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Welcome to the Halftime Report I'm Scott Wapner front and center this hour a flurry of new market moves from our committee today with stocks hovering near record highs joining me for the hour Josh Brown Stephanie link Jim Lavinthal Brian Belsky of BMO with us for the hour. As well there's a market picture.
12 noon in the east. Dow's down almost one half of 1%. S&P off a little bit. And the Nasdaq is the winner by a little, getting a little bit of a lift from some of the megacasts. But I honestly, I don't remember a day where we've had this many moves to document from our committee. And I want to begin by doing that because I think all of you will find those pretty interesting. Josh, I'll start with you because you have got four things in front of me that I want to document here. A new buy is where I want to start. And that's Starbucks, which is...
Pretty interesting to me. Why'd you buy it?
Well, fundamentally we can all agree it's a great company. Everyone is aware by now they've hired the literal best CEO in the quick service restaurant space, Brian Nicol, previously creator of Shareholder Value Extraordinaire at Chipotle. So the question really becomes like, what's the best entry in the stock if you didn't catch the bottom? And from my perspective, I thought the technical setup here looked really good. So I entered the trade and look,
Look, I don't know that this will necessarily be short term. I'm certainly going to give it a little bit of leash. But it is a technical breakout for the stock. And I want to try to respect the technicals while I'm in it. So ultimately, there will be a stop loss. Hopefully, I'm trailing the stock as it heads higher. But I think above 103, 104 on decent volume would be like the real breakaway. And I want to be in the name for that.
I mean, there's definitely been a nickel lift, right? I mean, you could see it in the chart when we backed it out a little bit further than the intraday. The excitement that was in the market when he got that job, it's pretty clear on the screen. The question is, Brian Belsky, as you bought more as well, how sustainable do you think that is and how big his lift is going to be?
We did. We bought it in April in our value portfolio. We love to buy broken growth stories. And as Josh said, they did the baller move by going to get Brian. I believe that this is a story that you're going to see massive restructuring, massive change in operating performance, and that will ultimately drive earnings growth and profitability going forward. We love the name, especially in a value type portfolio right here still. He's charged really with shaking it up. Hey, Josh. Yeah, Josh, go ahead.
I just, I want to add to that how great of a setup this is for both traders and investors. This is the worst performing stock in the consumer discretionary S&P 500 sector over the last year.
it's only up 2%, but literally the worst. So, you know, even though there's excitement over the new CEO, a lot of institutional investors have been giving up on this name over the last year. But now, technically, it's 3% above its 50-day. It's 15% above its 200-day. And it's only 2% below its 52-week highs. The stock is not yet overbought. RSI is 56. I
I would need to see this thing at 70, 75 to conclude that all of the juice from this restructuring is already priced in. And it's just not. This year, Starbucks earnings are negative 5%. Everybody gets that. Next year, the expectations are for 19% earnings per share growth. If we get anything even close to that, this is not gonna be a $95 stock.
You know, the other thing that you did, which I guess jumped out to me, is trimming Alphabet. You want to take our viewers why you decided to make that trade?
Yeah, so I've done well in Alphabet. I've been in it for a really long time and the stock's had a big recovery. But it's had trouble. If you remember, I first trimmed the stock in July or late June. I looked like an idiot immediately. I sold it like 160 something. It ran right up to 190 when they reported earnings. Pull up a chart though. Give me like a one-year chart.
Look at how fast that rally faded. They couldn't wait to sell it. Technically, the stock does not look great. Doesn't look like the end of the world. And I'm keeping about half my longer term position here. But this is my second trim of the name this year. And technically, it looks like it wants to break down. I don't know.
I don't like situations where a deterioration in the technicals are occurring at the same time that there seems to be a problem with the fundamentals. The problem here is not that they're gonna fail with AI. I think they'll do fine. The problem here is that they have more competition in AI
than they've ever had in their core business. And it's unclear how they'll be able to hit that same level of profitability with that competition in AI as opposed to what they've been able to historically do with search. I gave this company the benefit of the doubt for a long time. Price action is telling me there's just more doubt out there than there is enthusiasm.
I did not like the way it gave up that entire post earnings pop. So for me, I just want to be smaller there. And there are other setups that I like better. The salient point here, Jim, as you own the stock too, is that Alphabet's core business is under assault, my words, like never before. If you look at what generative AI has the potential to do
to search market share for a company like Alphabet. That's exactly what Josh is speaking of. - Yeah. Look, I think it's a great point, and the question for all investors, I'm in the stock just like Josh. I'm not trimming it.
is whether these competitive pressures are in the stock price already. I think they are. You know, roughly 19 times forward earnings. And there's a lot more. And Josh knows this. There's a lot more to it. It always trades, though. It's not like the stock was at a much, much higher valuation and it's come down significantly.
to 19 on those kinds of issues. What's its historical average? - I don't have it at my fingertips, but I'm gonna answer your question this way. - 22.
