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Halftime Report
The Road Ahead for the Rally 1/16/26
00:45:21
Frank Holland and the Investment Committee debate the road ahead for the rally and how to position your portfolio. Plus, the desk shares their latest portfolio moves. And later, Josh Brown spotlights CBRE Group in his "Best Stocks in the Market." Investment Committee Disclosures
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Hey, Fidelity, Can I get a second opinion on stocks in the Fidelity app?
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With Fidelity, it's easy to get an outside opinion from independent experts in a single score. And then when you're ready, trade US stocks and ETFs with no commissions.
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That's right.
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I am always right.
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Investing involves risk, including risk of loss.
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Online US equity trades and ETFs and retail fidelity accounts sell order, assessment fee.
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Not included some account types and securities excluded.
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Details@fidelity.com commissions Fidelity Brokerage Services, LLC member.
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NYSE SIPC before we had AT&T business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer even livestream the whole thing.
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Not good for business.
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Now with AT&T business Wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.
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AT&T business Wireless connecting changes everything. I'm Scott Wapner and you're listening to.
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CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.
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E
All right, thank you so much, Sarah and Mike. Welcome to the Halftime Report. I am Frank Holland in for Scott Wapner front and center at this hour, the rallies road ahead. Stocks are trying to avoid closing out the first week of Q4 earnings season in the red as questions rem around portfolio positioning and the rotations Runway. Joining me for the hour, we have a great panel. Stephanie Lane, Jenny Harrington, Jason Snipe and Josh Brown. Quick check of the markets before we get this discussion started. You can see a bit of a muted Friday right now. The Dow pulling back about 30 points, the S and P up fractionally. Same story for the nasdaq. The Russell to invest on a percentage basis up just about a half a percent. Steph, you're right here to my left when we start with you.
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D
Sure.
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E
In all fairness, the S and p is about 1% away from the all time high. So is the Dow. So it's not like the markets are in trouble. However, everybody kind of has an uneasy feeling. I think that's because tech and financials aren't really participating and the two combined, they're about half the S and P. Yeah. What does that mean?
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D
Well, I actually feel pretty good and I know Jenny feels pretty good because we actually have things beyond technology in our portfolios and if you do, you're actually doing pretty well, knock on wood. We've seen rotations in the past. We'll have to see if it continues. But I think what is a little bit different, a little nuance this, this go round is that the economy is actually stronger than expected. I mean, we had an Atlanta Fed tracker that came out on Wednesday at 0.3%. And then on Thursday we got better data again with weekly jobless claims at the lowest level on a four week average basis. Lowest level in two years. So the labor market is firming up. We got good manufacturing data from Philly Fed and the Empire State and they had good orders and good shipments, good prices paid, meaning lower prices paid. So good combination. So we're getting the data. And then last week I think the biggest thing is that productivity is up 4.9% and unit labor costs were up, were down 1.9%. That is like the definition. I don't want to say Goldilocks, but I'm going to say it right. It's good growth. It's not seeing a lot of inflation on the labor front. I know the CPI is a little rich, I get it. It's probably going to stay there for quite some time. But I would rather have Frank higher growth and a little bit higher stickier inflation any day from an investment point of view. And if the tech stocks don't rally, it's 35% of the S&P 500. Well, maybe it's a more particular ST stock specific game this year. And it's not just owning the cyclicals. You want to own the cyclicals because of what I just said about the economy. So that's industrials, materials, energy and financials. You may, you may pick some places in tech that get hit. I'm thinking about Broadcom. It's been down like every single day since they reported earnings. So I'm looking at places to add even in tech.
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E
All right, Jenny, come over to you. Steph mentioned both of you guys are feeling pretty good. You feel pretty diversified. By the way, Goldman out with a note saying bull markets, they're meant to be ridden, not time. But they say exuberance should be temper. And their global investment committee suggests what you two are both doing. Maximum portfolio diversification and also risk management. So the second half of that. Are you agreeing with that? Is this now time to mitigate some risk?
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Definitely.
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Even though the broadening trade is working?
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F
Yeah, definitely, definitely. Because we're still at a peak. But I think what I struggle with is that tension steps. Right. I am feeling good, but I'm feeling good about my portfolio. I'm not feeling that great about the broader market, I'm not feeling that great about the economy. I hear you on all of your economic data, but what I worry about so much is that that's in the past. When we look at labor, the labor markets are definitely weakening. And that's a really strong tension too because on the one hand, weaker labor is good for corporate balance sheets, help drive earnings, but if it goes too far, it starts to impact the economy in a negative way. And these are things where there's fine lines, there's not a lot of clarity, we don't know where it's going. So I'm really struggling kind of emotionally right now between being thrilled that like if you look at dby, a dividend etf, it's up four and a half percent this year. That's great. The rotation is great. I'm loving that part. But I really am worrying about the future. And Frank, to your point about like take some risk off, definitely. Rick Reeder had an interesting piece out where he says the odds are changing. 2026 is a market for investors, not gamblers. Which goes to your point exactly. Like you want to be picking the stocks, you want to be granular, you want to be nuanced, you need to be careful. And I do think if you can, you take risk out of your portfolio and that can come in a lot of different ways. It doesn't mean get out of stocks comprehensively. Right. There's different stock strategies out there. Some have significantly less risk than others. But if you have this opportunity and you don't need to, you don't need to nail the top. You don't need to nail the top. But however you cut it, the market is still pretty much kissing an all time high. So if you can take a little off, I'd say do it to where.
