The State of Stocks After the Fed Meeting 3/20/25

Summary

CNBC's Halftime Report: The State of Stocks After the Fed Meeting (March 20, 2025)

Hosted by CNBC's Scott Wapner, this episode delves into the current state of the stock market following the Federal Reserve's latest meeting. Featuring insights from market experts Josh Brown, Jim Laventhal, Jason Snipe, and Sarah Eisen, the discussion navigates through Fed policies, market reactions, significant stock performances, and notable corporate developments.

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1. Market Overview Post-Fed Meeting

Scott Wapner opens the discussion by highlighting the mixed sentiments in the market following the Federal Reserve's recent announcements. Despite a 10% decline in the S&P 500, the market remains broadly green, with specific movements in the tech sector catching investors' attention.

• Jim Laventhal emphasizes the Fed's nuanced stance:

  “Despite the cutting of the growth outlook, Powell is still pretty upbeat on the economy overall.” ([02:08])

  Laventhal notes that the Fed's hints about balancing quantitative tightening with debt ceiling concerns have primarily affected the bond market rather than the stock market. He underscores a regime shift where investors favor quality, dividends, and perceived safety over speculative tech gains.

2. Fed Meeting Insights and Market Reactions

The Fed's recent meeting revealed a complex outlook: lowering growth expectations while raising inflation forecasts. This duality has left investors uncertain about the next steps and how to strategize their portfolios.

• Jim Laventhal on the Fed's approach:

  “He's not so sure tariffs are going to cause that uptick in the services inflation or if they do, that's necessarily the Fed has to race to the rescue.” ([02:08])

  He points out that the Fed's comments on quantitative tightening, especially in relation to the debt ceiling, suggest a focus on bond yields rather than immediate stock market reactions.

Scott Wapner raises concerns about investor sentiment:

“Bullish sentiment seems like it's fully dried up. If you look at that survey that was out on Tuesday from Bank of America, their fund manager survey, they had the biggest drop in US Equity alloc.” ([05:00])

3. Expert Opinions on Market Stability

• Jason Snipe concurs with the cautious market sentiment:

  “There is a slowdown in GDP, and the balance sheet runoff spells some caution.” ([05:38])

  Snipe suggests that the market is in a "wait and see" mode, reflecting the Fed's mixed signals.

• Sarah Eisen provides a balanced perspective, noting the resilience in corporate profits and low unemployment:

  “Profits are growing. Companies want to lean into that. The last thing they want to do is lay people off when profits are growing.” ([06:00])

  Eisen expresses optimism based on the Fed's cautious stance on tariffs and the overarching strength in certain economic indicators.

4. Apple’s Leadership Shakeup: A Closer Look

A significant segment of the episode focuses on Apple Inc.'s recent executive changes amid challenges in their AI initiatives.

• Steve Kovach reports:

  “Apple appears to be shaking up its leadership around artificial intelligence.” ([11:19])

  The delayed AI Siri update and the reassignment of John Jan Andrea mark a pivotal moment for Apple's AI strategy. Kovach highlights the potential impact of a critical blog post by Jon Gruber, a long-time Apple supporter, which may have influenced the company's decision to restructure its AI leadership.

• Jim Laventhal and Jason Snipe discuss the broader implications:

  “Apple will have to earn back a lot of trust and these are going to be the new people in charge.” ([17:52])

  They debate whether the leadership changes signal deeper issues or a strategic pivot to reclaim Apple's competitive edge in AI.

Sarah Eisen adds:

“The PEG ratio of 3.5 is expensive by any measure.” ([20:37])

Eisen critiques Apple's high valuation amidst its current challenges, questioning whether the stock justifies its premium based on fundamentals.

5. Stock Spotlights: Chevron, AbbVie, and Nvidia

Chevron Corporation (Chevron) emerges as a standout recommendation from Josh Brown:

• Josh Brown details why Chevron is his new buy:

  “Chevron is trading at 17 trailing PE, with 13 times forward and 17% expected earnings growth next year.” ([30:19])

  Brown cites Chevron's strategic drilling in Venezuela and the potential resolution of acquisition overhangs as key drivers for the stock's anticipated breakout.

AbbVie Inc. (AbbVie) is applauded by Jason Snipe and Sarah Eisen for its robust performance and strategic positioning:

• Jason Snipe highlights AbbVie's pipeline strength:

  “AbbVie has one of the strongest pipelines in the biopharma space.” ([37:53])

• Sarah Eisen emphasizes AbbVie's management and growth:

  “Humira was a big deal, but they've successfully transitioned to Skyrizi and Rinvoq.” ([38:17])

Nvidia Corporation (Nvidia) receives praise for its continued dominance in AI and technological advancements:

• Jason Snipe underscores Nvidia's investment:

  “$1 trillion in capex by 2028 is a major number for the future of AI and productivity.” ([27:17])

  The consensus is that Nvidia remains at the forefront of AI innovation, positioning itself for sustained growth.

6. Market Commentary: Mike Santoli’s Midday Word

Mike Santoli provides a concise analysis of the current market dynamics:

• He notes the Fed's tentative approach and the market's apprehension:

  “Nothing is really getting in the way of the idea that you got oversold enough at the lows.” ([40:24])

• Santoli identifies the S&P 5700 as a critical support level:

  “The near-term hurdle in the S&P 5700 is seen as a key area that needs to be cleared.” ([41:28])

  His insights suggest a cautious optimism, indicating that while the market has rebounded, underlying uncertainties persist.

7. Record-Breaking Sale of the Boston Celtics

Transitioning to sports business news, the podcast covers the historic sale of the Boston Celtics:

• Mike Ozanian, CNBC's senior sports reporter, reports:

  “A group led by William Chisholm has agreed to buy the Celtics for $6.1 billion, the highest ever for a North American sports franchise.” ([44:24])

  Ozanian explains the valuation dynamics, comparing it to the Phoenix Suns' previous record and highlighting the Celtics' reliance on ticket revenue, given that their arena is controlled by the owner of the Boston Bruins.

