Joe Terranova (2:10)

See now is much more volatility.

Scott Wapner (2:13)

Okay, much more volatility. And maybe we're seeing some of that, maybe some of it's self induced by the Trump administration. The thing with Chair Powell obviously has made some people uneasy. What do you do in light of that and what could be a more volatile environment?

Stephanie Link (2:32)

Well, it won't take much to see volatility increase. We just had three straight years of double digit growth in The S and P up 16% last year, 23% in 2024. And in 2023 we had 24%. So the expectations are high. The valuations are rich for the broader market overall. But the economy is gaining steam, clearly at 5%. In Atlanta, Fed Tracker. Consumers are doing their thing. They're consuming AI. The momentum is still there. It's not going away. I do not believe 2025 will, 2026 will go away. I do think also you're seeing massive productivity gains. This is the big change for me, Scott. I mean, we haven't seen numbers like this in decades. I mean, we were, we were growing productivity like 1 2%, 4.9% in the most recent quarter. Unit labor cost down 1.9. That is very, very healthy. And the productivity number is actually pretty good for inflation expectations. So add it all up. Double digit earnings going away from technology, though, that's where the expensive stocks are at. You clearly see the rotation happening and I'm there, you know that. And I'm adding to them. We're going to talk about some of the things that I have been adding to because I have conviction in the underlying strength of the economy. So volatility increases. Use it to your advantage and buy on debt.

Scott Wapner (3:51)

Josh, do you believe what Rick Reeder had to say again yesterday, that this is the greatest investing environment?

Josh Brown (4:02)

Greatest might be further than I would go, but Rick is very bright and I wouldn't disagree with him materially on just the overall positive backdrop. You have deregulation with an occasional insane tweet. That's really powerful. It's hard to quantify, but people are taking risks and people are going into new businesses and there's tons of M and A that you actually can qualify. It's A great last 12 months for M&A. You've got IPOs back. We'll get space X maybe by the end of this year. I don't know. Is that a trillion dollar ipo? Maybe you'll even get open AI. Is that half a trillion, three quarters? I have no idea. Like you can't look at a backdrop like this and say it's not a good environment. The real question is, are we already pricing in how good it is? And that's like the main debate. But look, I listened to the JP Morgan call this morning and I know we're going to get there in a second. This is the cfo. Consumers and small businesses remain resilient. Continue to monitor leading indicators for any signs of stress. Despite weak consumer sentiment, trends in our data are largely Consistent with historical norms. We're not seeing deterioration. So people are not happy with the price of things. We all get that. That's what the midterms are going to be about in a few months. But at the end of the day, they're spending with abandon. Delta is making more money in the front of the cabin than the entirety of the main cabin of the plane. It's K shaped. It's this, it's that. In the end, revenues are going up. Profit margins will be 14, 15% this year for the S and P. Rates are either flat or maybe even lower. I don't know how you could argue with Rick materially that it's not a good backdrop to be making investments right now.

Scott Wapner (5:48)

Jimmy, you know, I'm glad Josh brought up the Delta information. It really is amazing when you look at it. The main cabin, okay, that Every. Everything below first in business class was down 7% year on year. Premium, which is first in business, was up 9%. Yeah, that screams K shape. It represents what the greater economy has looked like. Not commenting on the Delta number specifically here, but what about the backdrop? You do have this, I think it's fair to say this self induced volatility. Now you. When you had this self induced volatility of Liberation Day, that was short lived because parts of the market got unsettled to the degree that the administration became unsettled. Looking at the market.

Jim Leventhal (6:41)

Yeah.

Scott Wapner (6:41)

Becoming unsettled and the prospect of it getting even worse. Some are warning that the attack on Powell will backfire on those who want cuts. Obviously there's the issue of what the bond market may do. Stifel says the S and P is going to consolidate around 7000. Why? Because the, quote, emotional security blanket of rate cuts looks frayed. Schwab talks about today, bye bye bye to rate cuts. And then you have Wolf. We see several triggers on the horizon that could potentially spike bond volatility higher, including further worries about monetary policy and Fed independence. What do you think?

Jim Leventhal (7:21)

I don't think we need rate cuts. And I know there's a perception out there that the stock market is counting on rate cuts. I think that the market can fly without rate cuts because if we don't get them, it's for the right reasons. It's because the economy is growing. Stephanie, you just went through what The Atlanta Fed GDP is tracking 5% for the fourth quarter and in the third quarter it was 4%. We've got unemployment at 4.4%. And we got CPI today, which was really quite benign. I mean, I think the core was 2.7. Maybe it was 2.6% year over year. I'm perfectly fine with that. Now, I'm not saying we won't get rate cuts because it's too early to determine that, but I really don't think we need it. We've got tremendous fiscal stimulus coming from the budget bill. And what if, as is presumed to be the case, the Supreme Court overturns tariffs? What if they mandate the tariffs have been collected, elected have to be refunded and another 200 billion comes flooding into the market? You know, Josh said, and I agree with him that, you know, the good news may be priced into the markets, but there may be a absolute waterfall of money coming into the economy that will goose this market in this economy higher. I don't think we need rate cuts.

