Josh Brown (3:24)

My bad.

Scott Wapner (3:26)

Look, here we go.

Josh Brown (3:28)

I think that, look, I think the big takeaway for investors from this whole era is that some, sometimes the most obvious way to play a theme is the most obvious way to play a theme. You have to remember 25 years ago I was a retail stockbroker and we were trading the original.com boom. And every time a stock would make a huge move like a Dell computer or a Cisco or a JDS UniFace or a Lucent Technology, my clients would be like, okay, but what's the next right? What's the next Lucent? What's the next Cisco? And we would end up in stocks that would obviously blow up like Sienna and we would end up in things like Juniper Networks and Sycamore. The old timers watching the show will, will be chuckling along with me in video is still the most obvious way to play the AI build out theme. Just look at the Core Weave deal today. It's a $14.2 billion agreement with Meta. It's great for Core Weave because diversifies them a little bit away from Microsoft and adds another monster company to their roster of clients in a very big way. But what is Meta get out of this? They're getting access to Nvidia's greatest Blackwell 300 systems because core Weave already has that infrastructure in place and ready to go. This, all of this benefit accrues to in video in the end. So it may not go up the most from here relative to other AI plays. But it is, it is the foolproof name for people that want to gain sector exposure or want to gain thematic exposure. And I, I don't really see that changing. They've got this unbelievable competitive position. We've been talking about it on the show forever because it's true. And everyone's always like, well, what's the next. What's the new Nvidia? What's the. There are other ways to play AI. We've seen other chips, companies work out. I've talked about lam research on the show. We've, we've had Broadcom, we've had amd. But in the end, I still think people would be better off looking for the obvious answers and defaulting to them. And if you've done that within video, congratulations. We're now breaking into a new range and who knows how high this one can go.

Scott Wapner (5:49)

Well, the question is what to do with it from here. The stock's up 18% in the, in the third quarter. I know you're not. I do find it interesting, Amy, that you're trimming in video here. Why now?

Amy Raskin (6:04)

Well, we've trimmed it, we've owned it since 2014, so we've trimmed it along the way up. Every sale has been a bad sale so far. Obviously it's making an all new all time.

Scott Wapner (6:13)

Why is this time going to be different?

Amy Raskin (6:15)

I'm not sure it will be different. I just think I kind of, I agree with everything Josh said. This is the most obvious play. We're not selling out of it. But I do think it's prudent as the position keeps getting larger to just keep it in line. I do think at 4.5 trillion, you're kind of asking yourself, okay, what's the upside?

Scott Wapner (6:32)

I mean, you know what, right? If Brad Gerstner was here right now, you know what he would tell you the upside is because he said it this past weekend with Jensen Wong in his podcast with Bill Gurley. The upside is $10 trillion market cap.

Amy Raskin (6:45)

Market cap.

Scott Wapner (6:46)

That's not 10 more trillion from, from here.

Amy Raskin (6:49)

You're talking about a $10 trillion market double from here. I think that's a while away. And I think and with Nvidia, you do get opportunities to sort of go back in. It's not, it hasn't been a straight line up. And I do think you're seeing more articles about what the return on this, this, as Joe said, the trillions of dollars that are going into AI CapEx right now, what's the return on that? When are we going to start to see that? I think you will get people questioning that again on the way up if it eventually gets to 10 trillion, which again we'll see.

Scott Wapner (7:23)

I mean this, this remains a key question as, as Wolf Jim talks about spending expectations and how it's the biggest driver of market performance. So the hyperscalers are tripping over one another to continue to spend tens of billions of dollars towards their, their AI, their build outs. And for now it's great. And that's why CITI has raised its forecast for the hyperscalers to continue to spend the way they are. The moment and who knows when it's going to be. Could be next year, could be 10 years from now. Who knows. The moment that there's a comment about spending less in Capex. Is that the moment that everybody says oh no.

Joe Terranova (8:09)

Yes, yes it is, Scott. But I think to the setup of your question that we're probably a long way away from that. And it's not just because those hyperscalers have made such bold announcements really quite frequently and quite recently but it's also there's other aspects to this that I don't think we give enough attention to like the international exposure for AI buildouts. Let's not forget just a few months ago the President Trump visit to Saudi Arabia. The data center buildouts that are going on in the Middle East. Europe doesn't want to left behind, Asia doesn't want to get left behind. Really don't think that, you know, when you consider international. I don't think that moment of truth if we'll call it that is anytime soon.

