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Halftime Report
Trading the Rebound 1/22/26
00:47:12
Scott Wapner and the Investment Committee debate how to trade the rebound in the markets after President Trump threatened tariffs on Tuesday. Plus, the Committee shares their latest portfolio moves. And later, Josh Brown spotlights a solar stock in his "Best Stocks in the Market." Investment Committee Disclosures
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- [00:00]
Scott Wapner
Hey, Fidelity. How can I remember to invest every month? With the Fidelity app, you can choose.
- [00:07]
Josh Brown
A schedule and set up recurring investments.
- [00:10]
Scott Wapner
In stocks and ETFs.
- [00:12]
Josh Brown
Huh.
- [00:12]
Scott Wapner
That sounds easier than I thought.
- [00:14]
Josh Brown
You got this?
- [00:15]
Scott Wapner
Yeah, I do. Now, where did I put my keys?
- [00:19]
Josh Brown
You will find them where you left them.
- [00:23]
Scott Wapner
Investing involves risk, including risk of loss. Fidelity Brokerage Services, llc. Member nyse, sipc.
- [00:31]
Josh Brown
Oh, could this vintage store be any cuter?
- [00:33]
Scott Wapner
Right.
- [00:34]
Jennifer
And the best part, they accept Discover. Except Discover in a little place like this?
- [00:39]
Josh Brown
I don't think so, Jennifer. Oh, yeah, huh?
- [00:41]
Jennifer
Discover's accepted where I like to shop.
- [00:43]
Josh Brown
Come on, baby. Get with the times.
- [00:46]
Scott Wapner
Right. So we shouldn't get the parachute pants.
- [00:49]
Jennifer
These are making a comeback, I think.
- [00:53]
Scott Wapner
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report. 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, the rebound will trade all things markets today with the investment committee as always. Joining me for the hour, Josh Brown, Carrie Firestone, Jenny Harrington and Jim Leventhal. Let's check the markets. We are rallying yet again across the board. And we're trying to get back to 49. Five on the Dow S&P is back above 6900 as well. So you have a pretty good start. And there's the Russell, and that's been a huge story so far this year. And if you look at the markets today and you look at the markets yesterday, it is almost as if Tuesday's Trump tariff tantrum, the sequel, never happened. The S and p was at 6940 before that big decline on Tuesday. It hit about 6930 today. Interest day high. We're a little bit below that obviously now, but the Dow has turned positive for the week. We have a framework in quotes. Whatever that is, we don't know. But it's good enough for the markets to look like they do over the last two days. This sizable rebound. What do you make of this?
- [02:21]
Jim Leventhal
Yeah, so I was on the show very quickly after that series of Greenland related truth social posts, and my comment was like, haven't we been doing this for 15 years? Do you honestly need to be told, don't react to the first tweet or maybe even the second, Just like take a beat and let the market digest it's. Mostly Algos trading that stuff. Why would you join? The Algos are playing a different game than you. That turns out to have been sage advice. The S&P 600 Small Cap Index is the bell of the ball year to date, up 8% versus just 0.5% for the S&P 500. I absolutely love this tape. I know Jenny does. I know Jim does. Because it has nothing to do with data centers. Literally nothing. What's happening this year is really exciting. You've got Transports in the lead. When was the last time we've been able to say that? You've got the small cap trade working, which touches a whole host of sectors that again are not data center related and you still have semis doing well and now you have energy has decided to wake up. And again, a lot of these were areas that were left behind last year. A lot of them are under owned, a lot of them are lower multiple have tons of room to run and that's without even knowing what the earnings will be in Q4. They haven't even reported yet.
- [03:39]
Scott Wapner
Right.
- [03:39]
Jim Leventhal
But the multiple is lifting because people are looking elsewhere from Oracle and Microsoft. They want to do something else.
- [03:47]
Scott Wapner
It is January 22nd and the Russell 2000 is up 10% year to date. That's unbelievable. The transports which Josh was talking about, which Ed Yardeni is writing about today, by the way. He'll join us on Closing Bell today so you'll hear more from him on his outlook for the markets. Only 4% away from its previous high, which was on March 30th of 2022. If you believe of course in Dow theory, then this Transports breakout is very significant. This is in many respects what it was last week, the idea of a run it hot economy. That's why we asked you and we talked about in the face of that big decline on Tuesday, whether you should ignore the noise and focus on the fundamentals. The fundamentals that David Solomon, who runs Goldman Sachs and was with our Squawks Squawk Box team in Davos this morning said are this I think we're set up where we have the possibility for a stronger growth trajectory for the next few years.
- [04:52]
Jim Leventhal
We're set up for that. That might not happen.
- [04:54]
Scott Wapner
Much of exogenous things could soften it.
- [04:56]
Carrie Firestone
But that's I think we're set up.
- [04:58]
Scott Wapner
With a better possibility for that than we've had in quite some time. That seems to be the view. Charlie Scharf CEO, Wells Fargo says the same. It's more likely than not that growth will be Stronger than people expect which is why the sector sort looks like this. Materials up 9.25% to start the year. Energy up 9, Industrials up 7. It coincides with what the Russell Jenny is doing as well as the run it hot and tune out. The noise continues.
- [05:29]
Josh Brown
Right. So to Josh's point before, yeah, I'm loving this market this year. It's a lot of fun. But I look at it cautiously too. And so if we're going to go back to the beginning of your comments Scott, and focus on transports, I just think it's interesting because when I look at our transport holdings, we've got JetBlue, XPO, Uber and UPS. None of those companies have anything actually in common with them, with each other, other than maybe that oil, gasoline is a large input cost. And so really I look at it as a much broader market rotation.
- [06:01]
Scott Wapner
Well, I don't think they do have something in common. They're all reliant on a good economy. They're good economy and even better than what people thought like the Solomon Scharf perspective helps a UPS, it helps an Uber, it helps a JetBlue and it helps XPO.
- [06:15]
Josh Brown
But you know what, we had a great economy last year and those guys.
- [06:18]
Scott Wapner
Totally, we're going to have better growth than we did.
