Halftime Report Live from Future Proof 3/18/25
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All right, thank you, Sarah. Thank you, Mike. Welcome to the Halftime Report. I'm Dominic Hsu in for Scott Wapner. We are live from the Future Proof Citywide Conference in Miami Beach, Florida, where 2,500 financial advisors, wealth managers, institutional investors, and venture capitalists are converging, gathering here during this critical moment in the market today.

with stocks under pressure yet again today. Over the next hour, we are going to bring you exclusive access to the key conversations that are taking place at this major event. And we are lucky to have three of the investment committee members all along for the ride.

Joining us today, the brains behind FutureProof, one of them anyway, Josh Brown, along with Joe Terranova and Bill Baruch. They'll be with us here in Miami Beach for the entire hour. Let's check on the markets really quick before we get going here. And as you can see right now, the Dow Industrial is right near session lows, off by about 1 full percent. The S&P 500 off by about 1.25 percent. And the Nasdaq Composite has

as has been the recent MO on downside volatility, if you will. You can see the NASDAQ is down by more than one and three quarters percent at this point. It's been a tech-led sell-off for sure. With that, I want to kind of kick it off, first of all, with the scene setter about why we're here. And Josh, we're going to go to you first for this one. I mentioned that you are one of the kind of conceptualizers of this. This has been a big team effort between Ritholtz Wealth and also Future Proof HQ. So take us through the story about why we're here in Miami Beach.

Thank you so much, Dom. So what we figured out during the pandemic when we asked ourselves the question,

okay, what will make people want to travel again for business? What will make people in the financial industry want to get on an airplane? It's not going to be CE credits because those can be earned online. And it's definitely not going to be people talking on a stage because you can watch that all on YouTube. So what's going to be the thing? It's community and it's networking and it's sharing the best ideas that are working in one financial advisor's practice with all of their peers and

and kind of figuring out that process of figuring that out has all led us here. This is our fourth event.

It's the first one we've ever done in Miami Beach. And I don't know if you know this, Miami Beach is now considered Wall Street South. And that is absolutely the case as you walk around down on the beach. Pretty much everybody's here. Private equity, institutional investors, people that manage money for endowments, pension funds, insurance executives. The CEO of the Carlisle Group, Harvey Schwartz, was on stage this morning. It's just an incredible confluence of

of people learning from each other. And I'm so excited that we could be here doing the show. - Josh, we're gonna delve a lot more into the programming around Future Proof Citywide later on in the show. But for right now, we'll just say welcome to Miami, bienvenido a Miami. - Almost pulled it off. - Almost pulled it off there. We are though, in all seriousness here, we're in the middle of a notable market event today. Another tech driven sell-off that's developing right now.

Joe, I'm gonna go to you for this. I mean, we just looked at it. It's right near session lows for the NASDAQ, for the S&P and the Dow. This has been, I wanna say MO, that's maybe a little bit dramatic, but this has been the near to medium term trend since we hit those record highs. And it's been centered on MAG7 and tech.

What does today's price action tell you about what you think the market is brewing towards? Well, I just think it's a continuation of this recalibration story that 2025 is all about. I described it yesterday to you as the year of the bond, the first time that you're looking at unloved areas of the market over the last several years when you think about investing.

But that comes with pain. That has to come with pain. Because over the last several years, you had a dramatic beta chase. And within that beta chase, it was all about the Magnificent Seven and the outperformance. Now you see a very active unwind of that. And I don't believe that investors or viewers should expect

that abates anytime soon, and you get that V-shaped recovery that historically we've had over the last several years. Bill, the beta chase is one thing. The alpha chase also happens in both up markets and down markets. I don't pretend to know that this is the beginning of a broader down market, but we are now off about 13% from record highs in that NASDAQ composite index, to Joe's point about what's been kind of driving the market action.

If that is the case, how do you view the outperformance if there was hypothetically going to be more downside risk in the market overall?

Yeah, I think it's a great question, but I'm not as negative as Joe right now. I think we're in the later innings of what we could be seeing here. And I think to contextualize things, you really have to take a look at how we got here. You look at after Trump won the election, there was the Trump bump. In most markets, all ran. And the dollar rallied. And what we've really seen is a big unwind of the dollar this year. So where has the puck gone? You've seen Europe, you've seen Asia, a lot of outperformance there.

