← Halftime Report
Halftime Report
Trading the Stock Surge 2/10/26
00:44:20
Scott Wapner and the Investment Committee debate the surge in stocks and how you should trade it. Plus, the Committee share their latest portfolio moves. And later, Josh Brown spotlights 'Halo' Stocks in his "Best Stocks in the Market." Investment Committee Disclosures
Loading summary
Transcript134 lines
- [00:00]
A
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger. Or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
- [00:55]
B
AT&T business Wireless connecting changes everything. I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thanks so much. Welcome to the Halftime Report of Scott Wapner. Front and center this hour, surging stocks, the Dow and the equal weight, extending their record highs. We discuss and debate it with the investment committee. Joining me for the hour today, Joe, Chairman nova, Stephanie Link, Jim Leventhal and Josh Brown take you to the market, show you what we're doing at noon in the East. Not all that much, but we have been surging. Dow is right, I'd said record high there S and P is hanging in by 4 Nasdaq's given a little bit back. Retail sales were a miss, a bad miss. Capital econ, no real positives they describe it. But stocks continue mostly to go up because we know about this K shape recovery and as UBS says, we believe the backdrop remains favorable, driven by resilient economic growth, supportive Federal Reserve policy and AI investment and adoption. I will say this in terms of supportive Federal Reserve policy. Beth Hammack is the Cleveland Fed president. She's on the tape making some comments and she is a voter, by the way, this year she doesn't sound so supportive of future cuts because she says she's preferring to err on the side of patience for future cuts. Quote, we could be on hold for quite some time. Monetary policy is in the vicinity of neutral and that is the latest from Beth Hammock. So you take that all into consideration. Stephanie Link, and it takes us where.
- [02:46]
C
We'Re going higher in the markets because the economy is doing well. We don't need The Fed I think the Fed should cut but we don't need the Fed because we have all of nice tailwinds I we talk about every single day but the capex numbers from the mag 7761 billion in total this year that's up 75% year over year. That is a huge tailwind but that's not the only reason the economy is growing. The consumer is spending and I care less about a December retail sales print more about what Brian Moynihan said the CEO of Bank of America that January spend was up 5% year over year so it is case shaped. We've talked about that nauseum Scott but.
- [03:32]
B
It sounds like picking and choosing data points you like well said it to.
- [03:36]
C
Resiliency in the consumer, resiliency in corporate So a lot of banks are saying that today real time and they're front center right of of what is going on in the economy. So I care more about what the companies are saying. One big beautiful bill in deregulation has not even really hit and that' going to be $1 trillion in stimulus. Inflation is coming down. I thought the ECI today was pretty good. And then finally productivity and that is the real story of this economy and that's driven by AI and all the technology added all up double digit earnings. Earnings are getting revised higher. That's why the market is going higher.
- [04:09]
B
Okay. I mean UBS Steph been saying the same thing. It's hard to argue against it. I mean some of the consumer stuff squirrely it doesn't look great but then there is other offsets to the retail sales report.
- [04:25]
D
There are and I think we should be a little bit more excited coming into the show today. It seems like a quiet market day but it's really not. And it's not because you're maintaining the gains of the last several days and you have a variety of different stocks that are reacting to what is a really strong earnings season and we've had elevated volatility and I keep talking about.
- [04:45]
B
That the one place wasn't excited enough in her first answer it sounded pretty passionate to me. Pretty be excited sounded pretty passionate.
- [04:52]
D
Just coming up coming into the building today talking to a lot of the different traders on the floor. What's going on? Oh it's kind of a quiet day. We're moving moving somewhat sideways. I like the fact that it's quiet. I like the fact that you are stabilizing at a high level that is productive. And one last point on the volatility. I keep talking about elevated volatility the one market you don't have, the elevated volatility is, is arguably the most important and that's the bond market. The bond market remains remarkably calm and that is good for credit availability and the cost of capital not being a moving target.
- [05:26]
B
Josh, you know, if, if you're bearish, you probably hang on the. Well, is consumer strength starting to falter? That's what Capital Econ says today as they look at the retail report. If you're bullish, you are like Stefan ubs, which suggests the backdrop still really good resilient economic growth. The Fed still supportive doesn't, don't hang on what you know, the Cleveland Fed president is saying it's just one person in one vote and AI adoption is yet another reason to be bullish. So what do you make of all that?
