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Halftime Report
Trading the Rebound 5/5/25
00:44:16
Scott Wapner and the Investment Committee debate the state of stocks as the S&P 500 goes for 10-straight days of gains. The experts detail their latest portfolio moves. Altimeter Capital Founder and CEO Brad Gerstner joins as the Halftime Headliner. Investment Committee Disclosures
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- [00:02]
Scott Wapner
As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn more@bankofamerica.com LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation. All rights reserved. Hey, Fidelity, what's it cost to invest with the Fidelity app?
- [00:36]
Brian Belsky
Start with as little as $1 with no account fees or trade commissions on U.S. stocks and ETFs.
- [00:43]
Scott Wapner
Hmm. That's music to my ears. I can only talk investing involved risk, including your surplus. Zero account fees apply to retail brokerage accounts. Only $0 commission applies to online US equity trades and ETFs and Retail Fidelity accounts sell order assessment fee not included. Some account types and securities excluded. Details@fidelity.com Commission Fidelity Brokerage Services, LLC Member NYSE SIBC 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. Okay, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, streaking stocks, the S and p going for 10 up days in a row. Obviously have a little bit of work to do today to extend that run. We'll ask ask our experts how to play the markets from here. And we'll also be joined in just a little bit from Altimeter's Brad Gerstner from Milken in Beverly Hills. And we look forward to that. Joining me for the hour, Joe Terranova, Jim labenthal, Anastasia Amoroso, Brian Belsky. We'll show you what we're doing in the markets here. Dow's green, as I said, we do have some red on the board. S and P is down by 1/3 of 1%. Nasdaq's about a half. We might as well start with what the treasury secretary had to say. Obviously, we were watching the markets closely there, Joe, when Scott Besant was talking to Sarah. We're very close to some deals he said related to trade, maybe some as early as this week on China. I think we can see substantial progress in the coming weeks. We'll see. Didn't really want to talk about the market, as he made perfectly clear. But trying to remain as optimistic as certainly he can about where growth prospects are doesn't sound in any way that he Thinks we're going to have a recession. What's your take on the rally that we've had? We're going for ten in a row. And then in the context of what Secretary Bessen just told Sarah, I think.
- [02:32]
Joe Terranova
His words are always pro market. I think his words always give investors comfort. And I think his emphasis on where are yields, where is the price of oil? Really underscores what the clear intention has been on this three prong approach to fiscal policy. I understand the sequencing was difficult for markets to digest. That was a very aggressive tariff policy. But markets have clearly recovered. And when you ask the question, what do you think about as it relates to markets as we move forward? What's interesting to me is always trying to discover what the personality of the market looks like. And I think what's very clear in 2025 is that the opportunities that we are seeing are no longer just isolated to software, semiconductors, artificial intelligence, halo names. We're actually seeing areas of the market like financials, like industrials, that are providing strong earnings growth and therefore strong price appreciation. And if there's one thing I can emphasize to the viewers, it's not figuring out exactly where the market is going, not trying to figure out are we going up and but rather ultimately where you want to be. And in 2025, the one element of investing that we have restored is being able to diversify once again because you actually get paid to own financials, industrials and health care.
- [03:50]
Scott Wapner
We moved up a little bit, just a little bit on perhaps what the Treasury Secretary had to say to our Sarah Eisen there, again optimistic that we could get some kind of trade deals as early as this week. As I was saying a little bit earlier, I think we can see substantial progress in the coming weeks. Brian Belsk, Joe makes the point, you know, he said the markets, they've recovered. Yes, they have. But I still don't feel as though the great majority thinks we're out of the woods because there are a lot of issues to still be decided. As Apollo's Mark Rowan told David Faber earlier this morning, the uncertainty has, in his words, ground things to a halt.
- [04:39]
Jim Labenthal
I don't know what's been grounded to the halt. Stocks have been pretty positive for the last couple of weeks and I think Joe's most apropos comment, quite frankly, was about stop trying to pick the market and start looking and appreciating the diversification in the broad participation that we've seen. As you know, we've been long term bulls. We've been long term bulls in Financials and there's other areas of the market, as Joe said, in terms of where we're seeing some earnings growth, some healthcare, but mostly industrial and even some consumer. And oh yeah, by the way, big cap tech and communication services are doing quite well too. So I do believe that the longer term trend of normalization is upon us. I do believe that means that you're going to want to own some large, some small, some value some growth and be much more evenly distributed with respect to your equity investments. But I do believe that the recovery is real. This is not a dead cap bounce and I think stocks are going to be higher as we continue to go forward.
- [05:38]
Scott Wapner
Anastasia, what about you? Do you think we're far from out of the woods? Brian Belsky, I mean he's, he's kind of always bullish. So hearing him say that he's bullish today doesn't really shock me. What about you?
