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Halftime Report
Trading the Tech Takedown 2/17/26
00:44:05
Scott Wapner and the Investment Committee debate the threats AI pose to the tech sector and how you should navigate it. Plus, the Committee shares their top dividend stock strategies. And later, Josh Brown spotlights Real Estate stocks in his "Best Stocks in the Market." Investment Committee Disclosures
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- [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 oh, could this vintage store be any cuter? Right. And the best part, they accept Discover. Except Discover in a little place like this? I don't think so. Jennifer oh, yeah, huh? Discover's accepted where I like to shop. Come on, baby, get with the times. Right. So we shouldn't get the parachute pants. These are making a comeback, I think.
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B
Discover is accepted at 99 of places that take credit cards nationwide. Based on the February 2025 Nielsen report. I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the latest on the tech takedown. Nasdaq's been down five straight weeks, so we will discuss all of this with the investment committee. Joining me for the hour today, Joe Terranova, Jenny Harrington, Jim Leventhal, Josh Brown. Let's check the markets. It has been a bit of a struggle for risk lately, but we have had a nice little turn in stocks here at noon in the east, so we're a little mixed. We're still searching for something today. We're on back to back losing weeks, Joe, for the S and P, gold, silver and bitcoin are all lower. Nasdaq's down, as I said, five straight weeks, longest streak since May of 2022. Where does this leave us as we start a new week?
- [02:00]
C
I think it leaves us where we were at the beginning of the year, anticipating an environment that was going to be more volatile underneath the surface and.
- [02:09]
D
The need to really be a little.
- [02:10]
C
Bit more tactical and look for opportunities in what was unappealing areas of the market, whether that's geographically or by sector. And I think that's, in fact, what you're doing now. You have some carnage in some of the highly speculative areas of the market, obviously software being one of them. I do not believe that in totality, the entirety of the software industry is going to rerate its multiple to a level that it's unattractive. You'll find. So it's on its way to, you're going to find some winners on the other side. You have to allow this process that's going on right now currently where I think the marketplace environment is, is kind of looking towards risk and saying, okay, we want to take down leverage. So I just think that continues. I don't think you get too high, I don't think you get too low about what's going on. Right now we're kind of spinning to a lot of different places and ultimately ending up in the same spot. And I think that's the environment now for the next several weeks.
- [03:05]
B
Yeah, Jenny, you know, there, there are differing views as to whether this spinning around this, you know, volatility that's been introduced here, especially around tech, draws you know, these stocks into some form of broader correction from, from where they've already gotten. I mean, yes, software sucks a lot of air out of the room. Down 23% year to date. The Mag 7s, collectively the Mags are down 7.5%. So what do you make of that?
- [03:36]
A
Well, it's so hard to figure out is it, is it going to trigger something and we have the whole market down 10 or 15 or 20% or is it going to be this really intensive rotation? And through the rotation the broad market ends up kind of flat where it is. But, but within that you have more of what we've had so far where you've got like value up 7 ish, growth down 3 ish, energy up 20 ish, tech down 2 ish. So I'm not sure it feels to me right now like the rotation might continue to intensify where, where you end up the year with like the market in this really neutral, ish, lackluster, ho hum territory.
- [04:12]
B
Well, that doesn't have to necessarily. It depends what part of the market like if you, if you have, you know, if you have tech continue to take, whether it's a breather or even, you know, sell off a little bit more than it has, if you really have a bigger push into the rotation, then the market's just going to look like it has with the equal weight hitting a new record high. I mean, you do have notes suggesting today that you can still have lingering uncertainty in tech, as UBS says, but that a broader range of sectors looks set to keep the rally on track. It's exactly where you're going to. As Morgan Stanley as well says, despite the sell off in tech, several constructive drivers for equities are emerging. We can go through them all, but we Talk about the same ones every day.
- [04:57]
A
Right, so, so the emerge, what's emerging, you know, and how is it emerging? And this is what I've been struggling with, which is, is it that kind of what's done well so far again? Energy value, dividends. Have they done well because they suddenly have great earnings growth?
- [05:12]
C
No.
- [05:13]
A
Or was it simply because they were so wildly undervalued that as money comes out of tech? And this was my thought going into the year, which was people were just going to say, whoa, I've suddenly become really heavy in tech or in single stocks and I want to, I want to right size that where the money's not going to come out of stock. So where is it going? So are the parts of the market doing well? Right. That are doing well right now? Are they doing well because they suddenly have great earnings growth? Are they doing well simply because they had really, really compelling, relatively lower valuations? I'm not sure, but I was really concerned.
- [05:41]
B
It's a combination of both maybe, but.
