Rising Rates and the Road Ahead for Stocks 5/15/25
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Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. The road ahead for stocks, how rising rates might impact what happens from here. We'll debate that and everything else with the Investment Committee. Joining me for the hour today, Josh Brown, Jenny Harrington, Joe Terranova and Jim Labenthal. We'll take a look at the markets today. We're mostly in the green. NASDAQ is red and that a sight to behold because it hasn't been red

Very often of late. It's nicely above 19K. And you heard Carl say over 5,900 again on the S&P. You know, Josh, I know people are looking at rates. People I talk to are watching rates, you know, wondering how high they're going to go. Could be a problem for stocks.

Chair Powell today at an event in D.C. talks about potential supply shocks. Everybody's still watching the tariffs. Walmart was talking about price hikes. Retail sales barely rose last month. And yet the bias from these same people that I'm speaking with continues to be, you know what, stocks can still go up. Stocks can still go up from here for a while. I think we just got a CPI report that might be the last of the tame CPI reports. But

I also think some of the weirdness that we'll see when we get the May number, for example, in the middle of June, will be the type of weirdness that the market has historically looked through. So we're going to have these supply shocks for specific materials in certain industries. It'll be colored with anecdotal things alongside of the data. And the market's going to look at that and say, yeah, that's not great, but it's also not systemic rising inflation. It's not

the fall of 2021, and the Fed probably isn't going to be put in a position where they have to act on it. The Fed doesn't actually cause that type of inflation. The tariffs cause that type of inflation, and everyone knows it, and the Fed obviously can't fix it either. So that's where I land as far as like, is that the thing that the market has to worry about next?

I actually don't think tariffs are inflationary in the fullness of time. Let's assume this 30% on China stays. And by the way, with a tweet, it could be gone tomorrow. But just hypothetically, I actually

I actually think that's a demand destruction machine. And I think that ultimately you don't get incredibly high inflation as a result of that. You actually get disinflation eventually once you have those aberrant prints in the numbers themselves. So just looking at what we got, for example, on PPI, lower than expected. Month over month decline in trade services was the big reason why.

negative 0.5 month over month, so sequential, not year over year. Trade services dropped 1.6%. So when you understand the bigger picture, which is that we don't have companies fighting for talent, we don't have these incredibly rising rents or wages or used car prices or some of the things that were the leading drivers of the inflation problem we just survived,

and it's just this kind of trade war uncertainty, you realize this is not going to be a monster issue for the markets longer term. It might produce some scary days, but I just don't think that's the big problem right now. Joe, you know, the tariffs, if anything, they scared consumers and are scaring consumers into changing their buying decisions. They bought, we learned from retail sales, which barely rose, but they did...

rise in March. Why? Because people front-ran what they thought the tariffs were going to be. And now on top of that, you're going to raise prices, Walmart. And what do you think that's going to do to Josh's point to demand? Because Walmart today said that their price hikes could start later this month, despite the deal.

with China. You own Walmart. I do. I thought the eco data today was the beginning of what we've been talking about, which is the deceleration in demand, a cooling for the economy. And I agree with Josh. I don't know necessarily that the casualty of persistent tariffs is a spike of inflation. I actually

I actually think it's margin compression for corporations and the risk is to the earnings outlook. And I think we saw that and heard that today from Walmart. Look, I said yesterday, I think Walmart's a trillion dollar company at some point. I believe it's a core holding. There was a lot of positive that was idiosyncratic to Walmart.

e-commerce very strong okay you had both revenue and profitability that was present this quarter the problem was the commentary which was different than what we heard at the analyst a the analyst a we kinda heard well okay we're gonna absorb

a lot of the tariff cost. We didn't hear that today. Today we heard, well, guess what? Over the next month, prices are going to begin to rise. That was much different. So I think that rattled shareholders. Absolutely, I'm maintaining my position because I think they have market share. And it's the right type of market share to have in an economic environment that I think we're looking at the next 90 days, which is one where demand declines. Okay, so

That sort of sets the scene for the market. OK, the S&P, Jenny, is up more than 18 percent from its closing low on April 8th. Twenty five day trading period. The index has only done that five other times going back to 1970. That big of a gain in that short of of time.

Where do we go from here? Do we have the momentum to continue to go higher? We are but four plus percent from a new high on the S&P.