- [05:51]
Anastasia Amoroso
I do also think, Scott, that the recent positive momentum can actually continue. And you know, first of all on this point that so much demand has been pulled forward and this is why we have the strong economic data while an activity is likely to grind through the whole to the halt. That's what people think. But what the market really care about is two things, what is happening with trade deals and what is happening with tax policy. And it was we just heard from Secretary Bess and it seems like both are progressing quite nicely. So on the trade deal front, first, first of all, I do think we have seen peak tariffs and it seems like the administration is really committed to getting some of these deals done before the July 2nd or so deadline. So that means that even if we go through this quarter, the second quarter of uncertainty, certainty and the short term pain is going to be mitigated by the fact that when July comes upon us, we will likely have a deal in place. So I think that's quite favorable. The second thing that's quite favorable is that this is still sort of behind the scenes. But Congress is working on tax policy. And one thing Secretary Besson was emphasizing that they want the United States to continue to be a great place to invest. And that means not only personal tax rates which will be continue to be extended, but also on the business side, maybe there will be some accelerated depreciation, maybe there will be interest deductions, maybe there will be R and D expensing. So if you make this an attractive place to invest, the capital will continue to come here. So overall, Scott, I would say the administration's approach has been short term pain, which seems to be focused in the second quarter for long term gain. And I think we're starting to see sense some of that optimism about the long term gain. So I do think the market momentum here can continue. And by the way, the technicals are also much more supportive of it coming into May.
- [07:38]
Scott Wapner
Jim, maybe Belsky's bullishness is well founded. If you look at the three pronged approach that the secretary believes that the administration's taking. Tariffs are but one, taxes and deregulation are the other two, the other two outweighing the one. And especially if you think we're going to get some trade deals, which we are eventually, obviously we can dissect them at the time, but the tariffs to this level today are not going to be at this level figuratively tomorrow. Right. So what about that?
- [08:16]
Brad Gerstner
Well, I like running with Brian on this and I think when you get to the end of the year, if all the things you just laid out, Scott, come true, we're going to be nicely higher in the markets than we are now. I do have to respect, just as a market participant, that we've been up nine days in a row on the S&P 500. First time in 20 years, Scott. If we get a 10th day today, that's the first time in 30 years. I don't know if it's ever happened 11 days in a row. Somebody will probably tweet it in. The point I'm driving at with that is a lot of good news is priced in. A lot of what you just said, you know, deregulation and Anastasia said it as well. Deregulation, lower taxes and some trade deals. Okay, that's good. A lot of that's priced in. And as a market participant, I'm looking at the last two weeks of gains and saying, all right, I'm going to trim a few winners here and not put that money immediately back to work. I'm not making a huge market bet here, but I am taking a little bit of money out of the market so that if there's some dislocation on who knows what, you know, yesterday we had President Trump talking about 100% tariffs on movies filmed overseas and that knocked Netflix down, albeit it's recovered. My point being is that there is going to be volatility going forward. A lot of good news is priced in. It's probably going to come true, but there will be volatility and buying opportunities.
- [09:21]
Brian Belsky
I want to have the how, how.
- [09:25]
Scott Wapner
Is that priced in? How are taxes and deregulation possibly priced in? We're still, we haven't even recovered all the losses from the trade offset on.
- [09:37]
Brad Gerstner
The s and P500.
- [09:38]
Scott Wapner
We're still down. Let's just say we're still down year to date. We're still down year to date. Right. Let's just say that. How are taxes and deregulation priced in?
- [09:46]
Brad Gerstner
Well, because first off. Okay, good question.
- [09:49]
Scott Wapner
You know, first off, it's the question according to your answer.
- [09:52]
Joe Terranova
He always asks good questions.
- [09:53]
Brad Gerstner
I know, I know, I know. Did anybody read the Beige book last week? I mean, those, those anecdotes, manufacturers. Okay, those. That's good reading. Those anecdotes from manufacturers were pretty dire. And they were talking about things like they're not getting orders because of the higher prices. They're pushing through the higher prices of raw materials. They're thinking about laying people off. They're not making profits. Okay, so there is some bad news out there that this market is looking past and pricing in. In my opinion. They don't write this in the lead of the Wall Street Journal. It's being looked past by virtue of deregulation and lower taxes. And I'll also point this out. Deregulation and lower taxes are not a fait accompli. There is a lot of dissension, particularly on taxes in the Republican caucus that needs to be worked out. So when, you know, we're up 14% on the S&P 500 from the low, I would say there's quite a bit priced in. That's good.
- [10:45]
Scott Wapner
Yeah.
- [10:46]
Joe Terranova
I think to play the other side here, and I think to Scott's comment before about things grinding to a halt. I have had conversations in the last several days with several people, one of which was a very big real estate developer here in New York who has said, we are just seeing frozen commerce.
- [11:03]
Scott Wapner
Everybody knows. Everybody knows that business activity has slowed dramatically. CEO decision making has slowed dramatically. The uncertainty has slowly done that. We're not talking about the stock market activity, but Mark Rowan sees and talks to a lot of business owners. Yes. In a lot of areas of not only this country, but around the world, and talks to leaders as such. So he echoes what almost every other person has said. I don't know. We can get back to Belsky for a second, like trying to throw cold water on that notion. But you give me your answer. No, no.