Scott Wapner (8:47)

Let's look at Nvidia again guys. Put it back up for me please and take it out at least a year just to show you it's not immune to sell downs. We've seen it happen and it give me a year now if you could because it didn't happen that long ago. If you look at the one year it was in the spring that the stock had that reset. It got into the 90s, it did a long way. Here we are with a reboot, a double since then it did along with.

Jim Lebenthal (9:18)

The market and it really was a source of liquidity in atm if you would at that point. I think if you're owning in video you're asking yourself the question. Jim nails it. I mean and you brought it up to Jim Scott. It is all the risk surrounds the spending slows. Okay, how are we funding the spending right now? If you take the Mag 7 obviously Nvidia is not going to be part of this. And you also put Tesla to the sidelines. You're left with five companies who have $480 billion in free cash flow from operations this year to spend on the build out.

Scott Wapner (9:51)

Citi says Capex across the hyperscalers is going to increase in 26 from 420 to 490 billion. Right. So you're approaching a half a trillion dollars in spend and through 29 through 2029 from 2.3 trillion to near 3 to 2.8. So you're already looking out to 29. I mean, are we buying these stocks today trying to guess what 2029 is going to look like? If we're suggesting that a lot of the market performance is in fact being driven by the spend, as Wolf suggests.

Jim Lebenthal (10:27)

I would be remorseful, remarkably surprised if along the journey to 2029 there is not some form of a stumble, whether it's in the economy that allows that free cash flow grow not to continue at the pace that we've seen it over the last several years. So I think you have to be prepared for that. It doesn't mean I want to sell in video. It doesn't mean at the end of that journey in 2029 and 2030, Nvidia is still not the winner. But you just have to set the expectation. This is all about the ability to generate free cash flow.

Joe Terranova (10:57)

And there could be some form of.

Jim Lebenthal (10:59)

A stumble where these five companies don't gather the free cash flow at the rate they're remember.

Amy Raskin (11:03)

A revenue this year is projected to be about $20 billion. So you're talking about numbers getting to trillions of dollars of spend. Yes, I, of course I think the revenue will ramp, but that revenue has to ramp pretty damn fast at some point to justify these capex levels.

Joe Terranova (11:19)

Scott, let me make the pedestrian comment here that we're about to turn into the fourth quarter and this is a year in which I don't know what the exact number is, but mid-20s as a percent of managers that are outperforming their benchmark. That becomes a problem for the other 75% ish that get into the fourth quarter and say, oh my goodness, end of year is coming. I've got to throw money at the market, particularly if they raise cash. During that time that we were talking about, Joe, you said it was a source of fund in April, you know, when we had the post liberation day meltdown. People are going to throw money at the markets and where are they going to throw it? They're going to throw it at the obvious leaders, the things that are probably the safest.

Scott Wapner (11:53)

I just don't feel like that is a layup to make it such a declarative statement that they're going to throw money at the market. What if they don't because they look at the valuations and think what a lot of other people do. Why would I deploy all this cash now when stocks are at record highs and when people say valuations are already stretched? Maybe because I think earnings are going to be really good and the Fed's cutting So that supersedes any risk that I have on the other side about valuation and putting new money to work at these levels.

Joe Terranova (12:25)

You're partially answering the question, but allow me to be a little bit trite here and just simply say that this is the setup that happens in this sort of year. Every year going into the fourth quarter, despite what you just said, every year when you have this many managers underperforming, and in particular, when you had a whoosh down in almost a bear market in April that had a lot of people move to the sidelines, they've got to catch up. And I, I hear you, but it's.

Scott Wapner (12:49)

Trickier when you have such a select group of names. It's been carrying the load for the market years. Sure. But I don't know, what do you. I think I want to go back to Josh in a minute.

Jim Lebenthal (12:59)

I want to stay focused on the capex. That's the most important thing. That is the driver, that is the catalyst. Because if the capex is not coming from free cash flow, if it is coming from debt, then it's fair to start saying, okay, we're going back to 1999 and vendor financing and all that nonsense from there. If we could, while I'm speaking, pull up a chart over the last month of Oracle. If we could. I want to show what happened at Oracle because it went parabolic and then people realized, okay, they're doing a $15 billion debt offering.

Scott Wapner (13:29)

Wait a second.

Jim Lebenthal (13:30)

This is not a cash exercise. This is more of a debt exercise. And it's been on the retreat ever since. It's pulling all the way back. It got up to 345 in the day of the announcement. It broke out from 245, look at it today, to 78. It's retracing all of the gain.