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D
Where are you worried on the labor front? Because I don't really care about the non farm payroll numbers. That's backward. Look, I don't even care about the ADP numbers. But if I think about the coincident indicators, which is the weekly jobless claims. So we're at 205, 205,000. Right. Weekly jobless claims, that's as of Thursday and that's the four week moving average.
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Right.
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Okay. Recession is 350 to 375,000 and the five year average is 273. So we are across the board looking at something that's real time, real labor statistics, smoothing it out. And the numbers are good. I will give you, I will give you that it's cooling. Certainly not here's my issue.
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This is like when we talk about the K shaped economy. It is, this is exactly where it's at. So Steph, you're right. In aggregate. You're absolutely right. In aggregate the numbers look okay. But if you look at the monthly change in non farm payrolls, we've had eight months of no job growth.
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I don't care about the non farm payrolls.
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If you look at, if you look at us private payrolls, ex leisure, hospitality, education and health care. So we're talking about high, high paying. Right. You see seven months of negative numbers. If you look at. And these are numbers from the Fed probability of losing a job. The probability of losing a job, the odds have spiked. If you look at probability of finding a job, the numbers have plunged. If you look at college educated job loss rises. They're rising. So I can just go.
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Before we get too deep in the economic conversation, we got to get the gentleman involved in this.
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And I think like it's very dangerous. I think it's very hard. If you only look at the aggregate and I think you have to disaggregate.
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Only looking at the.
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I know and I don't, I disaggregate it. And what I worry about is all these nasty things that I'm seeing and all these nasty headlines bleed up.
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Understand the economics keep. When it gets back to the risk management really quick tonight. Are you trying to take some money off the table? Are you looking to manage some risk? Let's get back to understand the economic conversation that you're having. And we got Josh waiting patiently as well.
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Yeah, yeah.
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He always then.
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Right, right.
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I think for me, you know, it's a bit of a mean reversion trade which I think is healthy for the markets.
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Right.
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We don't, we don't want to see the concentration that we did in 2023. Right. 2025 was more of a broader play and RSP started to pick up some steam towards the end of the year and obviously it's producing now. You know, even as it relates to financials. It's kind of a sell the news event. I mean this is what we've seen over the last couple of quarters as financials have, you know, produce earnings and they were relatively healthy. I mean there's some splits, splitting hairs between some of the names. Like I looked at JPM as an example where banking, investment banking fees were down 5% and Citi were up 38.
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E
Right.
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So there's numbers like that that you could really scrutinize. But to Steffi's point, I think it is about really picking the right stocks. As an example, Goldman Sachs being a great winner throughout all of last year. Up 50 plus percent and continue on this year.
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E
All right, Josh Brown to you in this conversation. By the way Josh, it was great to spend some time with you yesterday at the CNBC pro event right here at the New York Stock Exchange. Here's some of your thesis on the market right now. I'm sure people are waiting to hear. Market's pretty close to an all time high. What now? Take money off the table. Press on concern about tech and financials being left out. What's your view?
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Yeah, I really love how Stephanie opened the show. Like just reminding people, all right, technology is not getting the job done but if your portfolio is diversified and you're in other sectors, you're in great shape. The market looks pretty damn good and I completely agree with that. Stephanie might disagree with the next thing I'm going to say which is that I think a new bull market started in the ashes of the fall of 2022. It was ushered in late November by the birth of chat GPT coming from a startup that nobody else was talking about prior OpenAI that kicked off I think a brand new bull market and a new economic cycle related to the capex build out and in video becoming the largest market cap stock in the world and then subsequently Broadcom and we've just seen like a classic, classic, classic cyclical bull market. It's been unique in terms of the strength of it maybe but we've seen this before So I think 23 was really like that that early stage of a new bull market and it was highly dominated by AI. Last year was a little different. It felt mid cycle the financials were the leading sector industrials were incredible. Stephanie, Jenny, Jason, we spent the whole year talking about all sorts of like newish bull markets coming along 24, 4, 25 you're talking about utilities. Like it was a really, it was just a really interesting bull market but nonetheless mid cycle this year feels like we're getting into late cycle. Doesn't mean like we're having a recession right after but outperformance by commodities, materials and energy is a classic tell that commodity pricing pressures are starting to build up higher demand than supply in certain commodities starting to build up some of those pressures a little bit of a softening in the labor market. I know you guys can debate that with me till the cows come home. Let's just say it's not as good as 24 and we could all agree to that. Like, that's sort of where it feels like we are to me. And what do I do in response to that? I'm looking at the types of stocks that are in the materials sector, in some of the industrial areas, in the commodity sector that maybe I wasn't looking at 18 months ago because they just weren't participating and now they are. So it doesn't mean we have to go into a recession, but in a cyclical bull market context, it does feel late cycle. I think that explains what's working this year, what's not. I think it's perfectly normal, totally not natural. And last thing here, just to remind people, the trade peaked not every stock, but the theme, the magazine 7 data center theme already peaked in October. Relative to the S and P as a ratio trade, that's already three months ago. And we've seen tons of money get made in all sorts of other sectors as those companies have either bled market cap or flows have gone elsewhere. So the Max 7 are fairly quiet this year. Amazon and Google are up. The rest aren't doing anything at all. But look away. Small caps plus 7% gold plus 7 mid caps plus 6 emerging plus 6 commodities plus 5. I got 9 or 10 commodity names on my, on my, on my list that are up like 12, 13% year to date and it's January 16th. So it's perfectly fine if the tech trade is on hold and we get into a later cycle situation. Lots of opportunities this year.