Yeah, thank you, Josh. That's part of my point. Right. So let me take your point and work with it this way. A 20% return from here if the earnings stay constant would put the stock multiple at 23 times. I actually don't think when you look at the growth rate for Google, I don't think that's too much of a lift at all. The competitive pressures are real. We know that.
But by no means, and Josh, you're saying this as well, by no means is Google going to be left by the roadside there. You also have a lot of other shots on goals here. I mean, YouTube has been really a standout. You've got the web services going on. Who knows what's going to happen with Waymo?
I'm really quite comfortable owning the stock here. I do want to make one point, another way of looking at what Josh is saying in the chart, and Josh knows more about technicals than I do. We all know that. But from a fundamental point of view, there's been a few quarters here where Google has seemed to disappoint, okay? There's been fundamental issues, whether it's transaction costs or things like, hey, you know, when BARD kind of messed up on a few things or the image generator went badly.
The last quarter was good. Unequivocally, it was good. Josh makes a good point. It sold off. It didn't hold the pop. My point is this. As a fundamental investor, many times I've seen this. When you have some quarters that have seemed to disappoint and then you get one good quarter, it's not enough. You need to have a second and a third quarter. You can point to Cisco, by the way. Different stock, different price.
Different industry, well, sort of different industry, but you can point to that where Cisco for many quarters in a row disappointed. The first time it had a good quarter, it fizzled. Second time, same thing. Now it's had three in a row and the stock is roaring. What I'm saying here is if you get another good quarter in a row from Google, I think it's going to hold those gains and take off. I'm quite comfortable holding it. Let me give you a counterfactual. Go ahead. If you get...
If you get a disappointing quarter, this stock couldn't rally on good news. Yeah. Your point's well made. Risk management here. I got a rising 200-day at about 164 and change. I mean, that seems to me, on a weekly basis, as a good place to start thinking about a stop.
Yeah, I'm not going to quibble. I think you've made your decision. I've made mine. My point is at this multiple and also knowing the market cap and knowing that as passive flows come into this market, they're going to go at least in part to Google. I'm just comfortable with it. I'm not taking shots at what you're doing, but I'm comfortable with my fundamental position. You've been out of this name for a long time. I mean, but this was the trade off, right? It was off Alphabet and into Meta.
right? Which has its own story with you too, but what's your assessment here? What's your assessment? I just think that alphabet, the regulatory risk is a headache. And I'm just trying to find within MagSavin that there's no headache. And to me, Amazon fits that bill across the board. We talk about winners and losers in retail, and they are an absolute winner along with Walmart and Costco and one day hopefully Target. But
That's to be seen. In terms of Amazon, they grew retail sales at 11%. Their operating profits were so much better across the board in North America retail, in international, as well as AWS. And what's really interesting, Scott, as of late, they just signed a deal, a five-year deal with Marvell.
to secure AI chips. So not only is that telling you that demand is there, but the supply constraint issues are actually going to get better. It trades at 14 times EBITDA versus 17 times long-term average. So to me, it's almost like your question on do you own Starbucks or do you own Chipotle? Chipotle is the winner. Starbucks, it's a show me. To me, Google is the show me and Amazon is the winner. Yeah. We have on the screen too, this is part of your
your plethora of trades today. You did buy more Amazon, maybe with the money that you trimmed off of Alphabet. Brian owns Amazon too. Is that what happened here? Is you want to get a little smaller in Alphabet and a little bit bigger in Amazon?
Yeah. Josh? Amazon is a clear and present breakout right now. So one of the things that I try to do, I try to understand the fundamental story, but it's important where you get into stock sometimes. And I've been in Amazon for a long time, so the question is, where do I want to add more? Obviously,
in a perfect world, you have a genie come out of a bottle and say, today is the bottom. But since none of us live in that world, the next best thing is to own it when the market has made up its mind that they want to take a name higher. So that's the idea behind averaging off
or down into an actual technical breakout. So that's what I think is happening here. I think the stock could get to 250. That's really like, it's like a $21 stock going to 25. It's not that big of a deal. This name has been building a base for a really long time. And I'm going to use this technical breakout as the trigger to get larger. You, remember,
Just to set the stage again, I mean, at the beginning of the show, I said, I don't remember a day in which we've had this many moves from this many people. You bought more Amazon as well.
for same reasons? Yeah, to paraphrase and kind of copy Steph quite frankly, if you're going to look at the Mag 7 and even go Mag 5, for us it's Apple, Netflix, and Amazon. In Amazon, we sold all of our DoorDash and took our big gain because we wanted to continue to accentuate the barbell within consumer discretionary. And so if we do that,
by adding a little bit to Amazon here, especially given how strong the consumer is. And we also upgraded consumer discretionary to an overweight in 2025. - We'll get to more of your moves 'cause you have many, but I wanna get Steph in the game a little bit more. You sold lamb, which surprised me. You talked about it a lot from the chip equipment space.
