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Halftime Report
Trading the Earnings Movers 10/23/25
00:44:06
Scott Wapner and the Investment Committee debate the earnings fallout after Tesla, IBM and others are on the move following their reports. Plus, the desk shares their latest portfolio moves. And later, Josh Brown spotlights a brokerage firm in his "Best Stocks in the Market." Investment Committee Disclosures
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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. All right, Michael, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the earnings fall out as Tesla, IBM. Other stocks are on the move today. Following those reports, the investment committee as always on the case and making some notable new moves. We will document all of them for you. Joining me for the hour today, Josh Brown, Stephanie Link, Malcolm Etheridge and Bryn Talkington. Let's go to the markets. We do have green across the board. This is a resilient market. How about this stat? The S and P Yesterday posting its 121st straight close above its 50 day moving average. It is the longest such streak since it went 130 days ending in March of 2011. We're going to get to the markets, we're going to get to all those names that are moving and a lot of moves starting with a new buy alert. That's what I'm calling it because Josh Brown has added a new stock and it is Zoom. You've talked about this before. Maybe you've even owned it in the past.
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C
Oh, yeah.
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B
But what's. What's. Why now?
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C
Me and Zoom go way back.
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B
Yeah. Why are you.
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C
I promise.
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B
Romance.
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C
I promised myself I would never do this again. So of course I did it. Here's the story of Zoom as I understand it and as I believe things to actually be this is a company that we use at our firm, Ritholtz Wealth. There's an SEC regulation where financial advisors and other staff are not allowed to use their personal cell phones to call clients or to send text messages with clients. So everyone has to have their own phone number. And this sounds obvious, but during the pandemic, a lot of Wall street firms got in big trouble for using their personal communication. Now you can understand why they were all sitting at home and nobody really had a plan. Zoom's got an enterprise business where they give. They give you phone numbers that you can use. It's an app. All of our employees use it. So that's what got me curious. I wonder how successful this product is because that's our telephony provider and they just announced that they now have 10 million users of Zoom phone. The reason why this matters is because the problem with the stock for the last four years since the pandemic is that everyone looks at video like it's this commodity thing. Like, oh, big deal. Microsoft Teams, Google Meet. It's all the same. The truth is, it's not all the same. When an enterprise adopts Microsoft Teams, the salespeople flip out because all of the customers they want to call on prefer Zoom calls. Zoom is easier for everyone. So they sort of have an edge in a business that people think is commoditized. Okay, put that aside. If they can build out this enterprise business of which telephony is only part of it, that's a really big deal. We have now adopted another product that they use called the Zoom Revenue Accelerator. That's a note taking AI, which of course other firms have. But it's becoming so good and so important to my organization that I can't imagine that's not the case for all of their other enterprise customers who are currently using it. I think there's going to be an inflection point where finally they're able to show some growth away from just the video calling. It could be this coming quarter. They're going to report on November 24, could be next quarter. Not 100% sure. But the great thing about Zoom is because there's no growth here and it's just been kind of flatlining mid single digit growth. The earnings multiple is 18 times. I'm getting a discount obviously to the tech sector, but to the overall S and P with the potential that they will figure out a growth strategy and it'll finally click. The company's got $8 billion in cash on the balance sheet. They can make acquisitions, they can continue to Buy back stock, they can do whatever they want with it. And I think that the risk here is minimal compared to the potential upside if and when they actually hit it.
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A
So you've seen the growth then if they have this, they can't. Well, why? Because you're going to pay 18 times for no growth.
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C
I'll explain it to you. Because if and when the growth shows up, the stock will get a rerating. Morgan Stanley just initiated coverage this week and that was actually their argument. Basically, you're not paying a premium for anything here. You're paying a low multiple relative to other communications and technology stocks. But at a certain point, all of these other enterprise businesses that they've gotten into, if they can start showing actual growth all of a sudden, this is a stock that people have to think about differently. I wouldn't be shocked if they finally post a growthy quarter or a growthier outlook. This is. This could be 100 bucks in the blink of an eye. Nobody owns it. Nobody owns it. The last thing I want to say here on the buyback or on the flexibility of having 8 billion in cash. One of the problems with this stock, they did all this hiring in the post pandemic like every other technology company, and they did something that was really generous for employees, but it screwed up the stock for two years. In other words, if they hired an engineer, they said, we're going to pay you $500,000, $200,000 of that is going to be in stock options. Then the stock falls 80%. So you either lose the employee or you top that employee up. They chose to top the employee up. Give them another $200,000 worth of stock options. That stock option compensation problem has been an overhang on this stock. A couple of quarters ago, the CFO came out and said, you know what? Wall street is telling us to knock it off. We have to stop diluting the shareholder base. We have to start focusing on shrinking the share count and being a little bit more shareholder friendly and a little bit less employee friendly. I think that's a very smart decision. And that's another thing that could end up showing up if and when the next time they're able to report it.
