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Halftime Report
The War and the Markets 3/12/26
00:43:20
Scott Wapner and the Investment Committee debate what the War in Iran means for the markets and how they are protecting their portfolio amid the uncertainty. Plus, the desk share their latest portfolio moves. And later, Josh Brown spotlights Starbucks in his "Best Stocks in the Market."
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- [00:00]
Stephanie Link
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 not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
- [00:55]
Scott Wapner
AT&T business Wireless connecting changes everything. 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'm Scott Wapner. Front and center this hour, the markets. Crude spiking, stocks falling. We're trading all of it with the investment committee, as always. Joining me for the hour today, Joe Terranova, Stephanie Link, Jim Labenthal, Josh Brown. We'll go to the markets. You'll see where we stand. Just past 12 noon in the east, we're read across the board, at least 1% declines. Crude oil up near 9%. Almost 95 for WTI. Brent's at 100. That's the whole story, Joe. Right? I mean, as long as oil remains as elevated as it is, as long as the Strait of Hormuz remains as dangerous, if not closed like it is, you're going to have a problem. Wolf says today our sense is that markets likely continue to bleed lower until either investors reach capitulation levels. Vix above 40. It's not there, obviously. Vix higher, but it's not greater than 40 or 2. The headlines point to a resolution in the Middle east where we're at neither place right now.
- [02:13]
Joe Terranova
So the world, the roller coaster ride continues that we've been on for the better part of the last 10 days. And we are unfortunately all becoming oil traders. The problem is that the real professional oil traders right now are not even confident on what they've relied upon in the past, sentiment and positioning that has given way to this dislocation where it is all about a very intense and complicated military operation and we're seeing significant headlines. What that means for the oil trading community is that there is less participation, there is less volume. If you look at the average volume for spot crude oil at the end of February was 300,000 contracts per day. As we approached last weekend, it was up to a million contracts. Today you got up to $119 Sunday night and every day since you're seeing the volume declining. So that is a very choppy environment to be in, unfortunately. Could we bleed lower? Yes, but remember, structurally we're still in a bull market. We still sit about 1 1/2% above the 200 day moving average. And candidly, less is more right now. It's a moment to really just kind of step back, observe the environment and allow this to.
- [03:20]
Scott Wapner
Unfortunately, you could get out of a bull market pretty quickly if things go even more south than you know, some suggest they're already heading, certainly from an oil and energy standpoint. And the fallout. Jonathan Krinski, btig, as we come on the air, just publishes a note moments ago in which he says 6550 to 6600 on the S and P is now critical. Closing below 6550 would suggest a meaningful top with a downside measured towards 6,000. That was just published by Jonathan Krinski of BTIG in which he says losing patience, breath erosion and financial weakness is just simply too much to ignore at this point. What do you think?
- [04:05]
Stephanie Link
No, that doesn't make me feel good. But up until this point we're only so good.
- [04:08]
Scott Wapner
Before I read you the note, well,
- [04:09]
Stephanie Link
we're only down 2% on the S&P 500. Now I know that there's a lot of damage way worse underneath the S&P 500, but it is encouraging that it's, it's holding up and you are still continuing to see different kinds of rotations. Look, markets do not like uncertainty and a war is, is maximum pain. We have no idea the details, we have no idea how long it's going to last. We, we just don't know every day that there could be a new development, a new tweet for all we know. Right? On the negative side, clearly oil prices are, it's worrisome to see the velocity of the move. But when you think about it, at the pump, right now you're at $3.60 at the pump. That's actually at levels seen back in 2022 and 2023. Thanks Brian Sullivan, for pointing that out earlier this morning. It's not demand destruction at 360 yet, so obviously that's why we're waiting. Now that's kind of the negative and the uneasiness. And I'm also not crazy about bond yields keeping on the upside. But on the positive side, Scott, the data in the economy is actually all right. It's pretty good. The Atlanta Fed tracker. I know I probably just stuck your, your thunder, Jimmy, but it's at 2.7%. Everyone was panicked on the nonfarm payroll numbers on Friday and we got great initial claims this morning. And also retail sales have been good. Look at Costco, look at Dick's, look at Wal Mart.
- [05:26]
Scott Wapner
I just feel like all of those metrics, granted, they're all good, they're all almost meaningless because their productivity is the
- [05:32]
Stephanie Link
thing I was about to say and that's not. And productivity is. No, and productivity is not backward looking.
- [05:37]
Scott Wapner
I'm not talking about productivity, but that's
- [05:39]
Stephanie Link
what I was going to add as my fourth and final point. Maybe these other things change, certainly. But right now the, the numbers are the numbers and productivity is a very big positive and that's a nice tailwind and offset. And one last thing, one big beautiful bill has yet to hit and that will help in terms of a little bit of the oil price, maybe the inflationary pressure.
- [06:00]
Joe Terranova
I'm sorry to interrupt. Jimmy and Josh, I agree with everything you're saying. Fundamentally to me, where we are in the moment. Can you, can you secure the Strait
- [06:09]
Jim Leventhal
of Hormuz or not?
- [06:10]
Joe Terranova
That's what everything boils down to. And if we can't, then this punitive environment continues. And if we're able to secure it, then we're going hard.
