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Halftime Report
Trading the Stormy Stock Market 3/21/25
00:42:58
Scott Wapner and the Investment Committee discuss the stormy stock market and how to navigate all the uncertainty. Plus, Josh Brown gives an update on why he’s getting rid of one stock in his “Best Stocks in the market List” And later, Tanaya Macheel joins us with the latest news ahead of the SEC’s first Crypto Task Force meeting and what it will mean for the space. Investment Committee Disclosures
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- [00:00]
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- [01:28]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Hi, welcome to Halftime. I'm Scott Wobner. Front and center this hour, the stormy stock market and how to navigate all of this uncertainty. Again this week we will trade it with the investment committee. Joining me for the hour today, Joe Terranova, Steve Weiss, Bryn Talkington, Josh Brown. Good to have everybody with us. Us we will check the markets we're pacing. The Dow is for its worst month Since September of 22s and P& Nas their worst month since November of 22. You get the story. I mean, it's been another week where uncertainty reigns supreme. Nike this morning giving terrible guidance or yesterday FedEx cutting its forecast transports down five weeks in a row. Gold's been surging lately. You've got tariffs looming. I don't know if that's going to be a liberation day for stocks, I'll tell you that. But we'll try and put it all in perspective. Brian, what's Your take here after yet another week that leaves us feeling a bit uncertain about where we're all heading.
- [02:37]
Joe Terranova
I agree with you. I don't think April 2nd is going to be a liberation day for Scott stocks. And so I think that tells you that we are going to be rangebound into how much we can actually move higher. And so I think once again you look back at 2018, we saw eight drawdowns in 2018 between 5 and 15%. Half of those were between 10 and 15. Yet the year ended down about 5%. And so I think you could easily, not that it's a perfect analog but very similar because a lot of tariff talks the Fed was inside of 2018. And so I think investors just need to underwrite that. This is going to be a volatile year and there's, there's no guarantee stocks go, they don't go higher every year. But that volatility creates opportunities and that, that's the way I'm seeing this year. But I definitely, if you look at a Nike, I think you want to be very judicious about. Nike has their own personal issues, then they have tariff issues, then they have China competitive issues. So I think when you're looking to take new positions or add to positions, understand the backdrop and the headwinds that a lot of these US companies are going to face as we have so much manufacturing that actually happens over fees.
- [03:47]
Scott Wapner
Joe, you want to, I mean you look at bank of America's flow show data today, okay, biggest weekly inflow into stocks of the year. So people are buying the dip, they're playing for the bounce. What would be your case to make of why you should buy stocks now? If you look at Nike and take it in total with the other consumer facing brands that have issued either warnings or caution. If you look at the move in gold, if you know that April 2nd is looming and looming large like a storm blowing in from the distance, what's the bull case for buying stocks now?
- [04:28]
Steve Weiss
Buying stocks immediately this week. You have to believe that over the long term and when I say the long term, over the next 6 to 12 months you are actually going to implement tax policy. You have to believe that we will not enter a earnings recession, that in fact earnings will stay strong. You have to believe that the tariffs were nothing more than a negotiation. I will say this, I thought last week was the week that we would bottom. I'm somewhat discouraged by the price action this week. As Brin highlighted, we are clearly in a range between 5500 and 5700. We're in a five week deleveraging period that has not ended. When you're looking at the Max 7 and technology names and I think something very critical, FedEx, Nike, Lennar, all saying the same thing. And here comes earnings season and what has been the one supportive element in 2025 earnings. And I truly believe the earnings season is not going to be about what you delivered for earnings and revenue growth. It's going to be about, hey, our guidance is it's not going to look so good. I think earning earnings estimates have to come down. So I still think we've got here over the next 30 days a very challenging environment that probably means a lot of capital goes to the bond market.
- [05:46]
Scott Wapner
I think their expectations are already coming down.
- [05:49]
Steve Weiss
Not enough, not anywhere near enough. I think the totality of what you're going to hear in the upcoming earnings season is going to be just like the rest of this year has been a recalibration. I think that's going to be a recalibration in terms of what earnings are going to look like.
- [06:04]
Scott Wapner
Okay, so if I said to you Weiss, what's, what's the bull case? I hear from people? Well, the bull case is that the Fed put is alive and well. And that's the feeling that Powell, the chair left you with this week that if the economy we're going to tolerate a little higher inflation and there's no reason why the stock market can't tolerate a little higher inflation, the Fed is not going to tolerate a deteriorating economy and labor market and at the first whiff of real trouble, they're going to cut and they kind of made that case. I mean that's the belief that people have. Is that strong enough to offset the other weights that the headwinds in our faces?
