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Halftime Report
The Supreme Court Rules Against Trump's Global Tariffs 2/20/26
00:46:23
Scott Wapner and the Investment Committee debate what the Supreme Court ruling means for the future of tarriffs, the market and your money. CNBC’s Eamon Javers joins ‘Halftime Report’ with the latest out of Washington. Plus, the Committee is making some major portfolio moves, they reveal their strategies. And later, Josh Brown spotlights Old Dominion in his "Best Stocks in the Market."
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A
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. EDWARD Jones Member, SIPC Comcast Business helps
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B
retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data, managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business, powering possibilities, restriction supply. 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, thank you very much. Welcome to the Halftime Report. I am Scott Wapner. We begin with breaking news. The Supreme Court striking down the Trump tariffs, as you know by now, a long awaited ruling that does have markets reacting. We're trading all of that, of course, with the Investors Investment Committee. Joining me for the hour today, Kevin Simpson, Bill Baruch, Jim Leventhal and Josh Brown. We'll go to the markets here where I think we're still trying to digest this ruling. It is the Nasdaq that's having the best day of it today, but we are green across the board except for the Russell, which we will call flat. But the headline is, as you know, 6 to 3, the court striking down the Trump tariffs in terms of markets discretionary. Interesting to watch as we've been talking about for the last few hours, industrials. Also, we'll go right to Eamon Javors here at the White House as we're still waiting for a, I think a larger reaction from not only the President. Amen. But the administration at large. And what you may be hearing from your vantage point there, Scott, we're about
- [02:14]
C
to get that reaction. Caroline Levitt, the White House press secretary, just posting on social media within the past 30 seconds or so that President Trump will hold a press briefing on the Supreme Court's tariff decision at 12:45pm in Eastern Time. So she's saying the president will speak directly to the press at the White house in about 45 minutes time about this and offer his first on camera reaction to it. We do know that behind closed doors this morning, he called The Supreme Court's sweeping 63 decision against his tariff authority under that law, AIPA, disgraceful. The President has said that this was one of the most important authorities that he wielded as President because it gave him tremendous negotiating leverage with countries around the world. But the Supreme Court this morning has struck that the Supreme Court putting this in historic context, Scott, and I want to read you from the opinion of the Court from Justice Roberts, who said Article 1, Section 8 of the Constitution sets forth the power of the legislative branch. And in that power, the first clause is that Congress shall have the power to lay and collect taxes, duties, imposts and excises. Roberts says it's no accident that this power appears first. And then he says what common sense suggests is congressional practice confirms when Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits. What Justice Roberts is saying here, the Chief justice of the Supreme Court, is that Congress has the taxation authority under the Constitution, not the executive branch, not the President of the United States. And because in this law, iepa, the International Emergency Economic Powers Act, Congress never explicitly said the word tariff, then the President doesn't have the authority to levy tariffs under that law, period. End of argument. And that sets up $133 billion free for all over how that money that the United States government collected in 2025 and early 2026 will be redistributed to the companies that paid it to Customs and Border Protection over the course of the year last year. About 133/plus billion now has to be redistributed back to those companies. You can imagine that is going to be a bureaucratic, mechanical and legal difficulty. Hornet's nest, maybe you could say, even in terms of how that money gets back to those companies. But that's what's coming next. And then we'll wait to see what the president says at 12:45 about how he intends to do a workaround. They've said that they're going to do that and how he intends to impose tariffs again now that the Supreme Court has removed this particular authority.
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B
Scott, you can, you can just use the word Eamon that some on the Court themselves have used. A mess is how this is going to be thought of in terms of whatever remedy, remedy, excuse me, now exists. And you know, as you said, just to remind people, 12:45pm which will obviously be carrying live on CNBC, you're going to hear from the President. Amen. Directly. And I wonder to what degree do we hear from some others who have made the case over the tariffs? The Commerce secretary, Lutnick, Kevin Hassett himself, who was sort of embroiled in that controversy already this week about the reporting on who actually pays the cost of the tariffs, which we already frankly knew who did it was just confirmed yet again by another report.
- [05:43]
C
Yeah, I mean, look, Scott, the big question in my mind about this press conference that we're going to see in about 40 minutes time is is this going to be a reaction press conference or is this going to be a rollout press conference? Remember, this was the expected outcome of this case and it has been the expected outcome of this case for some months now. So the White House has had a lot of time behind the scenes to think about what they're going to do. They've said they have all these other authorities under the law to impose tariffs. Will we see at 12:45 sort of a policy rollout of the new tariff authority by this administration? All these new, all these old authorities that the administration can lean on do require, you know, some time frame, some process of an investigation, some other mechanics that make it slower and more bureaucratic to impose tariffs. But the president can impose tariffs through these other means. So is that what we're going to see, or are we going to see the president coming out and just denouncing the Supreme Court and saying why this is a terrible idea? We'll wait and see.
