The State of Stocks 4/28/25
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All right. Welcome to the Halftime Report. I'm Scott Wobner. Front and center this hour, the bounce as stocks look to continue their tariff tantrum rebound. We are debating and trading these markets with the Investment Committee, as always. Joining me for the hour, Joe Terranova, Jim Laventhal, Bryn Talkington, Steve Weiss along in a moment. We will check the markets. A little volatile morning. We are red across the board. That's not how we started, though. And who knows where we will end. But

But, Joe, it does speak to what the week is ahead, which is huge. Jobs report and, of course, four mega cap earnings reports among a very busy week of big names that are reporting. As of Friday's close this past Friday, S&P has now recovered 50 percent of its losses from the February all time high to the April 7th.

post-liberation day low. And JPMorgan today says they are tactically bullish. It's not at all clear, but that this could go on for multiple weeks. The pain trade, they say, is higher. You agree? Okay, so let's talk exactly why I think the jobs report and the earnings from these four mega caps are so important. Because I think when you look at this rally, how have we gotten here? We've gotten here because there's been a pivot

clearly, and the administration, more Treasury Secretary Besson, less Peter Navarro, less Howard Lutnick. If you think about where we are relative to last Tuesday, Treasury yields since last Tuesday are down 20 basis points. So the equity market seems comfortable rallying as long as the bond market is actually going to go with it.

The problem is there's this vulnerability to the rally. I would call it delicate, right? This has been a real delicate-- it's not a robust rally. And it's reflected in something that I looked at over the weekend. If you look at where the majority of the buying is coming from, it's in short-dated options.

If there was real conviction, you would see the longer-dated options rallying. So that delicate nature requires that you need a new catalyst. And hopefully you get that this week from the jobs report and from really strong earnings from the mega caps. Lastly, the way I'm playing it, I still have these S&P futures. I'm riding them higher. I have a 54.50 stop.

in the futures, which is the equivalent of 54 and a quarter cash, 25 handle premium. I've been riding these hires since last Tuesday. Do I have real conviction in it? No, I don't. But I'm playing the momentum. Jimmy, I feel like delicate's a good word to use just because it implies both ways. Like if you're going to get a number of headlines at any minute, in any hour, in any day of the week, and the market's going to react to it, your position, whether bullish or bearish, is delicate.

because you just don't know what the headline is going to be and what the movement in the market is subsequently going to be. Well done, Joe. I mean, you summed it up in one word. I completely agree. And the problem for me is this all does still really revolve around trade. I agree with you the jobs report is important. And, of course, hearing CapEx plans from Microsoft, Meta, everybody else is very important.

important, but this thing will go up and down in the big sense on what happens with trade deals. Here's why I say that. We pretty much know that there is damage being done in the economy. We can talk about, you know, ship loadings out of China and we can figure out that there's going to be backlogs if this ever gets restarted at Los Angeles Long Beach. That's after we deal with what might be empty shelves this summer in some stores. But the equity markets right now are looking past that.

they are saying that as long as we get some memorandums of understanding some broad outlines of trade deals and as long as those are enough to delay further reciprocal tariffs then trade can pick back up and the big damage can be at least temporary in nature. That's what the equity markets are saying. It's a big lag effect. It's a big lag effect. The labor market

is a lag effect. And that's part of JP Morgan's tactical note. They're not naive to what they say the issues are. They just say that we're still one to two months away from seeing the negative impact of the trade war on the real economy, exactly to your point. Delicate, again, to the point we're all making here. If you think about the job market, companies are still loathe to lay people off. They remember 2021, 2022, how hard it was to get good workers. They're still loathe to lay them off.

But if they get into a situation where profit margins, which have been high, start to meaningfully contract or worse, go negative, they will lay people off. There is a finite amount of time to get these trade deals at least set up in the general concept. The other thing, Bryn, holding the market up, according to some, is the fact that the labor market hasn't unraveled. Like JP, Goldman Sachs' trading desk points out today that retail hasn't blinked.

yet and likely won't until you get a deterioration in the labor market. So, you know, retail's hanging in. Some suggest we're tactically bullish that we could continue to move higher over the weeks to come. And Tom Lee suggests that the probabilities today favor a V-shaped recovery for stocks. You buy it? I don't know about a V-shaped recovery. I think that