- [06:48]
Bryn Talkington
No. And the reason is I think that was a very optimistic view of what Powell laid out. And there are conditions to that lead inflation run a little hotter. We've seen that before and that's fine because we're at a level now where we can see an uptick inflation. We just don't know how big that uptick is going to be. And I'm cautious on that being at a level where the Fed can cut. So what he's saying though is that we will cut if things get out of control. He's now looking at the stock market in that case, right? He's looking at the economy.
- [07:24]
Scott Wapner
Well, he's looking at the credit markets. They're keeping their eyes, keeping their eye on, on credit spreads.
- [07:29]
Bryn Talkington
Yes.
- [07:30]
Scott Wapner
Money markets, as the chair mentioned himself when they do the easing off of the qt. Right.
- [07:35]
Bryn Talkington
Because that's an indication of the economy going lower. But you know, we've had spreads have been so tight for so long. See a little widening is just natural.
- [07:44]
Scott Wapner
Well, it raises an alarm bell. Right. You don't want to see the west they start widening. You don't want to see them get wider.
- [07:49]
Bryn Talkington
And we're not seeing a widening now or defaults where you have that. So. So I just don't think there's any reason to go into market. Even if we get the April 2, say April 2 is not as bad as we think it will be or something will be, you still have what it's going to do to the economy, what inflation do to the economy, what you know, ongoing trade wars will do the economy. Don't forget. That's just what we're going to say on April 2nd. Stop the responses. So. So I just don't think that there's any real reason to put money to work here. Any sale I've made has been a great sale.
- [08:23]
Scott Wapner
Yeah.
- [08:23]
Bryn Talkington
And anytime I thought of going in, I'm glad I didn't.
- [08:28]
Scott Wapner
You just don't know if you know it is going to be more bark than bite. You're not going to know until the second. What, what we do know is that, Josh, the economy is slowing. There seems to be no doubt about price that. And Jeffrey Gundlock told me yesterday that he thinks it's going to get worse. Let's listen. Thank the chance of recession is higher than most people believe. I actually think it's higher than 50% coming in, you know, in the next few quarters. So Josh, that's Gundlock, he said, you know, when I, when I followed up on that, well actually 50 to 60% is what he sees. He says they've been decreasing their leverage at double line to the lowest ever that they've had. He does think that high yield spreads are going to widen more. He talked about what he prefers in terms of bonds and he also doesn't think that the correction in the multiple of the market is finished.
- [09:28]
Josh Brown
Yeah, I think, I think it's important to listen to Gundlach on that spreads comment because if you think that the next shoe is about to drop, that's probably where it drops. We really have seen very, very tame spreads. We really haven't seen anything blow out yet. We haven't seen any bodies float to the surface. And that's like the thing that's been missing. And by the way, it was missing in 2022, and I would just remind you, Judge, all the bond guys were saying 75% chance of a recession in 23, 100% chance. So, you know, we've had these bouts before where it just looks all but certain. So it's important to just understand, like people can change their minds and you have to take recession calls with a grain of salt, especially when they're coming from the corner of the market where they come most frequently. So I'm trying to keep an open mind that we don't necessarily have to have a recession. But I want to agree with what Joe and Weiss said about the earnings problem because forget about Nike. Nike has been a basket case. It's had three negative years in a row for the first time ever. And they have their own problems. And I don't think the economy is going to bail Nike out. Look at FedEx, this one is meaningful. So they beat on revenue 22.2 billion versus 21.9 billion expected. But they miss on earnings. Capital spending forecast reduced to 4.9 billion. But then they lower full year guidance. And this is now the third consecutive quarter that FedEx is lowering their full year guidance for this year that we're in right now, 2025. And if you, if you read the stories, you know, it's very obvious why they had this carve out from the last bout with tariffs where there was this de minimis exemption for low value shipments. We don't know if that's going to happen this time. That was revoked and maybe they get it back. It's like day to day. If you told me tomorrow they're going to get this de minimis exemption, FedEx probably goes up 11% give you tell me tomorrow the White House says in no uncertain terms, nope, you're not getting it. It could have another 11, 12% to drop. How do you expect the CEO of FedEx to forecast anything? Speaking certainty.
- [11:49]
Scott Wapner
I'm going to interrupt you for a minute because I do. Josh, pardon me, but I want to go to the White House. Our Megan Casella. President Trump is making some new comments regarding tariffs. So we'll get that Now, Megan, what are we learning?
