The Markets, the Middle East, and your Money 6/23/25
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Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the busy week for your money. Investors watching the Middle East, the Fed chair on the hill over the next couple of days. Any developments, of course, on trade. We are trading all of that with the Investment Committee, as always. Joining me for the hour today, Joe Terranova, Steve Weiss, Amy Raskin and Bryn Talkington. We will check the markets here as we continue to watch almost everything. We're green still across the board.

Feels, Joe, like we're a little bit of wait and see what happens in the Middle East. Retaliation by Iran. What our next move might be. Thought it was interesting to move in oil up a little bit. Now it's down. The dollar was up against the euro and the pound. Last check, the dollar index was down. Rates were down. What do you make of all that?

that? 6 p.m. last evening, if you watch the opening of the market, you had the expectation based on where everything that was markets were opening that ultimately this could be a moment. Maybe the black swan event was unfolding for 2025 oil up near seventy eight dollars. S&P futures down about 60 handles and everything quickly reversed. It quickly reversed. And I think the follow through since then

is signaling some form of a message from the market which emphasizes the resiliency of the market. Now, you don't have to embrace that. You don't have to embrace the resiliency. You could push up against the resiliency, but you can't ignore the resiliency. One thing I think is remarkable and has to be shown, if we could show the chart of the EIS, that's the Israeli ETF, which I purchased on that down day of Friday, June 13th, if we could throw that up, that's

That has now reached all-time highs today. And I think that just speaks to this message in the market that you can't ignore, that there is remarkable resiliency. And then, by the way, today, you get a little bit of a pullback in yields on the chatter that the Federal Reserve might be facing a little bit more pressure to act quicker than they expected. Bowman made some comments regarding, which sounded pretty dovish today.

Raymond James Weiss tries to game this whole thing out. They say increased escalation, short-term higher oil rates, the U.S. dollar, and mentions of stagflation in the media won't be good for equities. Decreased escalation or a resolution is likely to mean the reverse and reward again the buy-the-dip crowd. The market maybe is making a bit of a statement today, as Joe said, but how do you see it?

I don't know where the dip is from what's happened in the Middle East. There really hasn't been one. It's been trading as usual. But it is the kind of market where if

Things are put to bed and everybody you know steps back from their position Then the market rally because this is a market that only knows one direction basically and that's up and that and that's what concerns me now I'm fully invested and I'll dress positions. We had closer earnings. I'm not as optimistic as others but

You know, I was at an event this weekend and there were a number of investors there. And I got to tell you, this really didn't come up in conversation. You know, we talked about oil for maybe a heartbeat, and that was it. Keep in mind, with the U.S. being in such a strong position as an exporter of energy. Yeah, and a producer of oil. Right, that we can cut off, if you really want to, you can cut off the exports and just use them here, right, in order to keep oil down. Saudis, they may also be willing to produce more.

Nobody wants Iran to have a nuclear bomb. And it's in the interest of every Middle East country as well. So they may say that they disagree with the U.S. strike, but it was the right thing to do. And I got to believe behind closed doors, they're all giddy about it. So I think that this is much to do about nothing. So then Neuheiser just back in view.

And you are 3% on the S&P. Right. They are in view because hopefully you'll have some room, you'll make some ground up on the tariffs, which have not been. And then we'll get to earnings. That'll be a different story. What do you think? I think that's the tariff issue is the big issue. We're three weeks away, less than three weeks away from July 9th. The longer we don't talk about tariffs, the better it is for the market. So actually, you know, all of the emails that I got this weekend was,

report after report after by the war. Wars tend to be inflationary. Those tend to be better for equities, at least over the last few decades. But I do think we still have July 9th looming out there, and there needs to be a resolution about that. I think it's going to be hard to get a new high,

before that or really a sustainable, durable new high before we get resolution on that? Because it's just the range of outcomes is so wide. A couple of pretty dovish Fed comments of the last 48 hours, if you only count the trading days as those 48 hours. Bowman today, Brin, and then Waller the other day saying, look through tariff inflation

I'd be willing to cut in July if all things are equal and you don't have a big issue between now and then on the inflation front. So you got that. And then the market clearly seems today to be trying to look through whatever's happening in the Middle East. Unless, of course, something takes a bad turn and then it'll have to assess that in real time. But for now, what do you see?

could easily have to rate cuts this year- the fed has been very it's very tight right now in terms of will say the fed's financial conditions the markets aren't tight. But I also think we already had our black swan event for the year that was April second. Most the poster board which caught everybody on by surprise and so I think it's pretty rare to have two black swan events in the year. I think the market has really digested anesthetized and somewhat moved on from the trade. The trade

tariffs. So far I think you're going to end up having the bill passed in whatever form that looks like that's a positive. I think you're going to have trade agreements of some sort that'll be a positive. I will say that in Q one earnings actually grew twelve percent.

