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Halftime Report
Year-End Rally or a Reversal Ahead? 9/29/25
00:44:27
Scott Wapner and the Investment Committee debate Goldman’s upgrade of global equities and what it means for a year-end rally. 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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Commercial Narrator
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes.
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Jenny Harrington
And everything in between.
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Commercial Narrator
With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones Member, SIPC and now a.
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AT&T Business Announcer
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- [01:02]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, an upgrade for global equities. Goldman Sachs looking for a year end rally, which means we'll discuss and debate that with the investment committee. Joining me for the hour today, Joe Terranova, Jenny Harrington, Steve Weiss and Brent talking to check the markets here. We do have the NASDAQ and the S and P are green. You see the Dow is a little bit red. You have gold extending its record high getting closer to 4k. Bitcoins about 115k and it is Goldman looking for that year end rally quote. We think that good enough earnings growth, Fed easing without a recession and global fiscal policy easing will continue to support equities. Brand, you like the call?
- [02:00]
Brent Thill
Yeah. I mean the trend is your friend, right? So we've got to dance until the till the music stops. I just think that because we do have the Fed now starting to cut rates which is positive. Earnings we've talked about all year have continued to surprise. On the upside, I think that the tech spend is massive. I think that the data center growth as part of GDP, it's close to 35% of GDP the last few quarters. Plus we're going to get a lot of stimulus next year with the big beautiful build starting to work its way through the economy. So I think it's hard to be negative at this point with that backdrop that I just walked through.
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Scott Wapner
Yeah, Steve, Earnings, Fed easing. That's the bull thesis right there in front of you. Anything to hit out on that?
- [02:47]
Steve Weiss
Well, let's simplify it. Don't fight the Fed. So whether the Fed goes in October, whether they go again for the end of the year, and there's some debate about that as the economy continues to look strong and we've seen somewhat a moderation inflation, meaning it's not ticking up. The last couple of numbers came in. Okay, so look, while I don't think anybody's happy with valuation, you know, we heard Tepper come on network last week and, and say that. So this is truly a hated bull market because valuation is where it is. There's no reason to believe that as we go through earnings and we're seeing, we're not seeing the revisions, that it won't take it another leg higher. And I think that's what will happen.
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Scott Wapner
But that'd be good.
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Steve Weiss
That'd be very good.
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Scott Wapner
You know, I'm saying if, if, if earnings are the thing. Yeah, that take takes it higher.
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Steve Weiss
Exactly.
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Scott Wapner
Just talking about multiple expansion here, you're.
- [03:37]
Steve Weiss
Talking about earnings growth, and we're not talking about earnings growth based upon an easing by the Fed. So when you add the Fed easing, you'll potentially put that hyperdrive and then we talk about a year out. What's it actually mean for inflation? That'll be very inflationary. But now you got to dance while the music's playing.
- [03:56]
Scott Wapner
Yeah. Market doesn't care about anything way, way out. Right. Tunnel vision. You play the cards that are in your hand and the hand looks pretty good, doesn't it?
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Jenny Harrington
Well, the hand looks pretty good in the short term. And I think that most hated bear market, like, that's where I sit. It's the most. I'm sorry, the most hated bull market. Thank you.
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Scott Wapner
You talk about it like it's a bear market, but actually, well, it's uncomfortable.
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Jenny Harrington
And I don't know anyone who's not, who's not uncomfortable. And so the way I look at it is clients are constantly asking me, like, is it too high? Blah, blah, blah, what else should I be in? But the thing is, there's not much else to be in. What are you going to be in?
- [04:28]
Scott Wapner
Cash.
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Jenny Harrington
That has a 4% yield right now, and that's going down. You look at bonds, those yields are way down from five, five and a half percent several months ago and a year ago. Those are down to like four or four and change and those yields are probably going down. I don't think it's going to drive the price of the bonds up huge because I don't think it's going to be a huge decrease in bond yields. But you look at it and you're like, okay, well even, even the companies with low multiples, like even the value stocks, they still have decent earnings growth out there. And I think you can't fight that. Decent earnings growth, lowering interest rates, those are just forces that support the market.
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Scott Wapner
So why so uncomfortable then? Because it's not like it's going up for no reason.
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Jenny Harrington
Why? Because we were up 20, up 26% last year, 20 plus percent the year after that. Before that were trading at almost 23 times earnings. It's just kind of too much and it feels uncomfortable and it feels frothy.
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Scott Wapner
Two hands are trading like at 23 times earnings.
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Jenny Harrington
Fair. But also that concentration in The S&P 500 makes people queasy. And I think that a lot of people are kind of all in on the S&P 500. And that concentration, plus the multiples, plus the couple of years in a row, plus we all have PTSD from when you have a couple of big up years. Like something just happens in the market backs off. So there's a lot out there. There's geopolitical unrest. I think we're all freaking out a lot. At least we should be about AI taking real white collar jobs. None of these things are super near term, but they're out there and they're lurking in people's minds and making them uncomfortable. But at the same time, even me, I look across the whole asset class spectrum and like equities are kind of the only place to be right now.
- [06:03]
Scott Wapner
Yeah, I mean S and P is tracking for a 7% gain, Joe, in the third quarter.
