The State of Stocks Amidst Market Turmoil 3/13/25

Summary

CNBC Halftime Report: The State of Stocks Amidst Market Turmoil (Released March 13, 2025)

In the March 13, 2025, episode of CNBC's Halftime Report, host Scott Wapner and a panel of top investors—including Brent, Josh Brown, Kevin Simpson, and Jason Snipe—delved deep into the current state of the stock market amid ongoing turmoil. This detailed summary captures the key discussions, insights, and conclusions from the hour-long podcast.

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1. Market Overview

Significant Declines Across Major Indices

The episode opened with a stark depiction of the market's current state. Scott Wapner highlighted that the market was experiencing substantial downturns:

• Dow Jones Industrial Average: Down approximately 480 points.
• NASDAQ: Nearly a 300-point decline.
• S&P 500: Decreased by 7% since the inauguration.
• Russell 2000: Fell by 11.5%.

Wapner noted, “[...] the state of stocks amidst this market turmoil” ([04:53]).

Factors Contributing to Market Turmoil

Several factors were identified as contributing to the market's instability:

• Producer Price Index (PPI): Cooler than expected, indicating potential easing of inflation.
• Tariff Threats: Ongoing tensions and potential new tariffs adding uncertainty.
• Government Shutdown Possibilities: Increased fears over fiscal instability.
• Comments from Treasury Secretary: Indications that the administration is not overly concerned about short-term volatility, though recession possibilities remain open-ended.

Jason Snipe emphasized the dissonance between earnings estimates and market sentiment, stating, “earnings estimates have not come down nearly as much as sentiment has and as multiples have” ([02:32]).

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2. Stock Valuation and Investment Strategies

Earnings Estimates vs. Market Sentiment

Jason Snipe discussed the disparity between earnings estimates and market sentiment, highlighting that while multiples have decreased from 22x to 20x forward, full-year earnings expectations remain stable. He quoted Michael Semblist, Chairman of Market and Investment Strategy for J.P. Morgan Asset and Wealth Management:

“The stock market cannot be indicted, arrested or deported. [...] It is the ultimate voting machine, reflecting prospects for earnings growth, stability, liquidity, inflation, taxation, and predictable rule of law.” ([02:32])

This underscores the market's focus on fundamental earnings prospects over policy-driven sentiment.

Adjustments in Market Targets

Ed Yardeni, a respected strategist, recently cut his year-end S&P 500 target from 7,000 to 6,400, aligning with broader downgrades from major financial institutions like BCA, HSBC, and Citi. Jason Snipe praised Yardeni’s approach, noting:

“He’s reducing the multiple on those earnings but reserves the right to go back to that 18 to 22 range if tariff issues are resolved.” ([08:57])

Scott Wapner posed a critical question regarding whether investors should lower their market expectations due to the introduced uncertainties:

“Is it time to reset your expectations?” ([10:06])

Bond Markets as Indicators

Kevin Simpson highlighted the bond market's resilience, suggesting it remains a smarter indicator than equity markets regarding recession risks:

“I agree with the bond market. It’s bigger, it’s smarter, and it’s telling you there’s not a recession on the horizon.” ([13:00])

This perspective emphasizes a divergence between bond markets and equity sentiment.

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3. Sector and Stock-Specific Discussions

Technology Sector Analysis

The technology sector remains a focal point of discussion, with significant declines in major tech stocks prompting strategic investment conversations.

• NASDAQ 100: Down 12% from all-time highs, marking one of the fastest corrections in 75 years.
• MAG7 Stocks: Down 15% or more, leading a broader market sell-off.

Jason Snipe analyzed the valuation of major tech companies, suggesting that many are now reasonably priced relative to their earnings growth:

“Relative to what is being expected by these massive companies, all of them are in 15% or worse drawdowns and most of them are now reasonably priced.” ([14:38])

Investment Strategies in Volatile Tech Stocks

Kevin Simpson and Jason Snipe discussed strategies like buying on dips and writing options to capitalize on volatility. For instance, Simpson explained his approach to Tesla:

“Pure price action. [...] I’m looking for volatility so I can write calls against this brain.” ([17:23])

Similarly, Josh Brown shared his options strategy with Tesla, focusing on collecting premiums amidst high volatility:

“I sold the April 17th to 70s and got $13 and so huge premium.” ([19:00])

Retail Sector Caution

Retailers such as Dollar General, Wal-Mart, and Target are signaling caution due to consumer spending concerns, adding another layer of uncertainty to the market.

Best Stocks in the Market

Throughout the episode, panelists highlighted a list of stocks they consider strong holdings despite current downturns:

• Lam Research: Favored for its AI applications and strong margins.
• Invitation Homes: A robust REIT with a solid dividend yield.
• AutoZone, Live Nation, Starbucks: Identified as opportunities based on support at key trend lines and strong fundamentals.

Jason Snipe elaborated on AutoZone, Live Nation, and Starbucks, emphasizing their support levels and growth prospects:

“Azo is up 10% year to date. It’s only 5% below its 52-week high.” ([38:33])

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4. Political and Economic News Impact

Trade Policy and International Relations

The discussion touched upon the Trump administration's steadfast stance on tariffs, with President Trump reaffirming his commitment to reciprocal tariffs amid ongoing international negotiations with allies like Britain, Canada, France, Germany, Italy, and Japan.

“President Trump says he’s not going to change his mind on those April 2nd reciprocal tariffs.” ([43:36])

Treasury Secretary Scott Besant echoed this firmness, suggesting the administration does not intend to reverse its tariff policies despite market turbulence.

Military and Educational Policy Moves

Additional headlines included:

• US Military: Potentially increasing troop presence in Panama to counter China's influence.
• Education Department: A lawsuit by 21 Democratic attorneys general challenging the administration's plans to dismantle parts of the Education Department.