So in that kind of environment I think that you could punch above an all time high which were a whisper right now but I agree with Amy it just doesn't seem probabilistic that we would do it right now. On before earnings and with all these other will say temporary

that will have the market will have to climb that wall of worry but with growth strong unemployment low. The Fed cuts one or two times. I think that just continues to be a positive. And there's only been one time to buy the dip and that was the week after April second. Everything else is just rallied and. Or since then so there hasn't been an opportunity to buy the dip. It's been a

Until that week. Interesting technical commentary today, Joe. Roth says, if there's a fly in the ointment, that's the terminology they use, it's the breath. Broad-based New York Stock Exchange shows just 44% of its members are above their 200-day threshold.

Hard to have a convincing bull market when over half the stocks are below trend. Jonathan Krinsky at BTIG says risks are elevated heading into month. And you've got some medium term. The bulls have the upper hand above 5800. But.

they think there's more risk coming and the level gets tested sooner rather than later. So how do you take, we talked about the fundamentals and there's a lot of unknown baked into that, but what about the technicals on top of it? - Okay, so I'm not gonna take issue with either of those perspectives on the technicals. I think what that means for the viewers, what it means for me is maybe you're not enthusiastically buying at these levels, but I don't think that means that you're taking the other side and you're aggressively selling either.

for a larger retreat. I think what we see in front of us is that the third quarter can have many challenges for a variety of the reasons that Amy suggested with tariffs and Steve's concerned about a deterioration in earnings. But I do think on the other side in the fourth quarter, you're going to benefit from the tax bill, the regulatory relief, and the potential that the Federal Reserve cuts. So don't

don't go too far away from the market. Yes, the market could fall 57, 5800 very easily. But I look at that as a pause that ultimately would refresh. You think it's it's it's dangerous to get too negative. Yeah. As this market continues to prove to people who are who have been more bearish or cautious, it really has been a resilient market in the face of pretty much anything except for moments here and there.

Agreed. And five years ago, which was a different market, forgetting about the pandemic, I'd probably be 20%, 30% that long. But this is a market that makes a fool of you if you're not fully invested. But you've got to be in the right areas. It's not as if every stock is up. You still have almost half the stocks below their 200-day moving average. Well, that's what we said, just 44%.

are above the 200 day. - Right, right, and I'm emphasizing that. So look, my positioning is predominantly in the large cap tech that we've talked about that have done pretty well, and I'm staying there, and that's Meta, Microsoft, Netflix, and then idiosyncratic stories

such as FTAI Aviation and Leidos. So that's where you make it up. So it's really a question of positioning, as you point out before. So Tesla's a big story today, Bryn. Let's address this. The limited launch of robo-taxis in Austin on Sunday. UBS raised their price target to $215.

at $2.15, stocks at $3.54. They reiterated their sell rating, so they remain negative, even if they bump their price target well below where it currently is. Dan Ives was overjoyed by the experience. I mean, how else do you describe it? He says the golden age begins. I'll leave that wherever.

The point though is that Elon Musk has bet the farm on this. He's bet the farm on autonomous. Are you optimistic as a shareholder that they're going to deliver? I think when I look out five years, robots,

licensing FSD just not FSD solar the collective of the company. I think it's very positive when I look back over the weekend at. My returns in my trade I've actually made more money selling calls on Tesla.

itself. And so I think that's where investors need to understand right now is that I think that. Three eighty to four hundred is the cap. We saw last week when he with the White House or what have you got down to two eighty. And so I think that the challenge to me to get above three eighty to four hundred. Is that actually the current business which is cars. Is that

underlying fundamentals are eroding. And so I think is a lot of premium in the stock and I do think I would never underestimate.

Elon and his team. But I still feel like selling Paul's against the majority of my position is going to be a way where I can have a better total return than just being long only at this point. It's a really interesting perspective to to say that the underlying fundamentals are deteriorating. I mean, that's the bread and butter of how one would typically assess a stock. Phil LeBeau joins us now. Of course, he covers the company. So

You have, as Bryn suggests, Phil, fundamentals that don't look good, OK, against this moonshot, if you will, that rolled out in a limited fashion. And investors like Bryn are trying to figure out if you put all of it into the pie, what it's going to taste like at the end of the day. Is it going to be good enough to be what investors are betting on? And nobody knows, Scott. That

That's the black box of this entire thing. Was it a successful weekend in terms of there was no major disengagement? There was no video that got posted of an autonomous robo-taxi doing the wrong thing on the road? No, there was not. All of the videos from the influencers show what appears to be a normal ride. But keep in mind, this was extremely limited. When you look at the launch yesterday, you had...

