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Halftime Report
The Road to New Records 6/11/25
00:44:27
Frank Holland and the Investment Committee discuss the market reaching for new records with the S&P within 2% of an all-time high. Plus, Steve Weiss shares some of his latest buys. And later, we debate the latest Call of the Day on Goldman Sachs. Investment Committee Disclosures
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- [00:02]
Frank Holland
As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn more@bankofamerica.com LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation. All rights reserved. This episode is brought to you by.
- [00:33]
Joe Terranova
Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Landsford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Update wherever you get your podcasts.
- [01:02]
Frank Holland
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern.
- [01:13]
Joe Terranova
Listen in.
- [01:18]
Frank Holland
Welcome to the Halftime Report. I am Frank Holland in for Scott Wapner, front and center this hour reaching for new records. The S&P 500 within 2% of an all time high after cooling inflation data and China trade tensions come off the boil. The investment committee is standing by to break this entire thing down. Here post nine we have Joe Terranova, Shannon's Okosha, Jason Snipe and Steve Weiss. First we're going to do a quick check of the markets before we begin the conversation. You can see a bit of a muted day right now. The Dow up a third of 1%, the S and P and the NASDAQ up very fractionally right now. And really that's where we got to start the conversations. Joe Surprise. We're not seeing the markets move higher after what we heard from Secretary Lutnick. The announcement that there is a deal when it comes to export controls on tech to China, rare earths to the US and seemingly that would kind of move supply chains on both sides that.
- [02:06]
Joe Terranova
Would indicate that it was priced in already. And I think in fact the market expectation is I said a couple of weeks ago we've become desensitized to all of the tariff negotiations and I think the market believes ultimately that there will be some form of a reasonable outcome that will comfort markets. I think we learned that well the weekend of May 9 through May 12 when you had the Geneva Convention with the Chinese. So it's steady as it goes. It seems as though it's a very calm environment. So far this week, you have the Vix now somewhere around 16. You have the narrative surrounding the broadening out thesis expanding to areas of the market that were further unloved, such as small caps. Last several days it appears as though you're seeing some capital go out of momentum into small caps. Overseas markets remain remarkably strong. You have Mexico up 17%, Brazil up 13%, Germany up 20, Spain up 22. You have the Hang Seng up 21, India up 5. So there is this narrative that you can diversify in this market. You're seeing the broadening out. It was reflected earlier in the year in broadening out with sector ownership and now it looks like we're doing it beyond that geographically and by equity size class. That's a good thing for markets in the near term.
- [03:23]
Frank Holland
So you believe all, all the good news is essentially priced into the market. Shannon, I want to come over to you. Wells Fargo out with the note earlier today talking about trade and tariffs. Obviously before we got this, you know, conversation that we had with Howard Lutnick saying in part, we believe we've seen the bottom as the feedback loop closed and tariff talk turned constructive going forward, we need tangible tariff progress for additional meaningful gains. If we reach the end of June with more promises than progress, expect another bout of volatility. I think the question is, as we said, about 2% from all time highs. Is this progress or is it just what everybody already expected? As Joe said?
- [03:54]
Shannon O'Kosha
No, I think the challenge here is that we've been in this period of lower volatility, but that really has been as a result of what frankly were earnings results that were a little bit stronger than expected. And so now we're entering this difficult period that we have four to five weeks before we really see any meaningful uptick in, in terms of earning announcements and most most importantly, that micro data that's going to corroborate or refute the macro narrative that's going to be created over the next four weeks or so. So I think the biggest challenge here is that to Joe's point, you know, I think markets, you know, investors and equity markets are anticipating that these tariffs are going to continue to move lower and that we're not, certainly not going to be at the peak, but that we're getting down to the areas where we might end up with a, you know, mid to high single digit tariff rate, which again, although three to four times what we started the year with, is certainly much less bad than what we were anticipating. I think the Other thing though, Frank, that we need to think about is what's really going to be the catalyst for the second half of the year. And so one of the things we've been talking about in terms of our positioning has been this anticipation of, you know, perhaps an industrial impulse in the second half of the year. Looking for that renewed confidence from businesses, we started to see capex expectations tick up just a little bit over the course of the last couple of weeks. We need to see real progress there, however, to justify the moves that we've seen in equities. Because the equity market in our view is trading as if we're going to get that inflection higher in economic activity and that we perhaps are near the bottom, if not just at the bottom, of some of these economic indicators that we've been watching.
- [05:26]
Frank Holland
I want to ask you a question. So you're talking about the markets anticipating tariffs moving lower. We know right now, at least from the president that the U.S. china tariffs or the tariffs the U.S. is putting on China is at 55%. We also, the reciprocal tariffs are going to probably be, be here until July 31st. Are you saying the market's like that's doable, 55% on China, reciprocal, It's okay.
- [05:43]
Shannon O'Kosha
No, I actually think that they continue to see the potential movement and more importantly, Frank, that those, the broad tariffs that have been announced over the course of the last eight weeks or so, that those are actually going to become much more narrow. And once they become narrow, then from a fundamental perspective you can look at industry sectors and individual companies and determine their tariff impact, which is much easier for the market to sort of define value. Winners and losers in that scenario.
- [06:09]
Frank Holland
All right, Jason Snipe, muted start, also a softer than expected CPI that came in a bit better than expected. Are you surprised by the action that we're seeing in the market again? Dow up just about a third of 1% last time I checked. S and P and Nasdaq up, you know, very fractionally but very important to know. We got to keep this in perspective. The s and P, 2% from an.