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5. Final Trades and Recommendations

In the concluding segments, panelists shared their top stock picks from Morgan Stanley’s 30-for-27 list, focusing on long-term investment opportunities:

• Visa: Viewed as a solid buy on dips due to its high margins and moat ([45:56]).
• Blackstone: Recommended for its private equity strength and growing net excess ([46:08]).
• Eli Lilly: Praised for its dominant position in the pharma space and robust pipeline ([46:21]).
• Invitation Homes: Highlighted as a valuable REIT with strong portfolio holdings ([46:32]).

Josh Brown added on Visa:

“It got caught up in that low capex, high margins moat buy on the dip.” ([45:56])

Jason Snipe shared insights on Invitation Homes, emphasizing its dividend yield and growth story:

“It’s a 3.5% dividend yield. [...] Total return for the last five years.” ([33:00])

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6. Conclusion

Scott Wapner wrapped up the episode by reiterating the market's current volatility and the importance of strategic investment amidst uncertainty. He emphasized the dichotomy between bond markets' optimism and equity markets' cautious sentiment, advising investors to remain opportunistic and focused on long-term fundamentals.

“For us, I think it’s about taking opportunity, being opportunistic in all the mess that we see.” ([10:06])

The panel underscored the necessity of distinguishing between short-term market upheavals and long-term investment prospects, encouraging listeners to navigate the turbulent market with informed strategies and a focus on resilient sectors.

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Notable Quotes:

• Jason Snipe ([02:32]): “Earnings estimates have not come down nearly as much as sentiment has and as multiples have.”
• Ed Yardeni ([08:57]): “He’s reducing the multiple on those earnings but reserves the right to go back to that 18 to 22 range if tariff issues are resolved.”
• Kevin Simpson ([13:00]): “I agree with the bond market. It’s bigger, it’s smarter, and it’s telling you there’s not a recession on the horizon.”
• Jason Snipe ([14:38]): “Relative to what is being expected by these massive companies, all of them are in 15% or worse drawdowns and most of them are now reasonably priced.”
• Kevin Simpson ([17:23]): “I’m looking for volatility so I can write calls against this brain.”

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This episode of Halftime Report serves as a comprehensive guide for investors navigating the current market turbulence, offering expert analyses, strategic insights, and actionable recommendations to inform investment decisions amidst uncertainty.

Transcript

[Scott Wapner]

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[Scott Wapner]

Available with TurboTax Live full service. See guarantee [e-mail] guarantees. 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. Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wobner. Front and center this hour, the state of stocks amidst this market turmoil. Continuing again today, we discuss and debate with the investment committee. Joining me for the hour, Brent, Josh Brown, Kevin Simpson and Jason Snipe. We'll take you to the market picture here, which as Carl just said, we're at the lows of the day. The Dow's down about 480. You do have almost a 300 point decline for the NASDAQ. The tech remains, that sector remains a pretty good point of selling. You did, as you know, have the PPI cooler than expected. There's more threats of tariffs today. We're watching the government shutdown possibilities. And then of course, those very important comments from the treasury secretary on our network this morning where he said we're not concerned about a little bit of volatility over three weeks in the stock market, that the markets are prone for big unwinds like this. Not sure why tariffs are such a big deal for the markets. And then I thought really importantly, when he was asked if his earlier comments about a detox is a euphemism for recession, he said, quote, doesn't have to be, didn't say, no, it isn't doesn't have to be. That means he didn't rule it out. And I feel like there's a lot of that around Josh, and that's why the market remains, I think, a bit unsettled.

[Jason Snipe]

Yeah, there's a couple of things here that I think are really important to just set up for the outset of this conversation. The first is that earnings estimates have not come down nearly as much as sentiment has and as multiples have. So now we're at 20 times forward, coming down from 22. So we're derating here on the multiple, but not yet. We're not seeing that for full year 20, 25 earnings expectations. And that might be the next shoe to. Or that might be the silver lining, depending on how long you think this tariff stuff is going to last and what companies have to do in terms of guidance in order to navigate it. But I want to share a quote from Michael Semblist, who said this last night to presumably all of JP Morgan's investment clients. Semelist is the Chairman of Market and investment strategy for J.P. morgan Asset and Wealth Management, most powerful guy in research in the entire building. He said, here's the interesting thing about the stock market. It cannot be indicted, arrested or deported. It cannot be intimidated, threatened or bullied. It has no gender, ethnicity or religion. It cannot be fired, furloughed or defunded. It can't be primaried. It can't be seized, nationalized or invaded. It's the ultimate voting machine, reflecting prospects for earnings growth, stability, liquidity, inflation, taxation and predictable rule of law. What he has put into words last night, I think is the thing that is now dawning on the markets. It's nice to have these policies, it's nice to have these, these grand pronouncements about punishing other companies that we trade with, etc. But the stock market doesn't care. What it's going to focus on is the earnings outlook going forward as a result of the policies. And you can't talk it out of repricing this risk. You can't tell it, no, stop, wait. This is going to work. The market is going to react first and that's just the way it's always been. And I think when you're investing right now in this climate, the thing you need to pay attention to is to what extent will earnings estimates be ratcheted lower by the street and how bad will the hippie to multiple, which is pure sentiment, not massive. We don't know the full extent of that yet. We could be just in the early stages. And that's the sobering reality that I think we're all contending with today.

[Scott Wapner]

Of note, the Dow as we come on the air today has given up 41,000. The last time it was below that was September 12th of last year. So far so bad really for this stock market which the S and p is now down 7% since the inauguration. The Nasdaq's down 11, Dow's down 5.1% but it's been really tech growth. The Russell is down 11.5% as well. Brin. So what's your take here? You know, the treasury secretary I thought was interesting this morning just didn't sound that concerned about what the markets are doing. And here's somebody who's been in the markets for more than 30 years.

