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Halftime Report
Trading the Iran War Uncertainty 3/26/26
00:43:04
Scott Wapner and the Investment Committee debate how to trade this market with the Iran War uncertainty looming over stocks. Plus, the desk share their latest portfolio moves. And later, Josh Brown spotlights Dell in his "Best Stocks in the Market." Investment Committee Disclosures
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- [00:03]
Janice Henderson
At Janice Henderson Investors we believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy, your valued assets and our valuable insights, your vision and our mission. Working in harmony to seek the right investment opportunities. JANICE Henderson Investors Investing in a brighter future together.
- [00:30]
Josh Brown
Not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time. Sometimes.
- [00:55]
Scott Wapner
AT&T business Wireless connecting changes everything. I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, trading the war uncertainty, stocks and oil remaining volatile yet again today. We do have some interesting new moves from the investment committee to share with you. And joining me for the hour, Josh Brown, Malcolm Etheridge, Steven Weiss and Rob Secchen. We will go to the markets where, as you see, we are lower. Crude is up almost 5%, so we're just shy of $95. The major averages are lower, as we said, led by the NASDAQ today. And we'll get much more into that. We've talked, Josh, yesterday, that this really isn't all that complicated. We have no real sense about where this conflict is going. And in the time it is, the bottom read on your screen, oils green, stocks red, plain and simple. And we'll just go with that until something changes.
- [02:04]
Josh Brown
Yeah. And I think the thing to keep in mind is that the vast majority of market participants are not actively playing this game where the market closes at 4pm they try to guess whether or not tomorrow is a green oil red stocks day and then position themselves accordingly. Most people are just riding this out. And if you're active, what you're probably trying to do is fade over reactions in oil versus Let me, let me try to be the person that figures out the exact moment this conflict either improves or gets worse. It's a game that nobody can really play with a straight face and tell you that they have any sort of edge because of course, they don't. So you have to decide what you're doing in the market, what type of participant you are, what you're expecting to get out of this I think it's perfectly okay for us to chop around, not make a lot of progress. Right now we're digesting three years of above average S&P 500 returns and if we have to go a quarter, two quarters, three quarters without much to show for all this volatility, truthfully it all comes out in the wash. It's not the end of the world. If you are looking to do something that is a little bit more proactive, what you're probably doing is sticking to the stocks that are working at the moment and those include energy oil stocks. Valero still looks great, all of the refiners, but again that's a fairly narrow lane. Most stocks are just chopping hard to
- [03:26]
Scott Wapner
really have some high level of conviction anywhere as long as we remain in this sort of murky, foggy area, right Malcolm?
- [03:37]
Malcolm Etheridge
Yes, but I think four weeks ago when this whole thing first started, we could make the case that it's probably going to be short lived. It's probably going to be a blip on this quarter's earnings reports. It's probably, probably going to be a thing where it's a temporary shock to the system. I think as we go into now earnings season rolls over into next next week we have CEOs presumably telling us that they can't quite forecast what their transportation costs are going to look like, what their energy costs are going to look like. The guidance that they give is going to be less sure than it would have been had this conflict been over before March was over. And so I think that we have to consider that negative sentiment and the weight that it could have on investors coming into earnings.
- [04:16]
Scott Wapner
I think it's a great point. Right. The numbers are still expected to be good. Earnings expectations and estimates even moving forward for the quarters ahead are still good. Malcolm raises a good question though. What happens if the narrative starts to deteriorate? How much say will that have into how the market trades?
- [04:35]
Steven Weiss
Yeah, So I think CEOs are going to be somewhat guided. I mean it's legitimate point, right. Once the war is over, what is the short intermediate? Forget longer term because I don't see longer term damage from us. What's that going to do to their input costs? Oil specifically your talks about not going online for two to three months, getting back to where we were. Those are important costs that affect nearly everything you're wearing today, everything on this desk. So what's that do to inflation?
- [05:05]
Scott Wapner
But this is real material. Speak for your, your sport coat might be made with a crude oil alternative, but just speak for yourself when you're talking about wardrobes on this show. Sorry, I digress. Please continue. Still wanting to soil anybody else's reputation up here when you should be singularly focused.
- [05:24]
Steven Weiss
It was the shine of your own wardrobe.
- [05:26]
Scott Wapner
Please go ahead.
- [05:27]
Steven Weiss
So, so, so that's part of the issue. But then, you know, we're so consumed, justifiably so by Iran. What we're not focusing on even though it's in the headlines is what's damaged private credit every day and that's euphemistically we see gates going up and limiting withdrawals. These are long term contracts. They have the loans so there's an inability to pull it out. What's that due to confidence though? And then when you get to what was else we'll see at least one cut this year, maybe two of those completely off the table. So there's a lot to navigate here and that's why I'm, I'm being very, very selective. We'll talk about, about later terms. What I'm doing basically staying pat. I raised some cash earlier on. I mentioned Taiwan. Semi got too big. It's still arguably too big but took some cash there. Other areas where I would have liked to have taken cash, I didn't. But it's not off the table.
- [06:19]
Scott Wapner
Okay. So Rob, UBS today tries to lay out their, their best in what sounds like their worst case scenarios in which they say a rapid resolution should see the S and P bottom soon and rise towards 7,150 by year end. So if disruption persists until end of April, we see the index potentially falling towards 6,000 which you know, I think others have opined about that. Number two, a more prolonged shock could push the S and P towards 5350. That would be an attitude adjustment if that happened for a lot of people who've been, who've been positive on this market for many of the reasons that Malcolm said because they've been trying to look past all this. You get down to 5,350 or even in the neighborhood, it's going to feel like a neighborhood you no longer want to live in.
