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Halftime Report
Trading the Massive Market Day 10/29/25
00:43:39
Scott Wapner and the Investment Committee debate the massive market day with Nvidia becoming the first five trillion-dollar company, Alphabet, Meta and Microsoft reporting in overtime and a Fed decision dropping later today. What does it all mean for the market and your money. Plus, we hit the latest Calls of the Day. And later, And later, the Committee get to the setup on some key names reporting in the next 24 hours beyond the big tech companies. Investment Committee Disclosures
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- [00:00]
Joe Terranova
Introducing Fidelity Trader Plus.
- [00:02]
Commercial Announcer
With customizable tools and charts you can access across all your devices, Try our most powerful trading platform yet@fidelity.com TraderPlus investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC Member nyse, SIPC and now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network.
- [00:46]
Scott Wapner
I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, Nvidia becoming the first $5 trillion company, Alphabet, Meta, Microsoft, all reporting in overtime that Fed decision in a matter of hours. We are trading this amazing day in the markets with the investment committee. Joining me for the hour today, Joe Terranova, Liz Thomas, Carrie Firestone, Steve Weiss. Let's check the markets today. We are green across the board. Joe, if this wasn't the kind of day where you'd like jump out of bed, ready to get up here and talk about this incredible market day that we have, I don't know what's going to get you to do that. I mean, you got the Fed decision, you got the 5 trillion Nvidia, you got some incredible earnings coming up and the market's hitting record highs again into all of it.
- [01:46]
Joe Terranova
Sure is a remarkable day. And I will say this, I think I speak for the majority of portfolio managers out there. It's somewhat perplexing. It's perplexing because the performance that we're seeing is being driven once again by this narrow, concentrated set of equity names.
- [02:03]
Scott Wapner
Why is that so perplexing to you?
- [02:04]
Joe Terranova
Well, it's perplexing because if you look at the S and P equal weight, it's down once again today. Yesterday, we had the widest differential between the S&P 500 and the S and P equal weight going back into the 90s. So most portfolio managers can't say, okay, as Steve has rightly suggested, I'm basically Just going to put my chips on these seven technology names and they're going to work for me. And they are working. There's justification there, but it's challenging for the rest of the portfolio manager environment. I will say this. What I believe that ultimately does is I think it's going to extenuate this chase for performance through the month of November because it's going to put people in a position where you look at the last two days, myself, I'll take look at Joe, the last two days, Jyoti is down in a market that the S and P is higher. You look at it that way.
- [02:53]
Scott Wapner
You're feeling as though, you feel as though somebody perplexed.
- [02:57]
Joe Terranova
Well, it's just, it's just not me.
- [03:00]
Scott Wapner
You're perplexed, right?
- [03:01]
Steve Weiss
I was perplexed. Look, I think Joe's right. This sort of lunacy, you know, what we're seeing going on, I mean, we'll talk about later, but you got industrial stock up 13% today. I mean, that's an AI move right there. But here's, but here's what I think is actually happening. Companies that come out, you're getting breath, even though undeniably, Joe, you're right, the worst breath, relatively speaking, since 1990. But I think you're starting to see if you commit to AI as a company and you show some increased productivity from it and your adoption, as we saw with Target, as we're seeing with ups and downs, as we'll see with others, that you're going to get a halo effect from AI. So you see it broaden out. Now, you won't see broaden out to the whole market, but selective ones like what we're going to talk about later. It will happen. So, so that's very positive right now. The question is when does it turn negative? Because you're not, you're displacing some real big buyers of consumer goods, meaning white collar, as we saw with Amazon, 14,000 of them. So when does the trade off happen? Now? I don't think we're near that point yet, but it's going to be a big question. Mark's going to have to answer. Will productivity of those companies and increased earnings offset massive and I do believe massive unemployment?
- [04:22]
Scott Wapner
So Joe, I think was alluding to this stat, Kerry, that bespoke put out just about yesterday's trade, that yesterday was the S&P's worst breath day ever for an update in the market since 1990. The S& P has never had weaker breath on a day that it closed. Positive IT closed up 0.23% with a net advanced decline line of -294,104 stocks up,398 down. Now you can hold that up and say this points to a weaker market under the surface or whatever you want to do, but this market hasn't been as strong under the surface of AI for a while now. So are we really to make something of it today?
- [05:15]
Carrie Firestone
Well, today is probably worse than yesterday. I think that people who had underperformance yesterday probably have worse performance today.
- [05:22]
Scott Wapner
I don't mean, I don't mean it even so specifically as today yesterday. But now in general, now we're going to make a big deal about this as we're about to get the 3 mega caps reporting and Nvidia hitting $5 trillion in market cap.
- [05:35]
Carrie Firestone
Well, it's more of what we talked about the last time I was on where we, we discussed how this is an environment for which the largest companies have everything they want, meaning they can figure out a way to make the problems go away. If it's an antitrust problem, any type of competition, if they've got some legal challenge, they make it go away. They agree to give some of the proceeds to the government. They're able to maneuver in this environment, particularly with this administration. So what happens that might be good for the largest names is not necessarily good for the rest of the market. And the market keeps rewarding Google and Meta and Amazon and Apple, Microsoft, etc.
- [06:24]
Scott Wapner
Wrongly so, do you think? Wrongly so.
- [06:26]
Carrie Firestone
Correct.