Scott Wapner (8:30)

You didn't address, though the issue of Powell. No. Oh no. The issue of Powell and Fed independence.

Jim Leventhal (8:36)

Yep. Let's hit it.

Scott Wapner (8:37)

I don't. What do you think? I mean, is it a binary, a binary deal? The market's trying to look past it, not necessarily believing that it's going to go anywhere. However, if it's a Powell indicted market, does something really bad, Powell not, then the market just blows it off. I mean, how would think about it?

Jim Leventhal (8:54)

I think that the comments that were made yesterday by Ben Bernanke, Janet Yellen, Robert Rubin and everybody else were right on the money that in the long run this does make us look like an emerging market economy. But I stressed just there, in the long run, this is a market right now that's focused on the short term of everything that I just said. Profit, gross economic growth. In the long run, it is a very bad idea to bring the chairman of the Federal Reserve under investigation because what it does is it says to anybody else on the board, whether either chair or governor or Federal Reserve bank, that if you don't toe the line, you are likely to be the subject of an investigation. Market is fired Like Lisa Cook.

Scott Wapner (9:32)

Yeah, the market. The market is ignoring it.

Jim Leventhal (9:35)

What I just heard for now. What I just said for now, the short term the market is focused on economic growth, profit growth, low unemployment, stimulus, potentially tariff rebates. But in the long run, this will.

Stephanie Link (9:46)

He's not going to be around in the spring leaves. So.

Scott Wapner (9:50)

Because some are suggesting that he may not leave altogether even if he does, and that could be an issue because then the administration wouldn't get the seat that they so covet to further in, at least in their minds, guarantee you're.

Stephanie Link (10:03)

Going to have a more Fed. You're going to have a more dovish Fed. There's no question about it.

Scott Wapner (10:06)

You don't care about this issue at all.

Stephanie Link (10:07)

At all. Not at all. I just want them to get rates right.

Josh Brown (10:10)

Can't afford to.

Stephanie Link (10:11)

We talked about this last, last time I was on closing bell. I mean I just think they haven't gotten it right in so many years in terms of, in terms of rate cuts or rate raises. I mean so to me the Fed. Yeah.

Scott Wapner (10:23)

What do you mean they haven't gotten it right in so many years? The whole reason why you are bullish in part on the the picture right now is because you can make the argument that they may have gotten it wrong at the beginning, but they've certainly gotten it right since I think inflation is low and the economy's good. What more do you want?

Stephanie Link (10:38)

And I think that they can cut because we don't have housing cycle. We need housing to recover. And if you don't have a housing cycle you don't have an auto cycle. And it's remarkable that we're growing 5% without those two big components. You need those two to actually recover. And lower rates is the only thing that's going to help that.

Joe Terranova (10:55)

Joe, monetary policy is easier.

Josh Brown (10:58)

Easy.

Joe Terranova (10:58)

It's getting easier around the world. To Rick's comment, as far as this being the greatest investment environment from an asset allocation perspective, he's 100% right and.

Scott Wapner (11:09)

They are the largest asset manager in the world.

Joe Terranova (11:11)

And in 2025 we had a paradigm shift. You had the opportunity to invest in what was under appreciated and non appealing type of assets whether it was investing in developed international emerging market, emerging market debt or back here in small caps. So that opportunity creates a much healthier environment as it relates to volatility. There's different types of volatility. The volatility environment that's most challenging is when capital exits. Because when capital exits the market due to volatility, it doesn't return. The volatility we're seeing so far year to date, which is warranted is volatility. That's suggesting we're seeing repositioning. You're just seeing capital being moved around in the market trying to identify where the next trend is alternative.

Scott Wapner (11:59)

You know, you don't want volatility to show up where you've talked about before and you know the answer questions I ask it.

Joe Terranova (12:04)

That's market. And you have not seen that the bond market remains at this point. You have not, you have not seen it. And why is that a good thing? Because what the markets need most what the economy needs most is the cost of capital to be relatively cheap and getting cheaper, which we agree it is. And you need capital availability. And then to Steph's point, if you could fix housing and people are able to realize the perceived value of what their residential real estate might ultimately be, then that's going to inject even more confidence into the economy, more of a spending catalyst as well, because it's a multiplier effect.

Stephanie Link (12:43)

Housing is, it's only 10% of GDP. But when you buy a home, you have to buy stuff inside the home, you buy stuff outside the home. You actually have to buy a car from the home to get to wherever you're going to be. That's why there's a real big correlation between housing and autos. It's very powerful. If we got that, we're going to grow even more. And that is a very healthy thing. And it also helps the consumer vacation.

Scott Wapner (13:05)

We are getting lower rates, mortgage.

Stephanie Link (13:07)

It also helps the cash, it helps the lower end. If you have rates come down, but.

Scott Wapner (13:11)

They are coming down well.