- [07:07]
Rob Secchen
You know I think the market has had support recently and that's been indicated in flows which have been positive towards equities for quite some time. We're only off 5%. I think it's, it's markets are trying to wrestle with the fact that there might be this pivot right in that pivot from the president. It has protected markets. You can't be Pollyanna about what the duration of the Impact could do to a lot of businesses. I think you have to pay attention to it, but the reality of it is you have to put yourself in three buckets. Are you looking to put cash to work? Do you need cash? Do you want to rebalance the. One thing I can tell you across all those, they may be different answers. Right. And so if you're in the put cash to work category, I think you probably want to undulate the accelerator because the risks certainly appear to be significant. If you were in the raise cash mode, I think maybe you take advantage of that selectively in the areas that have held up. Let's know though that fundamentals are being restored absent this shock. Forward p is now 19.7. The 10 year average is 19. The PEG ratio P E to growth because growth is exceptional. The 10 year average is 1.6, we're at 1.2. So we are trading at a discount on a P E to growth basis. So there's some fundamental restoration that has happened. You can't ignore the risk, but there has been fundamental restoration. There is limited complacency outside the price of equities. There's a lot of worry in sentiment for sure, but around private credit, around Iran. But the reality of it is is markets are behaving like they want to believe and if they're given a reason to believe, we're going to be okay.
- [09:00]
Scott Wapner
I know, but I feel if there's complacency anywhere, it's in the belief that this is going to be short lived, not broad and not more and not more messy because we may not have full control over the answer to that question. As you know, as the days progress we may find out that we don't necessarily have the only say in that question and there may be a level of complacency around this idea. Oh, this is not going to last all that long. It's not going to have a tremendous hit towards earnings. This too shall pass. Which is why Barclays today and their macro desk is out with a note that says the wall of worry is worth climbing. Thinking that, okay, we're, you know, we're all worried about what's happening over there, but fundamentals earnings investment are stronger than where sentiment currently implies it to be.
- [09:51]
Rob Secchen
And that is the great point. We have been saved again and again by rising earnings estimates which continue to happen. So that is happening. Companies are telling you that their plans are to continue to.
- [10:06]
Scott Wapner
Right, but is that breeding more complacency? Because, well, there's no doubt that it's a given.
- [10:11]
Rob Secchen
There's no doubt because it's evident in the price. You think with the news that we've had we shouldn't be down a little?
- [10:16]
Scott Wapner
No, but we're, we were not. Because we're afraid of what you said at the top. We're afraid of the Trump put like we, we saw.
- [10:24]
Rob Secchen
I don't know why we're afraid of it.
- [10:25]
Scott Wapner
No, you know what I'm saying? I'm saying you're afraid to get too negative.
- [10:28]
Rob Secchen
Correct.
- [10:29]
Scott Wapner
Because it's always lurking out there. That's the whole point.
- [10:32]
Steven Weiss
You know, I'm going to challenge the narrative that, you know, that we're complacent and that the market's only down 5%. Well, that's true if you're an index investor, but depending upon where you are in the market, you're not complacent. You're worried. You're looking at Microsoft, you're looking at Meta, you look at the Mag 7 overall, then you go and you look at some industrials, then you go and you look at the bank.
- [10:55]
Malcolm Etheridge
Wouldn't that have us down more than 5% percent?
- [10:58]
Steven Weiss
That's my point.
- [10:59]
Josh Brown
Down 6 point. Down 6.7% from the high. But to Steve's point, there are absolute wipeouts in almost every sector. Maybe the only sectors that you can't find a lot of wipeouts right now are utilities, but energy. But like even in industrials have. Of the 11 sectors taking utilities out, industrials have the most stocks that are still up on the year. Right. You can find industrials. Look at the home builders, those industrials that are down 35%. Look at retail names, gasoline. So this is via AAA. The national average price at the pump is now $3.98, almost 4 national. Right. So some places much higher, especially the places where a lot of people live.
- [11:42]
Scott Wapner
Diesel's like seven. In California at least.
- [11:45]
Steven Weiss
California is always super high. Ridiculous.
- [11:48]
Scott Wapner
Like that plays into the kind of input cost. But it's not the absolute.
- [11:52]
Josh Brown
But it's not the absolute level though. Can we.
- [11:54]
Malcolm Etheridge
It's the rise between 80 and $100 a barrel for longer takes away the profit margins of a company.
- [12:01]
Josh Brown
We know it does.
- [12:02]
Malcolm Etheridge
So that's the part that I think is breeding complacency. We're looking at what's happening right now. We're saying there's talks about talks happening and we trust that that's going to materialize into something positive. But what if it doesn't? Or at least what if it doesn't for the next quarter? What does that do to the Margins of the discretionary sector. Halo means heavy, heavy assets, low obsolescence. Right. Means probably that they rely on fossil fuels. So I have jets that have to fly, but I have to consider what does it cost to fuel those jets. I have trucks that move things from place to place across the. All of that has to be taken into account and being complex and the consumer.
- [12:38]
Rob Secchen
And the consumer.