[Josh Brown]

Yeah, I mean obviously he has, you know, best friends, very close with like the Stan Druckenmillers. I think he's a very calming voice as press secretary. But I think to build on what Michael Semblas Josh articulated so well is in the market price leads fundamentals. And right now when the fundamentals of the economy, I'll say the economy which is not the stock market are under question, the price is going to make that decision. To Josh's point, a voting machine. And I think where we all have to understand if the administration goes through which may be long term positive short term pain in reducing government employees across the board, if you look at 20, 24 government jobs accounted for at the state and at federal level. So I have to say that 85% of job growth we had huge deficit spending which by the way still continues. So that hasn't even remotely stopped. And so I think the economy, if we're actually going to pivot from this fiscal led to the private sector led, that is a detox. And I don't think it's going to happen as, as, as it's actually being laid out right now. But I do think it's something we all need to think through. How does the economy fare? And to me that's one of the biggest reasons that the market is selling off because we don't want inflation to come down because growth is coming down because jobs are our job, unemployment is going higher. And so I think this is going to be here for a while. Don't forget April 1st, that American first trade policy memo comes out. That's why Trump keeps talking about April 7th. Second, I think we're going to get another shoe to drop on tariffs with other countries. And so I think we're just have to Settle in with this volatility. I will say, you know, finally there is so much that investors need to understand. The CTA is the last two weeks, which are their commodity trading advisors. The selling is commensurate with 2018 and 2022. So they have just been pounding on selling and then now are short. And so I think that that's still going to cause flow issues for the market when you have all this wall of money that's mechanically driven, still now short this market and potentially with more to sell.

[Scott Wapner]

Some of the more bullish and or optimistic voices who watch these markets are growing more cautious. Ed Yardeni among them. He cut his year end S and p target to 6400. He was one of the highest at 7000. Now Chris Harvey at Wells was on closing bell with me yesterday and he, he's sticking with his for now 7007, which was right at the high. But Yardeni cuts his others real quick. It just follows what others have done recently too, and many this week. By the way, bca, remember, downgraded US equities to underweight on Monday, as did hsbc. They went to neutral Tuesday. Citi did the same. They went to neutral Wednesday. Costin at Goldman lowered his price to target. All of this following that move at Truist on 25 February, which was the first to downgrade US equities. So the view has gotten a little dimmer.

[Jason Snipe]

I just want to on Yardeni because I regard Ed Yardeni as one of the most consistently correct strategists and one of the few who was courageous enough to be bullish back when everyone was bearish. One of the people Talking about roaring2020s and sticking with that call throughout 2022 when things look really bleak. What Ed's doing in his note is he's keeping his earnings expectations. Importantly, he's doing what I was just talking about, which is reducing the multiple on those earnings. And that's based on the environment that we're in. And he's going from a range of 18 to 22 times earnings to 18 to 20. He's taking, he's chopping the ceiling off of that. But one of the things that he says is should this tariff stuff come to an end earlier, he reserves the right to go back to that 18 to 22 range. And when you do that, you can have a year that gets to 7,000. It just looks increasingly unlikely the longer that this goes on for. So I thought it was a poignant note and I think he's getting out ahead of where a lot of other people are going to be. Why, why do we deserve 22 times earnings for a year end?

[Scott Wapner]

Well, people, Jason, were asking, do we deserve 22? When we were at 22. Now we've come down to around 20. And maybe if the market upset continues the way it is, we'll be coming down even more from that. Is it time to lower your expectations on where you think the market can go because of all the uncertainty that's been introduced from the tariffs and sort of the way that it's all been discussed rolled, rolled out, rolled back, rolled on and rolled forward, which we still don't have all the answers on? I think tactically, absolutely. I think it is a time to kind of reset your expectations. You know, I think what, what Josh mentioned, I think is supremely important in terms of earnings revisions. They have not headed materially lower. We've had good strong earnings growth for Q4. Obviously we're so. But markets are always looking ahead. That's always the story. But the question for me, is it uncertainty or is it weakness? Right. Like material weakness? I think it's far more about uncertainty. The tariff talk is obviously an overhang on the market. The political rhetoric is obviously an overhang on the market. And it's hard to pay attention to the fundamentals of companies when there's all this noise out there. So for us, I think it's about taking opportunity, being opportunistic in all. In all the mess that we see, whether it's tech growth, obviously value is. Has outperformed 500 basis points year to date. But I think this is an opportunity. I think it is a tale of two halves. You know, as we look to the second half is more opportunity in the market. Kev, I like the way that Jason frames this. It's almost like uncertainty versus reality. Uncertainty speaks of. Well, we're not really sure. Growth scare versus reality of. Ok, now we have a recession. The credit markets pretty much reflect that. Reuters today with a headline. Corporate bond spreads hit their widest in about six months on recession fears. I get that. But they're still pretty tight. Let's just, let's just be clear FT US junk bonds slide as Trump's tariffs spark economic worries. Yes. Not in an overly meaningful way. We have to qualify all of that. J.P. morgan's trading desk asks the question, will credit markets be proven right Again, quote echoing the recession scares of the previous two years, credit markets are once again more dismissive of US recession risks than equity or rate markets. In other words, the credit markets which Are, at the end of the day, more important, important to the overall stability and health of the markets in general, are so far okay. And that's the underlying factor. Until that deteriorates further, then we have to have a different conversation. If that happens.