- [06:00]
E
Well, Steph is right and Steph has been right and you know, there's a whole cottage industry of people who want to nail the turn exactly as it happens. So they see a negative data point on the consumer and they spin it up and extrapolate it into this whole thing that's just not based in reality. I know we're going to talk about the travel stocks later, but I'm sorry, Hilton and Marriott is not like me pointing to the Four Seasons Hotel. So yeah, it's K shape. But honestly, people are not voluntarily crisscrossing the country on vacations. If the consumer is cracking, it's just not. I know the way reality works so I know how badly people want that turn and they want to be seen. I told you. But the thing is you listen to JP Morgan conference call, they issue everybody's credit cards, they see all the debit card spending, etc. Etc. And they almost have to apologize. Jeremy Barnum has to come on the call and say guys, I know what you're all looking for. And once again, 12 straight quarters, it's not here. There is no sign of exploding credit card liabilities and past due this and auto loans being payments being missed if we don't have it. I'm sorry. So until we do, how about we focus on exactly what Joe and Stephanie are talking about. The absurdly strong earnings picture. If you, if you think about it, analysts are now expecting profits to grow 12.3% year over year. That is 386 basis points ahead of what the estimates were right before we got the first reports of the season. So eight, eight, eight and a half percent was the expectation and we're doing 12 and change. This is quarter after quarter after quarter. So I'm not saying every consumer is. Okay. I'm pointing out for the most part, that is not the story. It's not.
- [08:06]
B
We get it. Yeah. I mean, that was excited, right? His air was excited. Airport almost blew out of his ear, by the way.
- [08:13]
D
It's a hell of a suit and tie combination. Thank you.
- [08:15]
B
Thank you very much. So, Jimmy, I turn to you and I say, do you remember the Ed Yardeni bullishness of yesterday? The delivery economy, as he put it. The transports and the production economy. The industrials are confirming the strength that both Steph and Josh are talking about. Caterpillar. By the way, nobody owns it on the desk here. They wish they did because the Target goes to 825 from 735 at bank of America reiterated by that stock has been. Look at it. Over the last year, guys, not intraday, please break it out. Thank you. And they talk about. Look at that. And they talk about turbine demand broadening out. It's not just data centers. It's exactly what Ed Yardeni is talking about. It's exactly what Joe has been talking about and what his Jyoti ETF has been moving about. Because the industrials exposure is 19%. It's the second highest in the group, in the, in the etf, but behind financials. So obviously that's where momentum has been. It's. You own a lot of these stocks. We'll put Delta in there. Industrials, amtec, Axon, Cummins, Emerson, Ferguson, Hubble, Rockwell Waste Management, General Dynamics, Parker, Hannifin, Rollins, Trane, Quanta. Hello, Industrials.
- [09:38]
D
It's the derivative trade. It's a derivative trade off the AI. Steph, you've been doing a great job talking about is vertive. It is Quanta that is really strong in the last five days. But there's some other names underneath the surface that have bubbled up and we've added the exposure there names that are kind of unfamiliar, like Ferguson, like Hubble, like Emerson, Trane Technologies. Another name as well.
- [09:59]
C
It's short cycle.
- [10:00]
D
It's short, short, short cycle. And it's. And it's really, it's the AI derivative trade. But it's also the industrial upcycle that we're seeing.
- [10:09]
C
If you look at ISE, over 50, 52.6. The Chicago PMI two weeks ago is 54. That is absolutely right, Joe. It's not just AI, it's really hardcore manufacturing that's starting to improve. That's short cycle.
- [10:23]
B
I'm coming, I'm coming back to you in a minute, Steph, because You have Steph has a move today that plays exactly into this story. I want to get to Joe because he's got the most industrial exposure on the desk. But now you've heard everybody sort of weigh in and then in the context of the Yardeni note and what Steph Yardeni, Josh all at UBS today, all sort of channeling the same thing.
- [10:45]
F
And doesn't it just make sense? I mean we have talked for years now about not just data center build outs, but infrastructure and supply chain onshoring and people like Steph and me have talked for, for quarter after quarter about we're going to move stuff, we're going to have to build stuff. And so if you think about aggregate materials manufacturers like a CRH or Volcan materials or something like that, of course they're doing well and of course transportations are doing well. And industrials as you mentioned, Scott, you know, it's not just the excavators that are out there building and again, more than data centers building roads, building new factories, it's the turbines that that caterpillar produces that we need as all of these data centers are looking for.
- [11:25]
B
Why don't you own a Caterpillar? Why does it Steph on a Caterpillar? Why don't more people on this program own a Caterpillar? The stock has been a ripper.
- [11:35]
F
So stock's been great, so has Delta.
- [11:37]
B
So his Wabtech talk about different businesses.
- [11:40]
F
We're absolutely not. We are talking about the same fundamental drivers. The same fundamental drivers. We are building things in America and it's great. I've said this for three years. That's excitement. Maybe the slap was just coming back at you a little bit. When you say Joe has the most exposure in industrials by the number of names. I run a much more concentrated portfolio. 25 names.
- [12:00]
D
Okay?
- [12:00]
F
So when I talk about something like Delta, that's a 5% position in my portfolio. That's a big name. We're moving people. Wabtec's a 4% position. That's, you know, they just did this great deal with Union Pacific not that long ago that they're going to refurbish 1200 locomotives. This, we're moving stuff. If you're going to build stuff in America, you've got to move aggregates, got to move steel, you've got to move energy.