- [05:43]
A
Like this morning I was concerned because there were a lot of really underwhelming negative earnings reports and they were from companies that I think are very reflective of the broader US economy of the consumer. So you had companies like Genuine Parts, Allegiant Builders, First Floor Corp, Herc, Vulcan Materials, all kind of raw in earnings. And you see, I see that as maybe a challenge to my hope that the broader market stays flat. It's a weird world. And you know Scott, when we think about the last two weeks too, and this is what Joe and I were talking about last week and you know, I said I think everything is under threat from AI and you said what about energy and health care? And I said if you'd asked me about financials a week ago, I would have said no. But I think we're in a very difficult, very opaque environment where it's hard to see what's coming next because we, we don't really know what's going to be under threat from.
- [06:31]
B
It's not like, you know, I get that there's all this concern about Mega Cap spending as the numbers continue to get larger, but it's not like the businesses are suffering in any way whatsoever because as part of the Morgan Stanley note which I've already cited with the headline being despite the recent sell off in tech, several constructive drivers for equities are emerging. Forward Revenue growth for Mega Cap has accelerated to plus 18%. That's a multi decade high. Okay, so that's number one. Number two, earnings revision breadth across semi software Tech hardware in the Mag 7 has rebounded. The Mag 7 forward P E has compressed to 27 times 12 percentile since early 2023. High CAPEX sales factor continues to outperform across tech in the broader market and the dollar index being down 9% year over year provides a tailwind given the global revenue exposure that a lot of these companies have. It's just people have gotten a little queasy about the rarefied air that they've been living in in terms of the capex.
- [07:36]
E
Queasy is a good word, Scott. I mean it feels like we're in stormy waters and it's not stormy at the headline level But I think what Joe and Jenny have been talking about is there does seem to be this rolling correction going through sector by sector. It's pretty intense if you look at something like the software index and it's pretty rapid if you look at last week where we went from software to financial services companies to even real estate companies. But the question that I think has to be answered is whether this rolling correction because something worth worse or if it's just a lot of noise that we're going to get through. I am firmly of the belief that it's just a lot of noise. Now why do I say that? Two things. One, if you look at what I believe are core principles, we've got a rapidly expanding U.S. economy, we've got decent, not great, but decent employment, you've got inflation in the mid twos depending on which indicator you use there's a lot of things going right and this is in the early stages of a very stimulative budget bill or what should be very stimulative this year. The second thing that gives me comfort is some of the areas of the market that you would really expect to be taking it on the chin if this were a harbinger of something worse are not. So if I look at today some of the hyper discretionary companies, cruise lines, hotels, leisure, gaming, travel, they're all doing really well now maybe it's because Elliot's taking a stake in. I think it's Norwegian cruise lines, maybe it's Royal Caribbean but that's too specific, this is too wide a sector and it's all doing well today which flies in the face in my opinion of this being something worse than just a rolling correction.
- [09:04]
B
Josh, it seems as though we need to rectify the issue of the companies say the mega caps say you've got to spend what you're spending to to win the build out is so huge for this Once in a generation transformation that is happening while investors are saying, you're spending too much, how does that rectify itself?
- [09:29]
D
I think you have to understand the education that the current generation of founders have received since they arrived in Silicon Valley. The stories that they, that they're, they've been steeped in are things like Motorola and Nokia and AOL and Netscape and they, it's, these are almost like things that keep them up at night. And they understand that what all of these stories of obsolescence have in common is that they had management that was more focused on quarterly earnings reports right off the cliff and missed the next transition. Whether it was PC to web, or web to mobile or social media to video. It's just this constant thing that's in the backs of everyone's minds. And I think when you look at it that way, as an outsider, we're coming from Wall street, we're coming from most of us a very New York perspective, which is like, what have you done for me lately? What are my quarterly earnings? Did you beat the whisper number? Blah, blah, blah. And they're thinking about, oh my God, if we don't do this, and not just do it, but if we don't lead, we might disappear. This platform might have a terminal value that's coming up on us way faster than we might have imagined. And could you possibly blame them? When you look at the rate of acceleration among startups utilizing AI building robots, startups, equity funded companies that aren't even public, you look at how quickly the innovation is coming, of course they're terrified. And being terrified in that context, a Silicon Valley context is not let's spend less and hunker down. It's the opposite. Let's make sure we don't miss the moment. That's a very different game than Jenny and Joe and Jimmy and myself play in portfolio management. But we should just acknowledge that mentality. Only the paranoid survive is what Andy Grove wrote about in his book. That mentality is the reason Microsoft is Microsoft, Amazon is Amazon, Metta is matter. It's not that they're 10 for 10 on every spending decision. It's that they've had the guts for every iteration of the future to be amongst the leaders. And that's why they're hyperscalers. And no one else is sure if we understand that. If we don't understand that, we worry less about capex and more about, oh my God, which of these names is about to be obsolete.