• Scott Wapner adds context:

  “The Grossbeck family paid $360 million in 2002. Two championships later, you restore the greatness and glory of the Boston Celtics.” ([46:33])

  The discussion underscores the Celtics' strong brand and competitive positioning, making the deal a strategic triumph for the buyer.

8. Additional Headlines

The episode briefly touches on several global and corporate headlines:

• Courtney Reagan reports on geopolitical tensions:

  “Hamas fired rockets at Tel Aviv as Israeli troops expanded operations in Gaza.” ([34:44])

• Updates on notable figures:

  “Pope Francis continues to improve, recovering from double pneumonia.” ([35:13])

• Academic policy shifts:

  “The University of California Systems will abandon diversity statements in hiring.” ([35:13])

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Conclusion

The March 20, 2025, episode of CNBC's Halftime Report presents a multifaceted view of the current stock market landscape, heavily influenced by the Federal Reserve's latest policies. While some sectors like energy and biopharma show promise, tech giants like Apple face significant challenges amid leadership changes. The podcast also celebrates landmark business deals, such as the Boston Celtics' record-breaking sale, illustrating the interconnectedness of global markets and corporate strategies. Experts advocate for a cautious yet opportunistic approach, emphasizing quality investments and the importance of strategic asset management in uncertain economic times.

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For those interested in staying updated, CNBC's Halftime Report airs live weekdays from 12-1 PM ET on CNBC TV, offering real-time market insights and expert analyses.

Transcript

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[Scott Wapner]

Eduardo I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. All right, Sarah, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the state of stocks in this still uncertain market. The Fed has spoken. Tariffs still loom amid serious questions about the economy. We will discuss and debate all of it with the investment committee. As always, joining me for the hour, Josh Brown, Jim Laventhal, Jason Snipe will take you and show you the markets here a day after the Fed been moving around a bit, but we are green across the board. You've got a little bit of movement in tech today. Metta is worth keeping an eye on. Getting a nice move. And by the way, back positive year to date. It's the only of the Mag Sevens that is now positive year to date. But Josh, it feels like we're still trying to figure out how to react to the Fed cutting the growth outlook, raising the inflation outlook, staying with two cuts. What are we supposed to do? What does it mean for stocks after that 10% decline in the S and P?

[Jim Laventhal]

Yeah, I think that's the right question right now because we don't have earnings season, so what we have between now and then is the macro stuff. The biggest takeaway for us from the presser is that despite the cutting of the growth outlook, Powell is still pretty upbeat on the economy overall. He also dropped the hint that he's not so sure tariffs are going to cause that Uptick in the services inflation or if they do that, that's necessarily the Fed has to race to the rescue like, like, like a firefighter and put that out. I think the balance sheet changes is probably one of the other interesting topics. Getting some detail around quantitative tightening for example was definitely a surprise, especially tying it to the debt ceiling. Think about the Fed's balance sheet. The average maturity of outstanding Treasuries just in the world is about nine years and the Fed's balance sheet maturity is a little bit longer than that. So the implication is you'd have a Fed that stopped selling or sell less at the shorter end of the curve, which is more pressure on shorter yields. So I think it was much more a bond market story than a stock market story just in, in, in overall balance. But from our perspective it really doesn't change the fact that you've got this regime shift in the market. People want boring, they want quality, they want dividend and they're not interested in speculating on the next leg higher in AI. If and when we get that this year. I think that's reflected in the fact that The XLK is minus 7 and a half percent on the year. Most of those stocks are below their 200 day. A few are still below their 50 day even with the recent bounce. And so I just, I've been emphasizing this all, all winter. I just think what investors want to do here is not focus so much on tech and some of the out of favor areas. Focus on what is working and there is a lot that you could be doing here.

[Scott Wapner]

Yeah. Jason, Tom Lee thinks that what happened yesterday is part of several positives that happened this week in which he declares that the Fed put remains in place. So he still thinks the markets are okay. Krinski over at BTIG thinks there's little reason to change his view that we can get a relief rally 58 to 5900 a little bit up from here. We're at 50. We'll call it 5700 now. Barry Bannister Stifel thinks a relief rally is going to continue as well. He qualifies it a little bit. But the stocks feel to you like this bounce, if you want to call it that can continue.

[Jason Snipe]

I think so, Scott. I think for me, as I kind of looked at the Fed commentary from yesterday, obviously it was, it was net dovish. That's how the market received it to your point. Lower growth expectations, increased inflation expectations. Talked about the tariffs as being true trend.

[Scott Wapner]

Yeah, we're back transitory. He did, you know he did have confidence about the economy and he didn't seem too worried about tariff inflation at least now. And maybe that's what the market glommed on to.

[Jason Snipe]

Yeah, no, and I think that's, that's a fair point. The other thing I would say which, which Josh mentioned is there is a slowdown in Kutty. Right, A slowdown. The balance sheet runoff, which is in our, from our perspective, spell some caution. But, but again, I mean it is, Josh mentioned this earlier as well. I mean it is a, it is a more wait and see moment and somewhat boring, which I think that is what the market is appreciating right now.

[Scott Wapner]

The problem with thinking the, I mean, potential problem, my word of course, is to think that stocks could continue to go up right now is that bullish sentiment seems like it's fully dried up. If you look at that survey that was out on Tuesday from Bank of America, their fund manager survey, they had the biggest drop in US Equity alloc. So, okay, market's going to continue to go up. Fine. Who are the buyers? Where are the buyers? Are the buyers going to last? What does that sentiment tell you? What are those flows tell you? Oh, by the way, April 2nd, looming large.

