Liz Thomas (3:44)

of me right now.

Frank Holland (3:44)

Are you often point out the momentum in the market? By the way, Jenny, want to come over to you wolf out with a note talking about momentum. Say that they are on the lookout for a reversal and a 6 or 7% consolidation would not shock them. Are you focused on the momentum in the market? Are you more looking ahead to Wednesday and even Thursday we get Apple. So five out of the mag. Seven names reported in this week. You're laughing.

Jenny Harrington (4:04)

No, because you know me, I'm like the antithesis of a momentum.

Frank Holland (4:07)

That's why, that's why she said that's why I brought it up.

Jenny Harrington (4:10)

But it's also funny when you're like are you looking out to the next week? No, I look out to the next three years. But the reality is is I'm a market junkie, you know, and I hit refresh on my screen to see the performance every two minutes. So. So I do look out to next week and where my head is is a little closer to wolves. So I think the market's run back up and it's been ignoring nuance and what we're going to start to get this week and next Week and the week after is we're going to start to get nuance in the conversation and, and to the previous highs going back to 50,000 on the Dow and 7,000 on the S and P basically says all clear. And it's not thinking about the fact that there will be aftershocks. I don't know how strong they'll be. I don't know if aftershocks from the closure of the Strait of Hormuz is going to show up in 1 month, 6 months, 12 months, probably all of the above. And so, so where I am is I think we have lower visibility. We're back at levels that we saw pre Iran, but there's lower visibility. I think we're leaning more now towards inflation. When you have higher inflation and I'm not saying high inflation, I'm just saying higher inflation, you don't deserve the same multiple that you get with lower inflation. So I think there, I think there's tricky stuff out there and I don't know if a 6 or 7% pullback is right, but, and I'm not, I'm certainly not saying bear market, but I think where you should be right now is you proceed with caution, you prepare for bumpiness and you think with nuance, it doesn't seem like all is clear, even though the market valuation suggests it is.

Frank Holland (5:36)

You know, nuance is a great word. Got again, mega cap tech earnings coming up later. We got Microsoft, we got Amazon, we got Metta, we got Apple. Do you think investors are going to be looking for nuance in those reports or is it simply about a beating a race?

Liz Thomas (5:48)

So this, first of all, this is one of the biggest weeks that I can remember, honestly in my career. We've got all of these mega cap earnings so far. Also reports earnings on Wednesday in case anybody wants that news on flash. We have five central banks making a rate decision this week covering all of the G7 countries. There is so much going. The Senate Banking Committee is voting on Kevin Warsh. Right. There's so much going on in this news flow that you can't ignore some of the nuances that will come out of it. Do I think there's going to be nuance in those earnings? Of course. I mean the people that are going to pore over the differences between where revenue is coming from and what the outlook looks like like. But I also think it's interesting that we're getting all of those mega cap earnings except for Apple, which will come later. We're getting all of those mega cap earnings on the same day. As the Fed, I would expect those companies to say glowing things about revenue expectations, capex expectations and just guidance for the rest of the year. I don't think anything has changed. Where the nuance is coming in is that we had this huge V shaped recovery after the market decided we were de escalating the war. Right. And a lot of things did go up. However, it is more narrowly led than it was pre war. We don't have the same broadness that we had before the war. And I do think the market is again reliant on technology first and foremost and a few other sectors, communications, consumer discretionary. And to Jenny's point, there will be some backlash later in the year as an oil shock works its way through even if we have de escalation now. So we still have to digest that later. And I also want to make sure that we remember we get GDP this week, we get PC this week and the Fed is likely to get a heads up of what that PC number looks like before it even comes out. So there's a lot going on. I think inflationary continues to be the story. I think yields continue to be the story for the rest of the year. And again to Jenny's point, multiples are going to have to digest this higher level of yields and perhaps even higher levels of yields as we hear more about how this bakes into inflation.

Frank Holland (7:49)

All right, Steve Weiss coming over to you by the way. Julian Emmanuel with a note saying the historically fast S&P 500 pivot off the March lows is only comparable to 1982. Going to lean on some of your experience. Do you see the comparisons in 1982 and what are you thinking about when it comes to these mega cap tech earnings?

