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Halftime Report
Trading Apple at All-Time Highs 10/20/25
00:44:18
Scott Wapner and the Investment Committee debate how to trade Apple as it touches record highs today. Plus, Josh Brown spotlights another stock in his "Best Stocks in the Market." And later, the Committee discuss some of their stocks on the move. Investment Committee Disclosures
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Introducing Fidelity Trader Plus. With customizable tools and charts you can.
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Access across all your devices, try our most powerful trading platform yet@fidelity.com TraderPlus investing.
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Involves risk, including risk of loss.
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Fidelity Brokerage Services llc Member nyse, SIPC.
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How will you shape the future of banking with confidence? Industry consolidation, crypto, the rise of fintechs all create a complex landscape for banks to innovate and grow. EY provides domain led insights to navigate today's fragmented banking sector. So whether you're tackling regulatory inventory complexities, integrating digital assets, or seizing M and A opportunities, EY sees your business from every angle, working together to deliver outcomes that create strategic value. EY shape the future with confidence. 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 rally. It is back on today. Apple hitting a new all time high as well as mega cap earnings draw closer. We're trading the markets with the investment committee. And joining me for the hour today, Josh Brown, Joe Terranova, Jenny Harrington and Amy Raskin. Let's go check the markets at 12 noon in the east, it is green across the board. The NASDAQ is the big winner today. Of course, Apple is playing a big role in that. A new record high. It is nearing $4 trillion in market cap. Take a look at that. Eleven bucks to the upside, almost 5%. It needs to finish the day above 259.02 for a record closing high. I don't know if this has been a stealth move or whatever you want to call it, but this stock seems to be back as word is that the iPhone 17 is driving the strongest smartphone sales growth for Apple and since the pandemic.
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C
All right, come on, be a little bit more excited about it. You and I have been talking about this since the summer and I think one of the things that's important to understand in particular with the Max 7 is where are people in terms of positioning, sentiment and expectations. Yes, we are getting better fundamental news regarding iPhone sales. I saw the figure. It's up about 14% relative to where we were 17 versus the 16 on the first 10 days uptake. But I want everyone to just remember where Was Apple in 2024? Apple was negative on the year. Think about that. Where Was Alphabet in 2024? It was negative on the year. And what did that do that carried forward into 2025, this kind of muted expectation, muted sentiment, muted positioning. Everyone wanted Nvidia. And then all you need is that one spark, that one catalyst. And maybe it was Tim Cook in the Oval Office with the President. I'm not sure if that's what it was.
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A
Maybe you can make a checklist and just say at the bottom all the above, whatever it might be.
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C
But it's a rebuilding of positioning. It's the, the moving of sentiment from somewhat muted to more bullish. And you see it reflected in the price action and strong technicals. And we're seeing it in Alphabet year to date. You saw it earlier in the year in Microsoft and now you're seeing it in Apple. One last point. I'll tell you what, Amazon's going to be the next one. I think it's going to be a 2026 story because Amazon is now getting a little bit of a disappointment because it's not really responding the way people thought in 2025. Watch 2026, Amazon do what Alphabet, Apple and Microsoft did this year.
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A
Let me just, let me just bring in, hang on. Before you get there, I'll come to you guys and I'll get everybody involved, but I want to bring in Steve Kovac who follows this company, this stock. Obviously, as we look at this stock hit a new high. Joe said maybe it's this, maybe it's that, maybe it's everything. Maybe it's the fact that just the company has finally given people a reason to buy a new phone to upgrade after a number of years. The strongest, as we said, since the pandemic. Maybe it's also Tim Cook's diplomacy both at home and abroad that has led this stock on this renewed run. What do you think?
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B
Yeah, the answer is yes, Scott, to all of the above. Just like, just like you alluded to. And part of that is also we're seeing the China rebound as well. So that Bloomberg headline that Joe was referring to, that they are estimating that sales are 14% better than they were a year ago and we've been hearing that since the iPhone went on sale about a month ago, that base model of the iPhone, the iPhone 17, got some of those high end features that we saw in the pro models before that's finally made their way down to that base model. And, and on top of that, the China subsidies are helping out a lot too. Plus we just woke up this morning to just tons of positive chatter from the analyst community. You have evercore adding them to their tactical outperform list you have Loop capital saying the 17 lineup is blowing past all of their expectations. It just showing this thesis that we had last year that I could provide this big boost, that Apple intelligence rollout to get people to upgrade. That didn't happen. That never materialized. And not just because Apple failed to deliver so many of those features. They did early on what they promised to do and then they kind of failed. What we're seeing here is new designs, new form factor with the iPhone Air. All of that is getting people excited. I saw this on launch day. I was standing outside the fifth Avenue Apple store, Scott, and you could just tell the vibes were totally different. People were excited about this lineup. They wanted those new pro phones with that great camera system and a new design. The Air doesn't seem to be selling as well here in the United States, but in China those customers are really hot on it. So look, we're in 10 days time, I'm going to be out in Cupertino. We're going to have those earnings. We're going to get our first real data, the first several days of iPhone 17 sales. And then I'll just talk about what Loop Capital was saying this morning. Look out for the guidance because that might actually surprise to the upside for the December quarter if this momentum continues. Scott?
