The State of Stocks After the Fed Meeting 3/20/25
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I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. All right, Sarah, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the state of stocks in this still uncertain market. The Fed has spoken. Tariffs still loom amid serious questions about the economy. We will discuss and debate all of it with the Investment Committee, as always.

Joining me for the hour, Josh Brown, Jim Laventhal, Jason Snipe. We'll take you and show you the markets here a day after the Fed. Been moving around a bit, but we are green across the board. You've got a little bit of movement in tech today. Meta is worth keeping an eye on, getting a nice move. And by the way, back positive year to date. It's the only of the MAG7s that is now positive year to date. But Josh, it feels like we're still trying to figure out

how to react to the Fed, cutting the growth outlook, raising the inflation outlook, staying with two cuts. What are we supposed to do? What does it mean for stocks after that 10 percent decline in the S&P? Yeah, I think that's the right question right now because we don't have earnings season. So what we have between now and then is the macro stuff. The biggest takeaway for us from the presser is that despite the cutting of the growth outlook,

Powell is still pretty upbeat on the economy overall. He also dropped the hint that he's not so sure tariffs are going to cause that uptick in the services inflation, or if they do, that that's necessarily the Fed has to race to the rescue like a firefighter and put that out. I think the

balance sheet changes is probably one of the other interesting topics. Getting some detail around quantitative tightening, for example, was definitely a surprise, especially tying it to the debt ceiling. Think about the Fed's balance sheet. The average maturity of outstanding treasuries just in the world is about nine years, and the Fed's balance sheet maturity is a little bit longer than that. So the implication is you'd have a Fed that stops selling or sell less

at the shorter end of the curve, which is more pressure on shorter yields. So I think it was much more a bond market story than a stock market story, just in overall balance. But from our perspective, it really doesn't change the fact that you've got this regime shift in the market

People want boring. They want quality. They want dividend. And they're not interested in speculating on the next leg higher in AI if and when we get that this year. I think that's reflected in the fact that the XLK is negative 7.5% on the year. Most of those stocks are below their 200-day. A few are still below their 50-day, even with the recent bounce. And so I just...

I've been emphasizing this all winter. I just think what investors want to do here is not focus so much on tech and some of the out-of-favor areas. Focus on what is working, and there is a lot that you could be doing here. Yeah. Jason, Tom Lee thinks that what happened yesterday is part of several positives.

that happened this week in which he declares that the fed put remains in place so he still thinks the markets are okay krinsky overt bt i g thinks there's little reason to change his view that we can get a relief rally fifty eight to fifty nine hundred

A little bit up from here, we'll call it $5,700 now. Barry Bannister, Stiefel, thinks a relief rally is going to continue as well. He qualifies it a little bit, but do stocks feel to you like this bounce, if you want to call it that, can continue? I think so, Scott. I think for me, as I kind of looked at the Fed commentary from yesterday,

Obviously, it was net dovish. That's how the market received it. To your point, lower growth expectations, increased inflation expectations, talked about the tariffs as being transitory. We're back to transitory again. Which was scary. He did have confidence about the economy, and he didn't seem too worried.

about tariff inflation, at least now. And maybe that's what the market glommed onto. Yeah, no, and I think that's a fair point. The other thing I would say, which Josh mentioned,

is there is a slowdown in QT, right? A slowdown in the balance sheet runoff, which is, from our perspective, spells some caution. But again, I mean, it is, Josh mentioned this earlier as well, I mean, it is a more wait-and-see moment and somewhat boring, which I think is what the market is appreciating right now. The problem is,

The problem with thinking the, I mean, potential problem, my word, of course, is to think that stocks could continue to go up right now is that bullish sentiment seems like it's fully dried up. If you look at that survey that was out on Tuesday from Bank of America, their fund manager survey, they had the biggest drop in U.S. equity allocation ever. So, OK, market's going to continue to go up. Fine.