[Kevin Simpson]

Yeah, I agree. I agree with the bond market. It's bigger, it's smarter, and it's telling you there's not a recession on the horizon. But I keep things really simple. So I was listening to Josh talk and I thought, okay, if we get 270, $70 in earnings on the S&P 500, which I still think is going to come down, but let's just start there and then we bring the multiple down to 20.5, that gets us to 5535. And when I looked up at the screen a second ago, it was 5542. So everything seems kind of reasonable here. We could certainly see multiples come down. I think we'll absolutely see earnings come down, but it's not that bad. And the bond market's validating that. I think we all got a little bit spooked earlier in the week when we heard from, from Delta. At least that's what got my attention. We see all the retail names coming out. Dollar General today, Wal Mart, you can take your.

[Scott Wapner]

Oh, the Journal has tallied all of the others. It's Wal Mart, McDonald's, Costco, Delta, Target, Foot Locker, Lowe's, Kohl's, Macy's, all Dollar General today, the ones who are warning about caution, about the consumer.

[Kevin Simpson]

So the consumer is flashing that cautionary tale. But there's another, like, maybe white knight waiting in the wing. So. So maybe revenues come down, margins come down, tariffs can affect it, but it also potentially moves up a Fed rate cut into the summer. So if summer is in play, which it wasn't two weeks ago, then at least you have a little bit, potentially for a stopgap here or at least a trading opportunity.

[Scott Wapner]

Well, speaking of the trading opportunity, there are, there are several who come on and say this is, in fact a buying opportunity at minimum, that you could get a tradable bounce. And we did, in fact, get one yesterday, especially in the mega cap and high momentum names. The problem is, is they're down again today. So if you tried to think that yesterday was a tradable bounce, tactically speaking.

[Jason Snipe]

Can I cook on that for a second?

[Scott Wapner]

Yeah, I want you to cook on that because you're getting punished again today.

[Jason Snipe]

Okay, let me point this out. The NASDAQ 100 is now 12% below its all time highs. That's a legit correction. And it's fast on the S and P. It's actually the fifth fastest in the last 75 years from, from an all time high to down 10%. So if we're repricing man, we're doing an overnight. That's number one. Number two, every MAG7 stock is now 15% below its all time high or worse. And when you now look at the multiples, you have a very different picture of what you had to pay for these stocks relative to their growth.

[Scott Wapner]

You sure did. Let me give you some numbers behind that and I'll let you cook some more. So a month ago, Nvidia's forward P E was 30.3 times. Today it's 24.9. Apple's a month ago was 31.6. Today it's 27.8. Microsoft's is down. Alphabet's is down. Meta's is down. Amazon's is down.

[Jason Snipe]

Yeah. Now let's take those numbers and let's compare them to earnings per share growth. Alphabet 16 times forward 11% earnings per share growth. Not cheap, not expensive. In Nvidia, a 20 forward multiple on 52% earnings growth. What's the problem with that? Metta 21 times 14% earnings growth. Amazon 26 times 37% earnings growth. Amazon's cheap guys. Apple 26 times, only 8% earnings growth. Still problematic. And then we won't do Tesla. But my point is, relative to what is being expected by these massive companies, all of them are in 15% or worse drawdowns and most of them are now reasonably priced. If you think those growth estimates could hold up and they're not very high growth estimates, it's not absurd to think that Medic can do 14% earnings growth over the next four quarters. Why wouldn't they be able to? Unless you're talking about like an outright recession that starts to slam ad budgets. That's not happening yet. You might think that that's possible. I agree, it's possible. Is it probable? I don't think we have the evidence to suggest that.

[Scott Wapner]

Amazon's on pace for its sixth straight week of losses. Metta its fourth straight. Microsoft its seventh straight. You know, Joe Terranova looked at the Amazon slide that Josh is talking about and he went in and he bought more of that stock. Retail flows from JP Morgan suggest massive in video and Tesla buying offset by big Apple and Microsoft selling. Which takes me to Kevin Simpson who bought more Tesla. So the stock had a couple of days up, it's reversed. Yet Again, you bought it at 226. Why was now the moment to do that? Yeah.

[Kevin Simpson]

This is not a fundamental story. I didn't jump in when Josh said, let's not talk about Tesla.

[Scott Wapner]

What is it?

[Kevin Simpson]

Pure price, price action. So you've got a Stock that's down 52% at 226. We stepped in. We're still up $10 on it. But think about how I can own this name. It doesn't matter what the ticker is. I'm looking for volatility so I can write calls against this brain. You're on the show today. You write calls on it more than I do. This is a situation where, just like we did with MicroStrategy, no fundamental basis for it, but just harvesting a ball play. So this thing goes up another 10, $20, I'll be writing calls against it. We'll be out.

[Jason Snipe]

How far out of the money do you go? With something like this, where it legitimately could bounce 20%, how far out do you go?

[Kevin Simpson]

So with MicroStrategy and Robinhood, we want a year out. That's what we're planning to do with Tesla. We want to write a one year leap and we can write it, you know, 10, 20, 30% out of the money, but it brings in massive premium.

[Jason Snipe]

Yeah.

[Kevin Simpson]

The intent isn't to hold it for the year. The intent is to collect that premium and then close it out on a pullback. You can't own these names and think that they're not going to drop after they go up.

[Scott Wapner]

You couldn't care less if. You couldn't care less if, if there's a, you know, a longer lasting impact of drop in Tesla sales. You couldn't care less if they sell fewer in the eu. You couldn't care less what Musk says, tweets, does.

[Kevin Simpson]

I wouldn't have enough and pay attention to it. Wouldn't have enough time of the day.

[Jason Snipe]

He's, he's. I would say this about Elon Musk.

[Scott Wapner]

This isn't even an Elon story. This is like, you know, a tactical. It's a trading story.