- [12:39]
Josh Brown
So when, when gasoline goes from three to four lightning fast, which is what just happened, you see the result. You see what they do to the Starbucks, to the McDonald's, to those names, those are the doordash annihilated. Those are the fastest things that people cut back on because not because they want to. They literally have no choice. And we haven't been in an environment like this for years. I would point out The XLY down 11% from its highs, but that's actually masking the weakness because there's big stocks in that. If you actually look, only 15% of XLY names are above their 50 day. That is a two standard deviation difference.
- [13:16]
Steven Weiss
And I was making. Yeah, but it's carnage underneath the headline.
- [13:21]
Scott Wapner
Yes, but just, but you, hold on, hang on.
- [13:24]
Josh Brown
Complacency. Therefore, in my opinion, you just bought
- [13:27]
Scott Wapner
back Dick's Sporting Goods which you, you used to own. So a highly consumer facing name quite obviously.
- [13:33]
Rob Secchen
Right.
- [13:34]
Scott Wapner
Why did you do that now?
- [13:35]
Steven Weiss
So, so I started a small position as I said yesterday. I don't know why it's up today, but I'm not going to fight it probably down tomorrow. I recognize I may be wrong, I may be very wrong and be way too early. But the way I look at it, the way my, my portfolio is structured, Dick's is a unique asset that gives me, you know, exposure to the consumer. Right. Which I think this is my bet in case I'm wrong and that, you know, we don't see a lasting impact. Plus you're coming into warm weather, which is one of their best seasons. They have a lock on the market. They have no competition. Retail. Sure you can go buy a few things at Wal Mart, order a few things on Amazon, but that's not happening. They've got a new store format that's killing it, but it's only a toehold right now. If it trades down a lot, I'll get bigger. They don't report to May 27, but we'll, we'll get a sense of what's going on in general retail.
- [14:27]
Scott Wapner
All right, let's, let's go deep on, on Microsoft for a minute. Yeah, it's a pivot obviously Back to where we were kind of getting with, with mega caps as we were we were mentioning because this is hard to ignore what's been happening with this stock. And it's, it's an important stock obviously given its size. And there it is year to date down 24%. It's having its worst quarter since 2008. It's having its worst start to a year ever. You want more? The stocks lost one and a quarter trillion dollars in market cap since its all time time high. Let's show you a wall here of some milestones that this stock made when it was doing fantastically. Did you Remember April of 2025 it became the most valuable company in the world. Right. We talk about Apple forever like that. Then Nvidia surpasses that. Microsoft became the most valuable company in the world in April of 2025. In July of last year it topped $4 trillion in market cap as I said now it's having the worst quarter since 08. Why the narrative? OpenAI OpenAI Anthropics at work the narrative around 365 copilot has been disappointing and people have been highly critical of it. Azure's revenue growth rate. People are throwing stones at this thing big time and it shows up in the chart. Weiss, Rob, Malcolm, you all own the name. What's your take here?
- [15:52]
Rob Secchen
So I mean it's, it's transitioning to number one, a more capital intensive model. They're behind, they're playing catch up and justifying a valuation premium when they haven't shown a great return. Return on investment in AI is, is hard. That doesn't mean that's not going to happen. We could have had the same conversation about Alphabet a year ago by the way. They weren't monetizing AI. Then all of a sudden, sudden they got their act together. They remember they were the eye of the storm for getting most disrupted.
- [16:24]
Scott Wapner
That stock had a moment in time based on what turned out to be a rather false narrative. This seems to be a more fundamental issue.
- [16:33]
Rob Secchen
Well, no, same thing. They weren't monetizing their AI. They weren't showing an ROI on their AI.
- [16:40]
Josh Brown
But it's not that. It's chatgpt and open AI and it's an open question now if that partnership is going from the balloons that were lifting the stock up to an anvil. It's a bigger attached to the bigger
- [16:55]
Steven Weiss
question is as a ce is he the right CEO? Do you make bad bets aligning with open air?
- [17:03]
Scott Wapner
Everybody thought he was. What do you mean? I mean everybody thought he's a genius. When that, when that announcement was coming.
- [17:08]
Josh Brown
Just did a $50 billion. They just did a $50 billion deal with Amazon. Like that is if you're long Microsoft for the exposure to the AI theme you do not want to see Microsoft's dance partner doing third party deals with everybody else.
- [17:22]
Scott Wapner
Anybody thinking about anybody? You guys, you three. Anybody think about bouncing this name?
- [17:26]
Malcolm Etheridge
No.
- [17:26]
Steven Weiss
Yes.
- [17:27]
Malcolm Etheridge
No. Here's what I'll say in defense of Microsoft. I get that the perception is that Anthropic is eating their lunch right now. Their cowork product is leaps and bounds better than Copilot. I haven't used it myself so I can't say it. I have used it Copilot. I agree it's kind of clunky. But what I think we're missing here, we talk all the time about Apple's 2 billion person installed base. Globally, Microsoft has more than 400 and something million paid seats around the globe of people using the 365 office suite. And that is the install base that they're proposing to sell into. Right. So if they can figure out a way to monetize the new relationship with Anthropic, they just struck it back in November. So we'll see what that materializes into. If they find a way to weaponize OpenAI's integration into their software suite, they will have an install base to immediately sell these products into as long as they can show that there's some there there. And I think that is what they're needing time to actually be able to prove. The street is basically saying we don't want to give you the time to
- [18:26]
Josh Brown
find open AI workout.