For somebody who's been kind of cautious on the overall environment, haven't heard from you, I don't think, since last weekend's agreement to roll back the tariffs. What do you think now? So I'm more uncomfortable now than I was even last week. How is that possible? Because exactly because of what you laid out. When everybody's positive, when everything looks good, that's when things might not be, when you might have topped out. So we're trading at 21 times. However you cut it.

you cut it, tariffs have brought more uncertainty into our world. Supply chains are messed up. And all the good numbers that we just saw come out in earnings, those are all reflective of a world order that's stale. That's three months ago. That world order is stale. Things are changing. And so

So I don't know what lies ahead right now. I don't know what's happening with interest rates. I don't know if we're going to be at 5% on the 10-year or 4%. I don't know what inflation is really going to do. We can speculate, but we really don't know. So when you have higher than average rates that we're at,

And massive uncertainty, that to me does not support 21 times. But then when you ask me, like, what do I do? Well, here's the irony, maybe. I'm still fully invested, but I'm comfortable with my portfolio because it trades at about 13 and a half times. It pumps out a 5% plus dividend yield. So that brings me comfort because that's more certain and less risky on a valuation perspective than the broader market. And that's

That's for me a hard thing to reconcile. How am I uncomfortable with the broader market, but comfortable with what I'm in? But I don't love this market. I don't see how you can be more negative today than you were last week, just given the rollback. I don't like that the market's up so much. The rollback of-- that's a fair statement, by the way. The market is up a lot.

Some suggest maybe too much. I mean, Steve Cohen yesterday at the Sohn Conference said stocks could retest their April lows and still sees a 45% chance of recession. He also said when he was answering the same question, if you would have asked him a week ago, he might have given a different answer, kind of to my point.

The trading environment seemed far different a week ago than it does today. Does it not? Despite the move in the market. Today, it just seems like a nonsensical return to the AI trade, right? To what we had all of kind of 2024. It just seems like people have thrown out the fact that there are real risks, that it is a different world. And they're saying like, hey, let's just go back to what worked.

I was listening to... Is it nonsensical, though? Those are the companies that comprise the bulk of the market cap in the S&P, and they had stellar not only earnings reports but spending guidance. They did. They did, with the exception of Alphabet and Tesla. They did. All right, let me rephrase. They didn't have stellar earnings reports given where some of their multiples are. Oh.

Wait, wait, wait. Given the fact that it was Wednesday? Something big happened this week, and don't lose sight of it, all right? Saudi Arabia, Humane, the company that the Sovereign Wealth Fund is putting together there, the spending that they're going to be doing on AI is actually tremendous. And I'm not somebody who drinks Kool-Aid, all right? I did listen to the

We'll talk about Cisco later, but I listened to the conference call last night, and I can tell you it's not just Cisco. It's Cisco talking about working with NVIDIA, working with others on hundreds of billions of dollars of incremental spending on AI, on data centers in Saudi Arabia. And let's just face it.

it. We weren't talking about that a week ago. It just wasn't anywhere on anybody's radar. But you need to believe it's 100 percent true. It is true. It's true. We recalibrated back to the consensus expectation coming into the year for tariffs. Fair enough. 30 percent was the number coming into the year. Everyone said, OK, the rate for China will be 30 percent. We're back to 30 percent. So why shouldn't we? Meta, meta, meta, meta came out. Meta,

META came out and confirmed its spending plans for the year, so did Microsoft. And the big thing that you don't have is the reason to say this rally is a false rally, and it still might turn out to be. The Qs went up 25%. The S&P went up 18%. So for those keeping score, a 25% rally in the NASDAQ

is an incredible rally, and it doesn't happen randomly. It happens because of those earnings results. Now, what could be the monkey wrench is if all of a sudden you start getting disappointments on the employment data. I think that's the bigger risk than inflation, than interest rates. The unemployment data so far is not falling apart. And so long as people have jobs,

this thing can continue to levitate. It's very frustrating. I was as bearish as anyone on this desk in April. And then you know what happened? Meta comes out. Microsoft comes out. Even Apple comes out. It's just not as bad as people thought it would be. And Josh, do you think companies... You got an initial claims number today of 229,000.

right on the number as far as what the estimates were. And do you think, I'm asking this literally, do you think companies really want to let people go right now when the trade policy uncertainty, which you've pointed out, Jenny, is coming down? I think this is the point where companies are saying it could get a lot brighter, the fog. We talked about the fog, Scott. If the fog...