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B
Okay, so we'll watch it. And if anything, it's a little bit of the flavor, if you will, about what we have coming up today. We have a number of moves and then we have a debate on the other side of the moves to try and give you as much information.
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C
I think Stephanie wants to buy something.
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B
Make your own decision.
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C
I mean, you basically no, no, you're looking at a ten year chart.
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A
I know, but look at the three year chart.
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B
It's been a dollar eighty for three years.
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A
Steph, Steph, this is just not.
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B
Well, the bet, you're right. I think the bet is that it's not going to be at $80 for the next three years unless they change their name to Zoom. That I'm still, I'm still not.
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C
The revenue accelerator is the AI products. We're using it, it works beautifully. My advisors are hooked on it.
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B
What does Sam Altman think about it? That will change my perspective completely. All right, so we'll, we'll continue to take a look at that. Maybe, you know, for a minute. This may be longer than a minute. It was a retail retail kind of name around the pandemic for obvious reasons. I bring that up because if you look at the market overall, retail continues to play a considerable role in where we are. And I'm not talking about the meme nonsense around some of the names that have gone crazy of late. How about this from Goldman Sachs. Yesterday, 25.2 billion shares traded across all US equity exchanges. Good for the fifth most active trading session of the entire year. The average year to date is 17.2. Again, we're at 25.2. Their internal data shows the retail community accounted for greater than 16% of of S&P 500 members total volume yesterday, which was at a 5 plus year high. What do I take from that, Malcolm? It's that retail is engaged. Retail hasn't given up to ship. Retail still believes in this market because they are perhaps tuning out the noise and they're focusing on the economy, they're focusing on earnings and they're focusing on don't fight the Fed. And they've been proven correct to do just that. Yes, and I think retail has been taking Those winnings from April 9 lows all the way through the summer and trying to find a place to redeploy that capital that made some sense. And so a lot of those dollars have piled into financials that's done well. A lot of those dollars have piled into energy that's done well. And they're really looking for where are the places that are going to be touched by the AI story, separate and apart from the hyperscale. And so we've seen, seen those dollars go in those directions. Quantum. You could make an argument that that's part of the momentum stocks and those have become some of the more bubblicious names. But other than that, I think retail has Gotten this one right so far, by the way. You know, Brin, it's from the, from the amateurs, so to speak to the pros. The Baron's latest money manager survey. 47% anticipate higher stock prices over the next 12 months. Why do you say? Well, it's under 50%, but it was just 28% in the spring. 57% believe that stocks are overvalued. That's interesting because it feels to me like it plays right into what we've heard from some of the brightest and most successful money managers of all time. It's like Paul Tudor Jones. Does he love the valuation of the market? No. Does he think it's going up? Yeah. Does he think you'd be foolish to miss out? Yeah. David Tepper came on the network and said, I don't, I don't love the valuation, but I'm not getting in front of, don't, don't fight the Fed and all that's happening. With the stock market likely to go higher from here, what do you make of that?
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A
The market goes up 75% of the time and in the 75% of the time, the average return is about 26 or 27%. The 25%, the market goes down, the average negative return is around 15%. And so I think if you're waiting for that negative year and you're positioning around that, that's just a great way to grow poor safely and you feel smart for that minute of time or that six or seven month or even year of time when the markets are going lower. But that's just proven to be a fool's errand. And so I just think we're in this moment of time. We've got a bunch of meme stocks that meme ETF is back, but we also have real stocks and real companies, as Malcolm was saying, I think across sectors, financials, utilities, industrials, of course, tech, that have really good earnings. And so to me, what I look at, although valuations are clearly at highs, highs going back decades, earnings also continue to not only grow but accelerate. And so I think while we have that, that reality, investors are going to continue to invest and we'll obviously have the speculative meme names that continue to garner a lot of headlines, but we'll also have really good, high quality companies, as we're already seeing in their earnings report that we've gotten so far.