Steve Weiss (8:05)

You know, it doesn't matter if I, if, if I see the similarity, 82 because the markets change so much. It just doesn't matter. And if we're that easy to say, well it was like this period back then, then managing money would be, you know, easy and it's not. So the market now has over 50% close to 60% in passive funds. That was not the case back then. It was a fraction. And there's so many changes, the algo trade, trading, et cetera. So I don't really think, think that's, that's very instructive now in terms of what's going on. Liz just listed a lot of events coming up this week. I think there are two critical events, one being, you know, the Magnificent seven, if you want to call that earnings, because clearly that's what's driven the market up. Everything's gone up in terms of their wake that supports their AI spending. And if they miss it could be ugly. So and then of course, the stalemate. So if you go back and play this for when we first announced, you know, the Iran excursion, the market took it hard and sold off. And then as we move forward and we saw that there was light at the end of the tunnel, they're sitting Iran, the US sitting at the peace table and then the market traded up. There are no negotiations going on right now, but. But the market's holding up. This little trade off we're seeing today meaningless in terms of where we've bounced to. So I don't know what the market's willing to bet on. I don't know what the market's willing to see. Truly every opportunity since 2009, a V shaped recovery and a buying opportunity. Corporate economy is pretty strong. The individual economy, well, that's feast or famine, right? People can't, they're making choices because the high price of oil. And then you get to the Fed and you got to ask yourself, is there any case to cut right now? I don't see it because you don't know what inflation is going to do. Even if you take out food and energy, inflation is still hanging out there. 3%. That's not where the Fed wants to see it go. If you lower right rates when wash comes on, then you really got to ask yourself, you already damaged credibility of the Fed because of what Trump has been saying about the Fed. Is that going to remove confidence in the US Monetary system or globally? Because everybody invests on or, you know, bases everything off the dollar. So there are lots of crosswinds. Push comes to shove, I think you stay long because nothing seems to matter. The market just seems to want to go up.

Joe Terranova (10:43)

So I think what the market is doing and hearing everyone's comments, you have one element where Liz and Jenny are mentioning the effects of oil and inflation. Well, that speaks in my view, to the opportunity for the 493 and the broadening out of the market. And then there's the other element of what's unfolded in the month of April to Steve's point on being long. And the market's focused on one thing, tech earnings, and it's focused on AI. And AI is back in the headline and it's superseding the headlines, even related to the Middle east and what the price of oil ultimately is. So this has been a story about a very powerful recovery in semiconductors, monolithic power Month to date up 49% micron. We'll talk about that in a second. Up 47% AMD up 70% Texas Instruments 42% KLA Corp. 31 Arista Networks 44 Lam Research 25 Generally, as it relates to the moment, the momentum factor, when you see that type of very strong one month return for individual equities, you extrapolate from that future gains over the next six, nine and 12 months. It does not mean that it's some form of a parabolic movement that signals an inflection point. It actually sets the stage for future price appreciation over those time frames.

Steve Weiss (12:13)

But I actually think that there should be a pullback, will be a pullback in chips. I'm talking overall through the market. Yes, in chips.

Frank Holland (12:21)

Well, we're seeing it today in chips and I was going to ask everybody about. We were ready to talk about a 19 day win streak when it came to the SO XX, but it's pulling back more than 2% last time I tried. Here's the thing, you're seeing it right now. Does that really pull back as far as we've come? No, no, it's not a, it's not a pullback as far as we come, but it's coming on today where there's a very bullish news when it comes to Qualcomm working with Open air, speaking to the AI trade that everybody says

Steve Weiss (12:42)

everybody's working with AI and also still

Frank Holland (12:44)

impacts them, but it's on actual devices. It's actually in Qualcomm's wheelhouse. Not those announcements where you're just like, hey, we're going to partner. Qualcomm makes chips for phones and devices and that's what they're partnering on. At the same time, we're getting a very bullish note. I believe it's Melius coming out with a 700 price target on Micron to Joe's point. So Jenny, I didn't mean to cut you off, but how do you view this going into earnings? We continue to see a lot of demand for memory chips and just chips in general. That's why Micron's higher. Why would chips pull back today? Is that simply profit taking? I understand it's not meaningful to the longer term narrative, but I mean, don't you have to look at this a bit today that this kind of.

Jenny Harrington (13:15)

I don't think so. Like, you know, when I look at it through my lens, which is Teradyne and Micron, but I don't mean Micron, sorry, microchip, which I own the preferred on you've got Tearadyne up like 106% for the year off of a multi hundred percent return last year. So I look at this as just profit taking noise. Like not, not with huge meaning just getting away from the semis. But, but you know, building on what Joe is saying, I think it's broader too. You know, if I look at Friday's earnings, it's pretty wild. So these are just highlighting some we've got like Charter hca, Proctor and Gamble. And when I read through all those, essentially in line for Charter hca, modest upside, Procter and Gamble, decent upside, Slumberger in line, like slight upside there too. And it's just everywhere we turn, right, there's this modest upside. So it's a hard time where you pair Wolf and you pair what Steve just said, where, sure it seems like we're ripe for a pullback, but the smart bet is not to time that and to stay invested. I actually got really ticked off on Friday because someone on Twitter was like, oh, Jenny, Eric has been negative for the last 2500 points or something like, yeah, I'm cynical. I'm also a smart investor. So I stay fully invested. And I think that's the message here. And I also think that, I think that we still have broadening this year. And if you look across the different sectors, even though, even though tax really in the mags haven't really run up in the last couple of weeks, I think if you look broadly everywhere you turn, positive earnings are coming out which ultimately, ultimately overrides all the negativity out there and keeps, keeps this market floating.