- [12:21]
B
Look, Wabtec's up 14 and a half percent year to date. Lockheed's up 29, Emerson's up 21, Quant is up 21, trains up 19, Ferguson 17 and a half. Cummins build engines up 15 and on and on and on and on. Steph, your move is buying more of Rockwell Automation.
- [12:41]
C
Yeah, so it is short cycle. So I like that this company beat earnings. And Earnings growth was 50% year over year. The revenues were up 12% year over year. Organic growth was up 10%, margins expanded and net income was up 48% year over year. This is a company that is doing a really good job in automation and robotics and that hasn't even really kicked in just yet. This is also a self help story, which is why I point out to the margins and guess what? I got all of that. And the stock fell 7% on the earnings day. That's why I added to it.
- [13:15]
B
It's only up five and a half percent on the year.
- [13:18]
C
And I think it's absolutely a sleeper name for 2026. And I also think the Rails are a sleeper story for 2026 because exactly to what you just said, Jim, you have to move stuff to build stuff. And these stocks haven't done that much. Asian Pacific I like very much and it's trading below the peer group. I know why, because of the Norfolk Southern deal and we're waiting for the approval. But I think the Rails are absolutely a place where you want to put money for this year.
- [13:43]
D
I agree with that. Correct me if I'm wrong because just looking this morning at our momentum screen, I saw the Rails rising. I think CSX, if we could show a chart is a 52 week high.
- [13:52]
C
Yes.
- [13:52]
D
So it's evidence to exactly what you're speaking towards in the economy. But they're delivering on the earnings as well. The Rails are coming. The logistical play is really strong. Prologis is a name that figures in that as well.
- [14:02]
B
Josh, go ahead. I'm sorry, hold on, I'll come to you. Two seconds.
- [14:05]
F
I want to add one thing that's important.
- [14:06]
B
He's all fired up.
- [14:07]
F
I'm sorry about that. You know, sometimes that next level down when we talk about these industrials and transportations that have done well not just this year, but in terms of their operating performance for years, what that means is their balance sheets are getting a lot cleaner. Now this is next level thinking. Stephanie, I saw you turn to me because you know what I'm saying, if the debt levels go down, that means more cash flows, more earnings that are attributable to us as shareholders. That eventually means higher dividends. It means higher valuation. If you're wondering why Caterpillar is trading at a low 20s multiple and maybe somebody thinks it should be in the high teens. The balance sheet looks a lot cleaner than it did three years.
- [14:44]
B
There's the xli. That's just obviously an intraday, but it's, it's moving higher. Two signs Jimmy's worked up. He hits the desk and he goes for the water. He hit the desk earlier. He just went for the water.
- [14:55]
F
I didn't know we were going to. I didn't know it was going to.
- [14:58]
B
Elizabeth, we got to be quicker. I got to see, I got to see Jimmy hit the water. I mean, that's a sign he's all worked up. Josh, you are a low aviation economy, but still, I know you're a believer in these themes we're talking about.
- [15:13]
E
Yeah, well, look, I think the number one chart we've been talking about on the show is the rsp. It's the equal weight S and P. It's an Invesco product. You can throw it right on your screen where you look at Spy and, and Triple Q. This is the chart. Give me more than just the last two hours, guys. This is the chart that tells the story we were talking about, like as recently as five or six months ago, the Mag 7, the Concentration. Oh my God. Tech is 35%. Throw all of that out. It's a totally different environment now. And just think about the nature of the stocks that are breaking out. Whether they're in industrials or they're in materials or, you know, you're finding names in health care, you're finding names that are not susceptible to, you know, the things that have plagued the software industry and can't be replicated by a chat bot or an LLM. And just they're going up. And there are so many of them, like thousands of stocks advancing, not all making new highs. But this is the chart that tells the story and the R in rsp. For people that haven't been around as long as Jimmy, Joe, Steph and I. That comes from Ride X. They were the, the only company that had an equal weight index product. And I guess when Invesco bought it, they kept it. The are there, but like that's how long this has been a trackable index. And not enough people are paying attention when we talk about the broadening. It's not a one day thing. This has been going on now for four weeks and will probably stretch into months and quarters.
- [16:53]
B
So let's talk about a couple other things. Okay. Gold was lower the last I checked. We can show it just to give you an idea of where it's currently trading, because Wells Fargo says is going a lot higher. They expect the rally to continue. Pullbacks or buys, we throw that up. Let's look at the chart, please. They raised their price target to 6100 to 63,000 bucks at least. Higher from here. 11 to $1300 higher for gold. Bitcoin was back below 70k. Michael Saylor Strategy says credit risk around that name's overblown. He's going to keep buying it coin quote unquote forever. Robinhood reports tonight as crypto is not traded well. Robinhood hasn't really traded well either. Back that out. Give me a year to date, guys, please. Coinbase has been in the news too. So there's your move. Lower year to date down 24%.