- [11:43]
Joe Terranova
I just think that the stock market sometimes is not the economy, and sometimes the economy is not the stock market. I really do believe the economy continues to cool. I think the effective damage from the aggressive tariffs is already built into the economy. I'm not sure. Exactly how you give people comfort to go out and say, okay, we're going to begin to accelerate spending once again either for consumers or for corporations. So to me that leads to an environment where at some point the Federal Reserve has to do something. Maybe they end. Kutty I look at the bond market, okay, we talk about being up eight or nine consecutive days. The bond market has allowed that. Remember that if the bond market, if the 10 year starts going back towards 4.5. Oh, we're not sitting here talking about the equity market going higher. The bond market is running the show and equities will roll over if in.
- [12:31]
Scott Wapner
Fact bonds bond yields have started to move higher towards the end of the week. Now, a better than expected expected employment report would obviously do the trick on that. Belsky, I'll give you the last word on this because your portfolio moves very much represent your perspective and your point of view. You are leaning in a little bit more to the consumer. You bought Deckers, you bought American Eagle, you bought more Target, you bought more AMD in terms of tech. So you are putting your money where your mouth is, so to speak.
- [13:05]
Jim Labenthal
Thank you. Yeah, my good friend Stephanie Link's been trying to get me to buy Deck for a long time and the stock's down 40 plus percent this year, but operating income remains quite strong. And on American Eagle, we've got some great brands there. But this is another area that has been absolutely hammered. We like to be value investors when everyone else is saying the opposite. And so at the end of the day, a lot of our work is centered around estimate revisions, Scott. And estimate revisions for the out year, meaning FY2 for 2026 have been hammered for the S&P 500. But even worse so for consumer discretionary and going way back over the last 20 years or so, we've always bought the consumer when everybody hates it. So I don't doubt that things have slowed down. I get that. But from a longer term perspective, these names have been absolutely beaten up. And given my prior comments that I think we want to own, quite frankly, some value and some growth, we need to be opportunistic in some of these areas that have been beaten up.
- [14:00]
Scott Wapner
All right, let's bring in our halftime headliner now. He is Brad Gerstner. He's the founder and CEO of Altimeter Capital. He's live with us for our annual conversation at the Milken Conference out in Beverly Hills. It's always great to have you, especially now. Welcome back.
- [14:15]
Brian Belsky
Hey, it's good to be here, Scott. Thanks for having me.
- [14:17]
Scott Wapner
Yep. The last time you were on with us, which wasn't all that long ago, of course, you were critical of the way that the tariffs were implemented. You called, called it an own goal. You did say at that time you were buying the weakness in the market, adding to your Nvidia position, which is your largest. I think people know that now. We've rallied a long way back. So how do you feel about these markets today?
- [14:41]
Brian Belsky
Well, if you recall, Scott, I set it up. I said there's a debate within the administration between what I characterized as the free and fair trade Trump versus the nuclear Navarro approach. So were we going to land the plane closer to 10% tariffs across the board, about 3 to $400 billion of tariff revenue, or were we trying to go back to a time of McKinley where we replaced the Internal Revenue Service? I think the market realized and that's why we were leaning into the market, that Trump at his core is a free and fair trader, wants to cut deals. And so the market's up 10, 15% off of its lows over the last 10 trading days because it's beginning to discount that future. Now we have a long way to go. We haven't announced any deals. We haven't, you know, set the framework for China. I think that's what's next up. We'll see the president on a trip to the Middle East. I think in a week or so. I expect we'll hear some deals there as well.
- [15:38]
Scott Wapner
Let me ask you this. The secretary, in his conversation with Sarah, which I know you were watching from, you know, adjacent, adjacent to where they were sitting, he said the US I'M quoting him. The US Is the best place, best place to invest and we're trying to accelerate that. There's been some questions, frankly, over the last two weeks to a month as to whether the US Was in fact, still the best place to invest. You saw some suggestions of capital flight out of the US I'm wondering whether you agree with his comment where others would also suggest that there's been, quote, brand damage. It was a Mark Rowan comment this morning with David. It was a Ken Griffin comment of late as well. How about that?
- [16:23]
Brian Belsky
Well, listen, I think whether you love him or hate him, this president anchors his negotiations in a very aggressive place. And I think there are a bunch of people who are beginning to question whether, in fact he was a free and fair trader, given that we went to 140% tariffs on China. But listen to the president's words over the course of the last couple of weeks. I Think all of these folks, they're out here at Milken. I've talked to all of them over the last two days. I think we all share this belief that he's going to land the plane. You know, the art of negotiation. You anchor deep and then you come back from that. But now we have to prove it. We have to prove we can get deals done not only with China, but the rest of the world. And so listen, the market's down 4% on the S and P for the year. It's down seven and a half for the NASDAQ on the year. That seems to me to be a pretty fair place to be given the remaining uncertainty that we have to. We have to reconcile over the course of the next few weeks. But remember, tariffs is just part of the story. We have a bunch of pro growth administrative policies around deregulation, tax extensions and incremental tax cuts. I think that people are looking for forward to in the month of June that could really set the next leg of growth for the economy.
