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Halftime Report
The Post-Fed Playbook 9/18/25
00:44:18
Scott Wapner and the Investment Committee debate your post-Fed playbook, as stocks hit record highs following yesterday's rate cut. The experts detail their latest portfolio moves. Calls of the Day include Walmart, Costco, American Express, and Progressive. Josh Brown highlights Expedia for his Best Stocks in the Market spotlight. Investment Committee Disclosures
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- [00:00]
Commercial Narrator
A rich life isn't a straight line.
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Jenny Harrington
To a destination on the horizon. Sometimes it takes an unexpected turn with.
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Commercial Narrator
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Jenny Harrington
And with 100 years of navigating ups.
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Commercial Narrator
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Scott Wapner
Warehouse we believe that shoes are an.
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Commercial Narrator
Important part of, well, everything from first steps to first dates, from all nighters to all time personal bests, from building.
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Joe Terranova
Pillow forts to building a life.
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Commercial Narrator
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- [01:03]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner from one market today in San Francisco. Front and center this hour, your post Fed Playbook. Stocks hit record highs following yesterday's rate cut. We will debate now the road ahead with the investment committee. As always, joining me for the hour, Josh Brown, Joe Terranova, Jenny Harrington, Malcolm Methridge. We will check the markets. I told you, stocks at record highs. The Russell today is outperforming. It in fact is trying for its first record close since November of 2021. Of course, the big question for everybody today is now what what to do following that rate cut and the idea that more are coming. On that note, David Tepper was on Squawk Box this morning and laid it out pretty clearly. Take a listen.
- [02:01]
Josh Brown
Don't love the multiples, but how do.
- [02:02]
Scott Wapner
I not earning own it with an easy, you know, I'm not ever fighting this Fed, especially when the market's telling me have I don't know what it is today but one and three quarter more cuts, you know, before the end of the year. So that's, that's a tough thing not to own. Josh, that pretty much says it all. I'm not ever fighting this Fed as he has really maintained from the depths of the financial crisis. When the Fed gets involved, you just don't fight it.
- [02:32]
Josh Brown
Well, I think the old playbook works just as well as any new playbook that anyone can come up with. And I think market participants have been Sniffing this out for months. Small caps and financials like you can do other things and we can get more specific looking at homebuilders, etc. But small caps and financials are really the playbook and that trade is in fuego already. Right. At all time highs today on the, on the Russell 2000. If the Russell 2000 closes today at an all time high, which is possible, I'll let you know in four hours if it happens. This would be the first all time high close since November 8, 2021. That's 967 consecutive days without an all time high in the Russell 2000. That's the second longest streak in in the history of the stock market. So we talk about big bases and breakouts and consolidation periods that are resolving to the upside. This is like the mother of all consolidation periods for the Russell 2000 segment of the market. We also have 36 financials on our best stocks in the market list. We talked about a bunch of them the other day. J.P. morgan, MasterCard, bank of America, Wells Fargo, BlackRock. You want to be long a market where those five names are among the top performing stocks. Then you look at small cap financials which scratches both itches at the same time. Right. So you've got interactive brokers which we talked about synchrony. We talked about Huntington Bank. I did, I did 10 minutes on HBA and the other day here on the show. Look at the way these stocks are trading. Huntington bank is 4% above its 50, 10% above its 200. There's no resistance. Above stock is only up 9% year to date. You didn't miss anything. There's been no multiple expansion for the financials. None. You're not paying up for these stocks. The financial sector is selling at the same PE multiple it was selling at in January. So what's the playbook? What do you do? This is the thing that always works. It doesn't require the Fed going down to 2% fed funds rate. If the Fed is on your side, small cap should work. Financials will almost definitely.
- [04:47]
Scott Wapner
Joe, Joe, is it, is it that simple? As David Tepper lays it out, I mean he's always had this amazing ability to just distill it down to the most easy to understand things that are going to drive the markets. I'm not ever fighting this Fed.
- [05:03]
Joe Terranova
No, you're not going to fight the Fed. And I think you also don't want to fight the calendar. I do think we set up here for a possible chase for performance. And to Josh's point, there's also the a conversation about pivoting in a different direction where there has been some form of relative underperformance. Josh is talking about the financial sector. Look, the reality is, and you know, in this business, you have to take satisfaction as an investor when you're investing in a particular direction and you get rewarded for it. I'm very proud and very satisfied of what Jyoti has represented. It took a overweight position in financials in January of 2024. We're at 35% right now. So, Scott, yesterday on the dip, I'm sitting there thinking exactly what Josh is saying. This is a moment where you don't want to fight the Fed, you don't want to fight the calendar. You're going into a rate cutting cycle. You see that small caps are rallying, you see that financials are rallying. What do I want to do? Do I want to find a single financial. And I basically just bought more Jyoti because we own 44 names, we own all the regional banks that Josh is talking about. We own the money center banks. And I think collectively the sector benefits from not just that, but also investor engagement, an increase in M and A and regulatory relief. So front and center, to me, that's where the financial sector is right now. And I think it's represented in the price action. And clearly you don't want to fight that.