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B
Maybe a combination of both. But we will, we will wait for the president. Eamon, thanks for your reporting.
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D
Appreciate that.
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B
It's Eamon Jabers down at our bureau in Washington. Let's kick this around. I mean, I told you what's been sort of moving here, unsurprisingly, discretionary industrials. How are you thinking about this, Jimmy?
- [07:02]
E
As you just said, first and foremost, it's not a surprise. Just the oral arguments three months ago indicated this is the way the court is going to go. So the markets don't like surprises. Not surprising the market is up. But what this means is in the short term, trade policy uncertainty increases. In the long run, it decreases. But just consider this for a second. There are a number of trade deals that have been done with countries over the last several months that are now drawn into question. South Korea has been dragging its features speed on a trade deal that was agreed to, at least verbally, and now I think we know why. They thought this was the ruling that was going to come out. Japan just this week got started on some of the investments it made. But maybe they're going to start slow walking as well. Now in the end, there is going to be longer term policy certainty increase because of this. We'll see what the, what the, what the tariffs are that the government, that the presidential administration is going to use, what statutes they're going to use at this press conference. They're going to be lower tariffs than what was, you know, the president could come out on any day and say, I'm going to charge 150% tariffs on China. This is good news that he can't do that anymore. The statutes that are being looked at have limits to them like 15%. So, you know, the markets should like this because people like me, KEVIN Josh, Bill are not going to wake up in the morning and say, oh my goodness, one of my companies is in the crosshairs of what the President likes or doesn't like yet.
- [08:21]
B
Josh, as we were just discussing with Amen. The prospects of this now being a quote unquote mess to figure out has just broad implications for, you know, potentially how the markets and the different sectors within it react based on what sort of outcomes probabilities are given to.
- [08:41]
F
You know what? I think I agree with everything Jim said. I just don't know if I agree with the conclusion. I actually don't think this is as positive to the market as most people would have thought it had been. Like, for example, if this ruling had happened six months ago, I could see a scenario where The Dow rallies 1200 points because six months ago this was like the number one overhang, especially with respect to metals and mining industrials, even pharmaceuticals automobiles. Like this was really a huge issue, psychological issue that the market had been wrestling with. And you remember, you would hear like Lutnick do a CNBC appearance and you would see the futures swing massively, either up or down based on what he was saying on this issue. And where I slightly disagree with Jim is I just don't think that this issue holds as much power over the market as it did. I think we sort of just got used to it. And yes, there were winners and there were losers and now we're having like rebukes of economists who said that this would lead to some sort of problem for the economy. The reality is I think the market looked at this as, all right, great, if the tariffs come off or are modified in some way or if there's a court challenge, that'll be a mild positive. And that's what I think you're seeing playing out right next to me. You see the S and P barely mustering half A percent in rally. Because now the next phase of this is more saber rattling, more speeches, more Lutnick appearances and then Trump appearances. If you know anything about the Trumps, they're not going to go away like this isn't. Oh, oh, I guess the court ruled against me, therefore I give up.
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B
Lol.
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F
So now what happens is we go back to the, the environment of six months ago where we have to have this roller coaster ride every day about who has the upper hand in this issue. So I don't know if it's bullish and the market is telling me today it's not now.
- [10:43]
B
You know, Bill, there are just so many different aspects of this. You know, companies had grown quite adept at dealing with the tariffs, right? They hadn't really passed on a lot of the costs to consumers. They figured out a way to have some of the importers pay a greater share. Just this week, I think it was the Wall Street Journal, we were reading stories that were suggesting that companies were reaching the point of, you know what? Enough is enough, now come the price increases. But now with a ruling like this, well, maybe you don't have to have the price increases because now all of a sudden you don't have to worry about tariffs in their purest form, form the way that they were originally rolled out by the administration. So it just, it does introduce some level of uncertainty on the, on the corporate front.
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D
Yeah, I do believe there's some uncertainty. And here's the thing. You go back to last year. There, there was an expectation that this ruling or the turn of the year, there's expectation that this ruling was coming. And I think a lot of companies dealt with the tariffs, throwing a band aid over it. And the band aid wasn't working anymore because there was also talk up until about a week ago that we may not get this rolling until the summer. So now we have it. What I'm looking at too is look at you go back to last year as the pace of inflation, the rise, inflation came down. The Fed kept pushing back on rate cuts because of the tariff, tariff prices that are coming down the pipeline. What do we get this morning? Core PCE was hotter than expected. The quarter for gdp, PCE prices hotter than expected. What does this do? I mean, we had stagflation data this morning with GDP itself coming in lower than expected and prices higher. And then we had flash pmi ISE worse than expected. This came right when we needed it. Although there's more uncertainties that are now going to bubble under the surface. This came for the market when it needed it, because you're now going to get seemingly prices coming down and paving the way for the Fed to cut rates. Kev?