- [06:26]
Jason Snipe
All time high, 100% and we're 20% off the highs. And I think it's to Joe and Shannon's point, a lot of this has already been baked into the cake. We had earnings growth above 13%. So obviously earnings were really good and robust and we're obviously looking to the next quarter. I think for me, as it relates to what is the catalyst going forward, I think, I think part of it will be the Fed. I think you know, tariff, tariff talk has, has obviously been more muted. We'll see if there are some deals done before this expiration in July. But you know, I think the Fed will meet next week. There will be no move. There's a 14% chance that they'll move in July. But as we saw lower and cooler CPI print today and we'll see a pie print tomorrow. These are May numbers that we keep pushing the ball further out. What if we get lighter numbers next month?
- [07:13]
Joe Terranova
Right.
- [07:13]
Jason Snipe
And now, and now the Fed has more of constructive story to potentially move because again when we think about small business, there isn't a lot of movement there in terms of Capex and, and labor. So I think the Fed could be at play going into the next few months.
- [07:27]
Frank Holland
I got to be, I feel like we're jumping the gun talking about the Fed already. A lot to digest today by the way. We're just showing bond yields easing back quite a bit earlier today about 5am I believe the two year was above 4%. Now it's at 3.96. So really sentiment, not a big move but a sentiment level. Steve Weiss, I want to come over to you before we get all the way to the Fed, let's talk about U.S. fiscal policy. In fact, Barclays was talking about it earlier today saying in part that they expect choppiness ahead but we're past peak uncertainty. They go on to say we see choppiness over the near term as the markets await clarity on U.S. fiscal policy. Spending and tax bill obviously is what they're alluding to. And with two Q2 earnings likely to feature the first hit from tariffs. They also think that peak trade uncertainties also in the past agree that Q2 earnings, that's where you're going to see the tariff impact. And then also we're having like a lot of uncertainty and the markets are waiting for some resolution there. Really from the Senate, what's the Senate going to say about some of these proposals?
- [08:19]
Steve Weiss
Look, you know, I agree in part with what, what everybody said so far. But except for what you said about earnings being good, earnings aren't going to be good if you, I think that's.
- [08:30]
Frank Holland
What Barclays is saying. We're going to see a hit.
- [08:32]
Steve Weiss
There you are. So if you, if you forget about the report say in prices and you look at the leading indicators, one of those being duty bonds. So when you bring in, when you import into this country, you've got to pay what the anticipated duty is to in a bond, get in the bond for the government and then ultimately Pay that off. I can tell you, talking to people in industry, those bond prices and what they've got to cover for the duty have been extraordinarily high. They've gone up by 10 and 20 times because of the value of it in terms of the bond costs that will come through the economy. Now you can't. And so what we've seen so far, we've seen a lot of front end buying in expectation tariffs. What we got today is yes, part selling the news, but the other part of it is there's nothing new coming out of it. So while you're saying the capex, a little bit of hint that it's going up, frankly, CEOs are still frozen. They've got no clarity on what duties will be, what their capex will be, etc. So I still think we're in a time of uncertainty. And I go back to where the market was, you know, six months ago when we were talking about or eight months ago, 10 months ago when, you know, we had a course that the market's fully valued at 23 times. We didn't have any of this, you know, uncertainty. There's always uncertainty, but this mega uncertainty. So look, I'm pretty fully invested. I'm actually looking for an opportunity to lighten up because I just think that the story is as good as what we're seeing. That's the market is a lagging indicator. As I look at the forward indicators, I'm not really impressed with what I see now. Offsetting that is that we seem to have a different cohort of investors this time. I've been saying this for a couple of years, where, where they're used.
- [10:22]
Joe Terranova
If.
- [10:22]
Steve Weiss
So if you come to the market since 2008 and older investors have aged out, so if you've come into that time, all you've seen is a V shaped recovery and so you're, you're immune to volatility. So I think that's actually a good thing.
- [10:35]
Frank Holland
Let me just saw the NASDAQ and the S and P both turn just very fractionally lower right now, but seeming to lose some momentum as we're talking about the investors that are here right now. Do you think people, I guess now positive again? Are people digesting something? I mean it's only a fractional move, Joe, but what do you make of that? Just turning negative in the last couple minutes?
- [10:52]
Joe Terranova
It doesn't mean much.
- [10:53]
Frank Holland
Doesn't mean much.
- [10:54]
Joe Terranova
I think it's, I think it's a very quiet day. I don't think there's much to trade off of. I don't think you had a. If you're bullish, you really didn't get the response you were looking for on the tariff news with the US and China, you didn't really get the bullish response that you were looking for as it related to CPI this morning. It seems like muted trading activity, almost like a summer environment. But let me just comment and respond to one thing that's Steve is highlighting and I think that the biggest risk to the market and where the market will stumble in the third quarter is if we lose the tailwind of earnings. Because let's remember something that has been the dominant tailwind force for this recovery since the fall of 2022.
- [11:36]
Frank Holland
So you're saying that the Q2 earnings already baked in that we're going to see the tariff hit and investors aren't as concerned about Q2. You're saying it's in Q3 or you're saying the impact of Q2 earnings, the.
- [11:45]
Joe Terranova
Upcoming, the upcoming earnings reporting season.
- [11:47]
Frank Holland
Got it.
- [11:48]
Joe Terranova
If there is earnings disappointment, I do not think the market will be able to ignore that and to continue to move higher.