- [06:30]
Scott Wapner
Malcolm is. I mean, it's financials with a record today, as we've said, Citi is a 52 week high. Goldman record, Morgan Stanley record b of a 52 week high. JP Morgan record high. Mike Mayo talking about it, of course, from Wells Fargo securities. Today, you get rate cuts, you get no recession, you're going to get a continued rally in bank stocks. It's the housing trade, as Josh was mentioning. You've got price targets going up almost across the board from some firms because of the rate cut. You have the gold move, you got the small caps move. But let's start with the financials. What, what, what, what does your exposure look like here?
- [07:06]
Malcolm Methridge
Yeah, Scott, I hear everything that Jyoti is saying. I hear everything. The case that Josh laid out for the small caps, which tend to lean financials more than anything else, and the rate cutting cycle being the perfect time to be owning these. But I would argue a little bit differently that as a person who looks downside first, anytime it's time to make a new investment, I don't necessarily want to be owning the banks that are below the Big Six. And realistically, I think the Big Three, J.P. morgan Goldman and Morgan Stanley are where I would cut it simply because the banking sector itself has ceded a lot of ground over the last decade to the, to the private credit market that's taken over the commercial lending space which tends to be the biggest piece of that business, which is very sensitive to net interest margin. That is the metric that really matters as a shareholder when quarterly reports come out. And, and that metric doesn't so much matter anymore for the likes of the big three that I just named who make the lion's share of their revenues from deal premiums that come on the backs of M and A transactions, wealth management, those sorts of things. And so as an investor I hear you, I really love the momentum behind the financial sector as a whole right now. But just thinking about us potentially being at all time highs in the market and everything else that we've been discussing. I would much rather own the safety of a well diversified financial than having to worry about one that's very sensitive to interest rate moves.
- [08:30]
Scott Wapner
I'm surprised you don't own any of the major banks. That just feels like a miss. How however you know, you nuance it. No JP Morgan? No. Goldman Sachs? No. Morgan Stanley? No. Bank of America. Why not?
- [08:46]
Malcolm Methridge
Yes, so we do own it in our growth and income portfolio for a number of clients. All three of those names you just mentioned. I personally prefer the fintech space because I think there's a tremendous amount of upside. If you look at the name like a SoFi for example, which I do own personally, their core competency to me is buried underneath the surface which is their ability to offer banking as a service technology to other banks that don't want to have to go out and get their own bank charter to offer banking solutions. So that tends to have a much bigger upside potential and is not so interest rate sensitive to me versus something like a traditional financial like we just described.
- [09:24]
Scott Wapner
Jenny, your favorite name, your only name is Columbia Banking. Why?
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Jenny Harrington
Well okay, so if you're picking out that specifically Columbia is in the dividend income strategy.
- [09:35]
Scott Wapner
And I'm only, I'm picking it out specifically because I have it as the only one you own.
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Jenny Harrington
But if we were to.
- [09:41]
Scott Wapner
What do you want me to do?
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Jenny Harrington
Well because you can't say Jenny, why don't you own financials?
- [09:46]
Scott Wapner
Right?
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Jenny Harrington
You should own. You show the large cap financials, they don't have the dividend yield, they don't have the free cash flow yields for me to own them. So I have to say where can I find you? And I think there's upside too so I've owned Columbia for several years and it's been a great performer. Not this year. This year it's mediocre at best once you put the dividend yield and it's a little bit better. But you know, we take a broader lens. And so we also own Schwab, which is up 26% this year. We own American Express, which has been a great performer. The big banks just don't fit our strategies. They don't have the free cash flow yields that we need.
- [10:18]
Scott Wapner
You know, I mentioned the homebuilders and B of A, raising the price targets on a number of firms today. 8% on average is what they've done. Dr. Horton goes to 175, Lennar goes to 135. Pulte Group 145. Toll to 155. Lennar, by the way, reports earnings after the bell today. Josh, you were just talking about the so called ice age in housing last week, maybe finally melting away, which is why you pitched Home Depot to Al Michaels live on the air. Is this now the place to lean in as well? You figure you got your rate cut and you're likely to get more.