10 to 20 model wise with the full self-driving technology autonomous vehicle technology there was a safety monitor in the front seat not in the driver's seat but in the passenger front seat there was also a remote backup driver monitoring every single ride if they had to engage or or they didn't engage we don't know nobody's told us that and the frat the flat fee for those who took the service

$4.20. Guggenheim out with a note today saying, by the end of this year, we believe the pace of expansion needs to be closer to a sprint to justify lofty robo-taxi expectations that are embedded in the Tesla valuation. As you take a look at shares of Tesla, that's the bottom line here, which is what Bryn was talking about, which is,

You believe in Elon Musk, you believe in autonomous, you believe in optimists, then you believe that five years down the road they are going to be perfectly positioned. But between now and then, Scott, certainly between now and maybe the next couple of months, you have no idea. I mean, yeah, they will probably come out and say, we did X number of rides and everything was fine.

But we don't know. We don't know what this is going to look like a year from now. Will it be as widespread as Elon Musk has said it will be or will it be much more subdued? And if it's much more subdued, then the question becomes, if you're a Tesla investors investor, do you still believe that by 2030 it will be as large as many project it will be?

Yeah, thank you very much for that. I mean, there's always been a little bit of built in. We don't know, Joe, as it relates to the boat with that reporting for us. Always a little bit of we don't know. Yes. When it comes to this, this company, you know, we don't know what the sales are going to ultimately be. Do they match the projections that are put out? Will this end up?

matching the, you know, some of the hype and the hyperbole that's been around all of that. Of course, we're doing the 420 thing again, too, which I'm sure everybody's taking note of as well. Yeah, I'm sure Waymo's taking note of that as well because they're charging a much higher price. So this is a very deflationary effect when you're telling me this is $4.20. I'm not sure. I think Waymo's somewhere around $15 or $20 for a ride. But this comes at a moment where

We don't know, but it's critically important that we do know. Because to Bryn's point, you've seen deterioration in the revenue growth for this company. They need something to revive that revenue growth. And a lot of the analyst community is expecting that ultimately this is what it's going to be. You have a decision to make coming up.

you're going to be thinking about your rebalance in literally a matter of days. So the rules at the end of July will really have this convergence of two factors, one of which continues to deteriorate, and that's the quality factor. The quality factor on Tesla doesn't look good. Now, you've had a 38% recovery so far quarter to date.

So the technicals and momentum look a lot better. But, you know, it kind of just snuck into the portfolio. 125 holdings was probably ranked right towards the bottom. So it snuck in. I don't know if it can maintain that. But I'll say this. 10 to 20 vehicles being monitored. I'm not so sure you get very excited about that until you have the firm evidence that they could scale it. But you're talking about 1,000.

of robo taxis in LA, San Francisco, not just in Austin. You know what nobody mentions, and we've heard three people talk about it? Profitability. This is not going to be profitable for them for a long time. It's not like Uber where the cost for maintenance, the cost for insurance, the cost for the vehicle are absorbed by the driver.

So all Uber does is split the cost, right? They split the fare, rather. So with these, and I've got this from good sources on Waymo, it's going to be a long, long time before they make money. Number one. Number two, Waymo is cheaper than Uber. We reported last week that San Francisco rides were expensive.

under 10 bucks wherever you're going in town. So substantially cheaper. But Waymo's more expensive. Right, but they're not going to stick with that cost. That was just media. He's great at playing the media. To me, I appreciate Vince Perspective, and she's been dead right on this and made a lot of money on it. I still think it's the most overhyped stock on a long-term basis I've ever come across.

If you take the Mag 7 in total, yes, it's been a huge question mark.

for the last many months, as we know. And so too is another name that everybody has been thinking about, and that's Apple, which is in jeopardy of posting its fourth straight down month. It is the only MAG7 name below its 50 and 200-day moving average, the only MAG7 stock that's negative over the past three months. Wedbush's trading desk notes that Apple's start to the year down 20% year-to-date is the second worst start in more than a decade. Now,

There are some questions as to what this company is going to do about its perceived back of the pack as it relates to AI and the arms race there. Our tech correspondent, Steve Kovach, joins us now because the name perplexity is out there again. And Bloomberg reports that Apple executives held internal talks about possibly making a bid for that company, which everybody seems to everybody in quotes seems to want a piece of.