Why did you sell this name? Because they have due 30 to 50 percent business in China. And with tariffs coming, I just think that that's going to be an overhang. I don't think it's going to be disastrous.
But when I was buying this, I've cited this many, many times. When I was buying this three years ago, the stock was trading at 14 times forward estimates. It has totally re-rated. It got as high as 25 times. It's now at 22 times. That's not really expensive if you believe in wafer fab equipment recovering. But I don't think that's going to happen until next year. And I think you do have this overhang with China. And I just wanted to use the cash to buy some other names. Part of that, I bought
Accenture. And we'll talk about that later if you want. But part of that, I also bought other things as well. Well, you bought more Gap. Yeah. You bought more Crowd. Yeah. Well, Crowd was down. I mean, that was just silly on Friday, down 6%. I mean, that quarter was fabulous. I mean, revenues and earnings are growing 30% to 40%, subscription revenues 31%. And we talk about retention rates because it's important, because everybody thinks that the software glitch that happened in the summer really is going to be permanently damaging for the company.
the retention rate was 97%. So to me, that was a no-brainer just to add more to it. And it's quite big now. And also, by the way, part of the reaction, I think, is because it was up 35% headed into the print, right? But it's still down from its highs, about 7%. So I still think that's attractive. The gap is, to me, like a no-brainer.
Richard Dixon is proving himself as a valuable CEO. He fixed Mattel, Barbie at Mattel. Now he has been there for about a year and a half at the Gap. He has a new CEO of Old Navy, new CEO of Athleta. Athleta grew 5% sequentially.
That's huge. They're taking massive share from the big names out there, and we all know who they are. In addition, I think the free cash flow at $500 million year-to-date gives them a little bit more breathing room, and gross margins and operating margins have actually been expanding. Operating margins are the best in seven years. Stock trades at 13 times with a 3% yield. You sold GE Healthcare, which, you know, the fact that you're selling anything GE-related is newsworthy because you've been...
I think, jeez, I feel like the biggest supporter of what they've done at this entire network, anybody involved in this network, of what GE and Larry Culp have done in splitting off these businesses. Why are you selling this one here? It's been a long and winding road with GE, for sure. So GE has outperformed healthcare since they spun out from GE. That's up about 37%.
The XLV is only of about 11%. They've done a lot of good things. I think there's still more margin expansion. They, too, have a lot of exposure in China. And that has been a headwind for all of the medical device companies. Just look at J&J and listen to what they're having to say and a lot of the companies over there. So I took that money and I put more money into Eli Lilly because that stock is down 16% from its highs.
they are growing like a weed and it's not just diabetes and weight loss it's also their oncology neurology their franchises are growing without the weight loss and diabetes something like
30%, right? And so when you look at what they have in the pipeline, in addition to these other faster growing drugs, I think it makes a lot of sense to buy on the weakness as the best in class. And I think GLP-1s, we're just in the beginning stages. We're in the second inning in this thing. You're trying to get a little lighter in health care.
You sold J&J, you sold Pfizer. - We did. - Broader strategy moves? - Yeah, we lightened Lilly. Yeah, we want to be more defensive. I think that given the fact number one, it's the second largest sector in the market, I think there's some risk there, especially given all the momentum players playing healthcare for momentum. - It's the worst performing sector of the year. - Correct. - Still positive by seven and three quarters percent, but nonetheless, it's been a disappointment. - I totally get it. I think where you need to be as an investor
is being more in the HMOs, in the providers and the biotechs and some of the devices. I think that there's gonna be some risks to owning these vaccine companies,
perceived or not. And so we'd rather sit on the sidelines and come back. Didn't sell all of our Lily for Steph's point. Amazing company, owned it for 10 years. We just don't have it as overweight as we were. You're trying to get a little bit bigger in financials, which you've loved for a long time. We know that because you've told us for a while now, years in fact. So Citigroup is a new buy. We can talk about what you added to, but people have started to, you know,
get an idea of what you've already had in your book, but Citigroup's new. Why? So we've owned Citigroup in our tactical and our value. We put it in our all cap. And the reason is that we really believe that Jane's putting the, is finally got her- Jane Frazier, CEO. Jane Frazier, CEO, has finally got the pieces of the puzzle in place with respect to her longer term vision. And the vision's working. We bought the stock originally in our tactical last September, September of 23.
We own it in our valley for 10 years, but all cap I think from a broader perspective, we want some more exposure there and that's why we initiated it. - So there was a couple calls yesterday related to Tesla.
where the broad view on it was the world's changed, right? Those were the words that were actually used in one of the pieces that we brought our viewers yesterday. You bought it. - We did. - In fact, because do you believe that as well? The world's changed? - We do, you've known me for a long time. This is a stock that I have not wanted to own. I have not wanted to own this stock.