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A
Yeah. You mentioned Loop and they upgrade today to buy from hold the target to 315 as you said, from 226. So the target had been blown through and now they take it even higher. Great job by the way guys. On the wall that was put together to show all of that positive news around Apple that has led to the chart looking that way. So big props back in, in the control room. What do you want to say? You want to rain on the parade?
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D
I totally want to reign on this.
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A
Parade because she doesn't own it.
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D
I feel like I'm sitting planet here. So Joe, when you said like okay, Google Alphabet could be the next Apple or Amazon, so it could be the next Apple, what that means we're going to be up 1% on the year because that's where we are. We're up 1% on the year.
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C
I said next year.
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D
Next year. What does that mean? Yeah. So next year Amazon is going to be up 1% for the year. This is, this is crazy to me that we're this excited about it. We're up 7% in the last 52 weeks. That's half of what the markets returned. If you look through all the Mag 7, Apple has the worst setup trading at 32 times earnings. Even after this news, analysts expectations are still coming in for like 9 to 10% earnings growth ahead. Everything else out there has either a better P E or better earnings growth ahead of it. And I just think like, I don't know where all this excitement is coming from. It's not in the huge air space. It's not. It's just to me, I'm like, what are we talking about? Why are we getting so excited about something that's up 1% on the year, 7 1/2% over last year, 52 weeks. It's just like none of the numbers look compelling to me. I could look out like far past the Mag 7 and find tons of things that I think have a better, a better earnings growth story, a better valuation story behind it. You know, I sold, I sold next Tara a couple of weeks ago because the numbers were not even this compelling. It was 23 times earnings with 8% earnings growth. And I sold it because I thought that was too expensive. So I don't see how we get this pumped about it. Like, yeah, from a new iPhone perspective the story is good. But from a valuation fundamental analysis perspective, it's boring.
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C
Wow.
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A
Stocks. The stocks up 30%.
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C
The stock is up 30% since the beginning of August. When I came on air, we talked about it. I said this is a moment that.
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D
Is clearing of today.
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C
It's up 30% since the beginning of August. When we came on air and we highlighted it, we said this is the moment that we believe Apple is about.
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D
To make the move 30% and be done.
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C
No thank you.
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D
Like why should it go higher from here?
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C
Momentum.
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D
Josh, respectfully, I know your team Joe, you're team Joe, no risk.
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E
Just respectfully, there are a lot of things that, there are a lot of things that I just choose not to have an opinion on. This is technology. And I have to tell you, the thing that none of us are saying out loud but is like buzzing like wildfire among Silicon Valley people is that Apple has a secret project underway for employees only. It's their own in house chat bot codename is Veritas. It is not available to consumers right now, but it is probably the early stages of what Apple's AI is actually going to be. Apple intelligence was a bust. We all know that. It's not that it doesn't work, it's that it didn't drive people to say I have to have the new iPhone and the 17 is doing well, probably better than myself and most other people really had given them credit for. And I think that's why you're seeing the stock at a high. But what takes this higher? What, what, what justifies 30 times earnings, which is admittedly very high for a company with this level of growth? What, what could. The only thing that could do that is a Chat GPT that Apple develops and releases in its, in its App Store as its own in house AI available to consumers. And the buzz right now is that that's going, that's a thing that's going to happen that's not in anyone's numbers. So right now, OpenAI's app, Chat GPT is the best app for AI in the app Store. And then we also know Apple's heavily reliant on, on Gemini. But the thing is, Apple employees are now using Veritas and they are getting contextual answers based on their own personal life, their own personal history in using that. Well, if and when Apple decides that they want to roll this thing out, that's a whole different story for the stock. And that's the thing that I think nobody has in their numbers, but. Or their expectations. And that is the most important thing that could happen.
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Let me get Steve Kovac back in. You want to respond to any of this?
