Scott Wapner (3:59)

We do have to get back to the tariffs for a second. So you're saying 6, 7%. That seems manageable. Yesterday we had an estimate that tariffs would be about an 8% hit on S&P 500 EPS. Today we have Barclays coming out saying in part, we estimate that this latest tariff announcement would amount to a low single digit drag on S&P 500 EPS if implemented and not rolled back this year. Josh Brown, I'm going to come over to you. What do you think? Do you think this potential hit on S and P earnings, is this manageable at low single digits? High single digits? And what do you think about the idea of Trump and XI meeting later today? Is there a risk for more volatility out of this meeting?

Jason Snipe (4:34)

The benefit of having lived through this already is that there are takeaways. The first takeaway is that these headlines, while they will produce day to Day volatility in actual fact do not lead to a more volatile atmosphere than usual, as a matter of fact, and not a lot of people notice the VIX was structurally higher during the Biden presidency than it was during the Trump presidency. So that's not going to be a day to day phenomenon. On any given day, you might have the market lurch this way or that because President Xi has a beautiful call with Donald Trump and it was a perfect call that might be good and then maybe he argues with the woman from Mexico and that's bad. But like if you're a long term investor, you already know you could safely tune all of this out. If you're a short term trader and you want to like play the tariffs, nothing I say is going to be relevant to you. You can tune me out. So I talk to long term investors. I talk to people that are focused on the reasons why they're investing. I don't talk to people who are delusional enough to think that they can read the minds of world leaders and try to divine like buy and sell orders as a result of that.

Scott Wapner (5:56)

Jason Snipe, want to get your take on this? Are you concerned about more volatility? You know, Josh just mentioned that during the Biden administration we saw more volatility than the Trump administration or Trump 1.0, I should say. But you know, Monday we saw a deep sell off on the idea that these tariffs would come into place. We saw China retaliate today. The futures were lower. Obviously the markets rebounded. Is there just risk in this market with the idea that this call might not be beautiful as Josh said it?

Frank Holland (6:19)

Yeah, no, I think obviously we have seen the first in the last couple of weeks. Right. We saw the news from Deep Sea and we saw a lot of volatility over that. It was kind of shoot first, ask questions later. The tariff talk, which has been not necessarily priced in the market, but we've known a lot about this. And now, you know, we have conversations on Monday and then now there's 30 day delays. We do know that these are negotiable tools. Right. So at the end of the day we don't pay too much attention to, we understand the potential impact it does have on earnings. But to Steffi's point, on a lot of the pieces that she, she mentioned earlier, services ism will get that in the expansion territory. As she mentioned, that manufacturing number was very positive for the markets. And then I look at some of the mean reversion traits. Health care up 7% year to date. The RSP, equal weight, doing better than it did last year to start the year. So there are a lot of things to like and earnings growth, to Stephanie's point as well, in double digit territories, you know, and I think about other areas of the market that are starting to grow. So for me, I like what I'm seeing thus far in earnings season. We're getting the report cards, we're seeing what fourth quarter has looked like, which has been abundantly positive. And that's why I continue to take bullish the market.

Scott Wapner (7:30)

Brian, coming over to you, you live down in Florida by what some people would call the Gulf of America. Are you worried at all about this trade war, the trade tit for tat, whatever we want to call it, but specifically tied to this President Xi and President Trump talking later today, according to the White House and what might come out of that, whether it's what the President says or other actions between the two nations.

Bryn Talkington (7:52)

Well, Frank, first of all, thanks for having us. We really appreciate it. You know, as part of our job, we not only have a US Strategy product, but we also have a Canadian strategy product. Then we run portfolio. So let's focus on the Canadian strategy product. Late on Sunday night, I was up writing a note to go out to all of our clients around the world. And I think it really focused on, I know it really focused on control, what you could control. We want to be known as the voice of reason and not be reactive. I think the one thing that Stephanie talked about absolutely positively has to be dug into a little bit more. As strategists, for 35 years, I have a discipline and a process. So you look at valuation, growth, operating performance and price performance, we do it for the markets and for our portfolios. So where am I going with this? If you take a look at the operating performance of companies, whether that's return on invested capital, return on assets, return on equity, and then also layer in some things from the income statement, including margins. These companies in the United States look amazing. So what does that mean for Canada? Our note to our Canadian clients and our global clients is focus on quality, focus on cash flow, focus on discernibility of earnings. When you do that, you will find companies that can, will and should quote, unquote, I said in the report, outperform Canada's volatility around the world. When you default to fundamental metrics like that, I know it's really difficult. I know that we're in a binary buy, sell type of market trying to create opportunities. But when you stick to a discipline and a Process, Frank. That's how you dilute all of these types of volatile moves.

