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Halftime Report
Trading Trump’s New Tariffs 4/2/25
00:44:24
Scott Wapner and the Investment Committee debate “Escalation Day” as new tariffs are set to be announced later this afternoon. Plus, the desk making some major portfolio moves, they detail them all. And later, we go through the Committee’s quarterly report. Investment Committee Disclosures
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- [00:00]
Scott Wapner
Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies?
- [00:33]
Carl Quintanilla
Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson 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. All right, Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wachter. Front and center this hour, escalation day. New tariffs set to be announced later this afternoon. So many questions about what the markets will do in the days and weeks ahead. We'll ask the committee. Joining me for the hour, Joe Terranova, Steve Weiss, Bill Baruch, Rob Seachin along as well. We will go to the markets. Some early weakness turning green, some what, four hours before. We get some more specifics here, Joe, the White House says as part of today's schedule, 8pm Global markets respond as the impact of America's renewed strength takes hold. We know how the markets have reacted so far. Yes, right. Yes, they've been lower. Nasdaq's down like 11% year to date, S&P down 5 and so on, on and so forth as the uncertainty has ramped up. Clearing event or not, that's all that matters. I think that's what people want to know.
- [02:13]
Joe Terranova
Clearing event sentiment and positioning works in the favor of bulls right now on April 2nd. However, I think when we look at the first six months of this year, we reflect back on it. Bulls, bears. I just don't understand how anyone can have such universal conviction in either direction. I literally think we're setting up for a pillow fight between bulls and bears. And in that regard, yes, this could be a clearing event in terms of markets might rally into the earnings season, but ultimately on the other side of that, am I going to get the big beautiful tax bill that I've been promised because maybe that's the clearing event that markets need. So collectively I think you put all of that together, you say to yourself how do I position in an environment where I think it's one big pillow fight and I don't understand how you could not be defensively allocating towards whether it's bonds or equities. And I have the exposure to equities. So a clearing event benefits me. But my exposure in places like financials, it's not in technology, it's not in the Mag 7.
- [03:22]
Carl Quintanilla
I want to get to some, I guess what we can consider Breaking news. It's Pippa Stevens with an alert regarding Amazon and TikTok in a very interesting headline. What more can you tell us?
- [03:34]
Scott Wapner
That's right, Scott. So Amazon is reportedly making a last minute bid to buy TikTok here in the US that is according to the New York Times, which does cite three people familiar with those talks. Of course, Oracle and Blackstone have also been in this process and there are open questions about whether or not China will actually sell. Now Trump is expected to meet with senior White House officials later today to discuss whether or not this is a possibility. But once again, Amazon putting in a last minute bid to buy TikTok here in the U.S. scott.
- [04:04]
Carl Quintanilla
Okay, Pippa, thank you for that update. We'll just kick it around for a minute. We'll get back to the larger issue at hand, obviously with the markets, but everybody owns Amazon on the desk. What do you think about that, this headline?
- [04:16]
Steve Weiss
You know, I thought about it before and I've not been able to really conclude on it. I'm going to defer to Andy Jassy who's gotten rid of all the vanity projects from Jeff Bezos who was a great CEO. And so this is not just a throwaway vanity project. I think that, you know, given their, their consumer, the points where they touch the consumer, they could probably do quite a bit with it, particularly on the advertising front. So I'm going to just be supportive of of Jassy if this is what he thinks they should do. But it's tough to analyze.
- [04:50]
Carl Quintanilla
We could show meta too if you want. I mean Amazon obviously getting a lift here. You'd think that Metta would probably prob a little bit red. In fact, it is even taking its marginal move up for Amazon. Marginal move down for matter. But nonetheless, I mean this is sort of where the conversation gravitates to in relation to what Steve was talking about with the ambitions that they may have.
- [05:12]
Bill Baruch
Ambitions for sure. You talk about a company that grew earnings 90% last year. And I see the cloud unlocking, the profitability there. It's going to be as a juggernaut. But as you kind of refer to it, it's not quite a vanity project. It's something that they really believe in. The advertising component, you know, has driven some of these names like Meta and Alphabet, I mean, tremendously over the years. And I think Amazon is, is well positioned to really capitalize on the infrastructure they already have and be able to pivot and add this to their toolkit.
- [05:41]
Steve Weiss
Yeah, I would say that the impact on Metta is inconsequential right here because it's already been assumed, I think, by Meta shareholders. If you go back to the big spike when they thought they put it out of business, the government, and now it's in the stock that somebody's going to buy it in the US but.
- [05:58]
Bill Baruch
Even get more granular, what type of infrastructure do they have in place right now that they could really utilize in order to make this even a more profitable business if they took TikTok on?