- [11:55]
Steve Weiss
You know there's one point Citi, Citi was reported to have added hundreds of millions of dollars to their loan loss reserve. So they're anticipating higher, you know, defaults or late payments. So, so you got to look at those signs. If you just focus on what the market's done, I think it's you're making a mistake or that were 2% off the highs. So look, I don't know if it's this quarter, if it's next quarter, but clearly PIE is a more important number than cpi. And, and then you get the Fed. And to your point, I don't see the Fed doing anything. I don't think they change language at all.
- [12:30]
Frank Holland
Right now again we're looking at the markets SB about 2% from its all time high. So Shannon, where do we go from here? Do you stick with tech? Do you still go to momentum stocks looking at stock like Palantir hitting an intraday high today or do you move to other parts of the market that have been working very well like industrials very quietly the leading sector year to date?
- [12:47]
Shannon O'Kosha
Well we've been doing that for some time and I think we were a little early on that in 2024 in terms of broadening out our exposure both from a large cap perspective into other sectors outside of tech as well as down into small and mid cap names. I think one of the reasons that you're seeing this interest in names outside of tech. Now, honestly, you know, we've seen, you know, pretty strong returns from certain tech companies over the course of the last number of weeks. I do think there's going to continue to be some bifurcation in that space. And I think that's important for investors to acknowledge that it's no longer just a Mag 7 versus the 493 trade. There's a lot of dispersion in that. But outside of technology, if you think about what are some of the things that are likely to be catalysts and so in order for companies to maintain their margin, so you think about things like productivity enhancement, you think about in the industrial sector, is AI or automation going to be able to create that more defensible margin profile? If you look at financials, for instance, I know we've, you know, we're going to talk a little bit about a few names today, but if you think about the deregulatory environment, you really need to see true deregulation, not just a lack of enforcement in regulation. And where you've actually seen true deregulation efforts is in the financial sector. Right. You know, kind of moving back from regulation that was going to be put on. Now, companies are able to adjust to that. So I think if you're looking at industrials, if you're looking at financial sector, if you're looking at some, you know, materials, even energy, energy has been a laggard, but starting to look a little bit more attractive, particularly if we don't enter into this recession that was feared kind of coming out of April 2nd. So I think there are opportunities. I think that there's going to still continue to be some momentum behind the tech trade because people are still excited about AI. But there are other ways that you can look at companies in terms of being able to defend their margin in the second half of the year and to defend Joe's point, perhaps be able to deliver that earnings growth that is necessary for the market to continue.
- [14:32]
Frank Holland
All right, Jason, what do you, what do you think? Are you also agreeing with Shannon? It's all about the margin story. I think another important thing to point out is the weakening dollar. If you look since April 8th, dollar is down about 4 and a half percent, has continued to soften since then. How are you viewing earnings season? We heard Joe's take on it, but how are you viewing the importance of this upcoming earnings season and also the margin story?
- [14:50]
Jason Snipe
Yeah, I think the margin story is absolutely always important. I think for me, as I look at some of the areas of the Market one obviously we've seen a lot of momentum in the air. If you're looking at some of the energy deals that have been done in terms of infrastructure, whether it's the Amazon deal or the metadeal on energy, just understanding that that story is still early, there's still a lot to go there in terms of monetization. The other point that Shannon makes that I think is, is, is huge is financials. I think financials are a nice opportunity if you think about credit quality which is still good. I understand Steve point you know about credit, you know, in terms of you know, some defaults potentially coming down the road and folks banks putting away capital for that. But I do think the M and A cycle is, is due to come back around even if it is a 2020, 26 story. I think a lot of these financials are primed for future growth, particularly the Goldman Sachs and, and others of the world. So I like financials. I can continue to like the tech story and you know as I watch the advanced decline line and looking at breadth broadly I think there's lots of areas in the market.
- [15:55]
Frank Holland
Weiss, I'm going to come over to you. Another part of the tech trade right now is chips. Our data team just actually sent out a note. Now this is a, this is a odd data point. I'm just going to read it anyway. The SMH, the chip ETF of course is having its best 44 day period since 2002 is one of those ESPN stats like best shooting on the third Wednesday into. So it's one of those kind of things but still best 44 day period since all the way back in 2002. So over 20 years. What do you make of the chip trade right now?
- [16:21]
Steve Weiss
You know. Well here's where I am. One of my large positions continues to be Taiwan semi and they just reported another Great month up 40%. That's where I play it. You know I think it's also the most reasonably valued here. I take take a look at Broadcom good company but I can't pay that valuation. One can buy Taiwan semi with I would argue even better fundamentals in video. You know, in video I, you know I still own some and I just wonder if we're going to see that trade down again because the pressure on them to continue to put up great, great quarters when you've got others in their backyard, you know, like Meta, developing their own chips. But semis overall, I mean that's as good an indication of which way the economy is going to go right now looks Positive, but I'm going to bet that's not the case.
- [17:13]
Frank Holland
Yeah, we got to talk to you about Nvidia. As part of today's deal we get the rare earth, they get a loosening of export controls seemingly that would mean Nvidia chips.
- [17:21]
Joe Terranova
It would. And look, I've talked at length over the last several weeks about the importance of this recovery rebound that we're experiencing experience in semiconductors and you attach some actual statistics to it, but really it's significant because that is kind of what's lifting markets here towards these all time highs. And I think there has to be a degree of sustainability in that. What I'm witnessing as it relates to what the momentum factor is doing in semis is it looks as though it's kind of beginning to moderate somewhat after it was very intense over the last several weeks. A couple of names where we still see very strong momentum would be KLA Corp. Applied Materials and LAM Research. Nvidia is actually maintaining its positive momentum as well. But there's been some other semiconductor names where you've seen that intense momentum of the last several weeks been to begin to kind of moderate somewhat and that's worth keeping your eye on.