Scott Wapner (9:31)

All right, so with that in mind, Brian, I want to show you guys a chart. This is the PVH chart over the last week. You're going to see a noticeable move when it comes to that PVH chart. A big dip. PVH is facing some issues in China right now, separate from the tariffs, according to the Chinese government, It's a separate issue. They say it really has to do with sourcing. We're not going to get into the weeds of it. But when you look at pvh, is that the risk that we have to worry about when it comes to a lot of companies, especially when it comes to the US And China, that there might be issues that come up with our companies or US Companies that are, quote, unquote, not related to the tariffs, but potentially related to these trade tensions? Steph, I just saw you not.

Josh Brown (10:05)

Well, I mean, I think we just spent the last five years getting out of China. US Companies leaving China, coming here on shoring, reshoring, we talk about that all the time. They did go to Mexico as well. Well, so there is that risk. But they're also going to India. It's one of my favorite places to invest internationally because they're going to be a huge beneficiary, but they're going all over the world. So I think companies have a lot less exposure to China. Sure, there's headline risk like the pvh, as you mentioned, stocks barely down, though, Frank. Right. So to me, yeah, there could be headline risk. But if the fundamentals of the companies are strong and to Brian's point, the growth is there, and again, the margin stories are there, that's when you get an opportunity, right? You want to be buying something of these headline risks. If the fundamentals are strong.

Scott Wapner (10:52)

Agree, Brian. Agree. Jason.

Bryn Talkington (10:53)

Hey, first of all, with respect to pvh, you have to kind of take two step, two steps back, I'm sorry, and think about operationally, are they making some. Operational risks, are they making some. They made some bets that did not go the right way. So that could potentially provide some opportunity as they kind of clean these things out. But at the end of the day, it really does come down to thematically and where they're operating and if they're making money and what kind of product that they have. And I think some of that is what's the headwinds with respect to PVH right now.

Scott Wapner (11:23)

So, Josh, coming over to you, I just heard you, you sound like you had a thought about PVH and just Some of this headline risk, I don't even.

Jason Snipe (11:30)

I've been working on Wall street for 25 years. I don't even know what PVH is. I want to make the point that the Chinese stock market has been closed for Chinese New Year. It'll reopen. The best proxy we have for how nonsensical this whole conversation is is the fact that the FXI and Kweb are both trading up between 3 and 4% right now. So that gives you some sense of where risk appetite is for when those markets reopen. FXI is really interesting. It's a BlackRock product and effectively what it does is it owns the H shares. These are mainland Chinese companies with tickers that trade in Hong Kong. This is, this is indicative of a situation where everyone around the world now understands that this is a reality show. The intention of announcing tariffs is to hold the news cycle in the palm of his hand. And none of this stuff is new. There's a New York Times article from six years ago talking about this moment in 1988 where Trump was outbid way before politics for a piano that was used in the movie Casablanca. And he was so mad that the bidder was Japanese that he went on TV with Diane Sawyer and said, we have to do tariffs. These countries don't respect us. We need to tariff. We need to tariff. This is 40 years of the same rant. So maybe it works, maybe it's great, maybe it's beautiful. If you're an investor and you're throwing out to bring Brian Belsky's point, you're going to throw out high quality cash flow generating companies because of a tweet. Maybe it's a good sign that you need to turn over your portfolio management to a professional and turn off the, turn off the news.

Josh Brown (13:14)

Frank. There were speculation that we would put 30 to 60% tariffs on China. So when it first came out and I saw that it was 10, I was like, wow, that's way better than I thought. That's probably why the FXI is actually rallying at the this point.

Scott Wapner (13:28)

Yeah, just to put a button on it, Josh, PVH is the parent company of Calvin Klein, Tommy Hilfigers, so brands, you know, you may not have heard Frank clearly.

Bryn Talkington (13:35)

Let me write that down.

Scott Wapner (13:38)

Josh gets a little snarky when he's away from the desk. Moving on. Some big earnings coming up, obviously. Alphabet. I want to get everybody's take on what you're expecting from this. Obviously we're just a week or so removed from deep Seek a lot of concerns about AI infrastructure companies, Google, Google Cloud services certainly one of the bigger ones. Brian, I just saw you nodding.