[Sarah Eisen]

Yeah, that's the big one. Buyers do appear to be on the sidelines right now. Yes, we've bounced off of last week's low, but it's not, not that convincing of a bounce and I don't think we're going to get a convincing bounce. I think there's a cap on any rallies because of this overhang of what are the tariffs going. Oddly enough, I think once we get the announcement, no matter how bad it is, I think the market really likes the certainty that will come from that. If we get that certainty. Obviously policy has vacillated quite a bit, but if we can get some certainty on what the tariffs are, then I think that cap on any rallies comes off. And you know, some may be listening to what I'm saying and saying, well, wait, what about the negatives? What about tariffs being inflationary? I agree, they are going to be inflationary. Fed Chairman Powell said he, you know, he implied strongly that they may well be a one time shot to the price level and that they would look, I think when you get past that, what you've got is an economy is still growing, although slower than it was. Unemployment is low. Even though it's rising, it's still low. Good weekly jobless claims today and profits are growing. Now that's the most important thing because if profits are growing, companies want to lean into that. The last thing they want to do is lay people off when profits are growing. They want to lean into it. Now, the last thing, and I'll just summarize this, I am a believer in Ed Yardeni school of thought that recessions, which is if this gets worse, that would happen only if there was a banking crisis. So when Jason, Josh, you guys just spoke about quantitative tightening, easing. What I hear from the Fed in that move is they're going to be well in front of any stresses on the banking sector. That gives me a very good feeling, good reason to be optimistic.

[Scott Wapner]

I mean, they talked about money markets and tightening in money markets and they'll obviously be keeping an eye on that credit spreads while not, you know, blowing out. Obviously not even widening that much. Have widened a little bit.

[Sarah Eisen]

Yes.

[Scott Wapner]

And that's made a few people nervous ahead of, as we said April 2, perhaps to nobody's surprise, President Trump posting on social media that the Fed should cut rates. The Fed would be much in caps. Better off cutting rates in caps as US Tariffs start to transition. He says ease their way into the economy, do the right thing. April 2nd is Liberation Day in America. Josh, I'd love your thought on that. You knew that it was only a matter of when and not if the president was going to weigh in on interest rates as what he calls Liberation Day on April 2. It could be Judgment Day for investors. I don't know. I'd like to hear your view.

[Jim Laventhal]

Yeah. So this is where the puck is going next as the, as the Q1 earnings season gets underway coming into April, you're basically going to hear the word tariff on, I would bet seven, seven or eight out of every 10 conference calls. And the larger the company that's reporting, the more likely you're going to hear tariffs discussed, not only during opening comments, as they kind of reset the bar for the, for the next quarter, but certainly in the analyst Q and A, it's going to be tariff, tariff, tariff, tariff. The Fed is a very convenient scapegoat and I would expect that you're going to hear a lot more pressure from the White House. And by the way, this is not just a Trump thing. Thing. Every president has had a view on what kind of help they either are or aren't getting from the Fed. The difference is that Trump just says it out loud. But so what I don't want to see people do investors do is start to freak out, oh, no, Trump's going to fire Powell if he doesn't cut rates. This is the kind of thing that typically happens behind closed doors. I would imagine in this administration it will happen behind closed doors, but it's also going to happen on Twitter and everyone's just going to have to get over that and live with it. What I would say, Judge, it's not a fight to quality in the market right now. It's a flight to perceived safety. And I'm going to give you evidence of that. The xlf, which is the largest banks, you know, if we were really on recession watch, they would not be up 3% year to date. I think we could all agree. Jimmy would agree, Jason would agree. The KRE is minus 4.4. So, like even within the financial sector, they want to buy the big banks year to date, at least 10. They don't want to buy the banks that are perceived as having more risk in the domestic economy, more risk of a slowdown. And so I think you see that no matter what sector you look at, last thing, even in, even the European stock rally, which maybe we don't talk about enough, the vgk, which is like shorthand for Europe, it's the Vanguard Europe ETF, is up 16% year to date. Only 8.4% of the VGK is in tech stocks. And they actually have a huge consumer defensive sector within that ETF relative to its counterpart here in the United States. So this is what investors are doing. They're prioritizing areas that they think they'll be somewhat shielded from this. And we'll let that Fed debate with the White House take place out in the open air and will kind of like be allocated just in such a way to get through it.

[Scott Wapner]

I want to get, I'll get to some more of what you're talking about. And I do want to, I do have some breaking news though from Steve Kovac regarding Apple. What are we learning? Steve?

[Steve Kovach]

Yes, this is just coming out in Bloomberg. Apple appears to be shaking up its leadership around artificial intelligence. This of course, follows what we learned a couple of weeks ago, that they're delaying that big AI Siri update. And speaking of Siri, it sounds like, according to this report at least CEO Tim Cook has, I'll just quote them here, lost confidence in their top executive. His name is John Jan Andrea. It doesn't say he's losing his job, but he is losing a lot of responsibility. Instead, he is going to be no longer in charge of the Siri group. Keep in mind, this is the big part of Apple intelligence that was supposed to launch this year. No longer launching. Instead, this is going to Go. Sorry. Let me just get this figured out here. So it's going to be the guy behind the Vision Pro is actually going to move over and start taking over some management of Siri instead of John Gianna Drea. As far as we know, Gianna Dreux still has his job. And this new Siri executive will also be reporting to Craig Federighi, who is the head of all software at Apple. But Scott, we've been talking about this so long. This is a huge miss for Apple. When they came out a couple of weeks ago and said they're not going to be able to ship the artificial intelligence products that they promised, it puts a lot of things into play. Their success in China, which obviously hinged a lot on artificial intelligence coming out, that's still expected to launch this spring. But all the AI features that you have on these Apple intelligence system right now, they're pretty minor. They don't work as well. And this was supposed to be the one that really brought Apple into the forefront in this AI story. Competing with OpenAI, competing with all these other companies we talk about. So this is seems to be a big executive shakeup. I just talked to Apple, they are not commenting on this, which is also, to be honest, a little surprising to me since this is such a big part of what the company's future is hinging on, what iOS is hinging on. And I expect us to learn more in June at the Worldwide Developers Conference about what they're going to do to really steer the ship around Scott.

[Scott Wapner]

So we discussed, you and me, the day that Jon Gruber of Daring Fireball wrote that blog, said to be the guy, right? When he writes something, you listen. Not only do you and me, they listen to Cooper Dinner community listen at the highest levels of Apple park, they listen.