- [06:18]
Scott Wapner
Okay, to that point, it's binary. Obviously the market is reacting to that to which JP Morgan's trading desk is making a tactically bearish call this morning. Long energy and energy stocks and short equities. It's really that simple. They say, quote, if we get to a Sunday when futures open without a resolution, we think risk assets will see a more aggressive sell off. I urge you to go to CNBC Pro. Subscribe and you'll be able to read more stuff like that because there's a complete right through on what JP Morgan's trading desk is saying about how to approach this market from a tactical standpoint. It matches with what Joe says. This is a binary issue. Rate open stocks up straight, closed stocks in trouble.
- [07:09]
Jim Leventhal
It is a binary issue, Scott. I agree. However, there is another dimension to it, which is time. How long does this last? The longer it goes, the more significant damage will be done. The President has said it's a four week operation. If that's the case and the straits are opened in the next two weeks, I think while there will be damage, there will be damage to profit margins and profit growth, it will be temporary in nature.
- [07:30]
Scott Wapner
We can even stop with the, what the four or five week month. This, that, because the messaging has been so inconsistent, because this morning it was. We're, we're going to stay there until their defeat as long as it takes. So reason you're going to hang your hat on? No, no, it's going to be four or five days or now four or five weeks or four or five months. Good luck.
- [07:48]
Stephanie Link
Yeah.
- [07:48]
Jim Leventhal
So I agree with you that the messing has messaging has changed day by day, if not more frequently. But what I'm saying is I haven't changed my stance, which is to be invested in a broadly diversified equity portfolio. So I'm not taking the JP Morgan advice. Not yet. And the reason is, is because of what you're saying, Scott. Because of what you're saying, Joe, that if the straits are opened tomorrow or a week from now or two weeks from now, I don't think enough damage will be done to upset the significant positive forces in the economy, in the markets, whether it's stimulus from the budget bill, whether it's artificial intelligence capital expenditures, the straits being closed will leave a mark, but it will not be fatal if it's, if it's open by the end of this week. And I do want to point out one thing regarding oil, that there are cushions involved here. We have to remember before this started, there was a very significant surplus of supply over demand. And it's not, you know, it's a matter of time before the Baker Hughes rig index starts to creep up. Particularly here in the US that has been very more said as long as
- [08:46]
Scott Wapner
it's open by the end of this week. You realize today's Thursday.
- [08:49]
Jim Leventhal
No, I, I'm sorry if I misspoke. I meant by the end of the month. By the end of the month. Thank you. Let me be very clear. By the end of the month.
- [08:56]
Scott Wapner
Okay. So Josh B of A today in their commentary is obviously about risks to the macro. And that's really what this whole story boils down to, in which they say we think markets could be underpricing the odds of a synchronized global slowdown. In the emerging markets, positioning is now much cleaner and interesting opportunities have emerged that's consistent to where people have thought there were better opportunities anyway in the emerging markets rather than in the US Market. For a Variety of issues. We don't need to really go there at this point, I don't think. But the idea of the markets underpricing a scenario in which you have a synchronized global slowdown.
- [09:38]
Josh Brown
Yeah, look, I think the big picture here is that I can't, I can't remember a time where the S and P has been as close to an all time high as we are now. With as little conviction as we're seeing. It's really a remarkable thing and I think the rotation is the reason why that's even been possible. So the problem that we have is that the stocks that are working are under owned and not large enough to accommodate the people that want to be on, on the right side of the trade. And the stocks that are really important are just not working. And so when you think about energy, far and away the biggest winning sector on the year, up 27% year to date. I of course have been talking relentlessly about Exxon Mobil which again is making a high now. But there are a few of these stocks. There aren't 100 like there are in the software group or the semiconductor group. There's just a few. And then you have to dip down into small caps. And that's sort of problematic for the market. The other thing is we have this slow motion negative news cycle which is now becoming a negative price cycle in, in, in private equity. Very quietly, the XLF is in a 13% drawdown that is very negative. I don't even know if it's very
- [10:58]
Scott Wapner
quietly, to be honest with you. I don't know if it's all that quiet. We've been talking about it for some
- [11:03]
Jim Leventhal
stocks and it's not that screaming.
- [11:05]
Scott Wapner
It's been screaming for, for a while that hey, if the financials continue to, I've said this numerous times and we've discussed it with numerous guests. If the financials continue to have an issue, you're going to have a really hard time getting this market to have some stability and durability again.
- [11:22]
Josh Brown
Well, you had a, you had a, you had a negative labor report that missed expectations. And now you have bank of America in a 17% drawdown. The credit cards Synchrony Financial down 28%. Capital One down 31%. And once again the, the jobs numbers are now surprising, negatively, not great. The XLF is in a drawdown almost as bad as the Liberation Day drawdown which was 16%. So we're down 13, we're almost there. And then of course you've got the P E/PC segment of financials which are at this point now in 50%, 50 or greater drawdowns. And now with JP Morgan starting to mark down the assets is lending against to these private credit firms. It's almost like a self fulfilling thing where the news cycle is bad, which prompts even more redemptions, which makes the news cycle worse, which worsens the redemptions. I really don't think that stabilizes on its own. So I know we're talking about crude and I know we're talking about the Strait of Hormuz. But guys, if that were resolved tomorrow, that doesn't change the bigger issue that we have here which is that lack of conviction. Last thing, here's what nimble traders are doing. I'm going to give you a couple of tickers. Throw these charts up for me. Here's another Hormuz related supply disruption, this time in the materials space. Look at these rallies. CF plus 13% Mosaic MOS plus 10% Dow Chemical plus 8% Lyondell plus 7% so traders are looking for opportunity from the Strait of Hormuz being closed down and these stocks are going parabolic. But again they're not big enough to offset the negatives.