- [10:59]
Josh Brown
Yeah. So the top 10% of Americans own 90% of the stock market. But when you look at all Americans and ask what is their biggest financial asset? It's their home. Now, for most of them, the home is not in the investment bucket, it's in the consumption bucket. But even still, not having the ability to sell a house, trade up to a bigger house, downsize to a smaller house because of the interest rate situation, having 7% rates plus on a 30 year mortgage for four years, it's literally economically crippling for millions and millions of households. Plus it slows down this unbelievable demographic tailwind that we have. We have millions of 29 year olds, 30 year olds, 31 year olds, they want to get married, they want to get pregnant, they want to buy a house. They've been locked out of that market because of several factors, obviously supply, but also the affordability crisis and the rates on the 30 year mortgage. With that coming down, it produces a cascading effect that, that is positive for the entire economy. This is when people are spending the most money in the real economy on Main street and at the big box stores. Home Depot gave us a preview of what that looks like as that ice age thaws out. And I genuinely believe if this bull market that we're in is going to have another 3, 4 innings in 2026, it's not going to be all I. It's got to be related to. To improving situation in the home building. Home buying, existing home sales, starts renovation, mortgage refi. All of that is. Is still on the Runway. So I'm long Rocket. I think it's got the most leverage to falling mortgage rates and all the great things that happen as a result. The XHB is up 10% year to date. That's nothing. That's nothing. That is not pricing in what could go right in the housing market next year. So I am bullish in the area. I mentioned Home Depot as a best stock in the market. I like that one to Sherman Williams looks great. There are a whole host of plays here. A lot of them nobody's been talking about for. I don't even want to say quarters. I want to say years.
- [13:15]
Scott Wapner
Malcolm, you have Rocket as well.
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Malcolm Methridge
Yeah. It goes back to the theme of fintech that we were talking about before. I don't really consider that one a housing stock so much. And I think that Rocket is especially attractive right now because they've been making some key acquisitions at a time when the market has been very frozen. So interest rates falling perfectly coincides with them absorbing Redfin, which turns it into a tech solution, with them absorbing Mr. Cooper, which is a mortgage servicer, which makes their life a little bit easier and allows them to go vertical in that tech stack. So I think it's a great time to be owning a company like Rocket. And I think to Josh's point, there's probably a good bit of Runway still to be had here, especially since we're still talking about mortgage rates. Even with the slide in recent days, we're still talking about something with a six handle on it. So it'll probably be a while before we get into the fives and the real boom takes hold.
- [14:03]
Scott Wapner
Joe, why none for you? I mean, if you. If you look at the momentum.
- [14:07]
Joe Terranova
Yes.
- [14:07]
Scott Wapner
Behind some of these names, it looks to me like it's. It's developing or. I mean, Dr. Horton's up 40% in three months and the gains from Pulte and Toll are similar. Lennar and KB a little bit less, but still. Plus 25% for both of those names. What's the problem?
- [14:26]
Joe Terranova
So I like the word developing because that's exactly what's going on here. We sold out of the home builders collectively. NVR is a name that you have not mentioned. You could include that in the list that you already did. We sold out in January of 25. We owned them in 23 and 24. I checked this morning in advance. Of the segment. Each one of those positions was profitable. Right now the momentum is developing. It's building its strongest right now in Dr. Horton. Also relatively strong in Lennar. And Josh's. Home Depot looks excellent as well. The end of October. We'll see where the strategy goes with it, but for sure you have building momentum.
- [15:05]
Scott Wapner
Guys, we need to talk gold today too. It's pulling back a little bit, but it's been on this remarkable run, as Everybody knows, up 39% hasn't rallied this much since 1979. Deutsche bank goes to 4,000. They were at 3,700. Jeffrey Gundloch's been very bullish on it as well. And he told me yesterday when we were sitting out in Los Angeles that investors should own a lot of it. Listen, I still think a 25% type of weighting in portfolios of gold is not excessive. I think that really took one quarter of one's portfolio in gold. Yeah, I think it's not excessive because I think that that is an insurance policy and it's in a winning mode because of the weaker dollar. Jenny, how about that?
- [15:57]
Jenny Harrington
Come on. So I had the same response you did, which was really, I was listening to that interview while you did it. And to me, 25% gold in a portfolio, I think it is a bit excessive. Now look, Gun Lack is super smart, he knows what he's doing. But I would personally never put 25% of a client's portfolio into gold. Part of that for me is pragmatism, which is most of my clients need a portfolio that's like really working for them in terms of income generation and gold doesn't generate income. My other concern with gold is I've always seen it and this was really trained into me during business school, which is gold is a speculation, gold is not really an investment and that's a wonky nuance. But the thing is, when something's a speculation, you are entirely dependent on other people's behavior and what they want to make that share price go to. You can't look at gold and say, oh, it's going to produce these cash flows over the next five years or ten years. Therefore the value should be this. And I think as a result, you can have a lot more volatility in speculative commodities than you can in stocks or bonds. So for me, I think the safer bet is to have a much higher percent of your clients portfolios in stocks and bonds. I don't have anyone in gold right now, but I'm not a bigger picture asset allocator. I thought that was entertaining to think about.