And sometimes you just have to admit where you've missed some things and be humble. And the world is changing. And so we've started to nibble on this. And we're clearly going to want to buy the stock, more of the stock, I'm sorry, on a pullback. But we need exposure there, especially given our theme of that.
barbell theme in this member Tesla's in the consumer discretionary sector. So if you barbell Amazon and Tesla on one side and you add to Lulu and some of the Starbucks in Home Depot and TJ Maxx on the other side, I think that's a great way to have the consumer. Sure. But let's be clear when we suggest that the world has changed. Yes. And you say, well, you know, we missed it.
It would have been hard to anticipate. I mean, you had to get a lot of things right. Number one, the move from the election to now, you had to know that or figure that Trump was going to win. That's number one. Number two, that Musk and his proximity to power, I think, is even more elevated than some had thought it would be.
It's one thing to support a political candidate with tens of millions, if not hundreds of millions of dollars like he did, but then to take the lean-in role that he's doing, that is why people think that the world has changed. For the better for Tesla shareholders. Yes, for the better of Tesla shareholders, and we're in the business of making our shareholders money in terms of our portfolios, and we wanted some exposure to that finally, and this pushed us over the edge. AMD is new.
Why'd you decide to do that one? Well, because it's a contrarian pick and we love to buy contrarian names. This stock is a name that has underperformed this year and our overall theme for technology is maintain your positions in the big cap, magnificent seven, and then start to buy and add to the smaller names. If you want to call AMD a smaller name, we think it's a name that we're going to see more and more flows into in 2025. Yeah. Josh, you bought more block. You really like this. Yeah.
Yeah, look, this company owns almost 9,000 Bitcoin. It is not obviously being valued like the Bitcoin treasury stocks currently are. And that's for good reason. The majority of what's happening here for shareholders is the core businesses. The payments network obviously is what's paying the rent.
And there are a lot of fintech solutions under the hood. They have about 56 million users, 4 million businesses use Block to process about $228 billion worth of payments annually. The entire fintech sector, payment sector has been on fire all year.
This had been one of the laggards. Technically now this one is closing in on 52-week highs, acting much better. And as I mentioned when we first talked about it, there was a pretty significant insider buy filing
about a month ago that was worth flagging. So I think this thing gets the triple digits. I do have a stop here because it is a Jack Dorsey special. And I'm a former Twitter shareholder, so I'm not like wildly bullish, but I think it could work. You've seen this movie before, as they say. Let's spend a couple of minutes just talking about the market, which, as we said, has been hovering around record highs and maybe pulling back a little bit today. But certainly that doesn't
seem to have any impact on where overall sentiment is. We have a new target, by the way, a new high for 2025. It's courtesy of Chris Harvey of Wells Fargo Securities, who, by the way, is going to be on Closing Bell with me today at 3 o'clock. $7,007.
Not 7,000, 7,007. Clever. Just to be different. It's a palindrome. We'll ask him how he got to that when I talk to him in a couple hours. But nonetheless, it shows you where sentiment is. You've got money that continues to flow into the market. Wolf Today, Jim, says it's pretty frothy out there, but extreme bullishness can persist.
Is that how you sort of would assess the landscape in your own way? It is. I mean, starting with the fundamentals, we've got a strong economy. We've got China stimulating its economy. We've got the Fed still wanting to cut rates, regardless of whether they should or not. The probability is now 70% of a December rate cut. That's a pretty powerful elixir for future market gains.
You've got the technicals of this late in the year, the market being up as much as it is. Who wants to sell? So you put this all together, and I do think you go higher. Now, if you're listening to me and you're saying, wait, the market's expensive, the market is expensive, fine. Pick your stocks. You can find plenty of financials, even after this run, that are trading at 10, 11, 12 times multiple, even below book value. You can find plenty of health care stocks. We were just talking about
that. Industrials, you don't have to just buy the market. You should, in fact, buy individual stocks. Later in the session, I want to talk about that. On that note, Lori Calvisina at RBC has financials at the top of her favorite sectors of 2025 list on the valuation question. Steph was with me yesterday in the afternoon sort of justifying that
You know what? It doesn't matter that these stocks have moved as much as they have. Goldman's up like 50% plus year to date. That in your mind, these are still cheap. Yeah, well, Goldman and Morgan Stanley are a little more expensive than some of the pure banks. Like Bank of America is trading still at about 13 times earnings. I mean, Citigroup, my goodness, well, that's always cheap. So that's a shocker.
That's a show me story for sure. But something like we talked about Truist being at 1.1 times book value with a 4% dividend yield. And it's a self-help story. Same with Wells Fargo. But back to your question or your comments about the markets. You know what's interesting? Companies agree that it has been a buying opportunity for the last 12 months. They bought back $1.4 trillion. So they obviously see value as well. And that's a nice support system for the overall market. You bought more Goldman and Morgan Stanley to the point.