And I didn't think that we would see continued tailwinds there. But right now, if the dollar is going to continue lower, and I am a bear on the dollar, I think you're going to see outperformance within those. But I do think we're in the later innings of some of this movement with tech. I mean, the money has been brought home. The money has been brought to Europe. It's ex-U.S. investors that have taken that money out and brought it to Europe, brought it to Asia. So that's why we're seeing that outperformance there. The euro on the month is over the last month. It's up

8%. That's a huge move in currencies. So I think you want to be looking at ex-US, but I wouldn't be chasing anything here. I think a lot of this move has happened. I think a lot of that currency move is also driving the outperformance that we've seen in European equities writ large versus the US market so far. Josh, as you take a look at the way wealth managers are

are here meeting with people and converging around different ideas. There has to be a feel right now of caution, at least among some of their clients. What are the conversations that you're having right now about whether or not this is the beginning of something possibly deeper? I think you can kind of separate the wealth management community into two buckets. Bucket one has been riding the Mag7.

has been willing to play along with this overweight u.s growth theme has been looking for uh separate account managers and fund managers who were willing to chase what had been uh seemingly a layup trade those are the people that are not having that much fun right now the other bucket which i think is the overwhelming majority of wealth managers financial advisors in america and also at this event these are the people who have been apologizing for european exposure for three

for three years. They're not apologizing this year. These are the people who have been chastised, gently chastised by clients. Hey, why don't I own this stock? Why don't I own that stock? Those conversations have ceased. Right now, you've got utilities and healthcare leading. You've got the median stock in a 20% decline

drawdown in the S&P 500. I know we're not officially down in a bear market, negative 20 on the S&P. I'm willing to call it a bear market. I think for most stocks, we're already there. And just it's classic the way that defensives are outperforming. This is exactly what bear markets look and feel like. So I think we're pretty much in one. Doesn't mean that we

We can't pull out of it because a lot of the wounds are self-inflicted. But for right now, this is exactly what it looks like, what it feels like. I want to share two things that I think are really important. The B of A Global Fund Manager Survey just saw its largest drop in U.S. equity allocation ever, ever, not just this year, not just this era. University of Michigan Gage is now hitting expected unemployment numbers at

the highest bearish readings since the great financial crisis 15 years ago. So I'm saying it's more than a correction. I'm saying it's a bear market. And I think the crowd here is happy to have other assets that are working right now. Okay, so I'm going to say this right now. I was on stage this morning with Gabriela Santos at JPMorgan Asset Management.

With Emily Rowland at John Hancock, with Brian Belsky, right, from BMO Capital Markets. They were all bearish. Okay, I'm just telling you right now, the conversation was cautious but not nearly as bearish as you were making it out right now because they think the economy is still constructed, Joe. I'm bullish. No, but what's the chance? Think about this. What's the chance that potentially what we're actually seeing is that large cap growth goes into a bear market, medium cap growth,

mid and large cap value enter a bull market. That potentially might occur. And I think that's something that you have to think about right now. - All right, so that conversation is there. Let's talk also about what's happening with the driver of this right now. One of those key catalysts, NVIDIA's annual GTC event is underway with CEO Jensen Huang, the poster child of artificial intelligence,

set to speak just in the next hour. So let's break it all down with Wedbush's global head of technology research. You know him, colorful as ever, Dan Ives. He has an outperform rating and a $175 target price on those Nvidia shares.

Notable bull, especially in technology. Bullish as your outfit right now. So let's talk about whether or not Jensen can deliver the goods at GTC this afternoon. I think it's going to be a watershed event. I mean, I think when you hear from the godfather of AI, Jensen, he's going to lay out what demand looks like for Blackwell. And ultimately, I mean, right now we believe 15 to 1 demand to supply, you know, in terms of what we see of Blackwell.

It's about not just things like in terms of Ruben and others, physical AI, autonomous robotics. And I hear everything that Josh is saying, but in my opinion, we are in year three of an eight to ten year build out for the AI revolution. And that's why it's so front and center what we're going to hear from the godfather of AI, Jensen, you know, in San Jose. All right. So NVIDIA shares have now pulled back notably, not as much as other companies.

mega cap technology stocks have, but a lot of it was driven by kind of the recent quarterly reports that have come out. The fundamentals are very much intact. Nobody's going to dispute that, but the question is relative to expectations. And that's where NVIDIA ran into some problems with its most recent numbers. They're still growing and by a rapid clip, but why are analysts then so much more bullish where they cannot meet exactly or exceed a

a lot the expectations that are out there. - I think it's a digestion period. I mean, I think we go through the next four quarters, you're going to ultimately see, I think, street numbers are going to come up 15%, 20% over the next few years. I think buy side definitely is very negative here, but as this all plays out, I think it's a stock that has a two in front of it.

because the AI revolution, remember, this is my deep seek in terms of everything we saw there with some of the Cinderella story in terms of some of the fears in terms of Nvidia on the chip side. There's one chip in the world fueling this, it's Nvidia. - This is the cheapest you have been able to buy Nvidia stock

since October of 2022, before the launch of ChatGPT, which set off the AI era. So Nvidia in the AI era, as the leading player in AI, has never been a better bargain than it is today. The stock is, the company has 52% growth expectations for this year. It's now a 20 forward PE.

