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Halftime Report
Your Rate Cut Playbook 9/12/25
00:44:20
Scott Wapner and the Investment Committee discuss their rate cut playbook ahead of next week’s Fed meeting. Plus, the Committee making some major portfolio moves, they reveal the latest. And later, Netflix down almost 5% this week, the desk debate their streaming strategy as a Paramount & Warner Bros. partnership takes shape. Investment Committee Disclosures
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This episode is brought to you by.
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Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10.
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Minutes or less, including projected stock updates, monetary policy decisions and key results and.
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Statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.
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It'S gotta be tied. 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 Wachner. Front and center this hour, your Rate cup playbook. With next week's Fed meeting looming, the committee will tell you the best ways to position. Right now with all that joining me for the hour, Steve Walton, Weiss, Kevin Simpson, Rob Seechen, Brent talking to so we're mixed today. Nasdaq's a winner. The others are red. But we have been at record highs. Notable today, the 10 year yield near the lowest level since April. So we're watching all that with the Fed meeting on tap, will they go 25 or will they go 50? That seems to be the biggest question because the market is convinced nearly 100% you're going to get at least 25. So Weiss, the question is what do stocks do? That's question number one for today. J.P. morgan's trading desk says this could become a sell the news event. I've heard the that from others as well because the market has continued to ramp up today notwithstanding ahead of that meeting. What do you think?
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D
So I think there's a real possibility, but it's not going to turn the rate cut. If we get 50, the market takes off. 25 is a base case. I think that what JP Morgan saying is that that's in the market right now. I agree with that. However, it's going to turn on what the narrative is. That's right.
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A
Paul's words more than the numbers are probably what matter more than anything right now.
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B
Right.
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D
And it's clear from the numbers that, that jobs are going away, claims are high, job growth is low, it's basically flat. So they're going to decide what is going to move the most. Is it going to be inflation spike up and then they have an out that's tariffs to one time event. So I actually think they're going to be somewhat dovish to you know when they go next week.
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A
Okay, how about a dovish 25 cut that great for the market goes up?
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D
I think it goes.
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B
Yeah.
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A
Brent, what about you? How do you game this out?
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C
Think we get a 25 basis point rate cut. 50 doesn't seem to be necessary. I think we get a 25 basis point rate cut. They acknowledge the weakness in the jobs market. I think they're also he's definitely get questions about the data itself. Right. The 911,000 revisions we have. So I'm really going to be curious to hear how they, they, they thread that needle. I think that the market once again is a pull forward mechanism. So we already have this priced in. I don't think we're just going to get some rip roaring rally. I think what's been working will continue to work and so I think you're going to have sectors like real estate, private equity, etc. That will continue to be these beneficiaries of a lower rate environment. And I don't think we are going to be one and done.
- [03:53]
A
I've heard Rob for I don't know like two weeks that it's priced in. How could it be priced in? If the markets continue to set new highs? Maybe it's not priced in.
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B
Well, there's a little bit of positioning there too. If you look at institutional investor positioning we're in the 58th percentile which Deutsche bank would define as decidedly neutral. So I agree with Steve. I think it depends on the communication that comes out with it. But it's also what the data informs from here. So short run you might get, you might get a move. But then what does the data inform from here? And I think if the data doesn't lean towards a direction of further cuts, not a disaster where you're seeing growth that completely roll over but just leans towards the ability to have further cuts. Given the moves in stocks, given the move in specifically small caps, Treasuries, gold, you know, you could see a rerating that's maybe more substantial. I just don't think so because as we go into the fourth quarter I think you're to see a pretty big positioning chase from here. It's more next year.
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A
Okay, that's what I want to get into. I tease it up perfectly. Like the best rate cut, right. We think we're going to get a cut. 25, 50, whatever. Your best positioning for a cut. Do you stay big or do you go small? Russell 2000 is on pace for its sixth straight week of gains. Small caps are having their best quarter since the end of 2023. The NASDAQ's up 14% year to date and the AI trade, as you know, has been back on lately. Stay big or go small post rate cut between now and the end of the year. What do you do?
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E
Well, I always stay big, so I'm a little bit less objective than some of our friends.
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A
Okay, well what do I, what are, what do our friendly viewers, what should they do?
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E
Follow me and stay big because the challenge is moving forward to Steve's point. If the data breaks down, then you're going to see the small cap, the.
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A
More speculative side roll over even with rate cuts. If the data breaks down.
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E
I think so because you're, you're betting on a stronger economy. So here's the thing about the sell the news because I thought that was a really interesting note. If we get a 50 basis point rate cut, I think that would be a sell the news event only because from my perspective it could be a little bit scary. Like why do they need to do that? I'd rather see it be my glide. Like give me 25 now and a few more 2550 may spook the market, man.
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D
It would spook the market very short term.
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B
Yeah, consumer sentiment came out negative today.