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E
All right, Josh. Seeing lots of opportunities. I want to go back to that risk management theme one more time because you're actually taking some money off the table. And One of those Mag 7 names, it's Microsoft.
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D
Yeah, I mean, I only had a very small position after the company reported last quarter. I thought the quarter was very good, but the stock has not acted very well. It's. I'm down. I was down about 2%. And I just see like what Josh just said, like he's looking at some other sectors. Well, I have been adding to some, like energy positions. I added to Chevron three times. I added to SLB last week. I'm looking at Dow Chemical now. I'm looking at the commodity cycle as well because I do think it has legs for sure. And I think that maybe, just maybe, the Mag 7 take a pause. We're seeing it. They've actually have already taken a pause. But I come to frank, the valuation on this one, it's just not compelling to me. I would rather, as I mentioned, I'd rather own Broadcom which has industry high margins, industry high free cash flow, the air it certainly has exposure to AI but it also has exposure to some software with VMware it's diversified. I love the management team. They're buying back a boatload of stock. I would rather pick that name that's down every single, almost every single day since they reported earnings back in December. Or I'll go elsewhere. The only two mag sevens that I own now are Metta and Amazon and I'm frustrated with both of them to be honest. But I think matter at a 1 a 1 times peg is too cheap for the, for the growth that you're actually getting and the monetization that you are seeing in terms of time spent that that has been up about 5 to 7% over the last couple of quarters. So that's one I would also take a look at. And then Amazon, I think, you know you win three ways. Right. You know us is accelerating, retail is growing like leaps and bounds over anyone else and advertising up 22%. Those are, those are three great businesses. And the stock is so frustrating because it's like flat over the last year. So there are other places I'd rather put my money.
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But you do own Broadcom, named maintained as a top pick over at Oppenheimer. Jason, coming over to you, you own Microsoft. What do you make of Steph's points? I mean she made it a pretty compelling case to sell out of Microsoft.
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Yeah, listen, the price action hasn't been great, that's for sure, especially over the last six months. And I think one thing we could all say about 2025, which I think was pretty straightforward, is these names don't trade as a monolith. There's no doubt about that. Microsoft has is expense. I think some of the open air news is kind of a little bit of a drag on the stock. I mean but again, 18%, 18% revenue growth on a company this size. 25% EPS growth, Azure continuing to accelerate. I think there are some things to like the PC market maybe continues to lift into this year. So we're going to stay patient with this one. But I definitely understand all the, all the issues you might have.
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Well the patience that you may be having maybe related to earnings season. By the way, Dan Ives out with a note saying that earnings seasons be AI validation for the bulls goes on to say he believes tech stocks can have very strong Q4, especially Microsoft, Alphabet and Amazon. The cloud stalwarts is what he calls them and that's based on his field checks. Josh Want to come over to you. Are you expecting a very strong earnings season by the way, kicks off just under two weeks when Meta and Microsoft report on January 28th. Are you expecting a strong earnings season specifically tied to tech?
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Yes, because the chips are telegraphing it. So the most that's like, to me the most important tell is people are buying these chip names with abandon. The Micron rally, it just tells you that like there is not even commentary in the industry about anything having slowed down from last quarter to this quarter. So yeah, I do, I don't, I don't know that that helps you. We had great earnings. We had great earnings the last time they reported in the winter, they reported the fall quarter. And a lot of these stocks are not higher. Stephanie points out Amazon and Metta. And it's just, it's not a given that you'll get great mega cap tech earnings and that will somehow mean 12, 12, 13, 14% rallies in these stocks. It didn't work last time. So I don't know how much that helps you pointing out Tech is supposed to have 29% earnings growth this year. Do you know that the next closest sector is like, is like 14? So there are earnings growth expectations completely off the charts. But everybody knows that. I'm reading you that off a website.
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All right, Jenna, I want to come over to you. Two issues. There's the chip space that we want to talk to you about. You got Teradyne and Microchip, two big winners there. And then also Meta earnings are coming up. That's the other one of the Mag 7 names. A lot of people have a lot of questions about whether it's debt financing, other parts of the business. So why don't we start with the chips? How do you feel about these two names that you own going forward into the upcoming year?