is lifting companies want to have their employees in place they don't want to let it was a big scary headline on cnbc.com and elsewhere about microsoft's mass layoffs dude they're laying off 6 000 people three percent of their workforce it was this huge splashy headline everywhere

Goldman Sachs lays off 3% of its people every year. Like, the unemployment situation has not changed. And from my perspective, if we say we're in a consumer-driven economy, if we say the consumer is 70% of GDP and that part of it is holding up, yes, I know there's trade downs, I know the lower income are more pressured by higher... I understand all these things. Tell me when we get a shock to the labor market and I'll

I'll tell you when it's time to start saying all of these expectations are going to fall apart. To get back to where you think the market should be, to get there, first you have to... What if we are where it is? No, you're not there, because sentiment is not aligned with where price is, nor is positioning. And that's why the NASDAQ's up 25%. Because the NASDAQ...

was the casualty of the market selling that we saw earlier. Everyone moved to the sidelines in those names. Now you're rebuilding positions, you're gradually, gradually getting sentiment up to where it needs to be. For you to realize the reality of where you think the market is, we've got to be sitting on the desk and we say, "Okay, now positioning's full,

Sentiment is overwhelmingly bullish. No one believes we're going back to the place we were in early April. And then you get your moment. I hear you. But, like, I think you guys are all presuming that me not being bullish means that I think the market's going down 10%. I'm not bullish. I think we're in a range. So I'm with you. The question was, how does the rally go higher? How does it continue higher? My question back to you was, I don't see—

how you can make a case today that we're worse off than we were a week ago. When tariffs have come down,

as significantly as they have. You can be annoyed at the process. I get we're in such a politically polarized universe. - But the worst off is on valuation. How do you go from 21 times to 23 times? - Well, you, but last week, but a month ago, you would have said that earnings are not gonna be good, we're not gonna get any guidance. There's no way that-- - I did say that. - Yeah, but it wasn't, it turned out not to be right. That's my point.

Okay. Guidance was way better than people thought, including you. Earnings were way better than people thought, including you. No, I thought earnings would come in as expected because that was already baked in. No, they were better than expected. They were better than expected.

Fine, but we're still at what? 11% earnings growth year over year? I don't get how we go from a 21 times multiple to a 23 times. Because I still don't think fundamentally the world is better off before it was before April 2nd. That's my problem. Why is it necessary for us to get the 23 times earnings? Because how else do you go up 10%?

Right? That's 10% growth. You need multiple expansion. No. If you have earnings growth, earnings growth. The earnings growth is already baked in. That's the thing. The earnings growth is already baked in. On April 2nd, the market was down 4% and change. Now it's up on the year. What's different? Well, the earnings growth came in to still put us on track for the 11%, 12% earnings growth year over year. Right? You have a multiple that's back to where it was. And I

I don't see the world as better now than it was before that. I don't think it's better now. I just agree with Judge that I don't think it's more uncertain. We could argue, is it less uncertain? I would say probably not. So Walmart comes in, they say we're going to maintain our full year forecast, but we're going to cut Q2. We're going to remove Q2 forecast. That's not great. No, but they're also saying the impact of the tariffs have yet to be felt. And that's why I'm saying this is reflecting a stale world order.

I think we all agree that the impact of the tariffs have not been felt. I think every one of us agrees with that. So that's uncertain. And we have no idea what it's really going to feel like. It's coming now. But listen, you had dispersion in the earnings. It wasn't isolated to technology and communication services. And here's the interesting part. So Josh said he's not bullish. And obviously, I think we're going to make a run at

at the all-time high. I think that's what momentum is telling you. But here's what's interesting about that. I was asked this on a call yesterday. Well, what happens next? Yeah, I agree. Do you break out from there? I'm not so sure. I think you might be trapping people. You know the answer. I think you might be trapping people up there. If you set a new high from here...

FOMO comes in and it comes in hard. That might be a trap. And you might be right, Jenny, from a fundamental point of view, but don't mistake that. You start seeing headlines of a new all-time high. You know what the number one category of ETFs gaining assets last month?

uh t-bills so it's your point like if you start printing new highs without a doubt there's a component of the investor class that's under investment i just feel like i feel like some of you guys and and people in general are are missing part of what's happening here in that

You're going to start hearing, I think, less and less about tariffs and trade and more and more about taxes and deregulation and the kinds of things that are going to be a boon potentially for this market, not an anvil on the shoulders of this market. I think you're exactly right. And, you know, look, you and I usually like to argue. I mean, you want me to buy UnitedHealthcare right now and we can start an argument? No.