To add to Joe and Jim's word of the year, I would say range bound. And so as it relates to labor, your first point, understand with immigration stopping, I think the labor force participation, that denominator could go down because there are just less people in the labor force. And so I think, though, you also have what we're hearing is people somewhat have higher, you know, people that own companies, PTSD. I'm talking about small, midsize. I'm not talking about Facebook laying off people from reality labs.

have PTSD of not being able to have enough people at the workforce because of COVID. So all I hear is people are hanging on to their workforce in mass. I do think this range bound is really important for investors from an allocation standpoint, because the 200-day, which the S&P is below, is at 5740. And so I think that that is a

a high level. It's somewhat like outer Earth orbit. We can get there, but it's very hard to punch through it. And it also is gravity, we'll say, on the downside, but we're below it. And so I do think we're in that mid-range right now. So I think we're turned. Maybe we can go up 2.5 or 3.5

before we hit that 200-day. But looking historically, you need a catalyst to punch back up above that. And so I do think range-bound is what investors should understand. And like a 52.50 to a 57.40 is a really good range. And so right now you have a little bit on the upside.

One last thing you guys were talking about, you know, obviously Google's numbers and the importance of the hyperscalers. You know, Goldman had a good quote that if you look at CapEx this year, they're expecting 9% growth in the S&P 500 and CapEx. If you take out the hyperscalers,

that growth goes to 1%. So if you want to talk about manufacturing in the US and spending, these companies, Google already came out, these other companies coming out this week, that is very important for CapEx to the US, which also obviously creates jobs if you take that down to the data centers, et cetera. Weiss, I feel like you got all bared up just as the market was getting tactically bullish.

Like if you bought the Weiss S-bomb on the halftime report, that was the buy signal. Who knew? I don't hear Weiss. I don't know if the viewers hear Weiss. Is he getting bleeped out? All right, we've got to fix Weiss. We've got to fix his art. Was that Weiss? No. I apologize. We'll work on that.

I'm back. Okay, there's Weiss. So you obviously heard my question. You got more bearish than most for certain. And the market clearly appears over the last handful of days that it's become a tactical opportunity for people.

Yeah, so let's look at it. I've been very cautious on the market since Trump took office. I've said that repeatedly, said it then, and continue to say it. Also, most of my exposure, and I wasn't as sure at one point, has come from indices. I have sold some stocks where I do believe that this will have more than a headline risk damage to it, meaning headline risk to the upside.

such as Amazon and Google because of the cloud. And I don't think it was spectacular cloud report from Google. It was okay, they met the numbers, but going forward, there will be challenges.

So that's why I do with indices. I don't do it with stocks a lot. I'm sitting and I can take those indices off pretty quickly because they're so liquid. That's what I did. So I don't generally catch all the bounce up, but I do participate. Now, specifically as to last week, if you recall, my position was when I dropped the S-bomb, was that, look, the market's going to bounce on headlines. It

It's a little bit oversold right now. And as you get these headlines come out, without substance, you can get the bounce. I still think the market should be sold. So there's the disconnect. The disconnect right now. Okay, so you'd fade this bounce that we got. Yeah. It was a...

it was a pretty violent bounce uh which no surprise i mean surprised me as it was happening but in quick recollection why should it be surprised the drop down was uh was just as violent so um but the way i look at it there's a disconnect between what the averages are telling what the indices are telling you and what's happening underneath the economy britain is dead on uh that

After COVID, you don't want to let your employees go. There are two levels of employees. One are the skilled laborers, and as our economies become more automated, including the warehouses, you need more skilled laborers.

However, you still then have the laborers that are, I call them day workers, unskilled laborers. And those, they're still not going to let go. Usually they're the ones to let go. So what does that do? So if you have to hold on to the workers with the business levels resetting lower from when you hired those workers, you're going to hit the margins of the companies. Where are you going with this, Weiss? I feel like you're telling us a riddle. What are we doing here?

I'm looking at our executive producer like, can you translate this for us, please? Most people don't need a translator, but I'm happy. Yeah, I knew you were going to come back with something like that, but that's okay. Costs are going to stay high for the companies while revenues come down. We're a consumer-led economy. You see what the approval ratings for Trump are. You see what the thoughts are on the economy, where it's going. So the consumer is drying up. I've heard that time and time again. So...

Revenue's down, margins higher. What do you have? You have a lower S&P reporting number that we're going to see if tariffs don't get handled. And Korea came out today, South Korea, and said, we don't even know if we can get a deal done by July. So you'll see another 200 fictitious deals announced, but they won't mean anything. Supply chains are frozen.

