The State of the Bull Market 02/11/25

Halftime Report

Published: Tue Feb 11 2025

Scott Wapner and the Investment Committee debate the state of the bull market following Fed Chair Powell’s Testimony before the Senate Banking Committee. Plus, the desk debates the latest Calls of the Day on Schwab, Vertex and Transocean. And later, the Committee reveal their latest portfolio moves.

Summary

Halftime Report: The State of the Bull Market (02/11/25)
Hosted by Scott Wapner, CNBC
Release Date: February 11, 2025

Introduction

In this episode of CNBC’s Halftime Report, host Scott Wapner delves into the current state of the bull market, analyzing recent Fed policies, market movements, and corporate earnings. Joined by top investors Josh Brown, Jenny Harrington, Jim Leventhal, and Steve Weiss, the discussion offers a comprehensive overview of the economic landscape as of early 2025.

Fed Chair Powell’s Testimony and Monetary Policy

Scott Wapner opens the discussion by highlighting Fed Chair Jerome Powell’s recent testimony before the Senate Banking Committee. Powell reiterated the Fed’s cautious stance on adjusting interest rates, emphasizing that the economy remains robust. However, he notably avoided comments on tariffs and their influence on inflation.

Notable Quote:
Scott Wapner ([00:59]): "The Fed is in no hurry to make its next move on interest rates, stating that the economy is in a good place."

Market Overview: Mixed Signals

Wapner observes that the market has been relatively subdued, with the Dow experiencing a slight dip. Despite the lackluster performance of major averages, trading remains active with notable movements in specific investment strategies.

Notable Quote:
Scott Wapner ([00:59]): "The Dow just dipping negative. So not too much activity for the major averages, but we will trade everything."

Investment Slowdown and Regulatory Uncertainty

Investor Josh Brown discusses the current slowdown in investment activities, particularly in mergers and acquisitions (M&A) and the IPO market. He attributes this trend to the ongoing uncertainty surrounding tariffs and potential regulatory changes under the Trump administration's second term.

Notable Quote:
Josh Brown ([02:26]): "Investment is dying down. The case for the banks, the IPO market, M&A has ground to a halt because you just don't know where the laws and regulations are going to go."

Ken Griffin’s Perspective on Tariffs

Steve Weiss brings attention to comments made by Ken Griffin of Citadel at the UBS Financial Services Conference, where Griffin labeled tariffs as “chaos” impeding growth. This underscores the broader sentiment among top investors regarding the negative impact of trade policies.

Notable Quote:
Josh Brown ([04:03]): "According to reports, Ken Griffin... has said, 'Chaos is an impediment to growth.'"

Economic Landing: Soft vs. Hard

The panel debates whether the economy is experiencing a soft landing, avoiding recession despite high inflation rates. Josh Brown confidently asserts that the U.S. has achieved a soft landing, with no signs of a recession.

Notable Quote:
Josh Brown ([05:42]): "The fact is, knock on wood, we have experienced a soft landing, haven't we?"
Scott Wapner ([05:50]): "Not for me to say. Really. I'll let others."

Earnings Season Success

A significant portion of the discussion centers on the stellar performance of the current earnings season. Steve Weiss highlights that 77% of S&P 500 companies have beaten earnings estimates, with 62% exceeding revenue expectations—both well above the 10-year averages.

Notable Quote:
Steve Weiss ([07:44]): "You have to go back to 2021 to find anything like that, 16.4%. So how much of that is the Fed? Very little."

Jennifer Harrington adds that the broad distribution of strong earnings across various sectors supports the ongoing bullish sentiment in the market.

Notable Quote:
Jenny Harrington ([12:31]): "Technology earnings are up 11%. Financials are up 59%, consumer discretionary up 35%... the broadening of the earnings growth is happening."

Shift from MAG7 to Broader Market Performance

Jim Leventhal and Steve Weiss discuss the shift from the prominent MAG7 stocks (Microsoft, Apple, Google, Amazon, etc.) to the broader S&P 500. They note that while MAG7 is detracting slightly from the S&P's performance, the remaining 493 stocks are showing robust growth, indicating a healthy and diversified market.