I was kind of wishing you still owned it today. That's so mean. He knows I'm kidding. I know you're not kidding. Yeah, I don't think you are. That is pretty show-stoppingly funny. But, you know, Scott, somebody said to me today, what if things go right?

Think about this for a second. Next year's earnings estimates on the S&P 500 are $300 a share. To the point, Jenny, that you're making, I mean, we're at 20 times that. But what if things go right? What if the tax bill is stimulative? What if the Fed cuts rates? These are just what ifs. What if the tariffs are, as you were saying at the beginning of the show, one shot, you're done, you get the price level reset, and you move on? I mean, what if 2026 is pretty darn good? Well, there's two things. The tariffs are so riddled with exemptions at this point.

That's why I think the market will see through

aberrant data in the next set of CPI, PPI prints. Because almost everything is exempt. It almost doesn't matter. If iPhones are exempt, what do people spend money on? If we start doing carve-outs for automakers, I don't think that's the story. The story is the slowdown for real. Goldman Sachs was saying, we think we'll see 4.7% unemployment. Then there's a deal on Saturday. I don't even know what the deal is. Goldman comes out and says, just kidding, more like 4.5%. All the recession...

uh... calls start getting moderated we we we think that that we were session now it is maybe recession my opinion so long as the consumer continues to spend and so long as the consumer continues to be employed every other data point we're following doesn't really matter and i understand people say employment is a lagging into okay it might be a lagging indicator but it's literally the best indicator we have been for three years five i get the recession call so are are

Are you saying that we might escape without the growth scare over the next three to six months? That's the thing. I don't know. How do you get a growth scare when the largest companies in the stock market are defensive? So this is the thing that people haven't. I think I'm living in the year 2030. This is the and I don't I don't like to brag about my insights that much. Sometimes I do. This is the thing that nobody has figured out yet.

Do people cancel Netflix in a recession? No. Do people throw their iPhone in the garbage because the services cost them too much money? No. Do people stop any of the behaviors with Uber and Uber Eats, with Spotify? Is any of that pro-cyclical or is the entirety of stock market market?

market cap now defensive services that people will not abandon. They will stop doing almost everything else before they stop with their digital devices and the way they spend their day, scrolling through TikTok, et cetera. So if that's the market we're in, we might have to accept the fact

that we just don't have as cyclical of a stock market anymore. The economy is still cyclical, but the stocks, we're not investing in economic conditions. We're investing in corporate profits. Speaking of, and Netflix, another all-time high today. Their ad tier now has 94 million monthly active users, reiterated outperform at Evercore and Josh Brown Capital. That's what I'm saying, dog.

And so I want you to think this through with me. If people aren't canceling YouTube TV subscriptions and they're not throwing away their iPhone because of the cost of the services,

and they're not cutting off Netflix, or if they do, they downgrade from premium tier to ad sponsored tier. And actually Netflix makes even more money in that case. If that's the makeup of the stock market, and companies like, do you remember how important Alcoa used to be? - Oh, come on. - The bell went, no, but do you remember? Jenny, I know you remember. - I remember, it's like 1980. - 20 years ago, Alcoa would report first because it started with an A. Guys, kids in the audience, I swear to God, this is real.

And we used to say, as goes Alcoa, so goes the, because the stock market was so cyclical. Now, it's like this oligopoly of tech companies that are consumer staples. They're defensive. I think you're pulling your punch. Don't just talk about Uber or Netflix. Go out.

go out to a generic steakhouse in new york city on a tuesday night packed i mean and you and all of us go out you know what i'm talking about every high-end restaurant is packed that's the k-shaped nature of the economy so a whole other discussion but but but but where do the profits come from and i'm not trying to be heartless where do the profits come can i ask you um back to you you had mentioned cisco a little bit earlier i just want to do a couple things before we take our first break uh... because you bought more of of this stock

They beat. They had upgraded to overweight at Wells. I know I took kind of a hard turn, but I want to get that in before we take our break. So I already talked about the macro implications of it. Let's talk about the stock implications. I think the direct analogy here is Oracle. I want everybody to think about Oracle. Three, four years ago, it was a mid-teens multiple. Nobody cared too much. It was a database software company. Then they got into Oracle Cloud infrastructure and the stock took off.