- [18:28]
Malcolm Etheridge
I completely understand.
- [18:29]
Josh Brown
OpenAI is behind in code. So much so that with zero warnings they take this SORA thing and throw it out the window because they recognized exactly what Malcolm is saying. They have to catch up to what the inroads Claude is making into the Office.
- [18:45]
Rob Secchen
And it's amazing.
- [18:47]
Josh Brown
It's an all hands on deck effort.
- [18:50]
Rob Secchen
It is amazing. We are. We still have Microsoft throughout our entire ecosystem. It is endemic. Yet you can bolt on something like enterprise clothes from Anthropic. And it's unbelievable too. And you're able to use these things interchangeably to drive efficiency that is beyond belief. I've never seen anything like it.
- [19:13]
Scott Wapner
What happens if interchangeability then morphs into one versus and then you find that one doesn't become as useful as it used to be? You're willing to pay a lot less
- [19:24]
Rob Secchen
for it from a grassroots standpoint. I'm not saying seeing that in any
- [19:28]
Josh Brown
way it's too early.
- [19:29]
Rob Secchen
But here's the other repricing it.
- [19:32]
Steven Weiss
The issue is your number licenses a lot. The question is, the concern is how many of those licenses are going to go away with AI as you're able to create your own software. I see companies in private market every day that are raising ridiculous amounts of capital because they can do just that. They can disintermediate Adobe, they can disintermediate Microsoft. I mean there are companies like a Rogo, which is a startup, it's got a ridiculous valuation because they can do everything that Microsoft can do with.
- [20:03]
Scott Wapner
What do we make of the fact that as a group. Right. Barron's has an interesting piece out today branding the once magnificent seven as the miserable seven because of the way that they've traded. Mega's Mega Meta is the worst mega cap this month. Alphabet's down 15% from its closing high. I mean I don't, I guess I
- [20:24]
Josh Brown
don't, I don't understand why people are confused this. For 15 years the mantra for growth investors was you want to own asset light businesses that have high profit margins. And software is exactly that. We had a thousand software IPOs, they all had billions and billions in market cap. There was plenty of room for everyone and they had these profit margins that were 40, 50, 60%. The world has never seen anything like this. It's what the bears got wrong over the last 15 years. They couldn't envision companies that could literally replicate their product at zero cost and distribute it on the Internet and have 50 and 60% margins. The problem is that story is no longer true. These companies are taking their entire cash flow and putting it into capex. And that's great. If it works, it's an open question whether or not it will. And that's why you're seeing these discounts appear in these names for the first time in really 15 years.
- [21:20]
Scott Wapner
The other problem too, don't forget the relationship, even if it's, you know, not a straight line, even if it's somewhat dotted to elevated interest rates to growth type stocks. As rates have moved up, these things have moved lower as the whole space has now software hasn't helped obviously and this has been caught up with that to the igv. Software stocks tried to make a rebound and they actually look like they maybe had bottom. Now I think we're asking ourselves the same question again, which leads me to you Rob, because you've done something that Malcolm has done of late. You looked at something that gotten, that has gotten beaten up pretty good. And you said enough's enough. You bought service. Now tell me more.
- [22:03]
Rob Secchen
And I don't think we're calling on the bottom but this is calling something. This a platform applied. We're saying that this is a platform of platforms. This sits atop the corporate IT stack. Single control point over underlying tech. Think about it is the air traffic controllers for four enterprises. 90% of the Fortune 500 companies use them. Dominant database management. You know their margins are still great. 35% free cash flow margins, no debt. Conservative. We think we're buying it at a 50% discount to its long term average. There's a margin of safety there that's reasonably attractive.
- [22:43]
Malcolm Etheridge
Malcolm, welcome to the party.
- [22:45]
Scott Wapner
Yeah. So what do you say to that?
- [22:46]
Malcolm Etheridge
Where were you three months ago when it was basically me and Bill McDermott making the case that this company is not going anywhere and the market is missing something.
- [22:55]
Rob Secchen
There we go.
- [22:56]
Scott Wapner
Yeah, you so and just coming back. Well you also sold Adobe.
- [23:00]
Rob Secchen
We did.
- [23:01]
Scott Wapner
You just finally decided enough is enough,
- [23:04]
Rob Secchen
the AI disruption is not enough. And this is living Farmer Jim need
- [23:08]
Scott Wapner
to have some kind of session or so you need to. He needs an intervention.
- [23:11]
Steven Weiss
He does.
- [23:12]
Scott Wapner
He needs an intervention.
- [23:13]
Rob Secchen
So I've completely done a 180. Given that you start to see the power of these things in enterprise when you bring them in, I think the, the disruption questions need to outweigh the valuation right now.
- [23:27]
Scott Wapner
Now back to Malcolm. You bought Octa, so you're not done, you're not done looking for, for deals.
- [23:33]
Brandon Gomez
Yeah.