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Yeah, I want to connect a little bit here, Scott. What Joe and Josh were just talking about. So look back three months, Joe kind of took the words out of my mouth. What happened three months ago? There was that Oval Office moment. The tariff monkey got off Tim Cook's back, at least temporarily. The worst of the tariffs aren't being absorbed. We can see, we could see the relief in the stock from that very moment and into the iPhone 17 cycle. On the AI front, Josh is exactly right to point this out. I would just note, though, Apple is only using that Veritas product that he's talking about. That is not ever going to be a public product in the App Store, so to speak. It's going to be baked into the iPhone. Right now, those Apple employees, the people I've spoken to about this, they're just testing the system on a kind of bespoke app that they built just to test and make sure the system actually works when they intend to launch it early next year. And it's going to be baked right into Siri. Siri. At least this is the goal. Not saying they're going to achieve it, but what they're trying to do right now is turn Siri into Chat cbt. So you don't even need to launch a separate app. You don't even need to go to the App Store. To do all that kind of stuff is baked right there in Siri. That was the original promise they made last summer. Didn't deliver on it and now they're adding even more. They're going to really tap into the web search and things like that. And we can't forget about the DOJ case with Google. That also unleashed a lot of the concerns about them partnering with Google on the AI front as well.
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A
Guys, give me a minute. Josh, before you jump back in, I want to hear from Amy. She owns the stock too. What do you think?
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F
I actually have a little bit of a different view. I look at Apple as like the ultimate staple and 30 times for a staple that's generating a lot of cash flow and has a, even a middling earnings growth I think is okay look at Costco at 50 times. So I think there have been really good stewards of capital. They haven't poured a ton of capital into AI. They're going to leverage other people's capital to sell the phone. So I think it's fine. I don't expect huge earnings growth, but I don't they, they have customers locked into their ecosystem and they're not going away anytime soon. And again, good stewards of capital buying back a lot of their shares, sort of doing the right thing and plodding along. And so I'm, we're owners, we haven't been big buyers but we're holding.
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D
I have a question. So if your owners like would you, if you had fresh new cash today, would it be a core holding today or is it mostly in your clients portfolios? Because it's a big position, you have a low cost basis, you have a huge capital gain and you can say to yourself look, there's no reason to go down 20%, there's no reason it should go down 30% so why pay the taxes?
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F
I actually think it's relatively defensive holding. So we don't have a huge position where underweight versus the, the benchmark but we do have large capital gains. But I don't have any problems putting new money to work in this market. The market's 23 times so Apple being 30 times isn't outrageously expensive to me.
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A
Yeah, deserved, deserved premium in the eyes of many. Kovac, thank you so much. I'm going to see again at 3 o'.
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C
Clock.
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A
I'll look forward to that. That's Steve Kovac of course joining us and giving really I think much needed context into, into all of this. If we move the ball from here a little bit forward and think About Apple in the context of the mega caps. It certainly is one reason why Goldman's Tony Pascarello remains more bullish than not on these markets. He says in a note quote, if you want to be a serious bear right now, I suspect your timing needs to be impeccable or the fundamental setup needs to change. Otherwise you're fighting the Fed and fiscal stimulus and US mega cap tech. We know that Apple reports in 10 days. We'll show you the wall to give you an idea and just to refresh your memories on when the other companies do. As JP Morgan today says that the earnings expectations, well, they're projected MAG7 to grow earnings by 15% in Q3, the remaining 493 at 4% 15% versus 4%. That's why there remains all this optimism. Is it euphoria around it? Is the bar high? Is it too high? Can of court asks that question today, Joe.
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C
No, I don't think the bar is too high and I do think it is all about earnings. You're looking at the s and P500 which is on track right now to deliver high single digit earnings growth in this quarter. That'll be I think nine consecutive quarters that we've had positive earnings growth. And guess what? You have the Russell 2000 which I get is a highly indebted and now the composition of it is more junk than than anything else. But the Russell 2000 is finally going to join the NASDAQ and S and P earnings party. That's going to be up year on year somewhere around 35%. So this chase for performance that we've been speaking about, it's real. It's a phenomenon that happens in years like this where markets are higher and as you push towards the end of the year, portfolio managers who are behind are going to chase. It makes bears look foolish. If you are bearish and you look at the to 2026, you're probably going to get an opportunity at some point that you are correct that there will be that 5% correction and volatility is going to spike. But now before the end of the year we just kind of resiliently overcame some headlines surrounding the president in China. The regional bank questions that we've had and you had the vix spike to 30. Where is the VIX now? If you could show a chart of the Vix, I think it's back down.
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To 18 as we're speaking.
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C
So that's resiliency.
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D
I really like the way Tony says you have to have perfect timing to be bearish and I think that's absolutely right. But I don't think this is binary. You don't need to be bullish and you don't need to be bearish. It's okay right now to be cautious, and I think it's okay to be apprehensive. And what you can do if you're a little cautious or a little apprehensive, you don't need to have perfect timing. You can incrementally de risk. And so I, I really, you guys know I'll get like really fired up when it's April of 2025 and we're all talking about like, oh, should we be adding bonds to your portfolio? Should be, you know, should we reallocate now? No, now is when you start to think about reallocating. And you don't need to be bearish to do that. You can just say, hey, we've had a huge run. We're up 15% this year. We're up 20 plus percent last year, the year before that. So you don't have to be one or the other, but you could take off 5%, 10% of the things that have really, really worked. Stick it in, stick it. Something that diversifies bonds.