- [06:20]
Josh Brown
Okay. Point is they completely lagged last year. So even with a good economy and they do need that, they, they did nothing last year. So this is just more to me like a comment of market rotation, a comment on people changing their positioning. It's, it's interesting. I mean you take like a UPS for example, right? It's down 17% over the last 12 months. It's up 11% year to date and you look out on that and okay, it trades at 15 times earnings. But the earnings growth for UPS isn't amazing, it's just not terrible. And it's in the middle of a transition. People are finally giving a middle of a transition, some like positive hope rather than you're not AI centric, we're ignoring you. So it's just this kind of like thematic thing that I'm seeing across the portfolio, across the market. To me it's encouraging. I like the breadth. Everyone does well, it's a positive economy. It's nice to see these guys participate.
- [07:11]
Scott Wapner
Yeah, care. We're at 49,500 on the Dow. So again we said we're back positive on the year and we haven't gotten everything back from Tuesday but we are working our way with it towards that direction.
- [07:25]
Jennifer
So here's a comment That I think is relevant to a discussion of indices. The S and P has 40% weight in a handful of big cap tech names, tech and communication service names, one of them in video. In video alone, which is as large in terms of market cap. Of the 300 smallest names in the S&P, 500. If you go from number 201 to 500, all of them fit into in video. So those $8 trillion worth of market cap can move a lot. If you get a few points that come out of Metta or Microsoft, which has been happening, or Nvidia over the past few months, that can really push hundreds of names that are outside of the, you know, trillion dollars or $100 billion club, which is a great thing for people who have broadened their investments, have diversified by their portfolio like the people on this desk. What you might find is that the S and P does very little this year, but these other indices do a lot. They can be double digits, they could be up 20% and you could have the S&P up 2%.
- [08:35]
Scott Wapner
Don't you think it's interesting, Jim, if you look at over the last 12 months, the Russell slightly beats everything. The Russell's up 18.6% over the last 1212 months. In this age and era of AI where everything seemingly is about that, where that trade, for better or worse, has dominated a lot of the conversation and a lot of portfolios. But that's pretty remarkable when you think about that fact that over the last year the Russell's up almost 19% and it beats everything else.
- [09:07]
Carrie Firestone
Yep, yep. And you know, Scott, you know, and we all know that the market likes to anticipate. It always anticipates. So what is it anticipating? It's bluntly anticipating much better growth in earnings from small caps. And by the way, the other 493 stocks outside of the MAG7, much better growth rates than we've seen over the last three years. And frankly, we're seeing going to see a deceleration of the AI stocks, earnings growth rates. That's the signal. You talked earlier about noise. There's a lot of noise out there. For fundamental investors, earnings is the signal. Now, I'm not saying, by the way, that the AI stocks are, are going to have lousy earnings, but if you take a look just as an example at Alphabet, it more than doubled its net income and earnings per share over the last three years. It's really hard to keep that pace of growth going. So it and the rest of the stocks may do 15 to 20% earnings growth this year. But guess what, the other sectors, financials, industrials, maybe even energy are starting to pick up to match that in the projections by the second half of this year. And that Scottish is why I think the small cap sector and by the way, the RSP also is outperforming.
- [10:15]
Scott Wapner
How about this? From the, from the fund manager level to the retail level, there is a level of bullishness that really hasn't been seen, I don't think to this magnitude in some period of time. Bank of America's latest fund manager survey is the most bullish in four and a half years. Cash levels are at record low. Protection against equity correction is the lowest since January of 2018. And investors are the most overweight stocks since December of 2024. On the retail side of the ledger, retail investors continue to set new records this year according to JP Morgan, reaching an impressive $12.9 billion this week. This level is comparable to last year's buy the dip episodes. But unlike those prior episodes which faded quickly, the current new year momentum has been sustained and has now pushed retail activity to an all time high on a rolling monthly basis. It's almost like no matter where you look, people are positive on this market.
- [11:19]
Jim Leventhal
Yeah. And I think, I think a lot of these sentiment surveys and polling of fund managers and positioning think it's important to remember for the most part what these are, are concurrent indicators. They basically describe the conditions as they are right in that moment. They can turn really fast. You get two weeks of negative closes to the S&P 500 and you'll see that bullishness drop right back down. It's perfectly normal, by the way, at record highs, the dow close to 50,000. Why wouldn't people be bullish? Which they'd be bearish. So like it's, it's almost like it's a tautology. But I want to go back to something that I think is really important. One of the main reasons why the small caps are rallying here and why it's hopeful for the overall market. The big question of 2025, if you guys remember at least the second half, was is there a bubble in the AI data center build out theme? Is all of this spending wasteful or excessive or about to kick us in the ass? And the obvious answer to that question is we can only answer it if we see, see smaller companies who are the customers of AI, the users of all that data that's being housed by Metta and others. If they have a concomitant increase in their earnings outlooks, then we know it's not a bubble because that earnings growth can only come from productivity which obviously will come from a few things. Lower energy prices, lower cost to borrow, but the usage of AI, the greater penetration of of AI workflows in their businesses. So the only way we can say it's not a bubble is if we see what we're seeing in the small caps and it's really encouraging. They're the buyers of all this technology and if it works for them and we're raising earnings outlooks for these companies, then no, it wasn't a bubble. And God forbid if we don't see the increase in Russell 2000 company earnings then we do have to worry about that question once again.
- [13:18]
Scott Wapner
Again, great, great point. I think it's the next big leg of the story to Josh's point.
- [13:25]
Jim Leventhal
Yeah, the user.
- [13:26]
Scott Wapner
What do you mean the users? It's all about the users.
- [13:29]
Jennifer
Here's more cap stocks this year to see the impact on their earnings.
- [13:33]
Jim Leventhal
No, you're going to have stocks have a 5 have a 5% profit margin versus S and P is more like it's going to be 14 or 15 this year.
- [13:41]
Scott Wapner
This helps explain the productivity in many respects. Don't you think so?
- [13:46]
Josh Brown
I think the problem is like productivity and efficiency is great and then you hit a very thin line. Where are people using it and becoming so productive and so efficient that you don't need to hire. And so there's a thin line between when this hiring is fantastic. Sorry, when this productivity is fantastic and when it starts to cut in the other direction when you don't see the.
