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All right, Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the latest in the markets, the president's so-called Liberation Day looming large. We'll ask the committee how to trade all of that. Joining me for the hour, Josh Brown, Stephanie Link, Jim Laventhal. We'll take you to the markets. We're down early, but you can see here a different picture. We are in the green as we await news tomorrow from the president on what the latest move in tariffs is going to be.
Josh, I think it's constructive just to talk about where we are. I mean, we're coming off the worst quarter since 2022. We know what's happened since the beginning of the year. NASDAQ's down 10% in that quarter. Bonds have rallied. Gold has rallied.
We may get more tariffs tomorrow. I guess the most important conversation I think that's being had is, is that a clearing event? Can you get past that and then we get to the historical nature of April, which is typically good for stocks, or is there just too much that's changed?
I think it's a short-term clearing event and clearly people are taking advantage of the fact that everyone got really bearish. You see 57% of the S&P 500 advancing today. You see some of the risk on stocks acting better than they have in about 10 days. And you've got these deeply oversold pockets.
all over the market. Dow transport, 17% below highs. NASDAQ 100, 12% off its highs. Some of the biggest NASDAQ names like Nvidia and Tesla, double digit losses from their highs. Even the S&P is 8% below its highs. So you had this
very oversold condition in the market, but Judge, to answer the second part of your question, yeah, there might be a tactical trading opportunity, but I think something technically is broken here, and I think one green day or two green days in the case of the Dow is not enough to say we're actually
out of the woods or we've had the definitive clearing event. I want you to keep in mind, the consumer economy is the only thing that matters. Not this AI noise and not necessarily cross-border tariffs on autos,
The consumer has to hold up. A lot of economists are now pointing to a deterioration in the consumer metrics. We got a taste of it during the last round of earnings calls. This round of earnings calls, which start in about 10 days, probably gonna be a little bit worse. The labor market is holding up. Not as good as it was, but it's not bad.
But that is the only game in town, the only thing worth watching. Will the consumer white knuckle its way through Tariff Spring? We don't have the answer yet, so I can't give you a definitive answer that this is it, we've cleared. I just don't think so. Some are placing their bets, though, that the answer to your question is going to be yes. That the consumer is, in fact, going to hold up.
that a consumption-based economy, two-thirds of which driven by consumers, is going to hold up. Like someone to my left, Stephanie Link.
Big part of your bet is there. You lose that, you lose. You lose your view. I mean, a big part of your view is that the economy is going to hold up, the job market is going to hold up, the consumer is going to hold up. You bought more Target. You bought more Target. Come on. I bought more Target. I bought more Amazon two weeks ago. I didn't overplay that. That's your view. For sure. You've argued that. And it's been right. The consumer has been really strong over the last five years, to be honest, right? We're not talking about five years. We're talking about more recently. This year, I don't—
But I've been right in terms of the consumer has held up remarkably well. And I have said it's because of the labor market. I cite the weekly jobless claims all the time, the four, six-month moving average. We're nowhere near a recession. We're at about 230,000 weekly claims, initial jobless claims. A recession is 350 to 375. That remains fine. Wages are
good, 4%, 4 to 5, depending on the metric. And the savings rate, Scott, is now 4.5%. And so what I would say is, yes, we're slowing. Yes, the consumer might pause, but they're in a better position to handle a slowdown, and they're in a better
position to actually handle the sticky, stubborn inflation, even though it's still high and it's still elevated. It's certainly down from 9%. And yeah, I'm buying Target because the stock is down 33% from its highs. It has done nothing in the past year, down 40% in the past year, trades at 11 times. It yields 4.3%. They have traffic. If they didn't have traffic, Scott, I would be worried. They have traffic.
2%, and that's been very consistent. They have had bad execution. They have had inconsistent margins, and I think they're on the right track. I think the guide has been very conservative for the full year. The first quarter is not going to be good. We all know February was crummy for everyone, weather, et cetera. We know tariffs are a problem, but I think the consumer can handle higher tariffs. And by the way, I think
people are so overdone on this tariff thing. I mean, I think we're absolutely pricing in universal tariffs of 20 percent. You get anything less than that tomorrow, I do think it's a clearing event. And then we're all going to go back to figuring out what the economy is doing, what it's growing at, how much we're slowing down, and what does that mean for earnings. And I believe earnings are going to be fine.