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A
Don't you think, don't you think though that constantly citing the fact, well, we're only up this year to date, or we're. It's skewed by the events Post Liberation Day where it destroyed the market and then that skewed performance of everything. Obviously things had to fight back from. What was it, you know, not known in the moment, but an artificial bottom. It was a, it was an unforced error that so to speak, that took place. Stocks down. So now if you look at my.
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D
Point, like why would you, why would you change your allocation? Why would you de risk in April? That's, I'm saying de risk now. It was an artificial bottom and I had clients, literally I had clients who were calling me, saying their other advisors were saying, oh, you have too many stocks, you should be buying bonds. There are a lot of people who.
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A
Don'T agree with, with you in the fact that they should be de risking at all.
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D
Okay, fair enough. All I'm saying is for those of you who are, are not full on bullish, those of you who are a little apprehensive, do it now before it's down 10%.
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A
Understand? But you've been, you've been apprehensive since the beginning of the year.
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D
Oh, I've been apprehensive since the beginning of my career. I'M always going to be. And so that's why I think when you have market peaks, like, that's when you de risk a little, you do not de risk at the bottom. This is a peak. Like this is a peak.
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C
We don't know it's a peak.
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D
No, no, no. At this moment in time, it's a peak. We might, we're going to have another peak. But if you're sitting home and you're uncomfortable and everyone I'm talking to is uncomfortable, do a little bit incrementally. Now, all I'm saying is you don't have to be bullish. You don't have to be bearish.
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A
All right, well, how about this?
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D
Somewhere a little in the middle.
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A
How about this? If you, if you take a look inside the market and you try and, you know, decide, am I on Jenny's team? Am I on the bullish team? The Wall Street Journal had an interesting look today about what's happening under the surface in the market. Josh, I'll come to you. And whether it's a warning sign for stocks overall. Utilities, health care and Staples are the sectors that are leading this month. That's not exactly the most bullish of signs you'll ever see, is it?
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E
I'm so glad you brought this up. This is the ultimate example of cherry picking starting points and acting as though the world just began in January of this year and nothing prior had ever taken place. There are specific reasons why those are amongst the leadership groups in the market. But a, they're not the only leaders and B, if we don't understand the context behind the leadership coming from those spaces, then we, it would be really easy to assume, oh, they're buying utilities, therefore everyone's bearish. Wrong. Utilities are going through a once in 100 years rerating because it turns out when you spend $1 trillion in capex on AI, you're going to need a lot more electricity than what the estimates would have suggested as recently as a year or 18 months ago. This utility rally kicked off last March. It's now been enforced for 18 months. And everyone understands the utility stock rally has absolutely nothing to do with people becoming risk off. It's the opposite. This is the bull market in electricity. It has nothing to do with.
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A
I think people understand that. People understand that. What about Staples and what about Staples in health care? What would your retort to that be?
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E
Okay, we thought, we thought Donald Trump and RFK were going to be the four horses of the apocalypse for health care. It turns out nothing could be further from that we get announcements about 100% tariffs. And then the next day Pfizer says, well, we'll break ground on a new manufacturing facility in the US and the White House says, all right, cool, we're good. That that doom and gloom that had been hanging over the health care sector is starting to clear. And it turns out there are a lot of secular growth stories in the health care space that aren't necessarily necessarily big pharma. And those stocks look pretty good. Not great, pretty good, but they're building off a very low base. They've done nothing for 10 years in many cases. This biotech rally, biotech has just had a lost decade. I don't think people understand that. So that's its own story.
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C
What's up?
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E
So then you, then you put that alongside this mag7 thing. Please understand. Last quarter, analysts were looking for 13.9% earnings growth and the actual max7 earnings were plus 26.6. They did double the growth rate. So when you have a market where you have industrials, utilities, you have now a health care rally, you have international stocks, every country making record highs. And then you combine that with this Mag 7, it is a much bigger story than just, oh, people are buying the defensives. A, they're not all defensive stocks in that sector, in those sectors. And B, try and spend like 10 minutes thinking about why those stocks are going up. And if you find out it's because of unexpected earnings growth, okay, it's, it's not quite a risk off move that portfolio managers are pursuing.
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F
Amy, I agree broadening the market out is a good sign, not a bad sign. But I also do agree that there have been some signs of froth and there have been some stocks that have just gone asymmetrically higher and taking profits in those names, which I talked about a few of those a couple of weeks ago, I don't think is a bad idea either. So I think you can, you can do both.