Scott Wapner (13:46)

Josh, your thoughts?

Josh Brown (13:49)

I just don't agree with the premise. And I'm not saying that you stated this, Scott, but that it's such a select group of stocks leading the market. I just, I think that's not actually what's going on. Let's talk about, let's talk about financials. Just from. I know it's a hard pivot, but bear with me. Financials have just recorded the second largest percentage increase in expected earnings out of all of the sectors for the coming quarter. Tech has had the largest. We all understand why the CapEx growth expectations have been ratcheted higher. What Oracle is saying now, core weave, etc. Etc. We all get that story. If that were 70% of the markets expected growth, okay, I would say yeah, we got a pretty narrow situation here. But that's not the case for the financial sector. Earnings are expected, expected to come in, come in at 11% year over year growth. That's versus a 7% expected growth expectation as recently as June. So in the last basically three months we have decided that the growth rate for the, for the S and P financial sector is going to be substantially higher and we don't have to wait two months to get those numbers. The financials start reporting on Tuesday, October 14th. That is, that's like tomorrow you're going to hear from JP Morgan, Goldman Sachs, Blackrock City, Wells Fargo, Schwab. They're all progressive. They're all going to tell you the outlook is getting better and better. So JP Morgan is one of the largest contributors to that increase in expected earnings for the quarter.

Scott Wapner (15:24)

Then you have, you think Jamie's going to tell you the outlook is getting better and better. He was I think with Leslie Picker not two weeks ago and, and said things were slowing, that the consumer slowing. Now I know people will roll their eyes when they hear it, but you know, also the stocks are up a lot. The stocks are up a lot. So the, the bars for some are especially high. Now what's interesting, there's a note from Deutsch today which talks about that where they suggest the bar is medium high for JP Morgan because it's up 9% in the quarter. Whereas Citi and Goldman, you have higher bars than they suggest because the stock performances have been much better. So the bar now rises.

Josh Brown (16:06)

I agree with that. The point I'm making is not necessarily what the stock price reactions will be. I think when we get that affirmation from the largest S and P financial sector components that things are good and getting better, that's good enough for a market wide continued rally, which is what we want to see. So as much as we're seeing fireworks in the technology sector related to this theme, you also have stories like Robinhood, which is trading like it's an AI stock. You've got banks making new, not just 52 week highs but all time highs. You've got insurance stocks like I own Berkshire Hathaway B shares. So as an example, that stock sat out six, seven months in the penalty box and that one's now trending higher again. So it is not a situation where we're all just reliant on, on a continued run in video and Oracle and Microsoft. That's just, that's not the tape right now. The tape is way better than some People are giving it credit for it.

Scott Wapner (17:12)

I got you. Morgan Stanley's Katie Huberty says the quote, everything rally will persist for now, but given the rich asset valuations, they suggest own quality, which is obviously extends far beyond the mega caps. We totally get it. Major averages in this quarter. We should show you just to give you the scorecard really of where we are in Q3. The S&P up 7%, Nasdaq's up 10 and a half percent in a quarter. The Dow up four and a half and the Russell Amy is up 11. So as we're talking about, okay, earnings going to be good. Fed's embarking on rate cuts and maybe the broadening trade is going to work out. Does the fourth quarter end up looking a lot like the third or no.

Amy Raskin (17:57)

I'm not sure at the fourth quarter. I mean, I think the rally does continue. I don't think it continues necessarily at this pace. Everything rally but, but it's not only the US Ex US is doing even better. I mean, I've spoken about Santander on this program many times. It's up 130% year to date. So like Nvidia, as to Jazz Point, isn't one of the best performing stocks in our portfolio this year. It's Franco, it's ABB, it's IonQ, I mean there's a, it's a broad. I have almost over half the portfolio up over 20% year to date. There's a lot of stocks that, that are working really, really well, including the financials and Goldman and JP Morgan, which as you know, I just trimmed as well and added to Berkshire. But there's just a lot of good news now baked into a lot of these stocks that we've had. Major, major moves. Goldman's up 70%.

Scott Wapner (18:46)

Is that why, is that why you trim Goldman and jpm? Because the moves that they've had.

Amy Raskin (18:50)

Yeah. Of the last 52 weeks, Goldman's up 70%, JP Morgan's up 50%, Berkshire's up 10 to Josh's point. So we took some out of those two names, put them into, put it into Berkshire. But we also own a lot of Japan, Japanese banks that are doing really well.