- [12:42]
G
Yeah, I think the clarity issue is the biggest deal here. I wasn't expecting to get the news as quickly as we did on Friday, but great that we have. I like Josh's take on the idea that this would have been more impactful had it happened six months ago. I totally agree with that. Because we've had so much time to digest it. I am surprised that the market's not responding more. Maybe somewhere between 100 and 1200 points would have been a better outcome here out of the gate. And maybe we still get that as we cycle through and parse through everything. But the real uncertainty is how you unwind this. You know, they use the word mess. So did you. I think that's probably the understatement of the day. We know that when we see the Press conference in 40, 45 minutes, it's going to be a beratement of the Supreme Court and then it's going to be an introduction to Plan B. But I like your idea, Jim, where it's going to be a reining in of what they can potentially do.
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B
I feel like, I feel like we need, we need to hear from our senior economics reporter today day as well on what the implications are for the path ahead on rate cuts, potentially. Steve Liesman, of course, joining us now on that. In a week in which, Steve, we've learned from the minutes that we have, as you described earlier in the week, three camps on all of this. We already know that one of the reasons why the Fed might have been reticent to continue to cut at the next meeting was because of expectations that you could still have ramifications from the tariffs filtering through the system and lead to another move higher in inflation. This just introduces something interesting into the room now doesn't.
- [14:17]
H
Sure does. And before I get there, Scott, I want to look at today's PC number. And if you do you look at the good section, you see that it's up. And the biggest year on year increase we've had in the goods section since the pandemic, 1.74%, 2%. If you drill in and see what's happening with durable goods, which are more likely to be affected by tariffs, obviously not all of these goods are tariff affected. But the bottom line here is you can see that slope from bottom left to upper right, the tariff impact is increasing, kind of underscoring what was written in that Wall Street Journal story. That it's going to be coming in the months ahead. I've always thought, Scott, of tariffs, of having really three taxes, the tariff itself, the uncertainty tariff and the complexity tariff or the complexity tax. I don't know that a whole lot of that goes away. Jim is absolutely right that the other alternatives to the that the President have allow for lesser tariffs, but they still allow for tariffs. So I'm not sure the uncertainty goes away for the market or for the Fed or the complexity goes away for business, which has been a big part of what the impact has been. So we'll wait and see what happens. And what the administration says it was the reason why the administration should have never done it this way. A business friendly administration would have done tariffs in a way that created some certainty. Now it's all up in the air again. We wait for, for 12:45. We have Scott Bess of the treasury secretary talking at 2:00'. Clock. All of those are going to be very significant as to whether or not we get any clarity. And I think Josh is right that six months ago would have been more important. But I also think the lack of clarity for the administration's response is a reason why the market reaction has been muted.
- [16:06]
B
It is a new level of uncertainty to some degree, whatever that might be in state. Steve, I wonder if as a result of that it merely has the prospects of pushing Fed cuts even further now down the road because now we don't really know what the reaction is going to be from this administration and once we even learn it, is it going to be challenged? What actually is, is the policy that goes into effect. Thus the Fed needs to potentially take this even further out, wait and see approach to see how everything transpires.
- [16:40]
H
Yeah, and I don't know, Scott, in all the breaking news, if you had a chance to prepare our Fed probabilities, but I'll read them to you, you're down now at a coin toss for June for a rate cut and that is remarkable in the following sense. June is the first meeting of the new Fed chair. So the idea that the market thinks that a rate cut in China, June is a coin toss just tells you how much uncertainty that either this rule, this ruling by the Supreme Court along with the higher than expected PC number is casting on the views of the Federal Reserve. And I'll just tell you what the other numbers are, Scott. By July, that first cut is priced in. But you have to wait till I know, October or December to get a second cut. So yes, it does change the view at the margin of the market's outlook for the Federal Reserve and rate cuts.
- [17:34]
B
That's very interesting, Steve. Thank you. I'll see you again at three for certain. That's Steve Liesman, our senior economics correspondent. That's interesting. If I told you. Okay, well, whatever your expectation is for future rate cuts, dial them back.
- [17:49]
E
Yeah.
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B
At least as we sit here today. Now, others would say we didn't need the Fed in the first place anyway because, you know, despite the lower than expected GDP report that we just got, the economy still poised to perform well. And most importantly, many would argue earnings have been really good. You've gotten, you know, your double digit earnings growth and the prospects of continuing to do that are high enough that the Fed is sort of an afterthought. You don't want it to be working against you, but you may not have the wind at your back that you once thought you might.