- [22:12]
C
There are times where the Jyoti ETF is going to be more quality, and there are times it's going to be more momentum. In the month of October, the Jyoti ETF is down because it is more momentum. And what has happened so far this month is the market is favoring quality, quality is up 1%, momentum is down 1%. But I'm going to make the argument that's actually healthy. That's exactly what you want to see for a resilient marketplace that's indicative of saying, okay, we're going to work off some overbought conditions. We're going to reallocate, rotate internally within the market and then we're going to go from there.
- [22:47]
A
We're also following the credit related stocks today. I want to get to those before we finish our A block today because the PE and the ALTS managers, that's really how we've been looking at these have not traded well over the last month. As you know, the Carlyle CEO Harvey Schwartz made some comments today on credit and a quote unquote worry list. Quote data suggests that companies are growing employment, steady inflation is a little sticky, but there's nothing in the immediate horizon that suggests that things are crumbling. Having said that late cycle, it should be on a worry list. Some of what's been happening in credit, the note of the day, arguably today comes by way of Citi which talks about those BDCs, the business development companies. Quote, a credit downturn is brewing in the leveraged loan market and public facing BDCs are positioned to feel that pain. The relentless search for yield has allowed a massive volume of questionable loans with questionable covenants to be originated and sold, creating a systemic vulnerability. BDCs are directly exposed as these very leveraged loans are their core assets. The first cracks in this structure are beginning to show. Obviously the BDC side of the story tells its own story. Those stocks have not traded well at all. You own 6th Street Specialty Lending. It is a BDC.
- [24:16]
D
Yep. And I also own Hercules Technology HTGC.
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A
Okay, so how are you thinking about this today?
- [24:21]
D
Yeah, so when. So we bought 6th street in January and that research process was super, super intense. Understanding the whole space, what kinds of loans each of the BDCs made, how many they had and like what their credit structure and credit requirements were. We came away saying 6th street is different than the rest. They're the best management team. They have the, the most thorough lending standards. They have, they have fewer loans. They have 95% first lien investments which is higher than any of their peers. They have an ROE of 16.8% that's almost 6% higher than any of their peers. And this all goes to kind of the quality of the management and the, and the rigor and structure of the lending standards. So you really can't buy these companies just oh I like 10% yields, let's buy them. You really need to understand what's under the surface and it is hard to do and it's hard to understand. So there's a few out there that are great. There's a lot out there where all of the commentary before is going to be perfectly true. One thing that I think is confounding is that the private equity stocks haven't traded as as poorly as the private credit stocks, where in the capital structure if there are problems, the equity holders are going to be more are going to have more pain and have more risk than the credit than the credit holders. So I actually think that the credit BDC shouldn't be down or should be down less than the private equity ones. So maybe that means the private equity ones should be down more than where they are now. But 6th street and Hercules, like they're pretty unique in that space space. So I feel really comfortable with them. But it's dicey. It's legit.
- [25:53]
A
Yeah, you get a nice spike in 6th street specialty as we talk about it. We'll come back to this in a minute. I do have some breaking news out of the White House. Eamon Jabbers has the news for us.
- [26:01]
G
What do we learn? Eamon Scott, President Trump was meeting with the Australian prime Minister Anthony Albanese here at the White House just moments ago, making some positive comments about trade and relations with China. Very encouraged ahead of his meeting with Xi Jinping that's on the schedule for next week in South Korea. Now the president also, though, although he was saying that he expects to have a good meeting, he does have a good relationship with Xi Jinping. Also making a specific threat in response to the Chinese restricting access to rare earth minerals. President Trump saying one thing the United States could do is restrict exports of airplane parts to China, specifically mentioning that the Chinese buy a lot of Boeing aircraft and if he wanted to, he could restrict their supply of repair parts for for those aircraft, which obviously would have an impact on the Chinese economy, would have an impact in China. The president said he doesn't want to do that, but that's one thing he could do in retaliation. So some optimistic comments here. SCOTT I would say about his relationship with Xi Jinping and the prospects for a trade deal next week, but also threatening to raise tariffs to 150, 157% on November 1 with China if they don't get a deal next week and threatening this airplane part retaliation as well, which again he said he doesn't want to do, but just sort of rattling the saber there a little bit on trade.
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A
SCOTT yeah, not not impacting the market. Certainly the market just is convinced that the worst of whatever is threatened would not be in finality and that's why you have what you do. EAMON Thanks. I appreciate that you're flawed to the White House Eamon Jabbers for us. All right. The credit issues have certainly spilled over to the regional banks. We have to get to that and we will after this break because there is one that is reporting today and it was right in the eye of the storm last week. We'll tell you about that. It plays right into, in some respects, Josh Brown's best stocks in the market, which he has as well, his favorite chart in one specific group. And it's not a stock he owns, which is even more interesting. We'll tell you about it next. The heaviest metal credit card of all time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the International Space Station and wielded at business dinners like a samurai sword.