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B
Speaking of like, let's look at IBM for example, which did have a good earnings report, beat on the top and the bottom line, the stock was lower earlier, it plays into the theme that I mentioned at the time, top of our program moves that the committee is making today around some of the stocks that are in the news. The stock is off, as you see. It's coming off the map, though, from where it traded after the earnings is IT staff. The fact that as you, as you talked to us on closing bell yesterday, going into the print, the software line was going to be the most important one. It was a little lackluster. Last quarter, the stock sold down after earnings. It only came out in line with street estimates yesterday. Is that why the stock did what it did?
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A
Yes, short term. Right. But the numbers, they beat earnings, revenues, they raised, they raised margins, they raised free cash flow. That was the second piece, Scott, that I was looking for in terms of free cash flow guidance at $14 billion. That was at the. Actually the high end. So, yeah, so the software piece was disappointing, but it still grew 11%. It still accelerated 5% sequentially versus 3% sequentially the prior quarter. So to me, I'm not getting all, you know, I mean, hybrid cloud at 14%. I'm not. I think that's actually positive. Okay, it wasn't 16%, but I just think that this company is positioned so well. In addition, the infrastructure revenues grew 19%. Consulting actually grew 3.3%. That actually surprised me a lot. I think they're taking a lot of share from Accenture. And so I think the fundamentals are sound. I mean, it was down as much as what, 6%?
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B
It was down.
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A
I mean, that's.
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C
That to me, is 25 times forward. I'll throw the same question you had on me, had for me with Zoom, back to you.
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A
Different company.
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B
Well, different.
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We agree, different company.
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What's the historical. What's the historical 16.
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Okay, well, 18.
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And what's it at now?
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It's at 25.
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B
Does that deserve that much of a premium?
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Because guess what, 74% of the company's revenue are software and services. If you go back in history, it wasn't even 20%. They didn't even have any software. There's a mainframe company, Right. So now it still is a mainframe company, but it's much smaller. Consulting is doing well also, by the way, aided by AI and software. I mean, look, hybrid cloud, 14%. Automation up 22%. Red Hat backlog up 20%. That, to me, tells me hybrid cloud is, is expected to accelerate in the second half.
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B
Okay, so not. We buried the lead a little bit. The fact is, both of you bought more of the stock. Yes, you look at the decline and you say, I don't, I don't believe it. I buy it. Tell me more. And then I want to hear from.
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A
You 100% because it goes back to actually just the market as a whole. It's not that difficult to buy stocks because earnings are actually coming in much better than expected. Earnings are running a 13% growth. Revenues are running about 18% growth. You buy stocks where numbers are going higher. IBM numbers are definitely going higher. They raised guidance. So I think you own the banks, numbers went higher. You own some of the consumer stocks numbers at American Express, Royal Caribbean Cruise.
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B
Oh, but you, you want to buy these things though. I mean you got to look at the valuation in some respect, don't you? I mean, you know, Josh's question has validity to it just like yours probably did with, with Zoom. I mean you don't, there's already a lot of that has to be in the stock. If it's 25 times forward, where is it going to go? Where's it going to trade at?
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A
The whole transition, the whole transition of this company I don't think is appreciated at all. I don't. There are still. So yesterday we talked about it. There are only 8 buys on this stock. There are 14 holds and sells on this stock. People don't believe in the software story. They don't believe in the management of the chart. I think the numbers continue to go higher as software and services become even more of a part of the story. And oh by the way, more recurring revenue, more predictable revenue.
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B
Malcolm, I agree wholeheartedly with everything Stephanie just said. This is a legacy mainframe company that's turning itself into a software company. It puts up margins, gross margins that look very similar to a software company. 60% almost. Yet the market is responding to a beat and a raise with a yawn. Not even a yawn. A sell off that shares sold off pre market all the way down to 8%. That is absurd to me. And so to your point, I stepped in and bought more shares this morning. I thought, I like this.
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C
I like the stock. First of all, I like it technically. Look, look, I, I like, I like this chart is exactly what I like to see as a, as a reaction. Look how quickly they came in to buy that up. And I just, I guess the part I would disagree with is that they're not getting credit for having transformed already into a software business. This is a Stock that's up 150% in the three years since chat GPT came along. I think everyone understands how important IBM.
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B
Is nine and a half billion dollars of bookings. And I specifically in three years for a company that, I mean this is old tech we're talking about.
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A
And that 14 billion in free cash flow. 14 billion. That was much better than people thought. At the high end of their. Of what was whispered. Whispered.
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I think the stock's going to work. So I like it.