- [18:20]
Frank Holland
All right, Jason, you also in Nvidia, also Qualcomm, as we talk about the loosening of the export controls. Again seemingly that helps Nvidia or at least leads to more Nvidia revenue going to China. What do you think this means for Qualcomm as well?
- [18:32]
Jason Snipe
No, I think it's a big deal and I think, you know, the story for me with Qualcomm is this recent purchase, you know, to improve their AI infrastructure which I think is going to be huge. Again the Qualcomm story is they continue to diversify revenue streams but it be Iot whether it be automotive and others. So I continue to, I continue to like this name. What the innovations of Snapdragon I think is, is, is crucial. And you know, as we look at this Apple deal coming to an end, I think they've done a great job of telegraphing where that's going to end and continue to diversify revenue sources over the last several years.
- [19:08]
Frank Holland
All right, great time to talk about the Max 7 as well. Shannon, what's your view on this basket of stocks up for the last three weeks? If you look at the charts, Tesla's been one of the big gainers in the max 7. Shares up over 30% over the last couple of weeks despite I don't know the word to call it the fight with the President I think that's putting it lightly when you call it a fight. Even though Elon Musk apologized, Apple a laggard actually negative over that three week period. What do you make of that basket of stocks?
- [19:32]
Shannon O'Kosha
Yeah, as I mentioned earlier, I think that there's going to continue to be dispersion here. So if you look at some of the challenges that Alphabet is facing, you saw the announcement of some layoffs and that was covered in the earlier show. I think that, you know, if you look at what came out of Apple yesterday, you know there's going to continue to be a wait and see approach as it relates to their AI, you know, their, their opportunity. But I do think that you know, for, for investors and this is actually similar to something that Steve said earlier. You know the, the draw of those strong balance sheets, the draw of that continued higher absolute earnings growth is continuing to have the investor, particularly the retail investor very much focused on these names as part of their portfolio. So I think it's, they're an important group. I do think that there's going to be some dispersion and again I would, I would acknowledge and probably advise investors really not to trade them as, as one cohort and rather look at this underlying momentum, particularly around the trade. I do think that this group, perhaps absent Tesla, is going to continue to trade on AI enthusiasm or criticism. And so I think that it's important to acknowledge that there might continue to be some volatility as that narrative unfolds.
- [20:46]
Joe Terranova
If I rank them based on relative performance, relative strength, it's clear to me that Microsoft in the process of rebuilding positioning and sentiment has been the strongest us. That's reflected in the expression of making most recently a new all time high. Second, I would place Metta Matter appears to have similar type of strong momentum in the near term where it wants to move towards that all time high. And you can make the argument for Video and Amazon potentially being able to do that as well. Though for Amazon it's a little bit more of a, of a challenge to get to that level. The other names that were that I didn't talk about here, they're struggling. Even though Tesla has had the recovery, it's struggling. Apple post WWDC is struggling as well. I think it's slipping below $200 as we're speaking. So I don't think the totality of the Max 7 has the dominance that it had in 24 and 23. And guess what? That's actually a really good thing because that means it's a healthier environment. And that allows you the opportunity to try and create some alpha if you can and outperform the market.
- [21:54]
Frank Holland
It's so funny that you say that. I was actually talking to some other money managers. They're saying people are going away from the triple cues and the SPY because that over concentration they'll make a cap tech names and just looking for more exposure other parts of the market. But we're going to focus on one of those. Max 17 right now. Joe, I got to ask you about Tesla. Huge month, huge month for Elon Musk in this company. Robotax is supposed to start in Austin. Is this a real inflection point for this company or do you think there's still that quote unquote cult of Elon that's going to continue to invest in this stock and believe in this company?
- [22:23]
Joe Terranova
So I'm going to be very authentic and very humble here and I'm going to tell you a lot of times people will come on the network and just pretend to know something about everything. It is such a complex story surrounding this company. And I spoke about this on Monday and what I said on Monday is I don't have the ability because the strategy that we're implementing, it's rules based, it's non discretionary and we look at a universe of 500 stocks. If I could say let's look at a universe of 499 stocks, I would do it. But I would have to change the SEC perspectives and that's a big process to do it. I can't do it. But if, if you have discretion. I just don't understand. Look, it's a great company. He's, he's a phenomenal innovator. He's, he's one of the best business partners person in the world. But there's such complexity to understanding how you navigate the volatility. And just when you think the volatility simmers down, no, it reemerges once again. So I don't know, it kind of overwhelms what is maybe a technology story related to Tesla itself. And it puts me in a position where I'm almost uncomfortable speaking about it because I feel uninformed. No, but I do. You feel unique, informed speaking about it.
- [23:36]
Steve Weiss
You just don't know. Lover of Tesla or you're a hater.
- [23:39]
Frank Holland
And I have to be. That's a choice. But can I run something by you? Why is my line to buy everybody?
- [23:44]
Shannon O'Kosha
I actually don't think it is.
- [23:45]
Frank Holland
I mean that's such a visceral reaction.
- [23:47]
Shannon O'Kosha
You could hate it. Not Just because of all the things that Joe talks about. Because as a fundamental investor into why I want to own this company, it can be rather difficult to navigate because the cannon.
- [23:59]
Frank Holland
I'll tell you what, if it's love or, hey, tell me who. Who's right. So Piper came out, reiterated overweight, $400 price target. Then Guggenheim came out reiterating, Sell 175 to 170 directionally, who's right? Or is it.