[Jason Snipe]

He's, he's crafty and he could come out with an announcement that takes the stock up 15, 20% any time he wants to. What if he announces a buyback? They could authorize it. He never has to actually do it.

[Kevin Simpson]

Right.

[Jason Snipe]

I mean, I would not discount the possibility that he's cooking up an idea to, to remind shareholders, hey, guys, I've made you a lot of money over the last 10 years and I could do it again. And it don't take much with this name. We all know, we've all seen these episodes. Brian looks like she's dying to get on this.

[Josh Brown]

So I wanted to talk also on the option side. So different from Kevin yesterday when the stock was at 250, I sold the April, I think April 17th, next next month to 70s and got $13 and so huge premium. So I could do that, you know, 10 times this year and make almost a 40% return just off selling one month out of the money calls because the volatility is so high. I think with Tesla there's so much negative sentiment. I mean there's just so much. But I promise you, let's talk about this in two quarters. The Juniper's rolling out all over the place. I think they're going to have very strong sales. They continue to have really strong adoption. It was the number one selling car in 2024. And there has been so much negativity, just like there was too much euphoria at 460. There's a lot of negativity here and I promise you that can change. And so when these, these numbers actually start to improve, I think it'll be two quarters. To get two full quarters of the Juniper, I don't think the stock will be at 235. But that being said, you don't even have to do a one year leap. You can do a one month, five weeks out and get 13 bucks. And I just, I think that there's been a lot of damage technically to the stock stock. And so to think that all of a sudden you're going to have this V recovery on the upside, I think is silly. It's going to have to build a base, it's going to have to have sentiment change and you're going to have to have good numbers around the cars because that is right now their business unit. So you can talk about autonomous, we can talk about etc. You need to see the Juniper actually flow through. I feel really confident the EU numbers and the US numbers and the Chinese numbers are going to change with the new model refresh.

[Scott Wapner]

There's been technical damage, there has been fundamental damage to whether it can be repaired in short order is the question the Microsoft thing, whereas Tesla is a price action trade, if you will. Microsoft feels like more fundamental stock just sold off too much 100%.

[Kevin Simpson]

This isn't some crazy idea that you're just playing a leverage game. This is a business that we think has come, it went up too high. It's Static for a long time. It's come down. The P E ratios are pretty attractive. Josh went through some of the numbers on these other names. Microsoft for us is an investment. We do have a short term call on it, Scott. It expires next Friday. We have a 420 that we brought in $3.50. So again kind of clicking some poop clipping some coupons here but we believe in the co pilot, we believe in the AI and we think this is a story for an investor, not a trader.

[Scott Wapner]

G.A. davidson. They take the target up today to 450 from 425. They also look at the slide in the stock. It was the worst performing mag stock in the six months since the downgrade that they had. So they feel like it's now properly reflective of what their fundamentals are. Apple watering yesterday at Morgan Stanley took the price target down. It was a very big move. Not a big move in price target but a big move considering the gravitas of the person who did it. Today it's KeyBank reiterated underweight 200 bucks. Is the price target worth keeping an eye on for certain. I mentioned momentum names bounces yesterday. Sold today palantir. Reddit's down another 6% percent. Josh Crowdstrike, AppLovin Trade desk Vernova, Vistra, Vertiv, Dell All Red Kevin Simpson buys more Robinhood. Why?

[Kevin Simpson]

It's almost like a combination of the two stories we had before. You get massive volatility like the Tesla. But there's a fundamental story here, a serious fundamental story with Robinhood also. So when you see this thing go to the moon, we wrote leaps on that like we were talking about Josh. More recently we wrote one week calls. One week calls and then we bought it at 36 bucks on Monday. Yesterday we wrote a $38 call. So $2 higher. We brought in $3. It expires next Friday. If it happens to be a trade, it's on half the position. We make $5. If it expires, we bring our cost basis down to 33. We started buying this at 40 in December. We like this long term and we like it as a trading opportunity into the interim.

[Scott Wapner]

A couple of things to mention real quick. Adobe is a disaster today. It's a new 52 week low on the guide. You got stopped out of it.

[Josh Brown]

Yeah.

[Scott Wapner]

So you got stopped out at the open 392. The stock is now 384.

[Kevin Simpson]

What's the difference? What a horrible, horrible stock. And we've known this for quite some time. I may have Been incredibly tepid on it. We've talked about it over the past few months. Fortunately, it was never a final trade. Always in encourage people not to follow us into it. We're finally out of it. You can wait on something only so long. They have the user base. They're not able to monetize it with the AI. We bailed on the name.

[Scott Wapner]

All right, got some other moves from somebody not on the program today, but a member of the committee. It's Bill Baruch. He joins us now to discuss via Skype. It's good to see you. So you sold the rsp, that's the S and P equal weight. You bought the Qs. Do you think? So you think that tech has gone down too much, that this is a good buying opportunity? Theoretically, I think the great buying opportunity, I mean you, as you highlighted, everybody on the panel today highlighted. I mean, some of these names are really reaching terrific value levels. Go back to middle of January though. We had the cues in our tactical ETF basket that accompanies a diversified individual stock portfolio. And we sold the cues and we bought RSP in the middle of January after that monster run in quarter four. Basically we're sort of unwinding that we're selling the rsp. We're going back into the queues. I think there's, there's a really good tactical play here. The S and P itself, the Nasdaq, they're all kind of trading near those September lows, I think with the later innings of the sell off. And yesterday's rally did put her out. I mean, they didn't have the volume. You really want to see. Those names that led, they didn't get 304% daily average volume days. So that kind of left us back in this, and we're back in this rotation of news and data is going to get us out of this hole. But I think we're at the later innings. I think we can rally 5 to 7%, get back in the range of the 200 day moving average in the NASDAQ. All right, well, we'll watch that. I'm going to, I'm going to keep moving and let you go. I appreciate the update on these trades. Again, selling equal weight, buying the Q's. Thinking maybe the tech trade is been hit a little too hard. Maybe Jason Snipe, you think the same thing with a name like Netflix, which you bought more of, which by the way is down about 14% in one month.