How insane is this market right now where they would rather buy Walmart at 30 some odd times earnings than this at 20? Walmart, if they're lucky, might be growing high single digits this year. - I'd say in 25 years doing this, I can name, so I count the times that have been almost the generational opportunities relative to what the stock's doing. That's where I think Nvidia is here. - You think this is a generational opportunity? - I think, because my view is we're gonna be talking about Nvidia

$4 trillion, $5 trillion over the coming years, despite near term, you know, in terms of political export controls, everything else. That's where this is going. We're talking about $2 trillion of AI capbacks next three years. There's only one red phone that you could call to get those chips. Do you want to laugh? You know what he should announce at GTC?

How about a buyback? I think that would probably do more good than any technology. - Okay. - Really at this valuation should be shrinking the float. - All right, so speaking of the valuation kind of construct, the paradigm that we're in right now, Joe, if you look at the way that it's been described and the forward basis and the valuation that's out there, there is a balancing that's happening right now about whether or not it is the fact that the analyst consensus, the forward earnings expectations for Nvidia,

are relatively off or whether it's the price that you pay for those earnings that is relatively off. Do you think, though, that this is the equilibrium point at which the analysts are more correct when you project earnings out in the next year? And is the market valuing those forward projections properly?

So unfortunately, I have to give you an answer that is not succinct, and it is dependent upon the capex. And the question ultimately becomes, does the macro environment begin to arrest the capital spending on the part of those big players? And if in fact that unfolds over the coming year, then when you think about where Nvidia is, I think it has the potential to cheapen its valuation. All right, Dan, if that is the case,

The people who spend the most money with Nvidia are hyperscalers. These are the most ginormous balance sheets in the history of corporate world.

What does the CapEx picture change by? How can it be affected by a hypothetical weakening macro backdrop? - Yeah, and Joe brings up awesome point. I just tell you, come back from Asia, it's actually accelerate in terms of we see about 70% of that CapEx actually accelerating because it's an arms race.

In other words, you have 325 billion that's gonna be spent by big tech, 100 billion year over year. You don't even have the sovereigns. You don't have the rest of the world. This is something where I actually think the industry is underestimating CapEx. And I get the point in terms of worries about macro. I actually see more and more big tech accelerating in terms of, because as this arms race plays out, whether it's M&A from we see Alphabet and others,

No one is pausing. They're actually accelerating. I think that's going to be the key. And I think that's something you're going to hear from Jensen on stage. Can I say one thing on this really quickly that I think is important? It's not definitely the case that CFOs are going to look at AI-related CapEx as a cost too high in a recession.

because we're about to have an IPO, Klarna is coming public. Klarna fired everybody and they're basically operating customer service on AI. That's the story that they're telling at their roadshow. This might be like the poster child for how much money a corporation can save

in staffing costs using AI. So it's not a foregone conclusion that a weaker economy necessarily means slashing CapEx. They might actually look at this as a way to get through a recession. I would say that when you're driving down the floor to go to the final four, this is the jump shot you take 100 times out of 100 times buying Nvidia in this market at this multiple. And I'll give you two reasons. Really, from the macro standpoint, the survey data

has eroded very quickly, historically quick. And that's the uncertainty that's within the market right now. That's the uncertainty that the administration's brought. But I think it's been so quick of an erosion that it's flushed out. And you're starting to see that. I think Atlanta Fed GDP is going to swing back for a number of reasons. And the other side

is there's a bigger story. Yes, there's competition with the LLMs, and you're gonna see new GPTs drop, it's gonna be DeepSeq, it's gonna be something else, there's gonna be another instance, but it's bigger here where the robotics story, you're also looking at the software, there's no second. This is their competitive advantage, that's their moat.

This is where I wanna buy. - All right, all right guys, we're gonna, this is NVIDIA conversation can go on forever. Let's move on here now. By the way, NVIDIA CEO Jensen Huang will be sitting down exclusively with our own Jim Cramer tomorrow at 10:15 a.m. Eastern time.