- [14:05]
Jim Leventhal
People who are there. Hold on, they're not hiring college kids. We're there, dude.
- [14:09]
Josh Brown
We're not even close to there. You had seen nothing yet. All the job losses that you saw in 2025 were just people were and not saying losses.
- [14:18]
Jim Leventhal
You said people don't need to hire. We're already seeing that in the data. We're seeing companies are low, fire lower today.
- [14:24]
Josh Brown
Like we're like the first batter of the first inning in terms of what I has the potential to do to job loss. We are too early to know where that's even going. I think that, I think all the weakening in the labor markets that you saw last year, that was just an excuse pointing to AI because they over hired during the pandemic. There's no cushion now. And what could happen is all this wonderful productivity that's awesome for corporate earnings could end up being very negative for the economy. If you have millions of 18 to.
- [14:51]
Jim Leventhal
24 to 27 or 28 story. Okay, 26 story. We're already seeing it.
- [14:58]
Josh Brown
Josh, you know perfectly well the market looks out 12, like 6, 9, 12.
- [15:03]
Jim Leventhal
Jenny, my point is this. It doesn't have to be one extreme or the other. It doesn't have to be 50 million layoffs or there's no productivity gain whatsoever. I think the answer is in the middle.
- [15:12]
Josh Brown
I think it's all right and I agree, but I think it's me, a slow and insidious creep. So what Kerry said, Scott, when you said, you know, all this positivity, Carrie turns, she's like, this isn't good. I said, I agree. You know, when is it ever good? When everybody agrees on the risk for.
- [15:26]
Carrie Firestone
All of us is that I actually is a bubble and all these stocks are inflated. I don't think that's the, the case. Look, we see the effect on a lack of hiring. But if you look at the U.S. census Bureau, which does these monthly surveys, and from January this month, companies with 250 more employee, 250 or more employees, big companies, 33% of them are using AI right now. If you drop that number down to 20 to 50 employees, I use that as an indicator of small businesses. That 33% drops to 18%. What that tells me those numbers. Tell me, tell me two things. One, small businesses haven't used it as much as big business. This makes sense, right? Does a pizza company, I'm being facetious, but does a pizza spot parlor really need. I know, but, but those numbers 18 to 33% tells me there is so much more penetration to come and there is money to be made. Stocks.
- [16:14]
Scott Wapner
I feel like to that point, I feel like the market is going to anticipate and move more sooner on the corporate benefits of all of this new technology over the societal impact from the stuff that, that you are talking about.
- [16:34]
Josh Brown
I agree. What I worry about is how much of that corporate positive impact is already priced into these stocks. Because.
- [16:40]
Scott Wapner
No, no, Josh's point is that it's not priced in right. Maybe he's almost at all. How can he possibly be wrong? We're just at the cut. Can I finish? Thanks.
- [16:50]
Jim Leventhal
Word, please.
- [16:51]
Scott Wapner
We're just at the beginning of thinking about all of these other companies and industries that are going to be impacted by all of the hyperscaling and all of the innovation that that's coming from AI. How can that already be in the stock market?
- [17:05]
Josh Brown
Because there's an interesting chart which I'll put up on my Twitter where it shows it takes all the, like a bunch of different valuation metrics and compares the market market to like all the way back to the 1920s. If you, if you use a pile of different valuation metrics, this market is more expensive than it's ever been since 1929. And when I see that, I think a lot is priced in.
- [17:26]
Scott Wapner
Why don't you just think that their earnings are going to be really good multiples are going to compress and the stock market's still going to go up like it has in similar periods of multiple compression and good earnings throughout bull market history.
- [17:37]
Josh Brown
This is why mostly fully invested. But I'm not totally. And, and what we all know is no one rings the bell at the top. But we know that we're all set.
- [17:45]
Jim Leventhal
Record highs though honestly.
- [17:47]
Josh Brown
Columbia bank shares.
- [17:48]
Jim Leventhal
No the amount of wealth, the amount of wealth in America is at record highs and people need to own stocks. Hang on. And profit margins. So we're going to Compare stocks in 1940s when they were, I don't know, smelting copper to the stocks in 2027 6. Like it's, it's apples to oranges. I would rather buy it at 16 times earnings if I could. But that's not the hand that we're being done right now.
- [18:14]
Josh Brown
I'm saying, I'm not saying you wait to 16 times. I'm just saying with rich valuations some huge amount is priced in. I know carries like crawling out of your skin.
- [18:21]
Jim Leventhal
12 times earnings in small caps is rich.
- [18:24]
Jennifer
So can I just want to make a comment because there is an industry which I think is on the cutting edge of what I could do, which is biotechnology. And last year was a very, very big year for biotech stocks. I have said on this show many times they're the ones that ought to be able to use it in order to find the targets and design the molecules and get clinical trials moving fast with the right group of patients. Have any of them done it? We're waiting for somebody to say Biden to say, oh, our new drug that's at the FDA for approval was designed through a. I was created through mechanisms.
- [19:03]
Jim Leventhal
That use will not be the first place it shows up. But it takes a long time if.
- [19:07]
Jennifer
If the stocks move 30% because of some of it may be in the prices already. Right.
- [19:14]
Scott Wapner
All right. So speaking of things that are maybe already in the price, I don't know. If you look at some of the mega caps, there is Alphabet which, which sticks out like a sore thumb. It was amazing last year and it's up 6% year to date. It's Far and away the best performing of the mega cap names. Gemini 3 has been widely regarded as maybe an enabler of this company, not going to some of the dark places that others have expected that they might. You trim the stock.
- [19:51]
Jennifer
Correct.
- [19:52]
Scott Wapner
Because of the incredible run that it's had.
- [19:54]
Jennifer
I mean, last year we added to it and it was selling for 16 times earnings beginning of last year because everyone was afraid of Deep seek. I mean, who even remembers what they were afraid of? But the stock traded up to 28 times where it is now. It has grown to be a very big part of our portfolio. You know, when a name gets to be close to 10% percent, we kind of back. We cut it back a couple of times and we did a little bit more cutting. That does not mean we are out of the stock by any means. We're overweight. It was just a trim, but it's because of valuation.