- [13:14]
Scott Wapner
No, but, but opportunity finds itself in times of upset as, as, as we've.
- [13:20]
Josh Brown
Here it is.
- [13:21]
Scott Wapner
Joe, you first day of the war. I think you bought cf.
- [13:26]
Joe Terranova
Sure.
- [13:27]
Scott Wapner
It was the first place I think you went in, in looking for stocks that may have an opportunity to go up on the headlines and the, the events of the taking place in the Middle East. So let's talk about that for a minute.
- [13:43]
Joe Terranova
The Iranians are significant exporters of urea nitrogen. It's not negotiable. It's mandatory in corn planting and CF had a 7% short interest on March 1st. That was one of the things, things that I found so compelling. A very cheap valuation to Josh's point. 75% revenue growth. So it is one of the first places I went. I bought it at 104. I'm going to be fully candid on something I do not know. I do not know. You're suggesting you're not usually with the position right now. So I'm maintaining, I'm holding the position, I'm raising the stop. But again it's binary. If the Strait of Hormuz is secured, CF Industries is going down 10%. I know that. So you could say okay, I'll sell a little. I'm not so sure I want to do it. So really only thing I'm doing right now is trailing the stop. But it is directly related that's what I would do. The war.
- [14:38]
Scott Wapner
So Josh made a good point, too, where he talked about the lack of conviction behind the market and behind certain strategies. J.P. morgan's retail radar. I know I cited their trading desk already, but I want to tell you about something that their retar. Retar, their retail radar had had tracked. Retail investors show persistent signs of weakness for the first time this year. How many times have we sat on this desk and we said that one of the pillars of this bull market was retail staying engaged, buying dips, buying rips, because they have thought that this bull market trend was fully intact. Well, maybe it's waning a bit. Weekly purchases decelerating by about 30% after defying seasonal patterns and making February their third largest month on record. So retail tried to stay engaged until some of the news flow got dicey like Josh was talking about. Some of the private credit headlines got dicey like Josh was talking about. Feels like stick that, you know, you don't want to lose that cohort because they've been almost critical in helping this bull market advance and stay as frankly resilient as you keep talking about this market to be.
- [15:56]
Stephanie Link
Well, war is scary and the headlines are really scary. And this is not Venezuela. This is a lot different. And so. And as you've been saying, there are these binary situations now that it's impossible to actually predict. But I suspect that maybe the retail investors just taking a pause, maybe they're trying to find other opportunities. I believe they're still buying some. Some Mega Cap.
- [16:19]
Scott Wapner
They're buying mega. They remain positive on Mega Cap. And what's interesting is there's heavy. The heaviest selling is in energy.
- [16:25]
Stephanie Link
Well, I don't disagree with that because, you know, I actually have been trimming slb.
- [16:29]
Scott Wapner
Well, I was going to get to that, but go ahead because it was a perfect segue.
- [16:32]
Stephanie Link
We did that good, right?
- [16:33]
Scott Wapner
I was going to say, and we have Selling in Energy too, on our desk, but you said it for me.
- [16:39]
Stephanie Link
Yes, I did. Really, it is. It's a trim. I am up 40% since I bought this stock back in November. It's a wonderful story. It's great. But here's why I get worried. 33% of their revenues come from the Middle East. And that was supposed to be the Recovery story for 2026. Activity improving aggressively, like sixfold. And now with this overhang, I just can't see that to be the case. Now, if this Stock is down 5% today, I was trimming it last week. If this thing is down another 5, 10%. I would absolutely buy it back because it's such a wonderfully run company and I think that their technology is so underappreciated with regards to their digital franchise, which is about $1 billion in run rate revenue right now. And that's going to grow exponentially over the couple of year, next couple of years. But I think it's prudent to take some gains. I mean, this stock again is up so much. The group is up so much. I wouldn't have a problem with anybody trimming energy at this point. I want to have exposure, but I don't want to be too greedy.
- [17:38]
Scott Wapner
So more energy moves. You sold Petrobras and you sold Canadian Natural Resources because you were, I think you were telling us the other day to continue to look across the northern border for, for opportunities in some of these Canadian oils.
- [17:53]
Joe Terranova
No, so what I had done was earlier in January when I began to build energy exposure. And by the way, I don't think you're taking chasing energy right here at all. I think you had to have had the energy exposure in the fourth quarter and in January you had to come in with it. Right? So oh is the name that I bought in early January. I sold out of that and I went into CNQ and pbr. Why? Because I felt as though they would be alternative sources of oil for the Strait of Hormuz being closed. The problem or the challenge or maybe the benefit that I have is that I was there on January 9, 1991. Regrettably, anyone that knows about oil remembers that Secretary of State Baker, James Baker, is in Geneva. He's having a press conference. And one of the world's best oil traders that I know left the pit in advance of that press conference. I said, where are you going? To get a hamburger. Why? Because I have no idea what he's going to say. And that's the environment we're in right now. He came to the podium, he said, regrettably, the price of oil spikes. That's where we are right now for oil. Understand it, it's binary. It's about a headline. And I don't want to invest in that situation. And I saw that on Tuesday when you had the announcement come out, you had the tweet and PBR and C and Q reversed and went the other way. I moved to the sidelines.