Bryn Talkington (13:59)

Yeah, I mean we made a big bet in Alphabet last year when it was down. We added to it and we don't own any Meta and you know, Meta was a big darling and we think Google's underperformance or Alphabet's underperformance really gave us a great opportunity. I think if you look at the majority of generative AI unicorns are actually on the Google platform. Not many people know that, number one. Number two, I think too that people aren't paying enough of a premium into Google with Alphabet with respect to YouTube TV. I really think that the, the streaming of sports, we talk about Netflix doing that. I think this is something that not enough people are talking about and it's going to be a huge, huge tailwind for Alphabet.

Frank Holland (14:41)

Jason, listen, I remember when obviously they reported last quarter and there was a lot of concern going into the print and they blew it out, right? So EPS was up 37%, revenue was up 16% and Google Cloud, which again was not profitable only a few years ago, was up 33%. So for me I just want to see more of the same. There's obviously concern around search and all the DOJ cases around the world. So for me, I think as long as they continue to pay attention to the their core business, which I believe they have, they'll be just fine and it'll be another bang out quarter for them.

Scott Wapner (15:16)

By the way, a lot of investor confidence when it comes to communication services. The XLC is on pace for its 12th straight positive session to be its longest rally on record since February of 2021. Josh, when you get your take. Alphabet earnings coming up.

Jason Snipe (15:30)

Yeah, this, this, this matters to me. I'm in the position, I've actually been trimming it and the stock's done really well. It's held up better than even I would have expected. But I'm not adding to it ahead of the print and I do think the action Frank is going to take place in the Q and A segment, more so than it will with the actual numbers themselves. But let's just go through them. 96.7 billion in revenue is the expectation that would be 12% year over year growth. Not terrible but for a magnitude mag 7 especially in light of what matter has been up to, not great cash flow expectations. 30.3 billion which would be about 30% growth. That's a little bit better of a number. And earnings per share should be 29% higher also good. Everyone's going to want to hear about Google Cloud. They're going to want to hear if there's any kind of deceleration Based on what we heard from Microsoft. Microsoft's cloud business was fine but it sort of underwhelmed and that's really what I think the risk is here. The other thing that I would point out though is the stock is going into this print very strong. It's got an RSI of 63, it's 9% above its 50 day, 17 above the 200 day. So there is a world in which this company going into the earnings already at an all time high maybe is already pricing in a good result and you might get a little bit of a pullback if it's not a great result. So that's what my mind is at going into the print. Go ahead.

Scott Wapner (17:04)

Why were you trimming though? Why trim going into the print? Did you trim post Deepseek or was there some other reason to trim before that?

Jason Snipe (17:11)

Yeah, I pre, pre deep seek to be clear. It's just, it's just a name where it's gone up a lot and I felt that Amazon was, was the better bang for my buck in 2025. I just think there's more upside in Amazon and I don't want to like overwhelm the portfolio with, with mag7 names. So of all of them I think Google is okay, not great. I think Amazon, the situation looks like it could be great.

Josh Brown (17:38)

Frank, I don't own it but isn't it really about the usage of Gemini because they hadn't made so much progress versus the other MAG7 in terms of the AI adoption option rate? Isn't that what this is all about? That's what the investors really want. Isn't the expectation really low?

Scott Wapner (17:53)

I think it's two pronged. It's also the growth of Google Cloud. I mean sure an important part of.

Josh Brown (17:57)

The business will be that will be strong. Microsoft was fine even though it was a little less than expected. 31% at Azure, that was pretty good. But it will do fine.

Scott Wapner (18:04)

But I would imagine there also be a question about CapEx. So we saw Metta hold steady on 65, we saw Microsoft hold steady on 80. But I would think that there's still shadows of deep seek in people's minds like do you really need to spend that much on AI infrastructure? Do you really need these advanced chips? You know there's brighter minds than me when it comes to AI infrastructure but I think a lot of investors do have those questions.

Josh Brown (18:24)

I think CapEx is going to stay exactly the same. I don't think it's going to change at all and I don't think it changes this year. Next year, maybe in two years, maybe it's a little less next year than this year, but it's still going to be huge in the $200 billion plus range this year and next next year in my mind because I think they can't afford not to.

Scott Wapner (18:42)

Yeah, well, Josh just mentioned it. Let's get to our chart of the day. Our chart, the day today. Well, it's Palantir. I actually didn't mention that. Surging to a new record high on strong earnings, but just the theme, I should say. Let's bring in the investment committee member, Bryn Talkington. She owns this one. Brent, I'm looking at the chart right here. Post earnings up over 22%.