Who are the buyers? Where are the buyers? Are the buyers going to last? What does that sentiment tell you? What do those flows tell you? Oh, by the way, April 2nd looming large. Yeah, that's the big one. Buyers do appear to be on the sidelines right now. Yes, we've bounced off of last week's low, but it's not

Not that convincing of a bounce. And I don't think we're going to get a convincing bounce. I think there's a cap on any rallies because of this overhang of what are the tariffs going to be. Now, oddly enough, I think once we get the announcement, no matter how bad it is, I think the market really likes the certainty that we'll come from that if we get that certainty. Obviously, policy has vacillated quite a bit. But if we can get some certainty on what the tariffs are, then I think that cap on any rallies comes off.

And, you know, some may be listening to what I'm saying and saying, well, wait, what about the negatives? What about tariffs being inflationary? I agree they are going to be inflationary. Fed Chairman Powell said he, you know, he implied strongly that they may well be a one-time shot to the price level and that they would look through that. I think when you get past that, what you've got is an economy is still growing, although slower than it was.

Unemployment is low, even though it's rising, it's still low. Good weekly jobless claims today and profits are growing. Now that's the most important thing because if profits are growing, companies want to lean into that. The last thing they want to do is lay people off when profits are growing. They want to lean into it. Now the last thing, and I'll just summarize this, I am a believer in Ed Yardeni's school of thought.

that recessions which is if this gets worse that would happen only if there was a banking crisis so when jason josh you guys just spoke about uh quantitative tightening easing what i hear from the fed in that move is they're going to be well in front of any stresses on the banking sector that gives me a very good feeling a good reason to be optimistic i mean they talked about money markets and tightening in money markets and they'll obviously be keeping an eye on that credit spreads

while not blowing out, obviously, not even widening that much, have widened a little bit. And that's made a few people nervous. Ahead of, as we said, April 2nd, perhaps to nobody's surprise, President Trump posting on social media that the Fed should cut rates. The Fed would be much, in caps, better off cutting rates, in caps, as U.S. tariffs start to transition into

he says ease their way into the economy do the right thing april 2nd is liberation day in america josh i'd love your thought on that you knew that it was only a matter of when and not if the president was going to weigh in on interest rates as what he calls liberation day on april 2nd it could be judgment day for investors i don't know i'd like to hear your view

Yeah, so this is where the puck is going next. As the Q1 earnings season gets underway coming into April, you're basically going to hear the word tariff on, I would bet, seven or eight out of every ten conference calls. And the larger the company that's reporting, the more likely you're going to hear tariffs discussed, not only during opening comments as they kind of reset tariffs,

the bar for the next quarter, but certainly in the analyst Q&A. It's going to be tariff, tariff, tariff, tariff. The Fed is a very convenient scapegoat. And I would expect that you're going to hear a lot more pressure from the White House. And by the way, this is not just the Trump thing. Every president has had a view on what kind of help they either are or aren't getting from the Fed. The difference is that Trump just says it out loud. But so what

What I don't want to see people do, investors do, is start to freak out. Oh, no, Trump's going to fire Powell if he doesn't cut rates. This is the kind of thing that typically happens behind closed doors. I would imagine in this administration it will happen behind closed doors, but it's also going to happen on Twitter, and everyone's just going to have to get over that and live with it. What I would say, Judge, it's not a flight to quality in the market right now. It's a flight to perceived safety, and I'm going to give you a –

evidence of that. The XLF, which is the largest banks, you know, if we were really on recession watch, they would not be up 3% year-to-date. I think we could all agree. Jimmy would agree. Jason would agree. The KRE is negative 4.4%. So, like, even within the financial sector, they want to buy the big banks, year-to-date at least,

They don't want to buy the banks that are perceived as having more risk in the domestic economy, more risk of a slowdown. And so I think you see that no matter what sector you look at. Last thing, even the European stock rally, which maybe we don't talk about enough.