And Dan, while we have you here, let's talk about another big deal right now. And that's Alphabet's $32 billion deal to buy cybersecurity startup Wiz. This was one that was coming to fruition and then didn't come to fruition and is now back in play again. So how big of a deal is this? Khan's gone from the FTC. Now the party begins in big tech. In other words,

Stronger are going to get stronger. They are not going to actually pull back. They're going to accelerate. You look at Wiz. We're talking about one of the golden assets in cybersecurity. And I think this, it doesn't just end here. You're going to see other big tech players, Microsoft, a lot of the Megs having, they're going to look to get aggressive on M&A. And I get some of the words by antitrust and others. This is a shot across the bow, what you saw today. All right, Dan, that's a good point. But Josh, everybody understands

I don't I shouldn't say everybody. A lot of folks made the assumption that after the new administration would come in, that this would be the green light for mergers and acquisitions. And to a certain extent, it may still be. But we have not seen the kind of floodgates open up for M&A activity. And the administration has kind of hinted at the fact that if this is viewed any deal as being detrimental to the American consumer, they are still going to put the brakes on it.

So just how much can we read into all of that? We don't know how capricious the...

the the antitrust um kind of vibe is going to be yet because nobody's really tried them so like this is good this is maybe going to be a really great uh uh guide post for other companies to look at and see whether or not sundar gets a hard time um and i i don't know the answer yet because like you guys i'm i'm sitting here waiting i would point out just on alphabet this is a name that's down 16 this year multiple reasons one of those reasons is people are concerned

with to what extent they are losing search share to people who just want an answer rather than a bunch of links. They're trying to utilize Gemini front and center in order to head that competition off.

I would imagine they're having some success, but those questions linger. Now you have a stock with a 20 PE, forward PE is 16. This is cheaper than most stocks in the S&P 500. In the meanwhile, the street is expecting to see 11% earnings growth this year, 15% next year.

If they're able to pull this deal off and it looks like they're in the White House's good graces, I feel like the stock should recover and should do as well as any of the other large cap techs from these levels. You know what, Joe? Oftentimes, and I think consumers will kind of identify with this or empathize with it, when things go on sale...

oftentimes you wait for them to go on sale further. But by the time they go on sale further, the inventory is gone, right? So you think about clothes during Black Friday and everything else. Is there a chance that the sell-off that happens with these Mag 7 type names like Alphabet, like others, is canceled?

capped at the downside because people will just say this is a chance for me to buy in at a lower price before it goes down even lower. Well, I think the inference in your question is to take the other side of that. Do we think the price action we're currently seeing in the Mag 7 indicates some type of inflection point like we saw in the late 90s into 2000? And I think without question, the answer to that is no. I think we're just going through a process, a very

dramatic deleveraging process in which these companies have been the center of the universe for the last two years. And in the deleveraging process right now, it's almost a requirement that you see these correct. So no, I don't think when you look forward over the next call at 18 to 36 months, if you're stepping into buying these companies, you're going to feel as though that was a poor move.

I think it's actually going to be a good move. I think the other thing to consider all of this is the dramatic resiliency so far year to date of cybersecurity. Cybersecurity, when you look at all these companies, whether it's Fortinet or Palo Alto Networks,

Basically, they're unchanged on the year. You have CrowdStrike, which I believe is up about 5%. And then there's another name out there. Dan, I don't know if you cover Checkpoint. Checkpoint's up 22%. Israeli-based company, $25 billion valuation. One of the best cyber companies in the world. One of the catalysts, though, one of them. There's many, Dan. One of the catalysts had to be the deep-seek moment back at the end of January, right? You had deep-seek.

supposedly disrupting what chat GPT could look like and the economics behind it, only to have themselves rise to number one in the Apple App Store and then get hacked literally within 24 hours after the deep seek announcement came out. So how much of that cybersecurity thing is just because we've had a high profile hack in artificial intelligence? No, I mean, I actually think it's more fundamental and checkpoint. It's a great point. One of our favorites. I actually think it just comes down to

Less than 50% of workloads are in the cloud today. That's accelerating to 80, 90%. And AI is accelerating that. And guess what? Second, third derivative? Palo, Zscaler, CrowdStrike, Fortinet, CyberArk. I mean, this is going to be a golden age for cybersecurity. Plus M&A, I believe cybersecurity, and we've thought in a year, could actually be one of the strongest subsectors in all of tech. It's the only line item nobody...

that no one can cut. Exactly. Look, if you cut spending on your CRM, you might piss off some customers. You might make it harder for some of your employees to go about their business. If you cut your cyber spend...