- [17:53]
D
What do you think first of all, for Robinhood tonight? I think a lot of people, myself included, look at this company and automatically think crypto and look. That's correct. I understand the decline we're seeing is related to that. But the overall exposure in their revenue that they have to Crypto continues to decline and it's now at single digits at 9%. So there's more to the story with Robinhood. You have to hear that story tonight. You have to hear about how they are diversifying the overall model. I'm not going to dismiss that the stock itself has pulled back precipitously from October. It's a prove me moment this evening for Robinhood. But let's not just make it totally about crypto.
- [18:32]
B
No, but it is what it is.
- [18:35]
D
There's a stigma. There's a stigma related to it for sure. And obviously it's been negative as it relates to what the, the impact on the stock price is. But there is more to the fundamental story for this company.
- [18:47]
B
Let's talk about something that we've been leading with a lot or certainly getting to higher in the program for the last gosh, feels like months. And that's software, which is getting a bounce today and it's noteworthy. And JP Morgan today mentions that they believe the balance of risks is increasingly skewed towards a rebound, especially in what they deem to be quality segments like Cyber, which is well loved on this program. They look at AI resilient companies. They like Microsoft, they like Palo Alto, they like ServiceNow. ServiceNow hasn't traded well, not for that matter. Microsoft hasn't either. There is Crowdstrike, there's Datadog, there's Z Killer, zscaler, Excuse me. And there is Checkpoint. And then there is Synopsis which Stephanie Link has a strong buy on. Yes, because you just bought more?
- [19:39]
C
I did. It's a new position though, so I started small. The stock's down 6% year to date. It's down 19% in the past year. These guys make mission critical software for the semiconductor companies. And the more complex chips get, the more they need Synopsis stuff. They have 41% market share, 70% is recurring revenue, and they've just done a big deal in M and A, which is going to add about $3 billion to their revenue base there. And their backlog is about $11.4 billion. So I like it. I'm just using the weakness and the bad days in software to be adding to it and I'll continue to do so.
- [20:12]
B
Okay. You know who else likes software? Retail. Retail like software. Because Vander Research today says there's been record buying from retail. Million rolling net retail inflows into the IGV surged to a record as of the close yesterday. More than double the prior peak seen during the late 2024 drawdown. So retail looks at this and says, enough's enough. There's your chart of buying. Josh, you have a thought on that day when Palantir, which is a very popular retail name, upgraded to a buy at Daiwa. The target does come down a bit, but nonetheless they are bullish there.
- [20:52]
E
Well, I was out buying the dip in some of my software names, so, you know, I obviously don't disagree. I think this has gotten completely carried away. I understand that in today's day and age these, these kind of like trading memes catch on like wildfire. And it's not just retail institutions, hedge funds, everybody gets the memo and reacts. But the interesting thing about retail is in prior eras you would look at something like that inflow chart and say, oh, that's the dumb money. No, the retail. The retail traders are hip to the game. They understand that in an overreaction you go against what the screen is telling you. And not always, but in a lot of cases we have V shaped recoveries now. I don't think we'll get a V shaped recovery for software. I think unfortunately these companies will continue to re rate lower even though their results are great for the most part because people just don't believe that they're all going to make it through the AI revolution. So I'm glad that I added to some of my favorite software names. I am not actively out there hunting for new opportunities in the space and I think unfortunately the rebounds are going to roll and these names will stay in a downtrend. They're guilty until Proven innocent. And I don't know when they'll be proven innocent. Could be a long time before people really believe that these companies are all going to make it fair.
- [22:23]
B
Fair points. Hard to argue with any of that. Quick thought from you before I move to something else.
- [22:27]
D
Greed. We are. I'm very comfortable in the moves we made reducing the software exposure down to five names. I think stability is the word you want to use here. What's happened over the last several trading days? It was the Oracle debt offering. Today you have earnings from Datadog. The Stock is up 16%. Reacting to that. Tomorrow morning you're going to hear from App Lovin. That is going to be important for the sector, sector stability that we're seeing the last couple of days.
- [22:53]
B
All right, show me shares, please, of Qualcomm Q Com and we can look at that on an intraday. Please resume sell at Morgan Stanley. Not doing anything, so give me a little longer look. Now if you would, please resume sell at Morgan Stanley. Memory headwinds will create handset shortfall. Resume coverage at underweight.132 is the price target. So they're looking for a little downside there. Executed well, they say, under challenging circumstances, but may have maximized earnings power for now. Jimmy owns Qualcomm. He's already gone through one water.
- [23:32]
F
I might have to fill one I might have to double.