[Steve Kovach]

That's exactly right.

[Scott Wapner]

Do you think that his critical blog post where he declared, quote, something is rotten at Apple was the final straw that forced Apple to make a move?

[Steve Kovach]

That's unclear. I don't know if it's the final straw. I guarantee you it had influence in there. This, I mean, Gruber is a guy who people has been very close to Apple, I mean, for years and he's honestly always been on Apple's side on a lot of things. Even when Apple might kind of screw up or do something wrong, he's always the Apple defender to come out there and say, no, wait, you guys are looking at it wrong. And so when he turns on Apple, that turns a lot of heads down there. So yes, that was a significant moment. I considered it an inflection point. I've been following his work for so many years. Even when I disagreed with him, it was hard not to disagree with what he wrote the other day. And I guarantee people were reading that. Did that cause Tim Cook to change his mind? I don't know. That's a question for Tim Cook. But again, it's, it's very clear. You just look at what happened and them delaying this product, delaying this feature after they promised it and it turns out what they showed us and what they literally advertised on television as a feature coming to the iPhone 16 didn't come to fruition. Someone needs to take responsibility for that. And it sounds like they're finally at least making some changes and holding some people responsible for that. And sounds like one of the main guys is going to be John Giann. Andrea losing some confidence from his CEO and losing some confidence from the AI team as well that you're looking at him right now.

[Scott Wapner]

The other issue, as you well know, because we've discussed it so much in recent weeks, is that the analyst community on Wall street has grown more negative. I'm not saying en masse, but you've had a couple of sell calls of late and maybe, you know, another shoe drop moment was when Eric Woodring of Morgan Stanley, you know, considered a very influential analyst there and he still likes the stock over the long term. He still calls it an outperformance, but he cut the price target. And I think it was last week also noting this big miss and maybe he used stronger words than that related to Syrian AI.

[Steve Kovach]

Yeah, that's exactly right. It's Eric, I think Woodring, he always has a very practical way at looking at these things. And you know, when you look at tariffs, first of all, we got to keep that in mind too when we talk about the stock. We still don't know what Apple's plans are with tariffs. Last time I asked Tim Cook about that, this was before the tariffs went into effect. He told me they're going to be evaluating and so forth. We have not seen price increases, but either way, just about every analyst on the street doing the math on this, they think that the tariffs are going to have a big issue. And then this push, this was supposed to be without new hardware that doesn't really wow people. You have to have something else to wow people to get them out there and upgrade when maybe earlier than they would have. We remember we were talking a year ago that I would be such a super cycle driver for the iPhone business. Again, that didn't happen. In fact, sales were down in the December quarter versus a year ago when they didn't even have an AI product to bandy about. And so much of the technology, especially their marquee feature right now, it's not an Apple feature, Scott, it is chatbots. It's OpenAI. So they're leaning on their own stuff. I'll also talk about, you know, let's tease ahead to WWDC a little bit. They also have to kind of prove that this can be a great development platform for artificial intelligence too. So there's a huge challenge here. We'll see how these, if these changes on the leadership side do shake out what that means on the product front. But this is, here's your signal right now at least that they're making changes. They know something is wrong here and they understand it. And this is at least the first step of them making changes. Who's leading these teams, how they're executing on these things. But they also have a lot of trust to build. Back to Scott, we talked about this last week that, you know, coming out there and saying this is going to launch, literally advertising it against NFL games, telling people if you buy an iPhone 16, you're going to get these features and then having to yank them and say we can't do it. We don't know when it's going to be ready. There's talks that it's not even going to be ready until 2027. Now. They're going to have to earn back a lot of trust and these are going to be the new people in charge, Scott.

[Scott Wapner]

And lastly, before I let you go, it's just this whole episode, Steve, is so out of character in some respects for Apple. They're usually not the first in which they weren't here either, but they usually get it right and they usually get it maybe best. And in this case it's not the case.

[Steve Kovach]

Yeah. And I've been covering this company for about 15 years now, Scott, and I was willing to give them the benefit of the doubt because there have been rare misses, yes, where they over promise and under deliver. But in general they say they're going to do something and they do it. So even though, yes, I understood at the time last June that some of these features weren't going to be ready for many months after when we would normally expect them in the fall timeframe when they always launch their software features, the idea that they said, hey, we're on a path to make this stuff happen and then they can't do it. And in fact, learning that what they showed us was barely functional at all. Not letting other people test it. Yeah. They're going to have to really show what they announced next is real. And it's going to be on this new shakeup of leadership to execute on it.

[Scott Wapner]

Yeah. Great insight, Steve. I so much appreciate you. Thank you for coming on with us. That's Steve Kovach with the breaking news and then the expert analysis. Really. And I like the words, Jason, that he used. Benefit of the doubt. Because investors have been always willing, for the most part, to give the benefit of the doubt to this company until recently when the stock started to go down. It's on pace now for its worst month since December of 2022. You own Apple like Josh and Jim. The only thing is you're underweight.

[Jason Snipe]

Yeah.

[Scott Wapner]

So tell me why.

[Jason Snipe]

Yeah, so I think, you know, kind of coming into this year, a lot of the, obviously a lot of the Mag seven names have run. I think what we were anticipating is, you know, what was going on with tariffs and their hardware exposure. Now, they did get an exemption the first time around. I know Steve just, you know, he just mentioned that. But for me, again, the story always with Apple is, you know, the multiple 29 times forwards down 13% with 8% growth rate. Again, services has, has been the one, you know, that's, that's been the profit center. That's the one that's been growing nicely. But, you know, I thought that there was opportunity elsewhere. You know, as I, as I look back even to earlier part of the show, you know, when we think about the other sector sectors, nine of the 11 sectors were positive coming into this week. So there are opportunities elsewhere. We decide to underweight Apple and stay market weight on the rest of the Mag 7.