- [17:35]
Scott Wapner
I'll go with your analogy. Are we going to land the plane with both engines intact or are we going to land the plane with some damage that we then have to rebuild?
- [17:45]
Brian Belsky
Well, I would tell you a couple of weeks ago the market was pricing it like it was going to be that Delta Airlines flight that came in upside down on fire a few days ago. But, you know, listen, I think all joking aside, the President has always been an aggressive negotiator. The country knew what it was getting when they voted for him. We'll see whether or not that's an effective strategy. It certainly has caused consternation among some of our allies in Europe and others. But I think the UK will be in front of the line. I think South Korea, Japan, India are lining up for these frameworks. I don't suspect that they're going to be that unusual. I think they're going to generally be a 10% tariff with exemptions. We're doing targeted things to rebuild important national industries like chip fabs in Arizona, steel, aluminum, etc. If that's where it all settles out, I think we will look back at this in six months and recognize that this was a huge buying opportunity. But listen, it is a higher risk, higher reward strategy than the last two administrations that came before him.
- [18:48]
Scott Wapner
No, I don't think they knew they were going to get a hugely negative market event. I think that was shocking to most people, probably including you.
- [18:59]
Brian Belsky
Oh, no. You know, if you remember, Scott, I came on and, you know, I talked about it on my podcast on February 4th, I came on in January and February, I told you we had taken our risk way down because it was very clear to me that the President was going to embark upon a restructuring of the global economic and trading order and the market wasn't pricing it in. So I don't think it was that surprising to folks. But Liberation Day clearly set the message that we're going to go hard. I think that event was surprising to the market generally. But now you've seen this walk back up 10 trading days in a row. The S&P 500 is up. So listen, if you would have told the administration that they could restructure global economic trade, that they could restructure regulation, etc. And only have the market down 4% from an all time high, I think they would have hit the bid. So we'll see. But you know, I don't think the President wants a recession heading into the midterms. I fully expect we're going to see over the next eight weeks like here's the flight plan. First we're going to get some of these announcements on other countries, then in the Middle East. Then we're going to probably see a walking back and a reconciliation at least partially with China. And then in the month of June we're going to negotiate the reconciliation bill which is going to include no tax on tips, no tax on overtime, no tax on Social Security and an expensing of business investment. If you do those things, that's a $500 billion annual stimulus into the economy. That's what the market is beginning to price in. If this president is as pro growth as the policies that he ran on, I think there's still upside to the market in the back half of the year. But you know, listen, we're going to have some chop along the way because there are a lot of balls in the air.
- [20:45]
Scott Wapner
Your optimism is represented in the way that you've been playing the market you've added to your core positions. Seems to me all of them in video, Amazon, Microsoft, Metta, Coupang, Instacart, Snowflake, Broadcom, Taiwan, Semi and Robinhood. What is your full experience exposure look like if it was taken down and then it was started? It started to go back up by the last time we spoke. Where is it today?
- [21:10]
Brian Belsky
Right. Scott, you remember, I think over the last few years we've talked a lot to the investors at home. Certain at certain times there are these macro events that mean you have to reduce or increase your units of risk. So think of it as a Volume knob. And in 23 and 24 I had nine units of risk on. So our volume was turned way up. At the start of this year we turned that down to 1 unit of risk 1 out of 10. And today we're back up to about 6 or 7 on that volume knob. And those are, you know, these macro overlays, tariffs, changes of regulation and taxes. The underlying stocks, our favorite stocks like in video, those don't change all that often. But the amount of risk that we have on at any one moment time has to change. And under Fortunately, 2025 has demanded that you're very agile because there have been a lot of changes in these first four months. I expect that that will begin to settle down. We'll get more predictability, we'll get back out there and rebuild Brand America, you know, with some of our allies. I think that begins over the course of the next few weeks.
- [22:16]
Scott Wapner
You obviously have high exposures. I just read off the names of your core positions all over the Mega Cap arena. We're not going to get Nvidia for a while, so we really don't need to go there. So specifically, other than for me to ask you, what do you think we learned last week from the Mega Caps and the hyperscalers that you can glean from them into what we might get down the road from Nvidia?
- [22:43]
Brian Belsky
Well, first, Scott, 75% of S&P 500 companies have reported and that 80% of those companies have beat their earnings expectations. Right? Nobody expected that coming into the quarter. Secondly, all the Mega caps, Microsoft Matter, etc. All reconfirmed their capex guides. Again, nobody expected that. They're spending and making incredible investments over the course of next three years because they know that AI is the single biggest super cycle we've ever seen in technology. Right? Take this stat. Satya Nadella told us last week, just last month alone they processed 50 trillion tokens. That's three and a half million years of a conversation. There's an extraordinary amount of pent up demand both by consumers and every enterprise on the planet and increasingly every sovereign in this room for AI, the President. And these companies want the world to run on American compute, American models and American applications. And we're just getting started. We're in the first inning. This is 2000 to 2003 Internet time here. And what we heard over the last few weeks is all of the biggest companies in America continue to double down on their investments in AI and they're seeing the paybacks.
