Halftime Report: Trading the Tariff Whiplash (April 14, 2025)
Hosted by Scott Wapner with Guests Joe Terranova, Steve Weiss, and Rob Sechkin

Introduction

On the April 14, 2025 episode of CNBC's Halftime Report, hosted by Scott Wapner, the discussion centers around the ongoing volatility in the markets, particularly focusing on the impact of fluctuating tariffs. Joining Scott are seasoned investors Joe Terranova, Steve Weiss, and Rob Sechkin, who delve into the complexities of the current financial landscape and offer insights on navigating the turbulent waters of tariff-induced market shifts.

Main Discussion: Trading the Tariff Whiplash

Scott Wapner opens the conversation by highlighting the current market sentiment—"the market is trying to build on last week's gains"—but notes the hesitancy due to persistent tariff uncertainties. The guests agree that preservation of capital is paramount, echoing sentiments from industry experts like Morgan Stanley and Goldman Sachs.

Joe Terranova underscores the "confidence shock" triggered by recent events, emphasizing the need for investors to "turn to the market and let the market guide you" (02:16). He points out that the bond market, previously a focal point as the "North Star," still holds significant sway, especially with yields recently dipping.

Rob Sechkin concurs, stressing the critical role of bonds and interest rates in shaping investment strategies: "the most important thing that's going to drive the market is bond yields because they affect your cost of capital" (06:00).

Sector Analysis

Technology Sector (MAG7: Alphabet and Apple)

The discussion shifts to the Technology sector, specifically the MAG7—a group of major tech stocks where currently only Alphabet and Apple maintain upward trajectories. Terranova notes, "you have only Alphabet and Apple higher as we speak. So we've lost basically the entire the MAG7 and you have the SMH lower. That is not encouraging" (02:57). This decline signals a broader uncertainty within the tech landscape, impacting sectors like semiconductors.

Insurance Sector

Steve Weiss highlights the resilience within the insurance sector, particularly auto insurers, which possess strong pricing power. "We like the auto insurers above all else in the insurance industry which has strong pricing power" (42:07), Weiss states, suggesting these companies are better positioned to weather economic downturns.

Company-Specific Insights

Apple Inc.

A significant portion of the conversation focuses on Apple, especially concerning tariff exemptions and production shifts. Steve Kovac explains, "one in five iPhones are now being manufactured in India and that's only going to increase" (22:33). This strategic move aims to mitigate the impact of 20% tariffs imposed by China on exports, although Rob Sechkin remains cautious: "There are too many variables that could happen" (26:43), including potential geopolitical tensions and supply chain disruptions.

Goldman Sachs

Rob Sechkin discusses his firm's tactical approach to trading, particularly with Goldman Sachs. "I bought some Goldman Sachs before the show and I think I've been paid for that" (15:30), emphasizing the strategic buys amidst volatility. He notes that while trading remains active, the broader uncertainties make it a challenging environment.

Other Notable Companies

The panel also touches on companies like Taiwan Semiconductor, Leidos, Cintas, and TJX, analyzing their performance amidst tariff debates and market shifts. For instance, Joe Terranova praises TJX for its resilience, stating, "TJX held up pretty well" (45:16), highlighting its ability to maintain market share despite consumer sentiment downturns.

ETF Strategies

A significant segment of the episode is dedicated to ETF strategies amidst current market volatility. Bob Pisani introduces Katie Stockton from Fairlead Strategy, who elaborates on the firm's approach to managing ETFs. Stockton explains that their tactical ETF focuses on defensive sectors and alternative asset classes to mitigate risk: "We have seven sectors that are qualifying. We recently eliminated the technology sector, which is very significant" (37:27).

Stockton emphasizes the importance of diversification, maintaining positions in gold, short-term treasuries, and excluding high-beta sectors like technology to provide stability: "This heavy defensive sector exposure is something we expect to stick with here for a while" (38:26).

Market Outlook

The guests present a cautiously optimistic outlook on the markets. Surat Sethi highlights the inevitability of ongoing volatility, particularly with upcoming earnings seasons laden with uncertainties: "We have a huge uncertainty as to where the bond market's going to be" (09:03).

Joe Terranova forecasts an environment of "one of the highest volatility environments", influenced by political reactions to bond market movements and ongoing trade tensions: "This is the single most important theme to monitor over the coming weeks" (19:44).

Rob Sechkin adds that while the bond market remains tumultuous, strategic trading and diversification can help navigate the uncertainty: "You always got to watch bonds, you always got to watch rates" (06:22).

Notable Quotes

1. Joe Terranova (02:16): "I think you have to turn to the market and let the market guide you as to where ultimately it's going to be going."

2. Steve Weiss (04:01): "There are days to be a buyer, as we've seen in the last several weeks. And there's days to ease up on the accelerator as well."

3. Rob Sechkin (06:00): "The most important thing that's going to drive the market is bond yields because they affect your cost of capital."

4. Surat Sethi (09:03): "It's going into earnings season where nobody's going to commit to anything."

5. Steve Kovac (22:33): "With China still has this 20%, the so-called fentanyl tariffs on them and that is still going to impact the bulk of iPhone production."

6. Joe Terranova (19:44): "This is the single most important theme to monitor over the coming weeks."

Conclusions and Final Thoughts

As the episode wraps up, the panel underscores the importance of strategic diversification and tactical trading in navigating the current market environment. Steve Weiss encourages investors to "look for the things that you want to own coming out of this", emphasizing that even amidst volatility, opportunities exist for informed investors.

Rob Sechkin reiterates the value of long-term thinking and profit-taking strategies, noting, "I think given my view, which marks your trade to historic multiple 16 times, I see 4000, 4500 on the S&P" (18:48). This perspective aligns with the broader sentiment of maintaining a balanced approach to investments, prioritizing capital preservation while being open to selective opportunities.

The episode concludes with a reminder to listeners to stay informed and adaptable, as the evolving tariff landscape continues to shape market dynamics.

Key Takeaways

• Preservation of Capital: Amidst tariff-induced volatility, safeguarding investments remains a primary concern.

• Bond Market Influence: Bond yields play a critical role in determining investment strategies and market movements.

• Sector Focus: Defensive sectors like insurance and consumer staples exhibit resilience, while the technology sector faces uncertainties.

• Strategic Diversification: Tactical ETFs and strategic company selections offer pathways to mitigate risks and capitalize on opportunities.

• Market Vigilance: Continuous monitoring of geopolitical events, trade policies, and macroeconomic indicators is essential for informed decision-making.

For those seeking to navigate the complexities of today's market, the insights shared on this episode of Halftime Report provide valuable guidance on balancing risk and opportunity in an era of tariff whiplash and persistent volatility.