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D
But I still think 50 takes it higher. Whatever the knee jerk reaction is, it's so tough to account for. It's a head.
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A
How would you answer that question? Stay big or go small. We're thinking about outperformance now, right? Not what we like this, that, the other. Yeah, outperformance between post cut and end of the year.
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D
Look, I would stay big because I think it'll continue to work. And if you take a long term approach rather than trying to buy the smaller companies caps here, the smaller caps, they're going to be hit a lot harder by a slowing economy and that's what we're seeing.
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A
But why then, why then is the Russell up 5% over the last month if the data has been showing that the economy and the job market is slowing? Well, wouldn't that be the leading, one of the leading indicators in the market that that agrees with the data?
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D
Well, these are new Markets. So generally yes, but generally the small cap starts moving and some of the junk, I'm not saying small caps junk, but we've seen that move also and that typically moves. They're the last ones to move. So as you look for what's not participating the rally over the last few years it's small cap. We've had some head fakes in small cap. So it's a catch up trade.
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A
Well you just said small caps are the last ones to move. We both know that generally speaking small caps are the first ones to go in and the first ones to come out.
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D
Go out. Right.
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A
So but they're not the first ones to go in because they're not going in. They're up 5% over the last month. Even in the face of data that's been a little squirrely and job numbers that just flat out haven't been grid right.
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D
Squarely the dynamics just fish. Yeah go the dynamics in this market unlike any other cycle. They just are because everything it's in index funds because retail investors aren't really selling much on news. Some are and creating those bottoms but overall people are adding to it. We really haven't seen that, you know, while we've all been in the business. So over the last few years it's changed. So that's what's affecting small.
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A
Well to your point then. So maybe there's full positioning towards the mega caps and if it's 50 people say well I mean there's going to be a huge bang for your buck in other places of the market finally. And then you get a rotation.
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E
Why would that happen? Because for three years there's been very little in the way of refis for these small caps. They're dependent upon capital markets, large caps aren't.
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A
So rates going down and capital markets already picking up is good.
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E
And I think that the small cap that's going to go out and refi that needs money. The cheaper money is better for the small cap. So we've seen it. Whether that trade.
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A
We've already seen it. Rates haven't even barely budged.
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E
We've seen the move in the small caps.
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B
It depends on the follow through from an economic standpoint period. With small caps, if you get follow through, which means that you're cutting in a benign scenario, small caps will continue to run. They will continue to do well. Aren't you labor?
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A
Are you kind of cutting in a reasonably benign.
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B
Yes, but by hanging. But that's why I talked about that intermediate thing. Scott. If the labor market continues to break down and the consumer fundamentals get worse. That indicates economic deceleration, further economic deceleration. And I think small caps have a tough time with that scenario. With that scenario. So I think we're, we're waiting for data right now to confirm the, you know, the slow, the pace of the slowdown. How dramatic is it going to be? We personally don't think there's going to be a recession but small caps have run so much here recently that I don't, I think the safe playbook is what these guys are talking about because remember the highest quality parts of the index are being driven by a data center and demand that is still robust. You saw it through Oracle, all those trends are very powerful in place and this is speculation as to whether we are going to be able to get that economic acceleration with rate cuts and you're going to be able to perfectly engineer that handoff of the baton from the one to the other.
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A
That's what we talked about yesterday at some of the notes that the visibility, AI visibility is just too good now that why would you move away from these kinds of stocks? I think that was a UBS note yesterday. Wolf also commented on this trade saying they believe that the mega caps are going to continue to do very well.
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C
Also they're growing twice as fast as the market. Their margins are two to three times of the market. And when you think like large caps can't move anymore, well Oracle is not a small cap stock or a mid cap and so I think this spend that. Right now we're in this environment where if you spend more as a hyperscaler the market will reward that today. Right. And so two years ago capex from the tech sector really the Mag 7 was 20% of the S&P 500 companies. Right now it's 30%. Seven companies are 30% of the S&P 500 capex. It's just massive. And so I think you're going to continue to see people moving in that direction. I think though the way you want to also think through is as a rate cut comes down those long duration high growth companies like I own like an iron cue or like a hymns or like the Palantir has already run up but I think you're going to get a continued move in these longer duration high growth companies that don't necessarily have it much of an E. That to me is how I would play the small and mid cap is on the growth year side versus buying an IWM which I agree with Rob. I think it's more just like A trading mechanism because I don't think the economy like Q4 of 2020, that was a fat pitch for small cap. Right now I think it's going to be a fits and start.
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A
It was Morgan Stanley's trading desk that had that note yesterday talking about it's going to be a herculean task derailing what has been increasing visibility. Let's talk about Microsoft. Speaking of all this. They're going to snap a five week losing streak unless something dramatic happens today. And Microsoft and OpenAI have reached a deal to extend their partnership. Reports I saw say Microsoft will acquire at least a $100 billion stake in OpenAI. The Journal reporting today as well that that truce clears the hurdle in their path for a for profit conversion. That of course being open air, everybody owns it. You.