- [06:26]
Scott Wapner
Because you're an Alphabet. Microsoft and Metta.
- [06:29]
Carrie Firestone
Yeah. So correct.
- [06:30]
Scott Wapner
And Nvidia, however, the problem.
- [06:32]
Carrie Firestone
Yes, the problem however is that they get to be such large, large weights in a portfolio that you're not taking into account the risk of concentration. And that has become the biggest challenge to portfolio managers, fund managers everywhere in this country. They cannot diversify their portfolios without losing ground to the S and P without losing performance. Correct.
- [06:55]
Scott Wapner
Okay, I got you.
- [06:56]
Joe Terranova
Of course.
- [06:56]
Scott Wapner
So Alphabet hits a new record high today into the print tonight. Microsoft 4 trillion in market cap yesterday into the print media is in danger of snapping eight day winning streak into its own print. But there's a look at Alphabet shares you want to. Liz, take issue, agree with or whatever with any of the comments that were already made on the desk.
- [07:20]
Liz Thomas
I mean I'll take a little issue with the perplexing comment because we've been good.
- [07:24]
Scott Wapner
I did too. So I'm glad you did. Thanks for the backup. Go ahead.
- [07:27]
Liz Thomas
Versaille. And on his birthday too, right, Joey? On his birthday.
- [07:31]
Carrie Firestone
Happy birthday Happy birthday, Joe.
- [07:33]
Joe Terranova
Thank you very much. Let's continue, please.
- [07:37]
Liz Thomas
So we've been talking about this for a long time that there would be a chase into year end. And here we are one month into Q4 and the chase is on. The large cap love affair is on, the risk on speculation. Trade is alive and well. The game is strong. Right. And this is happening during a week when Q4 seasonality usually picks up. And then we have this run into year end, so that supports this even further. And then this is also characteristic of late cycle large cap behavior. Usually when you have, number one, late, late economic cycle, late cycle in a rally, you also have concentration that just gets more and more concentrated until it turns the other way. There's no timing that, that could go on for a long time. But all of this is emblematic of that same trend, really.
- [08:24]
Scott Wapner
I mean, I've been hearing this a lot over the last year or so, if not longer. Are we really that late cycle? How could we be late cycle if people say we're in like the second inning of the whole I spend and the AI boom, that doesn't match up in my mind, somebody is wrong.
- [08:45]
Liz Thomas
We don't know who yet. So late cycle in the sense of the market cycle, there's a business cycle and there's a market cycle. Right now we are a little bit convoluted on where we are in the economy. Number one, we don't have a lot of data, but we're coming down in inflation, which is not usually late cycle behavior. If we get into 2026, it's possible that we have stimulus that comes into effect that actually drives inflation back up a little bit. We never actually hit target. We start rising again and inflation, unemployment starts to rise. That starts to feel more late cycle in the economic standpoint.
- [09:21]
Scott Wapner
I mean, we're cutting rates. The market's late cycle, we're cutting, we're cutting rates.
- [09:26]
Liz Thomas
Well, if we have to pause that, right. There's all of these question marks that could happen in 2026. That's not a 20 story, but there's.
- [09:34]
Scott Wapner
A lot, it seems a lot of if, if, if this happens, if that happens. But what's the likelihood we play probabilities too, more so than ifs. Right?
- [09:42]
Carrie Firestone
Right.
- [09:42]
Scott Wapner
Isn't that what you all do?
- [09:44]
Carrie Firestone
Can I just make one comment on full information? 2000, March of 2000 was when the market crashed. Right. And the S and p was down 50%. The NASDAQ was down 90% at the worst. And it was the beginning of the Internet. Right. It was the beginning of the Internet. But it was also the end of this enormous rise, the euphoria about Internet stocks that did come down crashing so they don't have to coincide and they cycle on the market.
- [10:10]
Liz Thomas
Right. They're not supposed to coincide. But right now I think we are at a point where actually the market is very detached from what the economy is doing. That doesn't make the market wrong. The market is always using the information it has and the optimism that we're looking at with AI you see the.
- [10:24]
Scott Wapner
Market'S detached from what the economy is doing. The economy is pretty good, pretty good.
- [10:29]
Liz Thomas
But it's not heating up, it's cooling down. So if the market is is with the economy, the market should be front running, maybe a heating up in economic activity. But we know that a lot of the metrics are showing us that economic activity is actually cooling down, which we needed to happen in order to bring inflation down. And now we're getting announcements that are getting slightly concerning layoff announcements from a lot of bellwether companies, but we don't have any labor data. So right now we can still say that the economy is okay and the labor market is okay because we don't have any data that proves otherwise. But when it starts coming back out again, we don't know what that'll look like yet.
- [11:03]
Steve Weiss
You know, it's so interesting because when you talk to two companies and whether it's CEO or CFO or just pick somebody, you know, that's in middle management, there's a disconnect because they don't see things being as good as in the economy yet. We see numbers, we see some companies reporting, but and I've been unable to square that disconnect and it's been going on for months and months that the economy is not that good. We hear from some people come on the network as well, but it really doesn't matter in terms of the market. Market's looking forward and what it sees forward is lower rates, low regulation levered.