- [12:02]
B
I mean, this is the greatest sort of spend. I would, I would gather oh yeah, by a collection of corporates in the history of grace.
- [12:14]
C
They're spending because of the perceived demand. They are spending.
- [12:19]
B
Right.
- [12:20]
C
Because the backlog orders are well over $1 trillion. Now you can question and I actually think the market's doing its job because if you look at last year for Microsoft, their CapEx increased 58%. What was the return on that? What did their cloud revenue increase? It only increased 20 plus percent. So the market is actually saying okay, in the moment, you are not realizing, you are not showing us the return on that, therefore your stock moves lower. I think the market's doing its job. You can question if that intended demand, if that backlog backlog number is real. Why? Because, Scott, in the case of Microsoft, 45% of the backlog comes from open.
- [13:01]
B
Worst performing mega cap year to date by the way. It's down 17 and a half percent. We know it's been caught up in the whole software thing which I want to get to in a minute but I thought the bank of America February Global Fund Manager survey was quite interesting where they, they frame it as CIOs deem capex to be too hot. CIOs telling CEOs to improve their balance sheets. You've got, you know, versus the idea of increasing your capex even further. And investors coming away with the whole idea of sort of how we framed it. You're over investing at a new record high judge and the payoff is so uncertain.
- [13:45]
D
I think, I think one thing that needs to be brought up and we never bring it up when we talk about AI. One of the reasons they're all going all out to grab as many users as possible and continue to satisfy all of the prompting and querying is because there's a gigantic meteor heading toward the AI theme and it's going to hit this year and we don't know if it's going to hit in May or in September. September. But I want people to understand this. Apple is coming. Okay. Agentic Siri is coming. Not Siri, Chat bot. Okay. Agentic Siri. So instead of typing something into a text box and getting a text response telling Siri to move money from bank of America into Fidelity, rebalance your IRA and make a minimum required distribution from another retirement account and put it at Chase Bank. And when you have Siri being interoperable with every app in the iOS ecosystem, all of a sudden this non player on the field, but a company with 2 billion devices in circulation becomes the number one consumer facing player in AI. They're extracting capital from everyone, including OpenAI who want to have their apps on the iPhone and in the iOS ecosystem. And if you're a player in this space, you need to build your moat as deep and as wide as possible. Now Apple has announced a March event. It's not a live stream, so maybe it's not a product launch. They have something scheduled for May and then they have a hardware rollout in September. And Agentic Siri that is interoperable with every other app, including every other Air app is going to be a reality before the end of this year. Apple is the best of the Mag 7 only down 10% versus all the others. And I'm going to tell you, this is the thing in the backs of everyone's minds. What happens when the device maker of choice all of a sudden also decides that they're going to get into the game and that's in the works.
- [15:54]
B
Well, that's, that's why Dan Ives today again says the sell off in Apple's unwarranted that 2026 will be the year Apple finally gets into the AI game. It's a case that he continues to make. It's not a new thought, but he'll expand on it today when he joins me on the closing bell. Which leads me to something I find really interesting. So you bought Apple on February 11th.
- [16:21]
A
Okay.
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B
Am I right that you have this in front of me? You sold it the next day?
- [16:27]
F
Absolutely.
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B
Why?
- [16:28]
C
Because on final Trade I gave everyone a 264 stop. I mean this isn't the WWE. I put the stop in, I got stopped out. I gave everyone in final trade a 264stop on the 261.
- [16:39]
B
Why didn't you buy it back?
- [16:40]
C
No, I'm not doing that.
- [16:41]
F
No.
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C
I've traded Apple twice in the last three years. I made 21% from August through November. I'm trying to in this environment keep my losses tight. Four and a half percent was enough. Did the same thing with Twilio.
- [16:55]
B
Why'd you buy it? Why'd you buy it on the 11 was the.
- [16:58]
C
I had a momentum signal. You know, was interesting about the momentum signal and the powerful reversal thereafter. I told myself afterwards and I actually spoke to a few people about this who are looking at the same systematic signals that I am. They're becoming more popularized. We're all looking at the same thing. So you had a really aggressive advance on February 11th. Why? Because all the trend systematic signals that are looking at short term momentum identified what I saw. Right. And then the next day you had the power I think was down 5% because everyone's basically neutralizing that momentum signal. So I'm comfortable with what I did. I told the viewers exactly where I thought you should get out and I have no problem with it now. But one last point by the way, on what Josh said, which I think is more important than Apple. Yeah, it's interesting because if you think about the Hyperscalers, the big four, they're increasing their capex by 40% year on year. What's the one name that's actually not Apple's? Capex is down 20% year to date. And there goes Josh telling us they're actually going to win. So is all this spending actually necessary or not?