- [17:14]
Scott Wapner
It's not so much that, that we need to debate the, the degree to which somebody needs to own gold or how much they do. It's simply if you're, if you're making that type of call, you're obviously going to bullish on where that asset is going in and of itself. So don't tell me whether it's good or bad for 25% of one's portfolio in it, but just about the nature of the call itself, that you need to have exposure to gold for a variety of reasons as people have held it over the years for those very reasons, but the fact it's just going higher, that's the. That's the call.
- [17:54]
Joe Terranova
So take a piece of paper. Take a piece of paper. Divide it down the middle on the left, right. The reasons to own gold. There's many. You've cited some already on the left. Cite the reasons not to own gold. The reasons not to own gold is because it's going up. That's not a reason to get out of something. It has the momentum, it has the fundamental tailwinds behind it. What we have in the ETF is Newmont Mining. But I also think if in fact you're going to go through a cycle of rate cuts and the dollar moving lower, that trend is not over. I know since yesterday's Fed announcement, the dollar has lifted marginally, but the prevailing trend is a lower dollar that benefits gold. And I also think it benefits commodities in its entirety. Commodities and investing in commodities. I think investors have fallen asleep a little bit on that. Besides the performance that they've gotten from precious metals, if we are going to see a continued lower dollar, you have to think about investing in commodities. Coffee's up 30%. Precious metals are up. The rest of the commodities, they have not performed well. This might be an inflection point.
- [18:59]
Scott Wapner
No, good point, because the inverse correlation, obviously weaker. Dollar typically good. Good for commodities. How about small caps? So Josh mentioned at the top of the show, they are the outperformer today. We're obviously going for the first record close for the Russell 2000 in an awfully long time. Bank of America says their regime indicator says recoveries here by small caps. Malcolm, is this now the moment we've been debating? This feels like forever. And I've heard, well, you got to wait until the Fed cuts to actually buy. Not in advance of that. Okay, this is the moment they did cut. So is this a buy?
- [19:35]
Malcolm Methridge
Yeah, you didn't hear that from me because I am not in the camp that thinks the rate cut is really going to be all that meaningful for small caps, I think you would have to have a significant break in investor psychology to separate us away from the biggest 10 companies that are really moving the S&P 500 right now. So forget about for a moment the small caps in the Russell 2000. It's the rest of the S&P 490 that needs a little bit more love. And so I think that realistically it'll be a little bit of a bump in small caps because that's typically the knee jerk reaction, that's the trade in a rate cutting cycle. But in the next month I doubt we'll be talking about the Russell 2000 really knocking the COVID off the ball. It's usually one year out of maybe 10 where small caps tend to do well and we've been sitting and waiting for that to occur for quite some time. So I'm just not a real big believer that this is the moment that small caps are going to get get that resurgence.
- [20:25]
Scott Wapner
We've been talking about 10% year to date. Josh, for the Russell 2000, what do you make of what Malcolm had to say? You disagree?
- [20:36]
Josh Brown
No, I don't disagree. Look, I think, I think the thing about asset allocation and portfolio management and you know, it's easy to forget this asset classes tend to move in trends and streaks and it's really hard to know when one will start. It's really hard to know when one will end. There are all sorts of false signs and signals along way. In the case of small caps, we've had numerous false breakouts that have led to this kind of thing where it's like a six week rally, then it falls apart. But in this particular case the breakout is so widespread and it's being so driven by the financial segment that I would just say like every once in a while you have to remind yourself there are five and ten year periods of time throughout history where small caps have outperformed the S and P. I know it's hard to imagine because we all are affected by the recency bias over the last 15 years. That just hasn't been the case. But nobody can tell you definitively that over the next three to five years it won't be so. When you're building a portfolio and you're allocating assets, it's okay to have underperforming asset classes relative to Nvidia. Not everything has to be neck and neck with the leaders of the market because these types of regime changes do happen. And I Think you need to be there in advance in order to benefit from them.
- [21:56]
Scott Wapner
All right, you mentioned Nvidia. I mean, another record high today for the, for the tech space. Obviously need to talk about that, but it says so much about what's happening in the market that it's 20 plus minutes into the program and we're literally just getting to tech Alphabet. A record high today. The target to 285 at Piper Sandler. Metta today is holding its Meta Connect event. It's a big, it's a big deal, obviously, out here. Mark Zuckerberg unveiling $800 meta ray ban display glasses. Julia Borstin is live in Menlo park for us today. As price targets are going up today. There's a lot of optimism around this name. Julia.