- [11:44]
Scott Wapner
I to the economy doesn't look good to you because if you go down the list, I love that that Carl, continue. Put this out on Social from Vital Knowledge. It tells a good story about if you're tech, boom. If you're not tech, not so much. Cheesecake Factory, weaker sales. Caesars EBITDA Ms. Etsy weak. EBITDA guide, Generac a Ms. In a guidance cut. Hormel EPS warning. Kraft Heinz guidance cut. Masco guidance cut. Mondelez guidance cut. PG Guidance cut. I can look at all of those and there are probably more and build a case that you see told you economy is not so good. And I We have a new economy that the market and investors are placing their bets on.
- [12:33]
Steve Weiss
Right. So comes full circle to what you started the show with, which is that the breadth disparity. So that's more reflective. The breadth is more reflective of what I believe is actually going on in the underlying economy. And the question is how do you play that? And the only way to play it with confidence, I believe is staying with the AI companies. Now they're overvalued on a reasonable metric. Right. But where else are you going to go?
- [13:00]
Scott Wapner
Okay. I love the way you posed that, Joe. Are some. So this is the decision that investors have to make. I'm just writing some notes. You, you buy stocks.
- [13:10]
Steve Weiss
Yes.
- [13:12]
Scott Wapner
Based on the underlying economy or do you buy stocks based on the economy?
- [13:18]
Joe Terranova
Well, you're buying stocks based on the economy because that's where the earnings growth is. And I think it's reflected in the fact that we have two distinctive economies and going to give you a very compelling statistic. Has anyone come on our show or the 3 o' clock show and said Scott, I want to be short financials.
- [13:38]
Steve Weiss
No.
- [13:38]
Joe Terranova
Myself included, everyone loves financials. They're overweight financials. The earnings for financials I think collectively we could define as being really robust. Well, financials as a sector month to date down nearly 3% while technology is up 7 1/2 percent. To your point. Point. It is unfortunately right now an environment where there's this concentration where the earnings growth is being delivered and where the earnings growth expectations for 2026 and 2027 are going to be. And it is all about technology. It's about the fact that collectively we're going to hear from four companies in the next two days that they're going to increase their capex from somewhere around 350 billion north of 400 billion. We're going to hear that these companies are going to experience growth in their cloud business because the cloud business is the one component of these conglomerates where you could see monetization on the air spend. And I think that's exactly the metric that you want to look towards tonight. You want to see that Azure growth maybe is potentially going towards 40% from the upper 30s. You want to see, see that Google cloud is experiencing that growth. It's all about seeing the growth in cloud because that's how you're monetizing the spending.
- [14:56]
Steve Weiss
Exactly. But you know, you know, it's interesting is that I think, I think the surprise is going to be that stimulus from the Fed is not going to drive employment because this unemployment is being driven by jobs that are going away.
- [15:14]
Scott Wapner
Right.
- [15:14]
Joe Terranova
You know, think about yesterday. Amazon says 14,000 workers, we're going to cut the workforce.
- [15:20]
Steve Weiss
Right.
- [15:20]
Joe Terranova
The market applauds that.
- [15:21]
Steve Weiss
Why?
- [15:21]
Joe Terranova
Because the market says, okay, they have more money to spend on the.
- [15:25]
Steve Weiss
And they're not cuts due to the economics of Amazon, they're cuts to making the economics better because productivity is increasing. Right. So that's the real issue. So we've got a real host of issues that are going to come up. Maybe six months, maybe it's a year. So you really got to party now while you can.
- [15:45]
Scott Wapner
So Piper Sandler today is I think channeling a little bit of Liz Thomas in that they asked the question what could cause the next 10% correction? Right. They look at this market and say, oh, maybe we should be on guard a little bit. But then they throw out. We studied each of the past 28s and P500 corrections of 10, 10% or more over the past 60 years and identified three common catalysts. One, rising interest rates, two, rising unemployment or three, exogenous shocks. Now nobody, I don't think is going to sit here and take the other side of those things that could cause a correction. Obviously if interest rates go up. Liz raised that possibility. Well, if inflation accelerates a little bit, maybe the Fed can't cut anymore. Maybe they even have to tighten rising unemployment. Liz talked about, you know, the layoffs. We're starting to see. It's Amazon and whoever else. And then you can never plan for the exogenous shock. It goes back to what I said before. I mean, what could cause the next 10% correction? What could cause me not to come in tomorrow? I forget where the New York Stock Exchange is. You hit by a bus crossing Broadway. It's a little crazy over there now and all and all that, but like, what's the, like what's the probability, a knock on wood, of, of any of that happening? You know what I'm saying? Like, what are we, what are we preparing for?
- [17:15]
Courtney Reagan
Right.
- [17:16]
Steve Weiss
Well, I think unemployment again is the wild card.
- [17:19]
Carrie Firestone
Yeah.
- [17:19]
Steve Weiss
Because will unemployment this time be a negative or for the few companies that, that, that benefit from AI? Look, I'm sound like an AI evangelist and the reason is because I am, because this is not like the Internet. This is actually massively increasing productivity of companies versus the Internet had some of that impact, but it was completely different. So unemployment you're seeing is being applauded at this point. There are no warning signs in the market from all the companies Target, you know, we've named them all that have announced they're shrinking their white collar labor.
- [17:54]
Scott Wapner
She's been around these markets for a long period of time. It is not a new phenomenon that when a company announces a bit of downsizing, the stock traditionally goes up.
- [18:02]
Steve Weiss
It does.