We did. We did because the overall scale, aside from deregulation, aside from the regionals getting a bid, aside from this way back into financials, is scalable businesses and the broker dealers are scalable businesses. And we haven't talked yet about the
the banking calendar. There's been no real big banking deals in 2024. That's coming in 2025. And so that's really going to spur a lot of the Goldman revenue, we believe. All right. So you got a couple other moves we'll get to a little bit later in the program because there are a couple of things on my list here that you sold that we didn't tell our viewers about. We will.
But let's take a quick break. When we come back, we'll do our calls of the day. We have a big call now on a big tech stock. It is touching all-time highs. Josh and Brian and Jim, they're all in it. Steph recently sold it, which is why we'll debate it coming up.
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That's who calls the day, starting with Apple. Why? The stock hit a new high today, and Bank of America today reiterates its buy. $2.56 is the price target. Josh, give me something on Apple here. I still read plenty of negative notes about the rollout of Apple intelligence and all this other stuff and what demand is going to be, but market seems to not really care.
Apple has been a really tricky stop to flip bearish on because of any particular product cycle and the reason why is the installed base is so large you could launch the worst phone that they've ever launched and you're still going to get a certain amount of units in replacement and That's really powerful when you think about the types of people who want to own the stock Their primary concern is or the margins still high
The answer is always yes. And is the reliability of the earning stream still there? And the answer is always yes. So for that investor, if that's their priority, they can overlook the fact that the iPhone 16 didn't exactly set the world on fire. - Brian. - Biggest position in tech, has been for 12 years. I never want to bet against Apple. - It's been your largest position in tech for 12 years? - Yes, it has.
That's all about the cash, all about the product. And now this Magnificent Seven stuff, you can't own them all. If you run a 50 stock portfolio, really difficult, really difficult to be overweight more than one or two. And this is one of the two that we're overweight. Okay, Jimmy, you're half the market weight of Apple. Why?
I just see better opportunities elsewhere, but let's also face it, I'm in the stock and I just want to explain really succinctly why it's setting a new high. It's because money is coming back into the markets, period. I alluded to this when I was discussing Alphabet with Josh just a little while ago. As money comes into the market, some of it goes to passive ETFs. If you're buying the triple Qs, 9% of that is Apple. If you're buying spiders, 6.5% of that is Apple.
That is why in the last two weeks, nothing fundamental has changed. The march to new highs is simply passive flows. All right. American Express, top pick Wells at Wells. That's for 2025. You on it, right? I do. I mean, it's up 61% year-to-date, and it trades at 23 times forward, which isn't egregious, but I was buying it at 13, 14 times forward estimates a couple of years ago. So it's had a massive re-rating.
I think it is deserved because they are seeing mid-teens growth in earnings and in revenues, and their loan growth is up 11% in consumer and up 18% in small and medium-sized businesses, while delinquencies are still quite tame. So I like it. Would I add to it up this much?
hard for me to do, but I'm going to hold on to it. OK. Barclays today, Jimmy, reiterates they're overweight. On Oracle, price target $202. Quote, multiple factors support acceleration narrative. You know, that technical idea I was sharing with everybody earlier that nobody wants to sell this late in the year, Oracle is a great example. By no means is this a cheap stock anymore. However, the momentum and the sentiment of people not wanting to sell this thing is very strong. It is likely to crescendo into year end.
It's gotten very big in my portfolio. It's up 75% year to date. So probably in the new year, I will trim it. I am not negative on the stock at all. This is just simple portfolio management. You trim your winners. You add to the things that are down if you still believe in them. But I'm not doing that until January. So, Steph, you sold GE Healthcare, but you still have GE Vrnova.
which gets its price target raised at 356 from 330. That's at JPMorgan, and they reiterate their overweight as well. Yeah, because it's all about electrification. And I think whether you believe it's a $4 trillion spend between now and 2050, $10 trillion spend,
So we've just heard last week that it could be a $50 trillion. Who the heck knows what it is? But we're spending a lot on this theme. Anything tied to AI, data centers, power, and grid are themes I want to be involved in for the next decade or maybe even longer. What I would caution on is that they have an analyst meeting on the 10th of December. I don't think they're going to be raising guidance and raising targets. I think they're going to be very conservative. And so that's your opportunity, I think, to buy.
I do think you're going to see a buyback announcement and dividend as well, but I don't think you want to own it ahead of the meeting. Real quick, because we've got to go, but Accenture, only because you teased it earlier, right? It was reiterated today at Morgan Stanley Equal, the target $335 stays where it was. Yeah, they're a little nervous about the government exposure for the company. It's 7% of total revenues. I don't think this is a big deal at all if we see cuts coming. So 33% of the government technology needs to be up.
And I think that's a nice thing for the company. They have the highest book to bill in 20 years. I think it's a great 2025 story. Quick break. Come back. I got three. Actually, you know what? We're going to go to Julia Boorstin first for the headlines. My bad, JB.
Thanks, Scott. Well, a new State Department-backed report from the Yale School of Public Health accusing Russia of using Putin-controlled aircraft and funds for a program that took more than 300 Ukrainian children to Russia for coerced fostering or adoption in the early days of the war. The International Criminal Court has already accused the Russian president of war crimes for deporting children.