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B
Okay, so the other one that is newsy comes by way of the AI power story, which you know we talk about a lot because there's a lot of ownership on the desk. You all probably own some of those stocks too. They had a pretty good pullback yesterday of what's perceived to be maybe some froth in the market because the stocks are up an awful lot. Vertiv is a good example. Vertiv had earnings too, which were really good. The CEO was on with Jim last night on Mad Money. It's a Stephanie Link name. Look at the stock today. It's rebounding up 6%. He bought more of it today.
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A
I did because the fundamentals are very, very strong. And I just can't understand why the Stock would be down 6,7% at one point last yesterday it was the momentum trade, right? The whole momentum trade totally rolled over. It was risk off. These guys got caught up in it. But they beat and raised. Total revenues grew 28%. Operating margins beat by 200 basis points. They, the orders is the thing that kind of was staggering to me. Up 60% percent.
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C
How much, how much was it down?
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A
It was down at one point at 6% yesterday.
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C
I thought you said 6, 7. I just wanted to get that.
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A
Yeah, 6, 7.
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C
She said it's got, she said it.
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A
Go focus on your zoom and that chart.
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B
Everybody got that. I'm assuming Bryn liked it. You know Brian, it takes me. We'll do Tesla here because the, the, the moral of the story on the show today is like a stock a lot been in it for a while. See a pullback and pounce on it while you have the chance. Tesla then brings me to you. Stocks down. It's coming off of its worst levels of course. So what's your take on the quarter and why don't I have anything on here that says Brin, Brin buys Tesla. I don't see anything. What buys more.
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A
I already own Tesla and so I talked about.
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B
I misspoke for a moment.
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A
Buys more. Yeah. So I've been investor for a long time. Let's talk about the call. Well, first of all, that chart you have up looks, looks just like one of, I think it was IBM, it sold off this morning. I think it got to 415 and look, it's already almost flat for the day. The numbers are the numbers. We all know that the earnings are down because less car sales. What was interesting though, I thought the call was very strong. They laid out a very good roadmap for investors for I say check marks and Catalyst. So first of all, you know I have a Tesla, I've had two Teslas. I understand where they are from a user in terms of full self driving. Right now they're supervised meaning that if you look down or if you sneeze it yells at you and says we're going to turn it off. I believe they're at that last mile and that the technology has gotten so good and he talked about that that they feel that, that by. And technically he said by the end of the year, which probably means the middle of next year technically they will be able to go unsupervised. So that would be a really big deal. They need regulatory approval. China supervised is not even allowed in China, which they talked about that I think as it relates to Optimus and what Dan and I were talking about, I was yesterday about the new value creation of the company. The question was asked like how quickly, quickly is Optimus the robot going to be rolled out? And Elon was really clear. He said I feel really comfortable five years from now we could be doing a million robots a year. But I feel less comfortable over the next one or two years because we all know the realities and the difficulty in manufacturing something that hasn't been manufactured before. And so I think what it boils down to, you will continue to have a tug of war where this stock trades in its own ecosystem. It doesn't trade with the S and S and P. And I still think that 46470 is going to be a ceiling for the rest of the year. And then I think you know that 40390 is a, is a, is a great spot. So I wanted to give a trade idea that I'm looking at. I said yesterday I would, I would buy more of the stock if I sold a call. You could buy the stock here for 34, sell the January four seventies and get 30 bucks. And so if it doesn't get called away, your cost basis comes down to 404. If it does, you've had a nice trade in one quarter. So that to me is the way I would be and I will be playing. The stock is buying more but only selling calls. I just don't think there's a catalyst to get this stock over that, that 464 70.
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B
All right. It still works. I mean, you still played into the theme. You had a. You had something going on. And it's good to get your perspective too. Which brings me to another stock that fell asleep after earnings. We could see what it's doing today. Netflix, you know, sort of kicked off the high, high interest out of the NASDAQ earnings reports. The stock is still trying to recover a bit from the sell off. You took a look at this and decided you wanted to buy more.