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F
So the two that we own I feel really comfortable about. Right. You've got Teradyne, which is basically on the manufacturing testing side. So it's not saying which specific chip will be the winner. And I think it's kind of hilarious that microchip even gets lumped in with chips because microchips are like the things that go in this, right. It's not sophisticated. It's just what goes in a remote control or you know, whatever, a smoke alarm. It's just old fashioned kind of chips. I don't think they should be thought of when we have a chip discussion. They're, they're an industrial kind of huge commodity like play. But the only reason that stock's done so well was because it got so ridiculously trashed during the liberation day. And then it's rallied back. It still has a low valuation. It means cash flow gold CEO came back. So that's really company specific. But I think, I think on chips it's going to be the same that I think on the Mag 7, which is each company isn't created equally. It's a year for nuance, it's a year for stock picking. Valuation is going to matter and you're going to need to see, you know, if, if people decide to switch from, you know, one kind of big GPU to another, does your company still survive? And the ASMLs, the Teradyne, the amounts they do. So we like being in there.
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E
By the way, the SMH chip ETF hitting a record high. Want to go back to Meta though?
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F
Yeah.
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What do you think about Meta going into earnings? Do you have questions about some of the debt issues? Do you have some questions about the business model, some of the cost cutting they've done? What are you thinking?
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F
No. So I think this actually lines up with Jason and why you stay in Microsoft. Because I presume unlike where you said you had a slight loss in Microsoft, it's easy to sell these things when you have a slight loss. But we have a cost basis in Microsoft. Sorry, we have a cost basis in matter of $116 a share. We are in this for the long term. I presume that's similar for you and Microsoft too. When you have that big a capital gain, it really changes your calculus on if you're going to get cute and play an earnings season. So the reality is like I don't really care. Right. Their earnings are going to be fine. We think ad spending on the, on the Facebook and Insta platforms is still resilient for a long time. We think there's a benefit here. We don't think there's huge threat. We don't think they're on the roller coaster that, that an open air is on. And when we look at the Magic 7 overall, you've got a stock that trades at 20 and a half times earnings with 20% earnings growth ahead. So to Steph's point, before it's at a one peg, you know the price to earnings to growth rate and you look across that and you know what stuff I'd rather own in video than Microsoft. No offense, but if I was buying something with new money and we camp for the discipline growth strategy, which is a bummer because the cash flow is not there, but you look at an Nvidia 24 times earnings with 50 60% earnings growth ahead. I look at a meta 20 times earnings of 20% earnings growth had valuation is going to matter here. So I'm fine with whatever comes our way on the earnings call.
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E
All right, want to move on. We're talking a lot about AI and chips has actually been eating the lunch of software though. A lot of software names hit in 52 week lows. I'm going to name a few of them. ServiceNow. Jason, you own this one. Jenny, you own DocuSign 52 Week Low. Josh own Toast 52 Week Low. And you also sold out of Adobe earlier this week. What's your view on some of these issues that software is facing due to the pressure from AI? Because I remember last year and it wasn't that many months ago that Brad Gerstner says he was seeing a rally possibly coming up. When it comes to of software, that narrative seems to have changed very dramatically.
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A
Yeah, it really doesn't matter right now whether or not AI is disruptive to all of these companies because the market has already decided that's the case. So if you are a contrarian and you are a value investor and you're looking at companies that are now selling at multiples, the likes of which you haven't been able to buy them for a long time, you're probably licking your chops. But that doesn't mean you'll get instant gratification jumping into them. And I'm a great case study in that. I dove into the dumpster for a little bit of Adobe. Very tight stop. I don't trust. I don't trust as far as I can throw it, I was stopped out like within 10 days. That's okay. It's part of what we all do here. But you know, how many times are people going to try the same thing, bottom fishing in falling knife software names before they just decide, you know what, I have no interest. And if that goes on long enough, ultimately a bottom will be formed. And I think what will be really interesting to see is what happens when these companies come out with pretty good results and say, yeah, we understand that there's AI disruption and we think actually we're going to be playing a role in that and that it's actually going to help us with our own growth prospects. Will anyone believe them? Because they're all going to say it. Benioff is not flying to Davos to say, yeah, we're screwed. Right? So they're all going to do that on the conference call. They're going to talk about their own AI initiatives and why actually this is going to be a good thing for us. Will the market believe have these stocks down 30, 40%? Have they puked up enough market cap where there's no one left to to sell anymore based on the same negative potential catalyst? I'm watching, but I'm not playing.
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E
Not playing. What about when it comes to cybersecurity? I know you talked the CrowdStrike CEO earlier this week. I was spending some time with Ben Reitze from Melius research. He said CrowdStrike pretty well positioned because they secure AI agents. And he says a lot of other cyber companies that don't, they're going to, they might face some issues because a lot of private companies and startups that do secure agents.
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A
Yeah, listen, CrowdStrike is, is selling fur coats ahead of an ice age. Okay. Maybe the best positioned area of software for the age is cybersecurity. And arguably the best executing company in the space, at least in my opinion, is CrowdStrike. I spent an hour with George Kurtz this week and that's all we talked about. They've made two acquisitions in the last five days and those app which acquisitions are about identity. And identity in the age is everything. George points out in. In the age of AI, the hackers don't breach the system, they just log into it. Why are they able to do that? Social engineering enables them to get people to give up their credentials. And then once the hackers have the credentials, they get into the house, they can walk into any bedroom, any kitchen, any closet, any basement, and do whatever they want. CrowdStrike is focused on the identity piece of this so that you don't have an actor who manages access, usually by tricking an employee. Just wander all over the premises. They should only have specific access to whatever task they're working on, no more, no less. And it sounds simple. You would not believe the scope of the technological undertaking to do that for Fortune 500 companies, governmental institutions, international agencies, it's, it's mind boggling. And so I think the only area of software other than Cuda, what Nvidia is doing, that actually currently has a stronger bull case. The age of AI is cyber and crowd is the way I play it.