Yes, Guy, it's almost as if the M&A team at Apple were watching us two weeks ago on your closing bell at the beginning reacting to that because perplexity was on everyone's mind. And yeah, you're right. Bloomberg did report last week that there were some internal discussions at Apple to buy perplexity. And those actually come on top of

comments from services boss Eddie Q last month where he said Apple's considering a partnership on search with Perplexity, sort of like it does with ChatGPT already on iOS. Now, what Apple could get from a Perplexity acquisition, obviously improvement on Siri search, but it wouldn't really help out as much with that delayed personal Siri that uses the data on your iPhone. Now, Perplexity is built on top

of AI technology from OpenAI and Anthropic. That means it doesn't need massive CapEx investment like we see so many hyperscalers doing. But at the same time, Apple almost never makes huge acquisitions like this. Usually small companies will pay tens or a couple

$100 million in that range, never really above a billion dollars, except one exception, of course, that $3 billion acquisition of Beats in 2014. That helped them really supercharge their Apple Music service. Instead of building it from scratch, they were able to deploy that within about a year or so. Now, as of last month, Perplexity raising more money, CNBC reports, at a $14 billion valuation, put a premium on top of that, and that would be Apple's biggest acquisition

acquisition ever. So the question for you guys to kind of kick around now is, can Apple pull off its own AI products after the setback this year, or does it need to make this acquisition to jumpstart it just like it did with music over a decade ago, Scott? Yeah, Steve, thank you. Steve Kovach. I mean, Amy, can you do this organically, or have they already proven that maybe not, and they need to go out and do something big and bold, the likes of which they don't really do, but maybe this time's different.

Yeah, I'm going to be in the minority on this, but I'm actually very happy that Apple has not engaged in this AI race and spending the billions and billions of dollars for what could be potentially a questionable return. So I'm actually, I mean, if they went out and bought Perplexity, it would be nothing to them. I mean, it would be, they have so much cash flow that it would be fine. And I think it would be more of a spoiler for everybody else because if they put Perplexity on there,

on their phone, that would be detrimental to chat GPT and Microsoft and Facebook and everybody else that is trying to get into this race. So I think it would be more of a negative for others than it would be necessarily a positive for Apple. But I'm actually, I,

I just read a report on Bloomberg. Brock is spending a billion dollars a quarter, a billion dollars a month on equipment and with $500 million of revenue. Like the spending for AI is out of control. And we talk about revenue and returns and profits like they're nowhere to be seen. I would be very surprised. That's just in the biggest pipe dream conversation that we could have. The

This kind of thing gets announced. I'd be shocked if Apple stock didn't go up quite nicely on an acquisition like that. Absolutely. The question is, what are they missing? Are they missing the intellectual capital or are they missing the technology? I think that's the biggest question right now. What is it that they don't have? I don't think they're missing the intellectual capital. I mean, somehow they just haven't been able to do what the investor community has wanted them to do.

I've been saying for a decade that Apple doesn't innovate and everybody said, oh, yeah, it's ridiculous. They copy. They copy well. Well, guess what? Here's where you can't copy. You need your own AI engineering talent, which they obviously don't have enough of or spent enough on. Keep in mind, Apple...

of all the big cap tech companies spends the smallest percentage of their revenue in R&D. So now you can't copy it, now you have to innovate. And guess what? They can innovate design, but they can't innovate functionality. - So maybe they just do an acquisition. Maybe that's why this time is different. - But Steve's saying they don't have the talent,

and and i think that he doesn't know you don't know what i mean i don't know but they're missing that to guess because they haven't been able to do it right while others have so that they're clearly missing something perplexing he's not a big company perplexing is only a couple of a hundred employees company right so you know yes it's low-hanging fruit because it's not that expensive

15, 20 billion gets it done. That's not big of a deal. But remember, 15 is not getting it done because it's raising at 14, 15 and getting it done. 25, call it 25, 30. Right. But they're sitting on nearly 130 billion in cash. But I think, yeah, to your point, they have to do something. They do. And I think the stock will rally. I'm not saying they have to do something. I'm

I'm posing it to you, you all. If they did something, would the stock react? I don't know why. How would investors not like it? They need AI because it's the price of admission now. So whether it's profitable enough for Microsoft or for Meta or for anybody else, the point is they have it, so Apple needs it. The perception of the market's clear, Bryn.

The market believes that Apple's behind. That's not my point of view. That is not anybody's up here. The facts are the facts. That's what the market believes. The question is, if they do something bold, does the market view it differently? That they can catch up, if not overnight, close to it, rather than try and do this organically like they've been attempting to do to date.

Where Steve is spot on about innovation or where they have innovated so effectively is with hardware. Okay, with the glass, with the thinner design, with the original iPhone, with Johnny Ive. They have never been an innovator as far as I remember in software and this is a software issue. And so I don't think they have the right people there. That is why Meta is paying, will pay $100 million just signing bonus while they're bringing people. That's why Satya,

partnered with Sam Altman is because they also did not have the intellectual prowess to be able to do this. And so I think that Apple- Is that going so well though? Yeah. I mean, it was all hoopla. What is going well for Microsoft stock? Financially, it's going great. Well, for Microsoft stock, it's going very well. But obviously, there's divorce. It's going very well. Well, I mean, I don't know. Some of the commentary and the reporting recently might suggest otherwise as to what the future of that relationship truly holds.