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C
Yeah. And it was an average up. So I own it for a long time. The stock has had an incredible year. Gave back a big chunk of the gain on the heels of earnings. It was very strange earnings reaction, in my opinion. So I wanted to fade that. They had a long standing dispute with the Brazilian tax authorities. I won't rehash the whole thing. What it boils down to is they paid a couple of years worth of whatever that dispute was. 600 some odd million. And absent having made that payment, which was not in their guidance, they would have actually beaten the number. People just didn't seem to care. They use it as an excuse to sell. Now the stock is testing its 200 day moving average for the first time since April. And I believe we have that chart. Just so I can illustrate this point, I do think. Here we go. I do think the buyers will show up here as they have in the past. I do think if it does break below, it'll be very temporary. I think the 200 day moving average has worked like a charm in terms of a good opportunity to accumulate shares in Netflix the whole way up. And I just want to reiterate how good the fundamentals are here. 25% net margins. They actually raised free cash flow guidance to 9 billion for this year, up from a range of 8 to 8 and a half billion. More importantly, they still have $10 billion left on their buyback authorization, which means as things settle out, they should be out there in the market sopping up some of that supply. They told us a significant increase in operating cash flow would come. And I think when you come up with like, what are the most important companies in the market in the world in terms of being a platform for consumers? Netflix has over 300 million customers. They're in almost every country. This is probably one of the five most important technology platforms in existence. And next year they take the fight to YouTube. They're bringing on podcasts like Bill Simmons and the Ringer, they'll probably do more of those. And I do think that this is a stock that should have a great 2026. So I wanted to make sure I own some more of it before we get there.
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B
Let's get to thank you for that, by the way. Let's get to a developing story. You saw those quantum names moving today on that Wall Street Journal report that the White House, the Trump administration, potentially looking to take stakes in those countries. There was a bit of cold water thrown on that from another news organization within the last hour. I'm going to Eamon Javers now, who's in Washington with the very latest. What do we know now? Scott, we're getting some denials here from the administration related to that report that we brought to you earlier from the Wall Street Journal. An administration official texting me just within the past couple of moments saying we are not negotiating with them on taking equity stakes. We also almost simultaneously got a statement on the record from a Commerce Department spokesperson. The Commerce Department is not currently negotiating equity stakes with quantum computing companies. That's the statement from a Commerce Department official, Scott. So some cold water on that report. And of course, these statements from the administration official and from Commerce both raise some questions, which is if you are not negotiating with them on taking equity stakes, are you negotiating with them on something else? Is there anything else going on here? And I can tell you that these officials are not responding to my requests for further information on this. So, you know, parse those denials as you will, but the administration officials saying we are not negotiating with them on taking equity stakes, and the Commerce Department saying they are not currently negotiating equity stakes with quantum computing companies. Scott, back over to you. Well, that's exactly what I was going to come back to you on that currently say they're going to be doing a lot of work doing. Does that does that necessarily mean that they won't be at some point? That's going to be the key question. Just because they're not today negotiating or not today in talks, whether it's something that could be tabled for another another day? Right. So, yes. Could it happen in the future or did it happen in the past and fall through? You know, could it have fallen through as early as this morning when it hit the Wall Street Journal? We don't know. But what we're told is that's not happening present tense right now. So look, that's one of the problems with the world of texting and statements is that you don't get a whole lot of context and Follow up. So we got to go with what we got to go with here, which is pretty narrow, but it is a denial and it's important. Given that these stocks are moving, it's important to bring it to you. Yeah, no doubt about that. And thank you for it. Eamonn, just keep looking at your phone. You never know. Eamon Javers. Bryn, I'll just go to you here because this was interesting in the moves that it caused. IonQ is the one that you have, you have taken profits in that name over periods of time. Lastly, about a week ago. So what do you make of this story? And now given Amen's reporting, what do you do from here?
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A
Yes, I mean I sold my last position at 70 just because the chart looked parabolic. And I do understand what these companies do and I appreciate that they can use their stock prices to go buy what I would call other research companies as it relates to the relationship with the government. I know this because IonQ talked about it. I mean their last call, they already work with the government. They recently bought a research team. I'm calling a research team out of New Mexico that already works with one of the three letter agencies in the government. So there are already, I think, well, existing research projects that the government is working for. I can't speak to the other, the other quantum stocks But I know IonQ does have that relationship so maybe they end up deepening that. But I just will say that to me the big news yesterday was with Google that announced, I forget the name of the chip that, that, that Google had what they called the first ever verifiable quantum advantage. It was in at Nature magazine or at Nature website. And so I mean Google saying that we now have the first quantifiable real advantage from quantum. So I mean this is early days so I think as an investor you can buy some of this. But I just think valuations which there's no metric to make sense, I think ionq is at 256 times sales. These are long duration, really high risk, high return plays. So I would, I would treat them appropriately in a portfolio.
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B
Okay, good stuff. We covered a lot in the, in our A block today. We're going to take a quick break. When we come back, we still have more moves to get to. Stephanie Link has another one. Bill Baruch is going to join us about something that he's doing. Excuse me, in the market. And then of course Josh Brown's best stocks in the market is coming up as well. We're back to, to realize the future America needs. We understand what's needed from us to face each threat head on. We've earned our place in the fight for our nation's future. We are Marines. We were made for this. And now a next level moment from AT&T business.