[Josh Brown]

Right.

[Scott Wapner]

And 15% off the highs. But what has really changed about the story materially nothing for me. So when I look at Netflix, the biggest thing I say is okay, top line revenue is growing faster than content spend. Very simple. That spells margin expansion, the foray into live sports, the ad supported tier, all those levers continue to work. So that's why we decided to add more capital to the name in this small drawdown that we've seen over the last month. All right, I like it.

[Jason Snipe]

25% earnings growth expected this year at a 30 p. E slight premium. Deserves the premium. This is a company annualizing at 30% a year has the highest revenue per employee out of the entire Mag 7 at 2.8 million. This is like one of the best businesses in the entire market and I think you're going to do well with this.

[Scott Wapner]

I'm watching the banks yet again because they've been down pretty sharply this week. JPM is down 7% again on the week. Not today. But it gives you an idea of where the trend in these names has been. More selling than buying that, there's no question about that. Which leads me back to Kevin who bought more jpm. You think, you think this sell off in the banks is overdone.

[Kevin Simpson]

You can never pick bottoms but it's down 17% in a month. Best of breed. A company that we were banking on generating tons of revenue from M and A and IPOs and that kind of got pushed back maybe till the end of the year or next year. So these are the opportunities we want to get in there. We got called out of half the position in January at 255. So coming back in here year is at 230. It's probably even cheaper today I think makes sense if you don't own it. We have a full position now. I think you can start buying it and buy it as things even.

[Scott Wapner]

Even, even if we move from growth scare to something a little more dire.

[Kevin Simpson]

I don't believe that's going to happen. So I'm not in the camp of.

[Scott Wapner]

But you're making a bet. This is, this is making the bet.

[Kevin Simpson]

I'm making an investment that even if it does, if we do go into a recession and the stock goes to 150, I can buy more there on January 1st.

[Jason Snipe]

We thought this would be the year year that finally the iceberg cracks and the liquidity comes back and it's capital formation and new listings and secondaries and PE companies start getting exits. Okay, that might be second half story. That might be a 2026 story. We don't know. But they already ripped $40 out of the price of the stock. So if you missed the huge run up that JP Morgan has experienced over the last 10 years, they're giving you another crack at it. Meanwhile, yield curve is actually steepened, which for their core business is very good. And if you really worry about bear.

[Scott Wapner]

Steepening here nor there, and if you're.

[Jason Snipe]

Really worried about the economy, quite frankly, this is, this is Noah's Ark, not the Titanic. So this is where the capital goes when people are worried about the economy and not vice versa.

[Scott Wapner]

All right, let's take a break. We do have more moves coming up as well, which I promise you that we'll get to. I've still got calls of the day. Josh is going to take us back to his best stocks in the market list as well. He's doubling down, so to speak, on three names on that list. We will tell you which one's coming up. 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 Fellowship before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for 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? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. 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 [e-mail] credit card based on the February 2024 Nelson Report at Capella University, 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 Edu, we're back. The Dow is still below 41,000 as you saw there. First time since September of last year. Let's knock out some more moves. Lam research. We'll just finish this tech thing up. You bought more lamb? Yeah.

[Kevin Simpson]

The consistent theme is we're buying, we buy weakness. We like to buy stocks when they're down $3 billion in backed up shipments. For this company, it's an AI play. Incredible margins up to 48%. That's a record. They're buying back shares, they're paying dividends. And importantly, if you're concerned about tariffs, they had 41% of their business in China in 2023. That's down to 31% now. So a lot of reasons to like this name here, Scott.

[Scott Wapner]

Okay, Jason Snipe, you bought more Lowe's? I did. Same store sales with a positive for the first time in two years. So I really like the print. The pro set, the pro segment, which one of the segments I really pay attention to, was up almost 10%. That's the second quarter in a row we got high single digit growth. The other thing that I know has been an overhang for a lot of these names is obviously mortgage rates. They're down 30 years, down for six straight weeks. Let's see how that continues to play out for names like this. All right, good segue into our calls of the day, which begins with Invitation Homes which got upgraded to outperform. Today was at neutral and that was at Mizuho. The price target moves up a little bit to 36 from 33. What do you think, Josh?

[Jason Snipe]

Yeah, so the way I own Invitation Homes and other rates is in my own ira because I don't want to, I don't want to pay the higher tax on the distributions. But this is a 3 1/2% dividend yield. Not high for a REIT, but I think it has a better growth story than most REITs. This is single family rental homes. They have a portfolio of 80,000 homes in desirable suburban locations, mostly in the south and in the West. It's annualized at 8% a year. Total return for the last five years. So the dividend is important to that calculation. And the stock has really bided its time in this low 30s level. I think ultimately it breaks out when people feel better about the housing market and they want to own rates again.

[Scott Wapner]

What about Pfizer, which was reiterated today as an underperform at Wolf, which you own as well?

[Jason Snipe]

Yeah, it's not like the worst stock on earth. It Stopped going down. Interestingly, it's not going up like a lot of health care stocks did from the start of this year. So I missed out on that rotation by literally owning the worst health care stock in the world. But 18 times trailing PE, 10 times trailing EV to EBITDA. They've had huge earnings challenges because they bet the ranch on Covid and that ship has sailed. They haven't replaced it yet with a robust enough pipeline for people to start taking their estimates higher. But that's, I think, how I get bailed out of this thing. I'm flat. I don't want anyone to feel bad. I have much worse stocks. But just the way that this company is being treated by investors right now, it's like a ghost. But I think ultimately this is the type of stock where when it does turn, it'll move too fast to catch it. And so that's what I'm positioned for. I don't think it can get worse.