And then, God forbid, something happens. It's an out-of-business risk for a small and mid-sized company. And as we saw last summer, for an airline, for a bank, this is like unthinkable to be spending less on cybersecurity, given how interwoven it is with pretty much everything that you do. So I feel that's...

a defensive part of the tech complex. Some of these companies, they're staples, they're not discretionary. - So you're making the case then that this is necessary spending? - Yeah, I remain long CrowdStrike. I think it's the best name in the group.

It's not the cheapest stock in the group, but there's a reason it has a premium valuation. All right, Dan, we've got a limited amount of time, and I know you've got a busy conference schedule here as well. Before we let you go, you've got a massive coverage universe. You cover all different kinds of technology companies. We've spoken about a few of them. Do you have a top two or three pick that you have in your coverage universe that you think is the best?

I shouldn't say safe harbor, that implies something, but as a relative outperformer in the tech world. - I think it's the messy of AI Palantir, it's my view, that's gonna be a trillion dollar company in the next two or three years, because ultimately more and more they're gonna dominate from an AI perspective. And to me, I think the name that's massively dislocated is a name like Microsoft, because there, as more enterprise move to AI, Microsoft and Redmond are gonna be that beneficiary. Stocks basically trading like something structurally wrong. - All right.

Well, thanks very much, Dan Ives, for joining us here at Future Proof Citywide and here on the Halftime Report. We appreciate it. Dan, by the way, will also be joining us on June 12th for our first ever CNBC Pro live event. Now, he's going to be leading a pro clinic.

on the best ways to analyze stocks, how he does it, also sharing some of his secret sauce, if you will. So if you want to meet Dan in person and some of the other CNBC pros in person, just scan the QR code on your screen there. Visit cnbcevents.com slash pro live for more info on that big June 12th event.

Now we've got much more ahead from Future Proof Citywide in Miami Beach, Florida. Up next, our calls of the day, including one firm laying out their March Madness favorites. It's that time of year. A list of sleeper stocks and potential upsets as well. We'll debate the names. Halftime is back in two.

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All right, welcome back to the Halftime Report. Let's hit some of the calls of the day. Berkshire Hathaway is hitting a record high again today, but TD Cowan analysts are saying that Berkshire's old school conglomerate structure is facing challenges. They cut the target price to $482, which represents about a 7% decline from where we are right now. Josh, this is one of the names that you own. Yeah, that's a terrible call. Berkshire is up 15% year to date. It is out of the

25 largest S&P 500 stocks. It is the second best performer in the entire stock market after only App-V. RSI is 71, so perhaps slightly overbought, but it's above both moving averages. You've got a green light on the 50-day, green light on the 200-day. This stock has made seven all-time highs. It is a battle cruiser in stormy seas.

It's everything that you want in a stock in an environment like this. I'm a very long-term shareholder. Wouldn't sell it regardless, but I don't agree with what that analyst said. I think they're missing the forest for the trees. $300 billion in cash, $1.1 trillion.

from a market cap standpoint, outperforming the S&P 3, 5, 10, 20-year time frame. It's been property and casualty insurance that really has been the significant contributor to performance. And what's most interesting about this is the price appreciation and the relative outperformance to the S&P is coming in a period where they're not buying back any of their stock.

They haven't bought back any stocks since May of last year. That's a very unique setting for this company. Now, you could claim whatever referendum you want on that or what the bias of Warren Buffett and the company is. But still, if you're invested in that company and they're not buying back that stock, it's telling you how strong it actually is. All right, let's move on to another one right now, and that's Block.

It's getting upgraded to outperform from market perform by analysts over at KBW. They lowered the target price to $80 from $87, but they say it's an attractive risk-reward skew following the recent sell-off. So this is a buy-on-sale scenario. Joe T.,

You're an owner of Block. Okay, so it is in the JOTI ETF along with PayPal. I will tell you that both of those names, the momentum is completely broken in those names. In the case of Block, ticker symbol XYZ, they reported at the end of February, they told you, 2025, we don't feel so good about. The outlook was not particularly strong. So you could put Block in the category of...

by a wide swath of companies who have within the last ninety days made a fifty two week high and now made a fifty two week low and in some cases were talking about four to six weeks for companies as a dramatic reversal momentum it doesn't come back quickly i think unfortunately block

It's going to be sideways to lower at best. All right, guys. Now let's move on because I mentioned March Madness. It's that time. Bracketology is coming full force. Let's talk about KeyBank's March Madness favorites. Our favorite sleepers, potential upsets. March Madness favorites are internet and digital media companies that should come out of a cycle stronger. Let's talk about a name. First of all, they highlight which is Uber. Delivery is a habitual category which should benefit from Uber One. And FX is now becoming more of a tailwind for Booking's bill. Uber.