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D
Yeah, look Microsoft goes through these periods even when the stocks trade in the 20s and 30s where it's just nothing's going on. Source of funds but the fundamentals continue strong. I love the fundamentals. Clearly, you know, open air getting that relationship right, which they appear to be doing is helpful. But you also have this major upgrade cycle that's happening, you know, with 11 and you're going to see, see a lot of new, you know, PCs, laptop spot, but you're going to see a lot of new subscriptions. Subscription price is going to go up. So I think that they're very, very well positioned now to continue moving higher. But it's the most hated except periodically apple of the Mag 7. Nonetheless I'm still there. Haven't sold any. It's not one of my largest positions.
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A
Meta is why is it, why is it one of the most hated? Why, why does that make sense? I mean looks up more than 20 Microsoft.
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D
We're talking, we're talking Microsoft stocks up.
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A
More than 21% year to date. So it can't be that hated.
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D
Well look at what Apple's up, you know, recently from the lows. So I'm just saying when you talk about it, it's when I say it's most hated Grant that may be an exaggeration.
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A
No, I know but why is it even. Why, why do you characterize it as such when it was like the first out of the box with the Open Air partnership.
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D
Right. Because it's been a source of funds for some while. You've seen, if you go through the charts, you compare the two charts between Metta and Microsoft, you'll see a complete different chart pattern on the short term basis. People use this as a source of funds. It's not Cheap. Neither is matter, but Met is growing faster.
- [14:12]
A
Well, who owns Meta on the desk?
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D
I do.
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How come? I mean, I'm kind of surprised the stock's trading the way it is with really no anticipation whatsoever of MediConnect, which is next week in San Francisco. That's a big deal. I mean normally a stock you think would sort of run up into an event. Now maybe you get updated glasses and stuff like that. You're going to hear from from Zuckerberg right during his keynote out there. Is that not expected to be a stock moving event?
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D
I just don't think they're focused on it, Mark.
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E
I mean Met as our number one.
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Pick for the year.
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E
We love the stock. I own both Microsoft and Meta. I think from a hardware standpoint, if you haven't TR these glasses, you need to. There are sunglasses for the most part. I know there's transitions, but I think when they roll out regular glasses like we're seeing that this hardware competes with anything Apple puts out. So I'm super excited about the event.
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D
Yeah, I think that people aren't focused on them as a consumer product company which they have the whole, you know, it's sort of like Apple when you take a look at.
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A
No, but you don't think Zuckerberg is going to stand up there on the stage in San Francisco and talk about their ambitions? Oh, I think it's phenomenal.
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D
I agree.
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B
So my. It is phenomenal. But there's this transition with all the Mag 7 from Cap Light businesses to cap intensive businesses in market tolerance of that you got to judge every time they're on stage and talking about what they're going to spend in this space. I think right now the market is completely buying into that. I am not using Microsoft as a source of funds. We're a little different. We've owned it a long time. We also bought Matter in December of 2018 on this show when it was 12 times earnings. They haven't sold a single share. But when you look at Microsoft, the reason to own it is 46% operating margins, 27% return on investment capital and 26% free cash flow margins in the highest, the highest and best position quality tech company in the world. It is expensive but I think that price premium is warranted at least right now.
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A
There's also Apple Brin which the new iPhones go on sale starting today. Their air launch, the iPhone air delayed in China over a digital SIM card issue. See what happens there? Some models are available because they they use the physical sim rather than a digital One Tim Cook, by the way, you probably saw him with Jim Cramer already on the network as Jim was. I think it was in Kentucky. Well, Tim Cook's going to be a guest tonight on Mad. You'll see more more of that interview and you don't want to miss it of course because you just don't hear from Tim Cook that often. You do around earnings with with Jim and Steve Kobach. But this is a good chance to hear from tonight. Six o'. Clock Bryn, what about Apple here?
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C
Yeah, I mean I already put my order in for the new earbuds in the 17 right. I've been really clear. Apple is a hardware company and aesthetics do matter. And you have a 4 out of 14 Pro. The Air is much much stronger, much faster. The camera is pretty neutral. But I'm not Owen Mills here. I just need to take a selfie or portrait every once in a while. I think that this is going to be a great launch for them. I think that with the earbuds do that instant translation when that comes out next year. I think this refresh cycle, I think people want to be negative about it but I think it's going to be strong going into Christmas. I think those earbuds are going to be very very popular. Across those who have a sticker 16 and 17 the new technology, I'm excited about it. They'll fix the China issue. I mean Tim Cook and his team have a master class of manufacturing and so they'll get that worked out I'm sure in court order.
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A
Been a big week for AI related names. I mean Oracle is obviously going to steal the thunder nebulous because the deal with Microsoft is obviously the runaway winner up 36% but many of the names especially in the power area have done well. Vista Vertivor for example GE Vernova, you bought more Rob NRG and you bought more monolithic power systems. Tell me more.