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B
All right. Welcome back. Let's talk some gold. Very much in the news of late. There's the stock. It's a reap the stock. There's the chart. It's a rebound, obviously the first back to back losses we've seen since September. So it's getting a little bit back. Still on track for the first negative week in the past 10. That tells you where the momentum has been, no doubt. Bill Baruch, he joins us now to talk about some of these moves that he has made. Tell us, tell us that this is in the specialized fund around commodities, right? Yeah, we, we do run a cta. It's a fund that manages futures and commodities. It's focused on metals. 4000 was a huge level for gold and it tested 4000 yesterday early, didn't even get quite to 4,4000. I think it shows the strength of the buying that stepped in. And that's a big retracement level, a 3, a 2 Fibonacci retracement, which which many people follow back to the July 31st low, which I find a very significant low because August 1st was the big payroll revisions. So this was a big support level. But I think even furthermore the market got some tailwind and then the Russia sanctions were announced late yesterday. And we have three big pillars to our bullish gold thesis, the dollarization, basil 3, because gold is a tier 1 asset, a balance sheet and widening fiscal deficits. This is huge for de dollarization because they are now blacklisting these, these Russian oil, oil companies and you cannot purchase oil from them or India and China. They now if they do, they will get blacklisted from say Western banking system or the global commodity trade. So this, this really sort of forces money away from the dollar and gold is seeing a tailwind from that. Whether it's justified or not that the dollarization is there in the air right now. This is a tailwind to gold and we're seeing a good response off of that. We're also using it as an opportunity to add to our mining portfolio. Well that's what I wanted to get to Newmont, Agnico, Eagle Core Mining. Yeah these Newmont reports after the bell today. Newmont and Agnico are both trading one standard deviation below their long term forward P E. You're going to see numbers here. 70, 80% year over year earnings growth expected in Newmont AM in the same ballpark. Tremendous free cash flow, you know in core more than the other three and other two have all has also made some tremendous purchases. You know Silvercrest Mine last November. They're also seeing some mine extension life. I mean there is really good news around these names and their input costs are being sort of stagnant. They're all, all in sustaining costs are really stagnant. Relative to this growth in revenue we could really see a significant level of capital return to shareholders whether that be buybacks or dividends. So I'm utilizing the, this pullback. We have cash in this mining portfolio to get to work again. Newmont reports after the bell today. AM and cd they report a week from today. Okay, good stuff. Thank you. Bill Baruch with those new moves in as gold makes a little bit of a bounce. So Stephanie Link has another move. You know I saw today one firm initiated some of the payment names like Visa, MasterCard were initiated by Amex, had good earnings recently. You bought more capital One.
- [33:40]
A
I did. We talked about this yesterday. The quarter was really good. They beat. They raised purchase volumes rose 39%. That includes Discover up 7% Capital One alone. Their delinquencies fell on their net. CEOs net charge offs for credit card fell almost 100 basis points. So no credit problem there. And then interestingly they actually announced a $16 billion buyback which is 11% of its market cap. So stocks trading at 11 times earnings super cheap. I love this Discover deal. They're going to see massive synergies and lots of market share growth in the payment network space.
- [34:17]
B
Yeah, it was Citi that initiated Visa and some of these other names today. So just wanted to get that out there. Thanks for the move. The headlines now with Bertha Coombs Hi Bertha.
- [34:24]
A
Hi Scott. Illinois Governor J.B. pritzker announced to the creation of a nine member commission to hold the Trump administration accountable for its, quote, military style assault on Chicago and its suburbs. He says it will establish a record of the conduct of federal law enforcement agents and will document the effect of the federal government's immigration crackdown. The administration is carrying out an immigration blitz in Chicago right now and has been seeking to deploy the National Guard in Illinois to fight what the President says is out of control crime. Social media site Reddit is suing startup Perplexity over its AI training methods. Reddit alleges that Perplexity illegally scraped its user posts to train its AI model. Perplexity denies the allegations and accuses Reddit of extortion and opposition to an open Internet and the lights will shine on Broadway tonight. The union representing Broadway musicians reached a tentative agreement with the Broadway League today on a new contract that includes higher wages, averting a potential strike that would have silenced 23 musicals. The union's members need to approve that deal, but it will be curtains up tonight.