- [18:04]
B
Well, they're just, you're talking about for part of the pun, apples and oranges in terms of the kinds of businesses and the reasons why the hyperscalers are spending what they are. But I don't really think you consider Apple to be a hyperscaler in the same way you talk about Amazon, Alphabet and Microsoft.
- [18:22]
C
They will put a tangible product in the hands of consumers though that shows them exactly how the interplay with generative AI works in their life. I don't think anyone else is really doing that. Is Copilot doing that for you and Microsoft?
- [18:38]
A
Maybe.
- [18:38]
C
I don't know to the degree that which Apple will do that.
- [18:42]
B
I want to, I want to hit something also that, that seems interesting in that, you know, in the whole software sell off, the cyber names have not been immune at all. If you look at at some of the performance of these stocks year to date. Checkpoints down 10. Palo Alto is down 11. Crowdstrikes down 13. Zscalers down 23 and a half. Yet I'm continually told by people on this show and elsewhere that this is one of the areas that is not going to be negatively impacted by AI. These are the kinds of stocks, Josh, that you need to own. It's part of Goldman Sachs's list today of the companies that have what they determine to be clear architectural motion votes so they're not wholly disrupted. Crowdstrikes down a bunch today. Palo Alto I think reports tonight. So there's a lot going on in this space and these have they been swept up in the sell off or they do they deserve to be hit the way they have been?
- [19:49]
D
I mean I guess I would just say like a little bit of perspective. CrowdStrike is negative 8.8% on the year. It's been compounding at 4,56% annualized for the last three years. So 100%. This stock has been whacked and it is actually from its all time high, it's in a 29% drawdown. But I can't envision a scenario where people say, oh, there's AI, therefore why are we spending anything as a corporation or as a government on security? Like it makes. The logic isn't there. The thing that you need to understand is the way the market actually functions. Everything is baskets. And if you're in the software basket, there's going to be selling pressure because of the sheer amount of dollars trying to get out of that basket. And when I say basket, that could be an etf, it could be an sma, it could be growth managers with a software sleeve that they're lightening up. Whatever the case may be, the selling pressure hits everyone and then when the dust settles, people come to their senses. I can't promise you that will happen today for Crowdstrike or for Checkpoint or Palo Alto or any of the other names. I'm just saying if you're an investor, you're obviously not selling on AI because I means one thing, guaranteed more workloads. And those workloads need to be defended.
- [21:11]
B
That theoretically, yes. I mean, that's what we keep hearing.
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A
But here's the thing, Josh, Like I can imagine a world where you do need to spend more on cybersecurity, but I can imagine a world where lots of small businesses say, hey, I can build this on my own, or even large businesses. And one of the things that I've worried about a lot with all, with the concentration of the cybersecurity firms being in this small handful of names is what if one of them goes down? And what if the disintermediation of cybersecurity is now possible? And what if that's a better model broadly to protect against the cyber threats that are out there?
- [21:45]
D
Respectfully, none of those arguments, none of those arguments make sense. Small businesses building their own cybersecurity out of what, Scotch Tape?
- [21:52]
A
Absolutely, they could. And it's not my size small business, but it's bigger. It can be done. And I think that's what's so scary about this. So scary to the software companies about the, like, you know, Claude Code and all the new coding programs is anything can be done. And I think we should be very careful to not not say I can't imagine because right now you need to be able to imagine anything.
- [22:12]
E
I think where Jenny may have a point here is not small companies developing their own security products, but small players developing threats that the incumbent Security providers are not ready for now. They will get ready for it.
- [22:25]
D
So who is though, you know.
- [22:26]
E
No, no, no, that's, that's fine, Josh. But I think what I'm trying to do here is to explain why these stocks may have sold off. And it's not dissimilar to what Brad Gerstner said about software, software in general, that the cash flows have become just a little bit more unclear. So the multiples come down. The threats that have been protected against so far using things like firewalls or identity verifications can frankly easily be gotten around by small players. Now, I do think that Palo Alto and CrowdStrike will be the ones that solve these new threats, but it's going to take a little bit of time. It's going to take a little bit of money and I think that's why they're selling off. But this is probably a buying opportunity.
- [23:01]
B
How about this? There was another interesting blurb out of the B of A desk today. We talked about the flow show information to set up part of our conversation. But how about this? While last week was our first net sell across equities on the B of A platform, this year, retail remains a committed buyer. And they were solidly adding to positions last week. 89th percentile buying consistent with year to date pattern. So, you know, buy the dip, buy the dip because the bigger trend is still intact. Is that, is that fair?
- [23:37]
C
I think it's consistent with what we witnessed last April. I think retail is looking at moments where they believe they see a decline in the market in individual equity names that they believe over the long term are going to have the appreciation. I think on the other side of that, institutions have become more short term oriented. I think there's a lot of systematic trading that is going on right now and I think that's the push on the other side, or rather the pull against what we're seeing. I think institutions have become far more short term in what their intentions are in the market.