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D
I mean, I think you're in the second inning in terms of M and A in CyberSecurity. We have 4,000 companies around the world, public and private, out there and you're seeing the big five companies, public companies anyway, making acquisitions. Josh mentioned CrowdStrike. Palo Alto has paid. Jason, you own it. To Identity. This is what they bought with CyberArk. Right. So. But they have spent $30 billion in the last four and a half months on four different deals. Yes, because they don't have enough of an offering. The whole industry does not have enough offering for their customers. So they're trying to bulk up and. And be able to offer more and more to their customers. And by the way, chief technology officers don't want to deal with 20 vendors. They want to deal with like five or six vendors. And so that's also going to happen and also lead to consolidation as well. Palo Alto, I think, is more compelling at this moment than CrowdStrike, and I own both. But because it has lagged so substantially and I like what they're doing, people are nervous about the integration of all these acquisitions. They'll get it done. They have a great CEO. And in the meantime, you have product revenue growth that's growing at 23%, gross margins at 77%, free cash flow up double digits. So to me, you could pick and choose whatever one you want. I think the big five are going to be the winners over the long term.
- [25:46]
E
And Jason Link mentioned you own Palo Alto as well. You agree with her thesis. The idea made some big acquisitions. Cyber Arcs really the headline there. And they're eventually going to figure it out. And platformization, which both Cyber Arc, excuse me, not cyber CrowdStrike and Palo Alto really focus on, that's going to win the day over some of these smaller vendors.
- [26:02]
C
I mean, there's growth, great points around, around, all over. Right. So I think from an identity theft perspective, I think as we continue to advance, I continue to have. Identity is a real issue. That's why Palo Alto stepped out and spent $25 billion to acquire CyberArk. And I think that was a little bit of a drawdown on the stock right. Over, over the last, you know, couple quarters. But I think that's going to be extremely important going forward. I think it's going to be accretive. Chronosphere also is a big deal for them. I mean, just to point $30 billion over the last couple of months. I mean, this is a big deal, but they understand what's at stake. And these companies, I think, you know, are well positioned going forward.
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E
All right, looking at Palo Alto right now, up just about a quarter of 1%. All right, coming up next, more committee moves. Steph's ready with another trade to tell you all about. And then later, Josh Brown's back with his best stocks in the market on a name that he's seen a major transformation in Halftime's back in just two minutes.
- [27:01]
B
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F
Edu what made you confident that you.
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D
Could do something that hadn't been done before?
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H
I have no fear of failure.
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B
Trailblazing women, changing the game One of.
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F
My favorite pieces of advice, think about.
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D
What your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
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B
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [28:02]
E
And we're back on Halftime Report with Steph Link's latest move. Steph, coming over to you. You sold Elanco Animal Health.
- [28:07]
D
Yeah, it was up 86% last year. So I took my profits and I put it into Zoetis because I do like animal health for the long term. It's a $50 billion total addressable market if you include services and retail by 2035. This is a $200 billion total addressable marketplace. There are only three players. IDEX. What is an Elanco? So what is has 20% market share and they have absolutely not been impressive in terms of of the execution. And it now trades at a discount to Elanco which has never been the case. I think you have to go back five years that the stock has traded at a discount set 19 times versus Elanco is at 25 times. So I'm just taking profits in Elanco putting it into Zoetis. I think this CEO is kind of on a short leash, to be honest. A lot of a couple of quarters that have been very disappointing in terms of guidance. They have the products. They've got five blockbuster products coming out over the next five years. So now they have to execute. It is a show me story. And so I think though that the overall theme is a very attractive one and I just think you're going to see some mean reversion throughout this year.
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E
All right, while we're talking about Zoetis maintain is overweight over at Morgan Stanley price target at 160. Want to move On Marriott. Big price target raise when it comes to Marriott from Wells Fargo. Jenny, you're in this one.
- [29:24]
F
Yeah, so it's a little bit late I'd say given the fact that the stocks up 24% since the end of October. But look, anyone who wants to give me a price target update upside, I'll take it. So what you've got going on here is that you've got strong overseas growth, you've got Revpar that was up two and a half percent. You have a pipeline of over 600,000 new rooms coming on trades at 28 times forward earnings, which is rich. Getting back to our PEG conversations. But you have incredibly consistent mid teens digit earnings growth for Marriott and when you have that kind of consistency it deserves a premium. So I always say this. We've had this stock in the portfolio for over 10 years. I bet it's going to be in there for another 10 years. It's exactly what our friend Steve Weiss always loves to talk about as a permanent compounder. So it's going to be in there for a while. So yeah, I'll take the, I'll take the price target upside.
- [30:10]
E
All right, we got one More quick 1. BlackRock price target raised over Morgan Stanley maintained it overweight. They say it's actually trading at a discount. Jason, you're in this now, man.
