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Halftime Report
Trading the Tech Wreck 6/26/26
00:47:24
Scott Wapner and the Investment Committee debate how to trade around the bumpy ride in the NASDAQ. The desk share their market strategy. Plus, the desk share their latest portfolio moves. And later, we hit the latest Calls of the Day. Investment Committee Disclosures
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- [00:00]
Commercial Narrator
At Edward Jones, we believe rich isn't about having life all figured out. It's opening yourself to all the possibilities. That's why your dedicated financial advisor provides long term planning built around you, meeting you where you are and helping you get closer to where you want to be. So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts. Let's find your rich Edward Jones Member SIPC I'm Kiana and I leveled up
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Shopify User / Shannon Maldonado
my business with Shopify.
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Scott Wapner
Once I figured out that Shopify was
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Shopify User / Shannon Maldonado
a thing, I never turned back.
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Scott Wapner
I can create a site with my eyes closed. Shopify thinks ahead of us, you know,
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Shopify User / Shannon Maldonado
and it thinks about the customer more than anything.
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Scott Wapner
Every day I'm thinking about some other new business, but Shopify is doing it to me because it's so easy to use. It's like I can't stop.
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Shopify User / Shannon Maldonado
I'm addicted.
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Scott Wapner
Start your free trial@shopify.com 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 tech rollover. NASDAQ heading for a rough week. As you know, we are trading that and everything else in these markets with the committee joining me for the hour this Friday, Steve Weiss, Jenny Harrington, Kevin Simpson, Bryn Tauchman, Washington show you the markets here. We've taken a turn certainly for the better. We're green across the board. Tech though remains a bit dicey. So at one point, you know, I don't know, within the last hour NASDAQ was on track for its worst week since April of 25. Come a little bit above that now as you see, the market has has tried to turn you. You do though have every mega cap tech Weiss at least in a correction some are in a downright bear market. If look at Microsoft is more than 30% off of its most recent high. Metta is 30% off of its most recent high. And these others are, you know, mid to high teens off of their own best levels in the last 52 weeks.
- [02:16]
Steve Weiss
Yeah. And so I think about that in Microsoft every day because I own it and sometimes most of the time saying now why am I there? Not because the stock price has gone down alone. Obviously it's a factor. It's that are these now just regular old companies that have huge capex currently and in front of them and what is the returns going to be? That's what the market's asking.
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Scott Wapner
Sure. And I don't think you can answer the question. You can't yet. Which is the. Therein lies the problem. Not that these are bad stocks, not that there's anything wrong with the story, but at least in the near term,
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Steve Weiss
the juice has been squeezed, been completely squeezed. And I mean, Medi talked about performance. Stock was over $800 a share and look where it is now. And it shows no relief now. Today we see it's up 2.44%. Who knows if that'll stay and could it be down 3% tomorrow? So where else can I put my. My money? But. But it just shows if you go through the list of stocks here and the trade dominates everything, everything, everything. Goldman Sachs, because we have open air, you know, delaying their ipo, that stock's taking a hit. So it's all related to the market. So look, you know, I've been raising cash. I'm happy to have the cash most days. And I want to let some of the volatility step aside because I don't find opportunity in the volatility just yet.
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Scott Wapner
Brin that the source of funds is. It's persistent. According to Wolf, at least related to the Mag 7. Michael Hartnett. He does the flow show at bank of America. We cited often you've had a $9.3 billion record outflow from tech. That follows a lot of money coming in. Now you got a lot of money coming out. He's looking at the mags etf. We can show that on your screen. And he's looking at the $60 level. We're at 62. We were at 61. You go below 60, he says, and then it's risk off for the summer, at least for the Mag 7. What's your take? As we watch sort of all of this, you know, percolate through the market,
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Bryn Tauchman
I think maybe they should rename it Lags, not mags. Right. Because these stocks matters down 15% for the year. Microsoft down 25. What's interesting though is the QS are up 15% for the year because the Microns, the Andes and the Intels have become a bigger and bigger weighting. So you've done very, very well if you just bought the index of the qs. And so that's why I think a lot of active growth managers are getting their faces ripped off this year because I doubt they had those big exposures to the memory names and the semi names. I think that what's happening Right now, specifically with, I would say Metta and Microsoft is. They are not executing on their strategy. They're literally pivoting like on a daily basis. So Copilot has gone from open AI to anthropic and then now you're hearing they're going to go to deep sea. So Microsoft is still figuring it out and we have Copilot. It still is not great. And then Metta I feel is just like burning money, trying to figure out what they want to be when really matters. Should just be focusing on Facebook, Instagram and WhatsApp. And they're in their glasses, which I think those three areas are doing great. But I don't know anyone that wants open source matters LLM and so until these companies start executing and have a vision of what they're spending all these billions on, you want to stay in the queues versus trying to bottom tick Mark Zuckerberg and Satya trying to, trying to execute which they're just not doing.
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Scott Wapner
Yeah, you know, I just want to take a look quickly at oil as I go to Eamon Jabbers who's got breaking news for us out of Washington because amen. You're report is related to the war. Oil is at 69 bucks. We're basically back to where we started before this whole thing began. And you have some new developments for us here.
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Eamon Jabbers
Yeah, that's right, Scott. A new social media post from the President of the United States acknowledging Iranian strikes on cargo shipping in the Strait of Hormuz, but not necessarily saying what, if anything he plans to do about it. Here's the President's post. He says the Islamic Republic of Iran shot at least four one way attack drones at ships traversing the Strait of Hormuz. One of the drones solidly hit the upper deck of a large and very expensive cargo carrying ship. Damage was done, but the ship was able to proceed on its way. We knocked down the other three drones. Obviously this is a foolish violation of our ceasefire agreement. That from the President just a couple of moments ago. And clearly the President is saying that this is a violation of the cease fire agreement that had been in some doubt. These strikes happened yesterday. We now see the President responding today. It was not clear whether he would say this is a violation of the ceasefire. He does say that left unsaid, of course, Scott, is what if anything, the US military is going to do in response and that could heat up things in the strait that had been relatively cool over the past week or so
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Scott Wapner
and what it means for the future of the MoU. Advancing into something more permanent. Correct.