So I believe the economy is going into recession. Well on its way into recession. That's why I think you sell the pops in the market. All right. Let me just pick up on the point of economic cooling and why it's so important. Because this is why to me the bond market, and you've done a great job talking about this,

The bond market is driving everything. And after Friday, if you see a 10-year reverse, Scott, go back to 450, that's a problem. You have to understand this year, at the end of the year, you have an avalanche of maturity, especially in the corporate market. You're going to have a tremendous amount of issuance that's going to be put into the market.

And if yields are going to spike, you're going to have a problem there. So the economic cooling is actually exactly what we need. If you're talking to me about a 10-year at 4%-- I mean, when you say what we need in quotes, only to get bond yields lower, like what you're seeing today, right, yields are at the lows of the day, and stocks are at the lows of the day. Because then you revert back to the economic cooling trade.

being negative for yields and being negative for stocks at the same time. Yeah, listen, I think a lot of what's going on today is maybe some short-term profit selling more than anything else. I do think there's this correlation where it's bonds higher and possibly equities higher. So I guess what I'm really saying is if you lose the bond market again, forget it. Game over. The equities are going right back down lower. Sure, but yields, if concerns about the economy only pick up,

Yields are likely to continue going lower, not higher. That's the direction I think we need, though. As long as the dollar is stable. I think that's the direction that we need. I think that helps the corporate issuance market. I think that does the work of the Federal Reserve that seems hesitant to go out and actually give the market rate cuts.

Tony Pasquarello at Goldman is looking, I don't think this would surprise people, more gap up, gap down price action. In other words, the volatility is going to continue. However, he does say that for the first time in two months, the technical factors tilt net positive. When you look fundamentally, I mean, the dynamics of what's happening right now are much less clear. And he says what you see is what you get. I think that he, Tony usually has a pretty

good and insightful way of like distilling down what the institutional community is feeling because that's who he deals with. He's head of hedge fund coverage at Goldman Sachs. He's talking to the biggest investors in the world on a regular basis and trying to set the level

on what everybody's thinking. Yes, you could get some pops, but you could also get some drops until something more material and fundamental changes about the environment that we currently find ourselves in. And I think you will get some drops. I agree with Joe that today's drop is probably just a little bit of exhaustion after four days of up.

And we were up earlier in the day, so I think there's just a little bit of exhaustion. But the real meaningful drops are likely to come because I don't think we're done with the hawkish tweets or whatever you want to call them. I mean, this is a president who likes to stir things up, and he's almost certainly not done. The question again becomes how much damage is being done and how long will it last? Unquestionably, there is meaningful damage being done.

The flip side of this is that sentiment has turned a little bit. This is what Tony Pasquarello is talking about. You see it in the advanced decline line, which has more work to do, definitely. Only near-term sentiment. Big picture sentiment is still bad.

It is, but that near-term sentiment, if it can continue, which is a big if, it's a big if, it becomes momentum-oriented. It gets to what a lot of people are talking about is escape velocity to the upside. Let me be clear, we're not there yet. No, but maybe you get there, Bryn, with the mega caps this week. Maybe Meta and Microsoft on Wednesday and Amazon and Apple on Thursday.

start to do the job of reminding people why that trade has worked so well, why they talk about CapEx continuing unless they see something dramatically changing. Wedbush's Dan Ives, he expects strong results from big tech this week as a exactly what we're talking about. The two words he uses confidence booster. We need it. We need one.

I think everyone's saying that the Mag 7 were dead a few years ago or a few months ago. I think you have to revisit that. Now, they're all different. And I've been really clear. I think you're going to continue to see dispersion. Tesla aside, Tesla's not in that trillion-dollar club anymore. The other trillion-dollar members are actually pretty cheap outside of Microsoft and Apple.

which are definitely the most expensive of the two. And I said earlier, I think the CapEx spend is real. That goes through our economy. And I think these stocks are cheap. Look at Google announcing the big buyback. These are really healthy companies that are, most of them are CapEx light or capital light companies. And so I think Microsoft

is going to be a great example because Satya has said very clearly that their spend, the amount of spend and where they spend it is going to be dependent on where the economy is. And so I think that's what we're going to learn from Microsoft is their view on the economy and how that spend will permeate itself throughout the economy. Yeah. Joe, a reckoning for the Mag 7 is going to test this market. That's what...