The VGK, which is like shorthand for Europe, it's the Vanguard Europe ETF, is up 16% year to date. Only 8.4% of the VGK is in tech stocks. And they actually have a huge consumer defensive

sector within the ETF relative to its counterpart here in the United States. So this is what investors are doing. They're prioritizing areas that they think they'll be somewhat shielded from this. And we'll let that Fed debate with the White House take place out in the open air and we'll kind of like be allocated just in such a way to get through it. I'm going to get I'll get to some more of what you're talking about. And I do want to. I do have some breaking news, though, from Steve Kovach regarding Apple.

What are we learning, Steve? Yes, Scott, this is just coming out in Bloomberg. Apple appears to be shaking up its leadership around artificial intelligence. This, of course, follows what we learned a couple of weeks ago, that they're delaying that big AI Siri update. And speaking of Siri, it sounds like, according to this report, at least CEO Tim Cook has

I'll just quote them here, lost confidence in their top AI executive. His name is John Gianandrea. It doesn't say he's losing his job, but he is losing a lot of responsibility. Instead, he is going to be no longer in charge of the Siri group. Keep in mind, this is the big part of Apple intelligence that was supposed to launch this year, no longer launching. Instead, this is going to go... Sorry, let me just get this figured out here. So it's going to...

be the guy behind the Vision Pro is actually going to move over and start taking over some management of Siri instead of John Gianandrea. As far as we know, Gianandrea still has his job. And this new Siri executive will also be reporting to Craig Federighi, who is the head of all software at Apple. But Scott, we've been talking about this so long. This is a huge,

missed for Apple when they came out a couple weeks ago and said they're not going to be able to ship the artificial intelligence products that they promised. It puts a lot of things into play. Their success in China, which obviously hinged a lot on artificial intelligence coming out, that's still expected to launch this spring. But

All the AI features that you have on these Apple intelligence system right now, they're pretty minor. They don't work as well. And this was supposed to be the one that really brought Apple into the forefront in this AI story, competing with OpenAI, competing with all these other companies we talk about. So this seems to be a big executive shakeup. I just talked to Apple. They are not commenting on this, which is also, to be honest, a little surprising to me since this is such a big part of...

of what the company's future is hinging on, what iOS is hinging on. And I expect us to learn more in June at the Worldwide Developers Conference about what they're going to do to really steer the ship around, Scott. So we discussed, you and me, the day that John Gruber of Daring Fireball wrote that blog.

Said to be the guy, right? When he writes something, you listen. Not only do you and me and the investor community listen. At the highest levels of Apple Park, they listen. That's exactly right. Do you think that his critical blog post where he declared, quote, something is rotten at Apple was the final straw that forced Apple to make a move?

That's unclear. I don't know if it's the final straw. I guarantee you it had influence in there. I mean, Gruber is a guy who has been very close to Apple, I mean, for years. And he's obviously always been on Apple's side on a lot of things, even when Apple might...

to kind of screw up or do something wrong, he's always the Apple defender to come out there and say, no, wait, you guys are looking at it wrong. And so when he turns an apple, that turns a lot of heads down there. So yes, that was a significant moment. I considered it an inflection point. I've been following his work for so many years.

Even when I disagreed with him, it was hard not to disagree with what he wrote the other day. And I guarantee people were reading that. Did that cause Tim Cook to change his mind? I don't know. That's a question for Tim Cook. But again, it's very clear. You just look at what happened and them delaying

This product delaying this feature after they promised it, and it turns out what they showed us and what they literally advertised on television as a feature coming to the iPhone 16 didn't come to fruition. Someone needs to take responsibility for that, and it sounds like they're finally at least making some changes and holding some people responsible for that.