- [19:14]
Scott Wapner
All right, so the other point that, that Josh had made and we were talking about the first financials, well, Ed Yardeni has now downgraded that space to underweight. So he'll be on closing Bell with me today and he'll expand on this further. But he suggests until the fog of Warren and Jamie Dimon's cockroaches. He says crickets here, but Jamie Dimon said the word for cockroaches. I'm sure that's what Ed is actually referring to. Until that disappears, we will underweight the sector. He's obviously referring to private credit because that's where Mr. Diamond made his comment. Comment in reference to. What do we think, Jimmy, about. About that.
- [19:48]
Jim Leventhal
So if we're talking about the public stocks of the private credit companies themselves, like the Blue Owls, like the Apollos, they're going to be hampered for a while. Now, I am sticking with Apollo and I'll get to the reason for us in a minute. But the reason these stocks are going to be hampered is because fundraising is going to be in decline. I want to draw a distinction, though. We're not, or at least I'm not talking about some corporate credit crisis here. I'm simply saying that the appetite, the sentiment for, for private credit has plummeted, to say the least. So fundraising and earnings growth for the public stocks of these companies is going to be hampered. Now, if you are invested in something like our clients at Sarity Partners in the Owl Rock Credit Income Corporation, this is a case in point where having the right advisor doing the right due diligence matters. We think that the strong performance over the last five years of that particular fund will continue to based on its investment grade rating based on the low less than 1% of amount of loans that are in accrual. But that is not the case across private credit writ large. There's plenty of stories about other funds, other companies that have gotten into credit trouble. I don't think the credit crisis is systemic, but I do think this is a case where you need the right navigator picking the right.
- [21:00]
Josh Brown
Jim, how do you. Jim, how do you. So you basically have to have full faith in the portfolio managers because you have absolutely no transparency into the underlying holdings, nor does anyone else. So just here, here's a question. I don't know the answer to it. I'm not asking rhetorically. I really am curious.
- [21:20]
Jim Leventhal
Yeah, go.
- [21:21]
Josh Brown
An adviser at any firm in America spends 2024 and 2025 allocating, let's say 5% of their $5 million and up wealth management clients into one of these interval funds. Private credit interval fund. What is the right thing to do at this point? Is it a try to get the full redemption that you can out? Because if you don't do it now you may not be able to later or, and obviously that makes you look stupid to your client or tell your client, trust me, I didn't get you into this for a one year hold. We're going to, we're going to stick day and we're going to see how this plays out. And then God forbid we have a negative credit cycle and these things get slaughtered. I'm not sure I know the right answer. What are you telling advisers and what do you think is the right answer to that?
- [22:13]
Jim Leventhal
Yeah, great question, Josh. Let me make sure I answer with full humility that who knows what's going to happen over the next year. But I think there is an analog and I think it's pertinent with the Blackstone Real Estate Investment Trust from about three, four years ago when they started gating investors and that lasted for about three or four quarters. It was very ugly and also very germane to where we are now. That was the time that we were worried about commercial mortgage backed securities office vacancies, the tsunami that was coming for maturities in that space. If we look at B REIT as an analog, the last year their return was 8.2%. Their last five years, including that period of maximum redemptions is annualized at 9%. And the point being is, if you do your due diligence, I will with full humility say I have a lot of faith in my team's abilities in this regard. You can pick the managers that are not only going to get through a moment like this, but actually thrive from the dislocations that happen in space.
- [23:11]
Scott Wapner
How, how big were the assets in bereit compared to the combined assets in all of private credit?
- [23:20]
Jim Leventhal
I don't, I would, I don't know
- [23:22]
Scott Wapner
the answer to that either. I would submit to you however, that the combined assets in all of private credit dwarf the assets that were in be read at that particular time.
- [23:33]
Jim Leventhal
So I think you're making a good point. And what I do have as a fact is what the combined assets of private credit are right now. 2.5 trillion. That's a big number. Let's bear in mind that when we're accumulating the MFS is the tricolors, the first brands. For a moment, you know, that comes out to just a little more than 0.1% of that number. Let's also put that number into the perspective of how much private equity investments there are right now, which is on the order of 9 trillion. Now I'm not trying to compare apples and oranges, but if we just look at aggregate balance sheets. That's a lot of private equity that you've got to get through before you get through impairment on corporate credit. What we've seen so far on private credit has been fraud, not actual business degradation.
- [24:17]
Joe Terranova
No, you need price transparency on what the value of the loans are that is being made by Wall street. Like just a software company not going to get that you don't have. Well, I'll tell you what, on Wednesday, I hope you get some insight from the Federal Reserve because it's their job to reach out to Wall street lenders and try and understand what, what the real marks are on these software.
- [24:39]
Scott Wapner
Let's do this. Let's bring in Leslie Picker because she's been on this story from the get go and she's been following the daily developments which have been many. And I hope you've been listening to this conversation and then you can add, you know, some, some more reporting that you have as you look at this landscape.