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B
Correct. It's all about data centers and regulate getting and regulating power. It's our favorite way to get exposure to data center consumption. You know energy specifically high quality company that is not that expensive. It out turns 20 times strong balance sheet relative to its utility peers. Highly efficient low emission nat gas is what they're focused on. And if you believe in the consumption story for data centers this is going to continue to be a huge beneficiary. You know we were very early on on Vistra, we were early on this trade as well. We think there's room to run. If you think about monolithic power kind of totally different. It's regulating the usage and there's so much need for, for regulating power usage in these businesses. Now that's something we don't usually do, which is pay 44 times earnings for a company. It's not, it's not central to what we do as money managers. But we think the fundamentals are so strong in this company and this is one. You can own a new position for us.
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A
The flip side of maybe questioning the fundamentals of a company. You sold half your Adobe, which is notable because it's sort of the have not at least one of them perceived by the market in the whole air arms race down 40% over the past year. They did have earnings. Let's look at Adobe guys if we could please. They did beat. They did give better than expected current quarter guidance. The stock. I mean I think the jury is still out that the market is not so convinced that they're going to be as formidable as some would have expected in, in this whole new area. Is that why you sold half the position?
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B
We did.
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Of earnings.
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B
We sold it ahead of earnings yesterday. It's funny, it bounced up a little bit after earnings and I was like, oh, we made a mistake. But we'd been patient for so long and from our lens we felt like we were swimming against the current. You know, we had, we had some losses that we could take. There's not a lot from a portfolio positioning standpoint this year and given how long we've owned this, that that we could take. Losses in overall earnings were solid though the AI revenue continues to come in above expectations. So we kept a little bit of it, but we wanted to reduce in favor of some other things.
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A
I will have to. We'll wait to hear from Jim Leventhal and what he's done with his position too, because he said that this earnings period was going to be the line in the sand for him. So next time he's on, we'll press him on that. Big week for IPOs, including get another one today. Gemini up at the Nasdaq. It's been a pretty big week, right? We had Klarna. There's Leslie Picker who's at the Nasdaq. We haven't had the first trade yet, right?
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C
Not the first trade. Gemini likely to start trading here within the next hour. 30 minutes to an hour or so. Currently indications showing about 34 after having priced at 28 last night above a boosted range. That would imply a debut pop of about 21% if my math is correct there. The cryptocurrency exchange, though backed by the Winklevoss twins is one of a handful of companies that have made and are expected to make their debuts this week. Fintech firm Klarna, as you mentioned, Scott, debuted Wednesday pricing at $40 better than its marketed range and trading up from there on day one. But shares have fallen over the last two days, getting a bit closer to its IPO price figure. Technology, however, which develops blockchain technology for loan making, had a big, big debut yesterday. Those shares higher again today. And the IPO deluge, it's not over yet. We broke the story this morning that another fintech company called Lend Buzz, which focuses on auto loans, would file its S1. It has subsequently done so. And StubHub, the ticket seller, is planning to go public next week as well. So far this year, 150 companies have listed. That's up 53% from the same period in 202024 according to Renaissance. But the amount of proceeds raised is up only 13% which is emblematic of a trend toward more but smaller deals. Scott?
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A
Leslie, thanks. We will watch to see when that begins. Trading price at 28 and that was above the expected range. So we'll keep our eyes peeled there. But it's been a real boon for banks and private equity this week. Private equity hasn't traded all that well now of late. The banks have as you know and many of those stocks were up. But Brian, you bought more KKR. Can you tell me why? Stocks up 6% week to date but as I said over a greater period of time. It just hasn't been all that great with many of these other names.
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C
Yeah. So I started taking a position right around the tariff a little bit before, a little bit after April. And so if you look at the economy is we're getting the obv go to the economy. Rates are coming down. The IPO market I think is not only thought is growing. If you look at KKR look at 2026 estimates looking to grow revenue and earnings 30%. They have great fee related earnings. They're growing their assets in mid teens. And so I just think this is to me a much better way to play the economy. The, the buying of the IPO lower rates than like a small cap. It's done really well since the April, May period. So I'll continue to add to it on weakness.
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A
Weiss, what's your take on these?
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D
You know I keep looking at them and I grew up not buying them. If you recall, the yields were monstrous a year ago. I think they're going to do well. I mean they've Got so much pent up capacity they've been looking to exit. They've got to return capital share but.
- [23:47]
A
You play through Goldman is your principal way of looking at this. Correct?
- [23:51]
D
Goldman's right there. I mean look we're looking at selling a couple of companies now maybe IPOing one and Goldman's our first call pure and simple. So we stay with the big banks. Evercore is another great bank, you know that gets a lot of business. So to me this is going to be their golden age as the, as the IPO market continues to open and we're seeing it open just for high growth right now but as it opens for more and more companies equities I think you're going to see the private equity firms do very well and the banks especially because they participate on both sides of it, both the advice advice side and then on public list.