Notable Quote:
Jim Leventhal ([17:57]): "It's interesting... the rally has legs, is because it can broaden, continue to broaden and go further."

Sector-Specific Insights and Stock Picks

The panel provides detailed analyses of specific sectors and stocks:

Leidos and Carlyle: Despite mixed earnings, Josh Brown remains bullish on Leidos, citing its strong government ties and potential for mergers and acquisitions. Steve Weiss views Carlyle as stable, acknowledging the competitive landscape in private equity but maintaining a positive outlook.

Notable Quote:
Josh Brown ([27:37]): "Look, here's the story... it's really the environment holding these companies back."
Carrier: Jim Leventhal discusses Carrier’s performance, noting that while earnings grew by 6%—short of the 11% expectation—the company has effectively managed tariffs by domestic steel sourcing.

Notable Quote:
Jim Leventhal ([29:55]): "Carrier is a major company that should be largely unimpacted by steel tariffs."
Charles Schwab and Vertex Pharmaceuticals: Positive updates on Charles Schwab's undervalued status and Vertex’s promising pipeline drug highlight investment opportunities amidst mixed sector performances.

Notable Quote:
Jenny Harrington ([32:22]): "The reason I own the stock is what's to come. Primarily, this Pain drug that should replace opioids."

Elon Musk vs. Sam Altman: OpenAI Bid Drama

A significant segment of the episode covers the ongoing battle between Elon Musk and Sam Altman over OpenAI. Kate Rooney reports on Musk’s $97.4 billion bid for a stake in OpenAI, describing it as a mix of genuine interest and psychological tactics to challenge Altman’s leadership.

Notable Quote:
Kate Rooney ([21:05]): "This marks Musk's latest attack on CEO Sam Altman... Sam Altman also telling Reuters... 'I have nothing to say.'"

Notable Quote:
Scott Wapner ([24:06]): "OpenAI was originally set up between Altman and Musk as a nonprofit... Now they're raising money at a post-money valuation of $340 billion."

This confrontation highlights the complexities of transitioning OpenAI from a nonprofit to a for-profit entity and the strategic maneuvers employed by Musk to influence the company’s direction.

Closing Remarks and Final Stock Movements

As the episode wraps up, the hosts discuss final stock movements and prepare listeners for upcoming trading sessions. Emphasis is placed on Q1 earnings and strategic stock picks to navigate the evolving market conditions.

Notable Quote:
Scott Wapner ([36:04]): "You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC."

Conclusion

This episode of Halftime Report provides an in-depth analysis of the current bull market, emphasizing the resilience of the economy, the impact of corporate earnings, and the shifting dynamics within the stock market. With expert insights from top investors, listeners gain valuable perspectives on navigating the complexities of today’s financial landscape.

Notable Quotes Summary

Scott Wapner ([00:59]): "The Fed is in no hurry to make its next move on interest rates, stating that the economy is in a good place."
Josh Brown ([02:26]): "Investment is dying down... because you just don't know where the laws and regulations are going to go."
Josh Brown ([05:42]): "The fact is, knock on wood, we have experienced a soft landing, haven't we?"
Steve Weiss ([07:44]): "You have to go back to 2021 to find anything like that, 16.4%. So how much of that is the Fed? Very little."
Jenny Harrington ([12:31]): "Technology earnings are up 11%. Financials are up 59%, consumer discretionary up 35%... the broadening of the earnings growth is happening."
Jim Leventhal ([17:57]): "It's interesting... the rally has legs, is because it can broaden, continue to broaden and go further."
Kate Rooney ([21:05]): "This marks Musk's latest attack on CEO Sam Altman..."
Scott Wapner ([24:06]): "OpenAI was originally set up between Altman and Musk as a nonprofit... Now they're raising money at a post-money valuation of $340 billion."

Additional Resources

For those interested in exploring further, CNBC offers an online course on mastering AI tools, referenced briefly in the episode. Visit cnbc.com/makeit to learn more.