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Joe Terranova
So everything that Jenny just said that you would be troubled by, you could have said that on August 3rd, 31st. Yep. And I did. And, and again, this is not personal directed towards you, but this is the general overall perception of the market. The interesting thing about that is we had a lot of skepticism moving into the month of September. Where are we on the other side of that? The S and P is up greater than 3%. The Nasdaq's up 5%. So I think that caught people off guard and I think that's important to understand when you're thinking about positioning and where we could go from here over the next couple of weeks. We're going to be waiting on earnings this week. The focus is going to be on the Labor Report. You have the end of the quarter. So this week, I don't know that you have very much of an edge, but I think overall the secular bull market is in place until you tell me that earnings are going to defeat them. In addition to that, we're talking a lot about the Federal Reserve. There's also the understanding that global central banks, 86% of global central banks, by the way, their last policy action was a rate cut. So it's not just here in the.
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Scott Wapner
US Why Goldman today makes the call on the global equities to overweight and they do mention global fiscal policies. And so they're in line with what you're talking.
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Joe Terranova
But there is still the remnants of, I think, the last five to seven years where you have skepticism and you have underweight positioning as it relates going outside the US Even myself personally, I'm not aggressively going to look outside the US When I should be actually doing that. I've done that earlier in the year with the eis, the Israeli etf. That's the one area outside that I got some overseas exposure. But domestically, US equities are giving me enough that I'm staying anchored there. And I think that's one of the reasons why you could see this run outside the US last a little bit longer than people anticipate.
- [07:50]
Scott Wapner
Jenny makes a good point. I mean, Doug McMillan, Wal Mart CEO like, I can't think of a job that's not going to be impacted by AI Now, I guess we'll worry about it when we have to worry about it. Market doesn't seem to care about really anything other than earnings are good. So I can justify where we are and the Fed's easing, so I can justify why we're going further.
- [08:11]
Jenny Harrington
I think the trouble with thinking about AI and the jobs that it's going to take and how that's going to impact the economy in the long run is that it's not going to be an overnight landslide. It's going to be a slow creep. So almost everyone I know right now who has a kid who's just graduated from college in May, they're sitting at home twiddling their thumbs and they're in final rounds of interviews. And, and the big companies, like big, big major companies, are waiting to make that final hire because there's so much out there. So my thought on how that plays out is we see it creep and we see the unemployment rate creep from like 4.2 now to 4.5.
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Scott Wapner
Low hire, low fire. That's sort of the right environment that you're in.
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Jenny Harrington
Right.
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Scott Wapner
Companies don't really know what the impact of AI is truly going to be on its workforce. So you're not really hiring as many as you normally would. Thus you still can't get rid of maybe as many people as you otherwise would because don't know.
- [09:02]
Jenny Harrington
And then at the same time, when you ask how far does the market look out? I think that lens has shifted to a much closer looking out than it used to be. When I started, I always thought the rule of thumb was the market looks out 18 months. Ish. Now I think people say rule of thumb is 6 to 12. Frankly to me it feels like 3 to 6. So if you're thinking the market looks out 3 to 6 or even 6 to 12, it's very hard to digest the fact that those job losses from AI are going to play out over the next five years and have a compounding painful.
- [09:30]
Scott Wapner
So you know what you do, you know what you do. You continue to buy stocks. That's what, that's what investors are doing. It's a tried and true place to be. That's why the trade continues to work better than anything else.
- [09:40]
Jenny Harrington
But I think the challenge there too is going to be the stocks right now that the primary stocks, many of them have pretty rich multiples. The first derivative stocks also have rich multiples. And when I think broadly about how this is going to impact us, everything can benefit. But you know, corporate from a corporate margin perspective. But everyone's going to benefit.
- [09:58]
Joe Terranova
You understand this, I know you do. Right now the market is not focused on what the multiple might be. The market, you have this force of momentum and just it is what it is. I mean we could sit here and we could say we have all of these deteriorating potential fundamentals. They are concerns for 2026. Right now the dominant force is that flow of capital that we characterize as moment.
- [10:22]
Scott Wapner
That's why I tried Bren to bring it that direction because the NASDAQ is leading today. It's tech and comm services. Nvidia. Let's check it right now. Nvidia is not at the highs of the day, but it was up better than 3%. It's up 2% now. The target goes to 2205 reiterated by Jefferies chips across the board today. Nvidia, Micron, AMD, Broadcom, they've all been higher. There are other names you could out point 2.2 as well, but that's where the action is today.
- [10:50]
Brent Thill
Yeah, and you know Jensen, this weekend was on One of your besties podcast, Brad Gerstner. I highly recommend people listen to it. And when you know Jensen talking about not the billions, you know, trillions, which is a crazy number because a billion seconds is 32 years and a trillion seconds is 32,000 years. And so while I always said Jensen is the master salesman, at the same time he's delivered the goods. And I think when you can get past the circular financing that's happening with an Oracle and an Open Air, which, which I don't own either one, I think that you still feel like the spend is massive. And to me, as long as, you know, the hyperscalers or cloud service providers don't do an Oracle and go negative, free cash flow to which I don't think they're even making that would be like almost impossible at this point. I think we're good. I think if we continue to see this, you know, strange financing, I would get more concerned. But as long as it's still going to settle around Oracle and Open AI, I think the Nvidia, the Broadcom, the verdicts are just going to continue to move much higher.