Scott Wapner (19:05)

What do you think of the wave Berkshire's traded since Mr. Buffett made the announcement? He did.

Amy Raskin (19:10)

I don't think it's that surprising that it took a pause after he made the announcement. But I really think Berkshire is like insurance. I mean, it's insurance literally, but it's also insurance if you do get a slowdown in the economy. If you do get the market rolling over. They have a huge cash pile that they could put to work pretty effectively. I think the team in place is totally qualified to do that.

Scott Wapner (19:29)

I think everybody's trying to assess where the best places to to be are for the remainder of the year, whether it's sector or individual names. And you know, some firms on Wall street are out with their own list today. Some of the names may not surprise you. For example, UBS has their highest conviction calls. Okay, Amazon's on the list. Everybody owns Amazon on this show. I think it's interesting. Disney, Disney is on their list. So people looking for names outside of the Mag 7. Well, here's your Disney.

Joe Terranova (19:57)

Yeah, well, you know, Disney had a great start to the year. It's kind of consolidated here. I almost said sputter because it's on the border between consolidating and sputtering. It needs to get some mojo back. The only thing that's going to do that is earnings. And the sign that streaming is picking up more and more steam as linear declines. And streaming should be picking up steam not just from the regular content, but from espn. Obviously, the theme parks doing well. And I think what we're talking about.

Scott Wapner (20:21)

Talk about succession, which is the biggest issue hanging over the whole story.

Joe Terranova (20:25)

Listen, it is a very big issue. I don't think that it. I don't think that it's make or break on the stock. I think it's important. I'm not saying that. But let's face it, there's some very talented people behind Mr. Iger. I mean, there's, there's Josh tomorrow. I might have got his name slightly wrong. Excuse me. At theme parks, there's Dana, I'm sorry, forgetting her name. The TV and. Thank you. Sorry. There's a very talented bench note to sell.

Scott Wapner (20:48)

Don't mention names if you don't know the names.

Joe Terranova (20:50)

I got half of it right. Give me some, give me some credit there. Also, I knew with a good team like this that I'd get back up. This exactly is what I'm talking about. If you got a good team, you got back up.

Scott Wapner (20:59)

Yeah, like note to people on a, on a debate, for example, don't make a list if you can't remember the list. You know what I'm saying? You know what I'm talking about. All right. Applovin is on the list. Joe T. It is.

Jim Lebenthal (21:11)

And I talked yesterday on the show about the skepticism that I still think is built in the stock price. In the analyst community. The price target way below low. The current price at $700 today. In addition to that, the ad platform continues to grow. They're delivering on the revenue growth. There was a point several weeks ago I was skeptical that this could continue. Thanks heavens that Jyoti is. A rules based strategy. Kept us anchored into that position. Didn't allow me to make a foolish move.

Scott Wapner (21:35)

Snowflake is on the list.

Amy Raskin (21:36)

Snowflake, a software name also related to getting that bump had. Had done really well year to date. Well, you know, very, very expensive.

Scott Wapner (21:44)

It's differentiated itself from some of the other software stocks. In the conversation over whether, you know, AI is going to kill software.

Amy Raskin (21:53)

Right.

Scott Wapner (21:53)

It's definitely hurt some software stocks, not this one.

Amy Raskin (21:56)

Right now you need Snowflake to organize your data and to make sure that you can use AI. So it has differentiated itself and it has a unique position. You're paying for it though.

Scott Wapner (22:07)

MasterCard.

Jim Lebenthal (22:08)

Yeah, listen, MasterCard has been one of our longer holdings for the better course of the last four years. Now you're hearing both Visa and MasterCard enter the conversation as it relates to stablecoins. That might be a tremendous opportunity for two companies that are well diversified in their model.

Scott Wapner (22:22)

Do I have any interest in Wealthfront, the company filing for an ipo, obviously, in the fintech space. We've talked about it on this program before. I think we did numerous times. This sort of robo advisor, automated investing almost. Josh, I know you have thoughts on this. So now the company is going to go public and we've discussed this with you before, both the concept and the company.