- [30:19]
C
What a Great quarter from BlackRock stock was up 5% post earnings. You know revenue was up 23%. EPS up 33%. Their, their AU up to 14 trillion with a capital T was up 22%. Very strong security backed lending technology services. So and they continue to grow in the private market space which is supposed to be a $400 billion market by 2030. So I like all that I'm seeing here at BlackRock.
- [30:46]
E
All right, we've got one more for you. Estee Lauder price target raised from 116 up to 131 over JP Morgan. They say Hiko channels they seem to be working. Link, you're in this one.
- [30:57]
D
So this stock is still down 70% from the highs it saw in 2022. And I think that's very attractive for a company that has best brands in 150 different countries. And they have a CEO who's been there for about a year as in this role. He's been at Estee forever but he's in this role and he's got this new strategy, beauty reimagined. And basically all it is is focusing on how to provide value to the customers, how to see real time performance in products supply chain fixes, sourcing improvements, etc. So it's a turnaround story. It's had a nice runoff of the lows. But I still think this will do well, especially since 50% of the business comes from China and the US and China last quarter grew 9%. So we're starting to see a pickup there as well. So very encouraging.
- [31:40]
F
Can I say one thing? Can I say one thing on essay and we were talking about this a little bit earlier, but every single new stock that I'm buying, I'm asking two questions. One, is there a significant threat from I definitely not say two, and this goes back to our conversation about labor. If the labor markets do weaken and the consumer gets significantly weaker, is there an impact?
- [32:01]
D
K shaped craft, prestige, prestigious China.
- [32:05]
F
That's what their client is, also China. So I thought it was interesting when you said that like a lot of the growth comes from China because that takes those off. But I think superficially what I would worry about initially would be, okay, what if the consumer does broadly weaken?
- [32:18]
D
Well, that's not my.
- [32:19]
F
No, it's just an interesting, it's an to me like that when we're talking about what do you buy? Like, that's where my head's at. I think, I think the esteem like gets out of both of those, you know, to your point about the K shape too.
- [32:31]
D
Yeah.
- [32:31]
E
All right. Estee shares are down just over 1% right now. All right. Time now for headlines with our Christina Parts nebulous. Christina.
- [32:39]
H
Hi, Frank. Well, a bipartisan delegation of US Lawmakers is in Denmark today for meetings regarding President Trump's threats to take over the semi autonomous territory. The 11 member group led by Democratic Senator Chris Coons says it wants to lower the temperature as the president insists the US Needs mineral rich Greenland for security reasons. Meanwhile, Trump's Greenland envoy says he will travel to the territory in March and that he believes a deal can be done. President Trump is issuing a pardon to Puerto Rico's former governor Wanda Vasquez. According to CBS News. She was previously indicted in a 2022 federal corruption case and faced up to 20 years in prison. But last August, she pleaded guilty to a misdemeanor campaign finance violation for accepting a donation from a Venezuelan banker. And the Health Department is launching a study on cell phone radiation. Health Secretary Robert F. Kennedy, Jr. Has previously claimed there is a connection to neurological damage and cancer. The Food and Drug Administration also took down old web pages saying cell phones are not dangerous.
- [33:45]
D
Frank?
- [33:47]
E
Christina, thank you very much. Christina Partis, have a great weekend. All right. Coming up next, Josh Brown's got a new trade to tell you all about. Plus, he's ready with his best stocks in the market. Stay with us for all those names. We'll be right back.
- [34:00]
B
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Edu what made you confident that you.
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Could do something that hadn't been done before?
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Trailblazing women, changing the game.
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One of my favorite pieces of advice, think about what your boss's boss needs.
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Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday, wherever you get your podcasts.
- [34:47]
E
And welcome back to Halftime. Josh, tell us all about your latest move.
- [34:52]
A
Which one?
- [34:53]
E
Invitation.
- [34:54]
A
What are we doing here, Frank? Invitation Homes. Okay, well, I'm sorry. So sold. Invitation Homes. There is going to be a presidential conversation about affordability live from Davos. And this is going to be one of the issues, whether or not institutional investors should be able to buy slash own single family homes. It's obviously part of a whole constellation of things that the Republicans want to talk about as evidence that they feel your pain. And that's fine. This is a stock that I've owned for a very long time. It's been terrible over the last year, but I still had a decent percentage gain in it. It's been a dividend reinvestment thing for me. I own it in an ira. And I just said, you know what, I don't want to suffer through this anymore. I don't think that the company will be put out of business. But if they're going to have more severe restrictions around homeownership on the part of private equity or corporations, it's just not worth slogging it out. So thanks for everything. Invitation Homes.
- [35:57]
E
I am moving on, but we were just having a talk about some of the headline risks from the president's expected speech about affordability at Davos coming up next week. So I think you're kind of in line with some of the conversations we're having, but we want to move on to one of your best stocks in the market, looking at commercial real estate.