- [35:41]
B
Scott, thank you very much, Bert Coombs. Coming up next, Josh Brown, an update to his best stocks in the market list. He thinks there's a buying opportunity and one name that's recently pulled back. He'll tell you what it is 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. It's a classic corporate power move. But the real power move having end to end visibility on your most critical shipments. FedEx, the new power move. And now a next level moment from ATT Business.
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C
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.
- [36:39]
B
And International Sleep Day is tomorrow.
- [36:42]
C
Luckily, AT&T 5G lets you deal with.
- [36:44]
B
Any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and device. Coverage not available everywhere.
- [36:53]
C
Learn more@att.com 5G Network.
- [37:00]
A
Welcome back to Halftime. I'm Kate Rogers with an update on the deployment of federal troops to the Bay Area from San Francisco Mayor Daniel Lurie. He just released a statement saying, quote, yesterday I spoke to San Franciscans about a potential federal deployment in our city. I said then what I've said since taking office, that keeping San Franciscans safe is my top priority. He adds, late last night I received a phone call from the president of the United States. I told him the same thing I told our residents that San Francisco's on the rise, visitors are coming back, buildings are getting leased and purchased, and workers are coming back to the office. We have work to do. And we would welcome continued partnerships with the FBI, DEA, ATF, and U.S. attorney to get drugs and drug dealers off the streets, but that having the military and militarized immigration enforcement in our city will hinder our recovery. We appreciate that the president understands that we're the global hub for technology and when San Francisco is strong, our country's strong. He also adds, in that conversation, the president told me clearly that he was calling off any plans for a federal deployment in San Francisco. So we'll continue to monitor this situation here. But as of now, San Francisco's mayor, Daniel Worre, saying he spoke to the president and says that this federal deployment will be called off. Back over to you guys.
- [38:11]
B
All right, Kate, thank you. S.K. rogers for us out at one market in San Francisco. Let's do Josh Brown's best stocks in the market. The spotlight shining brightly today on what.
- [38:21]
C
Name in interactive brokers? We we wrote the stock up over the summer and we talked about it here on the show, and it was a breakout in progress. It went up like eight or nine points from there. It's pulled back a little bit and I think it's setting up for another entry. Look, I'll make this really, really simple. They're in every market that Robinhood's in. Robinhood is growing faster and it's bigger. It gets a lot more attention. This stock is selling at a 50% discount relative to the multiple that's on Robinhood right now. So you could say, well, maybe that means Robinhood's really overvalued. Or you could say, maybe this is really undervalued, or maybe the truth is somewhere in the middle. I'm going to tell you that I think ultimately this is a company that's going to get acquired. I wouldn't say that I know anything or it's going to happen imminently. But the founder, who's a brilliant man, Thomas Peter Fee, is 81 years old. He owns 67% of the stock. And at a certain point, you look at all these companies that are worried about this convergence of prediction market markets and sports betting and retail brokerage and options trading. And at some point, one of these crypto players that needs to be in stocks is just going to look at this as a shortcut. So I think there should be more of a premium baked into the share price given that somebody's going to want this asset even if they don't take this asset. I think it makes a new high on its own fundamentals. They've been adding new accounts at ridiculous rate, doing very well in this bull market for all things options, crypto and stocks. I think that continues. I think the stock breaks into the 70s, makes a new high. So I wanted to shout this out because it's on the best stocks in the markets list. It really hasn't made the big move yet in my opinion and I think it's pent up and ready to go.
- [40:13]
B
Okay, thanks for the spotlight on it. Mike Santoli, he's next. Senior markets commentator Mike Santoli. He's here with his midday word. I think the price action in earnings disappointers. Yeah the stocks that went down, they're all going in the same direction. They're getting off the map.
- [40:49]
C
That is true. So and I earnings season often goes.
- [40:52]
B
In waves like that.
- [40:53]
C
Right.
- [40:53]
B
You'll have a little bit of sell.
- [40:54]
C
The news that washes through that resets.
- [40:57]
B
Expectations for the next round to come.
- [40:59]
C
So yes, back and forth. I think it's kind of this, you know, turbulence at 30,000ft for two weeks.
- [41:04]
B
Is what we've been dealing with.
- [41:05]
C
It hasn't really had a lot of net effect.
- [41:07]
B
We've been in the range still for a whole almost two weeks in the.
- [41:11]
C
S&P 500 and it's hard not to at least give credit to the fact that we've kind of taken on a.
- [41:17]
B
Lot of these concerns.
- [41:18]
C
I guess the brute force of earnings going up as much as they are also watching the 10 year treasury yields back up to 4 but really very.