- [18:20]
E
It shouldn't be working against you. I don't think we, we need the wind in our sails from the Fed. And the Fed is going to have a problem in front of it of potentially $200 billion of tariff rebates coming into the economy. And Even for a $30 trillion economy like ours, that's a lot of money. There's also going to be upward pressure on the curve from more deficit financing that's necessary without the tariff money coming in. So I'm not surprised that the odds of a rate cut have gone down. I am surprised strongly of the camp that this is a market that doesn't need rate cuts. But by the same token, we better make sure that things don't go the other direction. I don't think they will. You know, the absence of tariffs or the reduction of tariffs should keep inflation in check. I just have to say this, Scott. I think in the long run, another reason I'm positive is that the Supreme Court cited Article 1 of the Constitution, the separation of powers. The Supreme Court just laid down a line and said, this is as far as you go with the extension of executive powers. The markets are going to like that. We've been in this strange sort of multiverse world of the president does whatever he wants. There are limits now.
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B
All right, let's talk about some moves that we get. Let's get away from the implications maybe of the decision and all of that and what we think the remedies could be and everything else. I do have some moves that obviously not directly related to this are relevant because you bought more United Rentals. We're thinking about, you know, industrial type names. Kevin Sold Wayfair. Now you sold this again before the decision came out. But now I just wonder if you rethink or double down on your thoughts regarding the move that you just made.
- [19:58]
D
We didn't buy more United rentals today because of the news. This was on our, on our radar. You've been patient here after, after an earnings miss and watching this thing sort of bottom out. It has a lot of support from the V WAP from the closing high. Now this is the catalyst for this thing to run are numerous. I mean you got U.S. energy expansion, grid modernization, U.S. infrastructure. The big beautiful bill. It'll help middle market manufacturing, industrial capex spending. And this stock has performed overall very well without a US Energy capex cycle. So you know, all around, you know, we're looking at the backlogs, we're looking at a lot of tailwinds here for this name to really make a good run over the next few months.
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B
So as I said, you sold Wayfair. The company Yesterday posted its first annual sales gain since 2020 outperforming the overall furniture market. I wonder what you think. It did get downgraded today, by the way. Gordon Haskett. But what about this move that you made?
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G
Yeah, we couldn't have scheduled it better. You know, I was looking at the pre market or the early trades and it was up four or five bucks at the time.
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B
Better or worse? That's, that's what I'm asking you now.
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G
Yeah, I mean I feel worse about it but we run a rules based process. We were stopped out of the stock yesterday. I still love the company but I'm just a little bit concerned that if the consumer is slowing down that the home furnishings market might be one of the things that slows before, you know, food, shelter, housing. And this is a company that has improved their margins. The numbers were okay. I still think it's a good company but at this point I'm okay. You don't have to sellers regret but I'm rooting for it. We can certainly look at it down the road.
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B
What's, what's funny Josh, is that before we got the decision we're like all bulled up to lead on this idea that Citi downgraded tech today as we finish this week where you know, we're assessing the durability of that trade and we're looking ahead doing video earnings next week which are the, you know, the, the next big event that could have an impact on where the sector trades. They downgraded technology today along with discretionary and they have moved 50% of their US allocation into small caps. Now the Russell is leading on the year 7% like blowing everything else away. What do you make of that call today from Citi?
- [22:12]
F
You know a lot of people would make fun of that. They'd say okay, so you have like 50 mega cap tech stocks that are down 30% and you're downgrading it today. But I actually, I don't disagree with the wisdom and the timing of the call because I do think that we're going to be in for a frustrating year for tech. It doesn't mean that all the tech stocks are going down. I own a bunch of them. I just think a lot of rally is going to get sold because the, the, the negative overhang about the biggest theme in tech which is obviously AI adoption and CapEx like that, that negative miasma that we're like all living under this cloud of it's not going to dissipate and if anything in certain areas the uncertainty is going to only grow. It's almost impossible to envision a scenario where it doesn't. And so much of tech market cap is software and so much of tech market cap is hyperscaler. And those questions are increasing, not decreasing. We get periodic breaks and we see like a green day for the software names and everyone goes oh thank God, it was such a huge overreaction. It's finally over. It's not, we know it's not, it can't be. It's too, it's too soon. Nobody feels good about any of this stuff. So what we're doing right now is we're repricing the future cash flows of what these software companies are going to be. It's violent, it's not all sane, some of the behavior is insane. We won't know which is which for a long time to come. And so I like the call. And then when you look at this other part of the market, you look at small cap, mid cap, industrial cyclical, you look at Anything but enterprise SaaS. There are some really great stories happening. And the irony, the irony, it's almost like an old Henry short story. It's almost like a gift of the, of the magi. The irony here is so much of the earnings growth that will probably get out of small and mid cap is because of AI. We're going to start getting a rerating for the buyers of these products because they're going to have a positive story to tell about efficiencies, cost savings, hiring less people, lower pressure on wages, etc. So it's kind of funny the we want to now pivot the AI trade from the providers to the beneficiaries. And the beneficiaries are in the Russell small cap 600, mid cap 400 and that's really what's working. And I like the call. I think that will continue.