- [24:11]
Steve Weiss
Here's where I'd say this does not trade in fundamentals. It never did. It's always expensive. It's a capital intensive.
- [24:17]
Frank Holland
We talked about Elon.
- [24:19]
Steve Weiss
It's a capital.
- [24:19]
Frank Holland
But is it 175 or 400? Which one's closer?
- [24:22]
Steve Weiss
Look, I think that you've got enough sycophants and people that have posters of Elon Musk on their wall that just want to buy the stock and just don't pay attention. Fundamentals.
- [24:32]
Frank Holland
All right, 400, 175.
- [24:34]
Steve Weiss
Hold on, let me just finish. So if you took Musk's name off this and put somebody else there, and Musk is a story, granted, you'd say capital intensive company. A allegedly a CEO who can stay away from illicit drugs. Right. Where the board, as reported by Wall Street Journal, was going to conduct a search. There's nothing going for. Robotaxis are crowded space out of the front edge. Their robots are a crowded space. They don't have the edge there. So what are you going to do?
- [25:03]
Frank Holland
All right. Neither for you, in all fairness. Snipe. 400, 175. Which one's close?
- [25:07]
Jason Snipe
I think it's 400. I mean, again, to Joe's point, it's a very difficult story to understand and in certain respects, but if I just kind of look at simply his refocus back on the business, I think is an important catalyst. So I could I see it going.
- [25:20]
Frank Holland
Shannon, you said it was love or hate. I'm going to let you go. 400, 175. Which one's directionally close?
- [25:25]
Shannon O'Kosha
I cannot opine on that.
- [25:26]
Frank Holland
All right, fair enough. Restrictions, compliance and restrictions. All right, Weiss, we got to go to a break. Coming up next, our calls of the day, including a bullish call on one big bank. We have ownership here on the desk. Halftime. Back in just two minutes.
- [25:43]
Joe Terranova
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics. That may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.
- [26:13]
Frank Holland
Are you still quoting 30 year old movies?
- [26:15]
Joe Terranova
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- [26:42]
Frank Holland
From Mint Mobile with a message for everyone paying Big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a try@mintmobile.com Switch upfront payment of $45 for three month plan equivalent to $15 per month required Intro rate first three months only, then full price plan options available, taxes and fees extra. See full terms@mintmobile.com all right, welcome back to Halftime. We got some committee moves to get to Weiss going over to you. You boosted your exposure to industrials.
- [27:30]
Steve Weiss
Yeah. Yep. And I don't have a lot of exposure there but I bought XLI and I bought Caterpillar and here's the reasons. What if I'm wrong? You know I'm known to be wrong every once in a while. So if I'm wrong then these then the economy is doing okay. I really don't believe it. I bought these and also to balance out the portfolio my largest positions are met at Microsoft, Netflix, Taiwan Semi and that's where the continue to be and I think those are all weather stocks. So look CAT was just pretty cheap. I thought it was a way a good way to play it. I've always, you know I've generally played played it through Deer Deere I thought just moved up and right now is too expensive an entry point. So so it's as simple as that. It's just I would call it a hedge because I'm not reducing exposure anywhere but to participate if the market looks through the economic malaise to the Fed easing going forward.
- [28:31]
Frank Holland
Is this also a play on the idea of a US China trade deal tariffs easing?
- [28:35]
Steve Weiss
And part of it was that you know I thought Taco was still out there and in play and it still is obviously from the news we got in and you know given Besant the ability to, to negotiate away our hold on chips. Right. So he's looking for an off ramp. He just looking off ramp and that would make the cat attractive.
- [28:55]
Frank Holland
Get some thoughts about the industrial.
- [28:57]
Joe Terranova
The industrial sector is the best performing sector so far year to date, Joe. TTF has a significant, significant overweight to that. There's some stocks in there that are performing remarkably well. GE, Aerospace, RTX, Axon which made a 52 week high. Even Boeing looks to have some near term strength as well. And then helmet Aerospace performing well. It's interesting because the ITA which is the defense and Aerospace ETF that continues to move higher but yet a lot of the defense names and we own some of them, Lockheed Martin, General Dynamics, Northrop Grumman, they are struggling. So it's really, it's not that defense component.
- [29:36]
Steve Weiss
Yeah.
- [29:36]
Joe Terranova
It's really the aerospace component that continues to.
- [29:39]
Steve Weiss
Yeah and, and I'd say a bigger position than those. I'm up marginally in Cat next XLI basically flat because I just bought it last week. FTAI continues to do well. Stock continues to act like, you know, spectacularly well. Momentum's there. So that's what I like.
- [29:56]
Frank Holland
Just a side note, friend of halftime, Brian Belsky actually neutral on industrials. He says the fundamentals they lean slightly negative at least in his opinion. We're going to move on to our calls. The day B of A is bullish on Goldman Sachs. They rerated a buy rating with a $700 price target. A lot of bank ownership here on the desk. Joe, I'm just going to start with you. I mean what do you make of this call?
- [30:14]
Joe Terranova
I've had ownership of Goldman Sachs for the better part of the last four and a half years. David Solomon has done a remarkable job and just really navigating a significant turn in the business. Moving away from some of the consumer facing businesses that they attempted to move towards going back to what ultimately is their knitting as it relates to investment banking and trading and doing it remarkably well. It's, I think it's restored that, that reputation. I often use the example Goldman Sachs is, is likened to the New York Yankees in baseball. They have that very strong tradition and reputation and I see no reason why I'm going to be selling this position anytime soon.
