Halftime Report: The State of Stocks – July 14, 2025

Podcast Information

• Title: Halftime Report
• Host: Frank Holland (filling in for Scott Wapner)
• Guest Panel: Joe Terranova, Shannon Sokotia, Steve Weiss, Jim Labenthal
• Air Time: Weekdays, 12-1 PM ET on CNBC TV

1. Market Overview

[01:18]
Frank Holland opens the discussion by providing a snapshot of the current market status:

• Dow Jones Industrial Average: Essentially flat, up a few basis points.
• S&P 500: Similar to the Dow, showing marginal gains.
• NASDAQ: Leading the market with a relative increase of nearly 0.25%.

The modest upticks are attributed to investors processing the latest tariff threats emanating from the White House.

2. Tariff Threats and White House Stance

[02:13] Steve Weiss:
Steve emphasizes the president's firm stance on tariffs:

"The deals are already made. The letters are the deals, the deals are made. There are no deals to make."

However, the conversation reveals a nuanced position:

• Frank Holland: Suggests that while the president appears resolute, there is room for negotiations if favorable terms are presented before the tariffs take effect on August 1st:

"The deals are made in the president's mind. But if he gets to hear something that he likes better between now and August 1st, he is open to changing his mind."

3. Market Resilience Amid Tariff Threats

[03:17] Joe Terranova:
Joe provides insight into the market's resilience:

"The markets began to become desensitized to a lot of these tariff announcements... We have a very resilient and strong market."

He notes that the month of July has been unusually quiet, with the S&P 500 trading within a narrow range reminiscent of the summer of 2019.

4. Earnings Season Expectations

[04:59] Shannon Sokotia:
Shannon discusses expectations for the upcoming earnings season, highlighting:

• Tariffs Impact: Tariff revenues are being collected more swiftly than in 2024, impacting producers and the supply chain.
• Margins: Anticipates potential margin compression in the second half of the year but not immediate hits in the current quarter.
• Consumer Behavior: Notes that U.S. consumers may struggle to absorb tariff costs similarly to past years.

[06:47]
Scott adds data on sector-specific earnings estimates:

• Technology & Communication Services: Expected to drive growth with aggregate earnings growth surpassing other sectors.
• Financials & Health Care: Projected to have modest earnings growth, under 2%.
• Energy: Anticipated to face a 20-24% negative earnings outlook.

Shannon reinforces that investors are positioning themselves to benefit from these earnings expectations:

"Investors want to be positioned into an earnings season in which they're likely to be rewarded because it's a pretty low bar as it relates to earnings that are supposed to be delivered in the second quarter."

5. Sector Insights

a. Technology and Communication Services

• High Earnings Growth: Expected to significantly contribute to overall market earnings.
• Investor Positioning: Funds are already invested in these sectors, seeking to capitalize on their performance.

b. Financials and Banks

[07:46] Steve Weiss:
Steve critiques Evercore ISI's note suggesting tariffs may lead to further EPS estimate reductions:

"I think the market's going to continue to ignore these risks as they have for the last year."

• Big Banks vs. Regional Banks: Big banks like Goldman Sachs and Citi are expected to perform well, benefiting from strong capital allocation and investment banking activities. Regional banks, however, show mixed performance with some like Huntington expanding successfully, while others underperform.

[25:00] Shannon Sokotia:
Shannon highlights the potential for increased M&A activity among regional banks, citing Huntington’s recent $2 billion acquisition in Texas as a positive sign.

c. Energy

• Steve Weiss:
  Points out that companies like Exxon continue to perform robustly regardless of oil price fluctuations:

"In any oil environment, this company makes money... It returns it to shareholders in the form of dividends and share buybacks."

d. Insurance

[28:07] Jim Labenthal:
Jim notes that insurance companies are facing challenges as their earlier pricing power wanes:

"They're all rolling over. They've lost their momentum and the struggles are beginning."

e. Airlines

[43:34] Joe Terranova:
Joe discusses the bifurcation in airline performance:

• Delta Airlines: Performing well with strong revenue growth.
• Discount Airlines: Struggling to maintain momentum.

Jim adds that while demand remains, expectations for earnings to rebound are essential for broader sector strength.

6. Analyst Perspectives and Market Risks

[08:21] Steve Weiss:
Steve expresses skepticism about Evercore ISI's bearish outlook, advocating for market resilience and the expectation that most companies will exceed lowered earnings estimates.

[10:56]
Steve emphasizes the importance of earnings season as a catalyst for future market movements:

"An extremely disappointing season, earnings season if more than 75% of the companies don't exceed expectations because that's what they always do broadly."

[17:19] Scott Wapner:
Highlights RBC's revised price targets for the S&P 500, noting caution around momentum trades.

[19:31] Scott Wapner:
Discusses Deutsche Bank’s warning about potential sharp market reactions as August 1st approaches, particularly if tariffs are reinstated and an underwhelming jobs report surfaces.