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B
You know, Josh guys makes a good point in that we in terms of software which has been the greatest point of upset in this entire market that we may not know and we likely won't know anything to make us feel better for a minute. I mean Dan Ives puts out a list today of sort of 10 things that will stop the tech slide in the AI quote unquote ghost trade overhang. One of the things on his list is that AI monetization starts to show in the March results for Microsoft and someone like ServiceNow. All right, so what are you going to wait till April? This market's just going to be volatile in these areas until these kinds of companies report. You know, when you get into the first few weeks of of April, what's interesting to me is Bill, you bought ServiceNow so you're not waiting around to see what this company delivers after already working on its worst quarter ever. The worst quarter ever for ServiceNow is now a buy for you. Why?
- [25:42]
D
Yeah, I mean we don't love catching falling knives but know we did put buy it as a new position about a one and a quarter percent. If you look at it this is it's two standard deviations below its valuation. I mean it's a right now Forward valuation about 25. And we see AI as a adoption, as a complement, not a substitute to ServiceNow. And if there's going to be winners, this could be the time where you have to start picking some winners. Not, not push all your chips in there but, but start picking out some of these names that have been beaten and we think this is going to be a winner and that's why we we stepped in.
- [26:12]
B
But I mean the it may be, I don't know what to what degree you think it's going to be a winner. There are legitimate questions about to what multiple should your winner trade out. If you know the market, it seems to me has been reacting the way it has on the prospects of lower revenue growth, which is why the multiples have rerated to the degree that they have. Maybe we don't know just how deep a slowdown in revenue growth is going to be, which is makes it difficult to decide what multiple you're willing to pay for a name like that.
- [26:50]
D
Yeah, I think the mid-20s is definitely a spot for us to, to get it into the portfolio. And the names that we hold in the bottom half of the portfolio, we always add them thinking that we want to see conviction build and want to increase that size.
- [27:03]
B
It's still, you know, 25 and a half times 25 point point two means
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D
down from 65 over a year ago.
- [27:10]
B
How do you know 25 is the right number and it may be wrong? I mean, the way you can look at like CRM for example, which I think is down to like 13 or 14 or 15, something in that ballpark to what that stock has historically there it is at almost 15 to what the stock has traditionally traded at. People are asking the same question about this. Is 15 the right number?
- [27:33]
D
Well, I think what you're seeing is if you, if you go to 50 and 75 multiple where it was, the rerating has happened. And I think from us, from a sizing, you know, we look at sizing as our superpower. As we start to build into portfolios and adding this name here, if it does go to a 15, breaks a 20 multiple and starts continuing to go lower. We added about, at about $99. If we see a $75 on this, we're ready to buy more unless our conviction changes. And that's how we're positioned going into it. And that's how I think you have to look at some of these names. We're not heavy software. We're heavy in the air trade, heavy from the picks and shovel side of it. So we use this as an opportunity. We, you know, name like CrowdStrike, a name like Microsoft and a name like ServiceNow that, that we do like. But we wanted to be able to get some cash to work after the bludgeoning the space has taken. And I think this is, this is where we want to pull the trigger here.
- [28:21]
B
So we'll, we're going to take a quick break. We'll come back. We do have more moves to get to. A reminder, 1245, according to the press secretary, you will hear directly from President Trump about the Supreme Court ruling today striking down his tariffs. We're back right after this. How can you grow your business from idea to industry leader? Bring your vision to life with smart
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C
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- [29:08]
I
Well, many thanks, good sir.
- [29:11]
A
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I
Yeah, they do here Discover is accepted
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A
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I
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B
With the times.
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A
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B
Yeah, and it sounds pretty good, right?
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D
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A
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- [30:08]
B
All right, we have some more moves to get to. Kevin, you trimmed, speaking of software, you trimmed IBM, which is having its worst month since October of 2018. What's going on here?
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G
It's had a heck of a two year run though, so this is a little bit of profit taking. It seems like there's been some exhaustion in the tech trade, maybe understatement of the day, but we took an opportunity to do a little bit of a rotation trade where we took a percent of the portfolio from IBM, rotated it into Microsoft. We sold IBM at 275. It's pulled back to about 255. Microsoft entering at 400 for a lot of the same reasons that Bill just talked about in the previous segment. This is a stock that came down from 550 to 400.
- [30:47]
H
Yes.
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G
It's a baby being thrown out with the bathwater from the software as a service trade. I'm anxious to see if Dan's right about the Microsoft showing AI as a profit center next quarter. I don't think it's going to be the case, but I like it here long term. I think it's a good investment at this, at this point.
- [31:01]
B
So financials worth talking about too because they have been the worst sector so far this year and we do have the year to date. Goldman's up four and a half percent. Worth noting because Citi, Morgan Stanley, bank of America, JP Morgan, Wells are all down. You sold Goldman Sachs?