[Scott Wapner]

The valuations come down when it was 31 one and a half times. And even I'm sure some are still asking the questions at 29 times, 28 times or whatever, whether it's still trading at too much a premium valuation for too little premium fundamentals.

[Sarah Eisen]

Well, I think it is. I'm underweighted as well, Scott. Have been for quite some time less than half the market weight. You know, if you take the numbers that you just used 29 times forward multiple 8% earnings growth, that gives you a PEG ratio of 3.5. That's expensive by any measure. And then you've got these, you know, mishaps, I'll call them, with getting the advanced Siri, the AI Siri going. And it has me on the sidelines as far as adding to it now. I have added to other mega cap techs, Nvidia and Microsoft, not Apple. I think the better question is not why I don't add to it, but why do I own it at all? And I think this is important to address. It's not just that it's such a huge weighting in the passive index. It's not just the buybacks. It's that there is a retail shareholder base that is borderline fanatic about this. It was about three months ago, I was on the air, I think you were here, Scott, and I said, you know, at some point I might actually remove Apple from the portfolio. I got so many howls. I mean, we're a big firm. We've got 125 billion in assets under management. I got howls from clients, I got howls from advisors. Some of them said, you will remove shares from my portfolio when you pry them from my dead hands. Now, it's not just storytelling that I'm engaging here. There is a, as I said, quasi fanatical investor base here, retail investor base that is not to be trifled with. So if they get this right, and obviously there are some questions right now, I think that fanatical shareholder base will expand in the meantime. I'm not adding to it at this multiple. To get back to your original question.

[Scott Wapner]

Yeah, well, it moves us in some respects to the company that seemingly has gotten almost all of it right and that is in video, which is having its AI event. Josh, it's still going on. You do have a number of faults.

[Mike Ozanian]

I got it.

[Jim Laventhal]

I got to do. I got to do Apple. I got to do. I can't let, I can't let this go.

[Jason Snipe]

Okay?

[Jim Laventhal]

Let this go.

[Scott Wapner]

Go ahead.

[Jim Laventhal]

I said earlier this year, this is not going to be one of the best periods to be an Apple shareholder. You had this insanely high multiple. You had Berkshire Hathaway actively liquidating huge amounts of stock, billions of dollars worth of stock. And you really didn't have the benefit of that. Launch in the fall with the full features that Apple has been come to be expected. Like we, we have this expectation that when Apple launches something, it's not in two parts, it's not here. Upgrade your phone and we swear to God, in six months it's going to do awesome things. This has been a, this has been a horrendous period for, for Apple. But part of being a long term shareholder, part of the ability to make a thousand percent in a stock is to accept the fact that there are going to be amazing years and not so great years and occasionally terrible years and that you don't know when one is going to end and the other is going to begin. So I am not giving up on Apple. I'm not suggesting this stock's about to outperform the market over the next 90 days. But here's what I'm going to tell you. This is the largest installed base of devices in the world. Seven billion people on earth, and there's a billion devices. And if and when they do figure out how to do consumer AI, not enterprise, not whatever the lams are doing, consumer AI, they will be the best at it. They will have it being used by the most amount of people. And I'm going to tell you something. I get it. Chachi beat all these other apps, Perplexity, blah, blah, blah. None of those companies can monetize without paying Apple a third of their revenue the toll, so to speak. So it's, it's, it's too soon to say that Apple lost the AI battle and it's too soon to give up on the idea that ultimately, A, they'll get it right. B, they'll make more money from it. Here's the thing though. Including, including the LLMs.

[Scott Wapner]

Here's the thing though, you said the words you use or this has been a terrible period for Apple. Yeah, it really hasn't. I mean, if you look at. Let me go.

[Steve Kovach]

Go back.

[Scott Wapner]

Oh yeah. But let me go back to where I was going to go. It goes back to the benefit of the doubt because what the stock hit 250 in late October. It was getting the benefit of the doubt that they were going to get it right. It was only recently really that the stock started to pull back when it became more clear that, okay, maybe there are more issues than we thought. Maybe expectations need to be dialed back, maybe price targets need to come down. Maybe overall ratings on the shares need to be pulled back as well. It's only now. It is only now, Josh, feeling that pain. For a while, it was getting the benefit of the doubt.

[Jim Laventhal]

Okay, it should get the benefit of the doubt. It's, it's the most profitable company in the history of the world, other than Nvidia. So it should, that's first. But this is more important about the innovation piece. Henry Ford once said, if I had asked my customers what they want, they would have said faster horses. I'm not interested in what Wall street thinks Apple's AI product should be. Wall street is not Cupertino. They will get it right. I don't know how long it takes and that's why I'm not table pounding. Yes, you must have a fresh position in apple here at 214. I accept the fact that they're in a horrible embarrassing period. Scott, you are right. Stop this. The stock hasn't paid the price for the level of embarrassment they've just experienced technologically and maybe there might be more of a price to pay in the short term. I wouldn't disagree with you on that. I would just point out this is a comp. Do you understand people are coming on this network 10 years ago and saying Apple is falling behind on social media, they should buy Twitter. Do you know insane people are. They were saying Apple should build a car and compete with Hyundai. Like this is the level of Wall Street's, this is the level of Wall Street's suspension of disbelief around this stock. I'm not interested in what a sell side analyst types from his laptop on the Metro north on the way from Fairfield Connecticut to Midtown Manhattan. Let Apple be Apple. They're never first but they will ultimately get it right. That's all I'm saying. And as a shareholder I'm not going anywhere until they figure it out. And when they do nobody's going to make more money than they do. Nobody.

[Scott Wapner]

Let me, let me let Jason cook on, on Nvidia a little bit because they, they have this event. It's still going on.

[Jim Laventhal]

Cook it up.

[Scott Wapner]

It seems, it seems to be well received to say the least. Stacey Raskin who's the top analyst in that space outperformed 185 is that is the target says quote it may have been hard for them to truly surprise given all the pre event speculation but we thought everything sounded really good. It is still Nvidia's game to lose and they don't appear to be losing.