Angelica Peebles (19:02)

Yeah, it's really just amazing, you know, in 2024 for investors who are listening to the earnings call woke up that Palantir has always been. But now with the commercial business growing, a pure play AI enterprise software company. And I think that you're seeing that today with the stock up 22%, the stock is still very under owned and I think that's one of the reasons the stock is up so much as people just don't really, not really pay attention to what this company is doing. Their commercial business grew 64% year over year, 20% quarter over quarter. I think when you have a company that's under owned, it's in the square perfect spot of AI and they have zero competition or any. No competition that I know of. I think that's why you're seeing this huge reaction on the upside.

Scott Wapner (19:54)

So Brent, I mean you're talking about a huge reaction. How about the huge valuation as well? You concerned about this valuation? Stock trades about 200 times forward earnings and then is there any other. I guess we can call it Doge risk in this?

Angelica Peebles (20:07)

Yeah, I mean do Doge risk. No, I think there's like Doge reward because when you have the government having the, the inefficiency of how we do cost plus the DOD with Raytheon and Lockheed, I think that ends. And you have a company like Palantir that are already has all of the, the moat around government projects that's just going to continue to amplify, I think around the valuations. I mean the viewers will know if they remember January 2nd or 3rd. I sold over half my position in the 70s because I bought it at 25. And so it's like that's an Amazing return. And so I do think the valuation is really high. I think investors, if you don't own it, you are in this tough spot spot. Because this is a darling. It is expensive. But don't look at P E. This is like not a stock. You look at P E, you look at their margins, you look at their growth, you look at where they are and take opportunities to build a position because it will have some weakness over time.

Scott Wapner (21:05)

So, Josh, you just heard, you chime in there, by the way, stocks up over 500% over the last year. Josh, you were about to say something about the stock and the company when I said, is there any doge risk? Just asking basically because a lot big part of their business, of course, is tied to the government.

Jason Snipe (21:20)

I want, I want to, I want to congratulate Brin. This has been, this has just been an incredible trade or investment for her. But it's worth pointing out, as recently as last fall, this was one of the most heavily shorted stocks, not just in dollar terms, but just in terms of like how widespread the short thesis on, on the company had been. And obviously Trump taking office changed that narrative. So probably some of the short squeeze had happened prior to today. But I can't help but think there's got to be maybe on the option side. There's. There had to have been a lot of money betting against the name when they report admittedly great quarter but get this outsized of, of a move. So there's probably some element there as well of the end of the short squeeze that let's say maybe started six months ago. But this was the best performer last year in the S and P. It's the best performer again this year thanks to today. And I can't believe I don't own it. I actually actively hate myself.

Scott Wapner (22:28)

Josh, to your point, stock crossed 100 bucks for the first time today off this earnings move. Brian Belsky, very quiet on this one. You actually own this company.

Bryn Talkington (22:36)

Well, there's something about being humble sometimes we get it right and we bought this company in May of last year and then we doubled our position before the election. And here's why. As we looked at 2025, we said, you know what the make seven, we want to be more neutral and we want to be overweight on the barbell names like Palantir, Oracle, that type of thing. And the trade has turned out why? Because I think of the broadening out, number one, number two, the broad ownership of the Mag 7. But more importantly, with respect to Palantir, when you talk about Exceptionalism of fundamentals, exceptionalism of the product. That's what it does. And that's from a stock picking perspective. That's how that company is able to be far and above the others in that space. Yeah, we know all these trading aberrations, we know all this short squeeze stuff. We know about this momentum thing. But period, it's a great company with a great product with an amazing leader. And that's the kind of name you want to own.

Scott Wapner (23:30)

Again, Palantir shares up about almost 23% right now. Bren, Brian, take a bow. All right, coming up next, we're tracking the trades. Josh Brown just added a new healthcare name to his portfolio. We will reveal it coming up after this break. And then later, we're getting you set up for earnings from Chipotle, amd, Snap and Uber. Halftime. Back in just a few minutes.

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Scott Wapner (25:06)

Usaa. Welcome back to Halftime. Josh, you have a new buy in the health care space. It is Bristol Myers.