- [06:08]
Carl Quintanilla
You know, the other, the other story I wanted to get to is what Eamon Javors was just talking about at the end of the previous program. This Politico headline that President Trump is telling his inner circle that Elon Musk is going to leave soon. That was a report that sent shares of Tesla higher midday as well. You're looking at an intraday move there. Certainly one of the better performing stocks in the market today, up near 4%, as you see. And you probably have also seen, if not heard, certainly on this program and others on our network, the analyst Dan Ives has been urging Elon Musk to get back to his day job, so to speak, or at least one of them because he does have many. As CEO of Tesla, of course, delivery numbers came out. Ives called those a disaster on every metric. That was his new note today. Dan Ives joins us on the phone here because we wanted him to react to this news. You have been, and thank you for joining us, probably one of the most vocal, if not the most vocal supporter long term of Tesla and Musk in the analyst community. But also more recently, one of the more critical ones about his role in the government, what it's done to Tesla sales. And I want your reaction to this headline that Politico is moving within the last hour that maybe he is going to leave soon. What do you think?
- [07:37]
Dan Ives
Yeah, I think clock struck midnight for Musk. I mean, it reached a tipping point in terms of what we've seen with his brand crisis tornado. And he started to make that move with that all hands meeting, you know, after me and you spoke. And I think ultimately there was a moment of truth and he had to basically pick. I still believe he stays with Doge in some form, but I don't believe he could stay CEO of Tesla and continue to go down this path with Doge. And I think he had a pick and I think this is the right move for Tesla. And that's our view.
- [08:15]
Carl Quintanilla
I mean, you got to the point where you called this in your most recent note, a quote, full blown crisis that he needs to stop, in your words, a political firestorm. Do you think that this is sufficient enough, if it is in fact going to happen, to solve this crisis, as you put it?
- [08:39]
Dan Ives
Oh yeah, look, will there be scars, a black eye, stitches? Yes. But if he does this, and I believe it's a matter of when, not if, this stops Tesla over time from becoming a political symbol. And you're talking about, which is why it's been so frustrating to shareholders, one of the best disruptive technologies, if not the best in the world, but yet mosque day by day essentially was a third rail issue and he needed to do this. We talked about it was really by maybe and I think now as this comes out, look, I think it's been $100 at least overhang on the stock.
- [09:23]
Carl Quintanilla
Part of the narrative around the Wisconsin Supreme Court outcome was that, you know, it was not only a win for the liberal candidate, but a rebuke of Musk and his involvement, both his time and his financial assets in that race. Which leads me to ask you whether you think that there has been some degree of irreparable damage caused by his involvement with Doge and otherwise.
- [09:53]
Dan Ives
Look, I think there's definitely some permanent damage, but given our view of autonomous robotics, where Tesla is going to be over the coming year, I view it as just a dark chapter relative to Tesla, but I don't think that changes the long term story. But as we talked about it must continue to go down this path. It was the path of no return and that's why him starting to make this move. And we'll see as the news comes out. It's the best thing that ever could have happened for Tesla shareholders on the day that you have no rose colored glasses. An absolute disaster. Train wrecks, one queue delivery number. He needs to get back home being CEO of Tesla and I think that's ultimately the path he takes.
- [10:39]
Carl Quintanilla
All right, we'll leave it there. I appreciate you so very much joining me on the phone, reacting.
- [10:43]
Dan Ives
Thank you.
- [10:43]
Carl Quintanilla
With us to this. Shares are the highs of the day, as you see. Up, up 4%. You're. That you're a shareholder. Your reaction here.
- [10:51]
Bill Baruch
This isn't what we want to see. I mean, we've been waiting for this and I think, Dan, I've said it right. The clock struck midnight. You don't want to stay welcome too long in the White House under Trump. And I think an exit here would be the right time for him get back to business. He's an innovator, he's a disruptor. That's why we're invested in the stock. We do believe tech. At the end of the day, it's not what you're doing for me now, it's what you're going to do for me in the future. He needs to keep building for the future there, Joe.
- [11:16]
Carl Quintanilla
You guys still own it in the T. Yeah.
- [11:18]
Joe Terranova
No, the, the momentum is so negative here at the end of April. I think you suspect what ultimately will be done with this position, but I don't know. I'm not sure how this reverses though, the fact that registrations are down so significantly and it's not just in the United States, it's in Europe, it's around the world. It's clear that BYD has moved into the lead in terms of market share. So, okay, this, this might be a. According to Dan Ives, this might be a much needed step. But I don't know if this is the elixir that reverses the negative sentiment, the lack of sales that we're seeing right now for this company. Also, keep in mind the administration is not prioritizing decarbonization like the previous administration. So it's not as if you have someone standing up there at the bully pulpit saying let's go out buy EVs like we did in the previous administration. So I think this might be ceremonial more than anything else.
- [12:11]
Carl Quintanilla
You look at the decline in numbers, obviously the delivery numbers, as Dan Ives was talking about, were not good. Overseas, even worse. France down 37% year on year. Sweden down 68%. Finland down 39%. Belgium down 69%. You have a thought on that?