[Jason Snipe]

I couldn't agree more Scott. I thought it was a phenomenal interview with Kramer yesterday with Jensen. The big takeaway for me is $1 trillion in capex to be spent potentially by 2028. These are major numbers. So we've been complaining, crying about what matter is doing what Microsoft is doing in terms of capex $1 trillion just to stay in the race just to keep this thing going. When you talk about inference, when you talk about agentic AI reasoning, data center build out it's exciting to see where the technology is going and the productivity boom that I think is ahead of us and obviously Nvidia is at the center of all of it and that's all they've been chatting about throughout the week and I'M excited to hear more from Jensen on on on all what's going on there.

[Scott Wapner]

Let's let's squeeze a break in and we'll keep it going when we come back. We have a new move today from Josh Brown as well. It is in this year's best performing sector. We will bring you the trade and we will discuss next.

[Jim Laventhal]

Our state has changed a lot in the last 140 years. We know because MultiCare has been here guided by a single making our communities healthier.

[Sarah Eisen]

That comes from making courageous decisions, partnering.

[Jim Laventhal]

With local communities to grow programs and services and expanding healthcare access to those.

[Josh Brown]

Who need it most.

[Jim Laventhal]

Together, we're building a healthier future. Learn [e-mail].

[Josh Brown]

Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella. Edu.

[Jim Laventhal]

Hey guys, have you heard of Gold Belly? It's this amazing site where they ship the most iconic famous foods from restaurants across the country anywhere nationwide. I've never found a more perfect gift than food. They ship Chicago deep dish pizza, New York bagels, Maine lobster rolls and even Ina Garten's famous cakes. So if you're looking for a gift for the food lover in your Life, head to goldbelly.com and get 20% off your first order with promo code gift.

[Scott Wapner]

All right, welcome back. We told you Josh Brown has a new buy for his portfolio. It comes out of the energy space and it's one of the biggies. Chevron. Why?

[Jim Laventhal]

This stock just hit my list of the best stocks in the market on March 18th. Basically. Let me give you the setup and then I'll tell you the story for why I think it's going to break out. First things first, it's found support at that rising 200 day moving average flawlessly for the last six months. And now you've got the 50 day rising and you've got this thing in an uptrend. It's got an RSI of 64 so not terribly overbought. It's 2% below its 52 week highs above the 50 above the 200 stock is 17 trailing PE 13 times forward. 3% earnings growth expected for this year, but 17% expected for next year There are two major overhangs on the stock which I think has kept it in this consolidation zone really for the last year and a half. I think both of those overhangs are about to resolve themselves. Thing one, they are drilling big in Venezuela and obviously one of the first things Trump wanted to do was punish Maduro. He wanted them to wind down all of their activity. Just for perspective, chevron provides about 25% of the GDP of Venezuela. With their, with their drilling projects there in the last two days it looks as though that might actually reverse. There was a closed door meeting with Marco Rubio, Scott Besant and Mike Wirth, the CEO of Chevron this week. And it seems like Wirth has successfully gotten them to realize if Chevron pulls out of Venezuela, guess who's coming right in Sinopec. The Chinese will be in there like the next day. That's not good for Trump's MAGA American exceptional exceptionalism ideas. And I think that that's going to reverse itself. It remains to be seen. The Wall Street Journal is reporting that it looks like they, they got an extension. So far the second overhang, and this one's bigger, is the acquisition of Hess. So they announced this in the fall of 2023. Exxon immediately went to court to try to block it. I don't blame them. I get it. Exxon Mobil is Hess's joint venture partner in Guyana which is a massive oil project they're joint venturing on. They're trying to block this on the grounds that that ownership stake that Hess has should not or cannot transfer to Chevron in the event of an acquisition. We just found out that in the first quarter of this year Chevron actually did an open market purchase of Hess stock. They bought $2.3 billion worth. That functions in two ways. Number one, it's a signal of confidence that the deal will close. Number two, it's a giant FU to Exxon. Either way, I love it. So I think basically you've got a Stock here approaching 52 week highs, 4% dividend yield, massive buyback in place, two major overhangs should be going away at some point this year and strategically important assets to America all over the world. Completely in sync with the President's agenda. Berkshire Hathaway owns 118 million shares worth about $19 billion. Chevron is the fifth largest holding at Berkshire. It comprises about 6% of their portfolio. Come along with me and Warren Buffett, let's own some Chevron.

[Scott Wapner]

Thank you for that. You choose to own Exxon instead You know, you don't want to ride shotgun with, well, with Josh.

[Sarah Eisen]

I always want to ride shotgun with Josh.

[Scott Wapner]

However, when you.

[Sarah Eisen]

However, I've been in Exxon for a long time. Let me just explain this for a second. I've said this many times. If you want to be in a sector, any sector, we're talking about energy right now, you have to be in the creme de la creme. In the case of energy, it is both ExxonMobil and Chevron. I have nothing against Chevron. I've been on in ExxonMobil for a long time. These are the two Titans. Back in 2022 there was a divergence between the shares. I'm happy that I've been in Exxon since that time. Again, nothing against Chevron and I forget what it was. I think there was like a miss in some Australia oil fields going forward, where we are right now with oil at a relatively low level compared to the last few years. You want to be in one of these two names because they are big, they have economies of scale. Again, I'm in ExxonMobil because of a historical reason. If you look at the two companies, valuation is basically the same. Chevron's got a little bit of a bigger dividend. But that may stem back to that 20002022 mishap. It's either or. I'm in Exxon.

[Scott Wapner]

All right, let's get the headlines now with you.

[Jim Laventhal]

I like that guy.

[Scott Wapner]

Hey, Court, I Scott.