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Eamon Jabbers
Yeah. And I think, you know, we're at a point now, Scott, where the negotiations have kind of gone full circle since the MoU was signed, where we had this meeting in Switzerland, the Iranians came out and rejected just about everything the American side said had been agreed to in those negotiations. You could see a scenario here, Scott, where we basically just don't move forward from here at all. The Strait remains de facto under some kind of Iranian control. There is some kind of tolling in the strait and negotiations just kind of peter out or don't really go anywhere. And what we end up with is kind of status quo, plus Iranian tolling in the strait. That's. That's one way this ends.
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Scott Wapner
Yeah. Status quo now. Right?
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Eamon Jabbers
Status quo now, not status quo from
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Steve Weiss
before the war before.
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Scott Wapner
Sure. Right, sure. And important to point out that that would be a material change and potentially change at least a bit the dynamic of commodity movement, especially oil and what prices may do. However, as even as you're reporting this news out and we were looking at the price of crude oil, it's not like it's getting a material increase from where it was, as we said, down 4%. It's barely above 69 bucks. I still think, like, the overall market seems to view this. Amen. As we're going to get to some place where this is going to, as you said, either peter out, wind down, but move into a level that I think potentially would be just less hostile.
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Eamon Jabbers
Yeah, look, and I think if you're the oil market, you look at Iranian tolling in the Strait of Hormuz and you say, well, you know, maybe we can just afford that. You know, we'll just, that's just now the cost of doing business. We're going to have to pay the Iranians some number of billions of dollars per year. But against the scale of the overall oil exports out of the Strait, that's not very much. It's a marginal increase. We can pass whatever that is onto the customer anyway. And so we're back to business. So I think, you know, from a pure dollars and cents standpoint, this might not be an enormous cost for the market to bear, but it might be a geopolitical reversal for the US Government in terms of its influence in the region. But the oil market doesn't really care about the hopes and dreams of the US Government.
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Scott Wapner
Yeah, yeah. And certainly the dynamic of the leverage that Iran thinks it now has given the Strait and its importance and their control of it. Eamon, thank you very much for the Very latest from our bureau down in Washington D.C. as we said, crude's barely moving up on this. It's still low. I mean, Kev, the market has been looking past this. It's been fixated on tech. Back to our discussion. Did you know that the Mag7 names have shed nearly $3 trillion this month? It's the largest monthly decline on record. It would be a mistake, however, to view what's happening with tech as a referendum on the market at large, because it is not. Market looks pretty good and it's been pretty resilient even as parts of tech have rolled.
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Kevin Simpson
I don't think any of us a month, two months, three months ago would have expected to see S&P 500 at all time, record highs. When you look at the devastation within these MAG seven names, what I'm comfortable is that there is some validation, validation that's taking place. It's not just like we're thinking that the AI trade is gone or the Mag 7 is yesterday's news. It's more a question of, you know, how much have we paid for it and what will this look like from a fundamental standpoint moving forward. And I'm going to say it like this. We're going from a momentum trade to a fundamental trade within tech. And I think that's really healthy. So what does that mean? It means that we need to see return on investment. We need to see margins staying the way they are. We need to see the hyperscalers continuing to spend. And we got that news from Micron this week. The numbers were important, not just if you're a shareholder, because they blew it out of the water. Top line, bottom line guides. But what they did is they validated the whole trade that the spend still there. So I think AI is intact. It's just a question of what are we going to pay for it and which stocks will be the beneficiaries.
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Scott Wapner
Scott, part of our point is that there's a lot of other things that are working right. You can't come at me and say, hey, the market looks like garbage. No, it doesn't. Anything but. I mean, the equal weight hit a record high yesterday. The Russell's been hitting record highs. It rebalances today, which is a big story in and of itself, but there's a lot to do constructively in this market.
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Commercial Narrator
Right?
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Jenny Harrington
And for my perspective, where there is the move from momentum to fundamentals, it's been a great year. It's been a great market for me. What gnawed at me so much in 2025 and what made me crazy was that all of the, all of the money, all of the investor dollars were going to the stocks where it's like is going to change the world, you know, is going to, it's just the direct, it was just into the direct stocks and the obvious stocks and the lack of creativity last year made me nuts. And I feel like this year people are getting creative where they're saying, you know, what's the second derivative Beneficiary, what's the third derivative? So I spent two, two days this week at the JP Morgan Energy conference and it was amazing because that idea that I had last year that there's capital misallocation, right, there's under and over allocation, the point on that was nailed home in the opening session on the first day of this where Chevron said, hey, we just made an announcement that we are partnering with Microsoft to bring energy directly to their data center builds. And we can do this because we have access to the fossil fuels and we have the partnerships already in place with ge, Vernova and Caterpillar to bring the turbines there. And that was really amazing to me. And then you look at what's gone on, right? Microsoft down 26% this year, you've got Chevron up 12. Well that makes sense. And so now we're getting into this broadening, now we're getting into who can benefit from AI, not just the obvious players. And then as this conference went on, it got like more and more interesting. There is one company, I can't remember who it was, but they said they were talking about the way they're using AI to identify where to drill and how to drill. And they said that used to be, you know, a 20 month process. Process, it's down to 15 days and our accuracy is up to 90% and it takes a fraction of the engineers that it used to. And another company was talking about how they pay out royalties and just paying out royalties they said used to be a multi month, 15 person process. Now it's three to four days with three to four employees. So you see the energy space being wildly transformed not just by the ability to bring energy to the data centers, but throughout the entire and through the entire ecosystem. So I love this move that we're seeing.