- [24:55]
Leslie Picker
Yeah, no, I think it's a great discussion to be having. In terms of the numbers that we're talking about, you know, there's about $500 billion of that $2.5 trillion in private credit that's in these kind of semi liquid, they're called evergreen funds in some circles. So that's kind of the analogy that you're making with Beret there. And about 20% of that is in, is invested by retail, which is what we're seeing kind of being the driving force behind some of these redemptions you mentioned. Where is the money going? Well, the money, at least in terms of retail, is going out the door. At least it's trying to. The big focus today is the huge surge of redemptions we've seen across many of these non traded private credit funds. Cliffwater Morgan Stanley reporting redemption rates of 14% and 11% respectively. But the managers only fulfilled about half of those requests. The rest were gated per the fund agreements. And these numbers come after last Week's disclosures from BlackRock and Blackstone, the latter of which was actually able to satisfy the redemption requests through employees and the firm's own capital. Now, the gates are kind of a feature of these semi liquid structures and they exist to prevent forced asset sales and losses on illiquid assets. However, the fact that we're seeing investors get cut back on these requests now means it is likely that they try again in the second quarter, perhaps by an even greater magnitude if they expect to be capped again. However, analysts at KBW point out that this dynamic is driven More by a mismatch between liquidity of private credit assets and investor expectations of liquidity from these funds and not signal of credit quality. So in other words, this is a headwind and a reputational blemish for these funds that have been courting high net worth retail channel for its growth. But it's not necessarily reflective of a bigger systemic risk at this time. Scott.
- [26:45]
Josh Brown
Yeah, but they are, they are sell. But they are for selling.
- [26:49]
Leslie Picker
They are.
- [26:50]
Scott Wapner
There are some stories not always at
- [26:52]
Josh Brown
every media outlet that there are portfolios, billion dollar portfolios of loans now being sold specifically for these redemptions. That is the very forced selling that they were designed to not have to do. But the ones, the numbers are too big.
- [27:08]
Leslie Picker
The ones who are for selling are the ones who went above those caps. So you had Cliffwater selling $1 billion asset portfolio, choose Blue Owl selling $1.4 billion asset portfolio in order to meet those redemption requests. Those who are capping it at 5% or even, you know, may have a greater cash position, they're able to fulfill those liquidity requests, those redemption requests. They are not selling assets to do so yet. Yet, of course. Of course. So that's what I'm talking about in terms of next quarter because it's kind of similar to what you would do for a hot ipo. If you're an investor, you allocate way more than you necessarily want to own of a certain company in order to, you know, you expect to basically get a portion of that allocation you're asking for. Here you're seeing a similar dynamic with redemption requests where people are asking for way more than they think they're going to get because of the, just the nature of the news cycle and the nature of the redemption cycle that we're seeing. So that's expected to continue in the second quarter.
- [28:08]
Scott Wapner
Sorry. I appreciate you very much for your reporting and your insight less. Thank you. That's Leslie Picker. Have some breaking news out of Washington. Want to get down there to our Emily Wilkins on the Hill. Hey.
- [28:19]
Josh Brown
Hey guys.
- [28:19]
Stephanie Link
Well, the Senate has now passed a bipartisan housing affordability bill designed to increase supply and what they hope will decrease cost. And that does include that ban on private equity, institutional investors and major companies from buying single family homes if they already own 350 or more. Now, what happens next with this bill is a huge question mark. We know President Donald Trump has wanted this bill, has pushed for this bill, but that ban on institutional investors buying single family homes is causing headaches. We know that over the last couple of days when Republicans were down in Miami for their retreat and closed door sessions. You had members of House leadership saying that they were not going to swallow this Senate bill and that they needed to make additional changes that have been concerning for a number of lawmakers as well as those in in the industry. So we'll have to see if they wind up making further changes to this or if Trump decides to come in and sort of really put the pressure on lawmakers to move the bill the Senate has just passed. I mean, again, it's very notable how bipartisan this entire process has been, how quickly this has moved. This legislation probably stands the best chance of getting to Trump's desk. But it's a huge question right now how they're going to overcome this final hurdle. Guys.
- [29:32]
Scott Wapner
Okay, Emily, thanks for the update there. That's Emily Wilkins on the Hill for us. Coming up, we have many, many more committee moves. I didn't get you a handful and we will do do that. Josh Brown's best stocks in the market still ahead. So we'll take a break, we'll catch our breath, we'll come back and we'll give you more.
- [29:47]
Jim Leventhal
An all new season of the Secret Lives of Mormon Wives is now streaming on Hulu and Hulu on Disney.
- [29:52]
Stephanie Link
Mom talk has just been blowing up. Whitney and Jen are on Dance Meet the Stars.
- [29:56]
Jim Leventhal
Taylor is a bachelorette.
- [29:57]
Scott Wapner
Saying that out loud is crazy.
- [29:58]
Leslie Picker
Like that is huge. But all the cool opportunities could pull us apart.
- [30:02]
Stephanie Link
It's causing issues in everyone's marriage.
- [30:04]
Leslie Picker
My whole world is falling apart right now is chaos.
- [30:09]
Jim Leventhal
Watch the Hulu original series the Secret
- [30:11]
Joe Terranova
Lives of Mormon Wives now streaming on
- [30:13]
Jim Leventhal
Hulu and Hulu on Disney for bonus
- [30:15]
Scott Wapner
subscribers terms apply thy ticket lady, Jennifer of Coolidge. Well, many thanks, good sir.
- [30:22]
Stephanie Link
Here is my Discover card.
- [30:25]
Scott Wapner
They accept Discover at Renaissance fairs? Yeah, they do.
- [30:28]
Stephanie Link
Here. Discover is accepted at the places I love to shop.
- [30:31]
Scott Wapner
Getith with the times.
- [30:34]
Stephanie Link
With the times. You're playing the loot.
- [30:38]
Scott Wapner
Yeah, and it sounds pretty good, right? Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.
- [30:47]
Stephanie Link
Not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time.