- [24:28]
B
Yeah, I think Steve's right on the banks capital markets activity going to pick up Net interest margin spread is going to widen out I think I think a little bit for the banks we own in the, in the alternative managers. Blackstone, we bought it on the show in May. It's April, may it's up 35% since we put money into it. I mean this whole democratization theme is not going away. I think people are looking at all public markets with yields coming down on fixed income, stock prices elevated and rich. They think there's high returns in private markets. I think they're among the best in the world if not the best in the world at doing that. Them Apollo of the large cap providers.
- [25:06]
A
Record high for JPM today.
- [25:09]
E
J.P. morgan, Goldman Sachs, they've been our biggest winners this year. We expect that to continue.
- [25:13]
A
All right, gold as well. Fourth straight positive week higher you have UBS by the way raised their target to 3,800. I mean some targets obviously I've seen I think the last time I talked to Jeffrey Gundloch who by the way I'll be with next week of course as usual on Fed Day this time from out at Double Line I think he was talking about 4000 and others have lofty targets like that too. What's your move related to gold today?
- [25:35]
E
So we own AEM Magnico Eagle. It's been an incredible, incredible winner for us. It's up 100% year to date. So we took half the position. We wrote a covered call for three weeks. It gives us a participation up to 160. We brought in a little bit over $3 for it. There's just some volume gold and we wanted to hedge it a little bit.
- [25:52]
A
All right, we'll bounce for a quick break. We'll come back. We have more moves ahead. Kevin has more. We didn't get to one of Rob's too, and it's a significant one and we'll tell you about it next.
- [26:15]
E
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D
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A
This episode is brought to you.
- [26:44]
B
By Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10.
- [26:54]
A
Minutes or less, including projected stock updates.
- [26:57]
B
Monetary policy decisions, and key results and statistics that may impact your trading.
- [27:03]
A
Download the latest episode and subscribe@schwab.com MarketUpdatePodcast.
- [27:08]
B
Or find Schwab Market Update wherever you get your podcasts. I'm no tech genius, but I knew if I wanted my business to crush it, I needed a website. Now, thankfully, Bluehost made it easy. I customized, optimized and monetized everything exactly how I wanted with AI. In minutes my site was up. I couldn't believe it. The search engine tools even helped me get more site visitors. Whatever your passion project is, you can set it up with Bluehost with their 30 day money back guarantee. What have you got to lose? Head to bluehost.com to start now. Al, amongst all of the Dow 30 stocks, HD has the most significant amount to gain from the 30 year mortgage rate falling as this would drive existing home sales to pick up after a housing ice age over the last four years. Hold on. I want you to know I have owned that stock since Arthur Blank was running the company. That's how long I've had Home Depot. I am going to add. I just did. I took your advice. I added to the collection here.
- [28:28]
A
All right. Well, how fun was that Josh pitching Home Depot to broadcasting legend Al Michaels on the show yesterday when he was in Green Bay. In Green Bay ahead of last night's game. Al, you heard Bought more. Kevin Simpson did too. Would you hear this too? You like this pitch? No.
- [28:47]
E
It must have been a coincidence because I received a cold call from a young stockbroker also from Long island yesterday. I didn't get his name, but I think the firm was JT Marlin, maybe. Anybody see Josh after the show?
- [28:59]
B
No.
- [29:00]
E
In all seriousness, I couldn't agree with Josh's call more. We had this as our final trade last Friday. I bought shares last week at 407. We bought more shares yesterday at 417. The super cycle and rate cuts is great for the retail consumer as well as their pro division. Love the call.
- [29:16]
A
You own it?
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B
We do. What do you make of the pitch here?
- [29:22]
A
Nice looking chart.
- [29:23]
B
It's a. It's a nice looking chart. Skies are clearly clearing for Home Depot, Lowe's, businesses like that with the. They're beneficiaries of low rates, they're beneficiaries of more spending if the macro conditions continue to stay intact. I think Al's right. By the way, he did a great job calling that game last night, as he always does. Yeah, it's always one of the two best voices in sports, I think. Love him.
- [29:47]
A
All right, Kevin, you also bought more IBM.
- [29:50]
E
This was without the help of a young stockbroker, but we really like IBM. It sold, sold off since the earnings. I thought the earnings were really good and we just haven't seen it move. You've got a 17 times forward earning 2 1/2% dividend. Quantum computing, Watson, AI. Lots of things for an old school tech company.
- [30:05]
D
I agree with that. I was looking at it actually yesterday.
- [30:09]
B
That's okay. That's okay. If you were talking to me, you look. You'd have looked at it in May when we did.
- [30:15]
A
What's it, what's it up over that period? Put up IBM like one year from May 6th. Not a one month. Let me, let me see this, this.
- [30:24]
B
Thing, it's May 6th.