- [30:51]
Frank Holland
All right, snap you on Goldman as well. By the way, coming off some comments from Jamie DiMon, obviously from JP Morgan. I don't know if they're the Red Sox or the Mets. I don't know what they Are in that analogy. But worried about the economy slowing down. Is that something you're worried about impacting Goldman? If Jamie Dimon's right, of course.
- [31:06]
Jason Snipe
I mean, I think as it relates to Goldman, I think a couple of things, I mean Joe just mentioned getting out of the consumer invasions was big. They cut that loss. I think that was, that was super important as it relates to, to kind of the economy. Yes, of course. I mean as a, as a broad take, I mean that would, that would hurt all the banks. But you know, they, they are in right in that IB space which I think they're the best debris. Their trading revenue has done phenomenal. Particularly in the first quarter. You saw that really seismic shift. Their revenue was up 6%. The stock is up 9%. And again, as comments earlier I made, you know, just thinking about the M and A cycle to, to start potentially later this year, early 2026, I think is a catalyst for this time.
- [31:48]
Frank Holland
I know you own it too.
- [31:49]
Steve Weiss
Yeah, I do. And I was at a. They have a family office conference each year for just the top clients tell you get a chance to meet the people. I know a lot of. I agree with what, what Joe says about David Solomon, but I'll tell you that and, and I mean this and I'm trying to think if I'm wrong as I'm saying it. I haven't met a person at Goldman Sachs on any of their business lines that I'd say, you know, they made a mistake hiring this person. So the bench is extremely deep. What's amazing is the average age of the firm is up 30. So there's a lot of growth there. It's a really, really deep bench and they are poised. There will be an underwriting cycle, there will be an M and A cycle and for them, they're the purest play on that. So they will do exceptionally well.
- [32:33]
Frank Holland
Shannon, any general thoughts just about the financial space right now with the idea that those Fed cuts may be pushed out a little longer than we previously expected?
- [32:40]
Shannon O'Kosha
Well, I mean I think your view there are a lot of people coming into this year who are very excited about this M and A story. And so I feel like that's obviously going to be delayed. I do think that again, to my point earlier, I think, you know, if you think about the deregulatory impact and the lack of enforcement versus actual true deregulation, I think that you get a much more market tailwind. And so even in areas such as digital assets, for instance, you're seeing a tailwind in multiple parts of the financial sector.
- [33:06]
Frank Holland
All right, let's move on. We're getting in the headlines now. So Vonna now she has those headlines for us from CNBC hq. Sovana, good afternoon to you. Texas Governor Greg Greg Abbott will deploy the National Guard across the state as.
- [33:20]
Shannon O'Kosha
It braces for more ICE protest.
- [33:22]
Frank Holland
The governor said late last night night that the deployment was to, quote, ensure.
- [33:26]
Shannon O'Kosha
Peace and order ahead of a planned.
- [33:28]
Frank Holland
Protest today in San Antonio. And it follows last night's imposed curfew in Los Angeles after days of protest, Secretary of State Marco Rubio is pushing to open an investigation into Harvard University. The New York Times reporting the investigation would see whether the school violated federal sanctions by working on a health insurance conference in China that could have included officials blacklisted by the government. The State Department and Harvard declined to comment. And the governing body of women's tennis will protect the rankings for players who take time away to undergo fertility procedures. The WTA's announcement today comes just months after for the after it for the first time offered players 12 months of paid maternity leave. Frank, I'll send it back to you. All right, Silvana, thank you very much. Our Silvana Hanaud back at CNBC hq. Coming up, we got your ETF edge. We're going to drill down on the action across the biggest names in private equity. Halftime's back right after this break. Don't just ride the index, seek to outperform it with Felc, the Fidelity Enhanced Large CAP Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other etf. Discover Felc, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. Fidelity Brokerage Services LLC Member NYSE, SIPC Are you still quoting 30 year old movies?
- [35:32]
Joe Terranova
Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you, you're.
- [35:40]
Frank Holland
Stuck in the past.
- [35:41]
Joe Terranova
Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report.
- [35:59]
Frank Holland
And welcome back to Halftime. We're getting some news out of Washington. Let's send it over to our Megan Casella at the White House with more on that story. Megan hey, Frank.
- [36:07]
Shannon O'Kosha
So we're getting a few more details now on that China story, putting some more meat on the bones of that framework. This is coming from the Wall Street Journal reporting that, according to them, US Companies that are getting granted export licenses from rare earth companies in China, that those licenses will only be valid for six months. So it's only a temporary reprieve here in this trade truce. Now, I've talked to the White House on this and awaiting a fuller response from them. But in the meantime, Frank, this is different.
- [36:34]
Frank Holland
This is new versus what we've been.
- [36:36]
Shannon O'Kosha
Hearing so far today. It comes after Commerce Secretary Howard Lutnick was on CNBC telling us that China was, quote, going to approve all applications for magnets from US Companies right away, you know, very much like the same day. He did not talk about them only being valid for six months here. Frank.
- [36:53]
Frank Holland
So the important part is that this.
- [36:55]
Shannon O'Kosha
Is a way for the Chinese to.
- [36:56]
Frank Holland
Sort of preserve reserve leverage if things.
- [36:59]
Shannon O'Kosha
Do go south later this year, they have a way of sort of going back to the US and saying, actually, we're not giving you these rare earth minerals and these magnets unless you do more for us.
- [37:08]
Frank Holland
So it is still a step in the right direction.