THE WALL STREET JOURNAL IS TALKING ABOUT X THE RALLY THAT WE'VE ALREADY SEEN BACK IN THESE NAMES.

Nvidia is down fairly substantially today. It's the reason why the Nasdaq is at the lows of the session, down more than 200 points, one and a quarter percent. So I always like to talk about position and sentiment. And I think in both those instances, they work in the favor of the Mag 7 because position and sentiment obviously has been worked off from being aggressively bullish over the last six to nine months. Meta and Microsoft,

there has been relative outperformance so far year to date. That seems to be where investors are paying somewhat of a slight premium. Apple, which I do not have a position personally, nor does the ETF hold it. Meta got a massive price reduction today. Did you see that? I did. At loop? Yep, I did see that. To 695 from 900. Why? Because of China and softening consumer data. You don't often see

a reduction like that. They were at 30 times. They've taken it now down 25. They look at the issues as transitory, but nonetheless, and they urge people to buy on the weakness, but still.

reset your expectations is is the the words of the day yeah i i also think that price target is aggressive at a bare minimum you're talking about nearly 60 rally for the stock i i think that meta as i said before i think the management of the balance sheet i think what they've done with margins i think you'll be okay there i think you'll be okay with microsoft i'm concerned about apple

I think Apple, where it is, is probably fairly valued, but the revenue growth keeps disappearing. That's a problem. Apple is not growing its revenue like the other Mag 7. And when you think they're beginning to grow the revenue, then you see the actual contraction. So that's a headwind. I also think that when we continue to look at China and the importance of that geographic region in stimulating some growth, it's been missing. And I think we can expect that it's going to be missing for...

fairly longer than we anticipated. On the plus side, you're going to get exemptions from the administration as it relates to Apple. Yeah, we'll see. We'll see. I'm sure that headline's coming somewhere. So Amazon is the one name that I own personally. I bought it at $194. I own that because I think that AWS obviously has a lot of strong momentum behind it.

but I also think the diversification of the product mix has been very strong and I think the advancement more and more into streaming is going to benefit this company. Weiss, you think the setup's better for Microsoft since, let's take that one, it's tomorrow, sorry, it's Wednesday. Reiterated by Jefferies Goes 475.

They say the setup is de-risked, right? This stock had basically done nothing and it just started to get something going again. Maybe read through to ServiceNow like they do and SAP and even Alphabet and say, well, those results were better than feared. So the macro is more resilient than some have had feared. So it's time to be bullish that story again.

Yeah, you know, Microsoft is the one that I think about most because this is a core position, as is Meta, two of my bigger positions. Meta, I think, is my biggest next to Taiwan Semi. But Microsoft, I find the most confusing. And the reason is that they haven't executed tremendously over the last year. The stock has been sort of in this narrow range. I

I don't know, you know, it's really a question of degrees if it's been de-risked because it depends where they miss. If they miss on cloud, if they miss on their core business,

Those are issues. I really don't have an opinion on it other than I'm sticking with the position because it's a long-term compounder and it can get through any storm and ultimately it'll grow into whatever valuation it has. I feel the same way on Meta, which I actually think is more de-risked despite the bounce it's had over the last few weeks. So that would be the horse I'd play in this.

I do think the market is susceptible to headlines, more on the positive side in terms of bouncing. So I don't want to make it that I'm tactically bearish here right now. I happen not to be. So it'll be an interesting week, though. And that could change. This quarter is really, and the market moves dependent upon earnings and guidance, which hasn't been good. You're not tactically bearish?

So you're not fully hedged? I am bearish. I'm not technically bearish right now, today, for the next few days. I'm overall saying the market still trades below 5,000. That's unquestionable.

You know, in my mind, that's where we go. But right now, you've gotten so many negative headlines, as we saw last week. The siphons paused. It's a profit taking. I still think the overall direction was slower. But if we come out, OK, we've got an agreement in principle with Japan, then the market will bounce up. Nothing's happening on China.

Brynn, chips look to be the most controversial space right now. SMH is down more than 2%, lows of the session. That would be the first negative day in five because you've had a nice bounce back in names like NVIDIA. But as UBS says today, that the controversy around that name

remains high. You have the report about Huawei and their new chip to match Nvidia. That's probably weighing rather heavily on the space. You've had multiple price target cuts related to Nvidia as well. But a lot of the names in that area are all sort of tied together the way that they end up moving. Nvidia goes lower, Broadcom does too, and then AMD and Micron and on and on and on and on. But what about Nvidia right here?

