a moment. It reports on Wednesday. You already said you're not really expecting great things. I should note too, the stock has underperformed the S&P 500 by 20 percentage points. And the NASDAQ by 50 over the past five years. Now you have the Wall Street Journal out today in a report that says Musk is diving back into US Politics. That's their headline. Just when investors thought that he had maybe put that in the rear view, pardon the pun, and had decided to focus more on the issues that matter most to you. You hear this headline, you see the stock performance. You think what?
- [43:20]
Bryn
Well, I think from the fundamentals, which are earnings, that earnings are expected to be down, down 38%. So not going in the right direction. As I said earlier, I think I've done a great job trading this stock because I continue to sell calls. Right Now I have 500 calls that expire February 20th. And I feel there's a very low probability that those get called away. And so I'll take advantage of those political opportunities if that lends itself. When he announced that the American Party, the stock was down, I don't know, 15%, I bought more. I'll sell calls again. And so I think this is one of those names that you just own the stock and you time it right, time it wrong, you're right. But if you own the stock, add to it when you have these events and sell calls, you can have a really wonderful total return. So I'll just continue to do that because I do think this is like one of the great disruptive companies. And I'm. I'm a big fan of the innovation and the people that he has around himself and at Tesla, Space X, etc.
- [44:17]
Scott Wapner
Okay. IBM's Wednesday also. Kev, you on that name?
- [44:21]
Kevin Simpson
Yeah. We didn't talk about this as one of the Mag 7 stocks, but quietly it's up, I don't know, almost 30% in the past 1212 months. The numbers were good last quarter. They should be good this quarter. What to watch for Consulting services. We would like to see that stabilize.
- [44:35]
Scott Wapner
You want to take Altria, which is Thursday?
- [44:37]
Kevin Simpson
Yeah, I don't have any high expectations there either. Kind of weak off the last quarter. Quarter. You just want to see them maintain the cash flow to support the dividend. There's not much more to that story.
- [44:45]
Scott Wapner
Verizon next Friday.
- [44:47]
Kevin Simpson
Even a more extreme version of just hoping that they can make enough money to pay the dividend. I wouldn't be buying either one of those before the print.
- [44:54]
Scott Wapner
Wow, you don't sound excited about.
- [44:56]
Kevin Simpson
I've hated Verizon for seven years. We've owned it for seven years just for the dividend. Yeah. We have to have an allocation to a telecom. So for many years it was either Verizon or AT&T this point. Maybe T Mobile is even a better one to take a look at. But we've owned it. It hasn't done anything in years, but it pays us 7%.
- [45:13]
Scott Wapner
Exxon and Chevron are next Friday. Jimmy, you have Exxon.
- [45:15]
Jimmy
Yeah, And I think the thing here is that we are actually starting to see some upward pressure not just on crude oil, but natural gas. And that's going to flow through to a diversified company like ExxonMobil. You've got good refining margins, transportation, distribution, etc.
- [45:30]
Scott Wapner
All right, we'll do finals next. Closing bell, three o' clock Eastern. We'll have an interesting last hour, I can guarantee you that because we'll speak with Tom Lee, Keith Lerner, Malcolm Methridge, Jeff DeGraff and Low Tony as we look ahead to those mega cap earnings which are looming large next week. Brin, your final trade is what.
- [45:54]
Bryn
We'Re going to stick with. Capital One, very integrated, vertically integrated. They own the rails with Discover. They're the issuer. And now they have B2B with Brex. I think it goes to 250 in the next year.
- [46:05]
Scott Wapner
Okay, Mr. Gold.
- [46:07]
Kevin Simpson
Medtronic. It's a new position for us. Surgical, innovative, pioneer, tons of free cash flow and improving margins.
- [46:14]
Scott Wapner
You're going to go watch like Austin Powers or something this weekend. You feel good about yourself. Farmer Jim, Transocean.
- [46:21]
Jimmy
700 billion of free cash flow projected this year against a 5 billion market cap. You do the math.
- [46:26]
Scott Wapner
Okay.
- [46:27]
Stephen Weiss
Caterpillar, I mean, even stand three and a half percent today. It's not a big sell off in the context of what it's done, but I'd buy it here.
- [46:33]
Scott Wapner
All right, I'll see you for that final stretch. As we said, three o' clock on closing bell. The exchange begins 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.
- [46:51]
Julia Boorstin
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 and it should not be relied upon as such to view the full halftime report disclaimer, please visit cnbc.com halftimereportdisclaimer it's native.
- [47:26]
Scott Wapner
Hey, girl, what's happen?
- [47:28]
Julia Boorstin
Is that your antiperspirant?
- [47:30]
Scott Wapner
Uh, yeah. Let me see that can. Aluminum, butane.
- [47:37]
Bryn
I cannot pronounce that. You have to switch to native deodorant.
- [47:41]
Scott Wapner
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Bryn
Protection with no hydrocarbon propellant. Wow, this smells heavenly clean. Effective 72 hour odor protection isn't a myth.