- [12:00]
Megan Casella
Hey, Scott. So a big moment here in the Oval Office. President Trump is speaking with reporters and taking several questions on trade as well as other topics and on tariffs for what might be the first time. By my count, he is offering, he is appearing to offer some flexibility when it comes to those April 2 tariffs. He was asked specifically about whether he will be offering any exemptions or exceptions. He said that many people Many companies are coming to him and asking for that. And he referenced how a couple of weeks ago he offered the auto company some relief when it came to Canada and Mexico. When it comes to April 2, he said, and I quote, there will be flexibility. So he was emphasizing that he's not changing his mind on the tariffs themselves, but he said for what I think is the first time that there will be flexibility when it comes to exemptions and, and exceptions. He was also asked a couple of times about China, specifically whether there was anything that China or Chinese President Xi Jinping could do to either head off additional tariffs or reduce the 20% tariffs that President Trump has so far added. He said we can talk. And he also said he'll be speaking to President Xi and that they have a great relationship, so not committing there to making any changes on the China front, but also again, opening the door and allowing potentially some negotiations, some flexibility on China as well. So a big moment here. I will say that for company, for industries and for investors, this should come as a major, I guess, sign of relief or if perhaps that's too premature, at least a window of opportunity here to potentially see some changes between now and April 2nd. Scott?
- [13:27]
Scott Wapner
Megan, thank you. Megan Casella at the White House for us, Weiss, I mean, that's why we raised the issue of whether, you know, the bark is worse than the bite, because you just don't know whether a social media post which says liberation Day is coming, these tariffs are coming. But then, as Megan was reporting to us, the idea that the president says there will be flexibility, quote, unquote, we can talk, you're just not really going to know. You're not until the second, which in some respects I would guess puts a paralysis, if you will, on investing decisions.
- [14:07]
Bryn Talkington
Not only on investment decisions, but on capital expenditures from companies. So you could say, okay, maybe the market's got it wrong, maybe it's too pessimistic, but ultimately this is feeding into the economy as markets off the lows, by the way, I know nicely off lows. I've been watching there's a stock I want to talk about there which has been doing quite well. Just do it by Meta. So Meta seems to abide. If you take a look at it yesterday out of the gate, it was up over 4%. Now when the market sold off, came down. But but we see the constant move higher or lessening losses today. And Met is front and center. The other one that is is Netflix. Netflix continues to act well. So those are sort of somewhat as much as you can be in snow, insulated from the tariffs, insulated somewhat from the economy. Don't forget Netflix that you can go to their ad supported model. You're not getting rid of your streaming because you've cut the cord already. So you know, and the other factor is, look, I think there's too much focus on will we be in a recession that you can wait to decide that when you're in a recession, you come out of it. It's what's the direction is the direction of a higher economy or a declining economy. That's what I'm focused on. That's what I continue to see. And earnings that we're seeing today from the retailers and what we've seen are just a microcosm. Expand that to the S and P at large. So that's why I'm not.
- [15:32]
Scott Wapner
Well, I mean Joe, China, China tariffs are the, the greatest wild card in this whole conversation because of the, the importance that China plays in the global economy relative to the companies that we have here that rely so heavily on it.
- [15:45]
Steve Weiss
Yes.
- [15:46]
Scott Wapner
Like an Apple. Let's do an intraday of Apple. Just I want to see if there is an intraday move on the headlines. You can see the NASDAQ's bouncing. Theoretically you've had a move in all parts of tech. There's Apple for example, which gives you a good idea of maybe some of the relief from the commentary out of the Oval Office today.
- [16:06]
Steve Weiss
So I think one of the reasons why that bank of America flow study shows that people, investors continue to buy equities is I really think when people think about tariffs, they view tariffs as nothing more than a transitory variable in which it's a negotiation. I don't think people actually believe that these tariffs are going to stay in place for an extended period of time. And think about it, two of the largest exporters to the United States, Germany and China, both of their equity markets are up double digits year to date. So I think there is this skepticism and the overwhelming consensus believes the tariffs are really not going to be put in place. And if that's the case, okay, then you could look at equities here and you could potentially find some opportunities. But I'm just concerned that we might have already done the damage as it relates to what we're going to hear in the upcoming earnings season.
- [17:01]
Bryn Talkington
I don't see what you're saying. Are you saying that even if tariffs come on, if they get applied to the imports, that they'll go away, they're temporary?
- [17:10]
Steve Weiss
I just said that.
- [17:11]
Bryn Talkington
Yeah, well, I disagree. And that's fact. In fact not what, what's not occurred. If you look at the tariffs that we put on China, they came in during Trump's administration and they continued through the Biden administration.
- [17:22]
Steve Weiss
I understand that. I'm back from Florida. I'm nice and relaxed. I'm not looking to argue. I'm telling you just listen. I'm telling you the reason why I think people are still buying equities because I think that the consensus thinks, the consensus has skepticism that these tariffs are nothing more than a negotiation and temporary that they're not going to.