- [20:26]
Scott Wapner
Can we discuss what's happening with Apple, please? The stock is on pace for its eighth negative week in a row. That's the longest streak since 2022. Everybody knows why. The stock had lagged and then the stock had a huge, huge run, which we can look at rather than that. Interdate, please, on the hope and expectation that what was missed was going to be corrected, that they were going to get AI Right. Right. There's the chart. Underperformance and then big ramp up on their. Come on, this is Apple. They're going to get it right. They get everything right eventually. They may not be first, but they're usually best and they're going to figure it out. What in the world is up with this, not with this name, Josh. What gets this thing moving again?
- [21:10]
Jim Leventhal
Look, I think the iPhone unexpectedly was a hit and it's the first time in a while that we've been able to talk about growth beyond just a replacement cycle. I think that's super positive. When you look at some of the legal challenges that people were worried about with this name, they seem to have come out okay. On the other side, there are still overhangs here, but they're even doing better in China. And that was something that people were wringing their hands about. So, look, I think it's a very large stock. It can often be used as a source of funds. A lot of times you'll see it come down for no apparent fundamental reason and then all of a sudden just reverse sometimes. That's because Berkshire Hathaway is liquidating more of it, which may be the case here. They've been net sellers for a while now. There's a lot of reasons why you could see the stock sort of coast lower, but context matters. It made a new record high. So like this sell off didn't start from the name being being in a 10% correction. It made a new record high and now we're witnessing a pullback. And it's fairly ordinary, fairly gradual. The stock is nowhere near any critical long term trend level or moving average. And you know, in the end I still think this is a business that buys back a ton of stock this year, has decent earnings, not blow you away growth, but investors are willing to pay up in multiple multiple for the reliability of those earnings. Same reason Wal Mart, Costco, all of these stocks are selling at very high valuations because we care more about will the earnings show up then, oh my God, why aren't they growing by 20% anymore?
- [22:41]
Josh Brown
But that's an interesting point. When you say they pay up in multiple. This is the question that we always ask, what is the right multiple? So when I look at Apple here, I see this year, next year, the following year, 11 to 10%.
- [22:51]
Scott Wapner
You've hated this stock for a long.
- [22:52]
Josh Brown
Time time because it's boring and it gets more attention than it should and it trades at 30 times. What's the right multiple? Is it 23 times or is it 30 times? Because then I look at him, extremely.
- [23:02]
Jim Leventhal
High Mode services business.
- [23:04]
Josh Brown
But I look at Nvidia, 24 times earnings, 50, 60%. So why should Apple not traded in videos multiple, which is still a premium.
- [23:12]
Jim Leventhal
I'll give you an answer to that question and I own both. Okay, I'll give you an answer. That question I think is the right answer and maybe it's not. This is what I think. Nvidia is highly reliant on this very specific theme. The AI build out and always having the best chips and fighting off Now a lot of competitors which did not exist three and four years ago, okay, they had the whole thing to themselves and now they don't. And we're unsure if the pace of data center build outs and GPU purchases will continue. With Apple it's a totally different story. It's will the computer consumers continue to upgrade to the next iPhone?
- [23:48]
Josh Brown
But they do what they are earnings growth.
- [23:51]
Jim Leventhal
But that's what investors want. But investors are not betting that 11 goes to 15 or 20. Investors are betting the 11 comes in, the float shrinks, there's a small dividend there and they could sleep at night. It's a different bet. Video is not that bad.
- [24:07]
Josh Brown
I think Apple gets a premium because people like my mom can look at a phone and be like, I understand this.
- [24:11]
Jim Leventhal
Yeah, well, that's what I just said.
- [24:12]
Jennifer
That's right.
- [24:13]
Josh Brown
But I still don't agree. I don't think that counts for 10 multiple points or I don't think it should count for 10 multiple points. So when we see it fade, should.
- [24:20]
Jim Leventhal
When was this business ever about.
- [24:22]
Josh Brown
That's a fair point.
- [24:24]
Scott Wapner
All right, let's get to another move before we, before we take a break. A is it a hotly debated stock oracle? Maybe.
- [24:31]
Carrie Firestone
That's a quieted down, hasn't it?
- [24:34]
Scott Wapner
I don't think so. Yesterday it was down like, well, I mean it was down like 4 or 5%. I'm not talking about on the Tuesday. I'm talking about. It still seems, there still seems to be many, many questions about what's happening here. Stocks, cds, you can't look at one without looking at the other. Until you stop having that conversation, then you get where I'm going, then it's still going to remain an issue.
- [24:59]
Carrie Firestone
Great setup. Thank you. Because you just laid out why I'm buying it in my personal account and not for clients. I think it stopped going down. But Scott, that was a great setup for the fact, simple fact that I've got more risk tolerance than trying to flutter you up.
- [25:12]
Scott Wapner
You know, something's coming, something's lurking.
- [25:14]
Carrie Firestone
No, no, you know what's coming is.
- [25:15]
Scott Wapner
As I'm getting a nice British looking suit on, something's coming. He knows.
- [25:19]
Carrie Firestone
Saying this, I want Josh to think when I'm done what word you would use to describe the stock chart. But let me start by saying this. All of the concerns about AI, you know, the debt financing, whether or not open air is good for the money in general, whether it's a bubble, is all focused on this stock. And at 23 times forward earnings, I'm willing to say that I think it's cheap enough at least for me to take another, another slug of it into my portfolio. Not ready for clients yet because I'm not sure it's done. Going down those questions about that. So will you tell me what word you would use to describe.
- [25:51]
Jim Leventhal
I met one of your. I would call it crash tastic. It looks like, like they just launched a bitcoin treasury six months ago. I had lunch with.
- [26:00]
Carrie Firestone
Why I don't have it.