[Scott Wapner]

Brin, let's do roadblocks real quick because it's pretty clear that Moffitt Nathanson hates this stock. They reiterate its sell. I mean, I'm just telling it like it is. People price target goes to 40 from 34. However, again, 40 from 34. So they bumped the price target, but they reiterate the sell they talk about. Roblox has a problem. They say too much unpaid engagement needs advertising growth to come quickly to justify the valuation in which it comes. Currently trades and the demo, though evolving, is not mass market and likely won't be anytime soon. The business today is nearly 100% funded by just 5% of the audience. That doesn't sound like a stock that you still want to own.

[Josh Brown]

Yeah, this is. None of this is new news. I actually read the piece and his price target aside, I thought it was actually a balanced piece. And I think that when you look at a company like this, his risks are actually also the opportunities. And at the end of the day, he is saying that they are not going to be able to monetize ad spending, which Dave Bouzouki is. They have been very judicious on that. I think one of the reasons is they don't want to disrupt the player experience. And so that is a risk that over time, they cannot broaden that advertisement base. I think they will. I did think it was funny though, because he said 81% of the users are under 25, and so that's not mass market. I don't know what better demographic you could have between under 25 and so I think that he also raised his earnings, his earnings guidance quite meaningfully. And so I think with a company like this, where I see the positives, I see huge growth in Asia. It continues to be one of the stickiest platforms. Platforms they do gaming, but platforms. And I think Dave and team have been really clear that they are going to be slow rolling out the ad spending because they want to do it right. And so for that reason, I'm definitely not selling the stock on this report. If anything else, I think it balances out what one person sees as risks other people see as opportunities, which is how I view it today.

[Scott Wapner]

All right. We got you. That's why there are two sides to every trade. Bryn, thank you. To the headlines now with Silvana Hahnel. Hi, Silvana. Hey, Scott. Good afternoon. Secretary of State Marco Rubio is in Canada today meeting with a group of seven allies as tensions ramp up over the president's trade policies. Now he will be there for two days of talks with diplomats from Britain, Canada, France, Germany, Italy and Japan. Canada's foreign minister and the official host has promised to raise the issue of tariffs in every single meeting, as well as how the G7 can support Ukraine against Russia. Meanwhile, NBC News has learned the White House directed the US Military to draw up options for increasing the presence of American troops in Panama. The Trump administration's goal is to diminish China's influence while reclaiming the Panama Canal. And a coalition of 21 Democratic attorneys general are suing the Trump administration to stop the dismantling of the Education Department. The lawsuit filed today says the administration's move to cut about half of the agency's workforce takes away necessary services, resources and funding that students need in the name of stopping waste and fraud. Now the White House has yet to respond for comments. Scott, I'll send it back to you. All right, Silvana, thanks so much for that, Silvana. Now up next to check in on Josh's best stocks in the market list. We are back after this quick break. Foreign Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. 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 at discover.com credit card based.

[Jason Snipe]

On the February 2024 Nelson Report at Capella University.

[Scott Wapner]

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. Edu. We're back following three names on Josh's best stocks in the market list. They're down this week like many other things are. Again, these are names that have already been on your list. But you want to talk about autozone, which Jason owns by the way, but go ahead, cook some more.

[Jason Snipe]

So Jason knows that this is not just recently one of the best stocks in the market. This is like a perennial all star. And I wanted to highlight three names that are finding support at important trend lines because in this kind of market, if you want to buy strength, you should be buying strength intelligently. Azo is up 10% year to date. It's only 5% below its, its 52 week high. Importantly, it is finding strong Support at its 50 day moving average, which you can see in blue right there. It's got another level at the 200 which is not far below. This is an extremely profitable company. Net margins of 14%, 23 multiple, which is not terribly expensive. Expecting 3% earnings growth this year. I think it'll find that support. You want to go next? Live Nation?

[Scott Wapner]

Yeah, Live Nation.

[Jason Snipe]

Okay, looking for Support at the 50 day. Take a look at this folks. This is a stock that has been on the list pretty much for the last six months. For the most part it's above its 200 day, but its RSI is completely washed out. Relative strength is down at 21 in trading. We say around 30 is an oversold stock. So this is extraordinarily oversold. Down 11 on the year, down 12 in just the past week. But again, look at where it is relative to that support level. That 200 day. I think she could hold. The last one I want to do is Starbucks. We're looking for support here at the 50. This has been an incredible performer since they swapped out the CEO for Brian Niccol, who is arguably the best living CEO in the QSR game. Looking for support at that 50. Also keeping above the 200 RSI is 28 completely washed out on a relative strength basis, but still interestingly up 6% year to date. Not a lot of consumer discretionary names you could say that about. So these are three names still on the best stocks in the market list. Pulling back to important levels of support. If the buyers stay here, I think those will all three be pretty good opportunities once the market gets better.

[Scott Wapner]

All right, we appreciate the update very much. We will take another quick break. Santoli is on the other side with his midday word. Senior markets commentator Mike Santoli has sat down here post nine with us. So Dow's given up 41,000 and the treasury secretary today just didn't sound that concerned about this market turmoil. And even if it continues a little bit more.

[Kevin Simpson]

Yeah, there's no doubt that they're not.

[Scott Wapner]

They'Re not going to try to jawbone it and rescue it. And the market also continues to resist true washout type action. Whether that's good or bad remains to be seen. I mean Today you got 40% of stocks up the equal weights outperforming. It's actually, you know, in sort of the big NASDAQ stocks, it's sort of, you know, the beatings will continue till morale improves type of action. So more of the same.