- [12:31]
Steve Weiss
I do. Look, the brand damage here is permanent. There are many other options outside the U.S. keep in mind that Budweiser still has recovered over the last two years and change from their basically flawed advertising. Good point with Dylan. And that's not so identifiable with the brand here. It's one to one. So there are too many headwinds. They far outweigh the Tailwinds, where he's venturing in terms of robotics is extremely competitive. Extremely. I want to emphasize that.
- [13:04]
Carl Quintanilla
Yeah.
- [13:05]
Steve Weiss
So to me, he's lost the edge in terms of being. Not in terms of being brilliant. He is. But then his politics aren't going to go away. You're delusional if you think they are. We know position, the White House may. Those politics aren't going away and autonomous driving is still a long time away.
- [13:21]
Bill Baruch
But we know this is not valued as a car company. You mentioned robotics, you mentioned autonomous. But it's the data, the data that these companies carry has value. And I don't think there's permanent damage here. I think that will start to be removed from it.
- [13:35]
Steve Weiss
We'll disagree on that.
- [13:36]
Carl Quintanilla
Let me just move real quick because I want to get back to that news that we began the show with really this report of a possible transaction between Amazon and TikTok. If there's a big, high profile deal to potentially be had, you can bet that David Faber probably has details on it. In fact, he sat down at our desk here at post 9. What do you know?
- [14:01]
David Faber
You know, been tracking this one for forever, literally since the summer of 2020. In fact, towards the end of the first Trump administration when they were banning TikTok and there were lots of efforts being made, as you well know, Scott, as well, to buy what has only become an even more popular app in the four and a half plus years since then, as our viewers probably aware, a bill was passed in Congress essentially saying, hey, the app has to find a new home that is completely not controlled by a foreign adversary, in this case the Chinese, of course. And President Trump upon regaining office, put a 90 day moratorium or so on that. So we're coming up on the date by which some deal needs to be done. What I'm hearing today, in addition, of course, what we're hearing from the New York Times in terms of Amazon's interest, and I was hearing this this morning, Scott, is that we may get an announcement involving the future of TikTok today, along with perhaps so much else that's coming at us, not completely clear, but April 5th is the deadline. So of course that is looming regardless of whether it is as soon as today. And while the New York Times is reporting this on Amazon, and they do say that it sort of may not be taken as seriously by those involved, I've been tracking a deal that has perhaps more of a chance, which is simply one in which you would essentially dilute down the ownership ByteDance below 20%, allow many of the current owners of ByteDance to step up, bring in new capital and essentially say it is no longer controlled by a Chinese adversary. Oracle would still be involved in that. Again, people may recall that Oracle is where the servers are housed for TikTok. But it's interesting to note the press of the presence of Amazon and the benefits that might accrue to them as a result of taking control of TikTok shops and the user data that they get from that and what is essentially become a very popular way to buy things in terms of live shopping on that platform in qvc, but for the modern age. And I am also aware of another strategic my sources will not that unnamed at this point, not quite as large as Amazon, but another major product player that also has interest. All of the players apparently down in D.C. many of them told to show up today, is what I've been told in part because there may be something that comes out later or there may be further negotiating necessary.
- [16:30]
Carl Quintanilla
You've talked about this so many times along the way, as you've said. I mean Steve Mnuchin, the former treasury secretary, was a name that was in the mix totally. Bobby Kotick was a name in the mix way back when big venture names were in the mix mix. What I hear you saying here though, is that yes, we've seen this headline regarding Amazon, but the buyer is still potential buyer is still very far from certain, even as the decision could be closer and closer if not today.
- [16:59]
David Faber
That's true. And then you could even if you were to get an announcement along the lines of what we've been sort of expecting, more would be the case of diluting down ByteDance, having many of the current owners step up, bringing in some new capital. You still might get opposition to that. Remember this was passed by the Congress and signed by President Biden. You might get opposition saying, well the Chinese are still involved. You still haven't thwarted perhaps their ability to spy on on users of the service. And so even if you do get a deal, Scott, it's not completely clear to me that you wouldn't have an Amazon perhaps be trying to say, hey, we're the better alternative or again another company do the same. So I guess in some ways it may be far from done, but we may certainly get some clarity about what's going to happen in the but what's.
- [17:46]
Steve Weiss
To stop Trump from pushing the timeline back again? Anything?
- [17:50]
Carl Quintanilla
Ask David.
- [17:51]
David Faber
I don't, I don't know, Steve. You know, I'm looking back at the original order in terms of the extension of up to 90 days. And I don't know what the ability is to extend it another 90. My expectation would be that is possible. Yeah, yeah.
- [18:07]
Joe Terranova
David, what about Larry Osin and Oracle? There's such a familiarity, especially going back to the first administration. I mean the expectation was that Larry's going to ultimately end up in a strong position here.