- [11:59]
Scott Wapner
Weissbernstein I think sums it up pretty well. You do have huge numbers being thrown around. It makes some people concerned. It's almost in a bit of disbelief the level of investment that you're having from these various businesses. But they say, excuse me, demand looks off the charts. That in videos, Open Ideal and Broadcom's new five year targets suggest we still may be early and we're hard pressed to think of a better use of Nvidia's cash flow at this point. They argue own both Nvidia and Broadcom, don't pick between the two. And others would probably say yeah, own those two. And, and, and, and yeah, look, I.
- [12:41]
Steve Weiss
Mentioned this last week, the valuations in the public markets pale in consideration or relevance to the private markets. So you take a look at companies like Nvidia for example, investing 50 million in this robotics company, Humanoids, that has, that didn't have prototype, they just did around a year And a half, two years later that went from $500 million to 38 billion and still don't have commercial revenues. So that's kind of bizarre. So look, I think that there will be a lot of overspending and there will be a lot of companies that won't succeed that will go by the wayside. Maybe not to the extent that we saw in the top in the dot com bubble, but right now the momentum is going and this is, is such a game changer. That it's going to continue going for a while now. I think where the biggest risk to the economy is in is in the people that don't make a lot of money that live paycheck to paycheck. Those aren't necessarily very skilled jobs and that's a big part of the economy and we've seen that. We've already seen them under pressure over the last six months. However, the upper end of the economy, working in the engineering position for professional positions, even though they will be under pressure, are carrying the economy. That's where all the spending comes from. So those to me are sort of like the worry points. When do you tip the edge? We're seeing bankruptcies pick up in some of the private credit so those are all warning signs but I think we're going to keep going and when they hit they're going to hit the front.
- [14:08]
Scott Wapner
Page story of the Journal today about you know, some of the these bankruptcies and what's happening in the credit markets. Maybe it's. It looks great, may be too great. Howard Marks made some interesting comments in that in that article as well. Back to chips. Lam Research upgraded today Joe to buy Target to 150 was 100 bucks at Deutsche Bank. What do you think about that name?
- [14:29]
Joe Terranova
I think Lam Research and KLA Corp. These are the two semi equipment names that you want to own here. They are delivering on all the fundamental metrics that you want a corporation to be able to deliver on. Their participants participating in the build out with the partnerships with Nvidia Applied Materials is the one name we used to mention. The three of them together, that's the one that kind of has struggled somewhat. So I think right now these are the two of the three names that you want to kind of focus on.
- [14:56]
Scott Wapner
The president is talking about tariffs on foreign electronics based on the number of chips according to Reuters. So on a day where we're talking about potential tariffs on here, there and everywhere, why your Taiwan semi is among the biggest non U S chip makers as people know.
- [15:14]
Steve Weiss
Right.
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Scott Wapner
You've taken your position down a bit.
- [15:18]
Steve Weiss
I have.
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Scott Wapner
But you do have considerable exposure there.
- [15:20]
Steve Weiss
It's still my largest position. It just gotten too big. I bought it early, phoned it for a number of years. But the incongruity in the market today is that you see the defense stocks moving up and why? Because we're increasing our missile production. Part of that's replenishment from the wars that we've been sending to in Ukraine helping Israel out.
- [15:42]
Scott Wapner
That's why you have aerospace and defense Names up today. Right. Like the Lockheed's, the Northrops.
- [15:47]
Steve Weiss
Right. But the primary reason that's being attributed to the increase in production is potential for a conflict in China. So the incongruity here is that Taiwan Semi with most of their operations in Taiwan is at ground zero for that conflict. Yet the stock is uptake. That continues to be a concern of mine. Now in terms of the on shoring for like Taiwan Semi and and Micron, they're having their own issues because the issues are, is that they, when they announced these plans, these multibillion dollar plans to build here, they had assumed that they'd be able to export from this country to other countries their products. Now they're downsizing those plans because they won't be able to because those will be tariffed also on an outgoing basis.
- [16:31]
Scott Wapner
I just don't think the market at this point takes care of the tariff stuff. Seriously.
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Steve Weiss
Well, it does I think like if you or the Chinese.
- [16:38]
Scott Wapner
But if you talk about all right, I'm going to put tariffs on every movie that's made outside the United States. You see initial moves like if you put up Netflix for example, you would see an initial move on the headline itself and then the market's like yeah, yeah, but I don't really believe that probably going to happen. So there's the dip down earlier this morning in the red and then, and then you have the green. My first instinct was say oh well if that's going to happen then look at all the studio related names and they're probably all going to be down. In fact they, they weren't. It's just notable that you know details.
- [17:14]
Steve Weiss
Because if you make a movie and you stream it from overseas into the US they don't know if that's going to be tariff.
- [17:21]
Scott Wapner
I just don't think the market believes that what almost anything on that you.
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Steve Weiss
Just happen it complacency. But let me just finish this. The complacency. I go back to China. If China does go to war and does seek to annex Taiwan, that hits the global economy. It doesn't just hit the US doesn't just hit Taiwan, but the marks complacent that built in for that risk. I don't know if there should be but they say they want them and they haven't backed down from that.
- [17:46]
Joe Terranova
I think we have six weeks where you're going to hear a lot of mercurial statements being made about the suspension of reciprocal tariffs with the Chinese. Remember the Geneva conference in May. November 10th is the date so you're going to hear a lot of back and forth negotiation. I think the market's going to have to deal with. I think Scott's right. I think the market ultimately brushes it off. But those headlines, I don't know.