- [24:14]
A
I agree, I agree with Joe on the institutions becoming more short term. But in 1994, I interned for Laszlo Barini and I remember one of the things that he really taught us was that one of the biggest contrary indicators was the American association of Individual Investors. So whenever I see something with retail or individual investors leading the way, I still go back to my Laszlo 1994 training and think like, actually is that a contrary indicator?
- [24:38]
E
Let's remember that retail is different than what we remember 10, 20 years ago, however long ago. And a lot of retail these days are much Younger people than Jenny, you or I grew up with. It's just, just true. And a lot of these bodily, these are kids who are saying well look, I'm never going to be able to afford a home. I might as well make money in the stock market. We know this is true. And what's happened over the last several weeks, tax refunds, tax refunds from the budget bill are picking up. Now when we say retail is buying the dip, we don't know if that's big retail, small retail, young or old. But at least a cohort of that are people who have some money in their pockets courtesy of the government.
- [25:11]
B
The hardest question it seems to answer these days is which companies have some degree of of AI immunity versus the ones that are going to be disintermediated. Edgardeni was talking about that last week. I bring it up because JP Morgan has tried to do a screen and they've come up with the top mispriced stocks amid the AI disintermediation. Looking at ones that are the most insulated from from disruption. It's interesting. Carvanas Joe is on the list. They report tomorrow after the bell. It's been on Josh's best stocks list I believe as they say, disintermediation fears are overblown.
- [25:51]
C
I read the note. I think the notice is excellent. I really think that what Carvana has been defending against is two stories. First of all, we entered the stock at the end of October 306 had a significant run up to 486. It's retreated all the way down. It's more than just the AI potential disruption. It is about this Gotham City research note that suggests that there is in 23 and 24 an overstating of earnings to $1 billion. So I think on the call you're going to hear that being ultimately addressed. I also think you have to remember there's a very strong wet tailwind that benefits Carvana and that comes from the tariffs and the ability for interested buyers of new vehicles to be discouraged by what they're seeing as the tariff is built into the actual price. So tonight's report is going to be interesting. I think the expectation is they need to kind of really show what they're going to do. 5 billion on revenue EPS coming in at around A$26.
- [26:58]
B
Okay, so let's take a quick break. We come back, we go right into Jenny's wheelhouse. We're talking dividend stocks. The ETF that follows that group reaching a record high today. We have some top picks ahead and later. Josh Brown's best stocks in the market is back. We'll see after this.
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F
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- [28:51]
B
Let's talk about dividend stocks hitting a record high earlier today. The SD Y ETF having its best two month gain since late 2023, which got us thinking about Jenny Harrington.
- [29:02]
A
Well, thank you.
- [29:03]
B
Right in your wheelhouse, as I said. What's behind this? First of all. But we're going to get some picks. But what's behind this?
- [29:10]
A
Okay, so Josh, if your ears have been burning for the last week or two, it's because I've been looking lamenting the fact that you came up with that brilliant HALO acronym. It's perfect and it's frankly reflective of my portfolio. I'm like, I should have thought about that. Of course Josh did. He's so good at those things. So when Josh says halo, it's hard asset, low obsolescence. And I think that the rotation has really moved into those kinds of stocks. And if you think about dividend stocks, they really fit into that heavy asset, high asset, low obsolescence category. So. So do you want me to highlight a few in mind or.
- [29:44]
B
Yeah. Do you have, what would you say? I mean, you gave us a list of 5 of your dividend picks. Are these your top dividend picks right now?
- [29:52]
A
It's hard to say top. I actually started with a list of like 12.
- [29:55]
B
Are we going to let you compare.
- [29:57]
A
It back to five?
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B
Do we have these made up guys? Kimberly Clark, Bristol Dominion, Amcor, Enterprise Products.
- [30:02]
A
Yeah. So all of these. So Amcor, I've talked about it before. It's packaging. So when you know these little bottles, these are like Amcor. When you go to the grocery store and you buy chicken and it's in the, you know, in the plastic container with the wrap, that's Amcor. We all know what Bristol Myers does, we all know what Dominion does.
- [30:17]
B
And by the way, Dominion, 52 week.