Stephanie Link (13:12)

But we're not seeing it develop in the housing market. Not yet. I'm planning, I'm hoping it does well.

Scott Wapner (13:18)

Housing is a big part of your.

Stephanie Link (13:19)

Trade, but we haven't seen it. We need it.

Jim Leventhal (13:22)

You're likely to see it very soon. I know you've been patient, Stephanie. I know you've been patient. I think you're going to see it very soon. I mean, last week that the 30 year mortgage was below 6%, in the last year it's been above 7%. That matters. Stephanie, you know I'm not disagreeing with you, but we need more supply of homes and that will come with lower interest rates, which you're seeing. And clearly this President wants lower interest rates. By the way, that was one of the central planks of Secretary Besson and President Trump's platform when they got inaugurated. Remember the three threes? One of them was to get the 10 year yield down to 3%.

Scott Wapner (13:53)

Yeah, well, I mean, it's hard to do that when in the other hand you are holding up a big board of tariffs.

Jim Leventhal (14:01)

I agree. Totally agree.

Scott Wapner (14:02)

They did.

Jim Leventhal (14:03)

I totally agree. However, let's point out that, and we're just saying this, that the 10 year treasury at 4.18% is hardly nosebleed territory. And as the Fed continues to lower interest rates, which is the direction for now, whether we need it or not, think about all the interest rates that are tied to that, whether it's credit cards, whether it's auto loans, helps on the way, and it's coming rather quickly, Stephanie.

Scott Wapner (14:23)

Oh, well, speaking of credit cards, did you guys see Visa, MasterCard again today? Yeah, they're, they're getting hammered again today.

Jim Leventhal (14:31)

So you know what, Scott, all of this stuff, the credit cards, the companies can't buy homes, all that sort of stuff reminds me of six, seven years ago when we first got used to the Trump way of governing. And I remember when he blasted Boeing, rightfully so, for the delays on Air Force One, which still hasn't been delivered. I mean, we should all be used to this. And what happens in terms of being used to this is there is a couple of days, sometimes a week of response until the market wises up that it's easier said, literally easier said than done.

Scott Wapner (14:58)

I would say, obviously that makes perfect sense. I wonder if the variable in all of that, Josh, is the fact that the President and Elizabeth Warren spoke and they're aligned on this issue, that what was believed to be just a throw out comment, something with no teeth in it, because there's no law that would mandate these credit card companies, you know, lowering their interest rates to 10% could take on different steam. If you have more alignment in Congress, which you don't have much on anything, but you may on this. I think that's why Visa and MasterCard are down again today. Trump and Warren don't speak. You're not seeing this move in the market today in these names. That's what I believe. What do you think, Scott?

Josh Brown (15:51)

I think you're 100% right. I think that conversation lends credibility to the people who actually think something will happen here. And maybe it does. And maybe the final version of it is so watered down so as to not even matter, we don't know. Back to the JPM call, they were asked to opine on this. They said, okay, if it's the most extreme version, obviously that makes a material difference in the economics of this business. And then all of a sudden you see a situation where banks get out of the sort of subprime credit card business that ends up being the lifeblood of a lot of consumers because risk just can't be priced appropriately. And I promise you that's not going to be popular with Trump's base when people's credit card accounts start getting canceled or handed over. So like, you could tweet anything, you could have a conversation with Elizabeth Warren about anything. But then what's step 2, 3, 4, 5, and the further down that road you go, you start to realize, okay, maybe this will help me with the Midterms. If the whole thing is going to be about affordability. And I know the GOP is spooked on that because it's one of the few things Democrats look better on in the eyes of the independent. But what are the second and third order effects of that level of disruption in the financial system? You know what? Let's forget it. I mean, does anyone on the desk remember three months ago there was a tweet about carried interest with private equity firms? Like those stocks went down 7% and then the next day went right back and we never spoke of it again. You know why? Because Elizabeth Warren is not the last phone call Trump's going to have. Then he's going to speak to Steve Schwarzman right after. Right. He's going to, he's going to hear from bank of America. He's going to hear. So it's, look, I'm in my 10th year of managing money in the, in the age of Trump, both when he was in the White House and outside. And the main thing to do is not react to the first tweet.

Scott Wapner (17:43)

No. But this may take on something different, which is why those stocks seem to be under added pressure again today. By the way, Microsoft, Joe, was upgraded today to a buy at Compass point. Price target 735. That's on MA. Their top pick is Visa. The target goes to 436. So it was at 390. So they're still below where the stock is right now. You own MasterCard. Rick Reeder, in some of the commentary that he made to me yesterday, he's been a buyer of some of these names. He said it straight up yesterday on this set that he thought some of the move in the credit card names was overdone. Now, that was pre knowing that the president and Elizabeth Warren had spoken. Whether that matters or not, I don't know. What I do know is the stocks are down sharply again today.