- [18:18]
David Faber
Well, and Oracle obviously already is the host of. Remember, they all project Texas, moving everything to Texas. You're right. I think, Joe, that that is certainly an expectation that they have some influence there and who the new money might be that is brought in. Again, I just, I don't have a lot of clarity around this. And as so many other things in terms of this administration, things change very quickly.
- [18:39]
Joe Terranova
I just can't see the President walking away from that relationship which is perceived to be a close relationship.
- [18:46]
Carl Quintanilla
Probably speaking of the President probably has a as good a relationship. It's not, if not a better relationship with Amazon for that matter than he's ever had.
- [18:56]
Steve Weiss
Right.
- [18:56]
Carl Quintanilla
Relative to at least Jeff Bezos.
- [18:58]
David Faber
Certainly a better relationship with Bezos than was happening the first Trump administration. I mean, by the way, if it were to be an Amazon deal, it is worth noting Amazon could host all of that, of course on the US So it conceivably would be something investors want to keep in mind too. Yeah.
- [19:11]
Carl Quintanilla
I mean you paid, you know, tens of millions of dollars for a documentary on the first lady. Yeah, you. And you're, you've made yourself more present in the Trump orbit than you ever have prior. I think the relationship has grown, to.
- [19:28]
Steve Weiss
Say the least and maybe it's grown to the point where Eric and Donnie Jr. Are out there raising capital to participate in the transaction. Who does?
- [19:37]
David Faber
I don't know. Or even the yet to be run US sovereign fund may want to take a piece of TikTok. I mean, why not?
- [19:44]
Carl Quintanilla
Alright.
- [19:45]
Joe Terranova
The art of the deal.
- [19:45]
Carl Quintanilla
Thanks for, thanks for coming over here. Sure.
- [19:47]
David Faber
Thanks, Scott.
- [19:48]
Carl Quintanilla
And tell us more about this. Anything you get. You have a seat right there waiting. Rob Sechin, you own Amazon as well and we haven't heard from you yet. I appreciate you being patient as we get through through this, but what's your thought if in fact that's the way this goes?
- [20:02]
Rob Sechin
Listen, we just added Amazon this year, Scott. It's down a bit. It's outperforming some of the rest of the Mag 7. We added it because it was cheap relative to its history and 40% discount to that history. It's not cheap relative to its discretionary peers though. You know, when we look at the opportunistic opportunities that we see in growth. Amazon continues to show healthy earnings momentum and it's on pace to see high teens, EPS growth and it dominates these secular opportunities in E commerce and cloud computing. What I see as it relates to your question is a scramble for assets in this Space. All these Mag 7 companies are, are competing with each other, their customers with one another. And I have to think that them getting active here is important from a data standpoint, it's important from an E commerce standpoint and as, as David just said, it's important from a cloud computing standpoint. So I view this as an incremental positive if they were able to get something done.
- [21:13]
Carl Quintanilla
All right, let's get back to the story of the day and that is the expected announcement at 4 o'clock this afternoon in the Rose Garden of these additional tariffs and whether it in fact is going to be the clearing event that some are hoping for. Even as you know there are plenty of suggestions out in the market today that some don't think it will be. Rob, what is your thought on that? I have another target reduction today on the S and P that this time Soc Gen calls it a clear crisis of confidence. They take it to 6400 from 6750. And JP Morgan's trading desk doesn't believe that in fact it will be a clearing event. We still maintain our tactically bearish view given that we don't see a clearing event but the beginning of trade war escalation.
- [22:03]
Rob Sechin
You know, along those lines we continue seeing EPS estimates getting cut. So the upside from here even with a positive announcement is probably a rebound to recent highs. We're certainly not calling for the S and p to reach 7,000. We're unlikely to see the market get pulled higher by multiple expansion. But the counterargument there is that this announcement offers clarity in animal spirits pick back up. And the potential for for good things down the line obviously still exists with deregulation tax cuts, but that might be a little longer term. So the in the intermediate term you have, you know, the other catalyst that sentiment has as Joe said at the beginning of the program turned uniformly bad. ESM showing stagfish inflation like CEO confidence the worst in years, consumer sentiment pulling that 180 and you know, just this all on this trade is uncertainty. But what is going well is the jobs data is still showing solid hiring. There's been no job, a drop in openings or quits. There's no big increase in layoffs. So you have a little bit of a tug of war there. But I think the telltale thing is what the market is sniffing out and that's this, this tug of war between equal weight discretionary and staples. And it's really good at sniffing out changes in the outlook for the consumer. And we've seen significant underperformance of discretionary versus Staples. And so it raises the question is there this downside because of confidence in consumption? And does that. And I think it does increase the odds of, of the recess of a recession, although that's not our base call. So you might get some clarity. But I think the upsides capped our poll is still for a lot of volatility.