But Apple obviously needs to do something, whether it's by themselves or through an acquisition. I mean, they need to turn the narrative around. It's clear that the market has placed its vote.

Yeah, it's clear also from what they've produced, they've continually pushed back the introduction of real AI features that are frustrating consumers. If you went out and you bought an iPhone, the iPhone 16, and the promise was you will have these AI features and you don't have them yet.

So they've got to do for their reputation. Now for me, my standpoint, I wouldn't buy perplexity. I'd go out and buy a bunch of engineers, make a big splash about that. I think that'll serve you pretty well also. I think the argument that Apple historically doesn't make big acquisitions and the biggest that they made was in Beats with Beats for $3 billion. I don't think that works here. Yeah, they were able through Beats to advance the innovation surrounding Apple Music. Remember, everyone wanted to buy Beats.

Pandora and Spotify. I wanted to buy Netflix. Well, that was streaming. And now you have Apple TV. But in this case, I

I think that this is nuance. What's the difference? I think it's different. No, no, I'm saying if you wanted Apple to buy Netflix for the Apple TV and streaming side, then how could you possibly, I'm not saying you are, how could you then make the analogy to this then? I mean, it seems like the same kind of conversation you would have. Because when I was advocating for the purchase of Netflix, the stock was beaten up, it was down.

versus Perplexity, which is hyped up because there's so much VC. I was with the VC, large VC, and they said, "The only thing we're investing in is AI. We're going pre-seed, we're going concept, we're going seed, we're going round A." That is all they're doing. So there's so much hype driving those valuations. A company like Perplexity will only return capital to the investors in this round if they do another round and it'll be a liquid or if they sell.

So there's no way to get it back on a fundamental basis.

Right. But they can sell. And that's why they could do this deal. And again, I don't think it would be any sweat off Apple's back. But I don't actually think anybody's not buying an iPhone because Apple's behind in AI. I don't think people are really switching and saying, I'm going to go to another hardware platform. No, I don't think they're switching. I just think they're extending their market. This is a stock issue versus a fundamentals issue for Apple. Oh, I don't know. Maybe it's a combination of both. We're going to take a break. When we come back, calls of the day. We have five bullish calls on five committee stocks. We'll trade them next.

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Upfront payment of $45 for three-month plan equivalent to $15 per month required. New customer offer for first three months only. Speed slow after 35 gigabytes if network's busy. Taxes and fees extra. See mintmobile.com. All right, let's do calls of the day. Caterpillar target to 414 from 396. Truist reiterates that as a buy. Weiss, you own the stock. Yeah, again, for me, it's a hedge against a heavy, heavy tech portfolio and growth portfolio. We got some good news today on the nuclear plant that's going to be built in New York if they get approvals.

so so obviously that'll help the caterpillar so i i think that with the reshoring on of america which has been going on now for a number of years it'll help them quite a bit they'll may lose the chinese market but they can make it up here joe constellation very much part of that story that weiss just mentioned according to the journal new york to build one of the first u.s nuclear power plants in generation um it would be on the grounds of the three existing uh

Potential sites under review would be to include the grounds that are already operating, all owned or majority owned by Constellation.

So Vista got their price, Vistra got the price target up today, Constellation got the price target up today, both at JPMorgan. How do you see this? This is all part of a larger allocation within a portfolio where utilities now are being thought of the way oil was thought of 15, 20 years ago. So critically important as it relates to serving data center demand. You're seeing deals with a lot of the mega cap companies like Constellation with Meta and previously with like Microsoft. I think it's secular.

I think the momentum is clearly secular. I know Vistra is down today and people on social media are saying, oh, that's an indication of some form of exhaustion. Yeah, maybe in the near term it is, but longer term, I think you have to have the exposure. I like Constellation Energy a little bit better than Vistra, a little bit better positioned, and it's a longer term holding, I think, for anyone that gets involved. Amy?

Yeah, we own BWX in the nuclear space. It's been a moonshot up 40% in the last few weeks. So, I would sort of hold off adding to it here. But longer term, we really like the positioning. They've won a number of contracts recently. Canadian company, about $13 billion market cap. Can we get a one-month look at that, guys, so we can see what Amy's talking about? The move that the stock's had in the last handful of weeks?

there you go there you go exactly yeah it looks a little better exactly tells a good story there doesn't it yeah it's it's been a great call okay uh eog target to 140 a couple bucks higher uh ed wolf yeah 138 to 140. yeah big move there you take every dollar you can get exactly i will um no we like energy generally i think um the rest of the world is responding to this trade war by stimulating and so um we've seen u.s production sort of peaking and turning down

So, generally speaking, we like energy really cheaply priced and good low-cost producer. DoorDash.