Tom Lee has this view that it's going to be a clearing event, that it's going to be Liberation Day, all right, for the uncertainty, that that's going to be liberated, if nothing else. Others disagree. Chris Harvey, Wells Fargo, no liberation from the uncertainty. Now, this is someone who's got a 7,007 target on the S&P 500 for this year. He hasn't brought that in. What do you think?
It could be a clearing event. I think it would be foolish for anyone to say that they know it will be a clearing event because of the way policy has gone back and forth from this president. But I do believe that it probably will be a clearing event. Here's what I mean by that. I don't think that this presidential administration is out to wreck the economy just for the sake of wrecking the economy. I think they're trying to rebuild it. In fact, they've been clear that's what they're trying to do. And I think that what comes next after tariffs is tax cuts and deregulation.
If tomorrow we're done with the tariffs, that's a big if, but if we're done with the tariffs and now we move to the part that the markets are going to like, which are tax cuts and deregulation, then it's a clearing event. What if they do, in fact, think that you have to break it to fix it? Then we've got a problem. I mean, OK, so to be more specific...
besides we just have a problem, then somebody with a portfolio like mine has to do what he has not done to date, which is sell small caps, sell travel and leisure stocks. Because then, I'm just taking your question, the implication is that companies are going to look at a continuing tariff morass and start laying people off. And what Josh said about consumption, and you said, and Steph said, is absolutely right. Consumption's the heart. And if we start getting layoffs, then it becomes a problem. Tell me how you think that
they're not breaking it now. They are breaking the reliance on public spending. They want to get the deficit down. They are breaking the
trade alliances, trade agreements that we've had, trade policy that we've had for many years, and they're breaking the global alliances that we've had for decades. That's not a matter of opinion. It's simply a matter of fact. They're trying to change trade. They're
They're trying to change global relationships and they're trying to change where the deficit currently is and where it's going from here. So and that's the detox, the disturbance, all these words that the administration has used to sort of telegraph to you and you, the collective investor out there.
what might happen before it gets better? Scott, I completely agree with your characterization. Breaking, disturbance, there were a couple other words that you used, but I completely agree. Detox. Thank you. Also agree that the impact is negative. There's complete agreement. My point is that if we keep doing that, then you're going to have an effect. We've had weekly jobless claims hovering around at this incredibly low level of 220,000 a week. We've had the unemployment rate at 4, 4.1% for months.
That's not going to continue. Those numbers are going to get bad if we continue with all the words that we just used. If, however, just let me finish it real quick, Josh. If, however, we finish with the tariffs and we move to the parts that companies are going to like, you start cutting corporate tax rate, companies are going to like that. They're going to want to lean into it. That's going to mean their profits are growing. They're going to feel good about retaining and even expanding their workforce. Josh?
It's the first quarter now that it's in the books. I think when we see the report come from the Federal Reserve. So it'll be the first quarter to feature a fall in household net worth. The historical data is very clear on this point.
When stock prices and home prices aren't rising, savings rates are. People get more conservative. The number of job openings has been falling. We know this, it's empirical data, it's not my feelings on the topic. I wish it weren't true. But the labor market, while holding up, and Stephanie is correct, it's held up better than most people had thought it would over the last five years, that's not gonna be forever. It's about more than just the tariffs.
So this idea that tomorrow we're quote unquote done with the tariff, I don't even know how that's possible. They're gonna put the tariffs on, we're not done with them, then we have to live with them.
And we don't know for how long. Is that three months? And then he says, I won. I made my point and takes them off. OK, that would be good. Is it till the end of the year? Because that's a different story. So it's hard. It's hard to say it's a clearing event when you don't know what's in the mind of the sole person who has the ability to prolong this or put an end to it.
Now, you're in a situation where you have the 10-year falling. The 10-year is saying, don't believe in this clearing event narrative. Look at the airline stocks. They have been absolutely crushed.
Absolutely crushed. You take a look at Delta. It's in a 30 percent drawdown. Like, I don't think it's like I don't think it's like some capricious thing that just happened. No, by the way. So that's what I'm most worried about. Downgraded today. The airlines at Jeffries Delta to hold the sector is now, quote, in a holding pattern.
And the downgrades include Delta, American, United, and Southwest. Why? Because exactly what Josh is talking about. Consumer sentiment to remain soft on continued swelling, that's their word, macro uncertainty. Right? I mean, how about that?