- [18:08]
Scott Wapner
Ultimately, ultimately as it really the issue, it's in the here and now. The market's brushing it off. Who knows what it ultimately does based on whatever might happen or what might not happen. I think the market's tired of the we're going to do this here, we're going to do that there. It's like, all right, well I don't really believe it so I'll deal with it when I have to deal with it. But I'm not dealing with it now.
- [18:26]
Jenny Harrington
I think a little, a little bit differently, which is I think the market hears these tariff headlines and puts it into one of two buckets. One bucket is plausible and unfortunately a lot of the tariffs on things like World War I pool and Stanley that are in my portfolio plausible, like those are concrete and taxable things like electronics with X amount of chips. It's like that bucket is ridiculous. You know, it doesn't, it doesn't seem like it'll actually play out. It's too hard, it's too convoluted. The movie stuff goes into the ridiculous bucket but concrete things go into the plausible bucket and then the stocks are treated accordingly. So unfortunately for things like Whirlpool and Stanley, I've had a lot of pain because those tariffs are implementable and plausible. But other areas where it's just silly, you know, that you got to be.
- [19:07]
Scott Wapner
In the right tariffs versus the wrong tariff buckets.
- [19:09]
Jenny Harrington
Yeah. And then in the right, whichever we want to consider right or wrong.
- [19:13]
Scott Wapner
Right. But you know what I mean. Stocks and what don't.
- [19:17]
Steve Weiss
There's another tariff related issue which is the, the $100,000 charge for H1 visas. So what that's going to do, it's going to limit the pool of, of engineers coming over foreign countries, India etc. And that's going to raise the, the costs for wages in the U.S. number one. Number two, it's going to, on the other hand, it's going on the other side. It's going to strengthen the franchise of the big cap tech because startups can't afford to pay that hundred grand. So there's a lot of crosswinds here to your point, Joe, that we're going to hear about in six weeks.
- [19:52]
Scott Wapner
Weeks. All right, let's get another name on the move today. It feels like a stealth mover. Let's look at Robinhood intraday. It's ripping today, Brin. So they roll out their new. There it is. They, they roll out their new banking offering, but maybe more substantially the Kalsi prediction market, in which Robinhood has a relationship with a partnership with, their volumes were off the charts between college football, pro football, Ryder Cup. You still have Monday Night Football to deal with. Some are estimating that Robinhood users accounting for 25 to 35% of the daily volumes on Kelsey and the prediction market. Brent?
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Brent Thill
Yeah, just think of it as a custodian, right. This is most poor, poor level. It's like the stickiness of Robinhood. The other custodians can't even touch that. They're open for from 8 to Central Time, you know, 8:30 to 3. And so I think, you know, Robinhood, it's an engineer based company, just continues to innovate so quickly and I just think they're just cleaning everyone's block. So between stocks, between crypto, between this type of betting, you're just on that platform all the time. I just think it's such a unique type of custodial that the other custodians would love and wish that they would have thought of. But Robin has such a big advantage from the legacy custodian.
- [21:14]
Scott Wapner
Yeah, I mean it hasn't been a stealthy move in the last three months. It's been anything but. It's made a huge jump with other names in the, in the orbit of, you know, the Palantirs and Momentum, names like that. But this is a big move today.
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Joe Terranova
It is big move. There's a little of a bit of a follow through effect from joining the S&P 500. It joined, I believe on September 22nd. So there's a little bit of some capital flow coming from there. I think it's crypto oriented. I think it's strong engagement in the trading and investing community. I think it's telling their story. They've done a really good job of going out and telling what their story is, what their vision looks like. It seems as though the leadership has matured from the standpoint of understanding they really need to bring in a lot of intellectual capital. They have done that. So right now it's in the sweet spot. Momentum, yes, is fueling it. There's some fundamentals underneath the surface as well. But I want to be clear on one thing. If you were to see a rollover in crypto, you're not going to see a relative outperformance on the part of Robin.
- [22:16]
Scott Wapner
Not going to go have other levers. They do. It's not a straight. They, they don't play.
- [22:21]
Joe Terranova
No, they, they do. But you have to make the point that if you're long the stock and you seeing it at 131, 61, at it all time high, you can't say to yourself, it's going to be completely impervious to the fact that if crypto does roll over 15, 20%, that Robinhood can maintain these levels. You just kind of have to be aware in size, your positioning according.
- [22:40]
Scott Wapner
Speaking of levels, the biggest LBO ever, $55 billion. The acquisition. Acquisition, excuse me, of Electronic Arts. You own the stock and you haven't owned it that long.
- [22:51]
Joe Terranova
Josh and I were on the golf.
- [22:52]
Scott Wapner
Course on Saturday, bought it after or.
- [22:54]
Joe Terranova
You did, and we were talking about.
- [22:55]
Scott Wapner
It and he looked at me and.
- [22:56]
Joe Terranova
He said, you know, we both look like heroes. And neither of us bought it for the reasons that the stock is up that March. We bought it for the fact that strong momentum was in play, delivered on lb. We didn't think it was going to go out at a $55 billion valuation. And Jared Kushner, Saudi Arabia, was going to come in and buy it. So there are some that have criticized the deal and said maybe the deal know, adds upon some debt. It's moving to, you know, private markets right now. So for us as owners of it, we're happy with it. But I'm not going to sit here and say, hey, you know, we successfully navigated what was an lbo. We bought it because of momentum.