- [22:34]
Julia Borstin
Yeah, Met a share is rising this morning, up about 1% now after the company showcased its new hardware. And the star product were these meta Ray Ban displays that I got to demo last night with an in lens display and a neural wristband which allows users to pull up messages, take watch videos, get directions and ask questions of Meta AI as well as get the answers or recipes. All of that within the glasses. You see it within the lens. Now these ray Ban displays, along with upgraded Ray Ban Meta glasses and Oakley Vanguards are met as most ambitious bet yet on hardware and Mark Zuckerberg's conviction that glasses are the best way for people to interact with AI. Analyst Gene Munster says the pricing between 379 and 60 $799 signals met his ambition to sell tens of millions of units next year, up from about 5 million units this year. But it does come at a cost. The company has invested $65 billion or so in its Reality Labs division since changing its name to Metta in 2021. And it is unclear how fast the audience will grow for this totally new form factor. And it is technically challenging. A couple of live demos failed last night. When the glasses didn't respond, Zuckerberg blamed the wi fi. Scott.
- [23:54]
Scott Wapner
All right, Julia, thank you. Julia Borson in Menlo Park. Highest price target bump today goes to Wedbush 920 bucks. Jenny, give me something on Metta.
- [24:04]
Jenny Harrington
So this is what we struggle with, which is how profitable is Reality Labs and do we really believe in these metal glasses as the, as the next thing to drive it? Like on a personal note, separately, I don't think I want to live in a world where everyone's walking around wearing them, but if you put the numbers to it. Metal lost $18 billion last year. In Reality Labs. So let's say they don't have the success that they expect to and they scrap reality Labs. That could actually boost net profit significantly. Net profit was 72 billion. They had an $18 billion loss. So for us as investors, looking at earnings are like, you know, maybe, maybe this isn't the place to be. And then, you know, I pair up my personal opinion, which is I don't really love the idea of everybody walking around watching TV out of one eye and having too much information on me. So we'll see where it goes. I'm curious if Mark's right that the best way to interact with AI is through the. Through the lens.
- [24:55]
Scott Wapner
Yeah. Else. Elsewhere in tech today, as you probably know, intel up big Nvidia making the investment their best day in decades for that stock. The yeah, is SMH, the Semi ETF. Best day since June, up 10 of 11 days. You guys know about that? Software is big in the news today. Crowdstrike gets a number of target hikes after its investor day. So there's a Cyber. Speaking of IPO, Netscope pricing at 19. I think that stock has actually opened for trade already up at the Nasdaq. So we can maybe get a look at that as we do the segue to Malcolm before we wrap up our A block today. You bought Oracle. You bought it about nine days ago, right ahead of the earnings, I think. So you took advantage of the big bump and there's Netscope right there. So it is open for business. But tell me more about buying Oracle and what you think.
- [25:44]
Malcolm Methridge
Yeah, so plainly and simply. Well, two things. I bought Oracle ahead of earnings with the expectation that the positive momentum they had coming out of last quarter and we would get a little bit more information about the quote, unquote Mysterious $30 billion deal they had done was going to push share price maybe 5, 10%. I had no clue that it would be the bump that it was. But I'm also looking at Oracle right now and wondering if maybe all of the good news that's hitting the tape right now isn't a good place for long term Oracle shareholders to start taking some profits because we've basically gotten years of growth out of this stock in a weekend. And so I think it might be a place to start looking at that exit ramp if you have been in that name for quite a while and are curious where your exit range point might be.
- [26:29]
Scott Wapner
Okay, we'll take a quick break. We have more committee moves ahead. Josh Brown ready with a new buy to tell you about. Plus, we debate our top calls of the day when we come back.
- [26:44]
Julia Borstin
Oh hey love your shoes. If you're hearing this, this is your sign to try those on. Trust us, you can totally pull them off. In fact try on every shoe here if you want. We won't stop you. In our house you've got unlimited freedom to play. And hey fall is the perfect season to do wear. Be whatever you want. And with tons of shoes that get you at prices that get your budget, we'll give you something to brag about. So go ahead try em on. Let us surprise you.
- [27:14]
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- [28:01]
Josh Brown
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- [28:29]
Scott Wapner
Welcome back. I told you Josh Brown had a new buy. We will do it now. It is, it's Electronic Arts, right?
- [28:37]
Josh Brown
Yeah. So I pitched this on the show I think two weeks ago and the stock technically looks great so I'll just address that. It's 5% above its 50, 15% above its 200 day moving average. RSI is 58, so it's cooled off a little bit and it's about 5% below 52 week highs. But the stock is very stubbornly hanging up there after a really big breakout. And this is exactly when I like to enter these types of situations. And I got to tell you the fundamental catalysts here are really exciting. And I'm not a huge video gamer but they announced some huge launches. Battlefield 6 is obviously the big one. This is a marketing investment, the largest ever that, that EA has done and it's, it's I think a game that could revolutionize the industry. For the first time they're allowing user generated content in the game. There's a big interactive component. It'll be relevant on all platforms, iOS, all the, all the consoles, PC, etc. But they've got Madden NFL 26, now, FC 26, NHL 26, college football 26. It's the most ambitious release cycle in the company's entire history. So you've got the situation now where the fundamentals are breaking out alongside of the technicals. They have a new $5 billion share repurchase plan that was authorized last spring to replace a $2.6 billion share repurchase plan. So they are aggressively shrinking the float while earnings are growing, new launches are coming out and the setup here makes it really clear to me. I don't think there are a lot of sellers. Once it goes, I think it could really go. So I'm long, I've got a trailing stop loss. And the big launch for Battlefield is coming up in the second week of October.