You can win the argument today by saying, well, look at the labor market. The labor market is still strong. Even if hiring slows, firings outside of the government firings haven't risen to a... Not at all.
No, but not yet. Right. You could say that if the labor market is already slowing, job growth is slowing. Of course it is. So if job growth slowing warps into job firings picking up, that's an issue. And we do know from sentiment reads, by the way, the so-called soft data that the consumer is had about had it with all the tariff stuff.
Well, sentiment has been negative for or getting negative for a while now. It doesn't necessarily. It's been getting more negative lately as a result of tariffs. But it doesn't necessarily translate into spending. It's not a big correlation, believe it or not. No, you don't have to say believe it or not. The Federal Reserve chair, if he was sitting at the desk, would tell. He said that at the last meeting. There are haves and have nots in retail. I wouldn't touch an airline even in the good times.
The haves, you're going to tell me Costco is seeing a pressure on the consumer or Walmart is seeing pressure on the consumer with the comps that they just put up? Or by the way, let's get back to Target at 1.5 percent comps in a tough environment. So Amazon, let's just I mean, that's just a juggernaut. We all know that we all own it because of that. So to me, like there are haves and have nots. I'm not saying the consumer is perfect. I'm not saying that it's not slowing. I'm not saying job market isn't slowing. It is.
but I still believe that we are a nation of spenders and to bet against them has been the wrong move for 50 years. So to me, maybe we get a soft patch in the first quarter. Like I said, February was really crummy. A lot of the retailers told us that. Who's to say that maybe we get through this, maybe that the tariffs aren't as
onerous as expected. That's why I say I think the market's pricing in 20% universal. If we were to get something much less, well, I think the discretionary group would rally in a hard way and the consumer would maybe feel better. I don't know. But my point being is, Scott, the market is down 10% from its highs. But MagSavent, not only airlines are down, MagSavent, they are down 25% from their highs. The
The growth index is down 11% versus value, which is up one. And no one is in value. I mean, Jimmy and I have some value, but we have some growth too, and we feel it. So I'm just saying there's a lot of negativity here. Let's get the news. We can figure it out. And wait, maybe earnings go from 10% overall to five. I don't think they're going to zero because I don't think the economy is in a recession. No, but you nailed the point that matters the most. If earnings go to five...
then you're not putting a 20 multiple on the market. You're not. I'm not putting a 20 multiple on the market. Some of these stocks are not that I'm buying or not near. I'm saying the level of where stocks are. If you only have 5% earnings growth versus where the earnings projections were. And at that point, even at those levels, people were saying, well, the market's kind of rich. Come on. You
You can't have a deterioration to that degree in earnings and then say, well, the market deserves to be trading high because the multiple deserves to be. I'm not saying that. I never said that. I'm saying the sectors and the stocks that I'm buying are not close to 20 times earnings. They have fallen. Their earnings have not fallen. Look at technology. Look at MAC7. Now, those numbers have come down, but I think they're stabilizing actually here.
And I think they're quite cheap relative. I've seen such D ratings in something like a Broadcom. We talked about this a month ago when it was at 34 times earnings. It's now at 24 times earnings. That's not cheap.
But guess what? They have a great revenue mix and they are going to grow double digit earnings and they are going to see margin expansion and they have world class margins in general and they have AI exposure. And I do believe that is just as big as the consumer. So I don't agree with what Josh said, because it actually has so much to do with the overall economy.
So I think that there are plays that you can be buying. I went from 9% cash six weeks ago in my portfolio. I'm now at 1%. I could be wrong, but I just see opportunities in stocks all over the place. I mean, when you lose Yardeni, you know you've done it. Ed Yardeni takes his target down to $6,000 from $6,400. That's just a couple of weeks after lowering it to $6,400 from $7,000.
He still thinks you're going to have a roaring 20s, which he has talked about for a while now. But you've got too many stagflationary risks to deal with. And he raises the odds of that from 35 to 45 percent. Maybe you should have a drink. You OK? You OK, Josh? If I.