- [24:01]
Scott Wapner
Did you reduce your position in Tesla or sell it entirely.
- [24:07]
Brian Belsky
Our position is reduced in Tesla as we pull back our position and all the names in our book because of some of this, you know, macro risk that we've been seeing. And you know, like I said, Dara, Kash, Rashah, he's done an unbelievable job at Uber. They have earnings coming up, I believe, this week. Tesla's done an unbelievable job navigating a very tricky global backdrop. Right. Imagine they're in the center of the bull's eye of these tariffs. They're in the center of the bullseye of the negotiation with China. They're in the center of the bullseye on US Auto tariffs that the President announced early on. So it's tricky, but we believe in full self driving. We think they probably have the best full self driving technology in the world. And it's clear, you look around Los Angeles, on any street corner, you're now likely to see two or three cars with no driver in the front seat. One of the biggest transitions of the next five to 10 years will be the multitrillion dollar transition to autonomous driving.
- [25:05]
Scott Wapner
You didn't mention brand damage caused by Musk, which some have suggested is going to take a long time to fix, if it can even be fixed. Sales, if you look around the globe, are obviously down significantly, I think, even to a degree that have surprised a lot of people. Did that factor into any reason why you reduced the position?
- [25:25]
Brian Belsky
No. You know, listen, Elon has always been controversial. I think the work he's done in D.C. in reducing, with Doge, reducing government bureaucracy by 50 to $100 billion a year, we'll look back on that as a great gift, a great kickstart to some of the changes that needed to get made. But frankly, he said he's going back to his companies full time at Tesla, full time at SpaceX. Listen, the Chinese want to own global autonomous driving and they're running the table around the world. So it's very important. If the US wants to compete in global autonomous driving, we need him at the helm of Tesla and he's told us that's where he's going. So I think they're going to do just fine. But we are at this moment of, you know, I've described it as the fog of war and when it comes to Tesla, to self driving, to, you know, the Chinese auto industry, I think there's still a lot of uncertainty in the world.
- [26:20]
Scott Wapner
You think though, that the sales issues that we've seen, especially overseas, can rebound? When you say you think he's going to be fine.
- [26:29]
Brian Belsky
I think it has a lot more, Scott, to do with the competition with China and places like Europe. You know, do not underestimate Huawei. Do not underestimate, you know, when it comes to chips, do not underestimate Huawei. When it comes to self driving and autonomy or any of the other major Chinese companies. They are very competitive and they're determined no longer to be just Chinese players, but global players, South America, Europe, Middle East, Africa. If we want the U.S. you know, compute and U.S. technologies to be predominant around the world the way we did in technology or the way we did in the Internet, then we got to go full speed ahead. We got to stop worrying about how everybody else is running the race and how we keep our technology from them. And we need to defuse American technology as aggressive as possible around the world.
- [27:20]
Scott Wapner
All right, let's take a quick break. You stay with us. Sit tight. We'll do that and we'll come back. I want to get your reflections on Warren Buffett. Obviously you spend a lot of time out in Omaha. We'll talk Invest America too, which could be getting closer to the goal line and other stocks that we want to run by Brad Gerstner as well. We're back in two how will you shape the future of banking with confidence? Industry consolidation, crypto, the rise of fintechs all create a complex landscape for banks to innovate and grow. EY provides domain led insights to navigate today's fragmented banking sector. So whether you're tackling regulatory complexities, integrating digital assets, or seizing M and A opportunities, EY sees your business from every angle, working together to deliver outcomes that create strategic value. Ey shape the future with confidence.
- [28:14]
Brian Belsky
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- [28:43]
Scott Wapner
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- [30:06]
Joe Terranova
Brad, good to see you. I know in the past you've owned other sectors in the market besides communication services, by sides technology. We're talking a lot about those types of names today. Just give us some insight if you think there's opportunity, whether it's health care, industrials, financials. We've got stocks like Spotify, Netflix, Palantir, all racing towards all time highs. How are you thinking about all that?
- [30:31]
Brian Belsky
Yeah, good to see you Joe, you know, for sure. Listen, the Internet sector you mentioned a few Spotify, Netflix, etc. Some of the names we've owned there have had great runs this year, up 20, 30, 40%. I think they've been safe havens. A little bit tariff trade, you know, stock stocks that people wanted to get into. I think some of these other names in the US economy all also safe havens. So I think you have to be a little bit careful because as money begins to trade out of those safe havens, as we get some trade deals announced, the companies that have underperformed due to the tariffs I think will start to outperform. But generally the S and p is only down 4% this year. People still expect double digit S and P growth. I would say there's still a lot of disruption coming to the economy. There's going to be a lot of alpha. This is a stock pickers market. This is not a market just to own the index and go to sleep. There are going to be some companies that are helped by the tariffs, some companies that are hurt, some companies that are accelerated by AI, some companies that are hurt. So active managers get paid right now to do their job. Find those companies that are going to benefit and avoid the companies that are going to get hurt.