- [30:18]
A
High today, but I know it's wild and down to, unfortunately for me, only a 4% yield. I liked it better at 5 and a half. But Dominion is really focused in the Virginia area and we know where all the data centers and power is being used up. Enterprise Products is the pipelines, the gas and oil pipelines that go all throughout the country that bring fossil fuels to and from where they need to be. And we all know, Kimberly, tissues, toilet paper, Pampers, Sorry, not Pampers, Huggies, but diapers. Really hard physical assets. And by the way, all of these went into this year trading at a valuation that was in many cases less than half that of the broad market. They all have decent earnings growth ahead, you know, mid, single digit, not 18%, but 3, 4, 5% earnings growth. They've got yields of between 5, in this case, 5 and 6%, 4 and 6% across the board. And there are stocks that, assuming humanity survives AI, we're going to be using these products throughout the next 10, 15, 20 years. So nothing too exciting, just slow and steady.
- [31:19]
B
You know, we have a piece on CNBC.com that talks about some of the dividend names that top Wall street analysts are recommending. Devon is one of those names. 52 week high today. Josh, you own that and it was, maybe it still is on your best stocks in the market list.
- [31:39]
D
Well, yeah, that's, that's why I own it. I'm not like an expert in oil and gas and this isn't typically my wheelhouse, but to Jenny's point, this is a Jenny Harrington market and the rest of us are just living in it. And she's absolutely right. These are the types of stocks that people are not up at night worrying is Anthropic about to come out with, for example, a new drilling program in the Permian or a natural gas pipeline so Devon's Q4 production guidance is not going to be anything incredible. But these stocks have been rerated and that's why they're trading higher. I am riding this with a trailing stop. I've already been very right on it and it's short period of time, not going to stay with it forever. It is a trade but increasingly my best stocks list is looking more and more like Jenny Harris, Jenny's buying list. And that's, that's just the environment that we're in right now.
- [32:32]
B
All right, well speaking of, we'll take a break and we will come back with the latest edition of Josh Brown's best stocks in the market list, a sector that hit a 52 week high today. We're back after this.
- [32:46]
D
Martha listens to her favorite band all the time.
- [32:49]
B
In the car, gym, even sleeping.
- [32:54]
D
So when they finally went on tour.
- [32:56]
B
Martha bundled her flight and hotel on Expedia to see them live. She saved so much she got her seat close enough to actually see and hear them sort of.
- [33:05]
D
You were made to scream from the front row.
- [33:07]
F
We were made to quietly save you more.
- [33:10]
B
Expedia made to travel Savings vary and subject to availability.
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C
Flight inclusive packages are atoll protected.
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Comcast business helps retailers become seamlessly restocking frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become.
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The patient scanning data managing healthcare facilities.
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That we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business powering possibilities restriction supply guys.
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- [34:29]
A
We're back on hashtime. I'm Tippa Stevens with your secret CNBC News update. U.S. southern Command said today 11 people were killed in three strikes on alleged drug carrying boats last night in the Caribbean Sea and Eastern Pacific. Officials claim the boats were traveling on known drug trafficking routes. The US military has now carried out more than 40 strikes on alleged drug boats since last September killing more than 140 people. Ukrainian officials say Russia attacked the southern Odessa region overnight causing serious damage to its power infrastructure. It's the latest in a campaign of strikes on Ukraine's energy grid during the cold winter months. The attack comes as negotiators for Kiev and Moscow meet today for US Brokered peace talks in Switzerland. And the spokesperson for the Department of Homeland Security is reportedly stepping down from the job, according to Ms. Now, Trisha McLaughlin, departure has been planned since December, but she stayed on board following the shootings of Alex Preddy and Renee Good in Minneapolis. Politico reports she is leaving the department next week. Scott, back to you.
- [35:32]
B
All right, Pippa, thank you. Josh Brown's best stocks in the market. We do that right now. So the spotlight is on real estate which hit a 52 week high today. Tell me more.
- [35:43]
D
Wait till I show you these. Charge judge. Some of these are overbought. So what we did in the column today is we looked at, okay, you wouldn't buy it today at a 78R RSI. Where is a better entry if you, if you want to take part in this sector which by the way could continue to work for the rest of the year. So let me just show you them quickly. Realty Income. The ticker is. Oh, this is one of the most popular REITs there is. They call it the monthly dividend company because they do in fact pay out a distribution every month. This is a 7. Look at this stock is parabolic, is a 78 RSI which is a measure of momentum. You want to let that cool off. I'd use 58 as my line in the sand for risk management. Maybe let this thing have a red day or two. Just consolidate a little before entry. Iron Mountain IRM 3 and 3.3% dividend yield. Also a 77 RSI. Let this thing cool off for a second. Here are the two I like. Pld. This is Prologis. I've been in the stock before. I've talked about it on the air for a long time. Not too overbought. I think about 130 is the trend line that you're watching for for Risk Management. I think you can own the stock right here. The other one is Simon Property. Another name I've traded on the show. Another name that I've been talking about for years. This is one of the best charts in the entire market, not just in REITs. Steady grind higher. No parabolic spike, no Empire State Building in the chart. The RSI right now is 64 not yet overbought. I think we're tracking that 50 day weekly closing price as our risk management, which is about 187. If we're trading, investors can use 180, which you can see right before your eyes, has been true support for months and months and months. I think you can enter this stock right now as well. The one I bought, which is not on the list currently is cbre, which we can talk about in another time.