And it sounds like one of the main guys is going to be John Gianandrea losing some confidence from his CEO and losing some confidence from the AI team as well that you're looking at right now. The other issue, as you well know, because we've discussed it so much in recent weeks, is that the analyst community on Wall Street

has grown more negative. I'm not saying in mass, but you've had a couple of sell calls of late. And maybe another shoe drop moment was when Eric Woodring of Morgan Stanley, considered a very influential analyst there, and he still likes the stock over the long term. He still calls it an outperform.

But he cut the price target. And I think it was last week also noting this big miss. And maybe he used stronger words than that related to Syrian AI. Yeah, that's exactly right. And Eric, I think, Woodring, he always has a very practical way of looking at these things. And, you know, when you look at tariffs, first of all, we've got to keep that in mind, too, when we talk about the stock. We still don't know what Apple's plans are with tariffs. Last time I asked Tim Cook about that.

This was before the tariffs went into effect. He told me they're going to be evaluated and so forth. We have not seen price increases. But either way, just about every analyst on the street doing the math on this, they think that the tariffs are going to have a big issue. And then this AI push. This was supposed to be without new hardware that doesn't really wow people. You have to have something else to wow people to get them out there and upgrade prices.

when maybe earlier than they would have. We remember we were talking a year ago that AI would be such a super cycle driver for the iPhone business. Again, that didn't happen. In fact, sales were down in the December quarter versus a year ago when they didn't even have an AI product to bandy about. And so much of the technology, especially their marquee feature right now, it's not an Apple feature, Scott. It is ChatGBT. It's open AI. So they're leaning on their own stuff.

I'll also talk about, you know, let's tease ahead to WWDC a little bit. They also have to kind of prove that this could be a great development platform for artificial intelligence too. So there's a huge challenge here. We'll see how these, if these technologies

changes on the leadership side do shake out what that means on the product front. But this is here's your signal right now, at least that they're making changes. They know something is wrong here and they understand it. And this is at least the first step of them making changes. Who's leading these teams, how they're executing on these things.

But they also have a lot of trust to build back to Scott. We talked about this last week that, you know, coming out there and saying this is going to launch literally advertising it against NFL games, telling people if you buy an iPhone 16, you're going to get these features and then having to yank them and say we can't do it. We don't know when it's going to be ready. There's talks that it's not even going to be ready until 2027. Now they're going to have to earn back a lot of trust. And these are going to be the new people in charge, Scott.

And lastly, before I let you go, it's just this whole episode, Steve, is so out of character in some respects for Apple. They're usually not the first, in which they weren't here either. But they usually get it right.

and they usually get it maybe best. And in this case, it's not the case. Yeah. And I've been covering this company for about 15 years now, Scott, and I was willing to give them the benefit of the doubt because there have been rare misses, yes, where they over-promise and under-deliver, but in general, they say they're going to do something and they do it. So even though, yes, I understood at the time last June that some of these features weren't going to be ready for many months after when we would normally expect them in the

fall timeframe where they always launch their software features, the idea that they said, hey, we're on a path to make this stuff happen, and then they can't do it. And in fact, learning that what they showed us was barely functional at all, not letting other people test it. Yeah, they're going to have to really show what they announce next is real. And it's going to be on this new shakeup of leadership to execute on it. Yeah.

Great insight, Steve. I so much appreciate you. Thank you for coming on with us. That's Steve Kovach with the breaking news and then the expert analysis, really. And I like the words, Jason, that he used, benefit of the doubt. Because investors have been always willing, for the most part, to give the benefit of the doubt to this company. Until recently, when the stock started...

to go down. It's on pace now for its worst month since December of 2022. You own Apple like Josh and Jim. The only thing is you're underweight. Yeah. So tell me why.