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Scott Wapner
You had a number of sort of, not the kind of milestones you want to make, but you're making them with names like Microsoft. The worst month since December of 2000.
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Steve Weiss
2000, yeah.
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Scott Wapner
Apple worst day since April 25th yesterday. Nvidia's worst week since April of 25.
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Eamon Jabbers
Yeah.
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Steve Weiss
I mean Apple's kind of interesting because you have to wonder as they keep raising prices, are the telcos, the wireless company is going to be willing to subsidize as much of the purchase price as they are and if starlink does come in, which is going to take a while, if they do come in, will they subsidize? So, so it's not a good story for the wireless companies, but in terms of Microsoft, for what you talk about all the benefits of AI for the oil industry, there's also negatives, which is if you can find oil easier, Right. You can lower the commodity price. Right.
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Jenny Harrington
But that's great for society.
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Michael Ozanians
Right.
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Steve Weiss
But in terms of Microsoft, again, we don't know how it's going to turn out. We don't even know what their AI strategy is this point and will they be disrupted? So the better markets being. Yes, it will be. Now in terms of AI itself, don't forget that pricing always calls the end of something. Right. And so when you're talking to when deepsea can do it so much cheaper than all the others and robust. So while we'll keep spending, who are they going to spend on? They can spend on open air and anthropic, you know, who are both arguably arrogant and are the Chinese who have their own issues. So it's wide open. The government can't stop, and I've confirmed this with government, they can't stop companies from using Deep Seek. So that's a real threat and that's pricing. And we don't always have a Chinese company and the Chinese government that are concerned with profitability, they just want the lead. So there you go. And guess what, we don't have to outsource to China to get cheaper pricing.
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Bryn Tauchman
Right?
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Steve Weiss
They can just, you know, use the software here, Microsoft, those are the concerns.
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Scott Wapner
Microsoft's got a nice move today, almost 5%. So it's a, it's a nice snapback in an otherwise down week. And you knew that to some degree the buyers, we're not going to take that long to come in to these names. It's not like people are suggesting give up the ship. It's just maybe don't be as overweight as you had been in the past. Kev, this plays right into you. I mean you bought more in video yesterday at 194, right? So we're basically, we're a touch below that that now why did you do that?
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Kevin Simpson
I think it just comes back to that thesis of the haves and the have nots. You know, this is not the Nvidia from two or three years ago. It would double, you know, every five minutes. Micron's taken that, that lead. But this is a stock now that just becomes less expensive on a valuation basis because of all of the things that they're doing to generate revenue, to generate free cash flow. Scott, this is in our dividend play, which is interesting because it's a stock we've wanted to own for so long. This is the second time we've been able to add to it. It really came down to that dividend bump. It took the one penny per quarter up that to 25 cents a quarter, initiated an 80, $85, $1 billion share buyback. And when you look at the numbers here, to me, it just has a more of an investable app. I think there's more of an investable appetite for me than a trading Appetite. So under 200, I like the stock and I'm comfortable adding to it.
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Scott Wapner
You know, the other thing that may be weighing on the space now, again, tech's turned around a bit. Nasdaq, as we said, has, has gone green. And what looked like a pretty ugly start of the day, open air, according to the New York Times, is pushing its IPO to next year. Is that weighing on sentiment? I don't know. Kate Rooney has more for us from San Francisco. Hi there.
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Kate Rooney
Hey, Scott. Yeah, so from what we're hearing, OpenAI is very much leaving the door open on IPO timing. The giant has not set an official timeline for that listing, according to sources, and has not yet held those important pre IPO meetings to talk about pricing or demand. Leslie Picker confirming that one for us. I have also spoken to sources who say a lot of this is going to depend on market conditions. New York Times kicking this discussion off with reporting last night that OpenAI is now leaning towards a 2027 listing and that Space X volatility is weighing on that decision. Also, some details that CEO Sam Altman was very focused on $1 trillion plus valuation for that listing open. I did reiterate a prior statement when we spoke to them. They said we have not decided on timing yet. There are, of course, ripple effects here. Questions now about what it all means for Anthropic's IPO that company has also filed confidentially. We haven't seen the financials, but we do know that this company is unprofitable. It is losing about $2.50 for every $1 earned. That's according to Pitchbook. At least it is a private company, Scott. But OpenAI is very much tied to a lot of other companies in this whole ecosystem. If you see shares of SoftBank as a major OpenAI backer, it dropped double digits on this report.
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Bryn Tauchman
Back over to you.
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Steve Weiss
Thank you.
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Scott Wapner
It is, it is interesting that, you know, OpenAI gets our space X, excuse me, gets partially mentioned in this reporting. It's coming off its lowest close since going public. Brin, what are you doing with the position that you, I think still have?
- [19:23]
Bryn Tauchman
Well, we had a position that was in a fund that we were able to sell. So we sold that because it was a liquid fund and we were able to sell it. I think that, you know, obviously I'm a huge fan of Elon, the team at Space X Tesla. I think though, what investors need to understand is Since December of 2024 they've had multiple tender offers in the private market. Like In December of 2024 there was a tender offer at 350 billion. So this company has now basically 6x in the private, mostly in the private market and now is here for us in the public market to buy while the revenues have grown about 33%. So I think investors need to understand the first year of an IPO can be really dicey. I mean a lot of companies, Facebook, Uber, Airbnb, etc. Had like 50% drawdowns. And so for me, I want to see over the next few quarters, how does the stock trade? I think the stock could go to 500 billion before it goes to 20 billion. They need to execute on really hard stuff. And I also think that the VCs, there's been such lack of monetization within the venture capital world over the last five years. I do believe when these lockups are able to be, the stock is able to be sold by these VC firms. I think they will definitely take some off the table because investors want liquidity. And so it's been a great run. But understand investors, it's up 6x since December of 2024 while earnings have grown 33%. So to me, it's just, I'm going to sit here and watch it. I'll come back in a few quarters once I get a better understanding of how the stock trades and what actually happens with Starlink over the next, over the next year or so.