Israel threatened today to return to war in Lebanon if the ceasefire with Hezbollah collapses. The announcement comes after Monday saw the deadliest day of fighting since the ceasefire was announced.
And California Democratic Governor Gavin Newsom announced he's seeking up to $25 million in additional funding for legal fights against the incoming Trump administration. If approved by the legislature, state agencies would get the extra funding for court battles in areas including reproductive rights, environmental protection and immigration. Scott, back over to you. All right, Julia, thank you very much. Now we will take that break. And when we come back.
I do have three more moves from Brian Belsky to document for you. We'll do it next.
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Stay warm this season with Ariat jackets and vests available now at Cavendish. Ariat's built for every adventure with cozy warmth and rugged durability. Shop the latest selection of styles from men, women, and kids at your local Cavendish or on Cavendish.com. All right, let's do some of these moves. I said three. It's actually more than that. It's four. My counting lately has been a little suspect. I get it. All right.
Math's your life. - Our executive producer, he corrects me regularly on that. Just saying. Target. - Yeah. - You bought it. - I'm sorry, Jeff, I'm sorry. - You bought it. - I sold it in one, bought it in another. So I sold it in my dividend growth portfolio, but I bought it in my value. We love to buy broken names in value.
And I think given the fact that this stock is clearly underperforming, oh, by the way, from a historical perspective, widest spread ever in the history between Target and Walmart. So in terms of valuation. So guess what? I'll initiate a small position in value. FedEx got downgraded today. You sold it. Bernstein cut it. They see value in the stock, but...
but they don't want you to add at these levels. Seems difficult to defend, they say. Yeah, it's difficult to defend. We blew it out. We'd rather own a little bit more waste management in Lockheed, and that's what we did. Home Depot you sold, too. Why did you do that? We wanted to fund part of our Tesla position. We wanted to fund more of our Amazon ad and focus more on the smaller cap.
consumer discretionary in the S&P 500. Steph, do you still like Home Depot? I still love Home Depot. We haven't even had a housing cycle yet. Well, you can't own them all. How can you sell anything housing-related into 2025? Well, that's why I have TJ Maxx, because I think that's housing-related. Oh, that's not real housing. It's a little bit, but this is your pure play. You live in a house and you buy stuff at TJ Maxx. No, you buy stuff at Home Depot when the tide turns. Are you not bullish on housing?
I am. That's why I own Costco. That's why I own Pulte. That's why I own KB Homes. So, yeah, I think Home Depot is a name we've owned for 10 years. It's okay. We own Lowe's in our value portfolio. The comps get easier going forward. They've never in the history of the company have had eight losses.
negative comps and they just did. Costco's a housing play? Yeah of course it is. Everything's a housing play then if you live in a house. What do you mean? Just trying to bring some levity Scott. Yeah you're failing miserably. I know I am. BlackRock. It's in the news today because it's buying HPS 12 billion. It's just expanding their private credit reach like every private equity firm seemingly is doing these days. Why'd you buy more of it?
You know, on the theme of scale, the best money managers, the biggest money manager, they've done some great acquisitions and as more, we see more and more flows into equities, they make a lot of money in their equity product. Okay. You own MP Materials. It's in the news today. Again, China banning exports of certain minerals. Yep.
to the US. It's a win for the stock which is hitting a 52-week high today. There it is, up more than 12%. Yeah, and look, we're in a new investing landscape. That landscape is a trade war. We're in the opening salvos of it. This is going to be a beneficiary. GM was not, so I had to sell that, but this clearly is. This is a rare earth element mining and refining company.
They actually do more than that. They're actually starting to build the little magnets that go into all the modern day gadgets. But this is completely US production. So we expect that rare earth elements will be curtailed in terms of exports from China. This has been a strategic holding for me. You can't get caught up in the short term noise of where rare earth element pricings is. Very good balance sheet here, well-run company. This is going to go higher. Did you sell Cleveland Cliffs yet? No, I did not.
Because, thanks. Well, I mean, I'm asking, because now you have President-elect Trump says he's going to block the Nippon U.S. Steel deal, right? So that deal doesn't seem like it's going to happen, right? Right. Okay, okay. Why is Cleveland Cliffs down if that deal is not going to happen? And that company has been talked about as a potential suitor.
So why is it down on this news? Okay, so a couple of things. One, I'd be very surprised, very surprised if they bought all of U.S. steel. I mean, if they do that, it's going to be at a much, much lower price than U.S. steel is pricing right now. Well, now it's up. It's up a little bit.
bit. That's fine. But, you know, they did just buy Stelco. All right. And that makes them the second largest steel producer here in the United States. They're a big company right now. Stelco was a great acquisition. If they do anything with U.S. steel, it's going to be picking little parts, you know, here and there, little furnaces, little mills here and there. They need to do some balance sheet debt reduction right now, which they will. But, you know, apropos of what I was just saying about MP, this is a long term holding. This is a well-run company that just got a lot bigger at the
bottom of the steel pricing cycle, going into a trade war in which U.S. production is going to be advantaged. So you're never selling it? I will sell it at some point in time. You said it's a long-term holding. Now you've trapped yourself. I'm not trapped. I'm very comfortable with the position. Scott, no, I love this. I love this because what's the risk to a fundamental long-term holder like me? The risk is that I get tied... That it goes down another... No, no, no. Hang on. Hang on. You've had enough shots here. I like that. But no.