Josh Brown (22:46)

They have to go public. They have VCs trapped in this stock for 13 years. This was not. This marketplace was not supposed to develop the way that it did. If you rewind back to the 2012, 2014 period when these robo companies first came along, they were like very good at what they did, but they were a little bit too vocal about it. And what ended up happening was Vanguard and Schwab decided, hey, we could do that too. And then Merrill Edge digitized and then Fidelity and of course there's Betterment out there as well as the other standalone. And what ended up happening was Robo Advice became kind of this like commodity offering that everyone has. Sofi has it too. Robinhood has it too. So there's really nothing that they do that's unique. They did have a head start by virtue of how early they were founded, but that really doesn't matter anymore. This is basically just a marketing CAC business. Like how much money do I have to spend to get my next thousand clients? And that's never a great business. I think it's notable that Wealthfront tried to sell itself to ubs. UBS preferred to pay the breakup fee and get itself out of that deal rather than consummate it. I don't know what they saw that spooked them. So now a couple of years has passed since then and finally you have the type of tape where Robinhood's making record highs so far is exploding higher. It's a tape that's more hospitable to these types of fintech investment sort of platforms. So I think it's great timing to be selling it to the public today. Like just because people want these types of companies, I don't know that that means it's going to be a great investment once it comes out. So this is the type of thing where I'd rather just be a spectator and, you know, we'll all find out together how much appetite there truly is for a business like this.

Scott Wapner (24:42)

Yeah. We should also note S and P has taken a move higher here. We were uneven as we came into the session, but there's your move. Health care having a good day. You obviously have the announcement with Pfizer in the Oval, CEO Albert Borla with the president there on that drug pricing plan. So that stock's doing quite well, up 4%. Haven't seen that a lot. So that space is doing well. The AI trade working especially well. We'll bring it full circle to how we started with Nvidia above 4 and a half trillion dollars for the first time ever. First time ever a company has reached that level in market cap. Nvidia is up another five bucks today. That's just shy of 3%. But it's an AI story very much so. Chips are working, the power names are working. Vertiv, Eaton, ge, Vernova, for example, are all on the move and helping this market look the way it does. Some 24 and a half minutes into our program. We'll take a quick break. Coming up next, Josh Brown, he just made an out of the world trade. Did he say that? I guess he did. Somebody said that. We'll tell you about his new buy. We're back after this.

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Scott Wapner (27:34)

All right, let's talk about some of these moves we have by Tease Josh with a new buy. So it's Planet Labs. Give me more.

Josh Brown (27:43)

Okay, so I have a, I have a couple of moves and they're all related to something that I think is going to be a really big investment theme next year, which is the low altitude economy. Basically the low altitude economy is anything that's sub 3,300ft high in the air. So it's drones and it's, it's satellites will control a lot of the data that enable that. Although satellites are obviously in orbit in space, but mostly it's going to be air taxis. And there are a lot of catalysts coming up over the next three to six months that I think have the potential to really get people excited about the space. Planet Labs is basically setting itself up to be the data provider. It's a network of satellites, but they'll be selling their data to all of the air taxi companies, of course, in addition to military, in addition to forestry and meteorology. So they've got these next gen satellites. It's this constellation of satellites that they call Pelicans. And this is a real business. It went public as a SPAC in 2021, spent three, four years basically out of sight, out of mind. But now they're, now they're in a position where revenue growth is about 20% quarter over quarter. They did like 70 something million dollars in revenue last quarter. They reported on September 8th the stock absolutely exploded. I'm in a small position here in pl. It's very speculative. The company is not going to Be GAAP earnings positive for a couple of years, although they just had two straight quarters of non GAAP cash flow positive. So they're trending in the right direction and I anticipate being able to buy this stock lower over time. So this is just an initial starting position here in Planet Labs. Do you want me to talk about the other two or you want to do that later?

Scott Wapner (29:34)

Well, well, hang on a second. You have a question? Joe has a question about Planet. Hold on first and then I'll, I'll prompt you on the others.

Jim Lebenthal (29:41)

Josh, on Planet Labs, are you factoring a takeout possibility with Alphabet? I think Alphabet has 11% of the shares outstanding.

Josh Brown (29:50)

Alphabet owns 10 and a half percent. I don't believe that they own it with the intention of buying it because they've had that position. Of course, anything's possible and I'll be the last to know if that's going to happen. That being said, look, I like the data business. I like it in finance. I've pitched Moody's on the show. I've pitched S and P global indices. I think, I think, like when you, when you think of businesses that have the potential to scale and have really high margins, data in every segment of the economy almost always works. That's essentially what this business is. They're not sending rockets up into space. However, it's very high tech. The satellites they have all have these in video Jetson AI chips on board and they're generating some of the highest quality imagery and data. And the amount of customers who are going to need to buy this information from them is rapidly expanding thanks to the low altitude economy taking off next year. So, Joe, I'd be happy if they just remain the primary data provider to that theme. I feel like that would be good enough. If Alphabet's feeling froggy and they want to leap and take a run at this thing, that's okay too. But I have absolutely no need for that and I don't know anything about it.