- [18:03]
Scott Wapner
Investors like efficiency.
- [18:06]
Steve Weiss
That's absolutely correct. Except in declining. In a declining economic environment, the stocks go down because it's a sign of trouble.
- [18:14]
Scott Wapner
Amazon is not cutting jobs because they're worried about sales.
- [18:16]
Joe Terranova
Sales.
- [18:16]
Carrie Firestone
No, no, they're not. But it's going to start to affect Carnival Cruise Line. It will affect the airline industry.
- [18:22]
Steve Weiss
Absolutely.
- [18:23]
Scott Wapner
But how does it.
- [18:24]
Carrie Firestone
Because we heard last night and I didn't see anybody write about this today that unh, which had a very good quarter. We'll put that aside. We might talk about it later. Part of the reason is because health care costs are going up so much. Insurance premiums are increasing. That's their revenue. It is cost for lots of companies that employ people.
- [18:45]
Courtney Reagan
People.
- [18:46]
Carrie Firestone
Costs are going up and up and that is going to affect jobs. If unemployment goes up high enough, the market is not going to like it because it will affect sales and profitability of many companies. Now, you know that's not this quarter, but it could be in three quarters.
- [19:04]
Joe Terranova
In fact, if the economy is to contract significantly. Are you both saying that that would be what would motivate these companies to pause on the capex for AI? Because if that, if that happens, if they pause on the capex, the market has the problem that you made the.
- [19:22]
Scott Wapner
Argument yesterday that if these companies disappoint on earnings. Well, no, no. That the market doesn't have a problem, Joe.
- [19:30]
Joe Terranova
We're not at an inflection, birthday boy. We are not an inflection that up so well, I don't think you're supposed.
- [19:36]
Steve Weiss
To get wiser as you get older.
- [19:37]
Joe Terranova
I don't think you should get perplexed yesterday that we get five companies reporting and if we see some misses and these stocks go down, that it's an inflection point for the market. There's enough good stuff within the market, enough tailwinds, and I think the market will recover from that.
- [19:53]
Scott Wapner
Just made the course of the point through the first 18 minutes of how top heavy the market is. How you can look at any of those other portfolio managers and say, you know what? So if the air stocks disappoint, I'm going to rely on Hormel, Craft, Masco and Mondelez. They're going to take us no, they're.
- [20:09]
Steve Weiss
Going to carry it.
- [20:10]
Mike Santoli
No, no thanks. No.
- [20:11]
Scott Wapner
I'm going to go get some chili. So sit on my birthday and have fun and do some painting with pg.
- [20:17]
Joe Terranova
So if you're equally weighted, you actually want to see a correction in some of these mega caps and I think that you will see capital will rotate. I don't think.
- [20:24]
Steve Weiss
I agree.
- [20:25]
Joe Terranova
I don't think capital flees that.
- [20:28]
Steve Weiss
I agree. So those that haven't participated to the extent that perhaps they would have liked, they'll buy the bottom if these companies disappoint cloud. So I'm not saying you see a V shaped recovery, but it's going to be pretty damn close. If it was going to be inflection.
- [20:41]
Joe Terranova
Point getting in front of that, the junkier stuff in the market wouldn't be rallying.
- [20:46]
Mike Santoli
Right?
- [20:46]
Steve Weiss
But, but in the employment numbers you're not going to see it because don't forget with the immigration policies, I'm not saying they're good or bad. You've got lost a lot of laborers. So what you're going to see is a re education of the white collar labor force. There was an article in the Journal today about somebody who was, you know, in technology and now how to find a job selling cars. Selling cars. You know what the average unemployment person 27 months.
- [21:14]
Scott Wapner
Joe, you talk about the so called junkier part of the market rallying. Maybe you know the today's junk year. In your word part of the market isn't yesterday's in that we, we spent a lot of time talking about how retail has been fully engaged in this market. If you look at all the stats, it shows you they continue to buy stocks retail, spend the smart money in this whole bull market. They've been the smarter ones. Okay. And they like those stocks. What you consider to be junk other people think is their treasure. They like trading those stocks. So if you look at that performance and you say, well see that's a sign it shouldn't be happening in this junkier part. Maybe yesterday, but not today.
- [21:59]
Joe Terranova
Different time frame, much different timeframe. Their entry and their exit, I'm sure is much shorter in duration than what the four of us and collectively those members of the halftime report are doing. It's a completely different time frame. So over the course of a longer time frame, I'm not going to be able to successfully allocate in the direction of these companies that I can define as being.
- [22:21]
Scott Wapner
What are the, what are those companies that are lower quality in your mind? Like, like what?
- [22:25]
Joe Terranova
Well, they're the do it yourself Names that we've heard about. You know, last week you had the donut. What was the donut?
- [22:33]
Scott Wapner
Krispy Kreme.
- [22:34]
Joe Terranova
That, that's going up. You've got participation in stock stocks like that. I'm just never going to go there.
- [22:39]
Scott Wapner
You're talking primarily meme stocks.
- [22:41]
Joe Terranova
I call it do it yourself. Same thing.
- [22:44]
Scott Wapner
What was the last time you woke up at 5am to make a donut? No, no, no.
- [22:50]
Joe Terranova
I call the approach.
- [22:52]
Scott Wapner
You do that, the alarm goes off in the middle of the night. You're like, time to make the donuts go down to the kitchen.