Joe Terranova (18:31)

They are. And I'm going to agree with Rick and Josh's remarks here. I think what you don't want to do here, there's a January 20th deadline, a deadline which if we see the right conversations happening, we could extend the deadline. I think everyone agrees this issue needs to be addressed.

Scott Wapner (18:50)

I mean, there's no deadline because there's nothing that would enforce anything the president.

Joe Terranova (18:54)

Has put out their January 20th.

Scott Wapner (18:56)

There's no law that mandates that they have to do it by January 20th no matter what.

Joe Terranova (19:01)

Absolutely correct what is said. I cede that to you. You're absolutely correct.

Stephanie Link (19:06)

Correct.

Joe Terranova (19:06)

But if before January 20, we could have a conversation about what is a situation that needs to change. Whether it's the educational capacity of understanding. If you're a consumer, these are the behaviors that you need to have. So you're not paying 20, 25, 30%. I think the deadline can ultimately be extended. And I think what I don't want to see for investors who have maintained position in a lot of these stocks for a very long period of time. I just. Look, capital one is up 100% over the last five years, up 30% over the last 52 weeks. Synchrony Financial, that's been a good one too. To so Josh's point, if you react here and give up something that has been a winning trade for such an extended period of time because it's built on earnings growth, I think that's the wrong type of behavior.

Scott Wapner (19:55)

Okay, moving to tech, but not the mega caps. Because I thought that Reader made an interesting statement yesterday where he called out memory names. Now you know the move that we've seen in the chips. We'll show you what chip stocks have done. The SMH is up almost 37% over six months. Look at Micron, for example. Look at that chart over the same time frame. Okay, that stock has gone crazy. All right. Look at that. It's up 173% in just six months. Reader, in saying that some of these stocks looked a little ridiculous now was obviously talking about something like this. I mentioned that name specifically. To which he agreed. The price Target goes to 400 today from 300. There's a lot of momentum behind this name. The trend is what it is. The chart tells a pretty good story. You own this name. Does what Reader said make you at all think twice about taking a little bit off the table? Thinking that some names within this universe, especially in the memory space, have gone too crazy.

Joe Terranova (21:12)

So the question really is for me, if I had discretion, would I trim some here? Answer would be yes. If I had discretion, would I, and I didn't own it, would I buy it here? The answer would be no, I don't have discretion. We're rules based. This is the purest representation of momentum that you're going to find in technology over the last three months. And it's a, it's a stock that was kind of late to the AI trade. The stock is extremely extended. It's nearly 20% above its 50 day, 50 day moving average. So it is certainly vulnerable to a price correction. I will acknowledge that we understand the fundamentals at this point. If you don't know you have tight supply and really strong pricing. You're obviously living somewhere where you're not paying attention to any of the headlines.

Scott Wapner (22:06)

The other comment he made, Jim, that was interesting, he called, called software this year, quote unquote tricky.

Jim Leventhal (22:13)

It is tricky.

Scott Wapner (22:13)

I said if it's tricky this year, what was it last year? I mean, last year was really bad. If you look at the IGV versus the smh. Yeah. Over the last six months, if you want to do that or whatever tells the story best, you will see exactly what I'm talking about.

Jim Leventhal (22:28)

It's, it's been tricky. There have been spots and I know you've, you've mentioned this, Scott, things like Snowflake, that has worked, but the bulk of it has been in the air crosshairs as far as an industry that may potentially get disintermediated. And it's gone from Mega Cap. I mean, Microsoft's been kind of dull to say the least for quite some time to the smaller companies like Adobe, which I own. I'll come out and tell you what I believe, which is that I think the fears of AI disintermediating software are overblown. I don't. And I remember, you know, we've heard comments from others that 90% of software, software is going to be disintermediated. That seems a little.

Scott Wapner (23:06)

Brad Gerstner. Brad Gerstner made a comment.

Jim Leventhal (23:08)

That's right.

Scott Wapner (23:08)

He said 90% of the software stocks that are down a lot deserve to be down.

Jim Leventhal (23:13)

Yeah, that's what he said. Thank you very much. Now look, I'm tired of getting to defend Adobe, but I'm going to do it again because this is a stock that to date in the fourth year of the revolution has not been disintermediated. The actual operational and financial results have been terrific, but the stock has.

Scott Wapner (23:30)

Okay, okay, okay, hold on, hold on. I think that overstates it a little bit. You talk about terrific. I'm going to read you from the Oppenheimer Note today from the downgrade of Adobe. Okay. In our view, Adobe has good medium term opportunities and is a cheap stock. All right, they'll give you that.

Jim Leventhal (23:50)

Yeah, yeah, yeah.

Scott Wapner (23:50)

However, they say a challenging operating environment during the AI technology transition leading to uninspiring and decelerating top line growth, inconsistent execution with product cycles, durability concerns about their moat, lackluster investor interest for owning software names and down year over year operating margin guidance in fiscal year 26 will likely weigh negatively on the sentiment. This doesn't sound like, oh, hey, everything's Great. The market's just overdoing it on this name.