- [30:30]
Scott Wapner
Joe T. Owns this too, right?
- [30:32]
Joe Terranova
Sure does. Bought it back at the end of July. Josh did a nice job describing the technical and fundamental tailwinds. I would add to it. They're building their free cash flow. And in addition to the technical momentum in July that we saw building, we like the acceleration in the revenue growth.
- [30:49]
Scott Wapner
Yeah, look at the stock getting a bit of a move. It's a nice segue into your best stocks in the market list today, Josh, because you've had Expedia on it since last month. Almost a month or so. Why are we highlighting it today?
- [31:07]
Josh Brown
Okay, so Expedia. Expedia has had a huge move. It broke out after a really long period of consolidation. The reason why we're highlighting it today is because I think it's shaping up for an entry when you have stocks that I wouldn't say went vertical, but when you have stocks that after many, many years finally make an all time high, a lot of times there's a little bit of a retracement back to the previous point of resistance. That's what I think is playing out here with Expedia and I would let it happen. But if you look at the highlights from their last earnings call, they are just absolutely on fire. People thought that all this enthusiasm for travel was going to fade away after we all got it out of our systems in 2022 and 2023. Here we are in the summer of 2025 and the superlatives to describe the middle market to high end travel business are still just absolutely off the charts. Expedia also has a $5 billion share repurchase plan, which they first authorized a couple of years ago. They have been buying stock back hand over fist. In the second quarter, they bought 3.8 million shares for about $627 million. That's on like a $27 billion market cap cap, just to give people a sense. In the first half of this year, they bought back five and a half million shares of stock and they're diversifying away from the business that we all know, the core B2C business. They have an advertising business that's on fire, very high margin business which boosts profitability. The B2B business looks great as well. So I think an entry is setting up. I don't mean you have to pull the trigger right the second it made a big move to break out. And now I think you have this period of time between now and the next earnings report in October to start to accumulate. So I'm not in the name myself right at this minute, but that could change.
- [33:03]
Scott Wapner
All right. Good stuff. Speaking of best stocks, by the way, you can join Josh as he reveals his best stocks for 2026 at the next CNBC Pro Live. It's happening January 15, going to be at the New York Stock Exchange. You can scan the QR code on your screen. You can visit CNBC events.com/prolife for more information. And we hope you join Josh there. Let's get the headlines now with Courtney Reagan.
- [33:25]
Jenny Harrington
Hey, Court I, Scott.
- [33:26]
Commercial Narrator
European defense ministers will meet next week.
- [33:28]
Jenny Harrington
To discuss the creation of a drone wall along the EU's eastern border. It comes after Poland shut down Russian drones that entered its airspace last week. The European defense commissioner says the idea had been in the works before the incursion, but that now the European Union's.
- [33:43]
Commercial Narrator
Executive arm wants to move quickly to.
- [33:45]
Jenny Harrington
Bring the concept into reality. NATO also said it would beef up defense of the eastern flank following the incursion. A judge blocked the Trump administration today from immediately deporting Guatemalan migrant children who came to the US Alone. The decision comes after the administration tried to remove minors from the country who were living in government shelters and foster care over Labor Day one weekend. An Italian driver, Fabio Barone, broke his seventh world speed record today, becoming the fastest person to drive on the deck of an aircraft carrier. He reached 100 miles an hour on the deck. That's just over 250 yards long. It took Barone nine months and 160 hours of simulation to prepare for the feat. Kind of takes my breath away.
- [34:29]
Commercial Narrator
I'm worried he's going to go right over the edge.
- [34:31]
Jenny Harrington
Scott back over to you.
- [34:32]
Scott Wapner
Correct, Courtney. Thank you, Courtney Reagan. Coming up next, Mike Santoli with his midday word. Lots to talk about today. We're back right after this.
- [34:46]
Commercial Narrator
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- [35:32]
Julia Borstin
Ah, DSW Earth, place of the humble. Brag here, the shoes are so good, no one would ever know how little you paid if you didn't go telling everyone that is. And with never ending options for every style, mood and occasion, all at really great prices, they'll definitely give you something to brag about. So go ahead, stock up on fresh sneakers from your favorite brands or try those boots you always secretly knew you could pull off. Find the shoes that get you at prices that get your budget at DSW stores or dsw.com Let us surprise you.