Frank Holland (14:48)

Before we let go of the chips very quickly, btig out with a note saying bulls maintain control, but semis continue to go parabolic. They go on to say we briefly discussed the parabolic nature of the move in semis along with the high momentum in general and how likely, how like all parabolas, it's likely to reverse in equal and opposite fashion. So, Jenny, still bullish on the chips. Liz, I want to come over to you. I mean, should we look at the technicals? Here is the fact that we seen this huge run up and you know, according to Krinsky, at least there is history of it seeing an equally intense pullback.

Liz Thomas (15:17)

Sure. We just don't know how long that little hump on top of the parabola is right before it comes back on the other side. So I think a lot of actually what's going on today is the technicals. It's not fundamental. We know that the earnings of these companies are strong. We know that the theme behind AI continues to be strong. I don't see that heat coming off anytime soon. Soon. But you have to as an investor think about and to go back to the nuance point, this big bounce that we saw and the sectors that led us there, which were tech, communications and discretionary, are likely to be the ones that give a little bit back first if there's a relaxation in the momentum. And when that give back happens, because risk appetite is still so strong in the market, you're not going to see assets rotate out of equities, you're going to see them rotate under the surface within equities. And that's when investors start to look for other places that they can find growth. That might be pharma, that might be industrials, that might be financials. Right. So that's where that broadening out trade is likely to come in. I think some of that is going to take a little bit longer. I think we need decisive de escalation in this war to see the broadening out actually take hold again and be durable. So that could be months out, maybe a little bit later than Jenny and Joe are expecting. Something like that as well where I would sit. But that's how that works, right? You give a little bit back in the really high momentum stuff and that little bit that was given back broadens out into other things that are more like the old economy, the manufacturing economy, the activity economy.

Frank Holland (16:42)

So can I ask you strong earnings from these hyperscalers we have Amazon and Microsoft reporting, is that also a boost for the industrials you mentioned kind of the broadening out, does that translate directly to that or does that lead to even more money piling into tech?

Liz Thomas (16:53)

Well, so there's two things. First I want to mention P E ratios. We've got earnings right now growing faster than prices are growing in a lot of places. So all of this complaining that we've been doing for a while about P E is being so elevated. What's happening right now is the fundamentals are actually helping P E ratios stay in check. And I think that's good for investors. Does it directly translate into other sectors? Maybe not directly when you're hearing about earnings results, but eventually as AI takes a hold. Yes, you should see it bake through into other sectors as everybody's productivity grows and as other sectors need to take part in the build out that requires.

Frank Holland (17:29)

All right, so Joe, you were mentioned earlier, Alphabet hitting a new record high also with an outperform, no doubt by Evercore expecting Alphabet to print a modest beat. Is that going to be good enough? We're looking ahead to these earnings. We've seen pullbacks. Weiss and I have often talked about Taiwan semi and the fact that had a stellar report still pulled back. Are we still in that kind of regime when it comes to earnings and expectations?

Joe Terranova (17:51)

Look, I don't think anyone can accurately forecast what the reaction is going to be to earnings in particular for stocks that have risen so dramatically. Conversely, you have a lot of stocks that are trading near 52 week lows. I don't think that's a profitable endeavor trying to predict what the reaction ultimately is going to be. I think what's better served is an understanding of what the earnings ultimately are and what they mean to future price over a longer period of time. And I think in the case of Alphabet, this recovery that we've seen recently, largely driven by the understanding that maybe their technology is far more advanced than the street was giving credit ability to as it relates to tensor processing units. We understand about the cloud, we understand about YouTube. But then, oh, by the way, there's Gemini 3, a very powerful tool again I think underserved by the financial community in understanding how powerful ultimately it can be. So I think those forces are in play. If you tell me the reaction to Alphabet is particularly negative post earnings, it doesn't change my perspective that I think over the next 12 months you're talking about Amazon, you're talking about Nvidia, you're talking about Apple and you're talking about Alphabet as kind of the leaders in that mega cap universe.