- [36:13]
A
Yeah. So I don't know if you know this. Jason Snipe is wearing a wire I know exactly what you guys are talking about right now. Cbr, CBRE is name that's been on the best stocks in the market list for a long time. And I want to bring it to everyone's attention because it just broke out yesterday. We wrote it up yesterday morning. Here's why it's breaking out. This is one of the most profitable companies in the commercial real estate sector because they don't own buildings. However, it has been a misunderstood stock for a long time. A lot of people look at this and say, oh, it's old school, like office buildings, brokerage and transactional. And they have actually been transforming the business into much more of a management slash services play. They've been turning a lot of their revenues into something that looks a little bit more like air are quite frankly. And that is what the street is rewarding this company for. It's becoming sort of more like a recurring business. They're getting into other areas of corporate operations, real estate portfolios. They're doing tech and IT services, project management. They want to basically be the company that helps landlords and corporate leaseholders unify building operations, the workplace experience for employees and property management capabilities. And as you can see, they're absolutely kicking ass. So we wrote it up yesterday. I do think the stock is in breakout mode right now. I could absolutely imagine it getting to 200 at some point. And I think it's the type of story that not enough people really understand the transformation that's happened here.
- [37:49]
E
Yeah. By the way, real estate more broadly actually having its best month in almost a year. Best month is all we back in February of 2025. Jenny, you have quite a bit of real estate exposure, a lot of reads. I'm going to name a few of them. Realty Income, Postal Realty Trust, Vichy Properties, Vici, what's your thought on not only Josh's best stock in the market, but the real estate trade right now?
- [38:07]
F
Well, this is another one where like they're doing well not because they suddenly reported any great earnings. It's just a rebound. And it's a rebound because this was the worst performing sector last year. If you look across the 11s and P sectors, there's only one that's not trading at a valuation in excess of its 20 year average and it's the real estate sector. Meanwhile, as an investor, you can go here and hit on both those points that I was talking about before. You can go through and say, will I fundamentally destroy this business? And you can say, no, no, no, no, no. And you can say, will A rotten economy. Will job losses destroy this business? And you can say no, no, no, no, no. It's people lump commercial real estate into one basket but there's enormous granularity. So for example, you mentioned Vici. We own Vici and we own Realty Income letter O. Those are both triple net lease REIT companies. VICI owns huge gaming properties like the Venetian and Caesars and MGM Properties, realty income zones, big box stores, all investment grade companies. They signed 20 year leases. It does not matter if the economy is rotten. For the next three years they're collecting their lease, their rents and Vichy even during the pandemic had 100% occupancy. So they're great. They're trading at a discount. They have good earnings growth. We've got, we've got Sabra health care and we've got Ventas. Those are, are retirement homes and skilled nursing and in the case of Sabra Behavioral health, I cannot replace those and people are moving into those. No matter what happens in the economy might soften a tiny bit. But you can go through and you can look at Melrose Property or Ryman Hospitality Property and these are all things where there is no risk from AI. There's relatively little economic sensitivity. They traded a huge discount to the market. There's decent earnings growth by every, every historical valuation measure. They're cheaper than the rest of the market. So it's a nice place to be right now.
- [39:52]
E
I'm an owner of I believe the Grin Ole Opry as well. Back to Josh's pick. CBRE hitting a record high Postal Realty at a 52 week high. All right, coming up the earnings set up on some big committee names reporting in the week ahead. Halftime's back right after this break. And welcome back to Halftime. Let's get this set up with some key names reporting their earnings next week. First up is Dr. Horton reporting Tuesday before the bell. Jason, you actually own this. When we were talking about headline risk in the housing sector, Josh was a second ago worried about that. When it comes to this name, definitely.
- [40:36]
C
I mean I think affordability is obviously the theme coming into this year. I mean their segment is coming clearly the first time homebuyer and I think you know, last year wasn't a great year. It's had a little bit of mean reversion trade this year so far up around 8%. You know, so I think again that the 30 year mortgage rate is the proxy for this and the, and obviously as a ten year remain stubborn. It's going to be difficult for us to continue to see the stock move unless that number goes down. So that's kind of the focus here and we'll kind of stay patient and kind of see how it, it plays out over the next few quarters.
- [41:08]
E
All right, link you on this one as well.
- [41:09]
D
I think it'll be interesting to see what the administration does with regards to housing. They're trying to throw a lot of spaghetti at the wall right now. Who knows what's going to stick. But I do think it is interesting with the Fannie and Freddie making them buy $200 billion worth of mortgages. So I think that, yeah, you need lower rates. Quarter is going to be crappy. We know that. It's, how could they, how did they handle the margins? How did they, how did they handle the discounting? Probably not great. But the stock is not expensive at 11 times EBITDA. And if you think the administration is going to be successful, when rates come down by the end of the year, the stock will be higher.
- [41:39]
E
All right, Netflix also reporting after the bell on Tuesday. Josh, this is one of yours.
- [41:44]
A
Yeah, I have a very small position left here. I had taken 85% of my position off the table as it broke below 100. I, I'm very bullish on Netflix long term. I have no interest to watch the next six months worth of lawsuits and, you know, fights in Hollywood between directors guilds, etcetera, Play out. I'm not here for the political infighting either. So I'm just sort of going to be like waiting for a better opportunity to add it back. I don't even think the earnings are going to matter that much. I really think what people want to know is whether or not this transaction with Warner is going to happen and whether or not it's going to cost Netflix more in the form of, of it even higher bid.