- [24:02]
Carl Quintanilla
I mean, is that generally speaking how we see it here? More volatility, the upside being capped? Or are you more, more, I guess constructive than, than that perspective?
- [24:14]
Bill Baruch
I'm much more constructive. I, you know, I think Joe, you might have mentioned it earlier, a lot of the pessimism that's really flourished in this market. I do think we, when we rallied out of the hole a week ago and there was a lot of positivity that the White House was, was really trying to offensively place. I think there is a bit more tacticalness than what we're seeing or what may be believed. The auto tariffs last week, week, I think coming ahead of this announcement helped flush things down as well. They were really floating more of a blanket 20% tariff. And I think the market has already begun to discount that. The fact that we've made new lows this, this week and responded I think is a positive thing. But I think people are becoming a little offsides and not pricing for upside. You're seeing the targets, the Goldman Sachs, Morgan Stanley.
- [25:07]
Carl Quintanilla
Yeah. A lot of people are bringing in. They're. I said yesterday if you, when you lose your. Denny.
- [25:11]
Steve Weiss
Yeah.
- [25:11]
Carl Quintanilla
Then you, then you've done it because he reduced his target as well. By the way, Jonathan Krinsky of BTIG just before we came on the air with a note suggesting that tactical conditions are still favorable, that the risk reward favor stocks going up and the GLD going down. Gold's been off to the races as, you know, up and to the right stocks have been, you know, from the left down to the right and maybe they're, you know, the conditions have just gotten too negative on that note. Yes.
- [25:40]
Steve Weiss
It's just interesting to me that you can use analysts, strategists, lowering their price targets on the S and P as a buy point, but you don't use it when they're raising their targets to the moon. As a sell point because it's too enthusiastic. So you sort of got to pick your poison and what you want to use too many indicators. Look, the market, I would say I don't believe it's really oversold here. I do think that there typically is a relief rally. We may see it, but we don't know what the what the tariff plan is going to be. As a matter of fact, Trump didn't know what it was going to be because all reports are that they could work. Still working on it today. So to make the assumption that 25% is going to stick and that's going to be here and that we just don't know now, assume that because there'll be some certainty allegedly with that after 4:00 today going tomorrow, the market should rally. But then you do have the impact of inflation because they are inflationary. And for jobs growth, as Rob points out, when you when you get rid of deport a lot of the the undocumented people that hear that labor, you've got to back and fill with US Citizens, that's a good thing. But it will raise labor costs and we don't have the government numbers in there. So unemployment will go up. So the factors are there for the intermediate term that I believe will keep the market with a lid on it and probably push it down as earnings come out and guidance comes out for.
- [27:13]
Carl Quintanilla
The We've we've had a bunch of news already and we have one more item for you before we take a break. Angelica Peebles joins us now with a news alert. Angelica?
- [27:23]
Scott Wapner
Hey, Scott. The Wall Street Journal is reporting that the FDA has missed a deadline to make a decision on full approval of Novavax's COVID 19 vaccine. The vaccine has been allowed to be used under emergency authorization, of course, during the pandemic. And the agency was reportedly supposed to make a decision yesterday and they have not made that decision. Remember, Friday, the FDA's top vaccine regulator was pushed out of the agency, and so this would have been their first major decision following his departure. Of course, yesterday there were also tons of layoffs across the agency. So we'll have to see what happens next. We've reached out to novavax for comment and we'll report back when we hear more.
- [28:01]
Carl Quintanilla
SCOTT okay, Angelica, thank you very much for that. That's Angelica Peebles. We have more committee moves coming up. We've gotten through a lot already of stuff going on in this market today. It is a very, very busy news day. We have calls of the day as well as our quarterly report. Still to get to Markets are green. We're back in two.
- [28:23]
Scott Wapner
For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies?
- [28:41]
Carl Quintanilla
Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report. Ryan Reynolds here from Mint Mobile. I don't know if you knew this but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do@mintmobile.com.
- [29:25]
Scott Wapner
Switch upfront payment of $45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees extra.
- [29:36]
Carl Quintanilla
See full terms@mintmobile.com all right, we're 30 minutes into the program here. Stocks are green. More moves to get to Bill Baruch. You're going to start us off. So you, you have a lot of sales here. Astera Labs, Core Mining, mobileye, Marathon Petroleum. So you're going to sit on this cash but why did you get out of these specific names now all together.