Frank Holland (19:19)

All right, Jenna, want to come over to you. Be one of the biggest bulls when it comes to Metta. Some news related to them. China blocking matters. Acquisition of AI startup Manus Xia was on earlier with Sarah and David, but just kind of talking about what this could signal when it comes to China and their unwillingness to let some of their tech companies leave, you know, their boundaries and go to places like Singapore or of course be acquired by a U.S. company.

Jenny Harrington (19:41)

Yeah, and I think that was our biggest takeaway from us. From an investment in Metta perspective, it's meaningless, right? We don't care. It doesn't change our investment thesis whatsoever. But what it does say is like, hey, if, if China's objecting to this, then Metta was about to buy something that was really good and valuable and so smart technology. And that, that's the more interesting take. But from an investment perspective, you still have a company that trades at 21 times, has huge earnings growth ahead. Mints free cash flow as they come up on their earnings, we're going to be watching much more to see what they're doing with their capex spending. I mean they're planning to spend $125 billion this year, up from 70 last year. So our focus isn't on Manus. It's going to be on like hey, are you going to be efficient? Are you going to get a return on that? How's that going to play out?

Frank Holland (20:24)

All right, so the Manus acquisition you're saying isn't a big deal, but why investment. I understand.

Jenny Harrington (20:28)

Yeah.

Frank Holland (20:28)

But when I come over to you, the fact that China blocked it and also many gets about 10% of revenue from China even though Facebook is in there, just sentiment wise. Going into this Trump Xi meeting, the fact that China would do this, does that have any kind of implications for the rest of the tech sector?

Steve Weiss (20:42)

No. I mean you go into China, you try to make an acquisition and at best coin toss, particularly in this heightened environment and race over AI. I think you got a plan for it being rejected by China. So I don't think it comes to anything. I think that, that Trump and she have a lot more important matters to discuss than this relatively small acquisition for Metta. So I don't think they come back and say, you know what, we're going to let him buy it. No, it's about are you taking technology from here that you're going to appropriate, appropriate outside here and make the US stronger. So it's an arms race. So I'm not surprised. I don't think Metta having spoken by there, I don't think they'd be surprised either. So. So no, but I think it's more about and I'm not even sure we're going to see we should see some pull through in demand created by a like we're seeing with the ad model And I think that's the conversation you're going to have and play up and show we are getting return. By the way, the return we're getting is a much quicker return. Anybody else? I think where the problems are going to be Microsoft I think is the most tentative in terms of the quarter because if they don't reassert cloud growth then it's going to be an issue particularly with everything else that's going on.

Frank Holland (21:58)

All right, so you mentioned there are you also kind of looking at the fact that OpenAI and Microsoft have kind of changed the terms of their agreement. You know, going again to the guest was on earlier saying they've gone from basically being married to having an open relationship. Does that change your view of Microsoft? That some of their revenues being capped and they don't have as much exclusivity when it comes to open air and their technology?

Steve Weiss (22:18)

Polygamy is good with tech companies, right? You don't want to tell you tie yourself just to one. No, I mean, if you've paid attention over the last year, I mean, the relationship's been fraying so you had to expect something to happen. It also frees up Microsoft and the initial reaction, which was down about 2 1/2 percent, is basically a yawn right now. Stocks flat. So no, if you didn't see a change in the relationship coming, then I don't know what you're doing.

Frank Holland (22:46)

Joe, you on this one to give you last word.

Joe Terranova (22:48)

Yeah. So this stock, as we move towards a quarterly rebalance, is clearly struggling. Let's remember, as Jim Cramer said this morning, this is a software name in the market. So far in 2020, 26 has made the distinction between software and hardware. I also believe that the marketplace is becoming much more comfortable, as I am personally with Anthropic and their tools. I've said on air, I believe that Claude is one of the more powerful AI tools that you could be utilizing right now, far better than what I could find in a chat GPT. So I think that relationship that Microsoft has with Open Air, maybe in the environment of 2024 into the early stages of 2025, was perceived as though that was a winning position to be in because Open Air was going to be that trillion dollar valuation company. I think the market is correcting that thought process. I think the market is realizing today that no, maybe it is actually Anthropic that you want that strong relationship with because that ultimately is going to be that trillion dollar valuation. And companies like the Zoom Communications and Amazon have done a really good job evolving the relationship towards Anthropic and I think that's the right way to go.

Steve Weiss (23:57)

And maybe Microsoft comes out with an announcement that further ingrains them with Anthropic. So, you know, I can't tell you how many people I talked to where the companies like us are using both and the preferences to use Claude over chat.

Frank Holland (24:13)

Just never know. Never know. All right, coming up next, the one sector that Wolf says is poised for a bounce. We're going to see what the committee thinks much more. Halftime coming up in just two minutes.