I'm great. It would be foolish not to increase your risks of a recession, stagflation, everything with the news that's come out over the last two months and particularly on tariffs. The problem is clear. So is the solution. I do not know. And Josh was making this point. I do not know.
if tomorrow will be a clearing event. Nobody does. It's not a knowable fact. It's not knowable in advance. What I do believe, and you can disagree with me, is that this president is neither stupid nor crazy. And it'd have to be both of those to continue on this tack of policy uncertainty. I'm not talking about tariffs. We already know that's coming. But the uncertainty about them, if he sets them, companies can adjust to them. If he sets them in
Investors, consumers can adjust to them. And they will, because that's what Americans do, whether you're a company or you're an investor. Why aren't you taking advantage of the weakness that we've had in the market down 10%? Because I only see one person who's really doing that, and that's the lady sitting next to me here.
Well, the answer to your question is I am fully invested. And you know that over the last two, three weeks, you've seen me invest. You've also, I mean, whether it's in Microsoft, whether it's been NVIDIA, I added to WIN not that long ago. You know, what you're not seeing me do, because I'm fully invested, I can't buy more. But what you're not seeing me do, and this is important, is you're not seeing me sell.
Now, if we have to continue, if next Sunday night I'm reading another Wall Street Journal article about a change to what tariffs may be, then I may have to start selling. And I might have to start selling the things that right now I think are money good if we get through this tariff thing. I'm talking about travel and leisure. I'm talking about Delta, talking about small caps. If we keep doing this, we are going to run the economy into a recession. And I can't hold small caps or Delta in that sort of situation.
What about the small caps? They're underperforming the S&P by the widest margin in like 20 years, literally. Yeah. I mean, it's...
Forget whether it's frustrating or not. The question is what to do, okay? If this economy is going to come back, if we're just having a growth slowdown and we come back to meaningful expansion, and by the way, we're on-shoring production, that inures to the benefit of small-cap companies which tend to be domestically oriented. And I know I'm repeating myself, but the
point is clear. If we're going to continue doing what we've done over the last two months of every Sunday, we're biting our nails on what the tariff situation is going to be. Then, as I've just said, I've got to start trimming or maybe selling entirely small caps. Now, now, the Tuesday before what?
I don't know if it's a liberation day or not, but I'm not going to do it today. You're going to start trimming the small caps down 10%? Oh, are you kidding me? Yes. If we're going to continue, if we're going into a recession, we ain't done with the decline on small caps. And I mean, look, I get it. They're down 10%. A lot of things are down. I'm not trying to excuse it, but a lot of things are down.
If you're going to be clear, to be clear, if you're going into a recession from here, it's sell stocks. I'm just saying the writing on this has been on the wall for everybody to see for some time. Those who have tried to double down or justify the small cap trade hasn't worked. Right. I mean, Steph has made the other count the counter argument so many times.
So many times. I've never made money in small caps. I think they're kind of trades, right? I just don't think that there's transparency, liquidity. I just think that large cap companies, they give you more information to analyze from, but it's also the macro as well. You know, I just think that this environment sets up really well for best in breed,
high-quality companies, blue chip, large cap for the most part, that are on sale. - Wait. - That are down 10, 15, 20% from their highs. - Meta's down 21% from its highs and you bought Meta? - I did, I did, I did. - Wow. - I regretted selling it, I made a lot
a lot of money. I was buying it in the 90s, right, Scott? I sold it at 350. Then it goes all the way up, right? I miss it. So now it's down 20% from 21% from its highest trades at 20 times earnings. They're going to grow earnings at 20%, operating margins at 40%.
that's a great combination and by the way they are spending a ton of money on cappec can you imagine when they stop when they take their foot off the accelerator and put it on the brakes in terms of their spend but they have the best mode 3.3 billion daily average users across all of their their businesses and they're monetizing ai they're one of the only mag 7 that really is and so they all by the way have a 57 billion dollar buyback
And they didn't even buy any stock back last quarter, thankfully, because it was at highs. So I bet you they're in there now. And so I started a small position. If I'm wrong and the market goes down and MAC 7 continues to fall, I will buy more. But this is exactly what I'm talking about. This is a high-quality company on sale. Josh, what do you think about this move here? I remember, boy, I remember a debate that you and Steph had regarding Meta and Alphabet.
I think, right? That was years ago. But what about that? I mean, the broader point that Steph's making is like, look, these stocks are down too much. And now the valuations make more sense than maybe they did before.