- [37:11]
Shannon O'Kosha
But we're mostly just cleaning up everything that's happened since Geneva. Frank. And for now, still in a very fragile sort of trade truce on both.
- [37:18]
Frank Holland
Sides, with the US still having those.
- [37:19]
Shannon O'Kosha
Tariffs set to go back into effect in August. And now the Chinese, they saying that these rare earth export licenses are only going to be valid for six months at a time. Frank.
- [37:28]
Frank Holland
All right. Megan Casella live at the White House. Megan, thank you very much. Now we want to turn to our Dominic Chu with today's ETF Edge. We're having some technical difficulties. We're going to try to get back over to DOM in just a minute with ETF Edge. But right now we're going to take a very quick break. More halftime coming up right after this. Welcome back to halftime. And now back to Dominic Chu with today's etf. ETF as Dom, can you hear me now? Good.
- [38:23]
Joe Terranova
Yes.
- [38:23]
Shannon O'Kosha
All right.
- [38:24]
Frank Holland
The global trade war, Frank and The resulting macro uncertainty has put a lot more spotlight on markets outside of stocks and bonds.
- [38:30]
Shannon O'Kosha
Today's ETF Edge is focusing on alternative.
- [38:33]
Frank Holland
Investments that have been getting a lot more attention. So joining me now are Vaneck and associate CEO John Vaneck as well as Sprott Asset Management CEO John Champaglia. John, I'm going to start with you. Uranium. Right now, the hot trade with the global uranium ETF hitting its highest level since 2020 14, should traders and investors ride the upside wave or be more patient? Yeah, I think the sector is catching another bull market wave. We've obviously seen these stocks have a very sharp V shaped recovery. Since their April lows. The stocks are up around 50% and that is obviously being underpinned by a resurgence back to nuclear energy around the world. President Trump, the four executive orders a few weeks ago were very bullish. And we're also starting to see a short squeeze going on in a lot of these stocks that we think were oversold. All right.
- [39:24]
Joe Terranova
And John, you recently launched a fund.
- [39:25]
Frank Holland
Targeting all alternative asset managers.
- [39:28]
Joe Terranova
How much interest is there for a fund that targets the people who manage alternatives? Yeah, I mean I think what's happened.
- [39:36]
Frank Holland
Is there's a large part of the.
- [39:38]
Joe Terranova
Economy that's not captured by public stocks and bonds. Right. Lending since the financial crisis by non banks has exploded and because the IPO market has slowed down, there are over 1200 private venture backed companies that are just trading out there growing like Stripe or Space X. But there's no way to get access to them directly through an etf. But we can invest in the fund managers that manage those assets.
- [40:05]
Frank Holland
So it's not just private credit, it's.
- [40:06]
Joe Terranova
Private equity and everything else these days. Infrastructure. Right. So the name of that fund is Alternative Alternative Asset Managers. The ticker symbol is GPS because they what they call the fund managers are General Partners or GPs.
- [40:18]
Shannon O'Kosha
All right. Well, thanks to both John and Jan.
- [40:20]
Joe Terranova
For more on the alternative story, just.
- [40:22]
Frank Holland
Tune in to our ETF Edge online show 1:15pm Eastern Time. As you can see on your screen, ETF edge.cnbc.com and Frank, I'll send things back over to you. Tom, thank you very much for today's ETF Edge. Switching gears now, our friends at the Golf Channel are following the PGA Tour stop this week at the third major of the year with the 125th US Open getting underway tomorrow. Todd Lewis joins us now live from Oakmont, Pennsylvania with much more and what to expect.
- [40:51]
Jason Snipe
Yeah, hi there, Frank.
- [40:52]
Joe Terranova
Welcome to Oakmont, which is hosting the U.S. open for the 10th time.
- [40:55]
Jason Snipe
That's more than any other club in the country. It's kind of considered a cathedral of major championship golf. But I can tell you, when you.
- [41:02]
Joe Terranova
Play here, it's not like going to church. This golf course can eat your soul. 5 inch rough green speeds are 20% higher than the average green speed on the PGA Tour. So you have to play well. And some incredible names have won here at Oakmont over the years. Talking like Ben Hogan, Jack Nicklaus, Johnny Miller, 1973 shot what is considered the greatest championship round in major championship history. And that is a 63 in the final round to win here. So great legends win here at Oakmont.
- [41:30]
Jason Snipe
Three names are coming into this U.S.
- [41:32]
Joe Terranova
Open with a lot of attention, one of course, being Scotty Sheffield, the world's top player. He's won three times in his last four starts. Had a chance to walk with him in his practice route. I can tell you he is not searching. He is ready for this championship and he is trending. Obviously. There's Bryson DeChambeau. He is the defending U.S. open champion. He's not only doing great things with his golf clubs, he's doing wonderful things, creating content on his own YouTube channel. How about this?
- [41:55]
Jason Snipe
Last year he had 1.4 billion hits.
- [41:59]
Joe Terranova
On his YouTube channel.
- [42:00]
Jason Snipe
This year he's trending towards 2 billion.
- [42:02]
Joe Terranova
Hits on his channel.
- [42:04]
Jason Snipe
And then there's Rory McIlroy who arrives here, a little bit of an enigma.
- [42:07]
Joe Terranova
He missed the cut last week at the RBC Canadian Open and he signed his scorecard on Friday and then went home on the weekend. 21 shots out of the lead. Did a lot of heavy practicing over the weekend at his home course in South Florida. Comes here, hopefully with a different attitude. He hit the reset button according to his team.
- [42:25]
Jason Snipe
He's, he's playing a little bit better.