- [42:25]
E
All right, looking at Netflix shares right now, down very fractionally, but over the last month down just about 7%. All right, coming up next, Mike Santoli joining us with his midday word. We're back right after this break. And we are back on halftime, Commentator Mike Santoli joining us with his midday word. Mike, I'm just looking at the S and P up fractionally just a tick under 7,000. And that's something you've been watching.
- [42:51]
G
Yes.
- [42:52]
E
Can it get over that 7,000 mark?
- [42:53]
G
Well, it's, it's more than a tick below 7,000 versus how it's been the last few days. Right. So we've had five different days in the last six when it's gone within a half percent. Of 7,000 and just pull back now. Not major pullbacks. The market is still has a healthy look to it. S and P is up a percent and a half this year. Equal weights up 4% this year. Small cap still outperformance but it's to me tells me it's a rotational market, not a high momentum market. We may not have the horses this time around to really push higher unless you get I guess a critical mass of really surprisingly good earnings reports coming through. Also have my eye on other things that are either kind of breaking long watched levels or at extremes. So you have the 10 year yields at 421 right. For 20 has been this level. People saying maybe should hold and you know, the dollar is up a little bit bit. You have gold and silver pulling back. So it seems like the market is wondering if we're going to just retreat from some of the hot trades for a little while. But I don't see it as setting up any big alarms. Although at some point some of the froth is going to come back to bite.
- [43:55]
E
We were talking about before you got here, is there a lot of headline risk with the president's speech expected up in Davos next week? Focus Even though he's in Davos on.
- [44:02]
G
Domestic affordability, it feels like it's kind of trickling out. I mean we seem to know some of these measures, measures that are going to be suggested. I do wonder if it's much more, not so much the Davos thing, but three days, you know, three day weekend, we're up nicely. It's kind of a, you know, fast moving world right now in terms of headline risk. And so I just wonder if people are just going to, you know, lay low until we get through it.
- [44:26]
E
All right. Speaking of rotation, you're rotating a closing bell over time. Congratulations on Mike Santoli. Looking forward to seeing starts next week.
- [44:33]
G
Starts Tuesday with Melissa lee of course.
- [44:35]
E
4:05 and starts high Netflix earnings after the bell.
- [44:38]
G
Plenty to talk about.
- [44:38]
F
Absolutely.
- [44:39]
E
Congratulations, Mike. All right, stay with us right here on Halim. Congratulations again to Mike. Final trades coming up. Don't go anywhere. And we are back with final trades on half. Josh Brown, you're up first.
- [45:03]
A
We talked about Baker Hughes and some of the oil services names being on the verge of a breakout a couple of weeks ago that has now happened. Baker above 50 is in breakout. I think today's low volume pullback ought to be looked at by people that are not currently long anything in the sector.
- [45:20]
C
Jason snipe, Regional banks the yield curve continues to steepen Loan demand is coming back online. I like regionals here.
- [45:27]
E
Jenny Harrington.
- [45:27]
F
Okay, one from our international Strategy. Honda Motor, 4.3% dividend yield, 9 times earnings. Dominant position in the very high margin global motorcycle business.
- [45:36]
E
Stefan Link, you get the last word.
- [45:37]
D
I like what I see in the financials. Say the big six banks are all green. I think all of the quarters were good. Wells Fargo has a new beginning with the asset cap for 2026. They're going to take market share. You got to buy it here.
- [45:49]
E
All right, one quick check of the market markets before we let you go. It doesn't look like we're going to hit 7,000, at least not by the end of halftime. Right now we're looking at the S and P up fractionally. The Dow pulling back a few points. The Nasdaq pretty close to flat. The Russell the best performer, up just about a half a percent. That does it for halftime. The exchange starts right now. And we are back with final trades. Don't have. Josh Brown, you're up first.
- [46:19]
A
We talked about Baker Hughes and some of the oil services names being on the verge of a breakout a couple of weeks ago. That has now happened. Baker above 50 is in breakout. I think today's low volume pullback ought to be looked at by people that are not currently long anything in the sector.
- [46:36]
C
Jason Snipe, regional banks, the yield curve continues to steepen. Loan demand is coming back on the line. I like regionals here.
- [46:42]
E
Jenny Arrington.
- [46:43]
F
Okay, one from our international Strategy. Honda Motor, 4.3% dividend yield, 9 times earnings. Dominant position in the very high margin global motorcycle business.
- [46:52]
E
Stefan Link, you get the last word.
- [46:53]
D
I like what I see in the financials today. The big six banks, they're all green. I think all of the quarters were good. Wells Fargo has a new beginning with the asset cap for 2026. They're going to take market share. You got to buy it here.
- [47:05]
E
All right, one quick check of the markets before we let you go. It doesn't look like we're going to hit 7,000, at least not by the end of halftime. Right now we're looking at the S and P up fraction. The Dow pulling back a few points. The NASDAQ pretty close to flat. The Russell the best performer, up just about a half a percent. That does it for halftime. The exchange starts right now. You've been listening to CNBC's Halftime Report, the podcast you can always catch us.
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A
Live weekdays at 12 Eastern only on CNBC.
- [47:33]
B
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.
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D
Choose to show.
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B
Up.
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D
With the bold styling of the.
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B
Mazda CX30 I wake up.