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Dominic Chu (24:45)

Hey, what's your pin?

Liz Thomas (24:46)

Mm, 2538.

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Dr. Guy Winch (25:01)

Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.

Jenny Harrington (25:31)

Not every sale happens at the register. Before AT&T business Wireless checking out customers on our mobile POS systems took too long.

Uber Narrator (25:40)

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Jenny Harrington (25:43)

It's crazy what people say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time.

Frank Holland (25:55)

Sometimes AT&T business Wireless connecting changes everything. And welcome back to Halftime. We are watching the energy trade down big this month despite still being the best sector so far this year. But we're Wolf is staying bullish and says the sector could soon see an 8% bounce. Right now the energy sector pulling back just about a quarter of 1%. Joe and Jenny, you have a lot of ownership. Jenny, I'm going to start with you. You own Shell. They made some news today, acquiring Ark Resources in a $16 billion deal.

Jenny Harrington (26:25)

Yep. So sorry, I thought we were going big picture on energy. So yes, they are acquiring. I think the thing is that we need to get used to the idea that oil isn't going back to the 50 to 60 range. And so with this acquisition, with with the broader portfolio, when you think okay, we're probably going to be an eighty to ninety dollar oil range or maybe seventy to ninety, broaden that out. Everything gets profitable. Right. And the numbers get rich. Now interestingly, I have in the equity income strategy, so so Shell is in our international strategy but in the equity income strategy I've actually over the last three months slightly reduced our exc Exposure to specific fossil fuel energy names and a focus more midstream. And I did, I took advantage of it. So you know, and this wasn't technically an energy name but essentially was like we got out of Lyondale, you know, we sold Williams WMB as they ran up so much and the valuations became really stretched. And that's part of this challenge too is there was so much enthusiasm for the oil trade that suddenly started finding rich multiples. So here's what I still own by and large, Enbridge Energy, Enterprise Products, Energy Transfer, Kinder, Morgan Kinetic, and then in the international strategy, Shell and Total. But you can see all of those aren't really me saying hey $90 oil, hey $100 oil. It's really saying like fossil fuels are really important. What's happened in the last two months has been a great reminder of our inability to live without them in the US portfolio. I just want it. I want exposure to the fact that we're dependent on fossil fuels. And that's why I have the midstream space and the juicy yields in the international strategy. On Shell and Total you still have juicy yields, but you do have more fossil fuel exposure. But Frank, at 90 bucks they're going to make a lot of money.

Frank Holland (28:07)

Yeah. By the way, I mean it be you saying the oil is going to go to 90 but Goldman saying it now. The Q4 forecast now for Brent's up to 90 was 80 before. For WTI it's up to 83, 75 before. For Joe, you have a lot of energy ownership as well.

Joe Terranova (28:19)

Baker, Hughes, Schlumberger, those are the two names that have worked particularly well for us in the ETF so far year to date. The interesting thing about the conversation, collectively a big picture, as Jenny said about energy is surprisingly how natural gas prices have stayed below 3%, 3$3 rather during this conflict. And then secondary as I'm speaking, I don't know if we have the ability to show reformulated gasoline. Maybe let's show the June contract if we could. But Today the first four months of reformulated gasoline they have all made 52 week highs. So while we're all sitting here talking about the price of Brent and the price of wti, if you could pull that back to a one year chart please. As I'm speaking, that's May, there's June, There we go. May is coming off the board in the next couple of days. June, if you go back for a one year chart, you'll see it's making a 52 week high. So we're talking about Brent? We're talking about WTI. No, it's gasoline. That's the story. And that takes you directly. I own personally Valero. I'll maintain that position. But you could Also own Phillips 66. You could own Marathon. The refiners are really the sweet spot in this entire energy trade. And it's not just because of the Mideast conflict. They came into the conflict with this leadership status and now the futures contracts are validating that status.

Jenny Harrington (29:45)

And that's just one thing where you and I differ in our approach. This, the refiners make me nervous.

Joe Terranova (29:50)

Why?

Jenny Harrington (29:50)

Just because I worry about the valuations and I worry about how much they're supported by spot pricing for the time being. And this is where also I worry about what the aftershocks and reverberations are coming out of formula is like. How long does it all last? You know, And I think. I think to play the refiners. And that's why. That's why I sold the line dubbies. That's why I sold the Williams earlier in the year I sold Devon. It's because I get nervous, you know, that it may not last and that the good times may not last as long. And this goes back to our time frames, right? You move more strategically and more quickly than I do when I'm looking at, I want to own something three to five years. So I want to play it just saying, like, hey, we know these refined products and are going to move. That's why I want to own the midstream. I don't want the risk of, you know, of something changing quickly and those and those valuations collapse.