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Scott Wapner
You mentioned Goldman being down today. Hard to say definitively. Is it down because of the open air reporting? I mean the stock's been on a tear, still above a thousand bucks. It's had a great move like, like most of the space has done over the last month or so we can show it over. Let's show it a month, guys, please. Like a lot of these stocks, Citi's up 13 in a month. Bank of America 12 and a half, JPM 11. Goldman's, you know, more or less flat. But the stocks had a, if you even break it out a little more than that. Stocks had a nice move, right? Getting above $1,000.
- [21:41]
Steve Weiss
Yeah. And since I shaved back Micron sold the third before the earnings, this is now my largest position. It too is uncomfortably large. But I do think part of it today is open air. But I also think, and we can go back to other cycles, Goldman trades in line with IPO cycles, particularly in technology because they are the leader. So that's a downside to being a leader. It's minor downside because it's noise on day to day because those companies will come public, open air will come public. At some point they're going to have to because they're going to need the public markets. So I've got no problems with Goldman here. I like it. I still think they are the best tone in all the financials.
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Kevin Simpson
Can I just get one footnote on Goldman Scott? Something we don't talk about all the time. Jenny and I are dividend investors and yesterday after the stress test you saw both JP Morgan, Morgan and Goldman increased their dividends. So as we sit here, Steve and I, shareholders and watch Goldman do incredibly well. Don't forget the fact that this dividend just went from $4.50 a share to $5 a share. That's an 11% raise just from the.
- [22:43]
Scott Wapner
Yeah, maybe Jenny will start buying some of the big banks now.
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Jenny Harrington
Let's hope.
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Scott Wapner
Why not?
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Shopify User / Shannon Maldonado
Why?
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Jenny Harrington
Because the yields aren't high enough. You know, for the dividend income strategy that I manage, We've got a 5% average dividend yield. So like they're great. And it goes to your point on Nvidia, like they've got a nice growing dividend. The yields aren't just high enough yet. They're more likely to make sense for our discipline growth strategy where there's a free cash flow hurdle and the dividends reflective of that. But the downside to having this super tight discipline. But trust me, I want to own them. I just need the market to crap out on me really badly for like two weeks, put them on sale and then I can jump in.
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Steve Weiss
I never want you to own Goldman.
- [23:19]
Jenny Harrington
That's why I say just two weeks.
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Bryn Tauchman
Weeks.
- [23:20]
Jenny Harrington
This crap out for two weeks, let me buy it forever.
- [23:22]
Scott Wapner
I'm looking over your guy's shoulder. I know you can't, you can't see it at home, but you may hear this bell ring in a matter of moments. There's an IPO that's going to go out like literally right next to post 9. I only bring it up because it's Cinda. They're a silver miner. It's a perfect segue. Weiss, to you because you're out of the gld.
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Steve Weiss
I did.
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Scott Wapner
Now there was some, I think Hartnett as part of his note today said gold was at a good entry point. Now because it's come down a bunch, I still think there's a fair amount of bulls around the gold story. Doesn't feel like you were, you were in this for like a minute. Right?
- [23:53]
Steve Weiss
It was like six months or so and which is a minute, you know, because I've owned stocks for, for a decade or so. But look, you know, gold didn't do what I thought it was supposed to do. So when you have inflation running away, gold was trading down and now you have rates coming down and gold is trading up so well.
- [24:17]
Scott Wapner
There you go. Yeah, thank you for the timing on that.
- [24:21]
Steve Weiss
I knew it was getting close.
- [24:23]
Scott Wapner
You could tell.
- [24:23]
Steve Weiss
Yeah, your timing was incredible.
- [24:26]
Kevin Simpson
Coming through.
- [24:27]
Steve Weiss
But look, so gold is always up to value. It's more of a sentiment and emotional play because it hasn't proven itself consistently to be in hedge or anything like that. So I looked at it and I thought gold could come below 4,000, stay below 4,000 because of all the momentum money that went into it that's coming out of it. So I'm out of it again. I've been raising cash, looking for opportunities.
- [24:51]
Scott Wapner
All right, Brian, let's do one more thing before we take a break. There have been a fair amount of redemption headlines related to private credit this week. Apollo, Morgan Stanley, ARES all, all in the news for one reason or another around private credit redemptions and what have you. You sold Apollo. Why did you do that?
- [25:11]
Bryn Tauchman
Yeah, I mean the like Apollo's fee related earnings are great. I think they're still going to grow around 20%. But the sentiment around these names and I do, I do really respect the charts and the sentiment around Apollo, all of them really is just so negative. So you know, I still am keeping my BDC like OTF and RCC. I'm getting around a 13% yield and I feel like the underlying portfolios are money good. But in terms of Apollo, I just think there's capital is not flowing there. And at the end of the day, why do stocks go higher? There's more buyers and sellers. And I just think people in the financial market right now are going to go to the Goldman's, the Bank of America's, the JP Morgan. And I just think the sentiment in the story around these names are too, are too questionable. And so I took Apollo off and just, you know, just sold it. I sold it. I think I was flat on the name.