[Kevin Simpson]

You know, I think we are at.

[Scott Wapner]

That point just talking about that. You know, yesterday with you Scott, about down 10% to go much lower in a quick fashion from here you probably need to see the real economy start.

[Kevin Simpson]

To buckle a little bit or see.

[Scott Wapner]

The credit markets anticipate the economy buckling. And so now that's, that's the game we're playing.

[Kevin Simpson]

We're scrutinizing every basis point in the high yield spread to see if it's sort of really flagging something scary or.

[Scott Wapner]

Just the normal kind of following of equity volatility. Well, you make a good point because it speaks to what the treasury secretary also talked about in the first answer or the first one of the first couple answers was we're focused on the real economy and that's why the pain threshold, if you will, hasn't been reached as it relates to the stock market. If you have a boil over a spillover into the real economy, then maybe the conversation is different.

[Kevin Simpson]

Well, absolutely.

[Scott Wapner]

I think the issue for an investor is you're not going to get that evidence and still it until it really.

[Kevin Simpson]

Starts to pile up and by that point it could become somewhat self fulfilling.

[Scott Wapner]

Therein lies the problem. But also, you know, you have the administration sort of deciding to choose a.

[Kevin Simpson]

Target that seems more attainable.

[Scott Wapner]

Right. And so if you start to say, you know, we're going to, we're going to long term create better economic conditions.

[Kevin Simpson]

Then the test is far off and you can say that you're not playing.

[Scott Wapner]

For short term gains in the stock market because you maybe aren't going to get them. Yeah, I'll see at 3. Good stuff, Mike. Thanks. Mike sent only straight ahead we have stock picks for the long haul at least according to Morgan Stanley. They list a number of names to own over the next couple of years. We do have ownership in a bunch of them. Tell next, do you have some breaking news out of Washington? We'll go to Eamon Javors at the White House. What do we know? Amen, Scott. President Trump says he's not going to change his mind mind on those April 2nd reciprocal tariffs. The president is in a meeting right now with the Secretary General of NATO. Reporters are in the room and we're just getting a little bit of indication of what he's saying. He's just told reporters he's not going to change his mind on those April 2 tariffs. Also, in terms of markets, he says there will be a little disruption, but.

[Kevin Simpson]

It won't be very long.

[Scott Wapner]

And that kind of mirrors what we heard from Treasury Secretary Scott Besant on CNBC earlier today in which he said this is a smallish period of turbulence in the markets and it's not going to redirect the way the administration is thinking about tariffs. So if you were looking for the Trump administration to blink, they're not blinking today. Scott Eamon, thank you very much. I just want to get a comment on this, guys. You know, Josh, the idea of just a little disruption, in some respects, you play with fire a little bit and think that what's happening is only going to to be a little disruption. But at some point, you know, if the economy starts to weaken, you may not have full control over either situation, either the economy or the market.

[Jason Snipe]

Yeah, they're betting that they'll be able to we can tails tailspin and then pull ourselves out. You need to understand that the intellectual hero for a lot of these guys is Javier Milei. And there's this idea that we can produce a J curve where for two or three quarters the economy falls as you do these necessary operations to rip out wasteful spending, shut down bureaucracies, cut red tape and then all of a sudden the benefits of that start to shine through. And just like a J, you headed down, you headed down and then whoop. And you not only go back to where you started, but you then exceed to the upside. That's the bet. Javier Milei was at CPAC gifting Elon Musk a chainsaw. None of this is coincidental. This is what they think they're going to pull off. I don't know what they think their timeframe is. Presumably it's going to be before the midterms that we start to feel the silver lining of all of this. So Maybe they have it within them to go all year long like this. My personal opinion is probably not. But I just want people to understand the mentality and what they're thinking they're going to be able to pull off. Maybe it'll work. I don't know.

[Scott Wapner]

Detox, Argentina, a little Argentina, a little disturbance, a little disruption. We'll see what the, what the market makes of all that. We'll take a quickie. We'll come back with finals. All right, for final trades today, we're going to go through that Morgan Stanley 30 for 27 list stocks that they think you should own for the next couple of years. Visa, Brin is yours. That's your final trade.

[Josh Brown]

I love it. So I think Visa has gotten caught up. It's the third largest holding in the XLF as people have sold off financials. It got caught up in that low capex, high margins moat buy on the dip.

[Scott Wapner]

All right, thank you, Jason Snipe, Blackstone's yours on the list. Blackstone. Blackstone is down 20% year to date. We've talked about private equity and kind of what's going on with the price action. But pipelines continue to build. Net excess will grow. I like this one. All right, Kev Lilly.

[Kevin Simpson]

Yeah. We all know that Eli Lilly has dominated the pharma space. The momentum's not slowing down. Beyond weight loss. They've got a pipeline of Alzheimer, oncology, autoimmune system. I like Morgan Stanley's call on this one.

[Scott Wapner]

Okay. Live nation was also on the list, but we already talked about that because it's on your best stocks list. Amazon, Analog, Apple, Boston Scientific, Coca Cola, Progressive, Microsoft, Walmart, Chipotle, MasterCard are the others. And your final trade is invitation homes.

[Jason Snipe]

Your invitation to profit.

[Scott Wapner]

All right, Is that good? Yes. Good. I'll see you on closing bell. It's going to be an interesting last hour. You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC. 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 andor.

[Josh Brown]

Subsidiaries warrant its completeness or accuracy, and.

[Scott Wapner]

It should not be relied upon as such.

[Josh Brown]

To view the full halftime Report disclaimer.

[Scott Wapner]

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].