Jim Leventhal (24:21)

Well, what they've laid out there is exactly the arguments over the last now in a fourth year of doing this, that that's all coming, that the growth rate is going to slow down and that while the margins have gone down a little bit, I will admit that however, this is a stock that is still projected to see 12% earnings per share growth over the last three years. I mean the top line has grown at 12%. This is not dead in the water. It's trading at 13 times earnings. And I disagree with the note because what the note is saying is what is yet to come, that there are all these hindrances yet to come. That's what the thesis has been to the bear side for the last three years. It just hasn't shown up.

Scott Wapner (25:01)

Well, what do you mean it hasn't shown up? No matches the chart.

Jim Leventhal (25:05)

Yes, I'm saying operationally in terms of what has actually happened, revenues have grown in the.

Scott Wapner (25:11)

If they were knocking it out of the park, I'm sorry, the, the chart wouldn't look that way.

Jim Leventhal (25:15)

Okay. I am disagreeing with what the chart is saying. This is my prerogative as an investor. It's a prerogative of any investor, any of us. We take positions, we look at what's happened in the stock and we say I don't think that is right. You've heard me say this before and say it again. Sometimes the stock market gets it wrong and I think it's getting it wrong.

Scott Wapner (25:33)

On let's finish with what is arguably, I'm not going to say it's the biggest story of the day in tech, but it's got to be up there. And this is according to the FT and it was matched by the way by Microsoft's Brad Smith with our AIM and Jabras within the last hour that the likes of OpenAI, Google and Anthropic face being outpaced by Chinese AI rivals in the race for global growth. That is what the president of Microsoft did tell the FT again he sat down recently last hour or so with Eamon Javers because of Deep Seek. Now are we Steph, do you think underappreciating the threat, if you want to use that word, that deep sea remains in the global market share arms race that AI has presented. We all remember what happened more than a year ago when the market had a deep seek, unsettled moment. Moment.

Stephanie Link (26:27)

Right.

Scott Wapner (26:27)

And I'm being kind. Okay. It took a deep seek.

Joe Terranova (26:33)

We got you.

Stephanie Link (26:34)

I think they can all I think they can all coexist, Scott. And at any given time, one's going to be ahead and one is going to be.

Scott Wapner (26:40)

This doesn't sound like this. At any given time.

Stephanie Link (26:42)

I'm not. I'm not an expert on Deep Seek, but I can tell you that we bounced back pretty darn hard last February after we all panicked about learning about Deep Seek. It wasn't nearly as competitive as it turned out to be. Doesn't mean that they're not going, that they're going away, but it means that to me, we have some amazing companies that are doing amazing things, and I would not want to put all of my eggs in one basket, especially Deep Sea.

Scott Wapner (27:07)

Anybody else?

Jim Leventhal (27:09)

I think there's a real threat here from China. I don't think it means that the stocks in the US or outside of China are doomed for failure at all. But I don't think we should dismiss this. There was an IPO last week of a Chinese AI company called zhipu, which shows that they are not slowing down. This is a year after Deep Sea. What the threat is here is that China does what it's done with the Internet and just create its own AI universe. And, you know, let's not forget that there are a billion two people in China. That's roughly one fifth of the world's population.

Joe Terranova (27:39)

I disagree. I do. I think. I'm sorry, Jimmy. And if I'm cutting you off, I apologize. I think the technology is inferior. Inferior at best. When you look at these AI chips, there's so many concerns. The concerns about stacking, well, they don't resolve that question. Deep Seek in video gives you the ability to not have the stacking concern. Then we heard last week of the Rubin chip that resolves the issues surrounding data cooling challenges. The technology continues to advance more and more, and it's being advanced by our company.

Jim Leventhal (28:12)

I'm not selling in video. Okay, let me be clear. On the other hand, I am aware that China is absolutely not stopping in its own pursuit to replace Nvidia with homegrown chips. And I use that as one example. It's a threat that bears watching at that point.

Scott Wapner (28:26)

So let's. Let's squeeze a break in here. We're going to come back and we're going to get to several moves from Stephanie Link. Joe has one as well to tell you about, but the Linkster has been busy as usual. And we'll tell you where next. It's late.

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Scott Wapner (28:44)

What's happening? Is that your antiperspirant?

Stephanie Link (28:47)

Uh, yeah. Let me see.

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Stephanie Link (29:11)

It's.

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Scott Wapner (29:43)

What made you confident that you could.

Stephanie Link (29:45)

Do something that hadn't been done before?

Jim Leventhal (29:47)

I have no fear of failure.

Narrator/Announcer (29:49)

Trailblazing women, Changing the game One of.

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Stephanie Link (29:57)

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta face think big to accomplish big things.

Narrator/Announcer (30:05)

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.

Scott Wapner (30:26)

All right, let's do these moves we continue to watch Energy crude is at 60 bucks. That's the highest level since mid November. Stephanie Link bought Chevron last Friday and she bought more today. Tell us more.

