The Summer Setup for Stocks 6/2/25

Mon Jun 02 2025

Courtney Reagan and the Investment Committee debate the Summer setup for stocks as we kick off a new trading month. Will there be a June swoon or surge? Plus, Oppenheimer downgrading the banks, it’s our Call of the Day. And later, the Committee share their latest portfolio moves. Investment Committee Disclosures

Summary

Halftime Report: The Summer Setup for Stocks (6/2/25)
Release Date: June 2, 2025
Hosts: Scott Wapner, Courtney Reagan
Guests: Joe Taranova, Steve Weiss, Jim Leventhal, Brent Schutte

Market Overview

The episode kicks off with Courtney Reagan providing a snapshot of the current market conditions on the first trading day of June. She notes that while the Dow Jones Industrials are down approximately 0.4%, the S&P 500 remains slightly negative, and the NASDAQ Composite is leading the rally with a 2.10% gain.

Courtney Reagan [01:18]: "The Dow Jones Industrials are the laggard here on the session down about 0.4%, and the NASDAQ Composite leading the way higher by 2.10%."

Despite recent tariff headlines and ongoing geopolitical tensions, the market exhibits notable resilience, with stocks making numerous 52-week highs.

Scott Wapner [03:40]: "Since then we've been in a range 5832-5968. We continue to see stocks making 52-week highs, with about 15 of them today hitting new peaks."

Geopolitical Concerns and Trade Policy

Jim Leventhal delves into the prevailing trade policy uncertainty, highlighting recent geopolitical events that could impact market stability. He emphasizes the significance of resolving these tensions to prevent further market volatility.

Jim Leventhal [02:14]: "Trade policy uncertainty is the biggest thing facing the market. The Ukraine strike on the Russian Air Bases is a significant blow, and we also have concerns regarding China and Taiwan."

Leventhal stresses the importance of upcoming discussions between Presidents Xi and Trump as a potential step toward mitigating these uncertainties.

Jim Leventhal [02:50]: "A talk between Presidents Xi and Trump would be a step in the right direction."

Sector Analysis

Technology:
Steve Weiss discusses the changing leadership within the tech sector, moving away from traditional giants like Apple and Alphabet to companies such as Zscaler, Spotify, Palantir, and Netflix. He underscores the importance of focusing on growth-oriented tech stocks with strong defensive positions.

Steve Weiss [05:26]: "Most of my portfolio is in Big Cap Tech. Health care had the worst month last month, but every part of health care is up now."

Energy:
Brent Schutte highlights the energy sector's performance, noting a 3.5% increase driven by OPEC's decisions to ramp up production. He advises a cautious approach due to the sector's position below the 200-day moving average.

Brent Schutte [38:36]: "The vast majority of my holdings have distribution yields between 7-9%. Energy is well below the 200-day moving average, offering about 7-8% upside potential."

Financials:
The discussion shifts to the financial sector, with a focus on regional banks. There's a consensus among guests like Scott Wapner that momentum in regional banks is dwindling, prompting a downgrade from overweight to market weight.

Scott Wapner [29:00]: "The biggest challenge economically relates to growth, not so much inflation. Regional banks like PNC are struggling lately."

Investment Strategies

Momentum Investing:
Scott Wapner emphasizes the strength of market momentum, attributing current gains to sectors and stocks that have consistently outperformed, rather than traditional blue-chip names.

Scott Wapner [03:40]: "Momentum is a very strong factor right now, driving the market higher through names like Zscaler and Spotify."

Defensive Positioning:
Steve Weiss advocates for defensive sectors, particularly in technology and healthcare, despite recent volatility. He highlights the resilience of companies with strong growth prospects and defensible business models.

Steve Weiss [07:04]: "The most defensive place to be is in Big Cap Tech and Health Care, which are typically defensive sectors."

ETF Focus:
The episode features a segment on ETFs, specifically those focused on AI and Bitcoin. Jay Jacobs from BlackRock discusses the growing interest in specialized ETFs that provide targeted exposure to these high-growth areas.

Jim Leventhal [35:18]: "Allocating to a fund like AI-focused ETFs provides exposure across the AI value chain, from developers to data centers."

Notable Quotes

Jim Leventhal [02:14]: "Trade policy uncertainty is the biggest thing facing the market."
Steve Weiss [05:26]: "Most of my portfolio is in Big Cap Tech. Health care had the worst month last month, but every part of health care is up now."
Scott Wapner [03:40]: "Momentum is a very strong factor right now, driving the market higher through names like Zscaler and Spotify."
Brent Schutte [38:36]: "Energy is well below the 200-day moving average, offering about 7-8% upside potential."

Final Trades and Recommendations

In the concluding segments, the panel discusses specific stock recommendations and sector plays:

Cybersecurity:
Scott Wapner and Brent Schutte endorse cybersecurity firms like CrowdStrike, Zscaler, and Fortinet, recommending buying the dip in these resilient stocks.

Scott Wapner [45:05]: "Team Cyber is very strong right now. Whether it is Check Point, Zscaler, Fortinet, Palo Alto, all of these names are working really well."
Commodities:
Brent Schutte suggests capitalizing on the rebound in metals like Silver and Copper, anticipating further price increases.

Brent Schutte [45:47]: "Silver is doing a catch-up trade, and I think Copper is going to join the party with FCX breaking out."
Consumer Products:
Jim Leventhal points to LNG exports as a lucrative area within consumer products and retail, linking it to ongoing trade deals.

Jim Leventhal [46:02]: "In a lot of these trade deals, the low-hanging fruit is LNG exports, and that's going to play very well."

Conclusion

The episode wraps up with a forward-looking perspective, stressing the importance of monitoring geopolitical developments and trade agreements as critical factors influencing market trajectories. The panel remains cautiously optimistic, advocating for strategic positioning in growth sectors while remaining vigilant of underlying economic uncertainties.

Note: This summary excludes advertisements, introductions, and non-content sections to focus solely on the substantive discussions and insights shared during the episode.