- [30:26]
A
I mean. All right, so where it was to. To where it is, there are some who are talking about this being like the winner or certainly high up on the stack in quantum computing. Like, I know a lot of these other names have gone crazy over, over time, but people wrote this thing off totally.
- [30:45]
B
This thing is up 52% since we bought it in May. Okay. And it is clearly getting the attention. It's a beneficiary of everything that we're talking about today, whether that be in consulting, which are leading to their AI, their AI exposure and quantum computing. I think this is a great business. A little pricey here from where it was. I mean, I think you do have to pay attention to price. No question.
- [31:12]
A
Weiss likes to overpay for things he does. Only you see some of his buy and sell higher.
- [31:17]
D
Didn't somebody say that somewhere?
- [31:20]
A
Yes, that was our friend Joe T. Check out the book. It's probably still available. You also bought CME Group more.
- [31:26]
E
We did, we did. This has also pulled back about 10% since its highs, down 5% over the past month. Amazing earnings. We always like to get into this name in advance of December. They have paid historically, a very amazing special dividend each year. We're hoping for that again this year. But the real reason I like this, they were the main sponsor for the Robinhood conference. Britain. You'll love this. Could you imagine six years ago during COVID that CME Group would sponsor a conference for Robinhood? They're going to be posting the futures contracts for them. It's just a really, really exciting partnership.
- [31:59]
A
Brian, you got something you want to add there as, I mean, you're a.
- [32:03]
C
Robin shareholder number one. Yeah, I mean, you know, Robinhood, it is amazing as I've talked about how this company, we've all seen it grown up. It's very exciting about this partnership. I also got to say a shout out for, you know, I own Ion Q. And so you talked about IBM, Google talked about quantum, IBM talks about quantum and video talks about quantum. Really, IonQ is, I think, the best in the business there. And it's having a, you know, a monster today, a monster day today. So if you look for a long term, long duration, high growth VC type opportunity, I think, you know, Ion gives you full exposure to that quantum computing.
- [32:41]
A
But if I recall correctly, and you tell me if I'm wrong, you've been a little bit of a trader in this name, right? I know you've held it for a while, but you've taken down the position over time, if I, if I'm correct.
- [32:52]
C
Yeah, I bought it, I own it at 33. I sold, I think it ran up to 60 and I sold half the position and so I'm still in it. So it's a volatile stock, right? Up 17% today. This is like you build the position because there's no E here, right? There's no, there's not going to be any for years on this company. And so you got, you got to size it right and trade it. Right.
- [33:14]
A
All right, good stuff. We'll take a break. We come back. Santoli is on the other side with his midday word. We're back at post nine right after this. Foreign.
- [33:23]
B
I'm no tech genius, but I knew if I wanted my business to crush it, I needed a website. Now, thankfully, Bluehost made it easy. I customized, optimized and monetized everything exactly how I wanted with AI. In minutes my site was up. I couldn't believe it. The search engine tools even helped me get more site visitors. Whatever your passion project is, you can set it up with Bluehost with their 30 day money back guarantee. What have you got to lose? Head to bluehost.com to start now. It's not rocket science. Grayscale has been educating investors on crypto for over a decade. Grayscale invest in your share of the future. Investing involves risk and possible loss of principle. Visit grayscale.com for more information.
- [34:24]
C
Welcome back to Halftime Report. I'm Kate Rogers with your CNBC News Update. The 22 year old suspect arrested in the shooting of conservative activist Charlie Kirk is expected to be charged with aggravated murder along with felony discharge of a firearm causing serious bodily injury and obstruction of justice, according to a probable cause affidavit. All are state charges. Utah's governor said charging documents will be filed for early next week. A California bill that would allow health care providers to anonymously mail abortion pills to other states without the name of the patient provider or pharmacist on them is headed to the governor's desk. It aims to make it harder for states with abortion bans to accumulate evidence against providers for possible legal cases. Governor Gavin Newsom is expected to sign the measure. And the United Nations General assembly voted overwhelmingly to endorse moving toward a two state solution between Israel and the Palestinians today. 142 countries voted in favor, 10 against and 12 abstained. The declaration stems from a July conference on the decades long conflict. The US And Israel boycotted that event. Scott, back over to you.
- [35:33]
A
All right, Kate, thank you. That's Kate Rogers senior markets commentator Mike Santoli. He joins us now with his midday word. I suppose this is more about what Chair Powell says than what he does next week. And maybe the market's going to take a little break to see what all goes down midweek.
- [35:50]
B
Right. What Powell says and what the committee collectively says about the these risks that are in somewhat tension of a tension between inflation and growth and projecting ahead and how much they're willing to kind of extrapolate from this soft run we've had in labor market data to say that they really need to move faster to get ahead of this, to stay.
- [36:09]
D
Ahead of the curve.