[Courtney Reagan]

Hamas claimed it fired a barrage of rockets at Tel Aviv today as Israeli troops expanded their ground operations in northern Gaza. Israeli military said there were no reports of casualties from the rockets. The two month cease fire dissolved this week when Israel launched an aerial attack on Gaza that the IDF said was targeting Hamas. Israel has argued that the truce could not continue unless Hamas released more hostages. And Hamas has accused Israel of violating the terms of the cease fire. The Vatican says Pope Francis his condition continues to improve and that he has not recently needed to use a mechanical ventilation mask to help him breathe. The 86 year old is recovering from double pneumonia and has been in a Rome hospital since mid February. And the University of California Systems says it will abandon the use of diversity statements and hiring. The practice essentially asked applicants how they would contribute to diversity, equity and inclusion if they were hired. The move by the largest university system in the country comes as President Trump works to roll back DEI policies at the federal level. Scott, back over to you.

[Scott Wapner]

According to thank you very much, it's Courtney Reagan. Coming up, a big breakout for one name On Josh's best stocks in the market list. We have that for you. Next.

[Jim Laventhal]

Are you still quoting 30 year old movies?

[Scott Wapner]

Have you said cool beans in the past 90 days?

[Jim Laventhal]

Do you think Discover isn't widely accepted?

[Scott Wapner]

If this sounds like you, you're stuck in the past. Discover is accepted at 99 of places that take credit cards nationwide.

[Jim Laventhal]

And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nelson Report at Capella University.

[Josh Brown]

Learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.

[Scott Wapner]

All right, two health care names on Josh's best stocks in the market list. We are following them, including one he says is breaking out. It's already on the list. It's AbbVie.

[Jim Laventhal]

Yeah, we've talked about this before. This is a strong stock getting stronger. It's been under accumulation shrugged off the the recent volatility very quickly. Abbvie has an RSI of 63. One of the strongest stocks in the market is 3% within its 52 week high. It's already up 19% year to date. It's been a great place to hide out trades at a forward P E of 15. 21% earnings per share growth expected this year, 14% next year. It's one of the rare situations among large cap stocks where you're not overpaying for the prospective growth.

[Scott Wapner]

Let's get commentary on the desk too because we're lucky both you guys own the stock. Jason, you first. We talk about it a bunch. Yeah, but let's do it again because of the breakout that Josh is talking about.

[Jason Snipe]

It's been a Great stocks up 20% year to date and it's one of those names that has definitely had to follow through off that patent cliff. Right. For Humira, which, which was representative of a lot of their revenue. Skyrizi has has grown tremendously up 58% year over year. Rinvoak also has grown very well over 47% year over year. Their pipeline remains rich and I continue to like this name in the biopharma space.

[Scott Wapner]

Quick from you.

[Sarah Eisen]

Yeah. So we talk often about excellent management in companies. Here's a key case in point. The Humira cliff was a big deal. They replaced Humira with Skyrizi and Rinvoak really well. They made key Acquisitions as well. Last November they had a drug failed trial, schizophrenia failed trial stock went way down. I and probably Jason the time said many times you got to buy it here, you got to buy it here. This is not a knock on management management. Sometimes drug trials go bad. And when you've got a good management in a company like this and you get a price break like that, you step in the right thing to do.

[Scott Wapner]

All right, the other one, Josh, an update on Bristol. Bristol Myers.

[Jim Laventhal]

Yeah, yeah. So AbbVie is a great chart. This is a good chart that has the potential to be great. This is a stock trading at a 10 forward P E and with good reason. They have had earnings problems. They actually reported a loss on a net profitable basis last quarter. It's been a challenge stock, but this is the blueprint for how a pharma that's lost its way pulls itself out of a tailspin. It's almost never some sort of miraculous acquisition. It's usually what Bristol Myers has been forced to do. And now it's, it's finally starting to bear fruit. The expectation for earnings growth this year is 486% again. That's because of some quarterly losses this year. It's certainly not growing revenue that fast. But you've got a 4% dividend here for your patience. So good stock, not a great stock, has the potential to be great. And you know, I think it only really takes like one solid quarter for people to say they're willing to give this name a second look. And then all of a sudden you're not talking about a 10 forward P E. A rerating could be a 12 forward P E. That's a 20% move in the stock. They just have to continue to prove it.

[Scott Wapner]

All right, thank you for that. We'll take a quick break. We'll come back sent only as his midday word next. All right, welcome back. Senior markets commentator Mike Santoli is here for his midday word. I guess we're still trying to digest and figure out what our next move should be at table.

[Mike Santoli]

Yeah, and look, I think that the Fed yesterday, that was the absence of a new negative, right? So the willingness to look through tariff, potential tariff inflation and still be ready to cut if the economy needs it. Okay, fine. That's table stakes for having this rebound rally continue. But the fact that Powell and nobody else is professing any confidence in exactly how things are going to break from here policy wise and just exactly how much to worry about whether the survey based data is going to feed into something worse for the economy. I think leaves the market a little bit apprehensive. You know, nothing is really getting in the way of the idea that you got oversold enough at the lows. This is a pretty credible rebound rally over Friday and Monday. You probably have to chop and test this around a little bit. This is a process. Not a moment. But I keep pointing to the, you know, the near term hurdle in the S&P 5700 and change. It's been the ceiling three days this week so far and it's seen as one of those areas that needs to kind of be cleared. So it's not the most assertive comeback but maybe you wouldn't expect it to be given all the overhangs.

[Scott Wapner]

I mean you can't look past the fact that the Fed took its outlook down on the economy.

[Mike Santoli]

That's right.

[Scott Wapner]

Powell still says yes, it's solid but they still took their outlook down because of all of the uncertainty. Uncertainty. So if there's a reason to think that the market can still go up in the face of that.

[Mike Santoli]

Yeah.

[Scott Wapner]

And the weight of April 2 and more tariffs. It's Fed put. I mean what are you buying? What are you.

[Mike Santoli]

I mean I think the reason the market's hanging on to it. Okay. Is because that was really the Fed just marking its outlook to market. You know, I mean I think baked into, into financial markets were, you know, maybe sub 2% GDP growth this year with given the start that we've had. But you're right, it makes it a challenge. Second half earnings estimates, you know, they're going to have to prove it here at this point because they are still pretty elevated in a kind of muddle through slow growth.