Scott Wapner (31:07)

All right, so the other ones, you bought more Joby. Just in the theme, the low altitude economy is how you framed it. You bought more Joby and you bought more Archer Aviation. Go ahead.

Josh Brown (31:19)

You know what? I'm worried that these things are going to go and I'm not going to be big enough in them. So I added 50% to my position in each one. These are the most speculative stocks in my portfolio. I want to make it very clear. We're talking about literally flying cars. So people who are risk averse, people that can't withstand 30 40% drawdowns in a stock. Do not get involved with these stocks because they're going to be volatile. But if we're all talking about the low altitude economy next year, because these companies achieve FAA certification to begin EVTOL flights, that's electric vertical takeoff and landing, meaning somebody in midtown Manhattan goes to the roof of the building, gets into one of these four passenger air taxis, and can be taken to the Hamptons or JFK or to the Ryder cup out on Long island in minutes. Like, if that's where this ends up going, and I do think it will, I think these stocks are going to be like owning Tesla, like in 2013, 2014. So it's really speculative. It's not a huge part of my portfolio. The way to think about Joby is they could be like the Boeing of the low altitude economy. They're only producing a couple of vehicles a month at this point. It's going to be a long time before they're making hundreds or thousands. But Toyota owns a big chunk of Joby. Toyota is their manufacturing partner. Toyota makes a million out of the 10 million automobiles that are manufactured every year globally. Toyota is as good of a partner as you can get. And they have a vested interest in seeing Joby succeed. In the case of Archer, their vehicle is called the Midnight. They are also testing with the FAA trying to achieve FAA certification. They're not as big as Joby. I don't think they're as far along. It's too early to guess which one of these companies will win. So I own both stocks, Judge.

Scott Wapner (33:15)

Okay, you're looking at me like you keep looking over. Like there's.

Jim Lebenthal (33:20)

There's two ways I want. I want to react, if you would allow me to. There's two ways to think about Josh's ownership here in the vtol, and they're similar companies. Joby is further along for FAA certification much further along than Archer is. The other side of it that you have to factor in. And I'm sure Josh is significant. Cash Burn is involved in these businesses. And what does that mean? That means to get to the end point of FAA certification, you're probably going to see some equity dilution at some point.

Scott Wapner (33:49)

Okay, let's get the headlines now.

Josh Brown (33:51)

I think that's right.

Scott Wapner (33:52)

Hi, Bertha.

Amy Raskin (33:53)

Hi, how are you?

Bertha Coombs (33:54)

Florida Governor Ron DeSantis and his cabinet unanimously voted today to donate land next to the Freedom Tower in downtown Miami for President Trump's presidential library. The land is currently a parking lot that until last week belonged to Miami Dade College. According to the Miami Dade county property appraiser. The parcel is valued at more than $67 million. Polish authorities say they arrested a Ukrainian diver in connection with the 2022 Nord Stream gas pipeline explosion in the Baltic Sea. German prosecutors said the suspect was, quote, strongly suspected of being part of a team that planted the explosives on the pipelines. In August, Italian law enforcement arrested another Ukrainian man on suspicion of helping to coordinate the bombings. And Versant, which will become our parent company after a spinoff from comcast, signed an 11 year media rights deal with the WNBA today. Rosin says the agreement will start in the 2026 season and will include at least 50 WNBA games annually. The agreement expands on a previous deal the WNBA had signed with USA Network last year. Go wnba.

Scott Wapner (35:21)

All right, Bertha, thank you very much. Bertha Coombs, coming up next. Next, Mike Santoli. He's back with his midday work.

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Scott Wapner (36:30)

We'Re back. Senior markets commentator Mike Santoli joins us now for his midday Word. Final day of a good quarter for stocks. Not what the calendar suggests is supposed to happen, but that's the kind of market that we've been in for the last few years. Years.

Mike Santoli (36:43)

Yeah, for sure. You know, you have to give the market the benefit of the doubt when it does defy the negative seasonal tendencies. I think it's coming to the end of the third quarter in an interesting little zone here where you have a little bit of below the surface weakness and some stocks settling back. The index is holding up just fine. We haven't been able to have really a proper pullback.

Joe Terranova (37:04)

Interesting.