52-week high, Joe. Upgraded a strong buy from outperform at Raymond James. Do not stare at the P.E. on this one because it's triple digit for sure. This is not growth at a reasonable price. This is growth, though, for sure. It's a name that's really been rediscovered in the last 12 months. If you remember back to 2021, this was one of those do-it-yourself type of names.

We have still not exceeded the November of 2021 high. It looks positioned technically to do so, although I have to tell you, I'd be a little bit cautious about going out and buying it up here. All right. Let's get the headlines now with Silvana Henao. Hi, Silvana. Hey, Scott. Good afternoon to you. Amid the growing tension in the Middle East over this weekend's U.S. attacks on nuclear facilities,

Qatar said today it is shutting down its airspace temporarily as part of a security measure being taken in the region. Qatar is home to a major U.S. military base, and the shutdown comes after Iran repeated earlier threats to retaliate against the U.S. in the region.

Major U.S. health insurers, including UnitedHealthcare, CVS and Cigna, say they'll speed up and reduce prior authorizations, which make providers get approval from a patient's insurance company before they carry out treatments. The insurer said today the change will affect commercial as well as

some Medicare and Medicaid plans which they say will benefit 257 million Americans. And credit scores will soon take into account buy now, pay later loans. Fair Isaac Corp, which is better known as FICO, announced today that

It's rolling out a new model to factor in those loans. Now, the short term loans, which often play out with installments over several weeks, are among the fastest growing types of consumer credit in the last few years. Scott Silvana, thank you. Silvana Henao straight ahead. Your ETF hedge, Dom Chu, is standing by with more of today's market action. Halftime's back right after this.

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Ryan Reynolds here for Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a thing. Mint Mobile, unlimited premium wireless. I bet you get 30, 30, I bet you get 30, I bet you get 20, 20, 20, I bet you get 20, 20, I bet you get 15, 15, 15, 15, just 15 bucks a month. Sold! Give it a try at mintmobile.com slash switch. I'm

Upfront payment of $45 for three-month plan equivalent to $15 per month required. New customer offer for first three months only. Speed slow after 35 gigabytes if network's busy. Taxes and fees extra. See mintmobile.com. Just want to call your attention to a few things within the market now. You can see that the major averages have all turned red.

and oil has turned green. Remember, oil started the day up a little bit, then it was down, and now it is back up. There's your Dow approaching a 200-point decline. It's a Wall Street Journal story that moved five minutes or so ago that Iran positions missile launchers for potential attack on U.S. forces, U.S. officials say. So that's the Wall Street Journal. Reuters was out with a story as well.

The markets obviously are a little bit on edge, trying to figure out what the next move in all of this is going to be. If it's going to be retaliation from Iran, there are reports there we say there have been credible

Iranian threats to U.S. forces in the Middle East, according to those reports. We're going to watch all of that. The market did appear to move on that, both that and the commodities markets, too. Let's go to Dom Chiu. He has today's ETF edge. Dom, I'm going to send it over to you with the notion that there's a potential of me taking it back.

it back from you if we do get more on this. But for now, please proceed with ETF Edge. Of course, Scott. So we're going to kind of continue that theme with the geopolitical developments happening with the Middle East. How exactly are ETF investors reacting? So joining us now is Matt Bartolini, head of Spider America's research at State Street Global Advisors. They're the company that runs many of these

sector spider-based ETFs. Matt, for one of the things that we want to talk about first, we want to know exactly where you are seeing some of the relative activity within the ETF universe with regard to the geopolitical risks that have been mounting and are seemingly coming to a head over the course of the last couple of days.

Yeah, so I think what we've seen heading into this past weekend was a little bit of resiliency being built into portfolios. So you saw allocations into gold, you saw allocations into inflation-linked bonds, but also you saw some resiliency added through energy sector ETFs. Obviously with the spot price of oil popping as a result of the conflicts in the Middle East,

Energy sector ETFs have taken about $1.4 billion so far in June as investors start to position for potential rising oil prices, but I think also ongoing oil volatility. Now also, Matt, outside of the normal defense contractor type trade, gold type trade, treasuries type trade, are there other places that you would expect to see some more relative heat or activity if hypothetically...

things do escalate in the Middle East, as Scott was just pointing out with regard to some of the headlines coming out of the Middle East right now. Yeah, I mean, we have seen a lot of inflows into aerospace and defense ETFs just naturally. You know, if there is likely to be sort of escalated conflicts, but also just increasing defense spending, not only at home in the U.S., but outside the U.S., with Europeans coming to bear with some of their budgets.

that increase in defense spending could act as a tailwind to some of those defense stocks. So we have seen roughly about 700 million of inflows so far this month into aerospace and defense ETFs. That's one area. Another is just the sort of continuation of trying to buy sort of large cash flows. And so communication services sector ETFs, where there's a heavy amount of bias towards quality stocks and cash flow generation, have been some areas where investors are trying to sort of ride out this near-term volatility.