Jason Snipe (25:14)

Yeah, God help me. Here we go again. If you, if you liked how I did on Pfizer, you're, you're really going to love this one. This is, look, this is, this is technical, but I want to say a couple of things about health care very quickly. Number one, it's the best performing sector in the S and P this year. Kind of neck and neck with communications, but most of what's happening in communications is Metta making all time highs. So take, take that one with a grain of salt. Health care Is off a little bit today, but year to date up 6.55%. And it was one of the worst sectors last year. Obviously going into an election, people don't get bowled up on pharmaceuticals. Okay, fine, so that's passed. I think what's really interesting about Bristol Myers, this is a version that Pfizer should look at for how a turnaround actually happens. They have a legacy portfolio too, just like Pfizer, but now they've got a growth portfolio and it's focused on immunotherapy and oncology and that's a very hot area. And the stock is now working. They're going to report tomorrow. So if I'm hiding, you'll know where I am. 11.6 billion in revenue, which is give or take, take flat year over year earnings of A$47. But I think what people are really going to be keying in on is, is the continued improvement of the growth pipeline relative to some of the legacy drugs and the stuff that's coming off patent. Technically though is what I want you to focus your attention on. The stock is 3% below 52 week highs. RSI at 57 not yet overbought, only 2% above 5200 day. But this is a name that looks like it's going to break the November high and just keep on going. If you get a good number in the morning, that's your catalyst. That's why it will work out. If not, I am trailing it with a stop and it's on my best stocks in the market list for a reason. People are accumulating this name.

Scott Wapner (27:10)

I mean Josh, only because you mentioned, I do want to ask you about patent cliffs. I'm looking at Eliquis Generics for that next year. Eliquis is about 20, 25% of revenue. You talk about their growth portfolio. Opdivo patent cliff in 2028. No concerns about that. Is this a long term hold? Worried about that when so much of the revenue is tied to two drugs, they're going to fall off that patent cliff in just a few years.

Jason Snipe (27:33)

Well, this is the nature of investing in pharmaceuticals. They've all got patent clips. The question is, are the bets that they've made in oncology and immunotherapy or is that the next growth area for the company and will they be able to execute? And the street is aware of everything you just read to me and the street has decided that they will execute. They may not. But you know, from, from my perspective, buying it on the technicals, I won't be around in 2028 I have cliffs of my own to worry about.

Scott Wapner (28:06)

Brian Belsky as we look in the far pharmaceutical, the biotech space. You're also a shareholder of Merck. We're going to show that chart. Talk about a cliff. Shares falling double digits right now. Your view on the quarter?

Bryn Talkington (28:18)

Quarter was bad. Last quarter was not very good. You know, we own the stock because of dividend growth, quite frankly. Just as we own Pfizer too. I mean I think the problem with the pharmaceuticals is something that Josh talked a little bit about and the reason why we're underweight the sector. That's probably why you should be overweight by the way. If we're underweight that. But given the fact that so many people are hating on health care, you know, the reason why we're over underweight by the way is because of the kind of mood that we saw in Lilly. I think too many people were in Lilly last year. But I do think some of these legacy big drug makers, it's going to be really difficult to buy them for fundamental reasons. In terms of pipelines and growth, we own them for very different reasons, namely dividends and dividend growth. So as the stock gets cheaper, the yield is going to look more attractive.

Scott Wapner (29:04)

You also own Pfizer.

Bryn Talkington (29:05)

Your take, same thing, same drill. You still have a bit of a Covid hangover with this company. Again, we own Pfizer for the dividend. Here's a company that has not cut the dividend for over 10 years, yield above the market and also has steady earnings but not great earnings. So again they're reaffirming their longer term kind of vision. But at the end of the day we own it for the dividend.

Scott Wapner (29:27)

Alright, one more. Might as well just run through them. Amgen reports after the bell later today.

Bryn Talkington (29:31)

Yeah, we own Amgen and a few portfolios, dividend growth and value. Now Amgen is a place we think you should be. Amgen and Gilead.

Scott Wapner (29:39)

Why?

Bryn Talkington (29:39)

Biotechs. Biotechs with respect to pipelines. And Amgen's done a really, really great job in terms of their cash flow and their overall pipeline. So Amgen is a name that we like.

Scott Wapner (29:49)

Let's talk a little more broadly about health care. Steph, I want to come over to you. Wolf out with a note. Health care finally overbought. According to the note, they see more upside after a breather. As Josh mentioned, it was a laggard last year. One of the leaders this year while UnitedHealthcare.

Josh Brown (30:02)

And that's a name that is new for me over the Last two and a half weeks, that's the past year it's only up 5%. And it is the number one managed care company in the industry. Great management team, great balance sheet. $18 billion buyback, new buyback, by the way, way I think the medical loss ratios, margins, I think that they have peaked on the upside. Right. You want them to be lower. So I think that the worst is behind these companies. And I think as you go through 2025, you will see a gradual improvement. By the way, the only pharmaceutical company I own is Lilly and that stock is still down from 960 bucks. Right. So it's still down about 20% from its highs. And I do think that they have an excellent franchise, not only weight loss and diabetes, I get that, that's the excitement. But they also have oncology, neurology, immunology. And their total revenues grew 44% last quarter and that's when the stock fell 13%, which is when I bought it. But I think if you exclude the exciting parts of their, of their pipeline, diabetes and weight loss and all that, that other businesses that I've talked about, other pipelines, that's growing 17% as well, way better than Bristol, Pfizer, Merck combined. So to me, I think you take advantage of the pullback, Jason.