- [26:05]
Scott Wapner
Okay, we'll take a quick break. We'll come back. We got a big call today on one of Jenny's favorite conference subjects. I told you how much she loved the energy conference. Well, she said in the past how much she loves this other area of the market too, when she gets invited to one of their conferences. Well, we'll tell you about the call next and what the trades are when we come back.
- [26:29]
Commercial Narrator
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- [26:57]
Shopify User / Shannon Maldonado
It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover, you can get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show, see terms@discover.com credit card my name is Shannon Maldonado.
- [27:24]
Commercial Narrator
I'm the founder of Yaoi, a gift
- [27:25]
Jenny Harrington
shop from the lens of artists and handmade objects.
- [27:28]
Commercial Narrator
I chose Shopify because when I was testing other platforms, it was definitely one of the most user friendly. It was important to me to think about where we would be in the future. All of the tools for reading your sales, like planning inventory, they're just right there on your dashboard.
- [27:41]
Jenny Harrington
For anyone starting a small business, the
- [27:43]
Commercial Narrator
biggest thing I can tell you, it doesn't have to be perfect. Shopify can help you build upon it. Start your free trial on shopify.com.
- [28:09]
Scott Wapner
All right, let's do some calls of the day. Caterpillar man, this stock's been just a great stock. Price Target goes to 1200 was 1165 and that's it. Baird near 20. Upside record high yesterday. Upside 77% year to date. Both you guys.
- [28:27]
Eamon Jabbers
Yeah.
- [28:27]
Steve Weiss
So look, it's Been great. I cut again a third of my position as soon as it went. Long term. I don't think the shares are cheap at all. I mean, I'm used to this being in the mid teens, not 36 times. So valuation is an issue. And again, this is an AI trade, pure and simple. That's what it is. So I have all this, you know, increased exposure. Every stock I own, well, not every, but a lot are based on AI. So you got it. I got to cut it back. Now's not the time.
- [28:58]
Scott Wapner
I mean, it's an AI stock until it isn't.
- [29:00]
Steve Weiss
Exactly. And that's my point. And I don't know when.
- [29:03]
Scott Wapner
You don't know when the isn't this.
- [29:04]
Jenny Harrington
I think on this one there's a lot.
- [29:05]
Steve Weiss
I think we're closer to the Isn't then further away.
- [29:09]
Eamon Jabbers
Yeah.
- [29:09]
Jenny Harrington
I think coming off of that energy conference, I think Cat and G. Vernova, there's a long, long, long. One of the things that they talked about constantly were cues, you know, and how long the queues and how robust the cues are just to get their product.
- [29:21]
Steve Weiss
I ask you a question about the conference. How many companies got up and had any words of caution about their stock, had any negative comments from the fundamentals? And when did we ever see that?
- [29:33]
Jenny Harrington
Nothing to do with Cat.
- [29:34]
Steve Weiss
No, what I'm talking about is that generic question, what I'm asking.
- [29:37]
Jenny Harrington
I'm not unique to energy. That's any conference you ever go to on any subject in any industry. The CEO.
- [29:43]
Steve Weiss
That's exactly my point. That's exactly.
- [29:45]
Jenny Harrington
I'm telling you, the theme that I heard was the queues are long. The queues are long, it's hard to get to the turbines.
- [29:50]
Steve Weiss
That's exactly my point. So you come back and you keep talking about all this positive stuff. That's all they ever say. So that's only one data point. You can't rely on companies.
- [29:59]
Scott Wapner
Okay, Well, I mean, I'm not, it's not like their bullishness is unfounded. We're. We're tripping over ourselves to build data centers and.
- [30:12]
Eamon Jabbers
Absolutely right, Absolutely right.
- [30:14]
Steve Weiss
But no CEO I know has ever gotten up and called the end of a cycle. But that when you listen, when you listen to them, you keep think it's going to last forever. What I'm telling you is I think it's going to end sooner. And the market's telling you this month that they think the spending may end sooner than everybody thinks. So when the base case, that's going to go on forever for another Five years is in everybody's thinking, every conversation. You got to realize who's the marginal buyer for that theme. Right. And since everybody knows it, you know, that adds the risk, the risk substantially.
- [30:48]
Kevin Simpson
Caterpillar gets paid on the way. So when it does end, they're not stuck with IOU.
- [30:52]
Jenny Harrington
Right.
- [30:52]
Kevin Simpson
That's what happened in the late 90s. There were all these companies that were extending credit. Caterpillar gets paid along the way. So to Steve's point, someday it does end, whether it's two years, three years, or four years, there's still a Runway higher. But I like how you trimmed it. And that's how we manage it. Also, Scott, we keep a 5% max in caterpillar as it appreciates and we love seeing it go higher. We're trimming into strength and it creates dry powder for.
- [31:15]
Steve Weiss
Yeah. More acutely, it's not when it ends, it's how far in advance of the end. The market discounts it. Fair. And that we don't know for this cycle.
- [31:24]
Scott Wapner
That's more breaking news out of Washington. Amen.
- [31:26]
Mike Santoli
Jabbers.
- [31:27]
Michael Ozanians
We're going to.
- [31:28]
Scott Wapner
Hi, Emmett.
- [31:29]
Eamon Jabbers
Scott. That's right. The President pushing back on a possible European digital services tax taking to social media just a short time ago to threaten tariffs. Here's what the President says. He says numerous European countries have been discussing the imminent implementation of a digital services tax on American companies. Some of these countries are close to actually doing this. Please let this statement serve to represent that any country that imposes such a tax will immediately be met with a 100% tariff on any and all goods sent to the United States of America. This tariff will supersede trade deals made with the country, whether implemented, signed or not. Additionally, the 100% tariff will be immediately imposed if they proceed. So how should we read this, Scott? I mean, I think this is a flare up of diplomatic tension between these, between the United States and some of these European countries over this digital services tax. But the President doesn't necessarily have the authority, after the Supreme Court ruling on tariffs, to impose 100% tariffs. And particularly with the EU, which has its own rules and regulations in terms of trade, his authority to do something this sweeping might not be as clear as it's suggested by this tweet. Nonetheless, it does signify some diplomatic feathers being ruffled here over the possibility of, of this tax and that pushback. We'll see if it has any impact on the European decision making. Scott.