Stephanie Link (30:40)

I want to have more commodity exposure, not less, that's for sure. And Chevron is the best of the best and it's trading right now at 11 times EBITDA and in the past year it's only up 9%. And they have diversified assets. They've got very strong free cash flow. They CAGR on free cash flow is expected to grow something like 10% between now and 2030. And I don't know what is going to happen Scott with Venezuela, but they obviously are a player and I think on the margin they will see an uptick once we get through all of this. So to me it's best in class. And oh by the way, I really do like the M and A that they have been doing too, which is very synergistic. So I wanted to have more exposure to energy. I still think it's under owned. I was under owned all last year. I didn't own one. So now I own slb, which I bought back in November and I've been adding to it.

Scott Wapner (31:26)

And now Chevron, if you're under owned. We're big buyers of Stephanie Link.

Josh Brown (31:29)

Okay.

Scott Wapner (31:30)

We're long Link shares.

Stephanie Link (31:33)

Okay, yes.

Scott Wapner (31:34)

Just, just to be clear. Okay, okay. So you said that Chevron, they're players in Venezuela. Josh. Exxon is not. Okay. Darren woods made that abundantly clear what he thought about the investing opportunity at the White House last week to which the President took issue with. Quite obviously we already know that by now. Exxon hit a record high today though surpassing its prior high from October. How do you view this name right now?

Josh Brown (32:02)

Yeah, this is a sector wide phenomenon and I bought Exxon just as kind of an exemplar of, of this, of the space. These stocks were completely left out of the bull market over the last couple of years and with good reason. But things are changing. 85% of the XLE names are above their 50 day. 19% of these stocks are making 52 week highs right now. And guys, as farmer Jim has pointed out, that's with crude oil in the 50s. Can you imagine if there's any, any sort of uptick whatsoever? Hartnett was talking about the energy stocks being the contrarian call of the year. He actually made a comment in December. Soon every commodity chart will look just like gold. If oil looks 10% this year as good as gold looked over the last year. Not one of these stocks. We are not bullish enough on any of these stocks. So I don't think Exxon will go up the most. I just think it's the safest. I'm bullish on a lot of names in this group. Halliburton, Schlumberger. We've talked about Baker Hughes a couple of times on best stocks the market. I think you want to be in these stocks.

Scott Wapner (33:09)

Steph, you, you're in SLB. The target goes to 52 from 43. Ray J says outperformed yet again. Joe, you, you have a new buy. I do. It's a personal buy. It's the Oil Services ETF. It's the Oih 52 week high today.

Joe Terranova (33:22)

All right, so let's do the Josh Allen snowplow into the end zone here on why you should be buying energy. My ownership is Baker Hughes through the etf it is Valero, it is equity. Everyone understands the geopolitical risks. Everyone understands what Steph and Josh has eloquently explained. When you actually go out and call around you talk to people who are trading the energy markets. When you talk to people who are running non discretionary capital trend following and they allocate in the crude oil market. I can't find Anyone that's long, everyone is short. And when you look at the CTA commitment of traders reports, it is represented there. So even a mild uptick above 60 to where we are right now, approaching $61, that's going to lead to a little bit of a short squeeze.

Stephanie Link (34:11)

I mean, it's only 3% of the S&P 500 waiting. So for a long time you could ignore it. You didn't have to pay attention to it. But that's where your real alpha generation is. If you can go find quality names. And I am barbelling it because Chevron is not the safe way to play it. SLB is the beta. So I think you want to have.

Jim Leventhal (34:27)

A double weight just quick on ExxonMobil. Biggest part of the XLE over the last five years, its beta has been almost 0.5, meaning it's had half the risk of the S&P 500. That's made it kind of boring and Josh was alluding to that. However, over that five years, the annualized return has been more than double that of the S&P 500. That's the holy grail. Twice the return with half the risk. That's the holy grail.

Scott Wapner (34:49)

Let's get the headlines with Seema Modi. Hi Sima.

Stephanie Link (34:51)

Hey Scott.

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Here's what we're watching at this hour. The Food and Drug Administration releasing a letter asking companies to remove suicide warnings from GLP1 medications. The FDA says they found no increased risk of suicidal thoughts or behavior linked to popular weight loss drugs like Eli Lilly, Zeppbound and Novo Nordisk. Wegovy, the regulator, reaching a similar conclusion in 2024 but did not rule out the risk because of limited data. In other news, Dilbert cartoonist and controversial conservative political commentator Scott Adams has died at 68 months after announcing his diagnosis with prostate cancer. Adams Dilbert cartoon skewered the corporate cubicle culture of the 1990s. President Trump posting on Truth Social calling him a fantastic guy. The Trump administration ending temporary protected status for Somali immigrants. U.S. citizenship and Immigration Service is confirming on X that those protected immigrants are now required to leave the United States by March 17. The Trump administration has previously limited protective status for immigrants from Afghanistan, Haiti, Venezuela and South Sudan. Scott, back to you.