- [17:43]
Bryn Talkington
I want to argue this is not an argument and I suggest you go back to Florida if you don't want to have any discussion. But here's the story. The story is you said tariffs won't be permanent. Tariffs.
- [17:54]
Steve Weiss
I'm just talking to you today.
- [17:55]
Bryn Talkington
Tariffs have been permanent on China. Number one, people aren't buying stocks. Stocks are continuing to go down.
- [18:02]
Steve Weiss
Steve, we just did a Bank of America study that showed fund flows, people buying stocks like where is the show?
- [18:07]
Bryn Talkington
Where do you see the market?
- [18:10]
Steve Weiss
Listen to the show.
- [18:11]
Bryn Talkington
Where do you see them?
- [18:11]
Josh Brown
I know the market.
- [18:12]
Bryn Talkington
Show me what the correlation is between the fund flows so why are we reporting it and the marks because so.
- [18:18]
Steve Weiss
That when you get what you should have, you should have said I good.
- [18:22]
Josh Brown
Josh, I want to ask Steve. So I'm a little bit on Joe's side where I think the market is looking at tariffs. Look not in every individual stock but just generally speaking as right now a temporary annoyance similar to like currency fluctuations. Like we get it, it's not going to be great. It's a lot of earnings uncertainty for this particular quarter but but maybe not a risk to full year numbers yet. And my evidence of that is like why is Apple not 180, why is it 214 if we really think this is going to be a full year phenomenon? I also think there's some real politic going on and I'd love your take on it. Like Elon Musk makes half his cars in China and China's his biggest market to sell into. Does Trump seriously want a torpedo Tesla's auto business over this for the full year? It just seems unlikely that we are fully pricing in these market believe what.
- [19:21]
Scott Wapner
That'S what these charts would suggest wise is there's going to be some level of detente and you're not going to.
- [19:28]
Josh Brown
Have a six month vix. Look, I'm not pricing this in for a year.
- [19:32]
Bryn Talkington
Okay but let me come back at it this way. First of all I agree with what you're saying. Maybe the magnitude, like we saw 200% tariffs, we knew that wouldn't stick. Right. 25% tariffs aren't going to stick. But let's take a look at, at, at Booz Allen, for example, right. People started buying, they said, oh, this is overstated. So they took the stock up from 110 to 120. Right. So they discounted completely. Then what happened, then what came out from DoD was that the top 10 firms have to talk to us about every contract they have and the stock traded down 20%.
- [20:08]
Scott Wapner
But isn't that more representative of those types of stocks that were facing that kind of headwind?
- [20:15]
Bryn Talkington
It is representative.
- [20:16]
Scott Wapner
If I said to you, okay, let's assume that what the President says, there will be flexibility. Let's say that there is flexibility. And we don't get. I know you know, you, you don't believe that, but let's just say that there is the flip. Well, I can see it on your face.
- [20:33]
Bryn Talkington
I'm saying I don't believe anything Trump says because he's shown not to live.
- [20:38]
Scott Wapner
Well, let's say in this instance there will be flexibility as it relates to China. If I told you that that was the outcome, the market likes the prospect of that happening. Do you buy the, what was the magnificent. Too mediocre now 7 because those are the stocks that are moving the most.
- [20:58]
Bryn Talkington
That's always been my case by the Mac 7 because they're insulated with the exception of Apple. I'm not buying Apple. I sold Apple. But I just mentioned matter. You know, there are some other issues in there that, that relate solely to the, to certain stocks like Google. Google is losing share in search so you can't buy them blanketly like you could a year ago or two years ago. So I, so I think it's really bottoms up. It is syncretic risk in each stock that you have to take hold of. But, but you know, you take a look at Europe, Europe is preparing, take a look at Canada. They are preparing for some tariffs to be, be permanent. But what they are preparing for is a, is it is an environment that is encroaching upon them in terms of not being very stable, that they don't know where the US is going to go. So it's forcing them, for example, to approve $1 trillion spent in Germany. It's not just defense, but that's why.
- [21:53]
Scott Wapner
People, that's one reason why people think there's better stock market returns coming out of Europe.
- [21:58]
Bryn Talkington
Right. You can't have both Germanies you can't say that the U.S. hey, we're just getting on tariffs and have Europe, you know, do what we're doing. And by the way, on shoring has been a trend since COVID It's been a monster.
- [22:12]
Scott Wapner
I understand that, but why do you think the president is talking about flexibility as it relates to China? Because China is a much more important market in many different ways than the whole of the European continent is.
- [22:24]
Bryn Talkington
He's responding to what people have said to his response, what, what Musk is whispering to him. We'll see if it happens, right? There's lots of things going on there. I mean, you given, according to the Journal, given Musk access to our plans against China, defense plans. So obviously Musk has him wrapped around his finger. So maybe he does protect him in China, but it doesn't mean the Chinese people will still be buying the cars.