Yeah, so I think, you know, kind of coming into this year, a lot of the, obviously a lot of the Mag7 names have run. I think what we were anticipating is, you know, what was going on with tariffs and their hardware exposure. Now, they did get an exemption the first time around. I know Steve just, you know, he just mentioned that. But for me, again, the story always with Apple is, you know, the multiple, 29 times forward, it's down 13% with 8% growth rate. Again,

Services has been the one. That's been the profit center. That's the one that's been growing nicely. But I thought that there was opportunity elsewhere. As I look back even to earlier part of the show, when we think about the other sectors, nine of the 11 sectors were positive.

coming into this week. So there are opportunities elsewhere. We decide to underweight Apple and stay market weight on the rest of the MAG7. Jim, the valuations come down when it was 31 and a half times. And even I'm sure some are still asking the questions at 29 times, 28 times or whatever, whether it's still trading at too much a premium valuation for too little

premium fundamentals? Well, I think it is. I'm underweighted as well, Scott. I have been for quite some time, less than half the market weight. You know, if you take the numbers that you just used, 29 times forward multiple 8% earnings growth, that gives you a peg ratio of 3.5. That's expensive by any measure. And then you've got these, you know, mishaps, I'll call them, with getting the advanced Siri, the AI Siri going. And it has me on the sidelines as far as adding to it. Now, I have added to other mega cap techs, NVIDIA and Microsoft, not Apple.

I think the better question is not why I don't add to it, but why do I own it at all? And I think this is important to address. It's not just that it's such a huge weighting in the passive index. It's not just the buybacks. It's that there is a retail shareholder base that is borderline fanatic about this. It was about three months ago, I was on the air. I think you were here, Scott. And I said, you know, at some point, I'm going to actually remove Apple from the portfolio.

I got so many howls. I mean, we're a big firm. We've got $125 billion in assets under management. I got howls from clients. I got howls from advisors. Some of them said, you will remove shares from my portfolio when you pry them from my dead hands. Now, it's not just storytelling that I'm engaging here. There is a, as I said, quasi-fanatical investor base here, retail investor base,

that is not to be trifled with. So if they get this right, and obviously there are some questions right now, I think that fanatical shareholder base will expand. In the meantime, I'm not adding to it at this multiple to get back to your original question. Yeah. Well, it moves us in some respects to the company that seemingly has gotten almost all of it right, and that is NVIDIA, which is having its AI event. Josh, it's still going on. You do have a number of calls today. I'm sorry. I got to do...

I got to do Apple. I got to do it. I can't let this go. I can't let this go. Go ahead. I said earlier this year, this is not going to be one of the best periods to be an Apple shareholder. You had this insanely high multiple. You had Berkshire Hathaway actively liquidating huge amounts of stock, billions of dollars worth of stock. And you really didn't have the benefit of that launch in the fall with the full features that Apple's

Apple has been come to be expected. Like we have this expectation that when Apple launches something, it's not in two parts. It's not here, upgrade your phone and we swear to God in six months, it's going to do awesome things. This has been a horrendous period for Apple, but part of being a long-term shareholder, part of the ability to make a thousand percent in a stock

is to accept the fact that there are going to be amazing years and not so great years and occasionally terrible years and that you don't know when one is going to end and the other is going to begin. So I am not giving up on Apple. I'm not suggesting this stock's about to outperform the market over the next 90 days, but here's what I'm going to tell you. This is the largest installed base

of devices in the world, 7 billion people on earth, and there's a billion devices. And if and when they do figure out how to do consumer AI, not enterprise, not whatever the LLMs are doing, consumer AI, they will be the best at it. They will have it being used by the most amount of people. And I'm going to tell you something,

I get it. ChatGPT, all these other apps, Perplexity, blah, blah, blah. None of those companies can monetize without paying Apple a third of their revenue, the toll, so to speak.

It's too soon to say that Apple lost the AI battle, and it's too soon to give up on the idea that ultimately, A, they'll get it right, B, they'll make more money from it than any other company, including the LLMs. Here's the thing, though. You said the words you used were, this has been a terrible period for Apple. Yeah. It really hasn't. I mean, if you look and it goes back— Let me go back. Go back.