off. And the multiple went to the low 20s. I suggest to you, I submit to you that that is what's going to happen with Cisco. And it's happening right now. It's been happening over the last year. Josh, I ask you to take a look at it. This is a stock that should be trading in the low 20s, and it's trading at about 16 and a half times. It's buying back shares like crazy. It's got a good dividend. And most importantly, the fundamental drivers, they are growing their business. They are beating, beating, raising,

There's nothing negative to say about this company. The fundamentals are remarkably strong. And what's going to happen now, we identified it at the end of April as finally becoming a quote-unquote momentum trade. And you're going to see a lot of funds follow suit and begin to acquire this company based on momentum itself. We're in from April 30th. I thought the report was excellent. And there is obvious AI spend on network. Cisco is a really great example of the point I'm trying to illustrate. The way we used to think about that stock is it's effectively –

a call option on g_d_p_ if global economy is growing faster than normal cisco will have more orders at the global economy is slowing cisco will have less orders i think the stock

at least, has broken out of that paradigm. And they're now thinking about Cisco as, you guessed it, a more defensive version of its former self. It's no one's going to stop their internet usage. This is the most, no business, oh, it's an economic slowdown. Everybody used the internet 20% less. It's not going to happen. So Cisco is the reason that I can be kind of like negative and

Debbie Downer and worried about the future but still fully invested. So we've owned this for years in our discipline growth strategy. The thesis has always

always been. It's returning to a growth company. It should re-rate. But this is why I can be uncomfortable with a 21 times multiple on the market and comfortable being invested at 15 and change times here. So that's how I marry my pessimism with fully invested. It's very infrequent that you can identify the pivot point. It's happening right now. The multiple is re-rating, and it should. It's happening right now. I'm so grateful we were early. Let me move on. And just one more thing before we take the break. I just want to clean up

the situation in united health real quick but you know you know the uh... in terms of what the committee's doing

because we do have some moves, but a move. You know about the stock at this point. It speaks for itself, okay? Now there's a DOJ probe into possible Medicare fraud. That's the new news of the day in what's been a miserable week. And the trajectory of this stock over the last month or so, at least, has not been pretty. Mizuho today on UNH said there's some risk that the name gets removed from the Dow. So that's a big deal.

I mentioned the move. Steve Weiss is fully out, essentially making the point to us. He was unable to join us today, but making the point that this criminal investigation changes things. Stephanie Link, we reached out to for obvious reasons. She has defended this stock repeatedly, has bought more at times of weakness today, telling us that she wants to, but is not, not yet. And she's not doing anything today.

So just wanted to get that in there. By the way, Eli Lilly added to UBS top picks list. It replaces UNH. Joe, give me something real quick on that before I bounce. So we sold UNH out of the Momentum Fund basically 18 months ago. Eli Lilly remains a core holding. It literally trades like a biotech. And there's another company that's marching towards a trillion market cap. OK, we will take that break coming up. President Trump versus Tim Cook. Well, that took a new turn. Tell you exactly how.

Bring you the sound. We got some committee moves coming up too after this break.

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All right, welcome back. We're watching shares of Apple today as its China shift begins with Foxconn's $433 million chip deal in India. Speaking of India and Apple, the president calling out Tim Cook for the third time in some four days over the company's India plans. Steve Kovach joining us now with these latest remarks. Let me make of this.

Yes, I want you to take a listen to what the president said earlier today because he was calling Tim Cook out publicly again and a little bit more forcefully and specifically than he has before. Take a listen. I had a little problem with Tim Cook yesterday. I said to him, Tim, you're my friend. I treated you very good. You're coming in with 500 billion dollars. But now you're building all over India. I don't want you building in India. You can build in India if you want to take care of India because India is the highest, one of the highest tariff rates.

nations in the world. It's very hard to sell into India. And they've offered us a deal where basically they're willing to literally charge us no tariff.

So, Scott, look, that is not the outcome the president was looking for. Of course, two weeks ago during Apple's earnings, they painted a kind of new picture of what its supply chain will look like. Now, the plan is iPhones sold in the U.S. will be sourced from India, while other products like Macs, AirPods and watches are going to come from Vietnam. Meantime, China will supply the rest of the world. So far, though, no commitment from Apple to make iPhones in the United States.

which seems to be the goal of this Trump administration. Now, India iPhone production has been ramping up significantly since the pandemic when supply chains slowed down due to China's COVID lockdowns. It's

It's been ramping up again in response to tariffs. Still, they need a lot more capacity in India to produce the approximately 65 million iPhones sold here in the United States each year. Oh, that's why Trump now says he has a problem with Tim Cook and Apple and the public pressure campaign he's been on all week. Remember, Cook and Apple have made a ton of overtures to Trump and his administration. Cook's personal $1 million donation to the inauguration fund showing up.

behind President Trump as he was sworn in, building a new factory to make AI servers in Houston, all of that.