- [23:33]
Malcolm Etheridge
So I think two separate things are happening right now. We were just talking about software and the way that it's gotten crushed because software doesn't sell the way that it used to on a per seat basis just isn't going to cut it. We also have to consider that when a company sells off 30, 40, 50% in six months or less, who shows up? The activist investors. And what do they demand? A company puts itself up for sale. And so I think that a put is in some ways being put in under a lot of these companies that you do believe deliver a service that will be useful long term in the sense that there will be tons of MA transactions that have to happen because these companies have lost so much that someone shows up with deep enough pockets to take them over. So in Okta's case, I think that it's fallen enough. It's about 40% from its 52 week high. I think 75% or so from its all time high that it hit way back in Covid and this company basically is Helping to make sure that agents don't run rogue is what their new AI product is proposing to deliver. So we're talking about a world that's run by agents. And the term that I've heard recently from the cybersecurity world recently is agentic governance. It's basically who has access and what are they doing with the access process. That's basically Octa's claim to fame. And so to me, this is a company that's been whacked down enough that it's de risked enough that it makes sense to be buying it right here.
- [24:51]
Scott Wapner
All right, so there's going to come a time where when we talk about software and we don't automatically pivot to private credit.
- [24:57]
Rob Secchen
I knew you were.
- [24:58]
Scott Wapner
Today's not. Today's not the day that we're going to make that move because we are going to, because we have no choice. They're in. They're just linked. Morningstar Data Private credit fund inflows in the first two months of this year dropped by more than a third. Throw Barclays into the basket, though. That says this may get worse. It may look terrible, may be bad, but it's not systemic. Which brings me to Rob, who, as you may recall, I would say maybe was the biggest defender of private equity. Why'd you sell Blackstone?
- [25:26]
Rob Secchen
So tax loss fundamentals we don't think are deteriorating. We think it's dead money, maybe for a little bit. What's a little bit as this story plays out? Well, I'm going to tell you we're selling in our client portfolios, but I am considering personally buying it when my 30 day windows up after the tax loss back into my own portfolio. And the reason is, is because I think this is going to turn out to be that. We are at the kind of crescendo of what's happening now. Spreads are going to widen in private credit because. Because they need to. Because they're going to raise less money. The whole theme of democratizing investment, the mismatch of retail immediate demand liquidity with longer duration investments will be an intermediate term issue. However, let's not forget the private equity mostly sits underneath all the credit that you have in this. That there are holidays in a lot of these loans if they're leveraged funds that these guys can protect themselves with. So if things get too bad, there's a liquidity. Holidays. I am not seeing massive issues in these portfolios. Even in first. I'm drawing a blank on the name. The big loss that Jefferies First Brands. First Brands even In that the loss was 2% to Jefferies portfolio.
- [26:56]
Scott Wapner
But it's interesting though that you're. You're. You're selling this out of your client
- [26:59]
Rob Secchen
portfolios and mine right now. Because I'm in the portfolio taking those
- [27:04]
Scott Wapner
phone calls from your clients saying, how much exposure do we.
- [27:07]
Rob Secchen
I can defend it till the cows come home. I promise you that. But there is a. There is a fundamental change in the growth trajectory of this space because raising money from retail investors is going to be tough for a while. We are still seeing institutional investors. I don't care what these guys are doing. I could give to about it.
- [27:27]
Malcolm Etheridge
What are we talking about?
- [27:29]
Rob Secchen
What do you mean, what am I talking about?
- [27:31]
Malcolm Etheridge
You beat me up for saying this sector has a sentiment problem. We have to sell out of it until the sentiment shifts. You defended it until the cows came home. And I still straight minutes of you defending private credit.
- [27:46]
Rob Secchen
I will still defend private credit while you sell it. The.
- [27:49]
Josh Brown
The issue I have.
- [27:50]
Rob Secchen
I'm taking a tax.
- [27:51]
Scott Wapner
Hold on. I want. You needed to say, I want to get good.
- [27:55]
Malcolm Etheridge
What?
- [27:55]
Scott Wapner
Mountain good. I'm getting more comfortable over here.
- [27:58]
Malcolm Etheridge
All you had to say to the viewer is see Malcolm's previous comments. I now agree. I've now woken up and realized, Malcolm,
- [28:05]
Rob Secchen
I didn't know you. I didn't know you were the debater. I thought it was him.
- [28:09]
Scott Wapner
I like where this is going.
- [28:10]
Malcolm Etheridge
It's been two weeks. What has changed in the two weeks since you beat me up about this?
- [28:15]
Rob Secchen
I knew this was gonna be the day and I was ready for it
- [28:20]
Malcolm Etheridge
and I listened to your case, but you're basically having it both ways. And I don't understand.
- [28:24]
Rob Secchen
I'm having it both ways.
- [28:25]
Malcolm Etheridge
I'm listening to this and saying, what has changed since Malcolm looked directly into that camera and said, it's time to sell Blackstone?
- [28:33]
Rob Secchen
Are you gonna allow me to answer?
- [28:34]
Malcolm Etheridge
Heck no.
- [28:35]
Rob Secchen
I mean, you're allowing me to answer. So we are making other changes in our portfolio. We need tax losses and we don't have many. And so we are taking that as a tax loss. And I could be on here in a month buying these and I could be buying the entire BDC basket in a month because I know that many of these loans are good. There's a. There's a handful of. Of loans, but I talk to the private equity community every day. You really think they're going to walk away from every loan and not put more equity? Private credit is damaged.
- [29:14]
Scott Wapner
You said though what you said is important. The arguably the biggest growth engine that this Industry has had.
- [29:21]
Rob Secchen
Is changed. Has changed, maybe dramatically vanished.
- [29:28]
Josh Brown
Vanished for the next one.
- [29:29]
Scott Wapner
It's a change. It's changed significantly.