- [36:10]
B
So I do think that's part of it. The market today, it's kind of like on the fifth day the bulls rested because they essentially got everything they needed and wanted. And we're betting on already, which is cementing the idea of, you know, let's say at least multiple cuts this year from the Fed along with an overall economy that's still tracking at a decent GDP pace, even if the very noisy jobs data is starting to give.
- [36:33]
D
A very good cover story for this.
- [36:35]
B
Dovish ness and for the rally in bonds.
- [36:37]
A
Yeah, I'm looking at for the week some pretty decent gains in some of the chip names. We just talked about the banks as well. They jump out to you.
- [36:45]
B
They do. And I think pretty much across the board you would say the market itself is signaling good things. In other words, the stocks you would want to be leading like semis, I mean homebuilders on the big comeback, the housing related stocks and the banks. You know, there's only been a handful of times that the Fed has caught with the banks basically at a record high. Usually the implications are pretty decent after that.
- [37:11]
A
Michael, thanks. We'll see you later this afternoon. We'll see in a little bit too as well. Mike Santoli joining us. Up next is a real threat emerging for Netflix, the potential deal that has shares under pressure yet again today. We discuss, we debate, we do it next. Welcome back. Netflix shares worth watching yet again today. As you see, they are lower again today, down almost 5% on the week. That following news that Paramount Skydance is to going preparing a bid for Warner Brothers discovery confirmed by our own David Faber, of course. All right, so Baron says how a Paramount Warner Brothers combo could hurt Netflix. That's their headline. Puck's Matt Baloney was on Squawkbox today and said basically the same quote, if you put these two companies together, that's about 200 million streaming subscribers. That's a real competitor to companies like Netflix and Disney. Barron said Netflix won the first round of the streaming wars by a landslide. But it looks like Ellison's Paramount is getting ready to build a challenger. What has been an unquestionable, unquestioned amazing stock, right? Yeah, certainly for the last, I don't know, feels like a year. Can we look at the year? Because this thing's been like we talked about it so many times when it was like, all right, new high, new high, new high, new high. Now it's been a little side sideways, obviously. What do you think? Is this legit, like as a competitor?
- [38:50]
D
Look, should it, could it be?
- [38:52]
A
It happens.
- [38:52]
D
Yeah. I mean you can't dismiss completely. But at the end of the day there's room for more than one streaming company and Netflix to me will always be on top. Now obviously Ellison's got deep pockets through his father, Larry Ellison, the Oracle money. But I think it's more of a problem for all the other streaming services. So. So look, cord cutting continues to happen. We've seen it so much now. You talk to people. I don't pay for cable anymore, just streaming. Netflix is still going to be the top dog in my view. And that this is a momentary dislocation, may continue a little bit more, but I actually think it'll be a buying opportunity for you. So many streaming services, a lot of them are going to go away, period. You don't even have to consolidate them. And we don't know what the overlap is right now between Paramount and, and, you know, and what they may acquire elsewhere. I don't think your acquisition stops here, by the way. I think there are an M and A spree, but there's a lot of double counting. So bottom line, I'm not worried. Don't like seeing stock down like this. It was predictable. I knew it come down, but it's not worth selling it any you wanted to, right?
- [40:03]
E
Yeah. I happen to agree with Steve. I think there's room for more than one competitor. I think Netflix is by far the champ in this game. We actually wrote a covered call against it yesterday just because of some headline risk. I think it's going to work out fine, but I look at this as a buying opportunity. I would not be a seller.
- [40:18]
A
All right, we're going to hit ETF edge next. Don Chu, standing by with your playbook ahead of an expected rate cut next week. And by the way, we are still waiting Gemini's first trade up at the nasdaq. Leslie Pickers, Washington, watching that closely. We'll see where it opens. Price 28. We're back after this. All right, welcome back. With a potential rate cut looming next week, how should you play it in the ETF market? Dom Chu will tell you in today's etf. Dom. All right, so, Scott, with that expectation of a Fed rate cutting cycle possibly through at least the end of this year, ETF investors are reassessing their allocation. So joining me now is Marissa Ansell, the head of ETF investment strategy over at Goldman Sachs Asset Management. Marissa, thank you very much for being here with us. Now, the curious part, if there were to be a Fed rate cycle to the downside, it would make cash less attractive. That means investors are going to be looking for places to go in the fixed income side of things. What is your kind of outlook and strategy for how to tackle the bond side of the investment?
- [41:20]
C
Great. Well, first of all, thanks for having me on the show. Great to Be here with you today. Yeah. So look, with the Fed potentially cutting rates next week, I think you're exactly right. People's cash and money market funds in their portfolios in particular are going to see yields come down. You know, I think there are a few pretty easy things that our clients can do in their portfolios. Number one, step out of cash and actually look to other bond strategies like ultra short duration funds. Number two, actually look in the equity space and maybe we can get onto that for interesting income opportunities as well.
- [41:56]
A
So on the bond side of things, what type are we looking at? Corporate investment grade or shorter long term? How exactly does that go?