- [26:01]
Jim Leventhal
I lunch in the same room as one of your colleagues. She didn't come and say hello. We were at the beret luncheon at Australia. Del Bianco. Phenomenal Bolognese sauce. One of the big issues with, with the data center build out and the question about, well, who are we building these for? Is Oracle going to be able to maintain its investment grade rating? My question is, okay, you seem to think they will. What happens to the stock if they don't?
- [26:26]
Carrie Firestone
Well, then it's a disaster. Again, why? I'm buying more for myself, not for my clients.
- [26:31]
Scott Wapner
Change your mind.
- [26:31]
Jim Leventhal
You would change your mind on it if that happened because it would be.
- [26:34]
Carrie Firestone
It would be a gap that's going to be. It will make a big problem for them raising further financing. But. So, yes, that worries me. But I'll tell you what the bigger worry is to me. Whether Open Air is good for the money. And frankly that should worry everybody. Whether you're buying or, or Nvidia anything in this space. It does seem to come down to the epicenter is OpenAI. Now, Sam Altman, the CEO is over in Saudi Arabia right now trying to raise $50 billion at a, I believe a $500 billion valuation. $50 billion is a drop in the bucket relative to the 1.2 trillion that they've committed.
- [27:06]
Scott Wapner
500 billion was so last year, dude.
- [27:09]
Jim Leventhal
500 trillion.
- [27:11]
Carrie Firestone
Okay, well, they are trying to raise 50 billion. The point that I'm driving at is they're raising funds. They actually have contracts that they've been signing to bring in revenue. Yes, it is still a question. This is still a risky stock and that is why Oracle debt trades at approximately 100 basis points or 1 full percentage point more than say Metta or Microsoft. On the other hand, it trades below 6% yield to maturity. So to your point, that's not a distressed level. I don't think they're going to lose the investment.
- [27:37]
Jim Leventhal
Triple, Triple B now, I think, I mean that's like, that's got to be.
- [27:40]
Carrie Firestone
Yes, that it is not without risk.
- [27:42]
Jim Leventhal
That determines to me, that determines whether or not there's a door in the floor.
- [27:47]
Carrie Firestone
It is not without the floor. You know and I know and everybody knows you cannot get return without risk. There was risk in Google when Kerry and I were defending it about eight months ago. There was risk, real risk. We talked about.
- [27:58]
Scott Wapner
All right. You know and I know that we need to go to break. That's what we're going to do.
- [28:02]
Carrie Firestone
Good chat.
- [28:03]
Scott Wapner
Thank you.
- [28:03]
Carrie Firestone
I'm glad we have.
- [28:04]
Scott Wapner
It's my pleasure. My pleasure. All right, so we'll take a break. We will come back. I got a couple of moves in front of me to tell you about that Kerry has just made. We have some interesting calls of the day and other committee Names that are on the move. And we'll do all of that ahead.
- [28:23]
Josh Brown
Hey, Fidelity, what's it cost to invest with the Fidelity app? Start with as little as $1 with no account fees or trade commissions on.
- [28:32]
Scott Wapner
U.S. stocks and ETFs. Hmm.
- [28:35]
Jennifer
That's music to my ears.
- [28:37]
Scott Wapner
I can only talk. Investing involves risk, including risk of loss. 0. Account fees apply to retail brokerage accounts only. Sell order assessment fee not included. A limited number of ETFs are subject to a transaction based service fee of $100. See full list@fidelity.com commissions Fidelity Brokerage Services, LLC. Member NYSE, SIPC.
- [28:53]
Josh Brown
Thy Ticket Lady Jennifer of Coolidge.
- [28:56]
Jennifer
Well, many thanks, good sir.
- [28:58]
Scott Wapner
Here is my Discover card.
- [29:02]
Jennifer
They accept Discover at Renaissance fairs. Yeah, they do here. Discover is accepted at the places I love to shop.
- [29:08]
Josh Brown
Get it with the times.
- [29:10]
Scott Wapner
With the times.
- [29:12]
Josh Brown
You're playing the loot. Yeah, and it sounds pretty good, right?
- [29:16]
Scott Wapner
Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report.
- [29:23]
Josh Brown
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Scott Wapner
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Josh Brown
Right now, when you buy one dozen premium roses, they'll double your bouquet to.
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Scott Wapner
Two dozen for free. Valentine's is coming fast, so don't wait.
- [29:46]
Josh Brown
Until the last minute.
- [29:47]
Scott Wapner
Double your blooms today at 1-800-flowers.com sxm.
- [29:50]
Josh Brown
That's 1-800-flowers.
- [29:52]
Scott Wapner
Com sxm. All right, we're back. Let's do these moves from Kerry that I mentioned. Going to break a couple of sales. Intuit and Booking holdings. Why?
- [30:15]
Jennifer
I think there's a common thread there. Both of them are software type companies. I'd call them softer companies.
- [30:22]
Carrie Firestone
Both of them.
- [30:23]
Jennifer
And both, you know, one's in travel and one's in tax returns. But tax, so negative tax. I think of it that way, but I think they're being affected and disrupted by air. People are using AI for their travel plans and people are using AI in various forms of AI are very helpful for tax returns. So you don't have to hire Intuit or any of its software. Not that. Not that. We've seen a crack in bookings, earnings bookings. Been an incredible stock for us. It's up 200% in the last five years until we bought low. It hasn't done anything. Everything we've heard from Intuit sounds as if it's going to Be a tough slog over the next year, plus. And so we've just decided that we took our profits with booking. We have other places, places we feel that we can deploy the assets and into it, you know, we took a little loss and we're okay with that.
- [31:19]
Scott Wapner
Okay, let's talk about this call that Goldman has on gold, which has been unbelievable, obviously. So Goldman's raised its year end 2026 target to 5,400. It was 49. It's about at 49 now. All right, so we'll continue to watch that. Right. No one owns. No one owns gold. But the minor.
- [31:43]
Jim Leventhal
I own gold and minor exposure. I think the thing to say about the gd. The thing to say. The thing to say about gold. We know the thing to say about gold is that it trends and trends over multiple years. And every time it goes on one of these runs, of course, people say to themselves, well, I can't buy it now. Look what it just did. But that, that misses the point that it's very different from a lot of other commodities. It doesn't oscillate up and down, you know, with a given baseline. It's a whole different animal. And this could go on for 10 years. We've seen. Joshua, you could see it again.