- [32:51]
Scott Wapner
Okay. Amen. Thank you. That's Amy Jabras, the latest. We have time for another sure. REITs, your favorite conference.
- [32:59]
Jenny Harrington
It is.
- [32:59]
Scott Wapner
Wolf Research says we're going for a breakout in this space. And you have a lot of these.
- [33:04]
Steve Weiss
Every manager was very positive. I bet.
- [33:06]
Scott Wapner
Yeah. And maybe they should be, because it's poised for a breakout.
- [33:09]
Jenny Harrington
I mean, I think it. I think, you know well as well as I do, it's our job to read between the lines and see what's going on. So. So, interestingly, the global REIT is up 30% in the last two years. So to some degree, it's already broken out. But I think when you think about REITs today, they're the perfect halo trade. Right. Heavy asset, light obsolescence. When I mentioned before that I've been thinking about capital misallocation over and under, there has been no capital allocation to this area for a long time. They've been starved of capital. So company after company was saying there's no new builds coming. Whether it was health care or apartments or shopping centers, there was just no new builds coming. And so four and five years ago, they were talking about cap rates of 4%. Today they're talking about cap rates of 6 to 8%. And then you take the thing and layer it on, and there were companies like Mid American or American Homes for Rent, where there's just enormous documentation that. That's incredibly burdensome to their operations. AI is revolutionizing that. So I think it's a great place to be. I think it does have the wind at its back. But I don't think you get a huge pop because there has been a move.
- [34:09]
Scott Wapner
What's your favorite reit? Right now? Right now.
- [34:12]
Jenny Harrington
Okay.
- [34:12]
Scott Wapner
Putting you on the spot. I need an answer.
- [34:13]
Jenny Harrington
I'll give you. My favorite REIT is Melrose mrp, which is the spin off the land bank. Spin off from Lennar mrp. Mrp, Melrose Properties, but it's a land bank. It's spun off from Lennar last year. It's got like a 10% yield. It's a great company, really well managed.
- [34:28]
Scott Wapner
All right, we'll watch mrp. Thanks. We'll get Mike Santoli's insights next.
- [34:36]
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Kate Rooney
Welcome back to the Halftime Report. I'm Seema Modi with your CNBC News Update. Russian authorities in control of the Crimean peninsula declaring a state of emergency today after weeks of air attacks from Ukraine, including overnight strikes that were one of the largest since the war began. The Russian military says it intercepted 660 Ukrainian drones in the attack, but said nothing about any casualties or damage. Utah Gov. Spencer Cox restricted fireworks ahead of July 4 and declared a state of emergency today as the largest wildfire in the country explodes in size. The Cottonwood Fire in the southern part of the state, covering more than 100 square miles and prompting mandatory evacuations, is just one of six fires burning across the state and 0% contained. And space X reportedly selling, telling investors it plans to launch a Starlink mobile service for consumers. The Financial Times reports the company was considering a Starlink retail product and could build its own US mobile network. Starling currently has more than 10 million subscribers. The company has yet to comment on the report. Scott, back to you.
- [37:18]
Scott Wapner
All right, Seema, thank you. Sima Modi, senior markets commentator and overtime co anchor Mike Santolis here at Post nine for his midday words. Nice to see you. Big observation from this week is what
- [37:30]
Mike Santoli
you know, we've gapped out to extreme extremes when it comes to the narrowness of the strength in memory and the attempts to rebalance away from it. And I think that is really the story. Even if you look at a month to date basis, you're looking at a few percentage point outperformance of the median S and P stock over the S and P Today it seems like it's a little bit of unwind of that. Right. You're having things relax in the other direction. These software bounces have always been suspect. They always seem like it's just a little bit of a, you know, short covering and taking some, some exposure off because you get some big moves.
- [38:04]
Scott Wapner
To your point, I'm glad you mentioned that. ServiceNow is up 8 1/2 percent. Snowflake almost 5. Salesforce almost 5.
- [38:11]
Mike Santoli
So that's why I say it feels unwinding. Doesn't mean at some point, you know, the ball is going to stop rolling down the hill and you can maybe pick it up. But right now I do think that market kind of wants to go into the end of the month having done some of this work, I think to kind of broaden out a little bit and rebalance. I'm always a little bit suspect as to whether that means that's the new engine of the next bit of upside because I really do think you have to have some of the Magic 7 Wake up to help carry the index.
- [38:39]
Scott Wapner
Microsoft's up 5% today. I mean it's been a really bad run for that name, but it just shows you, I think at least to some degree, investors are not going to. The bulls in these names are just not going to let them fall all that far, even if they think a lot of juice has been squeezed. Like how, how far are these things
- [38:59]
Mike Santoli
going to, how cheap does Microsoft have to get relative to its history? 18 times. I also think the lower these stocks go, the more the incentives build toward the companies modulating on spending spend or doing something that says, hey, we get it, you're not confident that we're investing profitably.