- [28:35]
H
It's a classic corporate power move.
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A
But the real power move, having end.
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H
To end visibility on your most critical shipments.
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A
FedEx, the new power move.
- [28:46]
H
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- [29:15]
A
And now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network all right, welcome back. Dow is good for 400 as you just saw, the market like those headlines that Eamonn Jabbers brought us regarding the China trade war from the White House. So we are highs of the day. There's Zions. We show it to you up near 3% because it does report after the bell today. Remember last week the stock lost a billion dollars in market cap on Thursday alone. That's after they disclosed $60 million in loans that they said were unlikely to be repaid as regional banks find themselves. As I said before, in the eye of this storm around credit, Wells Fargo says It's a buying opportunity for this group. Joe has at least a dozen of these names I feel like in front of me. I'm not going to read them all off. I usually do, but I'll save time and I won't. But what do you think?
- [30:48]
C
Here we have seven mid cap regionals and we have two super regionals. I don't know if I would buy them here. I think I would pause. Just hear what you're going to hear from Zions. Hear what you're going to hear. I believe it's tomorrow or Wednesday on Western Alliance. I apologize for not knowing, but I know it is this week. Understand these are small cap regional banks. What I have ownership of are more mid cap regional banks and a lot of those banks have owned already reported and they've already confirmed and given you the confidence that they do not have the challenges ahead of them. So I don't think this is a story that's going away. I think we carry with us into 2026. I think, yes. In fact there are some bad loans out there. We're going to hear more details about that in the coming months. But I don't think you could universally assign that the regional banks themselves or a sale or the regional banks themselves are going to deteriorate to the regard that we believed last week.
- [31:45]
A
Well, let's see what Zions delivers and then what they say it's just a good time to hear from the company, which we will. As I said coming up, there's a stock up near 3%. I mentioned Josh Brown's best stocks in the market. It plays into this because it is the financials as a group. Now I tease the fact that the stock he likes the best, the favorite chart of the bunch, as he eloquently put it to our producers earlier today, is Amex, which you don't own, which did get its target raised today, which is coming off pretty good earnings of last week. Tell us more. Why did it land, why'd it land on your list?
- [32:28]
E
You don't have to know anything about, you don't have to know anything about technical analysis at all all to understand what's taking place here. But if you're interested in this, in the specifics, this is a name that has obeyed its 50 day in the recent uptrend. But in the long term uptrend it's obeyed its 200 even at the worst moment this April, this stock was not down for long. You've got it, look at this. You've got a golden cross here over the summer 50 day crossing over the 200. Jenny, cover your ears. I know you hate this stuff but what that means is that the buyers have taken control of the stock and they are coming in faster and faster on the dips. So it's not voodoo, it's human behavior. And why are they doing that? American Express is in addition to being the primary financial to capitalize on the fact that 50% of the spending in this economy in the United States is coming from the top 10% of households. Every one of them has an Amex platinum card in their wallet. It's also a bigger story about capital return and I'm going to get to that in one second. I would just point out it's tough to buy stocks at all time highs. Nobody wants to do that and I don't aim to do that specifically. But this is a fresh breakout to new highs. There are now no natural sellers left here. I think it can March up to 400 over time. And the reason I don't personally own it is because I'm already very exposed. American Express is the second largest holding at Berkshire Hathaway. It makes up 16% of Berkshire's portfolio. They have 152 million shares. So they have 50 billion worth of Amex on their books. And I am a long term Berkshire Hathaway shareholder so I don't need to double own Amex. That's why I'm not personally in this. How did Berkshire Hathaway end up owning 22% of American Express? They didn't buy it. American Express has one of the most aggressive long term share buyback plans of any company in the S&P 500. From 2005 to 2025 they have basically cut the float in half from 1.2 billion shares to under 700 million shares. So for me this is a really great setup for a trade. I'm along for the ride via Berkshire. But this is the best chart in, in all of the financial services stocks on my best stocks in the market list right now.
- [34:57]
A
Joe likes to buy stocks at highs.
- [35:00]
C
I do.
- [35:01]
A
If you, if you would have read your Long Island Homies book. Buy stocks or buy highs, buy high, sell higher. You, you know that I had the.
- [35:09]
E
First copy be printed.
- [35:11]
C
Of course you do. You know it's interesting.
- [35:13]
A
I look after your guy from the 51 6.
- [35:15]
C
You know what's interesting about Amex is In July of 23 we began to build positions in a lot of the regional banks that you talked about. And we also built positions in financials very quickly moved to an overweight the financial sector with Amex, the reason that we bought it was the balance sheet. We didn't buy it based on momentum. We bought it at 168. It's 348 now. Yeah, momentum is present now, but we bought it because of the return on equity, the debt to equity and the way in the environment of 2023, they were managing the business relative to the rest of the financial sector, which if you remember back at that time, really no one wanted to own financial, certainly not regional banks.