- [31:11]
Scott Wapner
Sometimes AT&T business Wireless connecting changes everything. All right, we are back. I mentioned. We have so many moves to get to that I did not get to. And I will say one of the greatest and most redeeming qualities about you, Steph, is that you not only tell a story about your views on this market consistently, but you always put your money behind those views. It's one thing to have a view and an opinion. It's another to step into the market and express that view with real dollars. So thank you for whatever that thank you is worth.
- [31:56]
Stephanie Link
Even if I'm under my desk pressing the button.
- [31:59]
Scott Wapner
I think it says a lot about you as an investor. Okay, so that leads me to the moves. But I thought that that was worthwhile saying thank you. You bought more Truist Financial. Tell me more.
- [32:11]
Stephanie Link
Yes, and so Truist really has nothing to do with private credit. And yet the Stock is down 19% from the February highs and it be should trades at 0.9 times book value. Historically, it's traded at about 1 to 1.2 times book. Whenever you can find a bank under book, it's usually a pretty good buy. But this company is going through a transformation with new leadership. And fees should start to accelerate based on the changes that they're making. And the most important thing to me is their ROTC, the profitability metric is expected to go to 15% from the low teens this year over the next year and then 16% in 2028. That's really very important for the bottom line. And then I would say lastly, excess capital. They have 22% of their market cap is excess capital to provide for shareholders. And this doesn't even include Basel 3 endgame, which is coming later this month. So I think you're going to see more buybacks, more dividend increases, and importantly for the economy, loan growth.
- [33:06]
Scott Wapner
All right, so let's talk software for a moment. Some have tried to call a bottom, whether it's Tom Lee or Dan Ives, and software has traded better lately, as all of you know. Stephanie Link once again expresses that view through a couple of purchases. You bought more Palo Alto Cyber has not traded all that well at all and you bought more IBM. Now, maybe Oracle saved the day in the in the near term because they're. That stock obviously hasn't done well, but they report earnings as stock shoots up and people are feeling at least better maybe than they have in a while about not only that company, but software in general, you included.
- [33:44]
Stephanie Link
No, I mean, I would say you want to own mission critical software, which is synopsis. You want to own CyberSecurity because your AI is not taking over cybersecurity. Talk to any of the executives there. And then IBM is kind of a mixed bag, but all three of those stocks are down, so. So Palo ALTO is down 24% from its highs. And this is a company where I think the growth is really not appreciated. They're going to. They grew Netgen Security organic growth at 28%. They grew RPO's at 23%, product revenue grows in the mid teens, etc. So I just think that this company is doing such a good job getting more product for their customers and they're seeing the growth as a result. And we haven't even seen the synergies from the $30 billion worth of acquisitions that they've made in the last six months. 11 times price to sales CrowdStrike by perspective 22 times. So it's a heck of a lot cheaper. And I think they're doing all the right things.
- [34:39]
Scott Wapner
All right, Jimmy, we turn to you. We get another test. We've had a lot of tests of software recently because of earnings reports that have come out and overtime, including Adobe tonight.
- [34:49]
Jim Leventhal
Yeah, I.
- [34:50]
Scott Wapner
Well told story, well debated. We don't even need to have the debate again necessarily, but we might tomorrow, depending on what happens tonight.
- [34:58]
Jim Leventhal
And I'll be here tomorrow to dissect it. Right? Well, I think. I'm pretty sure I am. Anyway. Look, unfortunately I can't say that tonight answers the question because what is likely to happen is that the earnings and the guidance are likely to be good, but not good enough to put to bed the questions as to whether AI will both eat into the core business and take away the seats that are licensed for Adobe products. Also, ultimately, this is a company that has for the last several years outperformed earnings expectations, has had very good growth in top line and bottom line, and has used the excess earnings to rapidly reduce its share count to the tune of 13% less shares outstanding over the last five years. Now, that's not going to matter if two years from now AI has eaten Adobe's lunch. But I'm going to continue to say what I've said for the last two years is that there's no sign of that happening yet.
- [35:49]
Stephanie Link
Yet.
- [35:50]
Jim Leventhal
So I'll dissect it with you tomorrow. I'm expecting good results. I wouldn't be surprised if the stock did nothing.
- [35:55]
Scott Wapner
All right, Steph, you sold this switch into other stocks. You sold Teradine completely, bought more Broadcom. We know you like the view on it for a long time, but you sold completely out of Teradyne.
- [36:04]
Joe Terranova
Why Straight.
- [36:04]
Stephanie Link
Yeah, because I'm up 100% in the stock, and I think taking profits makes a lot of sense.
- [36:08]
Scott Wapner
Okay.
- [36:09]
Stephanie Link
And Broadcom, by the way, is down 19% since last quarter. Not this past quarter, two quarters ago, 19%. And they are seeing amazing growth. And so I think that's the one I think can play catch up.