- [37:40]
B
But we did it the other day.
- [37:41]
D
Real estate.
- [37:42]
B
We did that the other day.
- [37:43]
D
Yeah. Real estate is a theme, is super durable. I think it's halo. I think it works in this environment.
- [37:48]
B
All right, Jenny.
- [37:50]
A
So the one, the one place I disagree with you on, Josh, is I don't think you need to actually hold off on buying these. If you take the lens out a little further and if you guys don't mind, if there's any way to put up the Realty income, the letter O on the chart and maybe put it on 10 years, you see, if you take a longer term horizon on these, they're really flat over the last five and 10 years and they're still trading at very inexpensive valuations compared to the market. So just again, Realty Income, you've got it trading and a half times. Yeah. You've got a nice 4.9% yield. And if you extrapolate further, that's true for most of them. I think it's a great place to be. And don't forget, even with this industry or the sector being up so much year to date, if you take a longer term horizon on that too, and look out over the past say 14 or 15 months, it's still well below almost every other sector in the market.
- [38:38]
B
Realty Income and iron hitting a 52 week high today respectively.
- [38:42]
A
Yeah, well, all time high.
- [38:44]
C
Welltower, that's the best name for me in the group. We've owned it since July of 24. That is senior housing. The revenue growth is consistent 20 plus percent for the better part of the last three years.
- [38:57]
A
All right.
- [38:57]
B
We'll take a break. We'll come back. Santoli, he's on the other side with his midday work. All right. Welcome back. Senior markets commentator. Overtime co anchor Mike Steven Santoli is at the desk for his midday Word Markets trying to work something out. Yeah, I'm not really sure what, what the heck it is at this point.
- [39:31]
C
It's a little bit confused. You obviously see that in the widely divergent action underneath the surface. It's staying under control in the sense that the pullbacks have found their footing at the same spot. Now Four times. I don't know if that's sort of living dangerously or not, but the lows of this morning are all also the lows from last week or also the lows from twice before this year. So it feels as if that's where the dip buyers want to get active. It's not really thematically coherent.
- [40:00]
F
Right.
- [40:00]
C
I mean it's sort of like you've had defenses ripping part of this year, yet everybody does want to be positioned for the reacceleration trade. And I do think that the most bullish thing would be perhaps for the majority of stocks to take a breather because they've been doing all the work and then have a little bit of relief in the mega caps just for a phase. It's only happening selectively. There seems like there's always three up and four down to the mag seven and, and so for now, you know, I still think people are taking heart in the broadening thesis. It's not clear that that gets the index anywhere as as has been shown, but it's still hanging together. I was pointing out before the median S and P stocks up like 7% year to date.
- [40:40]
B
Yeah. So Nvidia green apple, nice bounce, 2%. Amazon's up about a third of a percent too. But the market has been, as we've seen over the first 46 minutes of this show, pretty, pretty volatile. We do have some breaking headlines out of the Fed. Let's bring in our senior economics reporter, Steve Liesman. Hi, Steve.
- [40:58]
F
Hey, Scott. Fed Governor Michael Barr speaking at this time largely on AI but also talking about monetary policy. He says it's likely appropriate to hold rates steady for some time as the Fed assesses incoming data. He says he's personally looking for evidence that goods prices inflation is steadily declining before agreeing to cut rates again. The latest jobs report he's commenting on said it provided further evidence the labor market is stabilizing. The current employment rate he says is consistent with his own estimate of the long run level and where it could be. Labor supply and demand is in balance. You have that low firing. He points out a low hiring world. But the labor market could be vulnerable to negative shocks. Inflation based on PCE remains elevated 3%. We'll get that number on Friday. People think it will be close to 3% and he says there's a significant risk it could remain above target. It's reasonable to forecast, he says, that tariff effects will work through the system and ease later this year. He is concerned it could remain elevated for a time on AI, which is a very long speech about AI and the effect on the economy. He says it's unlikely to be a reason for lowering the policy rate, in part because all that investment could be inflationary, put upward pressure on the neutral rate. In addition, he says monetary policy cannot address structural factors created in the job market that could determine the long run unemployment rate from AI. AI, he says, is very likely to have profound positive impact on productivity growth and boost the rate of innovation. And finally, it could be a serious short term disruption in the labor market. Scott, we can't do it justice right now, but I know a lot of big money is trying to game out the effect of AI on interest rates and how monetary policy will adjust to it and incorporate it. And it's a big question right now that a lot of people are trying to figure out. And one of these days, you and I maybe a bottle of tequila and Josh Brown, we could figure it out there.