- [39:16]
Scott Wapner
All right, I'll see you on closing bell. Good stuff, Mike. Thank you. In some other news, Leon Black has just left Capitol Hill. His voluntary deposition in the front of the House Oversight Committee about his ties to Jeffrey Epstein was cut short this morning and lawmakers have now subpoenaed him to appear under oath on July 16th. The ranking members on that committee accusing the former CEO of Apollo Global Management of avoiding critical questions and not being forthcoming after refusing to answer specific questions about non disclosure agreements he had signed. More halftime report after this. Wanted to hit a number of committee names hitting highs and lows this week. McDonald's, Kev, lowest level since August of 24. That was yesterday.
- [40:18]
Kate Rooney
Yeah.
- [40:18]
Kevin Simpson
I feel like if you look at a five year chart of this, the Mendoza line of $300 is where it just likes to hover. So if you get in here, you can expect that it'll probably go to 300, and then that's about it.
- [40:29]
Scott Wapner
Why? What's the issue with the stock? Why is it the lowest level since 24?
- [40:33]
Kevin Simpson
I think a lot of it had to do with the profit margins that they were hoping to generate. And when they went back to the $5 meal, it brought a lot of people into the store. So when you look at the numbers, they look very good, but the guides aren't there. Inflation has taken a toll on the profitability at McDonald's. It's still operating amazingly well. They have the real estate model. We own the stock. Being a little bit Sarcastic about that $300, but there's a good reason that it stalled, and I don't know that you need to rush into it.
- [40:58]
Jenny Harrington
It.
- [40:58]
Scott Wapner
It's a good segue to Oscar the Grouch. United Healthcare. Highest level since April of 25th today, Oscar.
- [41:06]
Steve Weiss
Yeah, well, it is. And thank you for pointing that out. And thank you for staying away from my wardrobe.
- [41:13]
Scott Wapner
I was gonna go there, but, you know, you can only call it the Caddyshack outfit so many times. Joke is stale.
- [41:19]
Jenny Harrington
I think this looks nice today.
- [41:20]
Steve Weiss
Thank you. People allergic to nuts like fashion, right? And some people embrace fashion.
- [41:27]
Scott Wapner
UnitedHealth.
- [41:28]
Steve Weiss
UnitedHealth look, the. It's two things going forward is that you had some. Made some headway in fundamentals last quarter. I think it's anticipated you'll continue to do that with Emsley coming back. And health care is also defensive. So as you see on a number of red days, broadly for AI, you see night health being positive. So I think that's what it is. It's balancing the portfolio. So I'm staying there right now. It's been a great stock for me. But at some point, you know, you'll still have health care, which is a major, major head. Okay.
- [42:05]
Scott Wapner
Stanley, Black and Decker. Jenny. Highest since November of 24 this week.
- [42:09]
Jenny Harrington
Yeah. So I think, you know, I bought this a few years ago, and I think I paid 68 for it when I bought it. So it's been a long, long road of sitting and doing nothing, and then finally it moves up. But it's basically over its pandemic hangover, where it shot straight up during the pandemic, then it crashed down to earth. Then it took longer than I realized for inventories and all of that to normalize. But where they are, as they're normalizing, they're targeting 35% gross margins. They're actually executing on that. It's unfortunately down to 3.6% dividend yield. It's only 16 times earnings but that gives me that tough spot where I'm like look for the dividend income portfolio. I needed a juicier yield world. It's had a big move so I don't know if it will still be in the portfolio at year end. But they're doing everything right and it's a great, well managed company. A dividend aristocrat.
- [42:51]
Scott Wapner
Lastly, Brent quickly Palantir, lowest level since May of 25. So in more than a year now.
- [42:58]
Bryn Tauchman
Yeah, I mean this is a good example of when sentiment changes on a stock then all of a sudden it comes back down to earth. And so it's obviously getting a rally today with the software names and so I think if settling in here but it does continue to make lower highs. So I've sold a bunch by the way. Well lower than this and higher than this. I'm just like keeping what I have left long term. I do love what they're doing. They're the ultimate original AI software company that's executing and I think what Alex Carpent team are doing is great. So I'm going to continue to hold the position that I have.
- [43:30]
Scott Wapner
Take a quick break. Coming up, the world's most valuable sports empire. CNBC out with a new list today. Tell you who's leading the pack and why. Mike Ozanian joins us right here at post nine next. All right, welcome back. CNBC is out today with a list of the most valuable sports empires. Here to break down the numbers and the names is our senior sports reporter Michael Ozanians. Good to see you.
- [44:18]
Michael Ozanians
Great to see you.
- [44:19]
Scott Wapner
So this is an interesting list to put together. Tell us more.
- [44:22]
Michael Ozanians
Well these are the people and entities that own the most valuable portfolio of sports assets. And we say sports assets. We're not just talking about teams, we're talking about people that invested in things like golf, invested in networks, invested in auto racing, anything sports related properties.
- [44:40]
Scott Wapner
I mean like tourist attractions. I look at the star on this and I'm like that's not a team, that is a destination.
- [44:48]
Michael Ozanians
A lot of sponsorships though. Yeah, a lot of sponsorships. So directly related to to the Cowboys they generate from that.
- [44:57]
Scott Wapner
But number one is is Kroenke Sports and entertainment and they become a, you know it's funny, they become a juggernaut on and off the field.
- [45:05]
Michael Ozanians
Exactly. And the knock against Kroenke for years was that his assets were valuable but his teams weren't any good. That's not the case anymore.
- [45:14]
Scott Wapner
Tremendous arsenal just won the Premier League. Rams are good. Rams are good. ABS are good. Nuggets are good. It seems like whatever that this gentleman touches these days and his team, they've been running it the right way, as I said, both from both a business standpoint and on the fields of play.
- [45:36]
Mike Santoli
Yeah.
- [45:36]
Michael Ozanians
And Scott, you and I have talked about this many times. The value of operating your building or owning the land around it. He does both with all of his teams, so that's a big plus for him.