Mike Santoli (37:05)

You could squint and see the signs of a little bit of a softening up of growth expectations within the market today in some of the consumer areas. But in general, we've managed to keep it going. We have the combination of, yeah, this, this kind of weak jobs number. It's going to get the Fed in play a little bit more. On the other hand, a lot of leading indicators and expectations of a reacceleration out of this. And then the debate around the Capex stuff in the fourth quarter ramp is a universal expectation even though it only happens 75 to 80% of the time. So I think all that blended together has sellers kind of not in any hurry. But on the other hand you might have to go through a little bit of static before you get to that sort of all clear for the for the year end run.

Scott Wapner (37:46)

It'll be interesting to see whether the activity in the fourth quarter matches the third in terms of performance. I'm looking at the majors in the in this quarter and the Russell was the outperformer barely over the Nasdaq. That may end up being a neck and neck thing by the end of the today given where the price action in the market is. But nonetheless, I mean you had a nice broad market in Q3. Will it continue in Q4?

Mike Santoli (38:10)

It was yes, it was broad in the sense that it was not exclusively one little narrow slice of stocks. I think the whole breadth thing is completely about how you measure it. You know, the percentage of stocks above any given moving average is not that strong right now. If you look at the daily tally of up versus down, it's mostly hanging in there. It looks fine. Sector stuff is depending on what your start date is. So I don't know that there's a way to call it. Clearly obviously they try to execute the Fed rate cut playbook. You know, we basically have 125 basis points of cuts from the peak and we haven't had a recession. So in theory that should be supportive of of the market and has been so far.

Scott Wapner (38:47)

Yeah, I mean the market's definitely betting heavily on October and then in December. Mike, thanks. I'll see you on closing bell. Mike Santoli straight ahead. Amy Raskin has some more moves to tell you about and we will coming up.

Josh Brown (39:14)

All right.

Scott Wapner (39:15)

We have several moves from Amy that we need to get to. All right, so you bought more Visa which was reiterated outperformed today at Mizuho. $425 is the target.

Amy Raskin (39:26)

Talk to me again. We sold some of our JP Morgan and some of our Goldman Sachs. So this is sort of shifting our financials weight. It's a little bit more of a defensive name in my view. It's cheap compared to its own history. It has. We think it's really well positioned. Obviously high barriers to entry. Just spoke about MasterCard earlier. But we also like its international exposure. Exposure. There's a lot of stimulus overseas so Visa has exposure there.

Scott Wapner (39:51)

Okay. Regeneron has been disappointing.

Amy Raskin (39:52)

Regenerative has been terrible.

Scott Wapner (39:54)

It's almost half off its 52 week high.

Amy Raskin (39:56)

Exactly.

Scott Wapner (39:56)

And it's down 20 plus percent this year. You bought more?

Amy Raskin (39:59)

Yeah, we did. Almost everything that could go wrong for this company has gone wrong. It's cheap relative to its own history. And we like, we think the science isn't broken. That's a big point. They're expecting to get FDA approval for their high dose Aaliyah in November. Hopefully that comes. So we do see a few catalysts out there. Again, it has not worked. It's been really, really disappointing. We've had a lot of names that have worked. So we're taking some profits from what has worked and putting it into regenerative.

Scott Wapner (40:28)

Okay. A lot of people made a lot of money on IonQ. Yeah, right. When do you first talk about it?

Amy Raskin (40:32)

October last year. Which is really interesting because this is my third trim and I almost, I considered waiting till mid October of this year so. So I could make the gains instead of short term gains, long term gains. But the stock has done so well. We first put it in at $13 last October. It got up to 70. A lot has gone right for this company. They've gotten a lot of great talent, done some great acquisitions. The company's made more progress in 12 months than I expected. But the stock also is up almost four times.

Scott Wapner (41:07)

It's 600% winner.

Amy Raskin (41:08)

Exactly.

Scott Wapner (41:09)

Since you first. Since we, since you first did it and you first talked about it on the show. Unbelievable.

Amy Raskin (41:14)

So we still have a position. We're still there, but just keeping, you know, it's very volatile, speculative. So we're just keeping the position size small.

Scott Wapner (41:22)

Let's do another one of yours. You bought more Williams companies.

Amy Raskin (41:26)

Right. So this is a new stock for us. Williams. It's a pipeline. They control one third of the natural gas in the country. But their contracts are fixed costs so they don't have commodity exposure. Really. We just think it's a well positioned company going forward. It hasn't run like some of our other commodity related or gold related names. So we're, we added it to portfolios. We like it long term. I don't think this is a blockbuster double. You know, it's not an Ion cue sort of name, but a solid performer.