- [23:33]
Steve Weiss
You know, isn't that a comment on AI that you would think, you know, software companies are going to be disadvantaged because of AI and that companies like this with content can be disadvantaged by. They're obviously looking at AI and saying this is much better for us in the future because we'll lower costs and create more product. So I think that's, that's kind of interesting. That's my takeaway from this, Joe.
- [23:53]
Jenny Harrington
How do you trade it if it's not closing until the first quarter of 2027? What do you do with your holdings?
- [23:59]
Joe Terranova
Well, that's where all of the M and A arbitrage and there's a lot of people that are out there still playing that game.
- [24:05]
Steve Weiss
What do you mean, really well?
- [24:06]
Joe Terranova
Well, I'm not going to do anything until the end of the quarter until it moves. You know, we rebalance on a quarterly basis. I don't know what Josh to is going, going to do. We didn't discuss that. We were too busy looking for our balls in the weeds.
- [24:17]
Scott Wapner
China tech rallying today big time. Weiss, I'm curious your take on this because Goldman had an interesting note today talking about what was an uninvestable thesis in the hedge fund community, you included. Right. I mean you had come to the perspective that these were not stocks to buy anymore and you had, you had exposure there over the years that the tide has now turned because of AI and the fact that China is not just going to cede everything to the U.S. yeah. If you look at the three month gains, can we show some of these names? I think we have this. Alibaba is up 57%. Baidu 56, Tencent 30%. PD 25. The K Web overall which is the ETF composing these China tech names up 22%. What do you think?
- [25:02]
Steve Weiss
Well, I think I feel like complete moron despite having a stock whisperer is one of the best ever. Not whispering my ear, yelling in my ear to buy these. I had a dalliance with Bob and then quickly got out. So. So it's probably sustainable. They're not overvalued now. They're overvalued historically to what they were particularly Baba. And if you got so many levers to pull and what's changed now is that the Chinese governments behind them they're to trying driving innovation because they want to bring all the innovation and production on their shores. So I think they still have some legs going forward. My concern had been a delisting of these.
- [25:41]
Brent Thill
Yeah.
- [25:42]
Steve Weiss
Of these companies that never happened and I just don't see it happening at this point.
- [25:46]
Scott Wapner
Just a quick note. Josh has just texted saying that he. Josh is going to ring the register on ea.
- [25:52]
Jenny Harrington
So I think that's a good trade.
- [25:54]
Steve Weiss
It makes sense. The risk rewards untenable.
- [25:56]
Scott Wapner
This point he'll be on tomorrow. He can give you a little more color into that but he's ringing the register and you're sitting tight.
- [26:01]
Joe Terranova
I can't do anything rebalance.
- [26:05]
Scott Wapner
You just bought it.
- [26:06]
Joe Terranova
Personally, I want other people to make money before myself.
- [26:10]
Jenny Harrington
Oh, so generous.
- [26:11]
Steve Weiss
Yeah. Okay.
- [26:12]
Jenny Harrington
Such a match.
- [26:12]
Joe Terranova
Especially you, Steve.
- [26:13]
Brent Thill
Thank you, Jer.
- [26:15]
Scott Wapner
Yeah. Okay, up next, a committee move. Jenny, just hitting the sell button on a name that's up 20% this year. We'll tell you what it is when we come back.
- [26:32]
Commercial Narrator
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- [27:32]
AT&T Business Announcer
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- [28:03]
Commercial Narrator
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- [28:46]
Scott Wapner
All right, we're back. Jenny has a move to tell you about Star Bulk Carriers. You sold it?
- [28:51]
Jenny Harrington
Yes.
- [28:52]
Scott Wapner
Why did you do that?
- [28:52]
Jenny Harrington
Oh my gosh. This was such a home run of an investment. So we bought it in 2021 and we bought it around like 18 and change. Initially we just sold it around 19 and change at the exit price. But here's the awesome part on this we actually had 117% total return in those four years because they were paying out huge, huge, huge dividends. So when we bought it dry, bulk shipping rates were high and the inventory of dry Bulk ships was reasonably low, so they were just returning cash flow to the shareholders. They ended up making an acquisition, slightly changing their capital allocation priorities, not having this juicy dividend. And that's fine. I made my money and then some on it. So I sold it. It's a source of funds and I wish I could tell you what I'm buying with it, but I can't because I'm not done buying it. So when I'm on next week, I'll tell you, but I'll give you a little sneak peek which is, it is as interesting and exciting I think as Starbuck was when I bought it with those huge dividends. This one's boring. It's a consumer staples name that trades at a fraction of the. Of the multiple of the S and P and has a foreign change percent yield. So you can kind of see where my head's at, which is take risk off the table and move into something that's more.
- [29:56]
Scott Wapner
I was going to say. So it's not Costco or Walmart.
- [29:59]
Jenny Harrington
It's not Costco or Walmart, but it is, it is just a boring consumer staple company. And it is, it goes back to my opening conversation about out. I still want to be in stocks. You know, I could have sat in cash, I could have bought a bond, I could have bought a preferred. But I'd rather have a stock that has a foreign change yield with GDP plus growth that trades at a fraction of the multiple of the market multiple that's still compelling.