- [29:32]
Steven Weiss
What he just said was, do you think they're going to walk away? Not more equity in it. So if they've got to shore these up, right, and put more equity in it, then what's going to drive their growth?
- [29:43]
Malcolm Etheridge
Right?
- [29:44]
Steven Weiss
There won't be growth. They're just going to continue to backfill. So I don't, I don't get the by case for it. So I don't see the cat.
- [29:52]
Scott Wapner
We got to. We got to take.
- [29:53]
Josh Brown
I like the instinct these, these stocks are all down 40 and 50%. I like the instinct. I think what I would just say is, like, the fundraising environment, the second half of this year might be the worst they've ever seen.
- [30:05]
Rob Secchen
I think that's right.
- [30:06]
Josh Brown
Since they've been public. And so now, as an investor, you have to think about, all right, it's going to take two years for people to forget the gates and be interested in taking meetings about new allocations. And to Steve's point, it's like, all right, well, what are they going to spend the next two years doing? Making sure they don't blow up. That is not necessarily profitable in the short term. And so I like your instinct. I just think you're early.
- [30:28]
Steven Weiss
The thing I like about is the tax management.
- [30:31]
Rob Secchen
I mean, let's not lose sight of what I said is it's a tax loss sale. We don't have any.
- [30:40]
Scott Wapner
I understand, but we got to go.
- [30:43]
Malcolm Etheridge
Following my trades this month, my team can have transfer paperwork over to you tonight if you
- [30:51]
Scott Wapner
don't have a trail. Alright, we're gonna take a break. We're gonna take a break. Josh's best stocks in the market still coming up. We'll try and get some calls of the day. Hopefully we'll have some more debates like we just had. We'll do that when we come back.
- [31:03]
Janice Henderson
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- [31:33]
Brandon Gomez
The day begins at the Chase Sapphire lounge by the club at Boston Logan Airport. You get the clam chowder.
- [31:38]
Scott Wapner
Mm.
- [31:38]
Brandon Gomez
In San Diego, It's Tostadas, New York. Espresso martini. It's 10am why not? It's the quiet before your next flight. The shower that resets your day. The menu that lets you know where you are. This is access to over 1300 airport lounges and every Sapphire lounge by the club. And one card that gets you in Chase Sapphire Reserve now even more rewarding.
- [31:58]
Scott Wapner
Learn more@chase.com Sapphire Reserve cards issued by JPMorgan Chase bank and a member FDIC, subject to credit approval.
- [32:04]
Malcolm Etheridge
The wrongs you must right. The fights we must win. The future we must secure together for our nation. This is what's in front of us. This determines what's next for all of us. We are Marines. We were made for this. All right.
- [32:34]
Steven Weiss
Welcome back.
- [32:35]
Scott Wapner
Let's get back to our headquarters. Brandon Gomez has a market flash for us. What do we see here, Brandon?
- [32:39]
Brandon Gomez
Hey, Scott. Yeah, that's right. Look at shares of Brown, Forman and Pernova. Now this is based on a Bloomberg report that there could possibly be a deal between the two companies. I did reach out and have not been able to yet confirm, but we will have more hopefully at a later time. Right now, I mean, it makes sense in terms of what this could mean for the space. We've come into 2026 talking about how there might need to be some consolidation in the alcohol space, which has been struggling to capture some consumers. Brown Forman, parent company of Jack Daniels, another struggling category in this space. Again, no confirmation at this time from either company. But I will, I'll come back to you with more as I hear it.
- [33:12]
Scott Wapner
So I was going to ask you, and you touched on it, but give me some more insight because you know the space so well. This I immediately thought of as a possible deal out of weakness. Right. Because you covered these stocks for so long and have told us repeatedly what we have seen from the statistics. Right. About consumption of alcohol all around the world in this country, too, and how it's weighed on these stocks.
- [33:36]
Brandon Gomez
And not to mention too, the tariff conversation. Right. We're talking about a European company, a company that has a lot of US Operation, too. Jack Daniels, a great American brand when it comes to whiskies. I mean, there really did come into the year with analysts saying there had to be some type of consolidation in this space. It does make sense that perhaps a European player may want to have more of a US Operation. There was some news last year as well about Pernod Ricard diversifying their operations more globally outside of Europe. So again, a strategic move yet to be confirmed. I will let you know once I hear back from either company on what this might look like on paper.
- [34:10]
Scott Wapner
Yeah. Appreciate you, Brandon. Thank you. Brandon Gomez with the very latest Gen
- [34:14]
Josh Brown
Z's Just don't want to drink.
- [34:15]
Scott Wapner
Yeah.
- [34:15]
Josh Brown
They want to mog each other all day and be like clavicular and they want to look good. They don't want to be stumbling drunks. I think it's cool, but not good for these stocks.
- [34:26]
Scott Wapner
Let's just do something real quick here. Let's put up Brent and WTI if we might because the market's weakened since we, we came on the air undoubtedly. So the S and P is down more than 1%. It's a loss of more than 73 points. So we're, we're teetering at 6,500 and change and as the, the certainly our show. But as the day has progressed, oil's gone up and the stock market's lost a little bit of the steam that it was trying to gather. Remember the Dow actually went positive for a moment earlier in the session. So WTI is back above 95 and Brent is above 102. So that's the really important stuff to keep an eye on. We certainly will. Let me just squeeze in a couple of calls before you guys tell me. We got to go. Spotify was initiated, outperformed today. Daiwa price target 535. Malcolm, you got the name?