Oh, yeah. But let me go back to where I was going to go. It goes back to the benefit of the doubt.

Because, what, the stock hit 250 in late October. It was getting the benefit of the doubt that they were going to get it right. It was only recently, really, that the stock started to pull back when it became more clear that, OK, maybe there are more issues than we thought. Maybe expectations need to be dialed back. Maybe price targets need to come down. Maybe overall ratings on the shares need to be pulled back further.

as well it's only now it is only now josh feeling that pain for a while it was getting the benefit of the doubt okay it should get the benefit of the doubt it's it's the most profitable company in the history of the world other than nvidia um so it should that's first but this is more important about the innovation piece um henry ford once said if i had asked my customers what they want they would have said faster horses

I'm not interested in what Wall Street thinks Apple's AI product should be. Wall Street is not Cupertino. They will get it right. I don't know how long it takes. And that's why I'm not table pounding. Yes, you must have a fresh position in Apple here at 214. I accept the fact that they're in a horrible, embarrassing period. Scott, you're right. The stock hasn't paid the price for the level of embarrassment they've just experienced technologically.

And maybe...

there might be more of a price to pay in the short term. I wouldn't disagree with you on that. I would just point out, this is a comp. Do you understand people were coming on this network 10 years ago and saying, Apple is falling behind on social media. They should buy Twitter. Do you know how insane people are? They were saying Apple should build a car and compete with Hyundai. Like this is the level of wall streets. Uh, this is the level of wall streets, suspension of disbelief around this stuff. I,

I'm not interested in what a sell side analyst types from his laptop on the Metro North on the way from Fairfield, Connecticut to Midtown Manhattan. Let Apple be Apple. They're never first, but they will ultimately get it right. That's all I'm saying. And as a shareholder, I'm not going anywhere until they figure it out. And when they do, nobody's going to make more money than they do. Nobody. Let me let me let Jay.

Jason Cook on NVIDIA a little bit because they have this event. It's still going on. Cook it up. It seems to be well-received, to say the least. Stacey Raskin, who's the top analyst in that space, outperformed 185, is the target. Says, quote, it may have been hard for them to truly surprise given all the pre-event speculation, but we thought everything sounded really good. It is still NVIDIA's game to lose, and they don't appear to be losing.

I couldn't agree more, Scott. I thought it was a phenomenal interview with Kramer yesterday with Jensen. The big takeaway for me is $1 trillion in CapEx to be spent potentially by 2028. These are major numbers. So we've been complaining and crying about what Meta is doing, what Microsoft is doing in terms of CapEx. $1 trillion just to stay in the race, just to keep this thing going. When you talk about inference, when you talk about agentic AI,

reasoning, data center build-out. It's exciting to see where the technology is going and the productivity boom that I think is ahead of us. And obviously, NVIDIA is at the center of all of it. And that's all they've been chatting about throughout the week. And I'm excited to hear more from Jensen.

on all what's going on there. Let's squeeze a break in and we'll keep it going when we come back. We have a new move today from Josh Brown as well. It is in this year's best performing sector. We will bring you the trade and we will discuss next. The best cars for the money are Hondas. Save big with 0% financing.

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Hello, I'm Laura Castleton with Janice Henderson Investors. Is a brighter future possible? At Janice Henderson, we think it is. We've worked to help our clients achieve superior financial outcomes and fulfill our purpose of investing in a brighter future together. We never forget that this means our thinking and our investments are helping to shape millions of futures. At Janice Henderson, we are committed to helping you invest in a brighter future. To learn more, go to JaniceHenderson.com.

All right, welcome back. We told you Josh Brown has a new buy for his portfolio. It comes out of the energy space, and it's one of the biggies. Chevron. Why?