- [22:49]
Scott Wapner
All I know, Brin, is that, you know, the market's reacting to the headline that, that Megan Casella brought us. If you look at, you know, some of these stocks have just been decimated from their highs in video, down 20, almost 25% from its high. Alphabet's 21, met is 20, Amazon's 2020. The stocks have been in full correction in some cases bear market mode, like Tesla, for example. But if I told you that the worst fears of a trade war with China might not materialize, would you feel better? Is that a reason to write back to the beginning of the show? Is that a reason to be bullish and buy stocks? This too will pass. This administration doesn't want to tank the stock market for the entirety of their fourth year run.
- [23:36]
Joe Terranova
Absolutely. And first of all, the US is like a 10 times as big as a, as a, as a Titanic. And so China is incredibly important to us and we are incredibly important to China. And so I agree. I think you said it, Scott. Maybe Josh said if we really thought that this was going to manifest itself, Apple would not be at 214. They make everything in Foxconn. Right. And they can, they can say they have new plants in India, except, etc, the majority of their stuff that's imported back to the US Is made in China. And I think the market would sniff that out. I believe that President Trump wants a deal. And so I think that China is 10 times more important than Canada. Europe is about Naito and about them paying their fair share. And so that's where you're obviously getting Germany having much more defense spending, which is probably like two decades late. But that is a great thing for the west overall. And so I think that as an investor, understand that there's going to be a lot of curveballs here. I don't think the President is being dogmatic. I think he is being pragmatic. He wants a deal, but the deal within each country is incredibly diverse and distinct for different reasons. But I think getting clarity on China and Mexico as well, because we do manufacture and receive so many goods, are two of the most important countries to have that reconciliation filed then.
- [24:56]
Scott Wapner
By the way, Josh, Tom Lee, he thinks you get that tariff stuff out of the way on the second and he's going to join me on closing bell. We'll get more of his views and certainly in more detail that you can have a rally. The other question is we've had this 10% pullback in the S and P. You've had a pullback as well in the forward P E of the S and P from 22 and a half to 20 times. Maybe that's a reason to be bullied. Bullish. I would ask investors have. Have multiple. Has the multiple on the market corrected enough?
- [25:26]
Josh Brown
Yeah. And by the way, for Joe and Steve, I'm still in Florida and totally ready to fight anytime. Tom Lee told us in the summer of 2016 when people were saying the same exact thing they're saying now, why would I buy the market with. With this Brexit vote coming up? Well, who would be stupid enough to want to take risk? The entire European Union is about to come apart. Tom Lee was saying, no, no, no, you don't understand. I don't care what the outcome is. All the stock market wants is an outcome. And actually the outcome was a shock. It was negative. They voted for Brexit. You know what the stock market did? It ripped for the next six months, right through the first Trump election, the footsie. The British stock market made record highs shortly after that happened. So I think Tom is on to something. We have no idea what April 2 is. They could change their minds six times between now and then and four times the next day. We just don't know. I do think the market is waiting for there to be an answer. Even if it's a quote, unquote, worst case scenario. It's like, all right, fine, now we know what we're dealing with. We're not happy. But, like, the mystery is put aside. So I don't, I don't know that I would want to bet against what Tom is saying. I don't want to bet on it. But you asked the question, like, why would you buy the market well, that's a pretty good reason. This big bad event that's like 10 days away might, might come and go and people might say, all right, thank God that's over. Next, let's buy meta.
- [27:01]
Scott Wapner
Flip the script. You flip the script, you sell the rumor, you buy the news.
- [27:05]
Bryn Talkington
But I, I don't disagree with Josh is saying. And in fact we see that repeatedly, you sell the positive news. Right. And you buy the negative news event. So I don't disagree. My focus is a little more past that, which is on the economy, which is on earnings. So this is a great trading market, by the way. So I agree with that.
- [27:25]
Scott Wapner
All right, let's do this. Let's. We're break in. We have calls of the day coming up. We've got some crypto to talk about, which we will certainly do and some new reporting as well on that Alphabet whiz deal. Back after this. 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. Based on the February 2024 Nelson Report.
- [28:09]
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- [28:40]
Scott Wapner
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- [29:44]
Bryn Talkington
I did and I would have bought more Goldman as well, but it's a very full position. Look, bank of America has been a relatively small position for me for a while. I've owned it for a long time. But I look at deregulation is definitely going to impact the financials and the banks. So I'm not looking for them, as I said before, to lower their underwriting standards and I'm not looking for the loan book to grow. I'm actually looking for it to shrink a little bit. However, I do believe that they are so well capitalized that they will buy back more shares and that these stocks are cheap and could essentially be a safe haven, you know, because that all the big risks are in the private credit portfolios. They're not sitting on the major bank balance sheets.