All right. Matt Bartolini at State Street, thank you very much for that. We're going to continue this conversation next at ETFedge.cnbc.com. Matt will be joined by John Davi, CIO at Astoria Portfolio Advisors. Scott will be watching all of this in the context of

of the Middle East. I'll send things back over to you. All right, Dom, I appreciate that. Thank you. That's Dominic Chu. We'll take a quick break. When we come back, we'll have more on these reports that I mentioned to you about possible and the potential retaliation by Iran, certainly making its way through the markets. You can see the Dow was down by near 200, come off a little bit, but stocks move negative. Right across the board, we'll have an update from Washington next.

Get to the latest now regarding the Middle East. Megan Casella joins us from our bureau in Washington, D.C. What do we know, Megan? Hey, Scott. So there are a number of reports right now about a credible threat on this idea of an attack against U.S. forces in the Middle Eastern region. The Wall Street Journal is citing U.S. officials saying that Iran has moved missile launchers into place for a potential attack retaliation against those strikes on Saturday. Reuters says that threat is specifically aimed at the

Al Udeid, US-run air base based in Qatar. This all comes, of course, as we already know that Qatar has shut its airspace amid these threats of ongoing reports, Scott. So all of this happening right now, I will say there are early reports

some of these attacks could be in place there could be explosions we are monitoring those as we come what we know for now is that there are credible threats at this point against u.s forces in the region scott i'll also flag the president is scheduled to have a national security meeting coming up just in the next 15 minutes at the white house we'll monitor that as well and bring you more as we have it i think it's important to note too that

that presumably the United States would be well anticipating this sort of maneuver without much question, given the base where it is, the proximity and the ease, if you want to use that word, for the reach that Iran could do. It is the closest base to that country.

Absolutely. Officials have been braced since these attacks on Saturday night for something like this to happen. They have long been saying that 48 hours, the first 48 hours after those attacks were going to be the biggest risk for U.S. forces, especially in the region. Homeland Security has also issued threats about U.S. potential attacks on U.S. soil, saying they're on high alert for that.

particularly cyber attacks, but of course the forces in the region were at most risk here. That not only the long-range missiles that they have, but even short-range missiles by the Iranians could reach those as well. All right, Megan, keep us up to date if you would.

That's Megan Casella down at our bureau in Washington, D.C. We follow all of that. Let's just throw the market again, too, folks, if we could, because now the S&P is back in the green. And it's going to be very much headline driven, as you know. We can show crude oil as well, which is going to be about as headline driven as anything. Obvious concerns about the Straits of Hormuz, the Strait of Hormuz, excuse me, and the movement that we have seen. And look at that move right there in crude oil.

down about 2.5%. What do you make of that? That's obviously, look, this is a headline-driven market. You have a lot of algorithms. You have a lot of quantitative trading that's going on right now. We're talking about crude oil below $72. We were talking 12 minutes ago about oil above $74, the S&P lower. So I guess kind of step back, understand the environment. Really, I wouldn't

be doing very much in this market right now. This underscore why you own the kinds of stocks you do, Joe, the Joe T, General Dynamics, Howmet, Leidos, Lockheed, Northrop, Palantir. So the cyber elements, and if you think about the ITA, which is the defense and aerospace ETFs,

What has worked better is not the defense component of that. It's been cyber. It's been how men it's been names like that that have really worked. It's been Palantir. So General Dynamics, Northrop. No, they're not working well in the strategy. The strategy is doing fine, but they're not getting the contribution that we had thought you were going to get from the defense. So let me just let's throw up the move in crude one more time if we could.

I'm wondering if the market, Joe, as well as you know the oil market, is trying to suss out the idea that if there is this retaliation by Iran, it's through the actions that

they're on high alert for already in the region with U.S. forces in that base in Qatar, rather than closing the Strait of Hormuz. Yes, I think you're spot on with that. I think that's exactly what this is. And Brian Sullivan talked about this before. The Strait of Hormuz has never been closed.

It really, you can't close it because the Chinese are so reliant on that oil. About 50% of their oil comes through the Strait of Hormuz. I think for the United States, you're talking about mid-single digits at best. So I agree with you. I think that's exactly what this is. And all the attacks on Iran were at the nuclear facilities rather than any of the oil fields. All right. So let's take a quick break. We'll come back. Santoli's on the other side with his midday word.

We're back. Senior markets commentator Mike Santoli is here with his midday word. Just looking at my computer, afraid to look away because of headlines that are moving along with the markets. What do you make of this? I mean, the market's obviously wanting to see what happens next before it places its next bet. Sure.