- [30:21]
Scott Wapner
So Weiss, do you have any thoughts on that? Well, Staples play.
- [30:25]
Steve Weiss
Yeah. I mean first of all in carriers, I mean volumes continue to be down.
- [30:29]
Jenny Harrington
Yeah.
- [30:30]
Steve Weiss
I mean down rates down about 75% year day. You know, I look at the Staples and they're never cheap and you know, I'm just never comfortable owning because those valuations when they, some are. When they don't have. When they have really punk growth overall.
- [30:46]
Scott Wapner
Yes, you're making a blanket statement.
- [30:48]
Steve Weiss
Yes, I am. I am, I am. So I'm unattractive to the group and I'll continue to be unattractive because I see much better alpha elsewhere such as in technology names. So I don't feel alpha to broaden where I have broadened is like in, in a Caterpillar, for example, which we'll talk about later where I think the economy lowering rates will drive business and the onshoring.
- [31:09]
Jenny Harrington
But just to be clear, like I would not buy the consumer staples index right now or sector for that. I would look through and say there are certain names that kind of got punished because of tariff worries.
- [31:19]
Joe Terranova
Clorox.
- [31:20]
Jenny Harrington
No, I'm not going to tell you. I'm not going to tell you. Even if you get it right.
- [31:23]
Scott Wapner
B and G, I'm not going to.
- [31:24]
Jenny Harrington
Tell you what's going to tell you.
- [31:26]
Steve Weiss
Helen of Troy.
- [31:27]
Jenny Harrington
Oh, come on now. All right, I'll say one of those might have been right. But if you look through them and you say it does have 6% growth, 6% dividend growth ahead, it has a decent yield. That's okay. I'm with you. I wouldn't want to buy the group broadly. I think a lot of them still have rich multiples.
- [31:44]
Scott Wapner
When are they. When are you telling us?
- [31:46]
Jenny Harrington
I'll tell you next week when I'm on.
- [31:47]
Scott Wapner
Okay. It's not a staple, but we should hit Williams Sonoma and R.H. for that matter. We did mention tariffs. And the President talking about furniture tariffs. He says, I will be imposing substantial tariffs on any country that does not make its furniture in the United States. So we. We're looking at those names. Joe, you. You own Williams Sonoma.
- [32:08]
Joe Terranova
Yes, we do.
- [32:09]
Scott Wapner
Jenny's got Ethan Allen, but Ethan Allen.
- [32:12]
Jenny Harrington
Very different chart than Restoration Hardware and Williams Sonoma because, and don't forget the investment thesis there was that 70% of their manufacturing is in North America. And so if you look at Restoration, that's down like 60% or more from its high restoration. Super tame. The CEO was on, just on the show before us talking about how they manage that, you know, why they set the business up that way. And it's interesting to see now they finally get a little bit of a benefit.
- [32:37]
Joe Terranova
I love, I love how we look at the charts when it benefits you. Now we're looking at charts. The chart does look good, though.
- [32:44]
Jenny Harrington
But it is okay. But it is interesting because this one's insightful. Like if you have three furniture companies. Restoration, Williams Sonoma, Ethan Allen. Okay, fine. Why. Why is one not down so much? The reason is it's a totally different business model underlying it. By the way, Ethan Allen also has no debt. Right. Which is interesting. They pay a 5.4% dividend yield. That's got. I think they earn about $2 of dividends. It's a $12 dividend deal. So sorry, $2 of earnings, $12 dividend yield. It's just a totally different beast than the other.
- [33:14]
Joe Terranova
Have you been reading Buy High, Sell higher?
- [33:15]
Jenny Harrington
Stop it.
- [33:16]
Joe Terranova
Williams Sonoma, we bought it at the end of July. We bought it because the company is delivering strong operating margins. The problem is, and you can't ignore this, this is a challenge for them. The production is coming from Vietnam, it's coming from Malaysia, it's coming from Indonesia. Jenny is spot on. You want to be able to, if you're going to be investing in these.
- [33:34]
Scott Wapner
Names, show me three months.
- [33:35]
Joe Terranova
Identify, identify exactly which one we've given back. We were up, we were up in it. We're basically giving it back where we were. It's interesting is on Friday, everyone was buying La Z Boy because the majority of production for La Z Boy is in the U.S. i think it's like.
- [33:50]
Jenny Harrington
70% and it's comfortable. I love a lazy.
- [33:53]
Scott Wapner
All right, let's get the headlines with Angelica Peebles before that goes any further.
- [33:58]
Brent Thill
Hey, Scott. Federal drug prosecutions are reportedly down this year to their lowest level in decades. Reuters reporting that cases dropped by 1200 so far this year compared to last. That's a 10% drop and it's the slowest pace since the 1990s. A senior Justice Department official tells Reuters that the drop is a result of agencies switching to focus more on deportations. The Trump administration just announced it's opening up more than 13 million acres of federal land to lease to coal miners, while the Energy Department will be providing $625 million to power plants that use coal to help revive it as a fuel source. The president has signed several executive orders to boost coal output and repeatedly called climate change a hoax. And OpenAI launched a parental control option today for chat CBT by linking parents accounts to their teens accounts. OpenAI said parents will be able to limit their teens exposure to sensitive content through the controls. And they come in the wake of a lawsuit brought by the parents of a teenage who alleged the chatbot influenced him to commit suicide. Scott, back over to you.