- [23:34]
B
He's almost done with his second. Liz, help me out.
- [23:36]
F
I might have to double fist Qualcomm.
- [23:38]
B
So take this.
- [23:40]
F
Yeah, I mean, they have done well under the circumstances. And the big circumstance that is not in their control is getting access to memory chips. And we've talked about this for a long time, several weeks now about Texas Instruments, Micron. Every one of those companies saying, listen, we're taking all of our production and memory and we're sending it to data centers. That has meant that there are supply chain shortages for Qualcomm. I do think that that's a temporary set of circumstances. And in the meantime, the actual products that Qualcomm is developing, whether it's for handsets, but more importantly for automotive, for Internet of things, for data centers, that these are applications that the customer wants. So as soon as we can get more memory supply and even if it's at a higher price, Qualcomm should be able to raise their prices to adjust for it. But there is a time period here, and I don't think this is a moment where you have to rush out and buy Qualcomm. I don't think it's a Sell either. I think that's way too dramatic. I think it's way too cheap to sell it here. But it's going to take some time for those supply chain issues to work themselves out.
- [24:39]
B
Okay, now we did mention memory as part of this call. So let's look at micron. Target goes to 500 mu. Thank you. 376. So 300 was the target at Deutsche. It blew past that obviously. Now they go to 500. Joe T. Tell me more fundamentally, I.
- [25:03]
D
Still like where Micron is in the memory equation. It is a stock that broke out later than the other names. But it is in the midst of what was a deleveraging process over the last several weeks. People taking down positioning. The stock itself still resides at 377, about $55 above the 50 day moving average. So there is further room to fall here. However, I take the other side of that technical move because I think the fundamentals of memory remain strong. 26.
- [25:37]
B
Okay, let's hit one more stock that is having a great day and it's Spotify. Let's show that please. It's surging today. There it is. Almost 14. More than 14%. So they had a record Maus monthly active users for the fourth quarter. We talked about coming in. If you pull the stock back now, you'll see what I was talking about. Yesterday the stocks traded terribly right stock. You, you sounded like you almost. It was like a, like right on the doorstep of getting kicked out on the curb from the etf. But it had just enough momentum in somewhere to stay in. I don't know what you make of this move today, but it's quite a move relative to what it's done recently.
- [26:22]
D
So for the rules that we're applying, we're looking at quality, we're looking at momentum. Quality has never ever been the question for this company and it's supported in this earnings report with stabilizing and improving margins, double digit revenue growth and you mentioned the, the active users which are at an all time high. It was the momentum that was the challenge. And when we ran the last screen, you're taking a universe of 500 stocks. You're narrowing it to 250. I could tell you that this stock was as close to 250 as you can possibly come. So the lift here, it's really strong. It's really important. Daniel Ek has stepped down in 2025 as CEO. He was a co founder. He's still there in an executive chairman role. The co CEO is now doing a good job steadying the ship and setting it forward in 2026 and hopefully improving fundamentals continue to lift the stock. But yes, yesterday before this earnings report, this was clearly broken momentum.
- [27:21]
B
Okay, we'll come back after this break. So Josh has his best stocks in the market list and then another stock that's taken an elevator down since he bought it. Now he's out. We'll explain coming up. Comcast Business helps retailers become seamlessly restocking.
- [27:41]
F
Frictionless paying favorite shopping destinations.
- [27:44]
B
It's how nationwide restaurants become touchscreen ordering.
- [27:47]
F
Quick serving eateries and how hospitals become.
- [27:50]
B
The patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity.
- [27:58]
F
And expert partnership, Comcast business is powering the engine of modern business powering possibilities.
- [28:05]
B
Restrictions apply.
- [28:06]
A
Not every sale happens at the register. Before AT&T business Wireless checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time sometimes.
- [28:31]
B
AT&T business wireless Connecting changes everything.
- [28:36]
A
Looking for a Valentine's gift she'll truly love. 1-800-flowers.com knows what she wants. For 50 years, 1-800-flowers has helped guys like you get it right. Delivering millions of fresh Valentine's roses nationwide. 1-800-Flowers offers premium fresh cut flowers backed by their seven day freshness guarantee plus same day delivery when you need them on time. Valentine's is coming up and bouquets are selling fast, so don't wait on this order today at 1-800-FLowers.com. sXM. That's 1-800-FLowers. Com SXM.
- [29:21]
B
All right, welcome back. Let's get to this move that you have, Josh. I probably gave it away, but nonetheless, you sold otis. It's down 14% since you bought it, which is interesting. You know, we, we talk about the economy's doing well, the industrial economy is doing well. What's up with this one?