- [32:18]
Carrie Firestone
You also know, you know that it goes through periods of time longer than 10 years where the trend is absolutely zero.
- [32:25]
Jim Leventhal
It just did.
- [32:25]
Carrie Firestone
It just. Yeah, I know. I mean.
- [32:27]
Jim Leventhal
Right.
- [32:28]
Carrie Firestone
Just caveat emptor.
- [32:29]
Jim Leventhal
I mean, I got high gold is 2011.
- [32:32]
Carrie Firestone
Right.
- [32:32]
Jim Leventhal
And it didn't start rallying until 2021.
- [32:34]
Carrie Firestone
Yeah.
- [32:35]
Jim Leventhal
De facto, 10 years of misery. But that is why it works.
- [32:39]
Carrie Firestone
I mean, I should take up in this business with the original gold bugs after we, you know, got off of the gold standard, post Bretton woods, everything with Nixon. And they, you know, these guys went through the 80s and 90s making no money in gold, no yield. I'm not saying you're wrong because the trend is clearly higher right now. I'm just saying do be careful about buying.
- [32:56]
Scott Wapner
Isn't it. Isn't it in some respects a hedge on like, erratic policy making? There's what inflation may do on the other side of some of, some of all this. And as long as there's a bid in both of those, so to speak, that gold's going to have a bid. Right? What, what, so what would reverse this trend higher? That's, that's what I want to know.
- [33:21]
Josh Brown
There's an interesting, interesting chart that shows gold, silver and then bitcoin. And you see in September when Things started to get kind of wild. You saw that kind of risk off. Take the wind out of bitcoin, and you saw that risk off. And nervousness really, like, give gold and silver another leg up. So, Scott, I thought it was interesting at the beginning of the show when you were saying there's all this enthusiasm, all this bullishness by the fund managers, because what I'm seeing at the client level is that's not there. And I had a conversation with a client.
- [33:47]
Scott Wapner
Your clients aren't bullish?
- [33:48]
Josh Brown
No, they're nervous.
- [33:49]
Scott Wapner
Maybe they're fund managers making them.
- [33:51]
Josh Brown
No, I don't think so.
- [33:52]
Scott Wapner
Less bullish?
- [33:53]
Josh Brown
I don't think so. But I had an interest in client.
- [33:54]
Scott Wapner
I mean, you don't, you don't. You don't think that that has anything to do with it?
- [33:58]
Josh Brown
No, I think people. I think maybe some people are coming to me because they're a little bit nervous, but listen to this. So this guy said, hey, let me take my dividends out, and whatever I don't spend, I'm gonna go to the coin store and I'm going to buy gold. And I said to him, you know what? It's probably overvalued. And he said, you know what? I don't care. Because if things go really bad and this guy is no doomsdayer, he's a. If things go really bad, it just makes me feel good.
- [34:19]
Jim Leventhal
Tell me.
- [34:20]
Scott Wapner
By bullets, by the way, really doing.
- [34:22]
Josh Brown
Is just taking a little bit of risk off. It's like. It's like carry trimming the Google, right? It's saying, like, hey, it's up a ton. I'm going to take a little risk off, put it in my pocket. In this case, it's buying a gold.
- [34:30]
Scott Wapner
Coin, by the way, it feels like it's risk on. Like, I mentioned that because now, remember when we came on the air, I guess 34 and a half minutes ago, I said, well, the Dow's at 49.5. Just about. Well, now it's at 40, 49, 6, and you're better than 500 there. Let's throw up the S. Can we show that? And let's show the S&P2, which is now pushing 6940. Remember, we were trying to get everything back from Tuesday's sell off. So there you're at, you know, above 69.30. That's the highs of the day there, too. So we continue to work our way back as if Tuesday just never happened. Let's get the headlines now with Courtney Reagan. Hey, Courtney.
- [35:10]
Josh Brown
Hi. Scott. A winter storm is set to begin tomorrow, stretching 2,000 miles from the Arizona, New Mexico border to upstate New York. The storm is slated to start in Texas and Oklahoma with heavy snow hitting the Northeast by Sunday. According to the National Weather Service, 132 million people are under weather threats and the New York City area. Latest snowfall estimates for this weekend are 8 to 16 inches. Get your sleds ready. The US and China have signed off on a deal to sell TikTok stores US business to a consortium of mostly US investors. According to Semaphore. The deal is set to close this week. The new structure leaves ByteDance with under 20% ownership of the US business and 15% for Oracle, Silver Lake and GX, a state owned investment firm in the UAE. And President Trump could start flying in a plane donated by Qatar as early as the summer. The U.S. air Force confirmed it will deliver the jet for use as Air Force One within months, though the exact date hasn't been determined. The latest development comes after Trump's flight to Davos on Tuesday had to turn around mid flight because of an electrical issue. Scott, back over to you.
- [36:14]
Scott Wapner
Okay, Court, thank you very much. Courtney Reagan. Coming up is now the best time ever for retail investors. We asked that question the other day and now we want to get the committee's take because there's a surprising stat in what big name earnings report that has us asking that question yet again today. We're not going to go to break right yet just because I know you want to know about this. Bitgo holdings looks like they just had their first trade. It's an IPO Here. It is a digital asset infrastructure company and it has just opened on the New York Stock Exchange and we will follow it. It opens up by about 18%. We're back after this. Building a portfolio with Fidelity Basket Portfolios is kind of like making a sandwich. It's as simple as picking your stocks and ETFs, sort of like your meats and other topics and managing it as one big juicy investment. Now that's pretty good. Learn more@fidelity.com baskets Investing involves risks, including risk of loss. Fidelity Brokerage Services, LLC Member nyse, sipc Thy ticket lady, Jennifer of Coolidge.
- [37:30]
Jennifer
Well, many thanks, good sir.
- [37:32]
Scott Wapner
Here is my Discover card.
- [37:35]
Jennifer
They accept Discover at Renaissance fairs. Yeah, they do here. Discover is accepted at the places I love to shop.