Scott Wapner (31:13)

You have some broad health care ownership. UnitedHealth, the IBB, the biotech ETF, also AbbVie.

Frank Holland (31:18)

Yeah. So I'll start with Abbvie, which I think had a really great quarter. And to Josh's point earlier and just kind of these, these, these cliffs, you know, these patent cliffs.

Josh Brown (31:28)

Right.

Frank Holland (31:28)

So Humira was, was their main drug two years ago. Now it's, it's no longer exclusive to, to, to Abbvie. And you think about the other drugs that were in the pipeline, Skyrizi and Rinvo, that are up 50% year over year. And we looked at the quarter that they just had, which was phenomenal beat on the top and the bottom. Obviously, these other drugs have done really well. And you saw it in the price action with the stock Post earnings up 6%.

Scott Wapner (31:50)

All right. By the way, the Pfizer CEO is going to sit down with our Jim Cramer on Mad Money tonight at 6pm Eastern. It should be a very interesting conversation there. And now we want to head to our headlines with Angelica Peebles. Angelica.

I (32:03)

Hey, Frank. The White House is preparing an executive order to eliminate the Department of Education. That's according to two sources who spoke with NBC News. The move makes good on years of campaign promises Trump has made to abolish the agency. And it comes as the president signed an order to expand school choice last week. However, President Trump needs to have congressional approval to eliminate a Federal Agency. About 20,000 federal workers have accepted the buyout offer the Trump White House put forward last week. A senior White House official told axios, well, that's about 1% of the total number of the federal workforce. The administration expects more employees to take the offer, which is open through Thursday. And on Sunday, when the Kansas City Chiefs face off with the Philadelphia Eagles in the Super Bowl, a White House official confirms to NBC News that President Trump will be at the game in New Orleans. He'll also sit down for a pre game interview with Fox News. Frank, back over to you.

Scott Wapner (32:56)

Angelica. I think the Eagles are going to also win by a very large margin.

I (32:59)

I know you're rooting for your birds.

Scott Wapner (33:01)

But I mean, I'm just, this is reporting, Angelica. I'm not. This isn't fandom. This is just reporting. I think it's a pretty solid chance. Angelica Peebles back at CNBC hq. Angelica, come on, more positivity. Come on. All right. Coming up next here on halftime, we're taking you inside Brian Belsky's playbook. He just snapped up three new stuff stocks in the consumer space. We're going to reveal those names coming up. Halftime's back in just two minutes.

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Bryn Talkington (34:16)

How are you? So listen, we had a great trade in Lulu. We were very lucky and we bought Lulu and put it in our value portfolio and it was up 53%. Lulu obviously is not a value stock, but given the fact that the first part of 2024 massively underperformed, we thought there was an opportunity there. That's how you should manage at least part of value. So guess what is value? Nike. So here's why we're going back into Nike. I've not owned Nike since 2016. I think from an operational perspective, they are completely coming back and rebuilding it. They brought back an old CEO. I think ultimately they're gonna have a new CEO. They're focused on the shoes, they're focused on the product, they're focused on old school stuff. I think that makes a lot of sense. Again from that with respect to some of the other moves that we made, especially in our small mid cap, we bought Warner Brothers Discovery. Here's why Cash content and consolidation is been our theme in communication services for five years. I think from a streaming perspective, the way that Warner Brothers is breaking apart that company into two sides, it's a little goofy. But at the same time I think there could be some consolidation play there. Now onto the exciting stuff. We sold QSR and then we're funding it for two stocks. Josh's favorite, Shake Shack. I got to get on the Josh Brown train. I think Shake Shack is to Gen Z's what Chipotle was to the Millennials. I really think that's the play there. And then you like that Josh.

Scott Wapner (35:43)

And then wait, I don't even know what's the, I don't know. So think about.

Bryn Talkington (35:47)

So I've got a couple, I had a, I funded a couple millennials colleges and you know how much money they spent at Chipotle through those years. So I'm guessing that a lot of zers are spending a lot of money at Shake Shack after the bars close. But at the end of the day too, the gen zers want experience. They want that type of fun atmosphere and that's what Shake Shack gives them. Speaking of experiences, spending their money chewy online pet food. We think Gen zers and millennials are spending a lot of money there.