Scott Wapner (35:55)

Ok, Seema, thank you for that. That's Seema Modi. Up next, best stocks in the market according to Josh Brown. Three names in this year's best performing sector. We'll tell you what they are next.

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Scott Wapner (37:39)

Time for Josh Brown's Best Stocks in the Market. Our spotlight is on a very nicely performing materials sector and three names within it. What do you got?

Josh Brown (37:50)

Yeah, so it was kind of cool to see see these names pop up. Most of the materials exposure on the best stocks to market list last year were the Gold Miners, which obviously we talked about Newman, we talked about Anglo Gold, Ashanti. They were incredible home runs. Now we're seeing something different. Cement ready, mixed concrete aggregates, asphalt. You look at Martin Marietta. Let's put this chart up real quick. Mlm Very simply put, these stocks are not heavily owned. This is like one of the blue chips in the space. It's a $40 billion or so market cap and I use that term blue chip somewhat tongue in cheek. But this one and Vulcan materials, which is VMC, also 40 billion in market cap. Both charts look exactly the same. They look incredible. They are breaking out above those fall highs. Everything seems to be lining up. RSI not yet overbought. They really haven't been discovered yet. The other name, the other name worth I would just, I would stay with those two. CRH is a chart that sort of already made a big move. I just want to put it on People's radar because it may consolidate for a bit. You look at that 50 day moving average serving as support. If you want to take it for a trade, that's maybe where I would stop out. But I think the other two are a better setup.

Scott Wapner (39:06)

CRH got downgraded today. Maybe to your point, the analyst at Wells is sort of thinking about the same thing. Equal weight from overweight. So, you know, the stocks had a nice move. Stocks doubled already.

Stephanie Link (39:17)

Yeah. Yeah.

Scott Wapner (39:18)

So maybe that plays into that. Jimmy, you own that name. What do you think about this spotlight?

Jim Leventhal (39:23)

This is a stellar long term holding. You know, if the downgrade today is because it's run up, that's fine. You know, but I think for those of you who want exposure in this space, this is actually the name to own. And I tell you why. Vulcan and Martin Marietta, great companies, they trade at a 30 times forward multiple. CRH is 20. Now here's where it gets more interesting. The market cap of CRH is twice that of each of Vulcan and Martin Marietta. This is an industry where scale matters. You're talking about distributing really heavy material, concrete aggregates, all that sort of stuff. Spreading your fixed costs over a bigger company matters. CRH to me is the long term holding will be up and down. Over the short term, sure. But the long term track record, record not going to go through the numbers. You can look it up. 1, 3, 5, 10 years. It's crushed the S and P. Can.

Scott Wapner (40:07)

I ask a question? You own gold?

Joe Terranova (40:11)

I own Newmont. We bought Newmont in April at 52 in the ETF. I owned the GLD. Got out of it recently.

Scott Wapner (40:19)

Why'd you get out of it? Why'd you get out of it?

Joe Terranova (40:20)

Because I made a mistake, okay?

Scott Wapner (40:22)

That's. That's what I was trying to probe. You own gold.

Stephanie Link (40:25)

I do not own gold.

Scott Wapner (40:26)

I'm trying to understand why everybody doesn't own what has been one of the best. Seemingly.

Stephanie Link (40:31)

I prefer copper.

Scott Wapner (40:33)

I hate to use the word easiest because nothing to what you guys do is that simple. But man, that trade seems like the writing's been on the wall.

Joe Terranova (40:40)

Silver. In many respects, silver is the trade right now. Because silver actually has more fundamental validity in its ownership than gold does.

Scott Wapner (40:50)

You own that silver?

Joe Terranova (40:51)

I've traded and I've lost money. I'm trading it the wrong way. I've traded the silver futures. I'll trade gold futures. I haven't done well.

Stephanie Link (40:57)

Silver is industrial demand. That's half of why silver has gone higher. It's because of the industrial economy doing better Stephanie.

Josh Brown (41:05)

Stephanie prefers copper and diamonds.

Stephanie Link (41:07)

I do that. I do.

Scott Wapner (41:11)

I was going to say. All right, we'll take a break. Santoli's on the other side. Welcome back. Our senior markets commentator Mike Santoli joins us now for his midday word. What are you thinking about today as you look at this market?

Mike Santoli (41:29)

Yeah, it's holding it together, Scott, again through rotation, through kind of selective strength in a couple of the mega caps were kind of hanging near the highs. Think the CPI report was subdued enough that the bond market saw less reason to get excited. So you have those yields, yields pulling back from what could be these sort of trigger point thresholds on the, on the long end. And then it's just a lot of churn around the edges. I mean, the VIX is kind of firm here. It feels as if we're wondering if other shoes are going to drop when we look at the sell the news responses to some of the big earnings like in the banks and the airlines today. So a challenge to the very crowded consensus that we belong in cyclicals and the market's going to broaden out, but definitely have not, you know, disproven any of that Would also point. I can't help but notice the continued weakness in Visa and MasterCard even when there's a lot of doubt cast on the rate cap and they're not lenders. So I wonder if it's just kind of crowded compounders. These secular growth names, things like CME have also been heavy. Maybe that means people just want acute cyclicals. Maybe it means something else is going on there.