You know, I think this is a good move. And I think Meta, very interestingly, if things deteriorate in the economy, the narrative is going to be, well, Meta is an advertising company and advertising budgets are the first thing to go in a recession and blah, blah, blah. That ends up always being a bad call. And Meta ends up being kind of like an arc where you can get some safety. It's going to be...
a huge cashflow business. It's gonna be way more consistent cyclically than other areas of the market. And similar to Apple, like people flock to these stocks when they're worried about the rest of the tape. So I actually think Stephanie's making a move on two fronts. Number one,
there have been long stretches of time where these mag seven names have acted defensively and we've all come on the show and be like oh my god they're trading like bonds they're acting so well so that's one and then two um meta's growth story is probably least impacted by um manufacturing slowdowns or or trade wars um they're not in china they have no business there
He would do anything to get there. He would name a child after President Xi. It just doesn't work. He's not there. So you don't have that contamination of the macro trade problems with meta stocks. So I think Stephanie is taking advantage of a weak market and picking up a good one. I think it's going to work. You know, Jimmy, Deutsche Bank today on the MAG7 might be stabilizing. You have had a lot of outflows.
Tech in many respects has led those outflows. That's what Bank of America's client equity flows continue to show. Six of 11 sectors sold, led by tech for a second consecutive week. But as Steph has mentioned,
Names that you own like Nvidia down almost 30% from the high. Alphabet, you own that down 24% from the high. Amazon down 21% from its high. Microsoft down 19% from its high. And then, of course, Apple with some maybe some more idiosyncratic issues related to its own AI ambitions dragging that stock lower.
These stocks come down too much? I really think so. I mean, let me just go to the most egregious example, which is Alphabet. I just looked a second ago. It's trading at this year's multiple 17.6. I don't, I mean, that's really? Okay. This is, I mean, yes, I understand they're building a lot of CapEx on the data centers. I got it.
I understand there's competition too, but throughout it all, quarter after quarter, they keep defying these expectations that competition is going to eat into their earnings. They've got a lot of moonshots, some of which will pay off. Waymo seems to be gathering more traction. We've got YouTube. We've got the web services that they put together. I really think 17.6 is overdone by a lot.
We say the same thing about NVIDIA, 24 times forward earnings. I get deep seek. I get it. But it's clear that data centers are still being built. I mean, Satya Nadella, everybody else is leaning into their CapEx. I just don't see 23, 24 times forward earnings on NVIDIA as being right. I think it's way too cheap. All right. Let's take a break. We've got committee moves coming up still to get to from Stephanie Link. She's been very busy in these markets. Calls of the day coming up.
And later, the quarterly report. We check on what worked, what didn't in Q1. Back after this.
Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.
It's time to make America affordable again. It's time to support the President's plan.
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All right. Let's do committee stocks on the move. CrowdStrike was initiated overweight at Stevens today. The price target, 450 bucks. That's a big upside from here. The news I want to get to with you, Steph, is that you trimmed CrowdStrike last week and you bought more Palo Alto.
Correct? Yes. I like them both very much. I like cybersecurity very much. I have said this many, many times that AI is bigger and excuse me, that cyber is bigger than AI. If that AI is in the second innings, I think it's more than a trillion dollar total addressable market. I think the big players are going to get bigger. We have 4000 cybersecurity companies. So you're going to see massive consolidation and and CrowdStrike is the number one player.
Palo Alto is the number two player. And it's actually lagged though, right? And it trades at 14 times price to sales versus CrowdStrike at 22 times price to sales. And so it's actually down year to date 6%. And CrowdStrike has actually had a nicer recovery. So I just thought that there was more upside here to Palo Alto. So I took some gains. I mean, I've been up like 90% in the name and CrowdStrike. So I think it's prudent. Josh, do you have a comment?
On this, since you own CrowdStrike, just taking some profits here? Do I have a comment? Come on. I don't disagree with Stephanie on Palo Alto. My attitude, and I shouted out Zscaler the other day, just on the technicals, now on my best stocks in the market list. I think there are multiple ways to win here, but I'm a best of breed guy. I just...
It's just how I roll. I was always Nvidia, never AMD. I don't play this game where it's like, "Oh, this one's up a little bit more than the other. I'll play the catch-up trade." It could totally work though. And I think Palo Alto is fine. CrowdStrike is expensive, but deservedly so. 32% earnings growth expected next year. And there is a power law in software, and it's coming soon.
if it hasn't already to this cyber area, and Stephanie will be right, like you will see massive consolidation because I'm gonna tell you right now as a small business owner, the last thing I'm looking for is more vendors. I want less vendors who do more things and the way that happens is by working, I work with Salesforce.