7. Specific Stock Discussions

a. KKR

[30:36]
Steve Weiss downplays Evercore’s downgrade of KKR:

"Who cares?... I'm just in it for the long haul."

Joe Terranova defends KKR’s position, highlighting:

"It's a very well-run company."

b. Lockheed Martin

[45:47] Jim Labenthal:
Highlights global rearming trends benefiting Lockheed Martin:

"Countries all over the world are really rearming and they're going to be buying Lockheed Martin airplanes and missiles."

c. Exxon

[33:52]
Steve Weiss praises Exxon for its consistent performance and shareholder returns:

"Once in a while, it makes a big purchase like it did a couple of years ago... This is a good company to own."

d. Netflix

[43:19] Joe Terranova:
Optimistic about Netflix’s future earnings and content strategy:

"Why are you owning the stock? Because the back end of the year you're going to get strong content as well."

Shannon Sokotia considers Netflix the leading streaming service amidst a competitive landscape:

"Netflix generally kind of consensus seen as the best."

8. Hedge Funds and ETFs

[37:00] Dominic Hsu:
Introduces the segment on hedge fund strategies entering the ETF marketplace, featuring Bob Elliott from Unlimited Funds.

[37:33] Steve Weiss:
Explains the advantage of hedge fund strategies within ETFs:

"For the vast majority of investors... they have been locked out of hedge fund strategies because they have to invest in direct funds that are very expensive... Our idea was to package that in ETF... with daily liquidity and low fees."

[38:34] Joe Terranova:
Highlights the popularity of macro strategies in ETFs, driven by recent macroeconomic events:

"A lot of interest in macro managers and their ability to flexibly assess those circumstances and respond as policy changes."

9. Cryptocurrency Discussion

[40:14] Steve Weiss:
Shares his investment strategy in Bitcoin via the IBIT ETF:

"I think keeps going, you'll get it more regulated... I'm doing it on, not in Bitcoin directly."

[40:39] Scott Wapner:
Mentions a recent short squeeze in cryptocurrency but queries its sustainability:

"Concerned that the short squeeze may be over and the catalyst for cryptocurrency may have run out."

[41:00] Steve Weiss:
Reiterates his bullish stance on Bitcoin, emphasizing its growing regulatory framework and institutional adoption:

"They'll figure out a use case for it because there's not one right now."

10. Closing Remarks

Frank Holland wraps up the content-heavy portion of the podcast with a news update on:

• July 4th Floods in Texas: Ongoing search and rescue operations with approximately 150 people still missing.
• Federal Reserve: Chairman Jerome Powell requests an investigation into the $2.5 billion renovation project amid budget criticisms.
• Callaway Golf: Launches a limited edition putter shaped like Adam Sandler's hockey stick putter for the "Happy Gilmore" sequel.

Notable Quotes with Timestamps

• Steve Weiss [02:13]:

  "The deals are already made. The letters are the deals, the deals are made. There are no deals to make."

• Frank Holland [04:59]:

  "We're not going to see a margin hit necessarily this quarter from tariffs, but we could start to see those impact companies in the second half of the year."

• Jim Labenthal [12:27]:

  "The most benign outcome is you get a lot of clarity on August 1st. I would settle for some clarity but what I don't want is what we had happen last week which is basically had no progress."

• Joe Terranova [19:31]:

  "I think if you're not getting this market negative market reaction on tariff announcements, you're not seeing a significant concern about the dialogue around the Fed."

• Steve Weiss [30:48]:

  "Who cares?... I'm just in it for the long haul."

Insights and Conclusions

• Market Stability: Despite ongoing tariff threats and political rhetoric, markets remain resilient, buoyed by strong positions in technology and communication sectors.

• Earnings Season: Anticipated to be a key driver for market movements, with expectations of most companies meeting or exceeding lowered earnings estimates. Sectors like financials and technology are expected to lead the charge.

• Tariff Impacts: While immediate effects on margins are minimal, the second half of the year may see increased pressure. Negotiations with European and other international partners remain crucial as the August 1st deadline approaches.

• Sector Performance: Financials, especially big banks, are poised for growth, whereas regional banks and insurance companies face challenges. Energy sectors like Exxon continue to perform well regardless of oil price volatility.

• Hedge Funds in ETFs: The integration of hedge fund strategies into ETFs presents new opportunities for investors seeking diversification and flexible investment strategies without the high costs traditionally associated with hedge funds.

• Cryptocurrency: Bitcoin remains a topic of interest, with ongoing debates about its sustainability and regulatory future. The IBIT ETF is highlighted as a viable investment vehicle for Bitcoin exposure.

• Strategic Positioning: Panelists emphasize the importance of strategic positioning ahead of earnings reports and potential market catalysts, advising investors to remain agile and informed.

Disclaimer: The opinions expressed by the Halftime Report participants are solely their own and do not reflect the views of CNBC, NBCUniversal, or their affiliates. Investors should conduct their own research or consult with a financial advisor before making investment decisions.