- [30:30]
Scott Wapner
Josh, I want to talk to you about a couple of stocks that are doing quite well of late. The exchanges from the group ice, record high today, cme, a record high a couple of days ago. You've now taken them off your best stocks in the market list, presumably because they've had the move that you're on.
- [30:50]
Josh Brown
No, they're on. I apologize for the confusion. These names are on and staying.
- [30:54]
Scott Wapner
Oh, they're still on the one, yeah.
- [30:56]
Josh Brown
The one that's fallen off but I'm still long is nasdaq. So of the three major exchange stocks, wouldn't you know it, I bought the wrong one. I'm up in nasdaq. I've owned it for a while. NASDAQ really needs for there to be listings. That's like the key to that business. CME and Intercontinental ICE, these two stocks are absolutely on fire. They're in the top 10 performers in the S&P 500 year to date. CME is up 14%, ICE up 16%. These companies thrive on volatility and heavy trading volumes. And I think all of us could agree that is the environment right now. Volumes are going nuts and volatility has not only spiked, but it's remaining high. And that's the environment where these stocks outperform not only the financial sector, but outperform almost the entire market at this point. From the S&P 500 peak on February 19, Judge, the S&P is down 8.7%, CME is up 6%, ICE is up 4% in that time. So if you're looking for a safe haven within financials. And you think this volatility stays with us throughout the spring and summer? I think these stocks remain bid. They're both on the best stocks in the market list.
- [32:12]
Scott Wapner
All right. With me.
- [32:14]
Steve Weiss
I agree.
- [32:14]
Bryn Talkington
I agree.
- [32:15]
Steve Weiss
You're with me.
- [32:16]
Scott Wapner
Talk to me.
- [32:17]
Steve Weiss
So I agree with that. I think you could add Interactive Brokers to that list as well.
- [32:21]
Scott Wapner
Well, you own CME and Interactive.
- [32:24]
Steve Weiss
Yes, Interactive Brokers has cheapened up significant. I just think the trading activity is going to stay strong. Stevens buying bank of America. Let's remember you have Merrill lynch embedded in there as well. So Merrill Lynch, I think is on par with Morgan Stanley and Goldman Sachs. I think people when they think of bank of America don't really think about that. But Interactive Brokers is cheapened up nicely. It's running right above the 200 day moving average. I mentioned it last week and probably in the next couple of days I'll take a position there.
- [32:51]
Scott Wapner
You guys need to hug it out.
- [32:53]
Bryn Talkington
We always hug it out.
- [32:54]
Scott Wapner
He came back from Florida early to, to do us a solid.
- [33:00]
Bryn Talkington
Yeah, I thought you guys trained for the fight.
- [33:03]
Scott Wapner
Courtney Reagan has the headlines for us. Hey, Courtney.
- [33:06]
Joe Terranova
Hi there, Scott. Ukrainian President Vladimir Zelensky said a UN Peacekeeping mission is not an alternative to either the deployment of foreign troops in Ukraine or security guarantees to end the war against Russia. In a joint press conference today with Czech President Zelensky added the United nations would not be able to protect Ukraine from Russia returning and occupying the country once again. Iran's supreme leader warned Friday that U.S. threats against his country's nuclear program, quote, will get them nowhere. The warning from Ayatollah Ali Khamenei, which came during a live televised speech, comes as the Iranian foreign minister said Thursday it was still weighing its response to a letter from President Trump reported by Axios that gave Iran two months to reach a nuclear deal. And President Trump said today the Small Business Administration will take over the federal government's student loan portfolio from the Department of Education. It comes as the Wall Street Journal reports the SBA is planning to cut more than 40% of its workforce as part of an agency wide reorganization. Scott, back to you.
- [34:06]
Scott Wapner
All right, Court, thank you very much for that, Courtney Reagan. Up next, the cyber gold rush on full display this week with Google making its biggest acquisition ever with some new details on how the Wiz deal went down. Do that next. 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.