The risk here is that I give in, that I give in to you making fun of me. And I know it's all, you know, busting chops, but I'm not going to give in. This is a well-run company that's just made some incredible strategic moves. Strategic. I don't care about the tactics of where steel prices have gone in the first half of this year. Josh, Josh, it's not your time. OK, just let me finish here. This is a strategic holding. My risk is that Josh says something snarky and I
- I like it, it's fun, you know, Josh-- - He didn't even say it yet. - Would you just stop? - But he didn't even say it yet. - I heard him revving up, you heard him revving up. - And plus, if he's here and Josh is here and I'm here, isn't it our time?
Anybody remember that? Oh, yeah. Breakfast Club. Josh makes some good points. Oh, that's times. Bacoli. That's times. Yeah. Oh, God. Let me stick. Let me handle it, Josh. I know, I know, I know, I know. The risk here to a fundamental holder is that I give in and say, man, I just can't take Josh and Scott beating me up anymore. Guess what, folks? Not going to happen. I'm a lot stronger than that. Oh, wow. Wow. Santoli's next with his midday word.
Welcome back. Senior Markets commentator Mike Santoli is here with his midday work. What's on your mind today? You know, another day kind of like yesterday, which is most stocks down, but a couple of the mega caps managing to keep the index at
at or near record level. So it lets most of the market cool off and really no harm done. It's a market that's acting like it's going to be tough to knock it off course from the basic drivers, which is the general expectation. First of all, the Fed speak has, I think, been net dovish. At least bond markets have taken it that way in the last couple of days. So December is probably going to happen.
You have the Fed easing into a resilient economy. I think resilient and exceptionalism for the U.S. are probably the two most frequent words I'm seeing in the year ahead outlooks. There was one today. Exceptionalism was certainly used today. And so you have to sort of acknowledge that, understand that it's got a firm basis in reality, and then say, where might we misstep or feel as if we overplay that hand? I don't think the market is quite...
in danger of doing that immediately. Well, you have Harvey today, as we said earlier, at Wells Fargo, and he's going to be on later. Just to remind everybody, 7,007 is his target for the new year. I mean, there's just...
I don't know if it's overwhelming optimism, but it's hard to find many people who are bearish at this point. It's not overwhelming optimism in the magnitude of projected upside, but there's a unanimity about it. Oh, yeah, that's for sure. And it's basically there's a collective sense of I'm not going to be caught behind the way I felt I was caught behind most of this year. And so you have everybody taking the opportunity to have a clean sheet of paper for next year and saying, well, I guess we didn't get down to $4,500.
hundred so I guess it's going to be sixty five or seven thousand next year. Interestingly we are on a short term tactical basis sixty one hundred has been a very popular kind of beacon out there and I'll you know can get into if we get there why that might be. OK good stuff Mike thanks I'll see in a couple hours it's Mike Santoli up next we go to trade school with Josh Brown five of his stocks have been on a tear over the past few weeks and now he is taking action to manage those moves he'll tell you why with his risk management playbook next.
We are back. Risk management, a key part of investing, as you know. And today, Josh Brown is doing just that with five of his biggest winners as we go to trade school. What are you teaching us? Well, I think it's really important when you get yourself into a position, you should be able to say out loud,
and with supportive reasoning behind it, whether or not you're making an investment or you're doing a trade. And sometimes trades become investments, and that's okay too. But when you're buying something on technicals, you really should have some sort of risk management in place so that
If the technicals that attracted you in the first place were to wash away, if you don't want that to become an investment on long-term fundamentals, you have a way to get out without torturing yourself or watching a winner become a loser.
I know that this is the hardest part of being in the stock market, not knowing when or what to buy, but knowing what to sell. And I don't suggest that I have an answer that works for everyone. I have an answer that works for me. I'm not one of these people pretending to be a trader on television. I'm running a business, $5 billion under management, 70 employees, 4,000 client households we're doing retirement planning for.
I can't have an exit strategy that involves rolling options every month. Doesn't work for me. I also can't sit in front of a screen and babysit ticker symbols. I have to like be out and about doing what I do. So what I like to do is use stop losses and I like to roll them higher as a trade continues to work.