- [36:15]
Scott Wapner
We are back on the halftime report today from one market in San Francisco, senior markets commentator Mike Santoli joining us now with his midday word. It's good to see you. I mean, if you look at the market, it's no shocker why we're seeing the things rally that are doing so. But I want you to address what Tepper said on the network today, just the notion, don't fight the Fed like you can, you can, you know, pick on the multiple. You can say, well, maybe the Fed cuts too many times or is the Fed losing its independence. But as a, as an investor in these markets, don't fight the Fed sort of rules the day, at least according to David Tepper.
- [36:52]
Mike Santoli
Right. And I would add, and he would also embody this, don't fight the Fed and don't fight the tape. Sometimes that's the same thing in a bull market. And I think that, you know, you do want to stay involved for all those reasons. Nobody's going to be smart enough necessarily, even him by his admission, to say this is the moment when you want to Step back. He did say don't play as big. He did say he's not comfortable really with the levels that things are trading at. It's not as if there are many bargains out there. And, and it's also, I perceive that he had, you know, a sense of there's no edge.
- [37:25]
Scott Wapner
Right.
- [37:26]
Mike Santoli
I mean, I, it's like all the big themes are kind of known. We've already sort of capitalized into a fair degree. But, you know, you just kind of stay with it until something gets in the way. And I do think that really well captures how a lot of professional investors feel right now, which is they don't feel as if they're kind of outthinking the market. You're not necessarily pleased with the valuations that you have to enter at. But things are working. And, you know, the Fed's going to be cutting a little bit more from here at least. I also think you could look at the market today and say they had a pretty good fix on how this was going to go and mostly price. So, you know, do with that what we will.
- [38:05]
Scott Wapner
I mean, aside from don't fight the Fed, it's like, don't overcomplicate it. It's like, okay, financials, small caps, housing and some other obvious areas they're going.
- [38:15]
Mike Santoli
To, that people are going to try to execute the playbook until the market tells them that it's wrong or that it's already been fully exploited or something like that. You know, you're also seeing a little bit of spicy stuff move today. You know, the buzz ETF's up 3%, Robinhood's up 3%, Palantir's running again. So, you know, people got the, the signal out there, or at least they perceive the signal, that it's going to be safe to move out the risk.
- [38:38]
Josh Brown
Curve a little bit.
- [38:39]
Mike Santoli
We'll see if, if that proves to be the case.
- [38:41]
Scott Wapner
All right, Michael, thanks so much. That's Mike Santoli. Coming up next, we do our calls of the day. We're also going to tell you why Live Nation shares are under pressure. One of Josh's favorite stocks making a big move today. We'll do it coming up. Calls of the day. Wolf, today is out with a it's a pair call, really. It's Walmart initiated Outperform. $129 is the price target. Joe, you own that as you do Costco, too, which was initiated, peer performed. So a little bit of a difference between their views on both of these stocks. You can address both of that, that.
- [39:34]
Joe Terranova
He'S and they're right on this note. Okay, so first of all, Costco has to come out on September 25th when they report earnings and tell shareholders like myself why you need to stay anchored to this. It has been underperforming. The coming quarter they're going to be working against very difficult comps. Ultimately you're hoping maybe you get a stock split here, but you need to see growth kind of reignited. The other side of that, Wal Mart broke out in the last several days to a new all time high. And there's continued excitement surrounding Wal Mart. Now I understand the valuation is rich there. It's trading somewhere around 40 times. That's historically high. But underneath the surface, Wal Mart is going to be a clear leader. When you think about agentic AI and E Commerce, that's going to be valuable as we move forward. We know Amazon has the bottom buy for me button. I think that Wal Mart's going to be a clear leader in gentic AI for E commerce.
- [40:32]
Scott Wapner
How about Zimmer Biomet Jenny Initiated today, Rothschild Co. Redburn130 is the price target there for a stock you own.
- [40:40]
Jenny Harrington
Yeah. So I love this stock right now because I agree with David Tepper that the valuations of the broader US market, they kind of make me sick too. But I still need to be in it and as an active manager I can be in the US market with something like Zimmer that trades at 12 times earnings and they've got a strong demographic driving their earnings growth. They make the hip and knee replacements. Right. So they should have high single digit earnings growth. 12 times earnings revenue should be fine. It's a great place to be without being in that kind of nosebleedy sector of the market that trades at 23 times. So yeah, easy, easy buy for us here.
- [41:15]
Scott Wapner
Jenny, you take American Expression Express too. I mean the premium credit card wars are on. I mean big time. So. So their new Platinum card is going to be 895, $895. That's 200 bucks higher than the prior. You own the stock. What's it mean?