- [35:22]
Rob Secchen
Yeah.
- [35:22]
Malcolm Etheridge
This to me looks like strength at a moment when we're questioning the consumer. It pairs perfectly with like a Netflix because it's one of those things that's basically become a utility. You're not going to cut your streamer. It's obvious because growth is happening in the paid subscription piece of it. At the same time they're raising prices.
- [35:39]
Scott Wapner
We haven't talked about crypto all that much, but I feel like we should. I'm just looking right now we're under 70,068. Nine is where we currently are. We Wolf says stay the course. They reiterate their bearish view on cryptos which suggests not getting sucked into any potential near term upside. So that's where they are. You own bitcoin. Goldman says checking in on the crypto cycle regulation substitution of crypto trading with traditional brokerage. Increasingly attractive entry points for Coin and Robinhood are on that list too. What's your take here?
- [36:12]
Josh Brown
I think there's two things happening that don't move the price of bitcoin up or down, but they're foundationally important. The first is the debate in Congress about The banking rules and whether or not they're going to let stablecoins throw off a yield the way that money market funds do. That's still up in the air. A lot of the big crypto brokerages like Coinbase don't want to support that bill until it includes language that will allow stablecoins to pay a yield. I think that's the biggest story I'm watching Circle. I think that stablecoins are better than Bitcoin and ETH quite frankly, in terms of having a real consumer use. If they can get a yield attached to them, forget it, everything changes. So that's one. The other one is tokenization of trading, which is going to happen. New York Stock Exchange is doing deals. Fidelity's doing that. It, it is, it is inevitable. I don't know who wins. A lot of people want to bet that Robin Hood win wins. A lot of people want to bet on a, on a certain protocol like an Etherium or a Solana, I don't know. But those are the two big stories. Neither of them have anything to do with Bitcoin at all.
- [37:14]
Scott Wapner
You think Ethereum wins or you're just saying that because you're friends with Tom Lee and he wears a big, and he wears a big pin.
- [37:21]
Rob Secchen
I'm on the board of the company and I can tell.
- [37:23]
Scott Wapner
So that's why you're saying.
- [37:24]
Rob Secchen
Well, no, that's not why. I'm just kidding. I joined the board of the company because I believe, believe that Etherium is the fundamental backbone for the tokenization that Josh is talking about. And you know, it's a unique characteristic to it and then you can generate a staking yield from it. And that is becoming more broad based. Insurance companies are starting to think how they can ensure that yield for, for the staking clawbacks when there's a, when there's a mistake on the validation. And so it's a more interesting asset me because it's kind of like the iPhone in that it's the infrastructure that you can build applications on top of in some of the biggest industries in the world are leveraging those applications to tokenize, as Josh said. So I think there's a bright future in that. Bitcoin's a little different. It's, it's a store of value asset that is actually really.
- [38:21]
Scott Wapner
Was that in quote Circle.
- [38:23]
Josh Brown
Circle is a better store of value. So.
- [38:25]
Rob Secchen
But all I'm saying is a different asset and it's limited supply and you know, it trades like a risk asset right now. So my interest lies in an asset that's useful. Has you got.
- [38:38]
Scott Wapner
All right, we'll take them.
- [38:39]
Steven Weiss
Have utility.
- [38:40]
Scott Wapner
We'll take a break. And we've come back. Josh Brown's spotlight shining on a name. Well, it's in the software industry. That's in. That's interesting. It's in. Best stocks in the market coming up.
- [38:53]
Janice Henderson
Support is available 247 with VRBoCare. We're here day or night, ready whenever you need help. Because a great trip starts with the right support.
- [39:07]
Indeed Representative
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- [39:39]
Rob Secchen
In the red corner, the undisputed undefeated weed whacker guy, champion of hurling grass and pollen everywhere. And in the blue corner, the challenger,
- [39:51]
Scott Wapner
Extra Strength hadn't a drops that work all day to prevent the release of
- [39:56]
Rob Secchen
histamines that cause itchy allergy eyes. And the winner by knockout is Pataday Pataday. Bring it on.
- [40:09]
CNBC News Anchor
All right, time for a CNBC news update. And a victory for the Trump administration of federal appeals court ruled the US can continue to detain immigrants without a bond. It overturns a lower court ruling that required a Mexican national arrested for lacking legal documents receive a bond hearing before an immigration judge. Decision marks the second time an appeals court has sided with the White House on the issue. The House Ethics Committee holding a rare public trial today for Florida Democrat Sheila Cefilious McCormick. She was accused of stealing $5 million in federal pandemic funds. She was indicted last year, pled not guilty. Based on the outcome of the hearing, the committee could recommend expulsion from Congress. And the International Olympic Committee agreed to a new eligibility policy today banning transgender women athletes from the Olympics. New policy aligns with President Trump's executive order on women's sports. Out of the 2028 Summer Games in L A participation limited to biological females. Halftime back right after this.