- [29:43]
E
This one is much more connected to office buildings, apartment buildings, because it's elevators. So it really has nothing to do with when we talk about real estate or very little to do with. The story here is that it's two businesses. One is actually building and selling the elevators, which everyone is aware of. But the real business is the maintenance contracts. You can't install an elevator and then not pay people to inspect it, maintain it up, update the equipment, etc. So it's like Sort of an annuitized business and it's global and it's a great business. And the only reason I sold it is because there were too many other opportunities, too many stocks breaking out. So I may come back to this at some point, but it is currently not front burner.
- [30:30]
B
Okay, so the best stocks in the market today, you're talking about halo stocks. What does that mean?
- [30:36]
E
Yeah, so I think the antidote to people's concerns with how disruptible some of these information technology businesses are, whether we're talking about something like an S and P global, which is just absolutely collapsed and that's, you know, obviously the index business, the data business, or we're actually talking about vertical, vertical market software, some of the things that people think are immediately going to be replaced with AI. I don't believe that story, but it doesn't matter what I believe. The market does and I don't know for how much longer that will continue. So when we were talking about in the first segment, the stocks that are making new highs, the stocks that are going up, what all of those have in common, whether we're talking about a consumer staple stock or we're talking about something that moves earth or is involved in mining or agriculture or data center buildouts, they are heavy asset companies with low obsolescence risk. So halo is heavy assets, low obsolescence. And that is the third through line of all of the things that are working this year. The market is sorting out what can be replaced by the next product launch from Anthropic and what can't. And you really can't type something into an LLM and get a Hershey bar in your hand. And the market understands that you obviously can't see a situation where Claude is going to produce a tractor. And so that's the separating line between what I think is going to work this year and what's probably not going to work and is currently not working. And it's a really simple litmus test, Judge. It's a really simple question. A ticker comes across your desk, you're researching it, you're looking at it. The earnings is one thing. That's math. The sentiment is really tough. How do you get the multiple right? What people are going to be willing to pay? Apply my test. Does this company have heavy assets?
- [32:37]
C
Assets?
- [32:38]
E
And what is its obsolescence risk relative to the 700 billion some odd dollars in capex that are being spent by the AI complex? And if the answer is no, they can't replace this and the assets are meaningful, maybe it's a utility. Maybe it's an industrial, maybe it's a staple. But chances are you have a stock that could actually work in the year of our Lord 2026. Everybody gets that.
- [33:04]
B
Nobody waiting on the desk. We got you the charts. Not worth chasing the charts to get constructive on. And messy charts. Lauder. Estee Lauder is one of those on the list which Stephanie just bought more of. So let's go to her. Let's hear about this one, Steph.
- [33:20]
C
Well, I thought the quarter was actually very good. They beat on earnings, revenues, margins and organic growth. They guided conservative, conservatively, but they did inch up organic growth. The people were expecting a lot higher of a number, but down 21% after a company beats and does raise the organic piece, just not by as much as people wanted. That to me presented an opportunity. I really am excited that China has actually accelerated. Their growth was 12%. That was really very good. Offset by us, which was flat. Everybody wants the US to see a recovery, recovery because the two regions are 50% of their revenue. So you need the US to pick up momentum. I think they will. I think beauty reimagined. This is the strategy that this CEO, and he's fairly new, has in place. And I think they are seeing some momentum. You'll have fits and starts each quarter, but I thought down 20% was a gift.
- [34:15]
B
All right, let's get the headlines now with Courtney Reagan.
- [34:17]
A
Hey, Courtney, I've got a federal judge in Michigan rejected the Trump administration administration's attempt to attain the state's voter rolls. Now, the case was one of more than two dozen lawsuits recently brought by the federal government seeking state and local voter registration data. Administration officials say they need the records to keep elections secure amid unsubstantiated claims that undocumented immigrants have been voting illegally. Former Representative Tom Malinowski conceded the special Democratic primary in New Jersey to progressive activists on Alila Mejia today and congratulated her on the upset win. Less than 900 votes separated the two in the race to replace New Jersey Governor Mikey Sherrill in the House. And Canada's Prime Minister Mark Carney says he spoke with President Trump today about his threat to block the opening of a bridge connecting Detroit and Ontario. Carney said the situation would be settled, but didn't give details. It comes after President Trump said he wouldn't allow the Gordon Howe International Bridge to open until the US Is compensated by Canada. Scott, back over to you.
- [35:19]
B
All right, Court. Thank you, Courtney Reagan. Coming up, going global. Investors rushing into opportunities outside the U.S. we will find out where they stand on that trade and where people are looking. We'll tell you next. Comcast business helps retailers become seamlessly restocking.
- [35:38]
F
Frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering, quick serving eateries and how hospitals become.
- [35:47]
B
The patient scanning, data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity.
- [35:55]
F
And expert partnership, Comcast business is powering the engine of modern business powering possibilities.
- [36:02]
B
Restriction Supply thy ticket Lady Jennifer of Coolidge.
- [36:06]
A
Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance fairs?