I don't work with 90 other companies because Salesforce has all of what those companies do as features. So I think Cyber Palo Alto, there's a couple of other names. They're going to own this space over the next 10 years. Multiple ways to win, but I'm sticking with Crowd.
Okay. Live Nation, slightly lower today, at least it was. The Ticket Scalpers executive order. The stock is now positive, as you see here. What's your take on this story? Does it, I mean, I guess the Wall Street doesn't really think it's a big issue.
No, no, no. That would be backwards. Ticket scalpers are the bane of Ticketmaster's existence. It makes it harder for them to produce an outcome that the fans are happy with. When you have a bot come on right as somebody's going into like a...
a fan club presale or something and take down 20% of the tickets, everybody hates Live Nation. Everybody hates the artist. Everybody hates life. So this is actually going to be a good thing. And I think that's why you're seeing Live Nation hanging in there the way it is. They don't
benefit from more regulation. They don't lose. And I think that's a huge misunderstanding on the part of the media. They don't get it. Live Nation wants these auctions of tickets to go smoothly. They don't want scalpers reselling on Vivid and on StubHub. It doesn't help them at all.
Let's jump ahead to GE Vernova, which was added to Goldman Sachs' conviction buy list for April. Stephanie Link owning that stock. And there's a related move that you have to it. So tell us about this call, what you think, conviction buy. Because this has been in that momentum upset, unwind, however you want to characterize it. And then you bought more of a name related. So tell us. I mean, it's down like 40% from its high. So I get why they like the stock now. But it's still up 100%. This is GE Vernova.
It's up 121% in the past year. So it's been a great stock. Power, grid, electrification, that whole thing you've heard me talk about. I've been trimming GE Vernova and actually added to NextEra. And they have a partnership that they announced.
And I think that that is going to be very positive for both companies, actually. But you have a best-in-breed utility company that just did a great transaction. They're going to see above-average growth as a result. And the stock trades at 14 times EBITDA versus 16 times historical average, and it's down 17 percent. So I just kind of, from a tie. So I kind of just think that there was a little bit better value on the NextEra versus GE Vernova. But GE Vernova is going to absolutely win.
IBM taken off the conviction buy list, right? So you get a little love with GE, Vrnova, and then they, like IBM, get out of here. What do you think about that one? I know. I'm kind of torn because the multiple has expanded so big time under Arvind Krishna, the CEO, from 14 times to now it's at 23 times. And the stock has held up remarkably well. It's up about 12% year to date. But I just don't think you want to bet against him.
He has done a really good job in terms of M&A and changing the culture of the company, focusing on growth, AI, data center, blockchain, et cetera. And he's done, do you know how many deals he's done? He's done 39 deals under his- - Guys, deal maker. - He is a deal maker. - Arvin the deal maker. - Arvin the deal maker. But it's working 'cause the growth rate is actually accelerating. So I'm gonna hold onto it. Wouldn't add to it here, but I'm gonna hold onto it. - Okay, Santoli's next with his midday word. We're back after this. Actually, we'll get the headlines. Where are we going? Are we going to Silvana?
Okay, so Vonna, the news. Hey, Pat Fanks, good afternoon. Mass layoffs are underway at the Department of Health and Human Services. About 10,000 full-time jobs are expected to be cut as part of HHS Secretary Robert F. Kennedy Jr.'s wider plan
to remake the nation's public health system. Sources tell NBC News the cuts include teams tackling HIV as well as offices overseeing new drug approvals and responding to infectious disease outbreaks.
The woman accused in 2022 of killing her Boston police officer boyfriend is back in court today for jury selection in her second trial. The first ended in a hung jury. Prosecutors argued Karen Reid drunkenly backed her SUV into Officer John O'Keefe, but her defense claims she was the victim of a conspiracy involving other law enforcement officials.
And a volcano began erupting in southwestern Iceland on Tuesday, just hours after authorities evacuated a nearby community and the popular Blue Lagoon tourist destination. According to national broadcaster RUV, flames and smoke shot through the air as a volcanic fissure opened near a town. So far, the eruption has not affected air traffic. Halftime report. We'll be right back.