- [22:57]
Joe Terranova
The trading strategy, I call that do it yourself. Not seeking the guidance of an advisor to work with you. It's. You're doing it on your own, you're taking your investment capital.
- [23:07]
Liz Thomas
Aren't those just momentum trades though? I mean they're low quality stocks, perhaps, depending on how you define it. But isn't it just a momentum Okay.
- [23:16]
Joe Terranova
I mean in the near term, that's what. If you're a short term trader, you're relying solely on momentum, Right. You don't care what the fundamentals are.
- [23:23]
Narrator/Disclaimer Reader
Right.
- [23:23]
Liz Thomas
So then if the market continues to be driven by momentum, we've had some brief pauses in the momentum trademark, but if it continues to be driven by momentum and you are putting your money in high quality stocks at the moment that that momentum turns around, even if it's briefly those stocks take the biggest hit and then you're more durable throughout.
- [23:41]
Courtney Reagan
Right.
- [23:41]
Liz Thomas
Because you're owning that quality.
- [23:44]
Joe Terranova
I think, I think it's the overwhelming activity, it's the increase in daily volume that's the big issue. To Scott's point, the activities there beyond meat names like that, you're seeing active participation and God bless those of you that are out there doing it, making a lot of money. And don't forget the effect of zero dated options.
- [24:00]
Scott Wapner
Momentum names like the, the MTM encompasses names like JP Morgan. I think Goldman is in there. We're not talking about junk.
- [24:13]
Joe Terranova
No, no one, no one is saying so. What we're saying is that if you are beyond meat, if you are looking at the do it, I call them do it yourself stocks, I don't want to disrespect anyone say meme stocks. You're looking at momentum, you're using the momentum indicator, but you're using a momentum indicator on a shorter time frame. The emptum is looking at momentum over a 12 month period relative to where it is on a six month period. It's a much broader timeline than what someone who's just looking to capture swing trading in the short term is doing by the way, I just want to.
- [24:47]
Scott Wapner
Read this stat and then we're going to go to break since we're talking about what people continue to buy. According to Morgan Stanley's trading desk, the Mag 7 saw the biggest day of buying since mid August yesterday.
- [24:58]
Joe Terranova
Okay.
- [24:59]
Scott Wapner
And the fourth consecutive day of inflows. People are going where the money is.
- [25:04]
Joe Terranova
And I my response to that would be myself and everyone who has discretion over capital and is trying to allocate. You can't compete with the following. In the last five days, I've got in video up 15% Amazon up 6% Alphabet up 8% Tesla up 5%. Throw in Microsoft and Apple up 3 and a half percent Metta up 3% as well. How do you compete with that? You can all right, that's a good.
- [25:31]
Scott Wapner
Place to take a break. You go make some donuts. Coming up, a big call on Uber ahead of earnings next week. We debate that in our calls of the day. We got a lot more ahead. We'll do it next.
- [25:45]
Narrator/Disclaimer Reader
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- [26:15]
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- [27:27]
Scott Wapner
All right, welcome back. You said viva Yesterday.
- [27:31]
Joe Terranova
Okay, thank you.
- [27:31]
Scott Wapner
Scott said viva yesterday. My birthday present.
- [27:34]
Joe Terranova
An apology from you.
- [27:35]
Scott Wapner
Yeah, it's accepted.
- [27:37]
Liz Thomas
I don't know that I heard an apology.
- [27:39]
Scott Wapner
That's my way of apologies to stick that. All right, let's talk about our call today. Uber reiterated top pick at JP Morgan. As the AV landscape continues to evolve, we continue to expect Uber to be an important player in the AV ecosystem. And we're encouraged by the company's breadth of partnerships and willingness to invest to build out the use case Weiss.
- [28:02]
Steve Weiss
You know, Joe, find this perplexing as well, but the stock just can't seem to catch a consistent bid.
- [28:08]
Scott Wapner
Why is that?
- [28:09]
Steve Weiss
You know, I don't know. I don't know. It's got everything going for it. It's, you know, it's signing these, these deals. You point out a few of them. I just don't know. I just think it's no longer a sexy part of the market, number one. Number two, there are concerns about way more. There are concerns about, about Tesla. So maybe that's keeping a lid on it. That's all I can expect.
- [28:31]
Commercial Announcer
Really.
- [28:32]
Scott Wapner
Yeah, that seems to make money. What do you mean?
- [28:34]
Joe Terranova
Why do you think it's.
- [28:35]
Steve Weiss
It's not performing.
- [28:36]
Joe Terranova
I have the stock up 59% year to date.
- [28:38]
Scott Wapner
No, no, no, it's more recently.
- [28:40]
Joe Terranova
It's okay. It just made an all time high.
- [28:43]
Scott Wapner
No, I know, but, but there is not. It is a sideways move, but the stock had a great, great run and then it's sort of ran out of gas.
- [28:52]
Joe Terranova
Can we pull that back a little bit further? I'm sorry. The stock is $5 off an all time high. They're reporting earnings next Tuesday. The company is fine.
- [29:01]
Steve Weiss
It's been basically flat since May.
- [29:04]
Scott Wapner
Okay, isn't that the point we're making?
- [29:07]
Joe Terranova
It has been flat since May. No, it's been a little bit higher since May.
- [29:11]
Steve Weiss
Basically flat, relatively speaking.