- [31:39]
Scott Wapner
Since you talked about a stock pickers market, I wanted to ask you about the greatest stock picker whose ever lived. His name is Warren Buffett. And of course this weekend everybody is reflecting now on his announcement that he will no longer be CEO at the end of this year. I know you've been to Omaha and I know you know some of the people out there. I'd love to just hear from you on what you think his legacy that he leaves behind for people like you and others who are trying to invest in this market.
- [32:07]
Brian Belsky
Yeah, it's a. You know, when I saw those words from Buffett on Saturday, I was both happy for him to go out on top. 20% compounded returns for 60 years. We'll never see a goat like Warren Buffett. He was one of a kind. But most importantly, what you can't put on a spreadsheet is that Warren unlocked the potential in folks like me. I grew up in rural small town Indiana and I saw somebody in Omaha who sounded like people around me, who looked like people around me. He inspired me to start tracking stocks when I was in high school. You know, really inspired a generation, inspired many generations, a nation to invest, to understand the power of long term compounding to understand the power of investing in the upside of the American economy. He was a personal hero of mine. I was lucky to get to know the organization later and later in life. I came on, I think your show just after Charlie died and I said, the two of them, you know, they've always spoken truth, they've always spoken wisdom. Just this weekend he said free and fair trade, right has been the most powerful engine for prosperity on a global basis. And this country for the last 50 years, it's still the greatest country on the planet. He believes that deeply in his core. So I wish him the best. He's not going anywhere. He'll continue to weigh in on the important issues of the day at Berkshire Hathaway. But, but salute to Warren. It really is an incredible career. But it wasn't just about investing. He moved the country forward. He gave the country reason to believe. And in our most trying times, in the times where the country was beginning, beginning to lose faith. I remember the fall of 2008. He settled the market at critical moments in time. And so this nation owes an incredible debt of gratitude to Warren Buffett. And I was happy to see him go out on top like he did on Saturday.
- [34:11]
Scott Wapner
He leaves an oversized legacy. It's really hard to quantify it obviously, but In a way, you're thinking about your legacy, too, and the future investors and people in this country through your Invest America program that you've talked to us on numerous occasions. And I know you're dealing with that out there to some degree. The idea, of course, for those who may not remember, is giving every child born in this country an investment account, $1,000 funded by the government. That's the key. Funded by the government, because that means you need help to get this done. Where are you in terms of getting that help you need? As we are talking about a reconciliation bill and the Republicans trying to get their budget and their spending bill through Congress, Are you close? What can you tell us?
- [35:04]
Brian Belsky
Well, I'll tell you, we're making incredible progress, and I think we are going to get it in the reconciliation bill. But, you know, tying this back to Warren Buffett, nobody understands the power of compounding better than Warren Buffett. And now is the time. We have 70% of Americans who feel that they're left behind. They don't have accounts that compound. We need to get them into the game. So it's $1,000 at birth, seeded by the federal government. But private accounts, 3.7 million kids born a year, they each get a private account. Think of it as a 401k from birth. And we have companies like Uber and Dell and many, many others, Oracle, Nvidia, etcetera, Who all say they'll contribute to the accounts of the kids of their employees. We have philanthropists, major philanthropists, who are donating billions of dollars to this. If we set it up, we have states like the state of Connecticut or Ohio who will add to these accounts, and of course, parents will add to these accounts. So by the time you're 18 years old, you will have an account, The S&P 500, that's worth upwards of 50 to 60 thousand dollars. It changes the game by getting everybody. This is the President's Main street agenda. The White House is very much aligned with this. The Senate is very much aligned. You know, it's led in the Senate by Senator Ted Cruz and Hagerty and Booker Warner and others, a big bipartisan group. But Ted Cruz is helping to get this scored, helping to get it in the reconciliation bill. We got a lot of support in the House, again, bipartisan support led by the speaker of the House. So I fully expect that we're going to get this into reconciliation. Imagine this. If the President signs this into law as part of reconciliation on July 4th of this year, that means on our 250th anniversary, July 4th, 2026. We can have 40 million children, 40 million families. They can open up their phone and see their child owns a little slice of Apple, a Berkshire Hathaway, hathaway of Microsoft, etc. I think that's how we really make this a Main street economy. We know this is the most powerful economy in the world. It's high time that we get everybody into the game. But not on the back of a bigger government agency or a big government account. On the back of individual accounts. Make everybody an owner in the upside of America. Warren Buffett would give that his stamp of approval.
- [37:21]
Scott Wapner
All right. You keep us up to date on how that progresses. Your secret CEO council just littered with the biggest names in business. Barton and Benioff and Safra Katz and Michael Dell and Jensen Wong and Bill McDermott and Dara and Laureen Powell. Jobs and I left many off because they're just too many to name. But that speaks to the kind of corporate support that you have gotten. Let us know and we'll see you again soon. Brad, thanks.
- [37:43]
Brian Belsky
Thanks for having me. Thanks for having me.