[Scott Wapner]

The best case scenario for the first base case, at least at this point, base case is that, well the tariff price hikes will be one offs.

[Mike Santoli]

Yeah.

[Scott Wapner]

They'll be transitory and you can look through it. Of course there's a lot of risk on that too.

[Mike Santoli]

There's a lot of risk on all sides of it. And you know, we have this two weeks worth of suspense in terms of even knowing what we're dealing with and trying to quantify. So that to me is makes it a little bit soft footing as well.

[Scott Wapner]

All right, good stuff. I'll see you on closing bell 3:00. That's Mike Santelli. Straight ahead, we have some new reporting on that blockbuster deal for the Boston Celtics. Just how high the total valuation might actually reach. Details are next. Welcome back to halftime. Some very big sports business news today. A deal for the Boston Celtics has been reached and it is a record amount for an NBA franchise. A group led by the investor William Chisholm has agreed to buy the team from Wick and Irving Grossbeck in a two stage transaction, the first of which values the team at $6.1 billion, the most ever paid for a North American sports franchise. And according to a source familiar, the total valuation has a chance to reach 7.3 billion by 2028, depending on how well the NBA does over that time period. Wick Grosbeck will remain the franchise's governor through the 2728 season. Mr. Chisholm is a Massachusetts native. He is the co founder, managing partner and and chief investment officer of stg, based out in Menlo Park, California. CNBC sports senior sports reporter Mike Ozanian joins us now. It's good to see you. We knew this was gonna happen. We didn't know the exact number we would get. It just shows that putting a number, putting a valuation number on a team is an inexact science because in a case like this, in a case like this, this, it's going to go for whatever somebody's willing to pay for it. And this is a trophy franchise in all of professional sports.

[Mike Ozanian]

No question about that, Scott. And it's great to be with you. What surprised me about this, and we at CNBC valued the Celtics recently at 5.5 billion is that the price from a valuation standpoint works out to 13 times revenue. Now the Phoenix Suns, which were the previous record price for an NBA team, also sold for 13 times revenue. But the Suns, unlike the Celtics, control their arena. They get all the money from the arena, even from non NBA events. The Celtics building is controlled by the owner of the Boston Bruins. So the Celtics rely very, very heavily on ticket revenue. They don't get much in the way of hospitality revenue.

[Scott Wapner]

Yes, but the Celtics, unlike the Suns, have that thing called titles. Many of them, and those are worth a lot, especially when you consider that they're pretty set up to be successful into the future. I mean, their best players just got huge deals and are now locked up for some period of time.

[Mike Ozanian]

Yes, and to further your point, Scott, unlike say Los Angeles where you have two NBA teams, in New York, where you have two, two NBA teams, the Celtics own their market. There are no other NBA teams. I think that's part of being an elite brand as well, besides those trophies. But going back to your original point about the inexact science, here's a team, the Celtics, that likely could lose a lot of money this year. So what is it that the buyer is cherishing more the NBA titles or operating profits. Clearly it's the titles and the brand power that goes along with that, I'd argue.

[Scott Wapner]

Yeah, I mean, it's the whole thing. It is unique too in a two stage transaction. You don't always see that in sports. How a valuation can potentially go higher depending on how the league does overall. And the fact that Wick gross back is going to stay around for a while and be the governor for another three seasons.

[Mike Ozanian]

Well, look, you know, he's brought championships to the Celtics. I think what this does is it alleviates some concerns that fans of the Celtics may have that somebody's coming in and paying so much money for a team. Is he going to cut payroll or other expenses to help him pay for the team, maybe cut some operating losses? And I think with Wick, they're still running it. I think that those fears can go away. This is a team that's going to put titles ahead of profits.

[Scott Wapner]

Yeah, I mean, not a bad trade. The Grossbeck family pays 360 million in 2002. Two championships later, you restore the greatness and glory of the Boston Celtics. And now you command the highest valuation ever paid for a North American sports franchise. Truly remarkable. Thanks for helping cover it, Mike. Thank you. We'll talk to you. Thank you, Mike. Lan. Be sure to check out our CNBC sport newsletter to sign up. You can scan our code on the screen. It's the QR code, of course. You can go to cnbc.com/sportsnewsletter as well. We'll do finals next. Want to hit a call today from Mike Mayo, influential banking analyst, because he has a new note on J.P. morgan. He calls it the Nvidia of banking. Interesting note, interesting call. Josh Brown, you own J.P. morgan.

[Jim Laventhal]

Yeah. Doesn't he work for Wells Fargo? They must not be thrilled. I like, I like the. I like. Let's not say Wells Fargo is the AMD of banking. That would not be cool. All right. I like.

[Scott Wapner]

Well, they're the meta. They're the meta of banking.

[Jim Laventhal]

All right, fine. That's pretty good then. Okay. I mean, I like the idea behind what he's, what he's saying. And you know, this is the type of bank that I think works in either environment. So if you genuinely think that we're going to rip down this economy via tariffs and that's what like you're most worried about, that's the reason why you're selling and you're, and you're nervous, okay, that's fine. I don't think JP Morgan puts itself in a situation where they have like materially huge write downs or losses as a result of that. This company has been through much worse than tariffs and Jamie Dimon has been out in front of the fact that inflation might stay higher for longer. So I think he'll be right with this call.

[Scott Wapner]

What's your final trade?

[Jim Laventhal]

Chevron, sir.

[Scott Wapner]

All right, thank you very much. That's Josh Brown. What's your final trade?

[Jason Snipe]

Jason 5 Serve like this one here, Jimmy.

[Sarah Eisen]

UnitedHealth Group. You really have to respect the relative outperformance as the market's down from this name. Obviously a battleground stock, it's doing well.

[Scott Wapner]

All right, so let's see what this market does between now and 3 o'clock when I see on closing bell Jeffrey Gundlach with his first reaction to the Fed meeting, he'll join me You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

[Josh Brown]

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of cnbc, NBC Universal, 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 halftimereportdisclaimer. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn [e-mail].