- [29:14]
Joe Terranova
I've got a nice, I have a very nice upward channel. A series of lower. No, you have no capital handles. Lower highs. I have a low in June, head and shoulders, a higher low at the end of July, another higher low at the end of September. And currently in October, another higher.
- [29:35]
Steve Weiss
So what you're saying is you're not perplexed by this?
- [29:37]
Joe Terranova
Not perplexed at all. They report earnings on Tuesday. I think it's going to be good.
- [29:42]
Scott Wapner
Datadog buy it B of a.
- [29:44]
Joe Terranova
That's 181 of my favorite names. They also report next week, that report on Thursday. If you think about right now, the cloud, you need security Surrounding the cloud. And they continue to capture market share. One of the dominant players in that space. They've reported some good quarters recently. And 2025 has been a year in which they have seen their price momentum really been established, accomplished.
- [30:09]
Scott Wapner
UnitedHealth got downgraded today to a hold from buy at Deutsche Bank. Carrie, you meant you don't own it, but.
- [30:15]
Carrie Firestone
Yeah, yeah, yeah, we do.
- [30:16]
Scott Wapner
Oh, you do own it. Yeah. I'm sorry.
- [30:18]
Carrie Firestone
And we bought when it crashed. It's up 55%, I think, from the bottom, which wasn't that long ago. I mean, they had a good quarter. They reported revenues that were, I think, a little better than expected margin, slightly higher. The guidance was firm. And it shows that people have to pay more premiums for their insurance. And UnitedHealth is doing the job, supplying health care and trying to control their costs.
- [30:43]
Scott Wapner
Weiss.
- [30:45]
Steve Weiss
You know, I was surprised by how much the stock moved, and I'm actually surprised at it today. Coming down. The quarter was fine. Quarter wasn't great. It beat vastly lowered expectations. I'm staying there for now, but, but, but health care is. I know it's quite a bit recently. I just don't see it. Health care is in such trouble broadly that I think it's a minefield, frankly.
- [31:11]
Scott Wapner
About Chubb, Joe, reiterated by 308@argus. They think the pullback presents a buying opportunity. You disagree?
- [31:18]
Joe Terranova
I disagree. We rebalance on Friday. We have significant insurance exposure. Insurance has lost a lot of the fundamental momentum that it had as long as, as well as the tactical momentum. Just look at Berkshire Hathaway.
- [31:31]
Scott Wapner
FTI target goes to 200 outperform at RBC Weiss.
- [31:37]
Steve Weiss
You know, the company missed a little bit when they reported yesterday it took the stock down. I think this is just some follow through. $200 has been my target and then reassess and go to higher target. I think it's just some follow on selling. I'm not really concerned. Particularly as rates come down. The company will benefit and continues to perform. So it was a slight miss on earnings.
- [32:04]
Scott Wapner
All right, let's get the headlines with Courtney Reagan. Hey, Courtney.
- [32:07]
Courtney Reagan
Hi there, Scott. A new government report estimates the ongoing government shutdown could cost the economy up to $14 billion. That is, if it stretches into the end of November. According to the nonpartisan Congressional Budget Office. If the shutdown ends Today, on its 29th day, the report puts the cost closer to 7 billion. However, the CBO says the negative effect on the economy will mostly, but not entirely, reverse once the shutdown ends. Russia's Vladimir Putin says Moscow conducted a successful test of its new Poseidon atomic powered and nuclear capable underwater drone. In a visit today to a Russian military hospital, Putin claimed the new weapon cannot be intercepted. The test came just days after Russia tested a new nuclear powered cruise missile. And the Paris public prosecutor says the two men arrested over the heist at the Louvre are suspected of being the pair who actually rode the lift up to the side of the museum and broke into the gallery to steal priceless crown jewels. Four hooded thieves made off with the jewels after the break in on October 19th. The other two suspects are still at large and the jewelry itself is still missing. Scott, back over to you.
- [33:12]
Scott Wapner
All right, Court, thank you. Coming up, a double digit pop and a double digit drop for two committee names. We discuss next.
- [33:24]
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- [33:41]
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- [34:24]
Scott Wapner
All right, welcome back. I think at Weiss, you mentioned earlier when you said in industrial, you know, double digits or, or however you phrase it early, you were talking about Caterpillar, weren't you?
- [34:35]
Steve Weiss
I was.
- [34:36]
Scott Wapner
Which you own? Yes, 12 and a half percent. What's going on here?
- [34:40]
Steve Weiss
Well, so if you go back to when I first bought Caterpillar, which you know is this year actually, and so incredibly well, it's because I want to play the tool belt for AI in data centers. I didn't want to pay the increased multiply enough for that exposure. I also thought with rates coming down, it would be an additional boost. And what's happened is the data center business is rewarding them. So energy, which data centers all need, that was up 17%. Backlogs at an all time high, close to 40 billion. Construction is up 7%. Overall growth, you know, was 10% in revenues. And that's pretty significant for a company like this. So that's Sort of playing out. It's the halo effect again of AI that we've seen this week regardless of industry. And we're seeing real numbers come through for Caterpillar.
- [35:31]
Scott Wapner
We're thinking of Caterpillar as an AI stock, but Earth and somebody's got to.