Yeah, well, I think the ban on their chips, the H20 chips, is real, right? I think that's why they wrote them off, wrote that $5.5 billion off, because they were specifically made for China. And so I do think, though, if you actually read the article, it's like Huawei is developing, they're testing. I mean, so is AMD, so are these other companies.

and so i think for you know nvidia i think this is being priced into the stock today it probably continues to be a laggard all year long but like 2018 that was a wonderful time to accumulate shares of nvidia then and so i think everyone's trying to copy them we all know the chinese tech companies are wizards at taking apart putting back together

stealing our ip and then creating their own product but nvidia still to me is the is is the top dog in

in this race. And so, but that being said, I think sentiment is negative. These headlines will not stop. And so I think this is an accumulation here. The vol has been really low on NVIDIA. So you really can't even sell calls right now and get much premium. So I think you just have to sit and ride this out because they're still in pole position in terms of innovation, innovation and technology within all of this space. Weiss, what do you got quickly on that?

Taiwan said me you know China is increasing their. You know their training drills so. That's what I worry about. You know one day I can wake up and sell the other thing I'd say is that the chip companies are frozen.

And the reason is, before they go ahead with the building of new chip factories, they don't have any idea of whether they'll be able to sell the chips that they make here to other countries, or they've got to build smaller chip factories, the fabs, because they will only be able to sell domestically. So everything seems to be up in the air, and that sort of can make you cautious on chips. But I haven't cut back Taiwan's semi-annual yet.

All right. We'll take a quick break. We come back. We have our calls of the day, including a double downgrade from one of Joe's stocks, which means we debate it. We trade it next. How do you make an Airbnb a Vrbo? Picture a vacation rental with a host who's showing you every room like you've never seen a house before. Now get rid of them. There you go. No host ever. Now it's a Vrbo. Make it a Vrbo.

The U.S. and China are competing for global leadership. The country who wins will define the world we live in. U.S. international assistance is vital to our national security. It helps prevent terrorism and avoid costly wars. It fights diseases and saves lives. It helps keep America as the number one economy in the world. U.S. international assistance protects our interests at home and abroad. If America doesn't lead, China will.

What's your go-to drink before a flight? A West Coast IPA or Manhattan? Find the detail that moves you with local beer and craft cocktails at the Chase Sapphire Lounge by the club. Learn more at chase.com slash sapphirereserve. Cards issued by JPMorgan Chase Bank and a member FDIC. Subject to credit approval. Welcome back. Calls of the day. We have a double downgrade for Lily. It was to reduce from buy at HSBC to...

This price target, I got to do like a double take, Joe, to 700 from 1150, that the risk reward is no longer attractive, that the market has assumed a significant market share for Lilly with potential economic sensitivity to the adoption curve for GLPs. We think these expectations might be revised down. Wow. They report this week, too. That's huge.

I've been a strong supporter of what we've witnessed in terms of the price action in Lilly over the last several years. Everyone knows it's been one of the significant contributors of the ETF. But this is a good note. This is a good note that really gets in-depth into the challenges that Lilly could be facing. Now, if you're just purely studying price, okay, you're looking at momentum,

let's get past that it looks fine but now when you look underneath the hood you look the things that are important to me you look at their revenue growth their revenue growth there's too much variability to it so you talking about forty four percent revenue growth in the last quarter but then in the second quarter 25 we're gonna knock that down to 27 percent you've had a very strong gross profit margin in the 80s but again as you move through its through the course of the year that begins to decelerate so the

The possibility of deceleration in revenue growth is real. And the other thing that I think you have to think about, besides the fact that there is competition now, besides the fact that Amgen is coming with a weight loss drug, is, is there elasticity to an economy that begins to contract for people utilizing the drug? This market, this move in the market on the stock chart today says to me that the market kind of says, yeah, whatever.

I mean, the stock's down 1.4%.

on a double downgrade and a price target going from $11.50 to $700. And maybe they don't believe that there is as much economic sensitivity to the adoption of GOPs. I mean, I suppose they're suggesting that if we go into a recession, then people are going to be, and because consumer sentiment is where it is, that they're going to be less able and apt to

pay for these GOP one drugs that are not covered by their insurance companies. I think the calendar helps Lilly and us just because they're reporting earnings on Thursday. So you're going to wait until you hear what the earnings are. You're going to wait to see what the guidance is before you actively begin to pare down the position.