- [37:45]
Scott Wapner
Brad Gerstner out at Milken for our annual out there Contessa Brewer has the headlines now. Hakintessa. Hey there, Scott. Israeli Prime Minister Benjamin Netanyahu said a new offensive in Gaza will be an intensive military operation to defeat Hamas. In a video posted on social media, Netanyahu did not share details of how much territory would be seized in the enclave, but said the population would be moved for its own protection. Officials earlier said Israel could seize all of Gaza in an expanded operation. President Trump said Sunday he will direct the Bureau of Prisons to reopen Alcatraz Prison to house the nation's most ruthless and violent offenders. He said he wants it to be rebuilt and expanded. In his post, the president referred to, quote, radicalized judges, his words, who have. He said they want to have trials for every person in the country illegally. The notorious facility was closed more than 60 years ago because it was too expensive to operate. Now, of course, it's a national park. A record breaking 21.8 million viewers tuned in to see Sovereignty take home the $3.1 million prize at the Kentucky Derby Saturday. The race aired, of course, by our sister network, NBC streaming platform. Peacock also brought in the highest traffic of all partnered streamers this year. Scott. There was a lot of mud. Attendance was lower than last year, but the betting, 11% higher. That's pretty significant growth. Yeah, no doubt. Yeah. It was sloppy, for certain, but it was exciting nonetheless. Contested. Thanks. Contested Brewer. Coming up, we have fresh trades in the energy space. Oil hitting its lows for the year today. Tell you what, they are next.
- [39:26]
Brian Belsky
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your card you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com creditcard based on the February 2024 Nelson Report. Ryan Reynolds here from Mint Mobile. I don't know if you knew this but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mob. I'm told it's super easy to do. @mintmobile.com Switch upfront payment of $45 for.
- [40:15]
Anastasia Amoroso
3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full terms@mintmobile.com.
- [40:34]
Brian Belsky
Foreign.
- [40:38]
Scott Wapner
Let'S talk about some other moves that we didn't get to yet because Joe has done the rebalance as you know and we talked about the mega cap moves that he's made. But there are others that are interesting. I know you'll find them as such. Chipotle, you sold it.
- [40:50]
Joe Terranova
Have to momentum, focusing on momentum. You've had a slowdown in revenue growth. That's what the rules based strategy does. It looks at momentum, it looks at quality. If it deteriorates, moves to the side.
- [41:00]
Scott Wapner
I feel like you own this name in form or fashion forever. Even before you ran the ETF where you had to be rules based. This wasn't any rule other than I like Chipotle and I'm going to own it.
- [41:10]
Joe Terranova
Absolutely. Ten years ago we used to talk about it on the show. It was one of my favorite quick serve restaurants. I've owned it personally. And you have to separate the human emotion. That's why I just think rules based strategies are important in this environment. You separate the emotional element element that says you know what, this company is going to make a quick recovery. But the reality is that's not what's happening.
- [41:31]
Scott Wapner
You sold Delta. Tell me about that.
- [41:34]
Joe Terranova
We saw, we sold out a Delta Jimmy. I think we both saw that one coming. The airlines have always been just a trade and when you are rebalancing on a quarterly time frame. You're basically going to go into a name like Delta and hope that you capture something, something that's a much larger trend. But in fact, that has not been the case with the airline names, any of the airline names that we've owned.
- [41:59]
Brad Gerstner
You're extraordinary in your etf. You really are. The problem with Delta, for you, is the quarterly timing. It just is. Because, I mean, if you look at this over the last five years, this will surprise you. The, the total annualized return, 15 and a half percent right in line with the market. But it has these ridiculous ups and downs that are kind of on a quarterly basis. So, you know, if it, if it comes up on your screen again, let's talk if you're up for it. But it actually, the operations are doing just fine because traffic still holding up. Good. Pricing is good. And now you got fuel coming down.
- [42:27]
Scott Wapner
All right, we take a break. We come back. The explosion of new crypto ETF offerings. Papazon, he's got that. He'll tell us what's driving the boom in ETF edge. And that is next.
- [42:43]
Brian Belsky
We're back on Halftime.
- [42:44]
Scott Wapner
I'm Bob Asani with your ETF edge. The crypto ETF world is exploding. Forget spot Bitcoin ETFs.
- [42:51]
Brian Belsky
There's now ETF buffer funds that limit losses while allowing most of the gain. There's yield funds that offer 10 to 50% income.
- [42:58]
Scott Wapner
There's option funds, there's leverage and inverse funds and more.
- [43:01]
Brian Belsky
Here to make sense of it all, Rick Edelman.
- [43:02]
Scott Wapner
He's the founder of the Digital Asset.
- [43:04]
Brian Belsky
Council of Financial Professionals and the former head of Edelman Financial Engines. We have, you know, it didn't take long to go from spot bitcoin to buffered bitcoins. They offer downside protection and it gets more complicated from there. Make sense of all this exploding ETF crypto universe.
- [43:20]
Brad Gerstner
Well, it all started, Bob, as you said, with the introduction of the spot Bitcoin ETFs 14 months ago, raising $100.
- [43:26]
Brian Belsky
Billion in a year.