This stock just hit my list of the best stocks in the market on March 18th. Basically, let me give you the setup and then I'll tell you the story for why I think it's going to break out. First things first, it's found support at that rising 200-day moving average flawlessly for the last six months. And now you've got the 50-day rising and you've got this thing in an uptrend. It's got an RSI of 64, so not terribly overbought. It's 2% below its 52-week highs.

above the 50, above the 200. Stock is 17 trailing PE, 13 times forward, 3% earnings growth expected for this year, but 17% expected for next year. There are two major overhangs on the stock, which I think has kept it in this consolidation zone really for the last year and a half. I think both of those overhangs are about to resolve themselves. Thing one,

They are drilling big in Venezuela. And obviously, one of the first things Trump wanted to do was punish Maduro. He wanted them to wind down all of their activity just for perspective. Chevron provides about 25 percent of

the GDP of Venezuela with their drilling projects there. In the last two days, it looks as though that might actually reverse. There was a closed-door meeting with Marco Rubio, Scott Besant, and Mike Wirth, the CEO of Chevron, this week.

And it seems like Worth has successfully gotten them to realize if Chevron pulls out of Venezuela, guess who's coming right in? Sinopec. The Chinese will be in there like the next day. That's not good for Trump's MAGA American exceptionalism ideas. And I think that that's going to reverse itself. It remains to be seen. The Wall Street Journal is reporting that it looks like they got an extension so far. The second overhang, and this one's bigger,

is the acquisition of pass so they announced this in the fall of two thousand twenty three exxon immediately went to court to try to block it i don't blame them i get it exxon mobil is has his joint venture partner indiana which is a massive oil project that they're doing venturing on they're trying to block this on the grounds that that ownership stake that has has should not or cannot transfer to chevron in the event of an acquisition

We just found out that in the first quarter of this year, Chevron actually did an open market purchase of Hess stock. They bought $2.3 billion worth. That functions in two ways. Number one, it's a signal of confidence that the deal will close. Number two, it's a giant FU to Exxon. Either way, I love it.

So I think basically you've got a stock here approaching 52 week highs, 4% dividend yield, massive buyback in place. Two major overhangs should be going away at some point this year and strategically important assets to America all over the world, completely in sync with the president's agenda. Berkshire Hathaway owns 118 million shares worth about $19 billion. Chevron is the, uh,

fifth largest holding at Berkshire. It comprises about 6% of their portfolio. Come along with me and Warren Buffett. Let's own some Chevron. Thank you for that.

You choose to own Exxon instead. You don't want to ride shotgun with Josh? I always want to ride shotgun with Josh. However, I've been in Exxon for a long time. Let me just explain this for a second. I've said this many times. If you want to be in a sector, any sector, we're talking about energy right now, you have to be in the creme de la creme. In the case of energy, it is both ExxonMobil and Chevron. I have nothing against Chevron. I've been in ExxonMobil for a long time. These are the two titans.

Back in 2022, there was a divergence between the shares. I'm happy that I've been in Exxon since that time. Again, nothing against Chevron. And I forget what it was. I think there was like a miss in some Australia oil fields. Going forward, where we are right now with oil at a relatively low level compared to the last few years, you want to be in one of these two names because they are big. They have economies of scale. Again, I'm in ExxonMobil because of a historical

reason. If you look at the two companies, valuation is basically the same. Chevron's got a little bit of a bigger dividend, but that may stem back to that 2022 mishap. It's either or. I'm in Exxon. All right. Let's get the headlines now. I always knew I liked that guy.

Hey, Court. Hi, Scott. Hamas claimed it fired a barrage of rockets at Tel Aviv today as Israeli troops expanded their ground operations in northern Gaza. Israeli military said there were no reports of casualties from the rockets. The two-month ceasefire dissolved this week when Israel launched an aerial attack on Gaza that the IDF said was targeting Hamas. Israel has argued that the troops could not continue unless Hamas released more hostages, and Hamas has accused Israel of violating the terms of the ceasefire.