Joe Terranova (30:33)

So I've owned Bolero since July 29th of last year. Maybe that's not long enough for you, but that's your happy birthday.

Steve Weiss (30:39)

Thank you.

Joe Terranova (30:39)

So belated birthday, rather. But when you say old, when you say. When you say that you don't trust the move and you feel like not for much, very longer, is that a feeling or is it up picking based on facts? Because if I look at the facts and I see what pricing is doing, when I see the tightness in refineries, when I see the supply challenging, else that validates being long.

Frank Holland (31:01)

Well, wait, wait. I got to stop. Here's the facts. WTI at 96 Brennan 108. We got to take a break. All right, we want to go over to Brandon Gomez with a CNBC news update.

Steve Weiss (31:11)

Hey, Frank.

Frank Holland (31:11)

Yeah.

Brandon Gomez (31:11)

First lady Melania Trump urged ABC in a social media post today to take a stand against Jimmy Kimmel after he made a joke, referring to her as an expectant widow. Days before the attack at the White House Correspondents Dinner, the first lady said Kimmel's rhetoric is intended to divide the country and he shouldn't have the opportunity to enter people's homes. Each evening, Canadian Prime Minister Mark Carney said the country is launching its first sovereign wealth fund. It will start with about an $18 billion endowment from the federal government and will invest in projects in areas such as energy infrastructure and mining. And it comes as Carney seeks to diversify the economy away from the US And Pope Leo met with the new Archbishop of Canterbury for the first time today. Leo said progress has been made, drawing the Catholic Church and Church of England together, but said new problems have arisen in recent decades, the two denominations splitting almost 500 years ago. Frank, send things back to you.

Frank Holland (32:02)

Our Brandon Gomez back at CNBC headquarters. Brandon, thank you very much. Coming up next, we got your ETF Edge with Dominic Chu. Dom, what's coming up?

Dominic Chu (32:09)

So Frank, it's a massive week for megacap tech earnings reports, but where are we seeing some of the most notable options activity outside of those Mag 7 trades? We're going to chat with an option strategist on some of these stocks and ETFs that are catching traders attention. More on that when ETF Edge on the Half Hour port returns after this.

Frank Holland (32:28)

Commercial break

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Dr. Guy Winch (33:01)

Men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.

Frank Holland (33:30)

Before we had AT&T business wireless coverage,

Joe Terranova (33:33)

our delivery GPS wasn't the most reliable.

Frank Holland (33:36)

Once our driver had to do a 14 point turn to get back on route. A 14 point turn. An influencer, even livestream the whole thing.

Steve Weiss (33:45)

Not good for business.

Frank Holland (33:46)

Now with AT&T business Wireless routes are

Joe Terranova (33:49)

updating on the fly and deliveries are on time.

Frank Holland (33:52)

The influencer did get us 53 new followers though. AT&T business Wireless connecting changes everything.

Dominic Chu (34:03)

Welcome back to the halftime report. Between Mag 7 earnings, geopolitical concerns and the Fed, the next few weeks could be pivotal for investors. Options have become a big part of the ETF market so far. So what are they saying that ETF investors should be listening to? Joining me now for this conversation is Mike Coe, chief strategist over at yield max ETFs. So let's talk a little bit about where you are seeing some of the more heavy options interest and activity this week for Mag 7 earnings outside of the Mag 7 names.

Mike Coe (34:33)

Yeah, I mean I think the biggest space that we've been seeing for sure remains semis. I mean if you take a look at what was busiest at the end of last week, we're picking up in the exact same place right here and now. Names like amd, Nvidia, Micron Technologies, these are the ones that continue to see a lot of activity. Of course, Nvidia hitting fresh highs today, Micron as well, AMD selling off just a little bit. But you know, this is the place that people continue to plow in with with options basically chasing one of the hottest trades.

Dominic Chu (35:02)

Now what are the, what are the hot trades around some of those tech names and index level tech exposure areas? Is it on the call side of things? Are people looking for protection? Where is the trade skewing, so to speak?

Mike Coe (35:17)

Yeah, well you're hitting right on the language of an options trader right there. So when we talk about skew, what we're talking about is whether there is a bid to the puts or there is a bid to the calls. And what we are seeing right now is basically a continuation of the same theme. There is definitely a bid to the call side. We've seen a lot of these calls basically out trading the puts by two to one. Plus in fact, when I was looking at most of the big semis that were trading at the end of last week and early today, that's about the ratio that you're seeing about double the call volume over put volume in all of these names and all of them are trading huge volumes. We're talking about millions of contracts per day.