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Which is what? Let's wait, right? Let's not draw grand conclusions out of the action. I think you can go into this with the premise that we've been working with, which means if the S&P 500, to get much below the recent lowest, 5,500, it seems like you need pretty tangible, worse economic news, probably some kind of hard data.
or maybe a tariff announcement that's at the extremes or something like that. In the absence of that, all the quarter end, beginning of quarter machinations have at least given you a couple percent cushion above that. Treasury market is still in gross care mode.
did not love the i_s_m_ report you still have yields pressing down against some support levels we need reassurance economy's hanging in there were probably writing off the first quarter as as kind of a of a non growth quarter on i think the question is is sentiments i think you can say sentiment is negative enough
Seasonal should get better. There should be room for a further bounce. And I think the market is mindful of potential upside risks on a more moderate announcement tomorrow. We need somehow to collectively, as investors, decide whether the detox that is suggested we need to go through
a three-month phenomenon, a six-month phenomenon? Is it more than that? And does that period offset some of the things that people are looking forward to, continuation of tax cuts and deregulation and all those other promises like the cookies?
on the table way down there. It seems to me any detox that is really worthy of that label would be a lot longer than a few months, right? I mean, if you're talking about rectifying, kind of bringing the run rate of the deficit back into line, if you're talking about finding a place for the private sector to absorb hundreds of thousands of public sector workers, I mean,
That's not something that you can do very quickly. I think the Joltz numbers today show a very low turnover labor market that we have right now. It's just kind of sitting there. It's not high metabolism. So I think there's going to be questions about that. And it's also the equal weight S&Ps, it's 16 times earnings. Not terrible, not cheap. You just got to pick your spots within it, I think. All right. I'll see you on closing, Bill. That's Mike Santelli coming up next. The quarterly report, what has worked, what hasn't over the past three months. We'll talk about some of those names next.
All right, let's talk about our quarterly report. What worked, what didn't in Q1, highly volatile as all of you know. Reddit, Josh, was one of the big losers. Really caught up as I was talking with Stefan, this downdraft and re-rating of momentum down 36% in Q1. Thoughts?
- Yeah, it's up 124% over 12 months, but absolutely hammered in Q1. It's part of this group of stocks that includes Palantir and several others that they were pushed up by some of these pod shops that have momentum traders, a lot of prop traders pile onto that. And some of these stocks just were absolutely levitating in early January. The price that had to be paid was when the market turned
Momentum got wiped out, and this is definitely one of the worst names. Carlisle Group, you know, if you look back, I, what did we call this the other day? The, you know, the rethink trade of what we came into the year thinking was going to work and maybe hasn't. Like a name like Carlisle Group, for example. Private equity was on the, this is going to be a good time for private equity trade. And it just hasn't worked. Carlisle down 13.5%. Yeah. Yeah.
Yeah, need exits. So no exits, tough to raise money, tough to put money to work. I would point out, though, private equity firms right now have literally a trillion dollars in dry powder. And if this market dislocation continues for much longer, yes, these stocks will trade down with the market. But it also finally...
opens up much bigger opportunities than what was present in '23 and '24 for more investing. I think if you work at a private equity firm right now, you're an executive, you're equal parts rooting for more of this or back to the golden age of IPOs that we thought we were gonna have.
In either case, these are the smartest people. They know how to put money to work. And if and when they get that IPO window open again or they get a return to M&A, they're going to make a lot of money. So I wouldn't worry too much about it. Let's go to Megan Casella now. She has some breaking news, presumably some updates around tariffs. Megan, what are we learning?
Hey, Scott. So White House Press Secretary Caroline Leavitt just finished her press briefing a few minutes ago. And the biggest news that we got on the tariff front was that she told us that her understanding is that all of the tariffs that will be announced tomorrow on the reciprocal front, that all of those will be effective immediately. I would expect that means starting to be collected either tomorrow or April 3rd. That's for anything that's announced tomorrow on the reciprocal front.