Reserving judgment and being apprehensive and kind of open to the full spectrum of possibilities is kind of the only rational stance. If you even want to make tactical decisions based on how this plays out, I think you had to have everything in mind ranging from

This is kind of a stage-managed-- remember, one, and Don was in the reports last night. Two, even the retaliation just brings you one step closer to whatever the resolution is, and everyone's trying to kind of save face, do enough. Two, it kind of breaks containment and gets out of control.

I think the equity market smartly defers to the energy markets to decide if we have to be intensely worried in the near term or if we can start to worry about other things. Well, I mean, if that chart looked different in crude, if crude was going in the other direction, if the market

deemed it more credible than not that the Strait of Hormuz was going to be closed, you'd have a different market picture on all accounts. 100%. And that's why I feel like there's almost no reason to try and outthink or second guess what the crude oil market's doing. Not that it's going to be right, but it's going to be the most sensitive to what is happening most recently that matters for the economy of the U.S. and the world. That being said, I think everyone has in mind, too, the history of these conflicts where

I said this a couple of times, including on our special last night.

These kinds of conflicts don't end bull markets. OK, so big picture speaking, right? In fact, they've ended bear markets a couple of times. We're not in a bear market, right? We're in this kind of holding pattern, five weeks churning sideways with about a list of about a half dozen things that we know need resolution. And we're not sure we're going to get them soon, but it could be, you know, the next coming week. So I think that's why we're stuck. OK, I'll see you in a couple hours. We'll see where we are and we'll discuss that. And that's Mike Santoli. We'll do finals next.

get back to our Megan Pesella down in D.C. with the latest. Megan. It's got a few more details to bring you here on the ongoing situation in the Middle East. A source on the ground in Doha has confirmed to CNBC that they hear explosions in the sky over Doha. Again, that's according to a witness on the ground there to CNBC confirming that there have been explosions. I'll caution. We do not know if those are from incoming missiles

or from outbound air defense systems. It could be either one, but confirming there have been explosions now. A senior White House official has also told NBC News that the White House and the Defense Department are aware of these potential threats, specifically, again, to the Al Udeid Air Base, the US-run air base in Qatar, and that the president is currently in the Situation Room, Scott, with the Defense Secretary, Pete

Pete Hegseth, as well as the chairman of the Joint Chiefs of Staff, Dan Cain, and some other officials currently in the Situation Room monitoring the situation as it develops. So they are still planning a 1 p.m. national security meeting in the Oval Office as well, but for now, monitoring all of this from the Situation Room. Scott. Okay. Thank you for that update. That's Megan Casella down in Washington as we continue to

watch all this unfold. You know, the market's reaction to this is, well, we expected something was going to happen and maybe it's not the worst of the options. And hopefully whatever if this, you know, we're talking about missiles from Iran being launched at our air defense system.

dealt with that and that no personnel, no American military personnel was harmed at all. Yeah, the most interesting thing

about this to me is that Qatar has been the home away from home for the heads of Hamas and other terrorist organizations. So they're going into their airspace and trying to take out American troops. Look, we were prepared for it. What they're going to fire are missiles that we can defend pretty easily. I think they've got to do something. But I should also think that that

you can't take comfort that it's not going to be a bigger retaliation, although I personally doubt it. This one's just for show. Yeah. You know, crude oil is sort of sit and put. How are you thinking about how this might play out?

play out and how investors need to be thinking about all this? Yeah. I mean, again, I think if you want to invest in crude, which we're overweight energy and we like the space generally, but it's from a much longer term perspective, has very little to do, nothing to do with this conflict right now. I do think it's a good sign that they haven't gone after the energy infrastructure in Iran. We're not hearing anything about the Strait of Hormuz. So I think oil is going to probably escape this. And what

But we're focused on longer term fundamentals. Bryn, I've got 30 seconds left. Why don't you give me a final trade as out of places that frankly seems. I know our viewers care about that and I'd like to give them that. Do you have a name?

Yeah, actually, the bug ETF. I think you have a secular tailwind and a cyclical bull market in cybersecurity up 11.5% year to date. I think it continues to go higher. OK, you can obviously see we're talking defense and cyber, as you might expect from the final trades. We'll monitor the headlines and I'll see you on the closing bell. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.

Thank you.

but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer.

As a business owner, you wear a lot of hats. One minute you're ordering today's inventory and the next you're planning tomorrow's expansion. It's complicated, but your business credit card should be simple. With the Signify Business Cash Card by Wells Fargo, you earn unlimited 2% cash rewards on purchases for your business with no caps or categories to track. Signify Business Cash, the deliberately simple business credit card. Learn more at wellsfargo.com slash signify. Terms apply.