I want to give it enough room that I'm not whipsawing myself all the time. And I also want to utilize areas on the chart where it would make sense to say this uptrend has now come to an end. Sometimes you're using gaps and you're trying to get out on an upside gap right where that gap ended. Sometimes you're going to use a trend like a trailing 50 or 200 day moving average. And I try to isolate...
the weekly closing prices on Friday at 4 o'clock so that the noise during the week doesn't get me being more active than I want to be. You look at the five names, Judge, Nasdaq, Toast, Baker Hughes, the Trade Desk, 3M, all five are above their 200 day by a median of 24%. They're
all in their own individual bull markets. So I want them to have room to run. I don't want to sell them just because they went up. The trade desk, TTD, made a new 52-week high today. Uh,
NASDAQ, Baker Hughes, and Toast are all within 4% of a 52-week high. So strategically, the smart thing to do, if the technicals got you in, obey them. Let the winners run. But have an idea of where you want to be out. And the more you can automate that, the better your quality of life will be.
All right. Thank you for that. And by the way, just to bring things full circle, you know, we talked to Josh about Amazon top of the program as one of the moves of, you know, of adding more to that position. We do have some news regarding Amazon at this moment. Kate Rooney has it. She's in Las Vegas where this AWS event is taking place. And Andy Jassy had some interesting commentary, right?
- Yeah, Scott, he's on stage as we speak. We are at AWS re:Invent in Vegas. This is the Cloud Giants annual conference. I do wanna bring you those comments from Jassy, the Amazon CEO. He's on stage right now talking about AI and some of the practical use cases saying, for example, we're not using AI because we think it's cool. He said, we're using it because we are trying to solve customer problems. He talked a bit about how it's gonna help the e-commerce side of the business, Alexa, for example, and then faster processing for fulfillment centers. This is Newsy right here, he says,
Amazon's going to see 25% lower costs to serve during the holiday season because of AI and robotics. It's key for that margin story on e-commerce. Really underlining how it fits into the whole Amazon picture. Says, quote, we are in the process of re-architecting the brain of Alexa. Also talking about AI there and expects an update on Alexa in the coming months. On the AWS news front, on the cloud business, CEO of that part of the business, Matt Garman, talked about a key customer. This was big after the pandemic.
So the iPhone maker now using Amazon's Tranium 2 and Graviton chips. These two have teamed up in the past on AWS. They've had a relationship for about a decade. It appears to be the first time that those Apple executives at least have talked publicly about this. It is a positive signal for Amazon, which has been looking to take on NVIDIA with cheaper versions of semiconductors. They've got their own custom silicon. Amazon also announced that it's faster. Tranium 3 chips, Scott, are going to be available in 2025. Back to you. Thank you.
- Kate, we'll have you on closing bell this afternoon, in fact, with the head of AWS, correct? - Matt Garman. - Yeah. - Yes, stay tuned. Yeah, he's on stage now, but we'll get him around three, there you go, 3:20. - Yeah, good stuff. - So we'll see you a bit later for that, Scott. - We'll see you then. I mean, Josh, the bottom line of what Jassy's saying is because of AI, again, just to underscore what Kate said was the newser here, 25% lower cost of the holiday season because of AI. So you're not only getting leaner, you're getting more efficient, you're getting more productive.
What's not to love? Well, Wall Street's going to digest it. Stock's up a little more than 1%. But again, we'll hear from the head of AWS coming up. We'll do finals after this quick break.
All right. You know about the head of AWS joining at 3 o'clock. We'll look forward to that. Chris Harvey told you about that, too. We'll talk about his new target for 2025 of 7,007. He'll tell you how he got there. Ayako Yoshioka is going to be with us as well. And the mentalist, Oz Perlman, is back. He's unbelievable. I assume you've seen him. If you haven't, no matter what, join us. He's got a new...
He's got a new trick or whatever to show us. It's going to be fun. Whatever you call that that he does. Anyway, we'll look forward to that. Josh, final trade. Amazon, staying long.
All right. Thank you very much. Brian Belsky, it's been great having you. Thanks for having us. Thanks for having us. We really appreciate it. Let's stick to the early. 30 years in the business. Thanks for having us. Blah, blah, blah. Financials, financials, financials. We're going to go with another A stock, Agco, AGCO, $7.5 billion industrial company. All right. Thank you very much. Thank you. On holdings. You know, it flashed up on the screen earlier that Belsky added to it. Well, because Belsky just added, not added to it, added it.
Right to another portfolio, another new portfolio. So, look, Belsky's here. We want to have him back. I mean, you know, I'm adding to On Holdings. There will be a lot of gifts from the On Retail store in the Labenthal family for Christmas. Okay. Steph?
You Las Vegas Sands? Las Vegas Sands. The stock has done nothing in four years, and I think 2025 sets up really well. The renovations in Macau will be done. There's an analyst meeting in the spring. That'll be a catalyst. Singapore is on fire, and the stock trades at 14 times EBITDA. I think Jimmy had wind yesterday, didn't you, if I remember right? I did. I don't forget anything you do. I'm watching you. Oh, I know. I'll see you on Closing Bell.
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Thank you.
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