- [36:19]
Scott Wapner
All right, so we'll get to other moves. You have a new buy and a new sell. Okay. Not just buying a little more or selling a little new buy, new sell. Completely in or completely out. We'll do that coming up, I promise. Frank Thomas. Frank Thomas. Frank Holland. Frank Thomas. He's pretty good baseball player. Baseball player. Frank, did you like Frank Thomas? You know, I do like Frank Thomas. Like, I was the first baseman when I played baseball myself, and I was a pretty good batter. But I think we got to get to the news update now. The US says two sailors were injured in a fire aboard the USS Gerald Ford in the Red Sea today. That fire is contained and did not cause damage to the aircraft carrier's propulsion plan. According to a statement from Central Command, the ship's been in the Middle east in support of the war with Iran. The UN's refugee agency says up to 2 point or 3.2 million people have been displaced in inside Iran since the conflict began on February 28th. Most of them are reportedly fleeing from Tehran and the other urban areas towards the north of the country and other rural areas. The UN says that figure is only expected to rise. And Google is overhauling its maps to rely more heavily on AI. A new feature called Ask Maps will give suggestions to users looking for places, like some place to charge their devices or cafes with short lines. And a new tool through Gemini, dubbed Immersive Navigation will show a 3D perspective to make directions even more intuitive. Scott, back over to you. The big hurt, right? Big hurt. Brian Collin, thank you.
- [37:45]
Joe Terranova
Thank you.
- [37:45]
Scott Wapner
See you soon. All right, Josh Brown's best stocks in the market. Next. TaxAct knows every small business owner has different tax filing needs. With TaxAct, you can file yourself with the help of an expert, or TaxAct can do it all for you. You're the boss, the head honcho, the top banana. And TaxAct is like your loyal, trusty tax aide, ready to pounce on any tax needs you might have. TaxAct is dying to pounce on some small business tax needs. TaxAct, let's get them over with. Thy ticket lady, Jennifer of Coolidge. Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance Fairs? Yeah, they do.
- [38:33]
Stephanie Link
Here Discover is accepted at the places I love to shop.
- [38:36]
Scott Wapner
Get it with the Times.
- [38:38]
Stephanie Link
With the Times.
- [38:40]
Josh Brown
You're playing the loot.
- [38:42]
Scott Wapner
Yeah, and it sounds pretty good, right? Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report. You do it all. So why not get all the electrolytes hydrate better than water with new Gatorade lower sugar now with no artificial flavors, sweeteners or colors and 75% less sugar than regular Gatorade. New to the fridge. All the Gatorade electrolytes you love. Gatorade lowers sugar.
- [39:17]
Stephanie Link
Is it in you? Now available nationwide.
- [39:23]
Scott Wapner
Josh Brown's best stocks in the market. The spotlight today is on what
- [39:30]
Jim Leventhal
we're
- [39:30]
Josh Brown
going to talk about. Starbucks. I the stock hit the list. I couldn't believe it. I said, which Starbucks? But believe it or not, SBU Acts is now one of the best stocks in the market. Sean and I dove in in the column today and basically what's interesting about the situation is you have to make, you don't have to make the decision but like either investors are buying in on the turnaround finally after all these years being at hand, or they're buying the stock because it's one of a cohort of names where there is enough reliability and dependability that they're comfortable owning it and they're not as worried about the turnaround. They just know it's Starbucks. I should be fine. I'm not sure which. But again, you don't have to decide. Starbucks had a 10% traffic decline in 2024, but as of last quarter, US transactions grew across all day parts for the first time in eight quarters. This is the back to Starbucks turnaround strategy that Brian Niccol rolled out. And what they're trying to do is expand margins on a full year basis, bring expenses down and bring traffic back. So I think the stock can get back to 120, which was the high thing from August of 2020 21. This hundred dollar level had been substantial overhead resistance. As it breaks above. If it can stay there, I think that level turns into a little bit more of a support. If you're a trader, you Want to watch 95. If you're an investor, you want to use 89 as your line in the sand. So long as it stays above, I think it could be long. The name.
- [41:10]
Scott Wapner
All right, Steph, you, you are right.
- [41:13]
Stephanie Link
Starbucks, yes. It's my largest discretionary position. Back to Starbucks is working the Green Apron Services is working on culture on services. They're expected to grow 25% in earnings over the next couple of years. Operating margins are the most exciting thing for me because they're at 10% now. I think they're going to get to 17, 18%. And therefore you can see $4 in earnings power by 2027.
- [41:34]
Joe Terranova
The beans are green. Anyone who ever traded coffee know exactly what I'm saying. The rain in Brazil, what have you,
- [41:40]
Scott Wapner
what have you had from the fall
- [41:41]
Joe Terranova
of 2023 to the fall?
- [41:43]
Scott Wapner
Raise your hand out there if you
- [41:44]
Joe Terranova
traded coffee fall of 23 to fall of 25, you had coffee prices go up 99%. They are down 25% since October. That helps Starbucks expenses.
- [41:54]
Scott Wapner
All right, we have more again from Steph. Those moves I was telling you about, we'll do them next. All right. Welcome back. We have some news about our very own Jim Leventhal. This is the news right here. His new book, how to Ride the Subway, Getting around on Wall street and in Life. It's out March 24th. Jim's so excited about this segment. He took his tie off in the break. You take your shirt off, do you feel good about yourself? You wrote a book.
- [42:20]
Jim Leventhal
I just wanted to kind of show the real me, both right now and in the book. And obviously, Scott, you know, I've got some investing lessons that I want to share with the world, but I wanted to do it in my way, which is to put put my investing and business lessons in the context of a passion that I have. It's a little bit of an odd passion, but I love the New York City subway system. Anybody who knew my father is not going to be surprised that from an early age he and I were in the subways going places. He was a municipal financier, so that made sense. And this passion in the subway gives me all sorts of anecdotes that I have used to express lessons on investing and also in life, on just kind of how I live my life.
- [43:01]
Scott Wapner
Patience, discipline. Among the chapters that you have described, what is, I guess the ways to ride the subway, but also more importantly, how you you live and invest.