Look, all I'm saying is I have an openness to what I read in the report as someone who obviously has a bullish position in it because of my ownership in the ETF itself. So I have an openness to look at this. And I do see some of the things that they see that could be challenges as you move ahead. United Health price target got cut to $552 from $592. It's still overweight at Piper.

Weiss, you bought a little more of it today, UNH? I did. And that's--you know, if you take a look at the stock, absent that big drop after the quarter, it's really defensive. On down days for the broader market, it tends to trade higher. But on a fundamental basis, look, when we heard that announcement from Humana a while ago about their stars rating losing business,

United Health picked that business up apparently or some of it and just misunderstood how that would the risk of that book of business as well as V28 which I've mentioned repeatedly a number of times which goes to the coding and what are allowable expenses by the government for health care. So I think right now it couldn't be more negative. It's still a permanent compound in my view. So it's not quite a big position yet but

But I'll look forward to building as we get greater clarity throughout the year. Let's hit Chipotle, Joe, as well, because it's not often that the stock gets a downgrade. It did today to hold at Argus on those comp numbers that we got recently, slowing same-store sales. Rising avocado, chicken, and pepper prices. Fierce competition among restaurants. Higher wages and store location costs are likely to remain headwinds.

You agree with that note? First time in the last five years you had the slowing same-store sales. I think what's interesting about the stock is the reaction over the last couple of days since they reported earnings. Guess what the stock has done? They delivered some real negative news. They lowered the full-year guidance, and the stock has actually had resiliency. It's actually rebounded.

which is a point you were looking for, too, you've been talking about. In all of the stocks that we talk about in this environment, you want to see stocks that give you the bad news. And the stock just either hangs in or goes up. Yep. All right.

Let's get the headlines now with Courtney Reagan. Hey, Courtney. Hi, Scott. Good to see you. North Korea has confirmed for the first time that it sent troops to fight for Russia in the war in Ukraine. State media reporting today that the country's leader, Kim Jong-un, ordered the deployment and that its troops helped regain control of Russian territory that was occupied by Ukraine. Both the State Department and South Korea have criticized the deployment as illegal.

The FCC will open a review of the spectrum sharing rule among satellite systems. The agency's chair, Brendan Carr, said today the decades-old rule limits power usage, which hampers better coverage from SpaceX's Starlink and other systems. The FCC says the review will allow for a boost in space-based telecommunications.

And in Truth Social Post Sunday, President Trump says he's bringing, quote, Columbus Day back from the ashes by reinstating the day as a holiday, as he accused Democrats of destroying Christopher Columbus's reputation.

However, Columbus Day was never canceled as a federal holiday. In 2021, former President Biden became the first president to formally recognize Indigenous Peoples Day alongside Columbus Day in October. Scott, back over to you. All right, Court, thank you. Courtney Reagan up next, the manager of the world's largest actively managed ETF. You don't want to miss his take on the current market environment, why this year is shaping up to be another record breaker for that ETF and the space in general. ETF Edge is next.

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Book the perfect summer getaway today with Vrbo Private Vacation Rentals. Your future self will thank you later. The U.S. and China are competing for global leadership. The country who wins will define the world we live in. U.S. international assistance is vital to our national security. It helps prevent terrorism and avoid costly wars. It fights diseases and saves lives. It helps keep America as the number one economy in the world.

U.S. international assistance protects our interests at home and abroad. If America doesn't lead, China will.

We are back on the Halftime Report. We go to Bob Pisani now, who has today's ETF bet. Jay, Bob. Scott, good to see you. We've been telling you about this potentially record year for ETF launches. 288 new ETFs have already launched this year, well beyond the 120 new launches at the same time a year ago. We could see 1,000 new ETFs in 2025. That would be an all-time record. Leading the pack? Act.

actively managed ETFs. Let's talk to one of the leaders of that space, John Mayer, Chief ETF Strategist for JPMorgan Asset Management. John, what are the major trends in active? What are the lessons investors should take away from this wild month of trading in April? - You know, ETFs represent about 40%, recently, 40% of the trading in the overall marketplace.

Actively managed ETFs are really, right now, this moment is a good time to focus on them because of the dispersion in the marketplace. An active manager can do bottoms-up research and focus on the individual companies or securities inside an ETF. It's really important right now. Yeah, so you oversee the world's largest actively managed ETF. That's the premium income ETF, JEPI, we call it, J-E-P-I ETF.