Uber, is it a buy? - Yeah, absolutely it's a buy. And we bought it when it was down after earnings. We added to it then, doubled down. I couldn't believe it traded lower. I mean, the messaging that you got from the CFO at that time, that they were going to buy more of the stock, and the company found it undervalued. The diversification of revenue streams here, as you mentioned, geographically, I think is a tailwind right now, especially in this market environment.

It's going to become a free cash flow juggernaut. I mean, the trajectory there is unbelievable. So we love this narrative flip, too. Like there was there was talk as recently as three months ago, like Tesla is about to take off.

Tesla's down 45% this year. Uber is up 17% year to date in a horrendous market for almost all of its peers. 36% earnings growth expected for this year, which is far and away of companies that size. One of the better trajectories for earnings.

And it's a 15 times trailing PE. So like what else could you ask for in a growth company? I don't know. All right, bracketology is now in full force. We'll see how things play out for March Madness. Let's now get out to the headlines with Pippa Stevens. Good afternoon, Pippa. Hey, Dom. As President Trump called for the impeachment of the judge who issued orders blocking his plan to deport alleged members...

of a Venezuelan gang earlier today. Chief Justice John Roberts pushed back in a statement saying impeachment isn't a quote appropriate response to a judge's ruling and added that's why the appellate review process exists.

The family of a college student missing in the Dominican Republic has asked police in their hometown and in the D.R. that she be declared dead almost two weeks after she disappeared. Authorities in the Dominican Republic say they are still exploring whether she drowned, but haven't ruled out the possibility of foul play.

And the Professional Tennis Players Association and 22 players today sued two pro tours and other professional bodies in the UK, European Union and the US. The lawsuits accused the tours and governing bodies of unfair business practices and systemic abuse. In a statement, the executive director of the Players Association said, quote, tennis is broken. The tours have yet to respond publicly. Dom, I'll send it back to you.

All right. Thank you very much for the news update there, Pippa Stevens. Coming up here, Bob Bassani is standing by with your ETF edge as we gear up for a critical Fed decision. We are live from Miami Beach in Florida. Halftime will be back right after this.

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We are back on Halftime Report live from Future Proof in Miami Beach with your ETF Edge. I am Bob Pisani with Bond Yields Down. What should you do with the fixed income portion of your portfolio? Let's talk with Jeffrey Katz. He's the managing director at TCW. He runs the TCW Flexible Income ETF. That's a

fixed income fund that's been benefiting all from that recent equity volatility that we've been seeing. Jeff, we have heightened volatility. We have heightened concerns about inflation and tariffs. Where does this all fit into a bond portfolio? Are bonds a safe haven right now? Appreciate it, Bob. Thank you for having me here today. Yes, bonds actually are a safe haven. You look at bond yields relative to a couple of years ago, 10-year at 50 basis points wasn't so attractive. Today, investors are coming to bonds looking for income and looking for some

some buffer from the volatility. So there's definitely been some panic buying in bonds here at ETF Edge. We follow flows very, very carefully. Fixed income flows have picked up rather dramatically in the last month or so. They're almost rivaling flows into equity ETFs, and that's very unusual to see that fixed income flow so strong. Should investors be increasing their allocation to bonds at this point?

We think that they should. You look at correlations, I think the 60/40 portfolio and fixed income is doing its part. There was a lot of conversation and narrative about that not being the case prior to yields coming up. And so I think, yeah, that the fixed income is performing as it should with a lower correlation and a buffer for volatility. So you run, I want to get into specifics, you run an active bond fund. It invests in treasuries, mortgage-backed securities, corporates, asset-backed securities, really the whole range of investments.

What parts of the credit market are you overweight and enthusiastic about? What parts are you underweight? Sure. So you're speaking to Flexer, which is our multi-sector income fund. Parts of the credit markets don't look attractive to us today, given our broader macroeconomic view. We do think that the labor market is slowing. We're leaning into securitized, and so parts of the securitized market look very attractive to us, would be agency mortgages.