- [42:58]
B
There remain so many unknowns, Steve, among them, one of the simplest questions is, is whether the tariff effect, which hasn't had a profound and broad effect on inflation, still has one last thing to show itself in terms of companies raising prices. I've seen, and I'm sure you've seen the same kinds of articles that have been out in the last week at least saying, okay, the party's over now. Now these companies who make goods are going to start raising their prices after holding them down. And I wonder what the impact of that is going to be that we just haven't seen to this point.
- [43:42]
F
Well, that's why we have two kinds of Fed folks, those who are patient and want to see this process play out and those who say, you know what, we've been there, we've done that, we know what it's going to be and it's the extent that there are higher tariffs here, we're going to get lower prices over here, for example, housing and shelter. So that's why we've gotten these two and a half percent. We had Austan Goolsbee on this morning, he said not so fast, pointing out that we dropped 12 months ago a very high rate and that's one of the reasons the CPI fell. And I can tell you, Scott, the Fed's going to be more guided by the data we get on Friday when we get that PC report than it has been by the CPI report.
- [44:17]
B
Yeah. All right, Steve, thanks as always. Steve Liesman, senior economics correspondent. Thanks to Mike Santoli as well. Mike, we'll see you at 3 o' clock on closing bell. We have more of today's biggest movers next. I welcome back. Let's talk Jenny about some activism in a couple of your names. TripAdvisor, starboard pushing for a big shake up and we have Fiserv with Jana building a stake in that company. You own both stocks. How do you think about these?
- [44:44]
A
Right. So it's interesting and we were thrilled to see Jana and Starboard come into both of them after we bought them. But you know, these are in our discipline growth strategy. And if you think about what the point of that strategy is, it's to look for companies with high free cash flow yield, 5% or better free cash flow yield. That's perfect, right? For private equity companies, for activists. When you find a company that's trading at a very low value valuation, in this case they're both trading about seven times or less earnings and they both have massive free cash flow. So they can go in there and actually do something, right? Actually say, hey, let's use this cash more constructively. In the case of Fiserv, there's a relatively new CEO who came in earlier in 2025. He's doing a really good job so far. So I don't know how much more shake up there is to go, but it's, you know, it's an opportune time to come in and say you've got cash, you can do something with it. We can make a difference.
- [45:30]
B
I want to hit one more name. Wal Mart Evercore. ISI puts it on their tactical underperform list ahead of earnings on Thursday of this week. You own the stock.
- [45:37]
C
Yeah, Look, I've cited the fact that the valuation on this is elevated at 50 times. The same could be said for Costco. Remember, it's benefiting from significant inflows into the XLP consumer staple sector. 21% of that sector is attributable to Wal Mart and to Costco. So 190 million in revenue, $0.72 on EPS. You're going to hear a lot about the high margin business, E commerce and advertising, but I would not be reaching for it here.
- [46:05]
B
All right, we'll do finals next. All right, closing bell, 3 o' clock Eastern. Dan Greenhouse, Dan Ives, Adam Parker, Bryn talking to Keith Lerner. We'll track this final hour of trade and what has already been a volatile session to start this holiday short week. We'll do final trades right now. Josh Brown, you are up first.
- [46:28]
D
Apple remain long.
- [46:31]
B
All right, look at that. Up two and a half percent. It's coming off a pretty, pretty bad week and we'll see what happens there astrazeneca who's that?
- [46:38]
E
That is me. Pharmaceuticals have been doing well. AstraZeneca is a high quality pharmaceutical.
- [46:42]
B
How many waters you go through today?
- [46:44]
E
Just important to be hydrated.
- [46:46]
A
Supporting. Thank you for supporting.
- [46:48]
E
All right.
- [46:49]
B
I still haven't followed through on my Jimmy Watercam, but we're working on it. I'm told. I'm told. All right, Jenny, what's your final?
- [46:55]
A
Okay, Vici, earlier we talked about hotels and entertainment, how that's doing well. We talked about triple net leases that's doing well. This is both. You've got a 6% yield and an excellent management team.
- [47:03]
B
All right, good stuff. Ulta Beauty.
- [47:05]
C
Ulta Beauty, that would be me. And Josh puts everything out because he went with Apple's final trade.
- [47:10]
B
All right, good stuff. See you on the bell. You've been listening to CNBC's Halftime Report, the pipe podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:24]
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 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 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 Comcast business helps.
- [48:00]
E
Retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become.
- [48:11]
B
The patient scanning data managing healthcare facilities that we all depend on.
- [48:15]
E
With leading networking and connectivity, advanced cybersecurity and expert partnership. Comcast business is powering the engine of modern business powering possibilities, restriction supply.