This seems to have satisfied a big need for investors to have downside protection and generate income at the same time. How does JEPI work? Why has it been so successful this year? - That's a good question, Bob. JEPI is a unique fund. It offers a yield that's approximately 9%. Volatility is a friend.

As volatility increases in the market, so too does the income provided to the investor. And also, given that the options roll on a weekly basis, that increases the income. When volatility declines, also offers the opportunity for upside in the underlying portfolio. So you're selling calls and using that to generate income. Index, yeah.

Okay, so the ETF world also is seeing very big inflows into ultra-short bond funds at the same time. You manage a huge one, JPST is the symbol there, 4.5% yield, big inflows again. Short-term investment grade corporate, what's involved here? Again, this is actively managed. You're buying and selling bonds all the time.

all day long. Yep. You know, investors are looking to diversify their portfolios, particularly on the fixed income side. Given that yields have come down from 4.9 to 4.2 on the 10 year, this fund yields four and a half percent. And investors are looking to preserve capital while at the same time earning a relatively safe income. And it happens. This is actively traded. I want to point out you're not tied to any index here. Actively managed all the time, all the time.

Answer the original question, though. What's the takeaway from this wild month of trading? You manage huge amounts of active funds. What advice do you have to give about investors about watching this trading action this month? When you see the market move 5%, 7% down, you should expect that a few days later you'll see an upside movement in the market. And if you miss those upside days...

They're gone. And that's going to really impact your long-term returns. It's time in the market. It's not timing the market. That's an old Jack Bogle phrase, and I love it that you said that. Thank you, John. Appreciate it. Much more is coming up on where the money is going in active management coming up on ETF Edge. That's 1.10 p.m. Eastern time. John will be joined by Mike Akins from ETF Action. That's ETFEdge.CNBC.com. Scott, back to you. All right. Bob, thank you very much. We look forward to that. Coming up, we have a committee move. We have a buyer.

We have a buyer of a stock that is reporting earnings this week. He's going to join us next with that move. Welcome back. I mentioned a committee move. A buyer of a stock which is reporting earnings this week. It is Spotify, and it is Bill Baruch. Why did you buy this name? Which reports tomorrow before the bell?

Spotify falls within that theme we've been leaning into relative strength, relative outperformance. And a lot of that becomes a little to no tariff impact. Spotify is using AI and ad generation at targeting. The technical setup is absolutely terrific.

They're growing earnings terrifically last quarter, 589% year-over-year earnings growth. They're expected to show 127% year-over-year growth this quarter. Margins are expanding. The thing, too, here is sizing it properly.

We grazed quite a bit of cash in some what may be considered speculative names at the end of March, but this is a momentum play. I'd like to see the continuation and the technical setup coming out of earnings. Now, we sized it about 75 basis points.

If they miss and this thing's lower, it's going to have a little impact to us. But if they really beat and this thing extends and breaks out technically, I see adding to the position and generating 1% of alpha over the next year in a really strong environment. Year-to-date chart looks like a mountain range. Why?

Well, it's been resilient and growing earnings tremendously. And you had a big technical breakout at fourth quarter of last year. The pullback over the recent weeks as well has hit that support level just perfectly. And now it's rising again. So we're building a little bit of a wedge pattern. If this can break out and make new highs, I think there's a lot of strength behind it.

I mean, it just looks like it's at that level of maybe short-term resistance if you look at where the prior and most recent move was, right? We're looking at a chart. You're on the phone, and I don't know if you have a screen in front of you at this moment, but if you see, you know, in the later March,

Obviously, the stock moves up, then it moves down. Now it moves up right to that spot and looks like it's sticking right there. It is. $640, the high early this year. If we get a good earnings report, I expect it to break out above there. What I really do like is when we extended in November, we created a little bit of a range, November to the end of the year. You can kind of draw a wedge there. And the apex of that wedge was exactly that.

where we hit on support, about $480. So it's been trading really well technically. And if this breaks out, I do think that there's 50% to 100% upside in this stock. We have to see earnings growth continue to support that. But I think there's a lot of momentum behind it.

Okay, good stuff. Thanks for calling in. Joe, you own it too. Up 111% in the last year, up 56% since we bought it on Halloween. What has happened? It's become the classic momentum stock. Tomorrow they report earnings. Getting a little nervous now.