- [37:42]
Josh Brown
Getth with the Times.
- [37:44]
Scott Wapner
With the times.
- [37:46]
Josh Brown
You're playing the loot. Yeah. And it sounds pretty good, right?
- [37:50]
Scott Wapner
Discover is accepted at 99% of places that take credit cards nationwide based on the February 2025 Nielsen report. Shipping, billing, admin, payroll, marketing.
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Josh Brown
You're managing all the things. So why waste time sending important documents.
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Scott Wapner
The old fashioned way?
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Josh Brown
Mail and ship when you want, how you want with stamps.com print postage on demand 24, 7 and schedule pickups from your office or home. Save up to 90% with automated rate shopping. That's why over 1 million small businesses trust stamps.com go to stamps.com and use code podcast to try stamps.com risk free for 60 days.
- [38:38]
Scott Wapner
Welcome back. Breaking news out of Washington, our Eamon Java. Eamonn what do we know? SCOTT President Trump has filed a lawsuit against JPMorgan Chase and Jamie Dimon personally over allegations of debanking of Trump related bank accounts during the period of time that the President was out of office. This is a suit for as much as $5 billion filed by the President of the United States and a number of Trump entities against JPMorgan and Jamie Dimon as an individual. And we have a statement here from JP Morgan just within the past couple of seconds. They say while we regret President Trump has sued us, we believe the suit has no merit. We respect the President's right to sue us and our right to defend ourselves. That's what courts are for. JPMorgan Chase does not close accounts for political or religious reasons. We do close accounts because they create legal or regulatory risk for the company. We regret having to do so, but often rules and regulatory expectations lead us to do so. We have been asking both this administration and prior administrations to change the rules and regulations that put us in this position. And we support the administration's efforts to prevent the weaponization of the banking sector. That's an on the record comment from JP Morgan spokesperson Trish Wexler. SCOTT so this Lawsuit is a 56 page document. We're going through it right now. The gist of the argument is that this debanking was improper and due to political reasons. That's what the President says in the filing. And we saw, Scott, Jamie Dimon very outspoken in Davos, being one of the few CEOs to go public with criticism of the President over the immigration enforcement issue, criticism of the enforcement operation more broadly. And so this is a flashpoint of tension now between the President of the United States and one of the most powerful bankers on Wall Street. SCOTT all right, we'll follow that, Eamon. Thanks for the latest there. Same in Jabbers. Charles Schwab, that's the stock we want to talk about now because it is getting a bunch of target hikes today following earnings target to 138 is the high on my list. But you've got 128, 124 and 120 and 121. Excuse me, by. By a number of firms. Here's something though. In the earnings that really interested us. Schwab is seeing robust engagement with younger investors. Noting that nearly 60% of new retail client accounts opened last year were under the age of 40. The average age of new Schwab clients has fallen by 10 years in the last decade. Josh, I'd like your thoughts on that trend. And also as we ask the question question the other day and we bring it up again, whether now is the best time ever to be a retail investor. You have more opportunities to play this market than you have ever had before. You have the New York Stock Exchange just talking about 24,7 trading of tokenized stocks. You have the NASDAQ moving to almost 24 hours as well. Robinhood is a thing. You have prediction markets, etc. How would you assess that question?
- [41:48]
Jim Leventhal
I do think it's a great time to be an individual investor and I think Schwab in particular has done a very good job at looking at its investor base and asking itself how do we reach the next generation audience? Rick Worster deserves a lot of credit. The CEO and this is a company that just two years ago we were worried about things like regional bank blow ups and you know, some of the stuff with cash sorting and money being pulled out quicker than these companies had time to figure out what to do about it. And all of that is now gone. And now we're focused on what we should be focused on with Schwab, which is earnings, revenue, customer acquisition, etc. And they're doing a good job. I do think there's a wrinkle in the good time to be an investor story, which is there is a lot of choice and not everybody choice is a good choice and there are a lot of distractions and side quests and and a lot of circus activities happening alongside normal investing and trading. And it just means that people have to learn from their own mistakes, be a little bit vigilant and be on their guard. But I don't really see when that would ever not be the case.
- [42:56]
Jennifer
So I would say that Charlotte Schwab and all of the other insurance institution platforms owe a lot to two things. One is the pandemic which gave people a lot of time to work out how to use their phone, to trade stocks, how to understand different platforms, and also Robinhood because Robinhood really democratized the idea of trading for everyone in the, you know, in the country. So, yes, we own Schwab. We have free years. We love what happened in the quarter. But I think this is a phenomenon that continues.
- [43:32]
Carrie Firestone
We. We talk about this so far from the perspective of individual investors using Schwab. But there's another important client base, which is the four of us in the registered investment advisory business. Now, big phenomenon over the last 10 years is the big companies in the RI RIA world are getting bigger, whether it's by organic growth or by acquisition, but it's happening. And when you. You do that, when you get bigger as an ria, you want to have the trusted custodian, the company that always gets it right. That's why Schwab is our most trusted custodian. We also use Fidelity.
- [44:04]
Scott Wapner
Fidelity. Yeah.
- [44:06]
Carrie Firestone
No, we use Fidelity too. But Schwab is the go to if you don't want to have any mistakes as you're trying to grow.
- [44:13]
Scott Wapner
I feel like too honestly that the retail investor is smarter than it's ever been.
- [44:18]
Jim Leventhal
I mean, they agree with them and.
- [44:20]
Scott Wapner
They'Ve had to be. As more of these choices and different asset classes have, have opened up to them and more risks have emerged. Well, they've had no choice but to be.
- [44:32]
Josh Brown
Yeah, but they also have information.
- [44:34]
Scott Wapner
Well, but that's what I mean. That's part of why I think they're more educated about the markets and smarter about them than they have ever been. Because there is more information out there to, to help school yourself on a lot of different things. We obviously try and play a role in that too.
- [44:51]
Josh Brown
Can I say one last thing real quick?
- [44:53]
Scott Wapner
You can.