- [41:26]
B
Contained on a day when oil's up.
- [41:28]
C
A lot because they've been moving together. So if you're looking for things that.
- [41:32]
B
Would just sort of upset the general.
- [41:34]
C
Kind of macro constellation of factors, it's not really happening just yet. So I guess everyone can debate oh, is the momentum flush complete?
- [41:42]
B
Is it still have more to go.
- [41:43]
C
Are we back in this mode from back in February when it did get a little messier. Impossible to handicap because everyone's trying and coming up with different.
- [41:51]
B
They are. Morgan Stanley today to your point says it's more than halfway there. The momentum sell off what the best data point on that in my view.
- [41:58]
C
Was you've never had a similar decline underperformance the momentum factor in a week's time from 2009 to 2019 of 9% or something like that. Since then, you've had 25. So everyone's kind of crowding and using.
- [42:12]
B
The same factors and using the same risk management.
- [42:15]
C
And so you just have to weather it.
- [42:16]
B
All right. We'll see what's up at 3:00'. Clock, Mike, thank you. Mike Santoli. Up next, new details on that breaking story on an alleged sports betting scandal rocking the NBA today. Contessa Brewer with details breaking next. All right, welcome back. New details now on the alleged NBA gambling and sports rigging scandal. Let's get back to Contessa Brewer, who has new details.
- [42:52]
A
Contessa yeah, so it's Scott, you heard from FBI Director Cash Patel saying this is an insider trading saga for the NBA and a massive nationwide investigation that has resulted in serious federal charges against Trailblazers coach Chauncey Billups and Miami Heat player Terry Rosier. The NBA just sent us this statement in the last half hour. We're in the process of reviewing the federal indictments announced today. Terry Rosier and Chauncey Billups are being placed on immediately from their teams. And and we will continue to cooperate with the relevant authorities. We take these allegations with the utmost seriousness and the integrity of our game remains our top priority. Now Phillips and Rosier are both heading to federal court this afternoon. They're charged along with more than 30 other defendants, many with alleged ties to organized crime, accused of running underground poker schemes that cheated victims using modified card shuffling machines, barcoded decks, cameras built into tables and light fixtures. And they say the coach and the basketball star were involved with luring in the gamblers and legitimizing those games. According to prosecutors, multiple crime families associated with La Cosa Nostra are also charged with conspiracy, wire fraud, extortion and on and on for a scheme that ran into tens of millions of dollars, according to federal prosecutors. The other big investigation that was announced today, six defendants that included Rosier and former Cavaliers player and assistant coach Damon Jones, who, by the way, is also accused in the poker bust. They're accused of throwing games or providing insider information to other gamblers and then profiting off wagers for the Hornets, for the Lakers, the Trailblazers and the Toronto Raptors. Prosecutors indicated this investigation was linked to the bust of Raptors player Jontay Porter, who was banned from playing from the NBA for life and is now awaiting sentencing. The U.S. attorney is on the record saying that the sportsbooks are the victims here, not the perpetrators. And DraftKings just reached out to me to talk about how seriously they take the obligation to report suspicious or illegal activity. The American Gaming association is pointing out that the illegal gambling happens in the shadows and by bad actors. They're very much concerned about Scott trying to leave the association of organized crime and mafia led gambling behind. You know, that's something that belongs in the olden days in Las Vegas, not in the current business environment of reporting EBITDA every quarter.
- [45:32]
B
All right, you'll continue to follow it, I know you will. And we'll hear from you later and throughout the afternoon. Contestant Brewer, thanks so much. We'll take a break. We'll do finals next. I will do it again. Three o', clock, closing bell. Chris Verone, Abby Yoder, Jeff Richards, Stacy Raskon and Kevin Gordon. I hope you'll join me then to brin your final trade is what?
- [45:52]
A
Salesforce chart starting to rebuild itself. Good, good meeting. Good earnings. I mean, sorry. Good, good number. After the Dreamforce meeting, when their earnings come out December 2nd, they're looking to report 19% growth.
- [46:04]
B
Thank you, Malcolm. IBM, 9% year over year growth. What else do you need, Steph?
- [46:08]
A
Las Vegas Sands. Another beat and raise.
- [46:10]
B
Josh.
- [46:11]
C
Netflix looks like it wants to go green on the day. Where's the roof?
- [46:14]
B
See in two hours. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live live, weekdays at 12 Eastern only on CNBC.
- [46:29]
A
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement.
- [46:46]
B
To make a particular investment or follow.
- [46:48]
A
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- [47:18]
B
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