- [36:14]
C
Yeah, they do here.
- [36:15]
A
Discover is accepted at the places I love to shop. Getith with the times.
- [36:20]
C
With the times.
- [36:22]
A
You're playing the loot. Yeah, and it sounds pretty good, right?
- [36:27]
B
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.
- [36:33]
A
If you still haven't ordered her Valentine's gift, don't panic. Just hurry and go to 1-800-flowers.com to save up to 50% on beautiful premium roses. What sets 1-800-flowers apart from the rest are their premium first cut flowers backed by their seven day freshness guarantee plus same day delivery when you need them right on time for Valentine's. This deal ends February 10th, so don't wait. Beat the clock and save up to 50% at 1-800-Flowers.com sxm. That's 1-800-1-800, com sxm.
- [37:16]
B
All right, we're back. Interesting story today in the Wall Street Journal. Wall Street's hunt for cheaper stocks goes global. Nothing new. The only difference is that as they say, last spring it was Sell America. Now Wall Street's hot trademark is buy everywhere else. So less about selling the US because obviously we're at record highs on the Dow and the equal weight, etc. But there's a lot of interest elsewhere. Flows into international funds are huge. The Brazil ETF is up 21% year to date. Year to date. Stephanie Links been trying to tell everybody about it. She's been in it and she's happy to today.
- [37:55]
C
I'm happy today. Yes. So Brazil, it's very favorable demographics. Just like India, which I still like, but I don't own. But they also have favorable monetary policies. I think interest rates can come down because inflation has actually been making progress over the last couple of quarters. Most people think that Brazil is a basic materials and a resource play. And it is. But it's also a power play. They have the power that everybody in this world wants and doesn't have. And so I think they're going to be a very big beneficiary of AI and I don't think people really appreciate that aspect to it.
- [38:29]
B
Emerging Markets ETFs up 11 it is.
- [38:33]
D
So the cure I think the fundamental reasoning why you're seeing interest once again and understand you've had this dramatic shift in sentiment where for years you had investors and the financial services community community looking at the emerging markets at an underweight positioning and now you've had this paradigm shift. So it is the fall in the US dollar earnings growth in 2025 in the emerging markets actually outpaced the US so the US is doing some around 14%. You see the emerging markets doing 29%. You also get the exposure to technology as well. If we could show EIs as I speak that is Israel. I talked about it a lot last year. Last year Israel is the second leading exporter of technology. That's trading near an all time high. You could also throw up E W Y as I speak. That gets you exposure to Samsung Taiwan semi in Asia. Remember the supply chain is domiciled there as well. And then not an emerging market but developed international is really strong as well. You could look at the EWJ and you'll see the strength of the represented right now in Japan there's opportunities to go outside the US for the very first time in years.
- [39:43]
F
The same factors that we were talking about at the beginning of the show about favoring the rsp. We didn't really talk about small caps but those are. Those are sectors where the industries that are represented there are also represented in international and emerging market. Which sectors am I talking about? Industrials, financials, energy, material. They are heavily expressed relatively relative to the relative to the US market in international developed.
- [40:06]
B
So did you do any channel checks on your recent trip?
- [40:11]
F
Boy, that's going. Wait. Do you remember what that reference you just made is? Is. Do you remember where that came from? I'm not going to embarrass myself yet. I'm not going to embarrass myself. You've got to work for it, Jason.
- [40:21]
B
I don't know but. Oh dude, just answer.
- [40:23]
F
He gets the. He gets.
- [40:24]
B
Oh, it was JCPenney. That worked out well.
- [40:26]
F
Yeah. What about this actually did win the 2016 trading competition on JC Penning. My problem was going back into it in 2017. Your question on channel checks.
- [40:38]
B
We're good. Santoli's next. Senior markets commentator Overtime co anchor Mike Santoli joins us now. This midday word means kind of obvious a backward Looking retail sales report to Steph's point earlier is just not enough to derail all that's on the come yet for for bulls I would say.
- [41:16]
G
Not derail it but the bond market's paying attention. Yeah Fed expectations windows open wider to more than two cuts at this point and Home Depot is the the best stock in the Dow. So basically everyone's executing the oh let's go to the rate sensitive stuff that could carry us for a little while not we are about to race ahead in a in a sprint in the consumer part of the economy. I still think there's massive confidence and conviction in corporate capex in earnings in a lot of the elements that have been working right now but no not on a wholesale level. This market just sort of escapes constantly and slips these blows through dispersion and just to finding some other theme that's underexploited and that's what it's it's been doing today it still feels like a market where something has to be sold for something else to be bought because exposures were high coming into the year for most of the year sell the few to buy the many and now equal weights looking a little bit overbought and so we'll see how the market digests all these things. We've had great flows and the S and P this will be the 13th day out of the last 24 that the high in the S and p is above 6,950 and we've yet to close above 7,000. I expect it to happen given breadth has been strong but we'll see if.