- [41:02]
Scott Wapner
Josh Brown, best stocks in the market. The spotlight today is on which company
- [41:06]
Josh Brown
we're going to talk Dell. This is a really cool story because it is one of the best stocks in the market right now. And it's in a completely different iteration than the Dell that most of us Remember from the 1990s. The stock used to be the Michael Jordan of the nasdaq. It used to go up five points a day every day for like five years before the dot com bubble peaked. Then it spent like 15 years in the wilderness. Now this stock is back to growth like many other names in that era. And it's Halo Tech. They're selling integrated rack scalable systems. Basically they have this forward deployed team of engineers. They sit with the designers that are spending all this capex money on these data centers and they can work with any infrastructure, cooling methods, rack configurations, whatever it is. Dell has the best team. Everybody wants to work with them. And yes, they're selling servers and no, no, we're never going to pay 30 times earnings for a hardware stock. But they're also selling a lot of services. And that's where I think you see the stock waking up now. It is not just selling clunky boxes. There's a whole lot more to the business these days. So you're getting that appreciation but you're not paying up for it 14 times next year's earnings. They just forecasted AI server revenue of $50 billion for fiscal year 27. That is a 100, 103% increase over what they had done the prior year. And that's why the stock's making a high, that's why it's on my list right now. A little bit overbought. RSI is in the low 70s. Give it a beat, give it a day or two, let it work that off somewhat and I think you're going to have an opportunity here. This is a. Give me a longer chart please. This is a fresh breakout in a name that's been working all year. But finally coming out of this. Consultant, thank you very much. Finally coming out of this consolidation that's been happening since late October and people still don't own it. People still don't understand how this company has transformed from the Dell that they used to know. And now I think it's being discovered.
- [43:04]
Scott Wapner
It's a heck of a good looking chart.
- [43:06]
Malcolm Etheridge
Is there such a thing now as Halo Tech?
- [43:08]
Josh Brown
This is Halo Tech. It's the epitome. I don't care what you do on an LLM. You can't make a server, you can't build a data center. Dell can literally, literally build a data center. It's undisrupted by AI. It's obviously benefiting from the Capex boom. And absolutely, this is a very different stock than when we're talking about Adobe or we're talking about Microsoft. Whole different world.
- [43:30]
Scott Wapner
All right, Mike Santol is next. Welcome back. Senior markets commentator Overtime co anchor Michael Santoli joins us now with his midday word. I mean, you know, we were listening to the cabinet meeting for a long time. The market seemed to get a little worse, frankly as the longer that that went on and it's gotten even a little bit worse now.
- [43:51]
Michael Santoli
It did look, I don't know, all the signals are staticky, but the ones we're getting which are kind of trying to reconcile, you know, this war is one militarily we're dominating, but yet still, you know, we only have 5% of the flow through the strait and oil can't relax. And if oil can't relax, lack stocks are not going to necessarily take heart. And I think the bigger picture kind of structural issues with this move I mentioned earlier this morning, you know, the low for the S and P on this decline was in the futures market. It was in the pre market overnight Sunday into Monday. And sometimes you have one of those lows that just is a nagging thing and the market's going to need to see if it was for real. I say it's like the beating heart under the floorboard. So who knows it's only a percent down from here or something like that's not a big deal. But everyone thought maybe we could get out of it easy. The way out of it easy to kind of have a better bounce is probably to have AI and growth stocks and all the non macro linked stuff actually start to perform. And that obviously is not happening. It's the reverse of that. So I think it creates a kind of a complex issue. Everybody was saying we didn't really get a super panicky flush. If we need it, maybe we will. And then you have this sense out there there that we look, we have to put some credence in the idea that negotiations could happen and that this weekend could be consequential in one direction or another. So I think that's why it's confusion. It's low conviction trading. If WTI is above 90, like I said, you're not necessarily going to be able to get a lot of bullish flow in that.
- [45:18]
Scott Wapner
Sure. We're hopeful to get beyond the talks, to have talks stage and I think that the market is hopeful of that too. Which is to your point, while we're still in the in the ballpark here, Michael, I'll see you a little bit later. Thank you. Mike Santoli. We'll do finals next. Show me three o', clock, closing bell. Jeremy Siegel, Adam Parker, Walter Isaacson Doug Clinton and Jeff DeGraff. So we got a great lineup. And I hope you'll join me a couple hours from now. Robbie, you're up first. Final trade Meta.
- [45:44]
Malcolm Etheridge
Woof.
- [45:45]
Scott Wapner
That's ugly. Seven percent.
- [45:47]
Rob Secchen
Bad day? Breaking Josh's rule.
- [45:49]
Scott Wapner
All right. Yeah, we'll have more on that coming up at 3. I. I can promise you that. Weiss.
- [45:53]
Steven Weiss
I'm just staying in cash right now, and I'll wait for an opportunity.
- [45:56]
Scott Wapner
Okay. Malcolm.
- [45:57]
Malcolm Etheridge
IBM. Talk about Halo tech.
- [46:00]
Josh Brown
JB CrowdStrike green on a red day. I like it.
- [46:02]
Scott Wapner
All right, I'll see you.
- [46:03]
Malcolm Etheridge
Little bit.
- [46:05]
Scott Wapner
You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live. Weekdays at 12 Eastern only on CNBC.
- [46:17]
CNBC Disclaimer Reader
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer this is
- [46:51]
Brandon Gomez
the Chase Sapphire Lounge of Boston. Logan, you got clam chowder in New York, dirty martini over 1300 airport lounges, and one card that gets you in Chase Sapphire Reserve. Now even more rewarding.
- [47:01]
Scott Wapner
Learn more@chase.com Sapphire Reserve cards issued by JP Morgan Chase bank and a member FDIC, subject to credit approval.