- [43:27]
Brad Gerstner
That created massive liquidity in the marketplace. So option strategies naturally followed exactly the same as the stock market. So today you can engage in virtually.
- [43:36]
Brian Belsky
Any kind of a strategy you want.
- [43:37]
Brad Gerstner
Including limiting your downside.
- [43:40]
Brian Belsky
That's a huge thing because, because everybody.
- [43:41]
Brad Gerstner
Hates the volatility of bitcoin. But now you can guarantee you won't.
- [43:45]
Brian Belsky
Lose more than 10%, yet still get.
- [43:47]
Brad Gerstner
50% of the upside. So this is a huge opportunity to.
- [43:51]
Brian Belsky
Capture the potential profits while protecting yourself against losses. Another thing I'm just seeing long and.
- [43:57]
Scott Wapner
Short Bitcoin ETF, they're exploding, but the.
- [44:00]
Brian Belsky
Fees are high, 1.8%.
- [44:02]
Scott Wapner
You have a daily reset.
- [44:03]
Brian Belsky
All of this erodes the returns over time, but yet they're hugely popular. People want to bet long and short Bitcoin. And this is exactly the same thing.
- [44:11]
Brad Gerstner
We see in the stock market.
- [44:12]
Brian Belsky
And just as in the stock market, it doesn't make any sense.
- [44:15]
Brad Gerstner
Making a bet on what bitcoin will.
- [44:16]
Brian Belsky
Do in the next trading session, that's insane. That's not investing. That's a lottery tip.
- [44:21]
Scott Wapner
And now we have more.
- [44:22]
Brian Belsky
We have leverage inverts ether ETFs coming and more down.
- [44:27]
Brad Gerstner
The ETF industry is really good at.
- [44:29]
Brian Belsky
Manufacturing ETFs and if they can create a product that they can get you to buy, they win even though you may not.
- [44:35]
Brad Gerstner
So this is an opportunity for terrific opportunities and the expansion of your crypto holdings. You just have to have your head about you.
- [44:42]
Brian Belsky
We're going to have a lot more coming up with Rick EDELMAN ON ETF EDGE 1:10pm Eastern Time. In addition to these new developments, we're going to talk about a lot more.
- [44:49]
Scott Wapner
Of these crypto ETFs that are out there. We're going to talk about new ETFs.
- [44:53]
Brian Belsky
That offer elegant solutions to one of the big issues for investors and that's.
- [44:57]
Scott Wapner
How to capture a steady stream of income. Come some great new ETFs out on this. That's ETF edge.cnbc.com Scott, back to you. Okay, thank you, Bob. Bob Pizzani, we have more committee moves just after this break. All right, we're back. Watch our crude oil. It's a very big story today. It's down more than 2%. $57 on OPEC production increases just as bank of America Civita Subramanian upgrades the sector to overweight. You sold ExxonMobil in your rebalance, Jim. You own it, Belsky, you own it. You own Chevron. Brian, let me get your take on this space here and what you think of getting rid of Exxon here.
- [45:40]
Jim Labenthal
I think it's a really tough call to be overweight energy, Scott, especially given the fact that mathematically and historically when the WTI is negative on a year over year basis, the sector dramatically, radically underperforms the overall market. So I don't think it's different this time. And I think to be bullish energy right here is a really tough call.
- [45:59]
Scott Wapner
Anastasia, what do you think?
- [46:02]
Anastasia Amoroso
I think broadly, that's right, it's hard to be bullish on energy because it seems like more supply is definitely coming, and it's coming from OPEC because they're tired of everybody else not conforming to their quota. And it's also coming from the United States as well. So supply seemingly is surging. At the same time, if you look at demand, it's running almost 2 million barrels a day below where that supply is. So all things equal, the inventories are building. So unless we get to that 3% GDP growth that Scott Besson wants, I think the overall oil market will be challenged. But I do like the volume growth story in energy. So the MLP space, but I'll talk about that later.
- [46:39]
Scott Wapner
Joe, you sold the OG and you sold Diamondback as well, down to one name.
- [46:44]
Joe Terranova
That's Baker Hughes. If you look at energy, you haven't had a strong uptrend really since late 21. I'd focus on EQT. That's natural gas on that personally. And by the way, we added Constellation Energy ceg.
- [46:58]
Scott Wapner
Okay, we'll do finals next. We'll do finals. Brian Belsky, what do you got?
- [47:09]
Jim Labenthal
Rockwell Automation, rok.
- [47:12]
Scott Wapner
Thank you, Anastasia.
- [47:14]
Anastasia Amoroso
Midstream pipelines that can benefit from volumes.
- [47:16]
Scott Wapner
Of oil and gas farmer Jim Lockheed Martin, Joey Stryker Corp. All right, I'll see you on the bell. Look forward to that. The exchange starts right now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:39]
Brian Belsky
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 A SquawkBox exclusive.
- [48:20]
Scott Wapner
Legendary investor Paul Tudor Jones, his outlook for the market economy and American exceptionalism. Plus where he's finding opportunities now. Squawkbox tomorrow, 6am Eastern and streaming on CNBC.