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Scott Wapner
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- [35:07]
Scott Wapner
All right, we wanted to check in on some cyber stocks. They have been in the mix of late and they've gotten off the mat a little bit today for sure. Zscaler is now positive. Crowdstrike was lower than it is now. It's been a big week in that space, as you know, given Alphabet's $32 billion deal for Wiz, its largest acquisition ever. And one interesting sidebar is how the whole thing came together after Google Google's initial offer for 23 billion was rebuffed over the summer. We're learning some more details on that. Back in January, Wiz hired its first ever cfo, a man named Fazel Merchant, who brought with him many years of experience in the capital markets. He kept relationships with top bankers and had a track record of high stakes deal making. He was heavily involved in negotiating the transaction when DirecTV was sold to AT&T back in 2015 and a year later did the same while at DreamWorks in its deal with NBCUniversal. One thing that might have helped this deal cross the finish line, according to a person familiar, is that merchants secured term sheets from several reputable investors at lofty valuations. And he was also able to attract interest from other strategic parties considering their own bids. In other words, key leverage in negotiating the deal with Alphabet. He the result, $9 billion more than initially offered and the highest multiple ever paid for a company of Wiz's size. Just shows you how much demand there is going to be. There is now and will still be for cyber related companies. They've been volatile, Josh. As you know, Morgan Stanley today says guess who's back. Against a volatile market backdrop, Security looks poised to regain its safe haven status. This was a watershed moment, maybe this week in that whiz deal, Google willing to pay as much as it did. It just shows you why there continues to be so much interest in these names from investors, including you.
- [37:06]
Josh Brown
Yeah, there's actually a, there's a subsector or perhaps you'd call it an industry group within S and P technology called infrastructure software stocks. And if you look at that basket, 50% of them actually have gains on the year. Again, keep in mind that's in a tape where the XLK is, is is the most negative sector other than discretionary. So these stocks have bucked the tech sector. The median year to date return for those infrastructure software stocks is flat. Crowdstrike, which is my pick in the group, is is the third best performer among that entire cohort. It's up about 7% year to date. And as Brin and I and many others on the show have been saying for about four years now, this is the only line item that is not up for discussion when the board of any Fortune 500 company, any sovereign, any municipality takes a meeting about where they can cut cost, cut costs. This is like the most sacrosanct part of the tech stack. I don't see what makes that change anytime soon. This is literal out of business risk if you get hacked badly enough. So yeah, I get the multiple and I get why these stocks have looked so good relative to their peers.
- [38:21]
Scott Wapner
Brin, you've, you've expressed your view through the bug ETF rather than play individual names. But really this week was pivotal I think in the overall belief despite the volatility of what these stocks can continue to do.
- [38:39]
Joe Terranova
Yeah, and just to put some numbers on Bug to echo what Josh said, Bug is up for four and a half percent year to date. So, so, so nice, nice. Contra return to the broad market, I will say this team at Whiz, it's really exceptional. You know, they sold a company, a cybersecurity company to Microsoft about 10 years ago and then they only built, they only created Whiz in 2020. And so I think this is what happens when you have this exceptional team of expertise and this is a secular trend. And I think what would be interesting to see if the deal goes through. I mean Wiz's wizards current client base includes Oracle, Microsoft, us, Azure. And so if they're able to execute, I feel like this will be the most important. I guess I get it's the most expensive. I think this will be the most important, important acquisition from Google since double clicking YouTube. So I think if it goes through, I think it could be a real game changer and will be really instantly accretive to their ability to be able to bring in new business.
- [39:37]
Scott Wapner
All right, we'll take a quick break. Santoli, he's on the other side with his Midday word. We're back right after this. All right, senior markets commentator Mike Santoli, he is at the desk right now for his middle midday word. The midday words. There will be flexibility from the president Seem to have soothed the market a bit.
- [40:01]
Mike Santoli
Yes. Actually at 10am I said, look, you have to have it within your probability set that the president sort of pulls the punch to some degree on tariffs, not because you have some kind of insight that that will happen or be likely, but because you never know. And uncertainty doesn't mean we should keep this in mind. You have peak uncertainty in every respect, but uncertainty doesn't mean bad things will surely happen.
- [40:24]
Steve Weiss
So I think it was a good.
- [40:25]
Mike Santoli
Test of where the market's head is at. What I find interesting is if I look at the biggest losers on the S and P, let's say on one month, we basically peaked a month ago. It's not the list you would say, wow, that's all about tariffs, right? I mean it's a lot of airlines, it's a lot of consumer linked travel, things like that. Obviously some, some big tech that's just stumbled or earnings, you know, losers. My point is that even though tariffs is kind of like the major psychological barrier for people to get more comfortable, it's not to me something that the market has principally been contending with. So, you know, I think it's a little more of a complex setup. I keep pointing to last week's low as like a credible or plausible low for this correction, but not necessarily one where you say close your eyes and buy. That was the sure thing.
- [41:11]
Scott Wapner
I still feel like you have the, you know, the potential of 10 days of paralysis. Right. Until you actually nobody have a high.
- [41:19]
Mike Santoli
Conviction call on exactly how this breaks. And so, yeah, I think it's going to therefore, you know, sort of be capped and keep, you know, probably just kind of like dog on a leash running in either direction.