- [42:02]
C
Yeah, so I think there's a place for all of that in investor portfolios. But in particular, we're advising our clients to move out of money market funds where you're not really getting a lot of yield. You're going to get even less, probably and move into ultra short strategies such as our Ultra Shorts Bond ETF GS, or our ultra short Municipal Income ETF guy.
- [42:24]
A
All right, so we're showing some of these right now as well, also for dividend focused investors who are looking for that kind of exposure to income streams. What about the dividend side? How do you tackle that?
- [42:34]
C
Yeah, it's a great question. This year, actually, we've seen tremendous flows into derivative income ETFs. $44 billion to be precise. So funds like GPIX, GPIQ, which are our premium income equity ETFs, they actually solve a couple of different problems for investors. Number one, they give equity exposure, but with less volatility. So pretty ideal for the current market environment. And number two, they actually provide consistent high regular income to help our clients meet their income needs.
- [43:03]
A
All right, so the bond play and the equity plays. Marissa Ansel at Goldman Sachs. Thank you very much, Scott. I'll send it back over to you guys. But again, all eyes on the Fed and just how to tackle those investment strategies coming up next week. All right, good stuff. Thanks, Dom. Appreciate you, Dom Chu. Up next, another move for Rob Secchen, a stock that Steve Weiss owns as well. So means we're going to debate it next. All right, show me UnitedHealth, please. It's set for its sixth positive week. That is the best streak since 2019. It's up 35% over the past month. You back it out further than that, though. You know the story. We can show that, too. Let's cycle through that. So this is you. So you sold it. So this was like 35% in the past month. Pop and drop it Right. You're waiting for that move to get out of it.
- [44:06]
B
So what's interesting is I want to give Steve and Stephanie some credit. They bought it at the Lowe's. I was tempted to buy it for trade. We're not traders, though, so we don't. We don't manage money like that. We have, in fairness, owned this a long time and experienced a lot of pain on the way down. Not our best day owning. Owning this stock. However, we've had a rally of 50% from. From those lows when they bought it. And. And what. What I would say is you got to take advantage of that. There's still risk in this company, Regulatory risk, turnaround risk.
- [44:41]
A
Why. Why are you holding it, then?
- [44:43]
D
Because I think longer term, he's right.
- [44:44]
A
I mean, there is a lot of risk.
- [44:46]
B
It's expensive, too. Right away.
- [44:48]
D
Yeah. It is definitely not cheap on the current fundamentals. But here's why I own it. Steve Hemsley, who is the. Who was the chairman and was CEO, has come back to take the CEO role also. They made some major mistakes and mistakes were buying the Humana business. He's clearing that out. The guy is ruthless. I know personally know him well, and he's a great CEO. Got things where they were before he gave over the range CEO. So I think it'll work out. Could it trade down the interim? Yes. Health care is not out of the woods. It's actually a terrible place to invest this year. But as you look forward, it's going to go back to being a permanent compound.
- [45:24]
A
All right, well, Morgan Stanley tends to agree. 395 is the new price target. They bump it from 325. Overweight is the call. We'll do finals next. Closing bell today. Tony Pescarello, Goldman Sachs, right here with me post night with. We can't wait for that. I always cite his notes. Now you hear from him directly. Jeff DeGraff, Brian Belsky and Stephanie Link. Brent talking in your final trades. What?
- [45:53]
C
Yep. I like Ethereum, but I love the volatility of BMR. You can sell calls and get about 9% over a month.
- [45:59]
A
All right, thank you. Rob Secchin.
- [46:01]
B
I like that, too, but I'm saying NRG talked about it earlier in the show.
- [46:07]
A
All right, we'll get into the other stuff later. What's yours?
- [46:10]
E
The CME Group. The tailwind of volatility is a tremendous beneficiary for them, and I'm looking for that special dividend in December.
- [46:17]
A
You guys have any, like, original ideas?
- [46:21]
D
I like that point.
- [46:22]
A
Are we just getting what we talked about already. Weiss I bet.
- [46:25]
D
So the Winklevoss twins were on squawk box warrant. They talked about a million dollar price tag on a bitcoin so I don't think we get there still use the use case but I love that's all.
- [46:37]
A
You needed to hear. Okay yeah. All right. I'll see you on the closing bell.
- [46:39]
B
That's all you needed.
- [46:41]
A
That's all he needs.
- [46:42]
D
That's all you need.
- [46:42]
A
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.
- [46:56]
C
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal.
- [47:03]
B
Their parent company or affiliates, and may.
- [47:05]
C
Have been previously disseminated by them on.
- [47:07]
B
Television, radio, Internet or another medium.
- [47:09]
C
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 it's not rocket science.
- [47:37]
B
Grayscale has been educating investors on crypto for over a decade. Grayscale Invest in your share of the future. Investing involves risk and possible loss of principle. Visit grayscale.com for more information.