- [31:19]
D
Yeah, this is. We wanted to be more underweight on financials, so we cut this day. You know, with what's going on in the headlines here with private credit, I think there is concerns now there's something right up front center right now but there's concerns from the earnings perspective Goldman Sachs gets. It has exposure to asset management, IB advisory, IP debt, underwriting, lending, liquidity solutions. This name is up 35% over the last year and it's done very well for us. But I don't want to sit here and overstate my welcome if the bad news continues. And again there's nothing quite saying it's going to continue right now. But this is a cautious play. Raise capital. I talked about the last segment that I bought uri. We rotated a little, little bit of cash around here and to get the that exposure.
- [32:00]
B
Are you still in J.P. morgan?
- [32:01]
D
Yeah, we still in J.P. morgan. We see less exposure from the private credit, private equity side there. We also added Huntington bank about a month ago, so we went into the regional side. So that's where we're leaving our bank exposure along with financials in Berkshire.
- [32:14]
B
I mean Josh, I saw you posting some, some things about private credit which is once again in the news as we know because of Blue Owl which was last I checked down again after limiting those withdrawals from one of its funds. There's the stock, you know the, the, the company coming on with, with David Faber and the gang earlier today to try and you know, allay some of the fears around that. Do you have broader thoughts?
- [32:41]
F
They need a new PR firm would be, I guess the first thing that I come up with. They should be talking to maybe Jen Connolly or Street Cred or Prosec. This is whatever they're doing with oh, you want 5% redemption, here's 35% like it's not working. I know a lot of this stuff is not about the fundamentals, it's about the messaging. But messaging becomes really important when you have assets that are in question and don't price on a day to day basis or the pricing is left at the discretion of the people managing the fund. This is very different than public market markets both on the equity and the credit side. And I think you need to be more sensitive to the messaging, not less versus let's say somebody managing a traditional mutual fund or separately managed account strategy with stocks and public bonds. And we're getting the opposite of sensitivity here. We're sort of getting this cavalier attitude of the market. Stupid. The media is against us, nobody understands the math, blah blah blah and it can be fixed. And I don't think that these companies, any of them are sitting on this mountain of toxic assets like it's 2007. I don't believe that to be the case. That being said, I am not in these markets. We don't allocate to these types of things. People looked at us and said, what's your private credit strategy? Blah, blah, blah, you're behind the curve. All the other wealth managers are plowing full speed ahead. Well, congratulations. We just, we avoid it. But I am paying very close attention because I think there's a sentiment impact to the broader market and we're starting to see that more and more with every passing week.
- [34:25]
B
It's a, it's a nervous market, there's no question about that. Yeah. So let me show you shares of Core Weave, for example, which tell a story in its own right that the stock does, which has been down. Now it's down 12%. Okay. The, the story there was that a report suggested that Blue Owl shop debt for a $4 billion coral weave data center in Pennsylvania. They failed to arrange the financing to which Coralie CEO, I don't know if you all were watching earlier today had literally texted Jim Cramer on the air during the 9 o' clock at hour that the data center is fully funded, financed and on schedule. It's a, it's very much, you take that for whatever you will. It's a shoot first, ask questions second part of the market and it probably will be for the foreseeable near term.
- [35:19]
E
It really is and I can't see it changing. I mean, on the one hand I want to say something positive and will that the $1.4 billion of loans that Blue Owl sold over the past several days, they sold at par value. So at least those loans were not impaired. The question that hangs is what's the rest of their portfolio look like? And we don't know. And unfortunately, Scott, you're absolutely right. There's going to be shoot first. There's going to be rumors like we just saw with Core Weave. Oracle's down meaningfully today. I think about three and a half percent at the, at the last look. They've got major financing coming, needs coming up and Blue Owl has been a source of, of financing. So, you know, I think what we need to see here is time and some degree of financing getting completed.
- [35:59]
B
All right, let's get the headlines with Christina Parts and Evolas. Hi, Christina. Hi, Scott.
- [36:05]
I
A federal judge rejected Tesla's attempts to overturn a 243 million dollar verdict over a deadly crash. The case actually stemmed from a 2019 incident in Florida where the driver of a Model S was using the enhanced automatic autopilot feature when he bent down to look for his phone. And then he slammed into a parked suv, killing one person who was standing on the shoulder of the road. Jurors found Tesla 33% responsible for the crash. The judge ruled the evidence at the trial more than supported the verdict. Ukrainian President Volodymyr Zelensky says peace negotiations with Russia could resume later this month. But he cautioned there have been no foreign forward progress on the question of territorial concessions. His comments follow two days of US Backed talks earlier this week. And NASA is targeting March for its next lunar mission following the success yesterday of a critical fueling test. The first test was disrupted by hydrogen leaks just earlier this month. The space agency says four astronauts could launch as early as March 6 from Florida's Kennedy Space center for a leak lunar flyby as NASA seeks to put humans back on the moon.
- [37:15]
A
Scott.
- [37:16]
B
All right, Christina, thank you. That's Christina Partzanovolos as we wait for the President. 12:45 we are told from the White House to make comments regarding that ruling today from the Supreme Court. We come back next. That's a live shot of 1600 Pennsylvania Avenue. Again, 1245 is when we are told the president will hold a news conference. You will hear from him directly regarding the Supreme Court ruling. In the meantime, we'll do Josh Brown's best stocks in the market next.