But despite that, Apple shares have been underperforming its peers. It's the only mag seven stock still negative since Liberation Day on April 2nd, down about 5% since then. Cook has also been credited for managing the relationship with President Trump in the first term better than his peers. But it doesn't seem to be working out so well this time. Don't think Trump's going to be happy until he can hold up an iPhone that's made in the USA, Scott.

Well, then he's going to be unhappy for a long time, more than likely, because the idea that Apple is going to actually manufacture an iPhone here in the United States seems far-fetched at best. Yeah, far-fetched is exactly what it is. I mean, unless you want... There have been so many analysis of this, Scott, about how much it would cost to make an iPhone here, and that's because Tim Cook smartly built the supply chain over in Asia to be maximally efficient at manufacturing.

from the raw materials and the processing of those materials to where the devices themselves are assembled. That's why they're able to put out so many iPhones that they do. India is becoming another source for them to do that. But to bring all of that overseas, bring all of that somewhere in the United States would create just an enormously expensive iPhone. So if he does want to hold up that USA

made iPhone, it's going to cost like what, 3000 bucks or something like that. So yeah, it's just not in the cards here. And the question now becomes Tim Cook kind of in the crosshairs of the president because of this issue and how he can mitigate that situation going forward. Yeah. Steve, thank you. Steve Kovach with the latest. Josh, you know, is this a literal sideshow and irrelevant in the big picture or is there legitimate political risk?

lurking for this company. So during the first Trump term, we used to have a daily angry tweet from the White House at a corporate leader and the stock price would have a huge negative reaction to that.

It was pharmaceutical companies like Pfizer, and it was tech, and it was automobiles, and everybody had to just kind of accept, like, these landmines are going to be part of the environment that we trade in. And the more you don't react, the better off as an investor you'll be. I don't think anything's changed with that dynamic. The simple fact is India is one of the most tariff-heavy countries in the world.

And for the very simple reason that they're a developing nation. And if they didn't erect tariffs, the West would have come in and completely taken over their entire economy. So they protected industries. They protected specific companies. They protected specific investments that they thought it was in their national interest to do that.

And to a large extent, they still believe it's in their national interest to do that. Trump seems to be able to sort of get past that. He's got a good relationship with India. Does he want more and more press releases about Apple shifting from China to India? Definitely not. Defeats the purpose. But here's a very simple fact. There's only one product.

that Apple is manufacturing at scale in the United States currently, today. That is the Mac Pro, not the MacBook, what I'm using here, the desktop. And that is the very high-end version of the desktop. It's an expensive product to begin with. They make it in Texas. Can they do more things in that fab in Texas or elsewhere? 100%. Same thing if you're an Apple shareholder. You're not rooting for Apple to throw its margins away.

and start trying to build, you know, AirPods in Manhattan. I think what you're saying is just do some more press releases. Like, make a few more things. And I think Tim Cook is smart enough to understand that's exactly what he needs to do, and he will. Yeah, and let's just think about what if,

the president gets a lot of what he wants. What if we're manufacturing a lot of other things in America? Are there really going to be enough workers? Are there going to be enough resources to be building iPhones, which they shouldn't be in America? You're absolutely right. As you started, I thought about seven years ago, the Boeing Air Force, one tweet, you know, sent the stock down for a couple of days, leaving all the other Boeing issues aside. It was a complete, you know, it was a complete canard. It meant nothing. All right. Let's get the headlines now with Sylvana Henao. Hi, Sylvana. Hey, Scott. Good afternoon.

The Supreme Court today allowed the mother of a black man killed following a routine traffic stop in Houston to pursue an excessive force claim against the police officer who shot him. In a unanimous ruling, the justices faulted a lower court for focusing only on the moment force was used in 2016 and not the moments leading up to it. Now, this means the civil rights lawsuit filed by Ashton Barnes's mother can move forward for now.