Again, no details just yet on what exactly that would be. Levitt told us that the president is currently in the Oval Office meeting with his trade and tariff team, perfecting tomorrow's plans. Those were her words. I had been told earlier that there are still three options on the table, blanket tariffs, tiered tariffs or country by country customized tariffs, that they were still deciding exactly which way to go, but that the blanket tariff looked less likely than the other options. One other point from Levitt, Scott, I want to mention, I got a chance to ask her,
whether the pause that is set to expire tomorrow on those Canadian and Mexican non-compliant with the USMCA, whether those goods, whether the tariffs will go back into effect. So that pause was put into effect a month ago. It's set to expire tomorrow. That was the tariffs on the fentanyl front. And I asked her whether the president was considering extending that
pause. She would not answer directly, said she was leaving that to the president. But she also mentioned that fentanyl continues to be the number one killer of young people in the United States, suggesting, Scott, that the White House still has some concerns over fentanyl and that we might see that pause be lifted tomorrow and those tariffs kick back into effect. Scott. OK, thanks for the update, Megan. Appreciate that. Megan Casella. We're back after this on A.I.'s eye-popping valuation just gets bigger. Open A.I.'s gets bigger, bigger.
Kate Rooney, following the money, joins us next. Welcome back. Following the money behind OpenAI's mega funding round, its latest one. Our Kate Rooney joins us now from One Market in San Francisco with the eye-popping numbers. Although, I don't know, I guess we're used to it by now. I know, we're becoming immune to these levels, Scott. But OpenAI did break a record here announcing this $40 billion deal. It values the AI giant.
at 300 billion dollars at this point that is just behind spacex and tick tock parent bite dance if you look at private markets softbank is the one leading this round putting in 30 billion dollars with a caveat though so if the company's plans to restructure to a more traditional for-profit entity if that's not wrapped up by the end of this year softbank is going to ratchet down by 10 billion dollars so it'll be a 20 billion dollar total on their end open ai we should say was founded
originally as a nonprofit. It's been attempting to become a full profit company. It wants to spin off the charity as well. But one of the founders, Elon Musk, as you might know, has sued to block that conversion, throwing a wrench in some of those plans. You got Microsoft, KOTU, Altimeter.
and thrive. Also investing in this round, we did also get some chat GPT numbers. Now has 500 million weekly active users. That's up from 400 million about a month ago. At these prices, though, investors are betting and underwriting that some of that growth can continue. This is by far the largest round we've seen
at least in private markets on record. So for context, it's almost three times as big as the prior high watermark, which was Anchor Group raising 14 billion. You had Juul and Databricks also in the top five there. And it also tops some historic IPOs. If you look at Saudi Aramco, even if you adjust for inflation, that brought in less than $30 billion at the time. It's according to Renaissance Capital.
Alibaba and SoftBank itself both raised around $21 billion in their offerings. It does underline this shift we're seeing from public to private mega deals, especially in AI, Scott. Kate, thank you. Kate Rooney. Josh, I know you have some thoughts about this one.
I do. I think if the price was $60 billion valuation rather than $40, Sun would have written the check either way. I think this is somebody who is very, very comfortable making huge gambles. And sometimes they pay off spectacularly, as in the case of Alibaba. And sometimes they're WeWork.
And this is just the type of investing that SoftBank does. They bought in early to OpenAI, and according to the reporting at the time, Masayoshi Son was not happy that all he could get
was $500 million worth. So these talks have been going on for at least three months. I think what's interesting is the last time we heard that $40 billion number in January, the AI trade was riding high. Now it's obviously cast in a different light, but that did not change the valuation talk. And I think that's the most interesting part of this.
And so SoftBank is not worried about recent market volatility, not worried about CoreWeave, not worried about NVIDIA's drawdown. They are plowing ahead as though it's still January 2025. And I wish them luck. All right. We'll do finals after this break. All right. I'll see you on Closing Bell 3 o'clock today. Adam Parker, Gene Munster, Jason Hunter and Ali Flynn Phillips. We should have an interesting hour to say the least as we take you into the close. Josh Brown, your final trades, what?
Kinsale Capital continues to move toward record highs. Stock looks great. KNSL. Thank you. The Farmer.
Pacific Gas and Electric, this is a Northern California utility. It got knocked down in the L.A. fires, but that's outside of its service area. Okay, thank you very much for that. Stephanie Link, you must be UNH. Yes, it's quietly up 14% from the lows, but still cheap at 13 times EBITDA. All right, I will see you on Closing Bell, and we'll see what this market does between now and then. Green for now, the exchange is now.
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Thank you.
Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.
It's time to make America affordable again. It's time to support the President's plan.