- [43:13]
Jim Leventhal
That's exactly right. I mean, you use the word patience, which is the title of one of the chapters. And I think we've discussed my own patience in investing many times on this show. It is a core principle, as is discipline, as is investigating, as is being explorative, whether it's a new stock or just looking on the balance sheet of a company and finding something that other people don't know. And my, my co contributors, Steph, Josh, Joe, they all know this. They know what I'm talking about. I'm trying to put it in a way, in a format that people will enjoy. By the way, www.jimmylabenthal. somehow that website was still available. So if you want to buy Jimmy Labenthal, and I'm personally jim.com was taken. I have to look at that real quickly. But look, I am Jimmy labenthal is the people who know me, like you, Scott, who call me Jimmy. There's times where I have to be professional and it's Jim and we do that, but Jimmy is the real me. So I hope you'll enjoy this.
- [44:09]
Scott Wapner
All right. Congrats to you. Congratulations. It's not easy to do this, so congrats.
- [44:14]
Jim Leventhal
Thank you all. You guys are just a tremendous support.
- [44:17]
Scott Wapner
A couple of Steph's moves coming up next. Stephanie Link has bought Netflix. Tell me more.
- [44:23]
Stephanie Link
Yes. I've never owned Netflix, actually.
- [44:25]
Scott Wapner
Okay, why now?
- [44:26]
Stephanie Link
It's a simpler story. Without the Warner Brothers Discovery acquisition, I didn't really understand why they were going after that to begin with. But now you can focus on the fundamentals. Earnings are growing at 20%, revenues, 12 to 14%. Operating margins can see expansion. The buyback can be resumed, which they have is the 5.7 billion, which is about 2% of market cap. And it's trading not, not cheap at 30 times, but historically it's at 34 times. So I think I'm getting it at a pretty good price.
- [44:50]
Scott Wapner
Okay. Josh, of course, still owns that. You sold GE Health Care.
- [44:54]
Stephanie Link
Yeah.
- [44:55]
Scott Wapner
Are you breaking up with any part of GE's news? I know doesn't happen that often.
- [44:58]
Stephanie Link
I know why. Now, this one has been a little bit of a disappointment. I thought that they would have done better, but I think that they are really hampered by their exposure to China and the competition that they're seeing there. So I'm up there very small, so I decided to take that money and put it into Netflix.
- [45:13]
Scott Wapner
Okay. All right. That stock's down four and a quarter percent today, but we'll keep watching that. We'll do finals after this break. I see on the closing bell, three o', clock, Dan Greenhouse, Chris Toomey, Rick Heitzman, Ed Yardeni. And Jeff DeGraff. So we got a good one. And we will track this market. Fast moving, still volatile. We'll see what we do over this last stretch of trading, but we will. We'll do final trades first and foremost. And Josh Brown, you kick us off today.
- [45:40]
Josh Brown
Netflix. I think Stephanie's going to be right. I actually think it's a defensive stock.
- [45:45]
Scott Wapner
Wow. All right, Steph. Netflix.
- [45:47]
Stephanie Link
Nice.
- [45:48]
Scott Wapner
Starbucks.
- [45:49]
Stephanie Link
My final trade now.
- [45:51]
Scott Wapner
Yeah. What's yours? Give me yours.
- [45:53]
Stephanie Link
Minus target.
- [45:54]
Josh Brown
Okay.
- [45:55]
Stephanie Link
I was doing a really good job. $8 in earnings. Power.
- [45:57]
Scott Wapner
He likes that one, too.
- [45:58]
Stephanie Link
I know.
- [45:59]
Scott Wapner
Maybe you guys should collab on the best stock market list.
- [46:02]
Stephanie Link
I'm shocked.
- [46:04]
Scott Wapner
Farmer Jim.
- [46:05]
Jim Leventhal
Transocean rig. I've talked about this a little bit recently. What I haven't mentioned is they're going to do a merger with Valeris, which is really going to put them at the top of the stack as far as offshore drilling goes.
- [46:15]
Scott Wapner
All right, thank you for that. Congrats again on the book.
- [46:17]
Jim Leventhal
Thank you.
- [46:17]
Scott Wapner
Out again. When? March. What?
- [46:19]
Jim Leventhal
March 24th.
- [46:19]
Scott Wapner
All right. Thank you.
- [46:21]
Joe Terranova
Joe T. CME Group. The exchanges and insurance companies. While the financial sector looks bad, those are the places you want to be.
- [46:27]
Scott Wapner
All right, let's keep our eye on these markets. You know we will. We got some great guests coming up and I'll see you in a couple hours to the exchange. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live, weekdays at 12 Eastern only on CNBC.
- [46:47]
Stephanie Link
All opinions expressed by the Halftime Report 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.
- [46:58]
Josh Brown
You may.
- [46:58]
Stephanie Link
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 opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer Taxes was feeling unwelcome.
- [47:29]
Jim Leventhal
Now taxes is an open door, literally, to new TurboTax stores. Meet our experts in person.
- [47:34]
Scott Wapner
Hi. Welcome in.
- [47:36]
Jim Leventhal
They're powered by smart tech and ready to do your taxes for you. Get real time updates while you go about your day. Confident your taxes are done. Right now, this is taxes intuit. TurboTax.
- [47:47]
Scott Wapner
TurboTax store is opening soon.
- [47:49]
Jim Leventhal
Real time updates only in iOS mobile.
- [47:51]
Scott Wapner
Apple.