Mortgage credit, commercial mortgages, oddly enough, given some of the disruption we've seen over the last couple of years, and parts of the asset-backed securities market. And that's data centers, for example. You've invested in those. Why are data centers so attractive as an investment right now? Sure. So we have a pretty strong secular tailwind from the AI boom, in addition to some of the cloud storage demand. And so we've seen about $35 billion in issuance in the data center market.

You can buy investment grade high quality assets that trade one and a half to two points incremental yield to treasuries. And so it's a very attractive. Very briefly, you're underway corporate treasuries. Correct. We're underway corporate treasuries, corporate securities. Spreads look very tight to us. Really need to have the soft landing, no landing narrative come to fruition. Again, our expectation is that something outside of that would materialize. Jeff, thank you.

We're going to have a lot more on this, much more coming up on where to invest the fixed income portion of your portfolio. That's coming up on ETF Edge. That's 1:10 p.m. Eastern time. Jeff is going to be joined by Alex Morris. He's the CEO of FM Investments.

And we'll talk treasury ETFs as well as residential and commercial mortgages, ETFs, and asset-backed securities like data centers. That's ETFedge.cnbc.com. And it's such a pleasure to be here with Dom Chute, my old friend. It's great to be here with you guys. And Jeffrey, Bob, thank you very much for that. I know it's going to be a great program for ETF Edge today. Thank you. We'll see you guys later on here today. All right. Thanks, Bob. Straight ahead, the pulse from FutureProof Citywide.

The key conversations that are happening here at this critical moment in the markets. Halftime is back right after this. All right. Welcome back to the Halftime Report. As you know, we are live here from Future Proof Citywide in Miami Beach. It's a four-day conference dedicated to the modernization and the advancement of the wealth and investment management industries with more than 2,500 people expected to attend the festivities.

Josh, you were one of the co-founders of Future Proof alongside Matt Middleton. Yes. When you guys got together to conceive the Future Proof Festival and citywide concepts, what exactly were you trying to accomplish? Well, it's right in the name.

What most financial advisors and wealth managers want is to be as good at their job as possible, be up on the latest technology, understand what their peers are doing, and challenge themselves to come up with new and creative ways to stay relevant. The idea of being future-proof has never been more important in the age of AI. We all want to be future-proof. And what that means to me is we all

want to maintain our edge and continue to get better at serving our clients and continue to build practices and in my case, in some people's case, build

build entire firms that are future-proof in every way possible. Joe, you know, you work in asset management. I used to be in the business. We've gone to countless of these conferences back in the day between ICIs, Schwab Impacts, you know, TD Ameritrade, Fidelity back in the day. You know, all of these types of conferences had similarities. What is different about the future-proof concept to you, given what you've seen in the past from

from conference events? Well, first of all, I've been to South Florida probably 100 times in my lifetime, and I don't think you're going to remember the weather being as perfect as it has been so far, week to date and as it's expected to be. Beyond that, I think just the simple premise of being outside

So the conferences that you and I attend, you really don't have that ease of movement, the ability to kind of freely go from one venue, one speaking venue to another venue. And I think that's the advantage that this conference has being out there on the beach itself. In terms of the content, it

It's been remarkable so far. And Bill, last word to you here. Again, as a conference attendee for multiple of these things, what do you like best about the concept here? My background comes in the commodity space. And so my RIA that we launched about five years ago is newer. And I'm learning about just new technologies, staying up to beat, networking.

And it's enjoyable to be at. The content's great, but just seeing some of the greatest, best new technologies is really helping us up our game. All right. So a lot more still to come here. Lots more panels. I know I'm speaking with man groups, Robin grew later on this afternoon. It's going to be a great conversation there as well. How are you going to fight off all your autograph seekers? I know. No, it's going to be more for Robin than for me. When you're the world's biggest publicly traded hedge fund, you know, you got some stuff to say. So anyway. All right. Coming up next on the halftime. Uh,

Headliner and committee member Brian Belsky joins us live from the event here at Future Proof Citywide. We'll get his take on the state of the stock market, his outlook for the year ahead. Halftime will be back right after this.