A Wisconsin judge pleaded not guilty today to federal obstruction charges for allegedly helping a man evade immigration authorities in her courtroom. Lawyers for the Milwaukee County Circuit Judge Hannah Dugan say she's innocent. On Wednesday, her lawyers filed a motion to dismiss claiming she has judicial immunity for official acts. The trial is set for July.

and two researchers have concluded a copy of the Magna Carta Harvard University bought for less than $30 is actually a rare version from 1300 issued by Britain's King Edward the first that's what one of the researchers estimates that this copy is worth millions of dollars though Harvard says it has no plans to sell it Scott Wow talk about return on investment yet it's like 27 bucks I think I read they paid Silvana thank you Silvana and now

Up next, a new addition to Josh Brown's Best Stocks in the Market. We have more committee moves still to get to. And I'll tell you why David Einhorn, what has him still believing big time in gold? Let's say your small business has a problem. Like maybe...

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Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson report.

We're back, another addition to Josh Brown's Best Stocks in the Market. What'd you just add? Toast was added, and this is a stock I already own. And we've talked about it a lot on the show, so I don't want to go crazy here, but this name just took out its 2024 high of 43, has not traded above that level since Thanksgiving of 2021. The story here is very simple. The technicals look great, of course, but the fundamentals are really, I think,

deserving of a little bit of the spotlight. They're now at 140,000 restaurants and other customer locations. They basically have the whole industry in a chokehold. That's a 25% year-over-year increase. The last time they reported earnings, 31% annual revenue growth. And the profitability, this is the thing that people said, oh, they're giving away the handheld equipment. They'll never get to profits, blah, blah, blah. Profitability

profitability margins have increased significantly, 20.5% to 25.9% as of the latest quarter, just over the last couple of years, and trending in the right direction. So I'm long the stock already. I'm in it as an investor, not a trader. But the fact that it's hit the best stocks in the market list, breaking out as it is, I think lends itself to people that want to try to capture the momentum of that short-term breakout as well. All right. You can buy

By the way, catch that group of stocks that Josh has, his best stocks in the market. You can go to cnbc.com forward slash Josh Brown. You can get all of that, and I hope you do that. Let's do a couple moves. Jimmy, you bought more Lockheed?

Yeah. Well, because I think it's undervalued. I think it's been knocked down for several months on perceptions that the F-35 isn't going to get the orders that it frankly already has. It has a tremendous backlog. I will say I'm a little worried. I was talking about Cisco earlier and buying into strength. This is a stock that if you look at the chart, you're going to say, is there something wrong here? So look, I am building the position because I see value there. I think it's a great company developing great products, but the chart does look a little terrible. So Scott,

That gift that I didn't give you in UnitedHealthcare, you may have a new one. Jenny, you have a new buy in front of me. Ethan Allen, ETD. Right. Brand new. Tell me more. Brand new for the equity income strategy. First of all, if you're going to buy this, put a limit on it because it's really small.

Earlier, Josh said this is all so long as the consumer continues to spend. And even though I'm not terribly optimistic and I don't know if the bull market rages, I am perpetually optimistic that the consumer will continue to spend. So Ethan Allen trades at 13 times earnings, has a 5.9% yield, and has been on my dividend income screen forever. But I think the reason it's different now is because I think they might actually have a competitive advantage

advantage in a way that they haven't before. 70% of their products are manufactured in North America. Sorry, 75%, 40% in the US. A lot of their costs of goods or their goods are

actually sourced to. So, like, their wood all comes from the U.S. That is not true for their competitors. Most of their competitors source a lot from China. Here's the real kicker: zero debt. So, while their competitors, like Restoration, have been expanding and growing like crazy and taking up all the market share, that's been fueled by huge borrowing. These guys have zero debt. The CEO has been there forever. The vast majority of the compensation comes from that dividend. So it's well covered, well protected. They just announced earnings. Earnings weren't great.

but they still should earn $2.14 this year on a $1.54 dividend. So the dividend's well covered. I think it's a cool place to hide out. What's their AI strategy? Okay, if you're being serious about that, they actually use it. So you can go online and design. You had one of those stocks, right? I'm being serious. Yeah, but you had one of those stocks where you could go online and feed your room in, and it can populate the whole room, and you can say, hey, show me a gray couch, show me a purple couch, whatever it is, and that's an interesting, smart way to use AI. But

It's not completely unique to Ethan Allen. That's what all those furniture companies are doing. But you're troubled by the environment, and you think consumers are going to buy furniture? Well, I think that to some degree, everyone's still going to buy furniture. Just Ottomans. Only Ottomans. No, but I think they actually have the opportunity to pick up massive market share. Because I think they might lose competitors, right? And so if we said, let's say before we thought there would be 8% earnings growth ahead.