Scott Wapner (41:58)

Okay, thank you. We'll see what's up with that in the months ahead. Coming up, Spotify is on the move today. We'll tell you why shares are under pressure. Next. Got some stocks on the move today that have ownership on the desk. CRH is one company upped its outlook today. You went to the investor day.

Joe Terranova (42:31)

I did. Right Did Great news coming out of there. They're raising their guidance at least above what estimates were. This is a company that had more than solid performance. 58% annualized return over the last three years, 30% over the last five years. It's up 30% year to date now. Does it have more to go? Yes, and here's why I say it. It's the biggest paving aggregates cement earnings company in the world, bigger than competitors Vulcan and Martin Marietta. And yet it trades at a 33% discount on earnings multiple to those companies. There is opportunity there. Why does it trade at a discount? Because it's basically an international company that only recently in the last two years listed in the US and that's the opportunity it should accrete to the same multiple as Vulcan and Martin Marietta. There's much more to go here.

Scott Wapner (43:16)

Okay, Spotify is founder. Daniel Ek is leaving the CEO job. They're going to have co CEOs. The co presidents currently are going to take those roles. Joe T owns it and anyone that.

Jim Lebenthal (43:27)

Has been watching the show for the last several months know a strong advocate, I believe in owning this company. I think it's the equivalent in music to what Netflix is right now in streaming. It feels very similar to when Reed Hastings left and appointed Greg Peters and Ted Sarandos as co CEOs. Similar model now where you have a founder stepping aside from Spotify. I understand the kind of challenge that the market feels today from it. That's why it's down 6%. But I'll take the other side of that.

Scott Wapner (43:56)

Well, if you look at the chart year to date, it's had a. It's had a big move. It got downgraded today from Goldman. It did right to neutral from buy. They look at the chart and they say, well, risk reward doesn't look so good from here. They did bump the price target up there. You know, they're not naive to the fact that the stock can continue to go up from here. They just don't like the risk reward. Given what that chart shows, that's fair.

Jim Lebenthal (44:21)

But I think what you're up against here, if you own it, is less about a price correction and more about a time correction. More about kind of running sideways to lower until you could see some growth catalysts reemerge.

Scott Wapner (44:35)

All right, Nike reports after the bell. Oh, how the mighty have fallen. Amy, you sold it in May. Joe, you sold it in June. It's coming off its fifth straight negative week. So you obviously have a new CEO. And I guess investors are wanting to see results. It's down 8 and a half percent year to date. What gets you to buy the stock back?

Amy Raskin (44:59)

More rational, competitive landscape. I mean, you saw what happened with Lulu last quarter. I just think they're just too many players competing for too small of a market right now. So I'll listen to the market. I mean, it's a huge market. It's a huge market. But used to Nike, used to own this market. I mean, it used to be Nike, Adidas, Puma, you know, and now you have a lot of new startup sneaker companies, a lot of new brands out there. I mean, even just watching the US Open, there are brands, new brands every, every other minute. So I just think Nike has a harder road than it used to have.

Scott Wapner (45:32)

All right, we'll come back with final trades next. Full house at 3 o' clock on closing bell. Adam Parker, Courtney Garcia, Chris Hisy, Rich Saperstein and Rick Heitzman. I hope you'll join me then. Three o' clock Eastern. Josh Brown, your final trades. What?

Josh Brown (45:53)

Sticking with Nvidia, not selling.

Scott Wapner (45:56)

All right. Four and a half trillion dollars in market cap today. It is a new record high on this final day of the quarter.

Joe Terranova (46:03)

Farmer Jim, Lockheed Martin, it had a rough summer, but it's really making a nice run here. It's up 10% for the month. It's in positive territory for the year. And we understand what the drivers are. It should continue.

Scott Wapner (46:14)

Okay, Amy Raskin, Regeneron.

Amy Raskin (46:16)

We talked about it earlier. Maybe some of the health care. Health care might be turning a corner now that we got the news out about the pharma pricing.

Scott Wapner (46:24)

Well, today certainly leading the way after the drug pricing plan with Pfizer announced at the Oval Office with the president.

Jim Lebenthal (46:31)

Jyoti Amphenol been in Jyoti since inception of November of 2020. Continues to just work and move higher.

Scott Wapner (46:38)

All right, well, it is moving higher yet again today. I'll see at 3 o' clock on closing bell the exchanges. 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.

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