- [41:30]
Scott Wapner
Yeah. All right, I will. I'll see you on closing bell. Good stuff. Mike Santos straight ahead. We're on bitcoin watch yet again. The SEC's new crypto task force is holding its first ever regulation roundtable today. Just a few moments from now, Tanaya McKeel is going to break down exactly what to watch for next. We're back. We are watching bitcoin today yet again. The SEC's new crypto task force gets ready to kick off today. First ever regulation roundtable today. McKeel joins us now with what we can expect and what you'll be watching for.
- [42:03]
Joe Terranova
Yes.
- [42:03]
Megan Casella
God, it's the first In a series of discussions, the task force is hosting and today's is about defining the security status of crypto assets. This issue is at the heart of the industry's problem with the former administration's sec. It targeted many companies for their involvement with crypto, alleging most coins were unregistered securities, but failing to give clear guidelines to follow to avoid being targeted. This could be most interesting for ether ETFs. The SEC already said last month meme coins are not securities. The appetite for ETFs that's been tepid compared to Bitcoin ETFs. And one of the big reasons is the inability to earn a staking yield on those funds. Many see staking as a next step in crypto ETFs. If the SEC can iron out some of the uncertainties about those services being potential unregistered securities. Otherwise, you know, like I said about the meme coins, the SEC has sent several highly positive signals and investors are seeking reassurance. I think that they will remain supportive, hoping maybe that this event will be sort of a no news is good news event. Scott.
- [43:02]
Scott Wapner
All right, you'll bring us some updates as you have them today. Thank you tonight. McKeel. All right, Brian, you get the first crack here. What's your, what's your take by. We haven't talked about Bitcoin all that much in the last handful of days or so. What's your current view? I mean, it seems to be really anchored around the level it's been trading.
- [43:19]
Joe Terranova
Yeah. Right now it's dancing on the 200 day, which is right around, right, 84,000. So I think we have to watch that. Obviously there's not true fundamentals with, with Bitcoin or any of the cryptocurrencies. So I really do look at technicals on this. Let's see if they can dance and bounce off that 200 day. But I think you still have a risk off environment. And for whatever people say, bitcoin cryptocurrencies are risk on and risk off. And right now it's risk off. If it can hold the 200 day, that's great. Longer term, I will say Etherium, to me is the one that's more peculiar. It's just been left out, left for dead. And so I know there are some big short positions with hedge funds, but the Etherium versus Bitcoin has really not been in competition. Bitcoin is clearly outperformed.
- [44:01]
Scott Wapner
Yeah, Josh, if you look at the one month, you can see the sideways move. Really. That's why I've said it's pretty much been anchored around, you know, 83ish thousand.
- [44:13]
Josh Brown
Yeah. You know what's hilarious about this whole thing? Just like in the stock market, the biggest winners are the most boring industries. You know what's way more exciting than anything? Crypto this year? Gold. It's like this revenge of the analog technologies. It's kind of fascinating. Gold broke 3,000. This bitcoin's been sitting here in the. In the low 80,000 range. If nobody talks about anymore, Solana is an afterthought. So sometimes they.
- [44:41]
Scott Wapner
They.
- [44:41]
Josh Brown
Sometimes people are in the mood for the oldies. You know what I mean? Sometimes you just want to hear a little bit of Zeppelin.
- [44:47]
Scott Wapner
I hear you. The oldies. But goodies. All right, finals are next. All right, 3:00. Closing bell. Today we'll have a good one. Tom Lee, Ed Yardeni, Cameron Dawson, Eric Jackson. Lot to talk about. Dow's positive, Nasdaq's positive. There will be flexibility. That's what the president said in the Oval today. And that has the market rallying, or at least trying to certainly rallying off the lows. Final trades, Brin Europe, Robinhood.
- [45:14]
Joe Terranova
And you can also sell the June 50 calls and get four bucks, almost 10% of premium yield for just under three months.
- [45:21]
Josh Brown
All right, Josh Brown, Kinsale Capital. Feel like the stock goes up like every day. It's crazy.
- [45:28]
Scott Wapner
Okay, Tommy Hearns, Metta.
- [45:32]
Bryn Talkington
Look, I mean, I think the stock's bottomed and looks pretty cheap right now.
- [45:36]
Scott Wapner
Okay, Marvin Hagler.
- [45:37]
Steve Weiss
Yum. China. If there's flexibility, you want to own Germany, you want to own China, and you want to own stocks in the.
- [45:43]
Scott Wapner
U.S. okay, I call this bout a draw. I'll see you. Closing bell. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on on CNBC.
- [46:01]
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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 halftimereportdisclaimer Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.