- [35:54]
A
Jenny owns Amex, right?
- [35:55]
D
Yeah. This is when I really like things, when actually the fundamental picture matches up with the technical picture. And what you have with Amex is you've got a 20 times multiple which isn't that cheap, but it's cheaper than the market and you've got 13% earnings growth ahead and you have a great story and you have the high end consumer. So in this one, I'm all for it, but I'd rather own something at 20 times with 13% earnings growth than 30 times of 9%.
- [36:18]
B
All right.
- [36:18]
A
Well, you can join Josh as he reveals his best stocks for the 2026 year at the next CNBC Pro Live event. It's January 15th right here at the New York Stock Exchange. You can scan the QR code on the screen. You can visit cnbc events.comprolive for even more information. And we hope you do that. Let's get the headlines now with Julia Boorstin. Hey, Julia.
- [36:42]
D
Hey, Scott.
- [36:42]
H
FBI Director Cash Patel said the agency is investigating a suspicious hunting stand near Palm Beach International Airport. The Secret Service confirmed to NBC News that the stand has addressed direct sight line to where President Trump exits Air Force One. A source told NBC that the perch is across the street from part of the airport where private planes often park. The Supreme Court said today it will consider whether people who regularly smoke marijuana can legally own guns. The case involves a Texas man who was charged with a felony because he allegedly had a gun and admitted regular marijuana use. DOJ attorneys have argued this is a justifiable restriction on gun ownership. And Weight Watchers is teaming up with Amazon to deliver medications including GLP1 obesity drugs. Customers will be able to check whether their prescriptions are in stock and have them delivered more efficiently by using the Amazon pharmacy option on Weight Watchers website. The company will continue to let patients fill prescriptions through other pharmacies. Halftime REPORT is back after this.
- [37:54]
A
Welcome back to the Halftime report. I'm Dominic Chu with your ETF Edge. Now, both the tech sector and defensive Areas of the market are hitting record highs but in opposite directions. Joining me now to explain why this is is Todd Sohn, the technical strategist over at Stratega Securities. Todd, we're going to take a little bit of a look at that tech sector vis a vis all of the other ones out there. Just how out of whack has it gotten from a balance pers perspective with all the different components of the S&P 500?
- [38:21]
I
Hey Dom, great to speak with you. And you hit the nail on the head there. If you own a large cap blend fund like The S&P 500, if you own large cap growth, if you own thematic AI or even quality to some extent your exposure to technology sector stocks is at an all time high. Tech is 35% of the S&P 500. That's the highest we have in 50 years of data. Meanwhile, defensive sectors, Staples, health care, Utilities, energy are at 19% of the S&P 500. That's a 35 year low. So investors exposure to these tech names as much as it's benefited us, right? Is that an all time high? I think you have to at least pay attention of what you own at this stage in the market.
- [38:59]
A
And Todd, really quickly, how are some of the ways investors are tackling this imbalance?
- [39:04]
I
Well, they're looking at alts, right? Gold, bitcoin and cash. I can get 4% on cash with no volatility. Gold is the best trend around the universe, around the investable universe for a bunch of different reasons. And then crypto, it's rare you have a new asset in the ETF spectrum. Investors are flocking to this space to get that exposure and ideally two out of three of these will at least be uncorrelated to the technology sector stock. So it's a way to surround that tech exposure within a portfolio. Great trends. I think investors are going to continue to pile money into these alternative type assets going forward.
- [39:38]
A
A lot more attention being paid to those correlations. Thank you very much Todd. We are going to continue this conversation over at ETF edge.cnbc.com Todd's going to be joined by Gavin Fillmore, the chief revenue officer over at ETF Platform Title Financial Group. We'll talk about those levered ETFs alts in general. Scott, I'll send things back over to you guys. All right Dom, appreciate you Dom Chu. Up next, more committee stocks on the move today including a big pop for one of Josh's top picks. Plus we debate our calls of the day. Halftime is back in Just two minutes. All right, welcome back. We're going to start with Josh Brown's so called low altitude economy because Archer Aviation stock he owns strikes a major deal today with Korean Air. Korean Air plans to purchase up to 100 Archer midnight aircraft. They announced in a release today. Josh, tell us more.
- [40:42]
E
Yeah, so I've, I've explained this as I own this and Joby, I look at Joby as the Uber of the sky and I look at Archer as the Boeing. Archer wants to sell the midnight aircraft. Neither of these companies has any meaningful revenue or earnings or anything like that. So what they trade on is announcements and partnerships and deals. That's what moves these stocks. So the big one though, and this is a great announcement obviously, but the big one and the reason to own them now, the Dubai Air show is going to be the biggest event of the year for the EVTOL space. And again, these are the two biggest companies in that space. I think there are some big announcements being held for that. And if you think that that's what these will trade on, new deals, new partnerships, then you obviously want to own these stocks in advance. I would just caution people, there are no fundamentals. So we're two years away from commercialization. This may not be for everyone.