- [30:13]
Bill Baruch
Raises about 5% cash. We did this before Friday, really rolled over and ultimately having that flexibility going into this week is something that we want. Let's start with Alab and mobileye. The two of them, they're narratives that we like the connectivity and semiconductors as well. Well as autonomous driving. They are more speculative though in volatility that we just do not want the portfolio anymore. Not only that, when you take a look back at the tech names that we own, we still have a lot of exposure to Big Max 7 names and we may look to lean into those as leadership because their their valuations right now have come down and we like that. So we've raising that cash we may lean into a buying opportunity this week or next week. As for coal mining, I mean gold has had a tremendous move this year. It's setting new record Highs as I'm talking right now. I do a lot in the metals space. I run a metals CTA, a metals fund. I mean we're up 17% year to date on that thing and it's. Gold's going to continue to move. It's but it's likely to pull back a bit. Core has not captured that. So in an individual stock portfolio, Core is a very well run company. Mitchell Krebs, he's the CEO of that company, terrific pedigree. He's done a great job bringing that into to you know the 2022, 2024, 2025 in positioning for this move of metals. But I think a lot of their gains in the near term have been captured last year. And then as for Marathon Petroleum, it's seasonality quarter one is good for refiners. Marathon Petroleum has returned a lot of cash to shareholders. But I'm not so upbeat on oil right now. One of the things that's got us through this pullback in equities is 11% energy exposure. So we're just dialing that back a little bit right here strategically.
- [31:52]
Carl Quintanilla
Okay. Other moves directly related to the Politico report that the President is telling according to this report his inner circle that Elon Musk will be leaving soon. You bought Leidos on that news.
- [32:09]
Steve Weiss
Yeah, so I owned Leidos as you recall. I made shaved it going back when.
- [32:14]
Carl Quintanilla
All the start did you find and you finally sold. Sold it or you still had a little bit?
- [32:17]
Steve Weiss
I sold a little.
- [32:18]
Carl Quintanilla
Okay, so you added to it.
- [32:19]
Steve Weiss
So. So I did add. And the story is just is just that with Musk leaving you'll see more of a focus on on Doge. And at this point, given the cabinet meeting that was reported in the Journal a week or two ago, they've then put the the power of decisions as to who to cut in the hands of the cabinet ministers. So, so the people who the cabinet ministers in the with the DOD I think will be more responsible. Keep in mind that Leidos has 30% of their workforce is embedded with the government. And the reason that was done initially by the Clinton administration and gone through so that when they wanted to get rid of people that they didn't have to work with the federal union. So look, Leidos performs critical functions particularly with the VA in addition to their commercial business. We all go through their scanners at airports and they're in cyber. So they're in great areas. And with the focus of Musk now leaving that overhang leaves stocks extremely cheap.
- [33:23]
Carl Quintanilla
Yeah, well stocks highs of the day And Joe, we didn't get a chance to mention this at the top. It does play into the tariff story more broadly way people are feeling about the economy where interest rates could continue to go. This, if I recall, is your third buy of the tlt.
- [33:40]
Steve Weiss
Yeah.
- [33:40]
Carl Quintanilla
So loading up on that particular tactical trade.
- [33:43]
Joe Terranova
Yes. And this is not an expression of I think equities go lower. This is an expression of the tariffs.
- [33:50]
Carl Quintanilla
Having yields go lower.
- [33:51]
Joe Terranova
Well, this is an expression that the tariffs are going to have a deflationary effect, not so much an inflationary effect. And really you have to think about what's the effect on the rest of the world. I'm not sure we're correctly doing that. Look at sentiment, look at positioning as it relates to treasuries. I still think it's looking for a higher yield and for lower pricing itself.
- [34:10]
Carl Quintanilla
Okay. We will get the headlines now with Angelica Peoples. Hi, Angelica.
- [34:14]
Scott Wapner
Hey, Scott. The Senate Commerce Committee may subpoena the US army in order to obtain a helicopter safety memo. The committee's chair said to today that it could be issued if the army doesn't hand over the report by Friday, which details why the military branch regularly failed to use a safety system on flights around Reagan Washington National Airport. The US army has yet to comment, though it said earlier this week that it would speak directly with lawmakers. Former President Biden's health Secretary Xavier Becerra is entering the race to succeed California Governor Gavin Newsom. Becerra made the announcement today, joining a field of candidates that includes former Congresswoman Katie Porter and potentially former Vice President Kamala Harris, who has yet to make an announcement about her future. And Nintendo has revealed more details for the Switch 2 console. Nintendo said the new device will be bigger and faster and will come with a dedicated button to allow players to chat with friends. The Switch 2 will hit store shelves on June 5 for just under $450. Scott, back over to you.
- [35:14]
Carl Quintanilla
All right. Thank you so much, Angelica Peoples. Up next, we'll do our calls of the day.
- [35:25]
Scott Wapner
Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single purpose, making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies?
- [35:58]
Carl Quintanilla
Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're Stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card Based on the February 2024 Nelson report, we'll do calls of the day. We start today with Stifel. They do reiterate their buy of service now, but they cut the price target to 950 from 1175. It's a decent reduction there and they say it is due to taking a more conservative approach. Those are their words to a quote, heightened degree of uncertainty. My first reaction to this, I mean you can opine on that stock what it means if there's a, if an analyst is taking down a price target because of a heightened degree of uncertainty, then you might as well take the price target of every single stock within the S&P 500 and beyond down due to a heightened degree of uncertainty. Because we all know that there is a heightened, all at once heightened degree.