- [35:37]
Steve Weiss
Build the data center. Somebody's got to sell the equipment to build them. Somebody's got to sell the equipment to increase energy transmission. So it's the tool belt for AI. That's how I look at it.
- [35:47]
Scott Wapner
All right.
- [35:48]
Steve Weiss
And like Vertif is a tool belt for AI, it similarly is benefiting.
- [35:52]
Scott Wapner
Yeah, but I mean it has a more direct, understandable and identifiable role in the production of energy, power and whatever else to.
- [36:03]
Steve Weiss
Absolutely.
- [36:03]
Scott Wapner
The data centers.
- [36:04]
Steve Weiss
Absolutely.
- [36:05]
Scott Wapner
But as I said now I'm waking up and I'm seeing now Caterpillar is a big AI play.
- [36:09]
Steve Weiss
It is. I mean Caterpillar wouldn't have this quarter but for having data centers having to be built, you need construction equipment from somewhere. It'll never get the multiple that a Verve gets or the others get unless on trough earnings. But nonetheless it is participant.
- [36:27]
Scott Wapner
Maybe we should buy like is waste management. The difference is cement.
- [36:31]
Carrie Firestone
How about cement companies? They can be an I play too. There are all types of reverberations around these circles that are growing because people are looking for some place to address.
- [36:42]
Steve Weiss
The difference is that these are usually capital intensive companies. Right. Versus you can say AI is capital intensive with chips and stuff like that. But this is a little different, you know, in terms of what I mean by capital intensive.
- [36:57]
Scott Wapner
You want to hit booking holdings care they beat. They issued better than expected reservations. Outlook, you own the stock. Target is 6,000 bucks now at Mizuho.
- [37:07]
Carrie Firestone
Right. Well, it was a good quarter. I wouldn't say it was a blowout quarter. It was strong. Travel continues. Room nights were up, I think seven and a half percent. They bought back quite a lot of stock, which they continue to do. We sold some a couple of months ago just because it had become such a large position given the enormous move it's had over the last two and a half years. So we like it. It's not, I would say say a very attractive stock because of its valuation today. And if consumer spending slows at all, that will affect book.
- [37:41]
Scott Wapner
OK. All right, we'll do one more. Phillips 66. You want to take that?
- [37:46]
Joe Terranova
I do. Got exactly what you were looking for here. Refinery margin 99%. That's the highest since 2018. Chemicals business strong on the balance sheet. We talked about this yesterday with Josh. Their Debt positioning looks much better than it has over previous quarters. Markets responding, moving higher. I continue to own this name as.
- [38:07]
Scott Wapner
Well as Valero Thermo, Fisher, Carrie, take that one too. They're going to buy clinical service provider Clario for 9 and a half billion dollars.
- [38:15]
Carrie Firestone
Up to that, I think the market likes that deal. Thermo is one of these stocks that got really killed after all the COVID vaccine sales dried up and it's starting to come back from the underworld. You know, the stock's been acting well. The earnings are stabilizing. They're adding pieces to the puzzle that within health care continue to make money and can be accretive. So we think that the stock has more to it.
- [38:40]
Scott Wapner
All right. Santoli on the other side with his midday word. And we have a lot to discuss at this midday with the market set record highs yet again. All right, Mike Santoli, senior markets commentator. Just, I'm going to let you just go. What's on your mind?
- [38:59]
Mike Santoli
I mean, this is a day, Scott, when all of the major legs of the bull case are kind of right out in the open there to be proven or tested or disproven. I mean, obviously we start with the story. So the bull case is it's still early. This is sustainable. Levels of investment in video yesterday kind of gave you plenty of ammo for that case to be made. And the buying in the chip data center storage food chain is massive today. And it's disorderly and it's erratic and it's upside volatility. Everywhere you look elsewhere you have the Fed which is supposed to be cutting and normalizing rates into a strong economy. The equity market or the parts of the equity market that would reflect a strong economy are a little more hesitant right now. You have poor breadth in the overall market, not fatally so. But banks aren't doing anything special. Consumers not really participating in a major way. But we'll see if the Fed can kind of unlock some of that story today. So I think all of that together and then of course, trade piece or at least rollbacks of the re escalation on trade. That seems to be part of the premise. I think the big question is going to be is if we get all this, maybe it's to the favorable side and the market says, yeah, no kidding, that's why the S and p is up 2000 points from the April low. I mean, this is what we've been pricing in. So it's a fascinating moment in that way.
- [40:14]
Scott Wapner
Yeah. I mean, when I read that stat earlier about yesterday being the Worst breath day ever for the s and P500 on an up day. What do you extrapolate from that? Do you care? As somebody who looks at the market as closely as you do, I think.
- [40:29]
Mike Santoli
The first thing you have to note is that is something that can only happen in a hyper concentrated index. So yes, we have one stock that's eight and a half plus percent of the S&P 500. And if it goes up 2, 3, 5%, it doesn't matter what, what 400 stocks do. So that's the part of the premise where it's like, yeah, we haven't seen this before because we haven't been this concentrated before in the modern era. So that's one part of it. The rest of it is over time. Yes, you probably want to see more participation, anticipation because if the semis go up 2% a day and they're this far above their longer term averages and it's all the energy flowing into one part of the market, it's just going to become unstable and it's going to unwind in a way that's, that's not necessarily orderly. I don't think we're there. I think you have time for the rest of the market to prove itself.