Dominic Chu (35:54)

Actually is the sense that you're getting right now as an option strategist, Mike, that the surge in call activity, the purchase of these things is more for the hedging of the upside risk or the speculation that the markets are going to go higher.

Mike Coe (36:08)

I think it's a way to press a bullish bet while you're mitigating the downside. I mean, look, if you take a look at the moves that some of these stocks have had, let's just take a look at Micron. I think that's probably the poster child for all of this activity. How many people are going to look at that stock and say, ok, I'm really inclined to chase it here. This is a stock that was trading in the three hundreds earlier this month. It's up orders of magnitude since this time a year ago. And in that context, it's very, very difficult to chase it. So isn't it a little bit easier then for people to go out and say, you know what, I'm going to commit a little bit of capital by buying some upside calls. I get some participation in the event that the move continues, but in the event that it reverses because it's had quite a move already, I've already identified and mitigated my downside risk.

Dominic Chu (36:58)

All right, Mike Coe, interesting conversation for sure. We're going to continue this around the Mag 7 trade and more at etfedge.cnbc.com Mike is going to be joined by Paisley Nardini, managing director and portfolio manager over at Simplify ETFs. Frank, I'll send things back over to you.

Frank Holland (37:15)

Dom Chu with today's ETF edge. Dom, thank you very much. Coming up next on halftime, our calls of the day, TD Cowan says one committee stock is poised to stage a comeback. We'll debate the set up on Robinhood. Also ahead of earnings half times. Back in just a few minutes. And welcome back to halftime. Let's get some more analyst calls Jordache initiated as a buy at TD Cowan. Joe, you own this one.

Joe Terranova (37:39)

First of all, when you're looking at 12 month momentum, this has had a turn from being strongly positive positive to now negative, down 5.8% over the last year. The earnings report that will come out on May 6th will really tell investors two different stories. One, if you look forward 2027, a particularly strong year, you'll see a rebound recovery there. But in the near term, the challenges are this. Number one, spending on growth opportunities internationally, Canada and in Europe. And then we heard today from Domino's, we heard heard about the challenges related to the winter weather and a weakening consumer sentiment that will have a near term effect, I believe on doordash. So if your visibility is for the long term, you stay anchored to the position. But understand if you're looking at things like momentum, like I do. In the near term, there's clear challenges in front of the stock.

Frank Holland (38:32)

All right, Joe, we got one more yours Rollins. Price target raised to 66 to the Rothschild going up, up from about 52. And again, you own this one.

Joe Terranova (38:39)

Much needed earnings last week that we heard from this company. You're talking about 7 to 8% organic growth. The stock had not been trading well. Residential, commercial, all performing particularly well. So stock got a little bit of a lift. It's down today. But I like the earnings report from last week.

Frank Holland (38:59)

All right. G Renova downgraded to neutral from outperformer BNP Paribas. Why see on this one?

Steve Weiss (39:04)

Yeah, look, I don't blame them. I don't know when they got in, but stocks had a meteoric run and I can tell you it's not cheap. I'm still there. Tomorrow somebody's going to come out and raise the price target to 1500 bucks a share. So that's sort of what goes on here as long as the momentum of the fundamentals continues. And it is. I'll be there until it gets even more ridiculous. And very important.

Frank Holland (39:28)

No, you to date, stocks up over 70%. You're kind of pointing out some of the momentum in that name. As we mentioned, Robinhood maintained as overweight at Barclays out of its earnings. Joe, you on this one.

Joe Terranova (39:38)

This is going to be an interesting earnings report. There's a lot for them to discuss. It's the Trump accounts, it's the prediction markets, the day trader rule. You look at trends in the first quarter. While we saw elevated volatility, the month of March probably had a negative 3 effect on companies like Robinhood. Less usage, obviously, of margin, less engagement. I think you might have to look past that and look towards the trends that we're seeing in the month of April. You're seeing a really remarkable recovery that leads to a resurrection in the engagement that leads to more usage of margins. So you probably have to think a little bit more towards what the that guidance is going to look like because it's clearly a much better environment for Robinhood in the month of April. And you also have crypto recovering, which helps them as well.

Frank Holland (40:28)

All right, coming up next, we got Mike Santoli. He joins us with his midday word. We'll be right back.

Joe Terranova (40:37)

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Liz Thomas (40:48)

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Dominic Chu (41:44)

Aflac.