- [44:54]
Josh Brown
So the great earnings report, right? Great numbers. But the thing that matters most besides all these stories, aside from all these, is the numbers. This thing's amazing. And when we think about interest rates potentially coming down, that goes straight to Schwab's bottom line. So they actually saw their net interest margin grow a lot. And they've got 17, 18% earnings growth ahead with a 17 times multiple. Like, that's really all I care about.
- [45:16]
Scott Wapner
All right, we'll take a break. We come back. Josh Brown is ready with his best stocks in the market list. There's a new name that just hit the radar. We'll tell you what it is next. All right, let's do it. Best stocks in the market according to Josh Brown. The spotlight today is shining brightly on what name First Solar.
- [45:49]
Jim Leventhal
And I. This is. This is not ready for entry yet. I'm putting it on your Radar before it happens, can we go back to A Forever Chart? Company came public in 2006. It's up 800 something percent since it came public. But all of that gain happened in the first two years and the last two years. This has been a horrific long term look at this. Can you imagine holding this since the ipo? So this has been a very, very unique situation. But I think it's on the cusp of challenging that old 20 year high. Really good things are happening here. Fundamentally. Earnings per share growth should be about 55,0%. Revenues are growing. There's a massive $16.4 billion backlog and it is now a very different company than it was the last time it was at these levels. This is now very heavily focused on utility and industrial grade solar, not putting panels on people's houses. I want people to watch for a break above the 50 day moving average as your first clue that the buyers are really in control here and could take this back to the old highs. It could be absolutely explosive if and when it breaks through.
- [47:01]
Scott Wapner
Full disclosure on this. KeyBank today reiterated they're underweight. Their sell on First Solar. They say this time is not that.
- [47:10]
Jim Leventhal
Listen to this, listen to this.
- [47:11]
Scott Wapner
That different.
- [47:12]
Jim Leventhal
You have, you have a price target at 150 and you have a price target 350. The analyst community does not know what to make of this stock. So I'm going to focus on price over commentary.
- [47:21]
Scott Wapner
All right, Santoli is next. All right. You know him as the senior markets commentator. We know him also as the anchor of Closing Bell Overtime, the co anchor. It's good to have you off to a good start. This market too for sure.
- [47:50]
Carrie Firestone
Yeah, no, the market's kind of answering the challenge.
- [47:54]
Jim Leventhal
Trying to prove that what we had.
- [47:55]
Carrie Firestone
Was just kind of a shakeout from.
- [47:57]
Scott Wapner
A phantom thread and not necessarily something that was really going to change the macro picture. You mentioned the S and P. Kind of on the verge of regaining what was lost. Going back to Friday's close, about 6,940.
- [48:10]
Carrie Firestone
You know, yields have come off in the last little bit. It too. And in the last 24 hours the Kalsh odds of Rick Reeder being the next Fed chair nominee is up 10 points like 34%.
- [48:19]
Scott Wapner
Who knows if that's, you know, something.
- [48:21]
Carrie Firestone
That'S reliable but it might just be.
- [48:23]
Scott Wapner
In the market and the way it's.
- [48:24]
Carrie Firestone
Trading also, you know the Mag 7.
- [48:27]
Scott Wapner
Type stocks relative to the rest of the market did really get pretty stretched to the downside.
- [48:31]
Carrie Firestone
I would say there's an acceptable bounce.
- [48:33]
Scott Wapner
In those names today.
- [48:34]
Carrie Firestone
Something like Microsoft up 1% after looking.
- [48:37]
Scott Wapner
Awful doing its own part. I don't know if you could say that the bleeding is over in software.
- [48:42]
Carrie Firestone
Or in kind of the open air verse, but I do think those are relevant observations. The one thing that gives me pause is the market action so far, year.
- [48:50]
Scott Wapner
To date is pleasing too many people. Everybody wanted the broadening.
- [48:53]
Carrie Firestone
Everybody wanted the regional banks. You know, everybody wanted the cyclicals to work.
- [48:57]
Scott Wapner
And they are. And I just get uncomfortable that way, even though it could last for a long time. Yeah. All right, I'll see you on the closing bell. That is Mike Santoli. As you know, by the way, we showed Meta 5%. Jeffrey's saying to buy that dip today. And that is, wow, that stock is outsized gains today. We'll do finals next. 3:00 clock today, closing bell. We're going to kick it around with Ed Yardeni, Chris Toomey, Rich Clarida. Interesting time to talk to him, obviously. Stacey Rascon and Bryn Talkington. I hope you'll join me then as we chart this last hour of what seems to be a pretty darn good day on Wall street yet again. Gentleman Jim. Your honor, what's your final trade?
- [49:40]
Carrie Firestone
Vertex Pharmaceuticals. A nice little chart here over the last few months up about 30%, I think it continues.
- [49:46]
Scott Wapner
Thank you, Jenny.
- [49:47]
Josh Brown
All right, Kimberly Clark. Five percent yield really oversold. And it looks like the whole concern over the can do in Tylenol is starting to fade out of the share price in a positive way.
- [49:56]
Scott Wapner
Okay. S and P global.
- [49:58]
Jim Leventhal
Yes.
- [49:59]
Jennifer
So S and P should really benefit this year from strong debt and capital market cycle pickup.
- [50:06]
Jim Leventhal
JB we highlighted the breakout in Exxon off the best stocks in the market list in November and again in December. That stock is now materially higher. I remain long personally. I think we could see 150 this year.
- [50:19]
Scott Wapner
Okay, so we are better than 500 on the Dow and we are better than 6930 on the S&P. 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. 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.
- [50:46]
Josh Brown
Have been previously disseminated by them on.
- [50:48]
Scott Wapner
Television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement.
- [50:53]
Josh Brown
To make a particular investment or follow.
- [50:55]
Scott Wapner
A particular strategy, but only as an expression of opinion. Such opinions are based upon information the half time 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.com Building a portfolio with Fidelity Basket Portfolios is kind of like making a sandwich. It's as simple as picking your stocks and ETFs, sort of like your meats and other topics, and managing it as one big juicy investment. Mmm. Now that's pretty good. Learn more@fidelity.com baskets Investing involves risks, including risk of loss. Fidelity Brokerage Services, LLC Member nyse, SIPC.