Bill's buying it. Malcolm Etheridge bought it last week. I'm sure it's on Josh's best stocks in the market list. You have to hear tomorrow that they're going to raise prices and that they're confident that they are going to maintain the pricing power that they have. There's been the comp that this is very similar as it relates to music.

to what Netflix has been able to do and that there's a degree of recession resiliency. We'll see. Let's see what the conference call looks like tomorrow. I think that's going to be incredibly important. But I will say this. There's a lot of people that are now buying this name. Yeah. All right. Good stuff. Thanks for that. Up next, Santoli with his midday word after this break.

Senior markets commentator Mike Santoli here at Post 9 with us for his midday word. As you, like everybody else, I think, try and figure out whether, you know, this rally back, the rebound deserves an A, a B? Yeah.

I think it's pretty highly in terms of the character of the rally and a lot of the sort of internal stats and how strong and persistent it was for a few days. And so everybody knows you can tote a lot of those signals up and say, well, this has a pretty good risk reward set up historically.

But you have to be looking at six to 12 months. In the near term, I do think that almost was the easy part in the sense of you just had this huge burst of relief from, OK, we're going to be somehow backtracking a little bit from maximum tariffs. Bond market calmed down quite a bit. The idea that economic kind of activity didn't just sort of sudden stop.

And now I do think it's a matter of you have to see something a little more tangible. Now, up 4.5% in the S&P last week, up 14% from the low. So giving a little bit of it back

being short-term overbought, not that big a deal. But we didn't get escape velocity. There's a lot of other things you would look at that say, you know, we're making a kind of a run for the downtrend line. Not yet. And again, we still keep struggling under the April 2nd close. We've got to get through important things this week to maybe get to a point like that. Mega cap earnings, obviously, but even more substantially, probably because of where the narrative is, the jobs report. Probably, that's right. Yeah. So jobs might be one of those things where just sort of the app

of an outright negative is going to be fine, even though nobody's going to want to extrapolate too much from those numbers. Yeah, and that's, you know, the stock responses to earnings have been pretty good so far. We'll see if that does continue. All right, I'll see you at 3. Good stuff. Mike Santoli. The setup is next. All right, back at 40K for the Dow Busy Earnings Week. As you know, beyond the mega caps, including Visa, which is tomorrow. Bryn Talkington, you first.

Yep. I mean, this company consistently has low teens earnings growth, 65% operating margins. They're innovating with tokens, blockchain. They have a global presence. I think this is kind of an easy one going into earnings. They will continue to deliver and then warrant their above average multiple. AstraZeneca is tomorrow.

AstraZeneca is just a solid healthcare company, solid pharmaceutical company. Why do I say that? Because it's got a broad spectrum of treatments. It includes oncology, cardiovascular disease, rare diseases. It's got an attractive valuation, decent dividend yield, and it's in the defensive sector. I like it. S&P Global?

Tomorrow? S&P Global, this could be a difficult quarter. Comps are going to be challenged. Think about the issuance outlook. Not very good for high-yield investment grade. What about Sherwin-Williams, which is tomorrow as well? PMIs haven't been good. Housing market hasn't been good. That said, though, pain sales have been strong. All right, quick break. We'll do finals on the other side of that. Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime Podcast now.

I see on closing bell three o'clock Eastern. See what this market's doing. Anastasia Amoroso, Ed Yardeni, Alex Kantrowitz, Lauren Goodwin and Samir Samana. We'll take you through that final stretch. Let's do finals. Steve Weiss, you're up first. Goldman Sachs. There's an article in the journal today, which is what I've been talking about. Now's the time to get in front of potential clients, increased relationships with existing clients. And that's what they're doing. So we'll come at this even stronger than they were. All right. Thanks, man. Bryn.

Apollo Global, earnings come out Friday, so maybe dollar cost average. We should get 15% to 20% earnings growth this year by this name when it's on sale. The farmer. Qualcomm. I don't usually step in front of earnings on a final trade. They're reporting on Wednesday. But here's the thing. The multiple has come way, way down, which I think is pricing in an earnings disappointment that may or may not happen. Okay.

Jyoti? Checkpoint Software. After last week's earnings report sell-off, you get an opportunity to buy it at a better price. Okay, so we're currently red across the board. We're back below 40K on the Dow. We shall see, and I'll see you at 3. 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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