Liz Thomas (41:45)

The boldest thing that I've done in my 36 years as CEO has to be bringing on the AFLAC duck and the ability of it to captivate the American public. Our sales double in a matter of three years. I always say I based my whole career on a damn duck. If I had to choose one word to describe America 250, the word would be excitement. I believe the opportunities that America offers are unlimited. I don't believe there's any way that AFLAC would have been as successful as it's been were it not for the great country we live in.

Frank Holland (42:43)

And we are back on out of time. Senior markets commentator and overtime co anchor Mike Santoli joining us with his midday word. Mike, what do you think of the action in the market today? We've been talking a lot about the big earnings coming up later this week.

Joe Terranova (42:54)

Yeah.

Mike Santoli (42:54)

I mean, sometimes when there are big events on the way, the market literally does just wait and see. And that's kind of what the action looks like today. It's very evenly split between stocks that are up and down. Equal weighted S and P is flat. I do think it's interesting to see that the most overheated major part of the market in semiconductors is having just a modest 2% pullback.

Joe Terranova (43:13)

Very orderly.

Mike Santoli (43:14)

Other parts of the market are kind of picking up a bit of the slack there. So I do think, think that there is some comfort with the fact that the market has come back a good long way since the lows of March 30th. But I would say since six sessions ago really have been going sideways to try and digest that move. So that's all constructive now below the surface, I still think you're you see some hesitation in things like consumer cyclicals, which the median stock there is down like 5, 6, 7% from its high. Similar with industrials. You still have that them not quite back to where they were before. So it's not as if the entire market is ignoring or shrugging off what could be macro risks out there and oil prices at this level, it's just kind of trying to keep them contained within certain parts of the tape.

Frank Holland (43:58)

All right. Mike San Jose with his midday word. Mike, we're looking forward to seeing it coming up on ot. Thank you very much. All right. Coming up next on halftime, we'll debate more of today's top movers. Halftime back right after this. And welcome back to halftime. Let's get to some committee stocks that are on the move. First up we got Eli Lilly. It's buying cancer drug developer Ajax Therapeutics for up to 2.3 billion. Joe, you own Lilly and Joe T.

Joe Terranova (44:21)

So this is the world's most valuable pharmaceutical company. So it feels like there's been significant price appreciation. But if we show year to date, I think it's down 18%. It's flat over the last 12 months. They're rightly diversifying the model. The focus has been on obesity and diabetes. That's where the revenue growth has been. That's why they're the most valuable pharmaceutical company in the world now. They're doing pursuing a lot of deals. They're getting into cancer, they're getting into brain disorders. They're getting into immunology rather. And that's exactly what they you want them to do, utilize the strength in the stock price to diversify the business model for the long run.

Frank Holland (44:59)

Liz, I want to come to you. What's your just broader thoughts about the the health care space, by the way, over the weekend, Tribariat saying they're overweight, tech and health care kind of putting them on the same pedestal.

Liz Thomas (45:07)

So health care was one of my calls for 2026. Part of that call was because health care tends to be one of the better sectors in a midterm election year. But the way the politics have gone this year, I don't expect that midterm elections are going to produce quite as much volatility. I think the market's already pricing in certain outcomes. So I think there's still is opportunity in the growth parts of health care, which I would consider the offense of health care. But perhaps health care doesn't perform as well as it normally would in a midterm election year. On the defensive side.

Frank Holland (45:38)

All right. Looking at the XLV pulling back just fractionally right now. All right, stay with us. Final trades. They are coming up on halftime. They'll go anywhere. Trades. Weiss, you're up first.

Steve Weiss (45:52)

I'm going with Goldman Sachs. Stocks holding on well here after having a sell off on the earnings and then bouncing back nicely.

Liz Thomas (45:59)

Liz, Emerging markets I think when we finally get decided de escalation in this war, emerging markets can rip.

Frank Holland (46:06)

Jenny, okay.

Jenny Harrington (46:07)

Verizon just reported today and had a great earnings report. They raised guidance a little bit. They had subscriber growth. What really the most important thing is is that it shows that their strategy is working. And here you have a stock with a 6% dividend yield trading at less than 10 times earnings. 5 to 6% earnings growth ahead.

Frank Holland (46:23)

Joe, you got the last word?

Joe Terranova (46:25)

I do. Northern Trust Financial name remarkable quarter that they reported executing on diversifying the business model. I love obviously Steven's final trade of Goldman Sachs along there as well. Emerging markets. Liz, love that one as well. South Korea, Verizon. Very exciting.

Frank Holland (46:46)

Really quick one before we let you go. We'll let them talk amongst themselves down across the board right now. And with that we're going to toss things over to the exchange with Kelly Evans. That's it for halftime. Have a good day. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

Edward Jones Narrator (47:10)

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Frank Holland (47:44)

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