- [37:46]
A
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- [38:36]
C
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- [39:02]
B
All right, welcome back. Josh Brown's best stocks in the market is today highlighting Old Dominion Freight Line ODFL and I guess for good reason. Stocks up 16% in a month. Almost 56 and 3.
- [39:17]
F
Yeah, and it's been on our list for a long time and we chose to write about it this week because we looked at the fallout from what happened last week when they hit all the trucking and logistics and shipping stocks on absurd air fears that were generated from a press release issued by a penny stock. And out of the whole group, this is a perfect chart. Leave this right here. Out of the whole group, this one acted the best. It never got anywhere near its rising 200 day moving average. The buyers came in really quickly, took it right back up into that uptrend. Basically we got ourselves a float shrinker on our hands. This is a company that's been buying back a ton of stock stock. But they can walk and chew gum. In addition to the buybacks they are also hammering all of their fundamental expectations in the eyes of analysts quarter after quarter. They had a really tough time coming out of the pandemic. All of these trucking companies put on way too much capacity and then the whole economy shifted from goods to services and all of that investment that they made looks like stupid. And the stocks got hammered. Now we're on the other side of that. We see rising utilization rates and these companies that made the investment and stuck through it are the leaders of the space. Technically this is really easy. Traders can use the rising 50 day as a pivot point. That's about 175. I think you want to revisit that on a closing weekly basis. Not get whipsaw day to day. So long as the stock can maintain that 175. I think you want to be long longer term investors can use 156, 158. That was the prior level of resistance that eventually became support. Pull back the chart one last time before I toss it to the desk. I want you guys to understand what it means to be a best stock in the market. Give me one year, three years. That doesn't mean it's always in an uptrend or you always want to own it. This is a very specific breakout with a very specific retest of the rising 50 day. The retest was successful and that's why it's on the list. Won't always be on the list. And that's what we try to deliver to the readers at CNBC Pro every time we publish. Scott.
- [41:36]
B
Josh, thank you very much. Expertly done, especially the toss back to the desk. It's Josh Brown. We'll step away. We'll come back for a while. Yes. You have not your first row out. All right. We believe this is imminent now that we will hear from President Trump regarding that Supreme Court decision striking down his tariffs will take you live to the White House. The minute that we see President Trump emerge. Let's cover some more moves because we do have. Kev, you're real busy. You bought more Medtronic. You trimmed Merck related?
- [42:08]
G
No, actually we looked at Medtronic as a standalone trade. We trimmed Merck and rotated into Amgen. The idea here, Scott, is looking for things that are not candidates for a disintermediation. I want stocks that are going to benefit and profit from AI. I think pharma and biotech can certainly be in that play. Medtronic specifically, there's more and more of us baby boomers aging out. Tremendous prospect pool for them. Merck is just a stock that's up 50%. We rotated into Amgen. We like the biotech and the AI trade. I think this is going to work out really well for us.
- [42:39]
B
And it's non I Bill, you also own Amgen.
- [42:42]
D
Yeah, I like Amgen. I mean I think there has been a lot of tailwinds in biotech and we're continue to see that move. I think Amgen is really undervalued here and the technical setup is really great.
- [42:52]
B
So you bought Bill, speaking of you in terms of the metals trade which we have been so focused on obviously related to gold and silver in the last few weeks. You bought Hecla Mining. Tell me more.
- [43:02]
D
Yeah, we bought Hecla ahead of its earnings report last week. Just a lot of confidence in how they would report. They did beat the name was up about 7% or 8% after the after the number. Now we run this mining portfolio and we had about 20% cash. We're looking to get to work after some of that froth was coming out of the market. We saw that happen after at the end of January. Hecla is trading at a really great spot here, consolidating nicely but the volatility is pretty, pretty large. I, I think what we're going to see is is free cash flow from all of these miners continue to be better and better than expected as these prices in metals hold.
- [43:34]
B
Okay, let's bring in Mike Santoli as we await the president. He Is of course our senior markets commentator. He is the co anchor of Overtime. It's good to have you. It's, it's quite obvious that the market's not exactly sure yet what happens next.
- [43:49]
J
It's reserving judgment on any macro effects of the tariff ruling. Obviously we don't know how many more are going to be reimposed. The other piece of it is I don't think the market gets to be up 40% off the post Liberation day lows come into a new year saying tariff effects are diminishing. It's not going to be a big swing factor and then have the Supreme Court strike down half the tariffs and all of a sudden that's, that's your bull case. I do think it makes sense to have the isolated impact on the shoe companies and the furniture makers and the ones that really have been tariff impacted more broadly than that. You know, we tried to lean on the mega cap tech stocks that have nothing to do with tariffs to get us over the hump earlier. Market is in, the index level is at a weird stall speed. The 50 day moving average is like dead flat. We keep kind of like oscillating around it. So I do think in general you've sapped conviction from the market wide sense. Although we're hanging in there. We get through options expiration today. I don't know, we'll see if we get any further clarity going into next week.