Scott Wapner (42:32)

Interesting point you make as usual. I'll see on closing bell and then of course we'll see, I think on ot. Yeah, right, Michael, see you later. Mike Santoli. Up next, our top calls of the day. By the way, we have other Stephanie Link moves that play into one of the calls. I'll tell you what I mean next. All right, welcome back. So you may know Stephanie Link has been a big proponent of investing related to India. Now she has sold that position, but she's deployed it somewhere else outside the U.S. and that is Brazil. Brazil, the EWZ.

Stephanie Link (43:20)

Yes.

Scott Wapner (43:21)

Why?

Stephanie Link (43:21)

So this is much cheaper than the idea. But I still do like India for the long term for the next decade. But I do think this year sets up really well for Brazil. They're growing GDP at 3.4%. Their fiscal and monetary policies are easing, which I think will propel the economy to grow even faster. And of course it has a lot of focus on manufacturing, mining, agricultural. So that's really where I want to be. But the top 10 positions in the EWC is really financials. There's a, there's two that are very big in this ETF which I also.

Scott Wapner (43:54)

Want, want to get a one year of India please. Because that's not really going to show.

Stephanie Link (43:58)

You any last year. Yeah, it really didn't, it was flat and I was very tempted to actually.

Scott Wapner (44:03)

Add to it because it basically sideways.

Stephanie Link (44:05)

Yeah. But the prior year was up 25% so I mean I still like it very much. If I had, if I had cash I would, I would have held on to it. So I'll look and see if there's other places that I can sell and maybe add back. But I do think Brazil outperforms India this year.

Scott Wapner (44:19)

Feels relevant given this call we got from Deutsche bank today which says they're still bullish on the US and Europe but they close their tactical Europe overweight. So I mean there is a lot of conversation, Josh, out there about us versus other areas of the world as other areas of the world outperform the US by a large margin last year and some wondering whether that's going to continue.

Josh Brown (44:44)

Yeah. And the most fascinating thing is that while many, I would argue most of the developed market, country stock markets outperformed the US and many of the emerging, a lot of it was because of multiple expansion. The United States, our large caps actually outgrew in terms of earnings what their share prices did. So in many cases we had multiple contraction. I don't know when the last time you could say that happened was. And that gives me the ability to answer your question in the affirmative. Absolutely. If we see that multiple expansion, that rerating that we saw for developed Europe, developed Asia, etc. If we see that justified by increases in, God forbid, revenue growth and profitability for these companies, which is a huge focus overseas. Absolutely. This could go on for two years, three years, four years. We've seen it before. I know people under the age of 30 haven't, but believe me, it is a thing and it can persist for a very long time.

Scott Wapner (45:45)

I see you're repping the U. You're putting your heart where your wallet is. Quite obviously you're on the bandwagon.

Josh Brown (45:53)

Forever. Forever. So I believe in diversified portfolios.

Scott Wapner (46:00)

All right, we'll come back with finals next. All right, welcome back. Want to call your attention to a CNBC exclusive which is airing tonight. It is the premiere of Warren Buffett A Life and Legacy. In a series of never before seen interviews, Becky Quick speaks to Mr. Buffett about his philosophies on business, philanthropy and life and how his perspectives have changed over the decades. Be sure to tune in tonight, 7:00pm Eastern, right here on CNBC. Halftime back with final trades next. I hope you join me. Closing bell, three o' clock Eastern. Liz Ann Saunders will be with us today along with Dan Greenhouse, Liz Young or Liz Thomas. Mark Okeda with us as well. So we're looking forward to that. Let's do some final trades. Josh Brown, what do you got?

Josh Brown (46:50)

Reiterating ExxonMobil. Great blue chip for 2026 in my opinion.

Scott Wapner (46:56)

Thank you, Farmer Jim. Gee, I wonder whose pick is Delta.

Jim Leventhal (47:00)

It could be Joe's, but I'll reiterate.

Scott Wapner (47:02)

Delta Cleveland Cliffs was tick stocks down.

Jim Leventhal (47:04)

Are you looking at Cleveland Cliffs?

Scott Wapner (47:06)

Win was busy.

Jim Leventhal (47:07)

Are you looking at Cleveland Cliffs up 4%.

Scott Wapner (47:09)

You talking to me the linkster?

Stephanie Link (47:15)

Capital One yesterday is such an overreaction. I buy it with two hands, two fists.

Scott Wapner (47:20)

Okay?

Joe Terranova (47:22)

Yep, held the 50 day, bouncing nicely. Still in a bull trend.

Scott Wapner (47:26)

All right, so we got some work to do in the market. We'll see if we can work our way back on the Dow, which is now down about little more than 2/3 of 1% s and P down by a third. I will see you on the closing bell at 3 and the exchanges now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

Narrator/Announcer (47:52)

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 half time report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer did you know.

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