All right, we're back on the Halftime Report live from Future Proof Citywide here in Miami Beach, Florida. Let's now bring in our halftime headliner, which is BMO Capital Markets Brian Belsky. Brian, I had already alluded to the fact that we were on a panel together earlier this morning. We were. It was riveting. It was riveting. You, Gabriela Santos, Emily Rowland. I thought it was riveting. I loved being a part of it.

it as we welcome you in we hit a lot of themes today and one of them was whether or not we are in bubble territory and whether the bubble is bursting you don't think it is tell us why i don't think it is by the way thanks a lot for having us and this has just been an amazingly humble time being here and seeing all these great people and it's been an amazing but so

So let me ask you a question. To have a bubble, in my view, it's not a bubble just because asset prices go up. It's a bubble if everybody's making money. And I don't believe everyone's making money. Here's the two best examples.

lived through two bubbles. One was the tech wreck and the second was the great financial crisis. In both times, everybody made money, meaning the investment bankers and the sector that was leading the way was the asset price that everybody thought was a bubble. In tech, we had superstar analysts, superstar bankers, all the financial people, the investment banks were making tons of money, IPOs, secondaries.

And it was crazy. And so we got way over our skis. Same thing happened in the financial crisis. Now, again, in 2007, nobody made more money on Wall Street than they made in 2007, including myself. Haven't even gotten close to that high watermark. And I think because of that, just because assets go up doesn't mean that we're in a bubble. Now, if we're in a bubble, individual things like crypto or individual stocks, that's different. But I think in market sense, people love to make these broad calls that the market's in a bubble.

I just don't think it is until everybody is losing, everybody's making money and making really, really bad decisions. All right. So, you know, we also talked about this idea and Josh and Joe alluded to it earlier.

B of A fund manager surveys, low points right now. Consumer sentiment measures at really low points right now. There is a lot of negative, soft data, survey-type data that says people just aren't feeling good about what the outlook is. In times like that in the past, it has been a contrarian-type indicator. Do you feel that way now? It has, and I had the good fortune of working for Merrill Lynch for a long time, and we kind of used it as that actually even internally, number one. Number two on the consumer sentiment stuff is,

Remember, I'll remind everybody, the low watermark for consumer sentiment previously was November of 2022. This new bull market started in October of 2022, a month before that latest, that ultimate low in consumer sentiment. So again, some of these macro data points, they're not all contrarian, Don, but you can use it that way. And that's the way we kind of look at it. Lastly, just in terms of everyone's worried about earnings going down and everything, actually when earnings revisions wash out,

that actually also is another contrarian positive. So we have not changed any of our models. We maintain our 6,700 target, and we think the bull market is alive. Joe T., are you buying what Brian is selling? Well, I think the big question, Brian, is growth is down. S&P growth is down nearly 9% year-to-date. S&P value is only down 1%. That indicates a dramatic paradigm shift for investors. Respond to that if you could. How would you think about that?

Two points. Number one, as you know, the way that S&P puts the growth and value together is it's a farce, right? Because you have stocks in both categories. Okay, that's number one. Number two, it kind of follows through with our broader theme. We were just a little early on it. Last year, our theme was the Jackie Moon theme, everybody love everybody. I think you have to own a little bit of everything. And I think that's the market we're going into. And we've talked for years now that we're entering into normalization. What's normalization?

It's not normal to have seven stocks lead the way. It's not normal to have zero percentage rates. It's not normal for a lot of this concentrated momentum type performance, not just the MAG7, but these individual themes. Think about Lilly, for instance, right? And so what I think is going to end up happening is own a little bit of everything. And the growth in value indices and the small caps

and the dividend growth stuff that Josh and I have talked about for a long time back and forth. I think all of these things kind of fit together. It's not just all tech. It's not just all S&P 500. It's a little bit of everything, and I think that's really going to benefit investors. What about you, Bill? I just want to do Bill because as a commodities-related guy, as an RIA now, do you think that Brian's points are valid? I think they're very valid, and I like the sentiment indicator. We're seeing the bearishness, I mean, at historic levels, as great financial crisis levels. That alone is not a buy, but you look at –

put call ratios. Those are at buy levels. And I like the idea of owning value, but I don't think this is the time in which you're going to need to chase value. I think this is time to buy tech. All right. BMO Capital Markets, Brian Belsky, thank you very much. And it was great seeing you at the panel this morning, too, as well. Thanks. All right. Well, coming up on the show, we got final trades. We are live from Future Poop Citywide in Miami, Florida. Keep it right here.

All right, welcome back to the Halftime Report. Time for final trades. Bill, we'll start with you. In the theory of alphabet acquisitions, HubSpot, low capital requirements. We own this name, great product, and terrific free cash flow. All right, Joe, natural gas name, EQT. I'm proud of you, Josh. All right. One of the only discretionary names that has a positive return on the year. Starbucks up 8% year-to-date. This one's going to weather the storm. All right, that does it for the Halftime Report.

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