- [35:02]
Scott Wapner
All right, Angelica, thank you, Angelica Peoples. Coming up next, Mike Santoli with his midday word on the other side of this break.
- [35:21]
AT&T Business Announcer
And now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device. Coverage not available everywhere. Learn more@att.com 5G Network.
- [35:51]
Commercial Narrator
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- [36:23]
Scott Wapner
Senior markets commentator Michael Santoli joins us now. You're looking at how to know when it's time to worry about bubbly markets. I think everybody would love the answer. If you have it, let's hear it.
- [36:34]
Mike Santoli
And look. It's become an increasing focus. I would start by saying I always think it's a good time to start worrying about pretty much everything. It kind of stress tests your assumptions, keeps expectations in check. But if you're really trying to diagnose when you have a high risk of devastating capital loss because of the way assets are priced, I'm not sure you can make the case now what you'd want to look for, what I would look to see is truly extraordinary Trailing rates of return. We've had a great run here, but the NASDAQ 100 done like 30% annualized for the last three years. It's great, but not necessarily something that suggests it's overheating in historic fashion. The nature of the rally has also been pretty orderly. So usually you get this huge accelerations to the upside and you have volatility rising along with stock prices. That's something that I would keep an eye out for. And even when it comes to strategist targets, they're very muted for the end of this year. I'd be really focused on in the coming months. Everybody dialing ahead to 2026. Last year people got very overaggressive on the sell side. Maybe we'll see that again. So yeah, I get it. You want to be concerned about debt financing of this Capex boom. The fact that maybe there's a lot of redundant investment happening and maybe the returns are not going to be great on it. But as it terms of market wide risk, I feel like we keep letting the pressure out periodically. Every single MAG7 stock in the last three years has had basically a 30% or more decline except for Microsoft at some point along the way. It just didn't happen all at the same time. So we have these crises of faith once in a while.
- [38:06]
Scott Wapner
How are you thinking about shutdown and talk of more tariffs?
- [38:10]
Mike Santoli
I think not, not very much of a market swing factor yet. I think it really has to rise to the level of macro risk. It's an inconvenience not to get a jobs number on Friday, but I feel as if we can triangulate a little bit with claims and with, you know, jolts and with adp. And to me the market's not so much on an edge about stagflation risk as it was a little while ago. So I think he can navigate through it obviously, unless it gets prolonged and the bond market finds something to rebel against.
- [38:43]
Scott Wapner
All right, good stuff. I'll see on closing bell. Mike, thanks. That's Mike Santoli calls the day coming up next. All right, let's do calls of the day. Applovin is one that we'll do. So the analyst at Morgan Stanley obviously missed the stock. They had 480. Now they go to 750 overweights the call. Joe, you own the name.
- [39:25]
Joe Terranova
We do.
- [39:26]
Scott Wapner
So it's just a massive, a bit of catch up here on a stock that's frankly surprised a lot of people.
- [39:33]
Joe Terranova
It sure has. I mean it's, it is literally when you think about the story of momentum in 2025. It's Palantir, it's App Lovin recently added to the S&P 500 on September 22. This allows it to be the fourth best performing technology stock year to date along with Palantir, Seagate, Western D Digital. It's the ad platform. And you, you mentioned the skepticism in the price target. What's remarkable is that 82% of the analysts that cover the stock have a buy rating but yet the 12 month price target is only $597, well below where it is today. So I still think the skepticism is embedded in the stock itself. And as long as this momentum factor rather continues to be the leading factor that's going to further drive upside potential.
- [40:22]
Scott Wapner
All right. Weiss mentioned Caterpillar earlier. Its target got raised today to 513 from 480 outperform at Oppy. What do you think?
- [40:30]
Steve Weiss
Look, I think that this is, it's clearly going to benefit from the onshoring and that's exactly what's occurring here. So it's going to get a lot tighter. We see we, we are invested in some companies. Companies have skilled labor as opposed to, to labor that's not certified electrical and all that kind of stuff. And it's just very, very tight, exceptionally tight where these companies are actually developing their own schools to certify electricians, plumbers, etc. And that's going to mean that Caterpillar is going to have more work, it's going to sell more equipment. So I think you have to stay with this one. And Deere also deer I go back and forth on frankly haven't gone there and to me it'd be a little bit Like Caterpillar. So. So I'm not going to do that one. But others may.
- [41:17]
Scott Wapner
Okay. B of A still likes Progressive. Joe. They maintain their buy rating. They do bump the price target to 350 from 343. So that's a nice upside.
- [41:27]
Joe Terranova
Yeah. Over the last several months, I've been talking a lot about the insurance companies in the financial sector. I don't like what I'm seeing. Seeing the deterioration of momentum. I'm also seeing the. The earnings growth up against some very difficult comps. And I think it's reflected in this name itself. You know, I often talk about understanding where the individual equity names reside from a rankings perspective in the Jyoti etf. And you could see the insurance companies slowly dropping from the upper quartile to the middle quartile to now in the bottom quart.
- [41:58]
Scott Wapner
So if you back that chart up even more.
- [42:00]
Joe Terranova
Oh, it's going to do that really good.