Let's cut that to 4%. But Ethan Allen could have higher earnings growth because they're going to lose competitors. When you're importing from China and you had really low tariffs before and now they're only 30%, that stings. And when you have debt maturing because you borrowed and borrowed and borrowed to build enormous amounts of stores and now you can't refund that, you can't redo your debt at a low rate, you have problems. So I think they're going to lose competition. We are going to take a break and we come back.

Private investments inside your 401k. The biggest 401k plan provider yet says it's happening. Is it good or bad for your retirement plan? We will debate that next.

All right, welcome back. 401k giant Empower will start allowing private credit, private credit, private equity and real estate investments into some retirement accounts later on this year. It's the biggest plan provider yet to offer those investments. They align with Apollo, Franklin Templeton, Goldman, Neuberger, Berman, PIMCO Partners Group and Saggard. What do you think about this?

There's an overwhelming demand for access from retail and the every person to get a piece of alts. So at my firm, we manage about $300 million worth of 401K assets for plan participants. Most of the wealth management customers who are business owners are responsible for these 401K plans at their companies for their employees. And I'm sympathetic to the idea that there are asset class returns that should be made available to regular people that

aren't currently. And what better place to do something like private equity or private credit than in a 401k where you really have the long time horizon and you could actually sit and own something for seven years and let it play out. So that's the good part. The bad part is, I think for the time being, the fees will still be so high and the types of funds that get in will not be the very top echelon funds catering to small investors. So

I like the idea. I'm not just not jumping into it personally because I don't think the costs will be low enough to justify what the returns could be, even in the best case scenario. The partnership funds, since you bring it up, are likely this is according to The Wall Street Journal, by the way, are likely to charge fees ranging from one to one point six percent of the portfolio balance annually. The average target date mutual fund is about zero point two eight percent. To your point, the spread between got to come down. It will. Jimmy, you got to take.

Yeah, I do. I mean, first off, we know why this is happening, right? The private equity firms, the alternatives are running out of endowments and sovereign wealth funds to fund their new funds. So they've got to find new sources. That's fine. These are still valid investments. My comment to follow on with yours, Josh, is that these are not necessarily for the IRA because of the tax efficiency. These are so long term. Why not have these outside of your IRAs?

IRA and have the less tax efficient high yield bonds, short term trading funds in your IRA. All right. Quick break. Or 401k. Sorry, 401k. It's all right. We'll take a quick break. Come back. We'll do finals. And Einhorn on gold. Gold is about the confidence in the fiscal policy and the monetary policy. And since we bought gold in 2008 or so, it's been very clear to me that the U.S. fiscal and monetary policies are both too aggressive and create a risk.

That was David Einhorn yesterday with me at the Sohn Conference. And Greenlight, wow, they're off to a great start this year. Almost 12% net of fees through April, in part because of a big bet on gold that continues to work. And he clearly remains bullish, Joe, on that. Remember Gundlach telling me gold's going to $4,000. What do you think? You're playing it through equity. Yeah, and you've got to pull back right now to the 50-day moving average. I agree. I think gold's going a lot higher. Newmont mining is the way that we play it.

For the viewers, just own GLD. Just own gold outright. We can't own GLD because of the quality factor looking at revenue growth. That obviously doesn't exist with GLD. But Newmont Mining is the way we play it. It's been ripping. It's lowest level today, obviously, since April 10th. But nonetheless, you know the direction that it's been going. Join me, closing bell, by the way, Chris Harvey.

Of Wells. He's had the highest target on the street. And we'll find out where he thinks stocks are going from here now that we feel like the environment may be better than we thought just a week ago. Finals. Farmer, you're up. Adobe has just crossed above the 50-day moving average. It's an ugly chart, but I think this one will have legs. Joey. Microsoft continues to be the best Mag 7 in the market. All right. Jenny. Kinetic back down on the price of oil, 7% dividend yield. Thank you. And Josh Brown. Kinsale cap.

This is an investment of mine, long-term investment. They have their annual general meeting next week. All right. Good stuff. Look forward to seeing you in a couple hours on the closing bells. We see where this market ends this day. The exchange is now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.

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