- [41:33]
Jenny Harrington
I think it means that American Express has superb management and they know what they can get away with and they already have that really high end consumer embedded customer base. So they think they can pull this off. They've been right on a lot. We think they will be able to. Here's one that's a little bit at a discount to the broader market. 20 times. But when you look at their earnings growth, it's mid teens like 13% ish. Ahead. So that works out. And I think you literally just trust them to know their customer and know that they can get that they can pull off that $895, because that's a lot of money.
- [42:05]
Scott Wapner
Joe, you've talked a lot about insurance stocks lately. Progressive today cut to equal weight. It was overweight at Wells. What's it mean to you?
- [42:14]
Joe Terranova
The insurance stocks are struggling right now. And so unfortunate for Progressive on a day where the financial sector is rallying and Progressive can't participate. Like Allstate and Chubb and some of the other insurance names. Insurance names have lost their technical momentum. And fundamentally, the pricing power that they had in 2024 seems to be receding.
- [42:37]
Scott Wapner
And finally, Marathon, this is interesting for you because I think the Jyoti has it. You've personally sold Marathon recently, correct? The target today goes to 203 from 187, and that's at Goldman Sachs, which is reiterating the buy call.
- [42:56]
Joe Terranova
Yeah, we don't own Marathon in Jyoti. I owned it personally along with Phillips, Valero. I made the decision to sell out of one of those three refiner names. Looking back, should I have kept all three? The tape would suggest I should have, but I'm comfortable with what I have remaining in Valero and Phillips. I like the turnaround potential with Elliott and Phillips. And then I think Valero is the clear leader for refining, just to be clear.
- [43:21]
Scott Wapner
So the Jyoti does not own Marathon.
- [43:23]
Joe Terranova
It does not.
- [43:24]
Scott Wapner
Okay. All right. Good stuff. Coming up again, I'll tell you about this Live Nation story. It's been one of Josh's favorite stocks for a while. It is falling today. We'll tell you what's going on next. I want to show you shares of Live Nation we did just before the break. They're under pressure today after the FTC in seven states are suing the company for illegal ticket resale practices. Josh, you own the name. We were going to talk about it even before this news came out because at the CNBC game plan conference the other day out in Santa Monica, Michael Rapinoe was there, just bullish on the overall environment and even talked about concerts being under pressure priced and the opportunity that is still left in that regard. Shares are up 40% in the past six months. It's on your best stocks in the market list. But now you have to take in the context of what the FTC and these attorneys general are doing.
- [44:39]
Josh Brown
Yeah, well, there's not that much of a reaction in the share price. And I think one of the main reasons for that is, this is a company that has repeatedly been involved in these types of disputes because people are very passionate about being able to see their favorite artists not overpaying, not, you know, having to deal with scalpers, etc. Etc. It's highly contentious. There was something called the Bots act passed in 2016, better online ticket sales. And as part of that act, there was a limit placed on automated like bots literally buying up huge amounts of tickets and then reselling them. What the FTC in these seven states are saying is that Live Nation and Ticketmaster didn't do a good enough job monitoring whether or not these types of automated buys and sells were taking place on the platform. And they're alleging that the company is allowing it to happen because they're making more money from it. The company hasn't responded yet. I would imagine there will be a response. But I've been in the stock since $75 a share and they've been fighting off different versions of this complaint and others the entire time. Again, they're very large, they're very powerful, they do an amazing job. But people are passionate. When they get locked out of Taylor Swift or the site crashes while their favorite artist is selling out a tour, they get angry. And this is something that's really easy to score political points with. So I support Michael Rapinoe and Live Nation as a shareholder, as a user of the product, and I think the stock will be okay.
- [46:13]
Scott Wapner
All right, we'll follow it and we'll do finals next. All right, let's do some final trades. Malcolm, what do you got today?
- [46:29]
Malcolm Methridge
Yeah, I said it once. I'm going to go sofi again. Share just hit a all time high and I look for upgrades to start lifting the stock price next week.
- [46:39]
Scott Wapner
All righty, thank you. How about you, Jenny?
- [46:41]
Jenny Harrington
Clearway Energy 6 1/2% dividend yield. I actually spoke to the CEO this week and he confirmed that their objective is to grow their earnings, grow the dividend. And while the share price is impacted by rhetoric about clean energy, the business is not.
- [46:56]
Scott Wapner
Thank you, Joe Scott.
- [46:59]
Joe Terranova
We talked a lot about small caps. The IWM that has a health care as a sector weighting there of 16%. Take a look at the XBI.
- [47:07]
Scott Wapner
Okay. And Josh.
- [47:11]
Josh Brown
CrowdStrike up $50 today. Raise the roof.
- [47:14]
Scott Wapner
All right, good stuff, everybody. Thank you. The exchange is 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.
- [47:29]
Commercial Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer smarter by.
- [48:09]
Josh Brown
CNBC make it Career and Income Boosting Online courses to help you be smarter and more successful, get the newest course Now. How to Start a business. Go to CNBCMakeIt.com courses special offer ends September 30th.