Scott Wapner (36:18)

All right, so we got two oohs from Josh Brown. One was for Nike, one was for Shake Shack. Shake Shack up about 2.5%. One, we start with Shake Shack. We're just showing the charts. Second ago, about two and a half percent. Start there and then go to your on Nike, if you don't mind.

Jason Snipe (36:32)

I mean I'm a, I'm a long term shareholder in Shake Shack. I would just, I would own it. I would not trade it. I think Brian's going to make money there. Nike is interesting to me. So I, I can't buy charts like this, but if I were like a value disciplined investor, I would buy the stock. I think it's going to win work do you know how many times this stock has had negative three years in a row share price since its history in 1980? I think it came public. Zero. What just went on in the last three years has never happened before. An unprecedented horror show for Nike. And on that basis alone, it's probably not enough. So I'll tell you two other things. Things. The CEO is doubling down on athletes, which is what they should have done to CEOs ago. That's what they lost and it's cool again. There's a rapper from London named Central Cee and he's all about Nike tech, which is the, which is the performance fleece. Nike tech sales are taking off. Central Cee is helping to drive Nike tech in the culture, in the conversation. And before you know it, you'll see shoe sales come along with the apparel sales. And this might be the worst period of time Nike's ever gone through. Coming to an end in 2025.

Scott Wapner (37:51)

Yeah, big Central C fan. He and Dave have a great album. Also Luka Doncic going to the LA Lakers might be another boost for Nike. Very quick, before we go, Steph and Jason, some of Brian's buys. Nike Chewy, Warner Brothers Discovery, Shake Shack. Quick take from either one of you.

Josh Brown (38:04)

I'd rather buy deckers down 21% in the past week if trades at 4 point discount to Nike. I think Nike is fine, but I think you have to wait two years to see results. They haven't invested in years and so it's going to take time. Meanwhile, Deckers has Uggs, they have Hokas. We were just talking about it. They're growing both those segments double digits. So I think that's the one you want to buy.

Scott Wapner (38:25)

Snipe, Quick thought.

Frank Holland (38:27)

I'm not really in retail right now for a myriad of reasons, but if, if I was, was going to be the, the name that I like the most, which is a little different than obvious players, is Walmart.

Scott Wapner (38:37)

All right, there we go. Walmart actually hit an all time high or 52 week high yesterday. All right, coming up next here on halftime, Mike Santoli's midday word. We are back right after this break. And we are back on halftime. Senior markets commentator Mike Santoli is here with his midday work.

Bryn Talkington (38:56)

Mike.

J (38:57)

So Frank, it's the kind of day I think most investors might prefer, which is we're kind of reacting to earnings after the close and before the open. It's the market has a lot of two way action within it. There's a net bias to the upside, I think because of just kind of relief that we're not playing headline ping pong again. But I just wonder exactly how far we can, we can take that because you always have in the back of your mind, you're going to have to be aware of the, the sort of tariff debate incursion, who knows when we're going to settle all that. I think it's all happening very interestingly just in this three month range as we really have been sort of chopping right near the highs, only 2% off the highs in the S and P. It's not like we've really under stress, but there's been a lot of churn and turnover of leadership. And I think you have to be alert to the idea with health care starting to outperform, maybe there's some sort of emerging new leadership or character change to the market underway.

Scott Wapner (39:51)

I asked you this yesterday, Mike, Surprised about what you're seeing in bond yields. I mean, we're not really seeing anything. And we do have some new headlines when it comes to tariffs. China is shooting its tariffs at midnight. Now, you know President Trump, President Xi are going to talk. Do you think there's some risks there for the market about what comes out of there? Maybe what the president says, maybe actions by either country.

J (40:09)

I don't know if the bond market has a clear playbook of this is what you're supposed to do. If we get to tough tariffs, either you're going to start pricing in maybe a little bit of risk of economic slowdown if you think it's going to be punitive or do you decide that inflation expectations are going to become broken loose again to the upside? I don't, I'm not particularly surprised, you know that the jolts number was pretty downbeat today. You got a bid in bonds, meaning yields kind of came in a little bit on that because everyone's focused on the fact that what the Fed looks at in terms of economic readings aside from inflation is job market softening up. So not really surprised. I think stability in the bond market at these yield levels is probably okay for stocks.