- [37:19]
Steve Weiss
Of uncertainty and that is the only certainty.
- [37:21]
Carl Quintanilla
Yes, that's true.
- [37:22]
Joe Terranova
And that's where I began the show by saying I'm not sure how you could have have such strong conviction about anything right now. In the case of ServiceNow, though, I think the real concern here surrounds government contracts, Department of Defense, what the DOGE efforts are ultimately going to be. And this was a company that was growing its revenue plus 20% over multiple quarters and you had investors paying a premium for that. Now you're seeing the deceleration in growth. You're going back towards the mid tweet, teens rather. That's not good enough. Straight wants to see it in the 20s.
- [37:52]
Carl Quintanilla
You want to take Northern Trust while you're at it too. Speaking of price targets going down, this one did 2 but by 4 bucks to 112 from 116. However, the analyst at Wolf is not positive on this name. Underperform is the reiteration. They're also down. The price target is at Morgan Stanley.
- [38:10]
Joe Terranova
This one. I think Northern Trust has the Northern Trust has the ability to kind of have the pause that refreshes and that's really what's going on right now in this stock. The revenue growth has accelerated for sure and management has emphasized that they are focusing on reducing costs. They have a target of 20, 25 of 5% cost reductions. I think if they're able to hit that margin, stay strong, revenue growth, stay strong and you see a resumption of what's been a very bullish Pattern over the last five quarters.
- [38:39]
Carl Quintanilla
Rob, Take Comerica. The target was also cut from 72 to 67. Raymond James still likes the stock. What about you?
- [38:49]
Rob Sechin
We still like it too. This Dallas regional has a strong commercial lending franchise and a sticky deposit base. We agree with them that the macro environment necessitates a more modest expectation for a lot of regional banks given the economic and rate uncertainty. However, we think that they'll continue to benefit from a recovery in net interest margins because of the steeper yield curve and lower deposit costs. And their loan portfolio also skews towards fixed rates, which should support revenue growth and offset the headwind that Raymond James is talking about.
- [39:28]
Carl Quintanilla
Bill, give me 20 seconds on AT&T. Target gets bumped by a buck. Wolf likes it. Outperform is the call. It's a big position for you.
- [39:34]
Bill Baruch
That's why it's our number 10 name. It's benefited from barbell approach. As communications get spread out, some of that risk a little defensive. But at the end of the day they are the major owner of the fiber lines in the US and how you get all that data spread around through fiber. They're really capitalized on that.
- [39:50]
Carl Quintanilla
All right, quick break and then the quarterly report. We will talk to the traders about what has worked and what did not in Q1. Back after this. Let's go through our quarterly report. Bill, we start with you. We just did AT&T which is your biggest winner by the way in the quarter. So good stuff on that. Amgen and AbbVie up 19 and 18% respectively. Rob is next, but he has both of those stocks too. What do you do with those healthcare names here?
- [40:22]
Bill Baruch
They're the only two healthcare names that we own. So we're really not doing really, we're sticking with them. Our fear coming into the year that is the health care was going to underperform and what kind of questions were going to be in government there. They've really risen out of this as defensive names. Abbvie continues to pad revenues with the, with moving away from Humira, Skyrizi, Riddenbach continue to do great. There's, there's a lot of optimism optimism around Amgen and their, their obesity drug Maritime. I think that there's really great tailwinds here and I think that both of them can continue to, to do.
- [40:55]
Carl Quintanilla
The biotech stocks have gotten hammered recently. Maybe there is a reversal now of what was earlier optimism. You don't, you don't worry about that. The trade's been, been ugly lately. But no matter what, no matter what it did for the entirety of Q1 biotechs have been rolling over lately.
- [41:16]
Bill Baruch
Yeah, we are underweight health care. We only got about, about a 6, 7% position in health care with these two names. Do we move the puck somewhere else and take a little bit less risk and something that could be a little more stable? You look around and get Johnson Johnson news the next day or something. But I think for us right here holding these two names and is they've been in our portfolio for well over a year or two. So I'm going to stick with it.
- [41:38]
Carl Quintanilla
Okay, Rob, you've had, as I said, Amgen and Abby, nice winners. Bob is your biggest up 56%. 3M has done quite well. Salesforce down 20, Broadcom down 28. You know, software chips. What's your, what's your take on those names?