- [42:02]
Scott Wapner
Well, because this is a space that had a ton of momentum and price. Yep. And it's all feels like it's gone.
- [42:11]
Joe Terranova
It is. I mean, there's some remnants. I looked, I could see Hartford, which we still own. Travelers. That's okay. It's fighting to maintain its momentum all state. But in the case of Chubb and in the case of Progressive, it really has lost that positive momentum.
- [42:25]
Scott Wapner
Quick, Spotify.
- [42:26]
Joe Terranova
Spotify 845 at our streamers. They just did a deal with Sony. Now they have the three major music Warner Brothers along with Sony and Universal. This potentially leads for his last potential belief that they are going to launch a music pro subscription which would be really interesting for superfans.
- [42:47]
Scott Wapner
All right, we'll come back. Sorry, Joe. We'll come back with ETF Edge after this. Told you. Top of the show. Goldman upgrades global equities. Well will find the biggest opportunities outside the US In ETF Edge next. We're back on the half. Emerging markets have been on fire this year. The EEM ETF far outpacing the S and P. But is that running out of steam? Contested Brewer has that and more. Today's ETF bad. Jake Contessa.
- [43:18]
Brent Thill
You just really nailed all those letters in a row, Scott. Good job. It is true investors have been moving around the globe looking for opportunity, but they've largely been ignoring two of the largest markets. Our next guest says you can't simply have emerging markets back in favor without China and certainly not without India. Joining me now, Kevin Carter, founder and CIO of E M cuc. Okay, so if they fell out of favor because of Geopolitics what's fueling that resurgence in investor interest?
- [43:47]
Scott Wapner
Well, if you're talking about China stocks in particular, it's I think it was Deep Seek and the AI that India that China has, you know, China had been basically thrown away, was uninvestable, according to people. And so the stocks got really, really cheap. And in January when Deep Sea showed up, investors looked at the Chinese Internet companies and China tech stocks. They saw how cheap they were and they realized they are neck and neck with us for AI. So I think that was really the catalyst. India, well, India is a great story. India is like China was 15 or 20 years ago. So China's got the most developed Internet market in the world. More than half of all e commerce is in China today. India is like China was again 15 or 20 years ago. But when China was at this stage, nobody had a smartphone. Today you can get a brand new smartphone for $12.
- [44:37]
Brent Thill
So what are your top holdings that help you take advantage of this thesis that technology is really the key in these two markets?
- [44:44]
Scott Wapner
Sure. Well, in China, we own that, you know, Alibaba, Tencent, Baidu, etc. PDD. Latin America, it's Mercado Libre and Nubank Southeast Asia, Sea Limited, Korea, Coupang. And in India, which is hard to access, make my trip trades here or Eternal, which is hard for investors to buy, trades in India.
- [45:03]
Brent Thill
It's a fascinating look at emerging markets. We're going to continue the conversation over at et cetera etfedge.cnbc.com and Kevin will be joined by Dave Natick, who's the president and director of research@etf.com so, Scott, we'll get more into that still to come.
- [45:18]
Scott Wapner
All right, contestant, thank you. Jessa Brewer. We'll do finals after this break.
- [45:45]
Joe Terranova
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast now.
- [45:59]
Scott Wapner
All right, Brian Belsky, Cameron Dawson and Gene Munster will join me today on the closing bell, three o' clock Eastern Eastern time. And I hope you will as well. Brand, you have a final trade. Let's talk about it.
- [46:11]
Brent Thill
Yeah, Etha, it's down about 15% from its August highs. It's right at support from its 20, 2024 highs. So I think it's a good setup for Q4 risk on where are you on Bitcoin?
- [46:22]
Scott Wapner
Weiss, what are you there?
- [46:24]
Steve Weiss
I'm there. I, you know, I'm not surprised by declining after the big run up. I think it'll reassert that.
- [46:30]
Scott Wapner
You're sure there through what again?
- [46:32]
Steve Weiss
Ibit.
- [46:33]
Scott Wapner
Ibit. Okay, that's what I thought. What's. Well, you're also in Leidos and that's why it's your final trade. Right.
- [46:38]
Steve Weiss
Look, the world, world's a tough place and with cyber making. So look, the government, the Chinese government spends 600 times we spend on cyber. Leidos has a great cyber offering, security offering and I just think defense companies continue to see increased valuations.
- [46:53]
Scott Wapner
Okay, thank you very much. They many are on the move today and fact we're showing Jenny because Charles Schwab is you.
- [46:59]
Jenny Harrington
Yep, Schwab fastest earnings growth in the financial sector. They benefit from high share prices, fed rate cuts and it trades at 18 times earnings.
- [47:06]
Scott Wapner
Well, there were a number of positive calls today on some of the regional banks as well. And speaking of the big banks, Morgan.
- [47:12]
Joe Terranova
Stanley, Joe T. One of the Fin5 Morgan Stanley. I think you could pick any of them. But I like what Morgan Stanley is doing here with the wealth management.
- [47:19]
Scott Wapner
All right, good stuff. Thanks, everybody. I'll see you on the closing bell, 3 o' clock Eastern Time. 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 CNBC.
- [47:36]
Commercial Narrator
All opinions expressed by the halftime report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the halftime report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full halftime report disclaimer, please visit cnbc.com halftime reportdisclaimer. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more@capella.edu.