- [41:16]
Scott Wapner
Yeah, that's another thing you sent out today. The sox, right. The semiconductor index so far above its, what was it, 200 day?
- [41:24]
Mike Santoli
Yeah, the 2, 200. I mean it's where it was like July of 24 at the peak. That was not the end of a bull market but there was a pretty sharp reset. But again it's in videos right there. And if, if the rest of the world is going to pay in video half a trillion dollars over the next five or six quarters and they have 70% gross margins and everyone says, yeah, 55% net margins for Nvidia is fine. I mean you can't really argue against the valuation for Nvidia. You, you can question the rest of those companies spending it, I guess.
- [41:53]
Scott Wapner
Yeah. All right, I'll see you on closing bell. We got a big one because we're going to lead up to the earnings obviously. We'll see chair Powell, meet the media and then we'll talk to Jeffrey Gundlach and Mike will be there with us as well. We'll do the setup next. I know it seems hard to believe but there's a lot more going on besides tech, so we'll do that. Well, that was going to start with KLA in ServiceNow. All right, you know what, let's start with Burke. Okay, there's A lot going on outside of the mega caps. How about that? Kla Jyoti, they report their earnings today after the bell.
- [42:33]
Joe Terranova
They do. We're going to hear obviously the restrictions with China wafer fat market. There's been an improvement in the rhetoric. I think that's going to lend itself positively. We also had the ability to hear from Lam Research just last week very strong earnings there. That along with the recent price action in the the entirety of the universe for air has taken Applied Materials, Lam Research, KLA Corp. Semi Equipment names to new all time highs. Throw in Teradyne there as well. I like Semi Equipment to continue its positive.
- [43:06]
Scott Wapner
You like servicenow?
- [43:07]
Joe Terranova
Ah, that's a struggle. That's a struggle to the bell. That's a struggle. And that really is a battleground stock when you think about it.
- [43:13]
Scott Wapner
Let's look at further out.
- [43:14]
Joe Terranova
Pull it all the way out.
- [43:15]
Scott Wapner
Further out please.
- [43:16]
Joe Terranova
So we have the benefit of being in this name From July of 2023 at much lower levels. However, over the last year the stock has really moved sideways over the last year I think it's down about 3%. A lot of the challenges surrounding the Doge cuts dramatically impacted the stock company. Hopefully tonight can be an inflection point where you begin to see the beginnings of AI being a catalyst for the company. This software app company. This is a really important quarter that we have in front of us now. We rebalance on Friday. We do look at momentum over the last year. It is negative 3% in an environment where the S and P is up over the last year. 18 some odd percent.
- [43:55]
Scott Wapner
Okay. Gosh, that was a lot. S and P Global try to give.
- [43:58]
Joe Terranova
Me a little less S and P.
- [43:59]
Scott Wapner
Global's tomorrow before the bell.
- [44:02]
Joe Terranova
S and P Global should be very strong right now given the financial services engagement environment. They're being called on quite a bit, wouldn't you think?
- [44:11]
Scott Wapner
Okay, Merck reports tomorrow as well. But rather than hear from Joe, I want to hear from Liz on this resurgence in health care and biotech. What do you think?
- [44:20]
Liz Thomas
I like health care. I so I respectfully disagree. I don't remember what you said before Steve, but you did not like health care.
- [44:25]
Steve Weiss
But you'll disagree.
- [44:26]
Liz Thomas
I disagree.
- [44:26]
Scott Wapner
You can disrespect. You don't have to respectfully disagree.
- [44:30]
Liz Thomas
Respectful even though it's not your birthday. But I really like health care. I definitely like it into 26. Not necessarily for the insurers but for the pharma and biotech side of it as people look for growth. And because 26 is a midterm election year. I think defense is going to come back in vote.
- [44:46]
Joe Terranova
Are you trying to incite a debate between Liz and I? Because I own own Merck and I am going to sell Merck on the close today going into the earnings report. It hasn't gone anywhere from when I bought it. I'll take the capital, put more into the xbi.
- [45:01]
Scott Wapner
You're going to sell it before.
- [45:03]
Joe Terranova
I don't want to take it into the report. You're going to have to hear a lot about Keytruda, which is their blockbuster cancer drug. What's going to happen in the coming years. There's a lot of risk there. So I just don't want to take it into the print.
- [45:13]
Scott Wapner
All right, we'll do finals next. Got a big closing bell. Jeffrey Gundlach, as usual, following the Fed chair. And then we're going to take you right up to those big earnings reports. Got some great guests of shareholders. We'll cover all of that for you.
- [45:28]
Joe Terranova
Why Spinal fta.
- [45:30]
Steve Weiss
You have to buy it when slightly dislocated as it is now.
- [45:33]
Scott Wapner
Okay, Kerry, Next year.
- [45:35]
Carrie Firestone
Just reported good quarter and now it's a data center play.
- [45:38]
Scott Wapner
Thank you very much, Liz Thomas.
- [45:40]
Liz Thomas
I think software gets chased into year end in this tech play.
- [45:44]
Scott Wapner
Joey Donuts, Steel Dynamics. Happy birthday, Joe.
- [45:47]
Steve Weiss
Thank you.
- [45:47]
Scott Wapner
I'll see you at 3. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [46:02]
Narrator/Disclaimer Reader
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer this is.
- [46:41]
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Scott Wapner
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