- [41:56]
Rob Sechin
So you know that we, we trimmed, we trimmed Broadcom earlier in the year. It's down 30% since we trimmed in January. It's still up 175% for us since we bought it. It remains a core holding, you know, fundamentally sound great secular growth opportunity. And you know, it's, it's really attractive price wise relative to the semi space as it relates to Salesforce. You know, a little bit of a tough start year, A little bit tough last year too. But it's a 50% discount to its 10 year average at a 24 times PE and it's a 10% discount to its software peers. They will emerge as a leader in AI monetization. I can tell you I run a big company and this is one of the most powerful software tools that we have at our disposal.
- [42:50]
Carl Quintanilla
You got like 25 couches behind you. We know you run a big company, Rob. We know exactly what you're doing. We're back with Santoli next. All right, we're back. Senior markets commentator Mike Santoli has his midday word. As you know, we're all thinking the same thing. Stock market's trying to get a little, little, little move here into 4:00. On one level you could say the.
- [43:32]
Joe Terranova
Market is sort of pulling a little more neutral. We've rallied right up to a 21 day average. You can try to execute the playbook.
- [43:42]
Carl Quintanilla
We got a little IPO here. Yes, it's a, it's a reit. A REIT going public right behind us.
- [43:48]
Joe Terranova
Thus the Bell Self Storage reit. Very exciting. No, you could, you could sort of see if you could execute the playbook of correction, retest, double bottom. We front loaded a lot of the pain we've been dealing with. Assimilating these issues for a while. Sell the rumor by the news. I get all that logic. It makes sense. We've reset sentiment and positioning enough. We obviously need to know the details and we obviously need a much more forceful upside response than we got the last time. You know, last time we sort of topped out 5750 or 5775 in the S and P s and P wasn't really enough. You gained back only 40% of what you lost. So that's where we are right now, I think is sort of that figuring out if we can figure out what tonight means for setting earnings expectations and then deciding where that got priced and where it didn't.
- [44:35]
Carl Quintanilla
So we got earnings close. I mean, you're the attention. We're going to.
- [44:42]
Joe Terranova
We're going to shift right into it.
- [44:43]
Carl Quintanilla
Shift right into it.
- [44:44]
Joe Terranova
That's right.
- [44:45]
Carl Quintanilla
I think that's what the market where. How are expectations expectations? I mean, numbers have come down.
- [44:49]
Joe Terranova
They've come down for the first quarter. They've got, they started out at like 11% annualized growth. They're down like 7 every, you know, they always beat by a few percentage points. So that's still a good number. The question is whether people have really held off on revising the rest of the year at this point. To me, that's where the, the real swing could come.
- [45:06]
Carl Quintanilla
All right, we'll do finals next, Mike, thanks. I'll see you three.
- [45:27]
Rob Sechin
Are you following the Halftime Report podcast? What are you waiting for?
- [45:32]
Carl Quintanilla
Look for us in your favorite podcasting app.
- [45:35]
Rob Sechin
Follow the Halftime podcast now.
- [45:41]
Carl Quintanilla
A big guest coming up tomorrow. Good timing, too. Brad Gerstner, Altimeter Capital will join us tomorrow. The halftime report exclusive, 12 noon Eastern today on closing bell. By the way, we'll take you in the final stretch with a great lineup. Jeremy Siegel of the Wharton School, Tom Lee will be here on set with us too. Richard Fisher, the former Dallas Fed president, Dan Greenhouse, Lucy Baldwin of Citi. And we're going to be busy over that last hour. You, you can bet on that. Rob Secchen, why don't you start us?
- [46:08]
Rob Sechin
Sure. Gilead, one of the best performing names in one of the best performing sectors this year, still has a reasonable valuation of 14 times.
- [46:17]
Carl Quintanilla
Okay, thank you very much.
- [46:19]
Bill Baruch
Bill Baruch, Amazon, it's our top position. I think it's with or without TikTok. I think this is ready to rally big support here and it's had really good volume on its updates. So I think we're going to see it higher.
- [46:30]
Carl Quintanilla
All right.
- [46:30]
Steve Weiss
Weiss, Alphabet, begrudgingly instead of going into more cash. Look, the stocks are so beaten up the market rallies after this.
- [46:38]
Joe Terranova
It should participate a technology name first time this year, probably semi semi equipment KLA Corp.
- [46:44]
Carl Quintanilla
Thank you. The exchange is now You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNN. All opinions expressed by the Halftime Report.
- [47:01]
Scott Wapner
Participants are solely their opinions and do.
- [47:02]
Carl Quintanilla
Not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium.
- [47:12]
Scott Wapner
You should not treat any opinion expressed.
- [47:13]
Carl Quintanilla
On this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an.
- [47:20]
Rob Sechin
Expression of an opinion.
- [47:21]
Carl Quintanilla
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.
- [47:32]
Rob Sechin
To view the full Halftime Report disclaimer.
- [47:34]
Scott Wapner
Please visit cnbc.com halftime reportdisclaimer Our state has changed a lot in the last 140 years. We know because MultiCare has been here guided by a single making our communities healthier that comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more at multicare. Org.