- [44:46]
B
I mean we have to watch rates, you know, we already did because of PC for sure. And now again we just have to see what happens for the next move on the, on the tariffs and watch the bond market. There are Fed ramifications most likely out of all this too, right?
- [45:01]
J
I mean you have to squint to see any treasury yield impact. But yes, you want to be alert to the idea that all of a sudden the market decides the fiscal situation is eroding a little bit. And in terms of the Fed, I mean I guess you could say maybe there's like a half percent of extra GDP growth this year. If in fact the tariffs were to fully go away, does that mean they're less likely to cut or does it mean that they're less concerned about residual inflation impacts? I still think we're data dependent. I don't think it's a bad setup. We've got a 5% nominal GDP, you know, two and a half and two and a half in terms of real and inflation. And I think the market's okay with that piece of it.
- [45:36]
B
Well, I mean you did see, I thought Leesman was so interesting when he said you saw the prospects for a June cut.
- [45:41]
J
Yeah.
- [45:42]
B
Come down.
- [45:43]
J
Exactly.
- [45:44]
B
Which is just so interesting in and of itself because Kevin War is presumably first meeting. No exact share.
- [45:52]
J
It's fascinating because, and obviously that's implicit in that is whether in fact, we get some disinflation that hasn't yet shown up in pce, or in fact, you know, look, maybe people are hiring again if they have fewer tariff impact.
- [46:04]
B
Yep. All right. Good stuff, Mike. I'll see you later this afternoon. That's my Mike Santoli, moments away from the president. We're back after this. Obviously a busy news day as we await the president, but. Oh, yeah, Nvidia reports next week. Josh?
- [46:23]
F
Yes, they're reporting on my birthday. I don't know if that's good or bad. Next Wednesday, February 25, we will hear from arguably the most important company in the world. I think the news flow going into the report has been pretty good. A lot of stuff with the open air has sort of been clearing up. Some of the stuff with Metta has been clearing up. I don't know how deliberate that is, but it just seems to be that people are thinking more positively about Nvidia's dominance being maintained this year. The revenue for the quarter billion gross margins, 75% ex China. That would be 14% sequential growth from Q3's record quarter already. And 69, excuse me, 72% earnings per share growth. So if they come in the neighborhood, the stock holds up just fine.
- [47:17]
B
Yeah. What about the rest of the tech trade, Jimmy?
- [47:20]
E
I actually feel good about it. I think the uncertainty that we talked about earlier has a lot to do with the funding issues that we were talking about with Blue Owl. I know that's for more specific software, but I think it extends to the ecosystem. I think that will heal over time.
- [47:35]
B
All right, we'll be back right after this. All right, we're still waiting on the president there in the briefing room. His first public reaction to the Supreme Court striking down his tariffs. We will take you there live as soon as we see President Trump. A reminder later on closing bell, we'll react to everything, whatever the President says and what the market reaction could be going forward with Wharton School Professor Jeremy Siegel. So we're happy to have him with us today, and I hope you'll join me then as well. Let's do some final trades. Josh Brown, what do you have for us as we await the president here?
- [48:08]
F
Apple pulled back Friday, just barely green again. I really like the set up here for the stock going into the rest of the year.
- [48:15]
B
All right. Yeah, you've been talking about that one lately for. For sure. Got an event coming up, we think in March to farmer.
- [48:22]
E
Jim Transocean. I've talked about this recently. They had earnings last night, cash flows better than expected, debt levels lower than expected. They're doing a merger with Valeris. The slightest bit of analysis will turn you positive on the stock bill.
- [48:34]
D
Baruch Applovin. And now there's a lot of positive news around it. Terrific margins and it's been beaten down. It's a great place to step in.
- [48:44]
G
Microsoft.
- [48:45]
B
Why are you looking at me? Who do you think's left as far
- [48:47]
G
as AI is concerned? Copilot is a show me story, but the Azure growth is real. Under $400 a share. I like the name.
- [48:54]
B
Still needed to be prompted after. After all the time we've spent together,
- [48:58]
G
I'm not used to this one. Chair.
- [49:00]
B
Yeah, all right. You're a little close to the sun.
- [49:02]
F
Don't get used to it.
- [49:04]
B
All right, so look, we are, as we said, all joking aside. We are waiting for President Trump there in the briefing room imminently to respond publicly for the very first time to that Supreme Court decision. I will see at 3 o' clock on the closing bell. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [49:30]
A
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its 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 Fast Money 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 Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer with VRBoCare. Help is always ready before, during and after your stay. We've planned for the plot twists, so
- [50:10]
D
support is always available because a great
- [50:13]
A
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