- [45:47]
Scott Wapner
Is it harder to build? Now, these are also, let's make it clear. These are teams that have been owned by their respective groups for a long time. Except for, you know, the commanders. Relatively new, obviously for, for blitz for Josh Harrison and company. Is it harder to build empires from the ground up today because valuations have gotten so large?
- [46:09]
Michael Ozanians
No. You know, we're seeing people like Mark Wall Street Walter. He's new to this year's.
- [46:13]
Scott Wapner
Oh, yeah, that's a good point. You know, Dodgers. Right.
- [46:15]
Michael Ozanians
And he bought the Lakers recently. So often it's people that own an NFL team and an NBA team that are up near the top because those are the two leagues with the most valuable teams.
- [46:26]
Scott Wapner
That's a good point you raised. Where is, where is the Walter? Oh, it's too global. They're eighth.
- [46:32]
Michael Ozanians
Yeah.
- [46:33]
Scott Wapner
How come only eight?
- [46:34]
Michael Ozanians
Yeah, yeah. Well, because we only count the value that the person own. So if you own 20% of a team, that much of it is attributed to you. So he doesn't own 100% of the Lakers. Whereas somebody like Steven Ross or Cronke, for example, he owns 100% of his teams, are very close to it. So all of that value goes to his enterprise. Whereas with somebody like Mark, generally owns, even though he's the controlling owner in those teams, generally owns, you know, less than 80%.
- [47:03]
Scott Wapner
Love the insight. Thanks for being here.
- [47:04]
Michael Ozanians
Thank you very much.
- [47:05]
Scott Wapner
That's Mike Ozani. And a reminder as well, three o' clock today, closing bell, the Rams president, Kevin Demoff. He's going to join us and we look forward to that conversation. We'll do finals next.
- [47:33]
Bryn Tauchman
Right now.
- [47:34]
Steve Weiss
Look it up.
- [47:35]
Scott Wapner
Your mic's open.
- [47:36]
Eamon Jabbers
We're back.
- [47:38]
Scott Wapner
Welcome back. Welcome back. Thank you, Netflix.
- [47:42]
Steve Weiss
How about a heads up?
- [47:43]
Scott Wapner
I'm going to give this to you, so if you're not ready, looks bad on you. Lowest level since October of 24.
- [47:50]
Steve Weiss
Yeah.
- [47:50]
Scott Wapner
What do you do with that?
- [47:51]
Steve Weiss
You know, I was just saying to Kevin, look, the stock's up today. So the stock's been in some pressure trade down in the 80s on, on rumors that they're going to acquire Lionsgate. So don't forget they went after Warner. So this looks like okay, when now we're dipping down. We definitely feel we need more content and that's not a good look for the stock for the company. So again, this trades quarter to quarter. It's when I look at when I had cut back on and I think down here it's too cheap to sell. So let's wait for the quarter, see what happens.
- [48:19]
Scott Wapner
Okay. Fiserv. Lowest level since October of Wow, 2016. Jenny.
- [48:25]
Jenny Harrington
Yeah. So we've owned this for a long time. You know, there's new management that came in about a year ago and they've actually been executing well and meeting their numbers. It's a huge free cash flow story. Trades at 6 times earnings, has a 16% free cash flow level. And we actually added to it about a month ago. We added to it when it was at $56. So we're down on that. We might add to it again. But the bottom line is like everybody hates this. But the numbers are the there, the math is there, the cash flows there. And it's a necessary product. So it got caught up in the software, you know, apocalypse. But this isn't one where you can go and replicate on your own using quad like banks depend on everything they do.
- [49:00]
Scott Wapner
Okay. Dick's Sporting Goods. Highest level since February of 2025. This week. Earlier this week.
- [49:07]
Steve Weiss
Look, they're distinguished. They're not quite the only sporting goods retailer out there, but they are the largest, they are the most national. They keep refreshing their stores. So I think you're in season for it. But I still like the stock. I think trade in premium multiple.
- [49:21]
Scott Wapner
Okay. Again near February 2025 highs. Professor Jeremy Siegel of the Wharton School will join me at 3 o'clock today on closing bell. So we will close out the week with a conversation with him. Brin, what is your final trade?
- [49:37]
Kate Rooney
Uber.
- [49:38]
Bryn Tauchman
Nice bounce off of 70. I think it's 87 is the next stop for the stock.
- [49:42]
Scott Wapner
All right. Kevin Simpson.
- [49:45]
Kevin Simpson
I think Nvidia is cheap down here. Demand continues to outpace supply and the Blackwell was ramping up faster than any product in company history.
- [49:53]
Scott Wapner
Which is why you bought more. Jenny Harrington.
- [49:56]
Jenny Harrington
All right. From the Energy Conference.
- [49:57]
Scott Wapner
All right.
- [49:58]
Jenny Harrington
Enbridge. 5% yield. It's an enormous midstream energy company. As long as fossil fuels are flowing, they make money.
- [50:04]
Scott Wapner
You got any conference conferences next week we need to know about?
- [50:07]
Jenny Harrington
I've been to so many.
- [50:08]
Scott Wapner
Yeah, it sounds fun. Weiss.
- [50:10]
Steve Weiss
Yeah.
- [50:10]
Bryn Tauchman
From.
- [50:10]
Steve Weiss
From the REIT conference. No, I'M only kidding. I'm going with. I'm going with meta. I think it'll continue to bounce here.
- [50:16]
Scott Wapner
Okay, the multiple is pretty low in
- [50:18]
Steve Weiss
the teens, so why not buy it?
- [50:20]
Scott Wapner
Hey, you always tell your family office conference and all that I'll see on the belt You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekly days at 12 Eastern only on CNBC.
- [50:36]
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- [51:11]
Shopify User / Shannon Maldonado
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