Scott Wapner (40:48)

All right, 10 year right now for 4.52%. Mike Santoli with his midday word. Mike, thank you very much. All right, coming up next on halftime, we have this set up. Stay with us. Welcome back to halftime. Let's get these set up on some key earnings coming our way in the next 24 hours. Let's start off with Chipotle. It's after the bell today. You can see it's up just over a half a percent, almost three quarters of a Percent. Steph, you on this one?

Josh Brown (41:12)

I do. So I think they have to do 5.7%. Same store sales or better. Pricing has to be up about 1%. Operating margins could be up as much as 70 to 80 basis points. But the big commentary is going to be about avocado prices and tariffs and that sort of thing. So luckily, the Stock's actually down 12% from the December peak. So I think the expectation is fairly muted.

Scott Wapner (41:32)

All right, and next up, we have AMD that company reports after the bell. Bram Belska, you on this one.

Bryn Talkington (41:38)

Yeah, it's part of our barbell. We've been adding a little bit to it as it's been down. I think advantageously, we still think that they have a great product. And we're going to really listen hard and carefully to Lisa's messaging, which I think is going to be positive, ready to go.

Scott Wapner (41:52)

Belsky, you also own Snap that also reports after the bell.

Bryn Talkington (41:56)

Yeah, we love Snap. We love the alternative in the new media side that that's what we added to Reddit in the SMID cap. We do think that this company still throws off good numbers and I think they're going to beat.

Scott Wapner (42:05)

All right, Uber also reporting tomorrow before the bell. Josh, Jason and Belsky all own it. Josh, why don't we start off with you.

Jason Snipe (42:12)

I think this is the most mispriced security on the NASDAQ. I think it's 50% below where it should be trading. This is a company that probably is going to grow cash flow next year and the year after by 50%, has the wherewithal to buy back a lot of the float and is just getting literally no credit for the way that Autonomous could be transformational to its own business because people are so caught up, worried about the cyber taxi. I'm long. And if they crush the stock for some reason, I'll buy even more. I cannot be convinced that this shouldn't be a triple digit name.

Scott Wapner (42:54)

Jason.

Frank Holland (42:55)

Yeah, so I would, I would keep it simple here with this one. They missed slightly on gross mobilities driven by, driven by Mobility, obviously, last quarter. I think that will rebound and we'll see, we'll see a positive return here.

Scott Wapner (43:07)

Steph, any take on this one?

Josh Brown (43:09)

You know, I've never owned it actually, so the valuation has always been kind of hard for me to understand. But clearly they're the industry earnings. But 17 times earnings, you could buy the past. In the past, Josh, it has not traded at 17 times earnings. It has been much higher in terms of the valuation. Not to say I wouldn't take a look at it. This is actually in the XL now and I don't need to own any more industrials because I am already about 5015 percentage points overweight in terms of my benchmark in terms of industrials.

Scott Wapner (43:39)

All right, overshares up just about three and a third percent right now. Coming up next here on Halftime, we have final trades. Stay with us. Are you following the Halftime Report podcast?

Brian Belsky (43:57)

What are you waiting for?

Scott Wapner (43:58)

Look for us in your favorite podcasting app. Follow the Halftime podcast now. Welcome back to Halftime. It is time for final trades. Josh Brown, you're up first.

Jason Snipe (44:14)

New 52 week high in Starbucks, which I'm long great earnings result I didn't get to talk about on the show. But not new all time high. That's closer to 120. Sticking with the trade. Rolling up my stop. I continue to think that the payback from this turnaround hasn't fully happened yet.

Frank Holland (44:35)

Jason Autozone Advanced Auto Part its plans to close 700 stores this year. They will continue to grab market share.

Bryn Talkington (44:43)

Bram Belsky Sonos S O and no had some operational risk last year, but new CEO and it's a great product.

Scott Wapner (44:50)

Step link Last word.

Josh Brown (44:51)

I'm going to go back to deckers. It's down 21% in the past week. It's gone from 38 times earnings to 28 times earnings. Best in class on sale Uggs are gone 16%. Hoka's growing 23%.

Scott Wapner (45:02)

Like the story, Josh, we were just talking about. I'm a Nike guy, Josh. I know you're a Nike guy too. I'm never switching from Jordan. Steph's jumped. Shit.

Bryn Talkington (45:09)

She's all the way off the show.

Josh Brown (45:09)

You gotta try hoka.

Scott Wapner (45:10)

All right, that is for halftime. The exchange starts right now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

Stephanie Link (45:26)

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates 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 halftime reportdisclaimer Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more@capella.edu.