- [42:25]
B
Transports and industrials start to have a problem on economic concerns then the market's going to have a problem.
- [42:33]
G
That's right. I mean and I don't even think people should be too concerned about the economy. It's just about did we, did we kind of front load some of the benefits of what we expect in terms of you know just how strong the economy is going to be? I think that's really the equation especially as a point yesterday the industrials sector of the S and P has a higher PE than tech.
- [42:53]
B
Okay, I'll see at 3. That's Mike Santoli set up. It's coming up next.
- [43:17]
C
Welcome back.
- [43:18]
B
Want to highlight an upcoming event for CNBC Pro Live wealth for Women is happening on May 28th at the Nasdaq market site in New York. It's all about financial strategies for women who are investing for themselves and for others. Featuring our top contributors including our very own Stephanie Link. For more you can scan the QR code on your screen or visit cnbc events.com wealth for women we are back with the setup. Next. Stock, some earnings. We do have to set up Gilead after the bell today. Joe t has that.
- [44:06]
D
That $78 EPS 7.7 billion in revenue. You want to look at the prescription HIV drugs, see what the uptake is here. Stock is up 20% since January 20th. Be a little bit careful here. It is somewhat parabolic in the nature of the it's traded last Zoetis is.
- [44:23]
C
Thursday staff well, I'm a little nervous about this one. The only good thing is it's actually down 25% and low expectations. This company is on a poor job in terms of execution in the face of an exploding animal health environment. Elanco now trades at 27 times. This thing trades at 20. And I think their product setup is really a lot better. So hopefully they can execute. If they do, I think the stock can go much higher.
- [44:47]
B
Vertex Thursday after the bell. Jimmy, take that one, please.
- [44:50]
F
Yeah, very good company. And what we're looking for here is what is the script? Growth in journey backs, their pain medication, a little price, see here in the low 20s. But that's been a multiple that it stayed at for many years. And I think it'll continue.
- [45:02]
B
Toast Thursday after the bell.
- [45:05]
E
Josh, I think the results will be great. I just don't know if anybody's going to care. This was one of the names I bottom fished in late last week. Look, the platform has already surpassed 2 billion in RR. About half of that is payments AR and they're up to 156,000 locations. That's restaurants, which is up 23% year over year. I think the momentum continues. The report will be great, but the reaction I have not. I'm mystified at this point.
- [45:38]
B
Okay, PG&E Jimmy, that is Thursday before the bell.
- [45:44]
F
Yeah. What should have been a boring utility got unnecessarily exciting last year. Those horrible fires out in L A. People were concerned that PG&E was the culprit. It was not. However, there are some financial implications and we should get some insight into that on the quarterly call. Stocks in an uptrend. I'd like to see it take out 17. I think it will.
- [46:03]
B
Okay. One of Jimmy's favorite favorite stocks.
- [46:06]
F
Oh, yeah. When it's in no man's land.
- [46:08]
B
Thursday after the bell.
- [46:10]
F
It's in no man's land. And I say that because I trimmed it, I don't know, maybe three months ago at 126 shot up to 130. Now it's down at 116. I'd love to buy back what I sold below 110. It did that. It was down there for just a nanosecond last week. But at 116, I'm not going to sell it here. I'm not going to buy more. Let's see what happens with earnings and I'll decide what to do with it after that.
- [46:33]
B
All right. You need another water before we're done? Are you good? Julia? He needs another one.
- [46:38]
F
Let's do a channel check on the water.
- [46:39]
B
We got final trades. It's a lot to get through that with no water for you. We're back after this. All right, three o' clock Eastern on the closing bell. I hope you'll join me. Liz Thomas, Lauren Goodwin, Oswat Dumotorin, the so called dean of valuation. So we all talk to him about with as we said, Dow record high, equal weight, record high, mega caps. A little mixed and he's got thoughts on everything, which is great. Josh Brown, final trade.
- [47:07]
E
Uber just went live with their Apollo go Robo taxi in in Saudi Arabia today. This is my, my stock to go.
- [47:16]
B
All right, Jimmy Waterworks, what do you got?
- [47:19]
F
I'm well hydrated. Oracle up three days in a row. Even if it's a relief rally, I think it's got more stuff.
- [47:24]
D
Dow Chemical, self help, Goldman Sachs to a thousand.
- [47:28]
B
Okay. All right, well watch that. I'll see you on the closing bell. The extension change begins 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.
- [47:45]
A
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast and as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the 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 halftimereportdisclaimer if you your parent or spouse served in the military, you could join our family. Our members saved an average of $70.
- [48:26]
C
A month on auto insurance when they.
- [48:27]
A
Switched tap the banner or visit usaa.com join today to check your eligibility restrictions apply.