- [42:27]
Joe Terranova
But we shall see. It's going to be A Great Championship. 200,000 people are expected here at Oakmont in Pittsburgh this week for the U.S. open. Should be a fun show, guys.
- [42:37]
Frank Holland
Todd Lewis, thank you very much. At Oakmont, right outside of Pittsburgh. Stop at Permanent Brothers. Good sandwiches there. Also, be sure to follow the coverage of the US Open beginning tomorrow at 6:30am Eastern. That's on the USA Network. Again, live at 6:30am Eastern on the USA Network. Coming up next, Mike Santoli joins us with his midday word. And we're back right after this. And we're back on halftime. Senior markets commentator Mike Santoli joining us with his midday word. Mike, what do you make of the action we're seeing right now?
- [43:09]
Joe Terranova
Pretty Pretty muted obviously reaction to what was a benign tame CPI report. And I guess we can explain that in a few ways. One, markets a little bit unwilling after this run that it's had to just extrapolate out from here that the inflation data are going to continue to be free of of tariff influence. Obviously there's no direct line yet from a very low CPI print and Fed easing or anything like that. Plus you have to ask why is the s and P500 up 25% in two months? Obviously it started out mega washed out, oversold. We took care of that with some of the reversal and along the way we've rebuilt the idea that the economy remains in a decent spot as inflation maybe is so far in check and we're going to get progress on trade. So I think when you get up to these levels a lot more has to work. And so I don't know that there's any real red flags going up because we haven't gotten yet a positive reaction to cpi. But it just does show the distance we've traveled already to get here.
- [44:05]
Frank Holland
You know a couple of recent announcements about this sector, the energy sector is the best performer over the longest last week up about 4%. What do you make of that rise that outperform in the other sectors just over the last week as we get some, you know, what you call benign news when it comes to inflation and also some movement when it comes to trade.
- [44:20]
Joe Terranova
I see it as part of a general rotation below the surface that's been going on which is out of momentum mega cap growth and then into value and neglected sectors and year to date laggards that's been evident across different sectors and energy has been a big, big beneficiary of that. Plus crude prices have firmed up in part because companies have, are exploring less and they're drilling less and the rig count is down. So you have a supply response to low prices that is firming up prices. That's kind of the way it works in commodity.
- [44:49]
Frank Holland
Yes. Some of those nuclear deals also obviously benefiting the sector as well. Our Mike Santoli with his midday word. Mike, thank you very much. Coming up here on halftime, we got this set up. Stay with us and welcome back to halftime. Let's get this set up on Oracle reporting after the bell tonight. Jason Snipe, you own this one? Yeah.
- [45:27]
Jason Snipe
Stock's been on a run since April 21st. It's up almost 43% and I think in the last quarter the concern was around supply constraints, you know, for the, for infrastructure, infrastructure build. So they have about 130, 130, 130 billion in RPO. RPO revenue was up 63% last quarter. So let's see if they could monetize that. I think some of the news that we heard today out of China and releasing of export controls I think will be positive for the stock. But that's going forward. So I, I continue to like this name going into the print.
- [45:57]
Steve Weiss
You love it. Up 43, man. Of course, excitement.
- [46:02]
Frank Holland
Is this the momentum trade you guys were talking about? I mean, does Oracle symbolize. You took the words out of my mouth. Does this symbolize the momentum trade that you guys were talking about earlier?
- [46:10]
Joe Terranova
It does. It's, it's in the moment. It's in our momentum etf. It's in a lot of other momentum strategies as well.
- [46:15]
Steve Weiss
For sure.
- [46:16]
Frank Holland
Weiss, you're excited about him.
- [46:17]
Steve Weiss
Next move I'm signing for my friend.
- [46:19]
Frank Holland
You might be orphan. Final trades are coming up next. We're gonna see what Weiss is really doing coming up. Stay with us.
- [46:28]
Joe Terranova
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast now.
- [46:42]
Frank Holland
And welcome back to halftime. Time now for Final Trades. Steve Weiss, you're up first.
- [46:46]
Steve Weiss
Qxo. So I bought some more QXL last week. Haven't been been on the show for about a week when they completed their additional fundraise. So look, Brad can raise a lot of money. He used that to pay down debt or make acquisitions. This is a long term play. 10 years. The stock is going to do what other Brad Jacobs stocks have done, go.
- [47:04]
Frank Holland
Up and up Santa's, of course, energy.
- [47:07]
Shannon O'Kosha
So there seems a little bit counterintuitive given the fact that oil prices have been pretty rangebound. But we have some optimism around natural gas and around the inflection of economic activity in the second half of the year.
- [47:18]
Jason Snipe
Jason Snipe, Evercore M. And a cycle and deregulation coming back in vogue. I like this one here.
- [47:24]
Frank Holland
Jyoti with the last word.
- [47:25]
Joe Terranova
And that would be Charles Schwab, which has had a remarkable recovery from where it was in March in 2023.
- [47:31]
Frank Holland
All right, that's going to do it for us and halftime. Thank you so much for watching. The exchange with Kelly Evans starts right now. You've been listening to CNBC's Halftime Report, the podcast you can always catch us.
- [47:42]
Joe Terranova
Live weekdays at 12 Eastern only on CNBC.
- [47:48]
Frank Holland
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC NBCUniversal. Their parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer trading@schwab is.
- [48:29]
Joe Terranova
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Frank Holland
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Joe Terranova
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Frank Holland
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Joe Terranova
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Frank Holland
Learn more@schwab.com trading.