- [41:43]
A
All right, it's up near 6% is Archer. Starboard is apparently going to detail the need for change at TripAdvisor. That is going to come tomorrow at the active passive conference. Ken Squire runs that Starboard reportedly took a 9% stake over the summer. They have not discussed it publicly. I think Faber has Jeff Smith on tomorrow too from that event. So you want to catch that, Jenny, I'm sure you'll be watching that because you want to hear about this. You own the stock.
- [42:11]
D
And even without that, it's, I mean, it's great that it highlights it, but even without it is compelling. When we bought it, it was trading at 8 times earnings. Sorry, this is what it is today. We bought it in, in December of last year at $13. Not now. It has 8 times earnings, 12% free cash flow yield. Back then it had this like overhang of Liberty Owning stock. That's all gone. They it's just a huge free cash flow business and it's underappreciated under recognized. So I'm delighted that Jeff Smith is bringing some attention to this.
- [42:37]
A
All right, well, we'll find out more tomorrow. To be continued. Coming up, Santoli, he's bringing us more in his midday word, which is next. All right, senior markets commentator Mike Santol is here at the Desk. I mean you said it last week at the end of the week as we chatted we made it through some, some nasty weather last week and here we have some sunny skies again.
- [43:00]
J
People are making the bet that it was just this necessary shakeout. We have just enough, you know, kind of scary stuff that, that encroached the challenges to the bull case on credit and trade. It seems a pretty mechanical 1% bump here but you are above last week's highs in the S&P 500. That's a first step. I'm seeing some, you know, Nvidia and bright Broadcom are underperforming. So it's not as if it's all guns firing today but it's certainly enough. And I think, you know, the windows for bearishness to work tactically have been very narrow this whole time up and you did see a pretty good positioning reset. I mean I'm surprised to see the degree to which, you know, the Deutsche bank positioning monitor went from pretty overweight to neutral over the course of last week. So there was a derisking and you know, maybe that is enough for now. I'm not sure it means it's some kind of an all clear but clearly you had enough people who got defensive quickly and any day that you go without the credit contagion, fear being realized in another way, you know, you're going to find some comfort.
- [44:03]
A
And we were, we only talked about it today in the context of Zion. Zion, get it. Getting set to report in the regional banks but you know, they're not following through with a DID last week.
- [44:12]
J
I think you can still have some unease and you could say maybe the public corporate credit spreads are not giving you the full story and maybe private credit is kind of overshot but it's not as if it's a here and now issue for the economy or for bank balance sheets.
- [44:26]
A
All right, I'll see you three. That's Mike Santoli finals there next. All right, three o' clock Eastern today. That man right there joins us right here on set. Rick Reeder, BlackRock CIO of Global Fixed Income, a member of the so called final five apparently in the running to be the next Fed chair. We will discuss all. He'll be with me. Dan Greenhouse. Dan Greenhouse is here. Courtney Garcia and Gabriela Santos. We look forward to that Final trades. Josh Brown, you're up first.
- [45:01]
E
Still my favorite financial as a long term investor. JP Morgan stock looks great.
- [45:07]
A
Thank you very much. Amy Raskin Illumina.
- [45:09]
F
The competitive machine from Roche is finally out. I think that was an overhang for the stock. So I think it can move up from here.
- [45:15]
A
All right, thank you, Jenny Harrington.
- [45:18]
D
All right, Columbia Banking. It was unjustly caught up in last week's regional bank panic attack. 5.7% yield, 10 times earnings.
- [45:25]
A
Joseph, if I could give two, it.
- [45:27]
C
Would be XBI and BABA, but we're only showing one BABA.
- [45:30]
A
Well, you just gave two.
- [45:31]
B
I did.
- [45:32]
C
I stuck that in.
- [45:32]
A
Broke the rules nonetheless. All right, so the market looks right around the highs of the day. Of course, that's one of the stories. The other is Apple hitting a new all time record high. We'll discuss in a couple hours. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [45:55]
H
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of cnbc, NBC Universal, their parent company or affiliate 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 halftimereportdisclaimer. We all take good care of the things that matter. Our homes, our pets, our cars. Are you doing the same for your brain? Acting early to protect brain health may help reduce the risk of dementia from conditions like Alzheimer's disease. Studies have found that up to 45% of dementia cases may be prevented or delayed. By managing risk factors, you can change make brain health a priority. Ask your doctor about your risk factors and for a cognitive assessment. Learn more@brainhealthmatters.com.