The Vatican says Pope Francis' condition continues to improve and that he has not recently needed to use a mechanical ventilation mask to help him breathe. The 86-year-old is recovering from double pneumonia and has been in a Rome hospital since mid-February.

And the University of California system says it will abandon the use of diversity statements and hiring. The practice essentially asked applicants how they would contribute to diversity, equity and inclusion if they were hired. The move by the largest university system in the country comes as President Trump works to roll back DEI policies at the federal level. Scott, back over to you. All right, Courtney, thank you very much. It's Courtney Reagan coming up. A big breakout for one name on Josh's best stocks in the market list. We have that for you next.

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All right. Two health care names on Josh's best stocks in the market list. We are following them, including one he says is breaking out. It's already on the list. It's AbbVie.

Yeah, we've talked about this before. This is a strong stock getting stronger. It's been under accumulation, shrugged off the recent volatility very quickly. AbbVie has an RSI of 63. One of the strongest stocks in the market is 3% within its 52-week high. It's already up 19% year-to-date.

It's been a great place to hide out. Trades at a forward P.E. of 15, 21 percent earnings per share growth expected this year, 14 percent next year. It's one of the rare situations among large cap stocks where you're not overpaying for the prospective growth. Let's get commentary on the desk, too, because we're lucky both you guys own the stock. Jason, you first. We talk about it a bunch. Yeah. But let's do it again because of the breakout that Josh is talking about.

It's been a great stock. It's up 20% year to date. And it's one of those names that has definitely had to follow through off that patent cliff, right, for Humira, which was representative of a lot of their revenue. Sky Rizzy has grown tremendously, up 58% year over year. Rynvoke also has grown very well, over 47% year over year. Their pipeline remains rich, and I continue to like this name in the biopharma space. Quick from you. Yeah, so we talk often about excellent management in companies.

Here's a key case in point. The Humira cliff was a big deal. They replaced Humira with Skyrizzy and Renvoke really well. They made key acquisitions as well. Last November, they had a drug failed trial, schizophrenia failed trial. Stock went way down. I and probably Jason at the time said many times, you've got to buy it here. You've got to buy it here. This is not a knock on management. Sometimes drug trials go bad. And when you've got a good management in a company like this and you get a price break like that, you step in. It's been the right thing to do. All right. The other one, Josh, and up

Update on Bristol. Bristol-Myers. Yeah.

Yeah, so AbbVie is a great chart. This is a good chart that has the potential to be great. This is a stock trading at a 10 forward PE and with good reason. They have had earnings problems. They actually reported a loss on a net profitable basis last quarter. It's been a challenge stock, but this is the blueprint for how a pharma that's lost its way pulls itself out of a tailspin. It's almost never some sort of miraculous acquisition.

It's usually what Bristol Myers has been forced to do. And now it's finally starting to bear fruit. The expectation for earnings growth this year is 486%. Again, that's because of some quarterly losses this year. It's certainly not growing revenue that fast. But you've got a 4% dividend here for your patience. So good stock, not a great stock, has the potential to be great. And, you know, I think it only really takes like,

one solid quarter for people to say they're willing to give this name a second look. And then all of a sudden, you're not talking about a 10 forward PE. A re-rating could be a 12 forward PE. That's a 20% move in the stock. They just have to continue to prove it. All right. Thank you for that. We'll take a quick break. We'll come back to Santoli as his midday word next.

All right, welcome back, Senior Markets commentator Mike Santoli is here for his midday word. I guess we're still trying to digest and figure out what our next move should be at the table.

Yeah. And look, I think that the Fed yesterday, there was the absence of a new negative, right? So the willingness to look through tariff, potential tariff inflation and still be ready to cut the economy needs. OK, fine. That's table stakes for having this rebound rally continue. But the fact that Powell and nobody else is professing any confidence in exactly how things are going to break from here policy wise and just exactly how much to worry about whether the survey based

data is going to feed into something worse for the economy, I think leaves the market a little bit apprehensive. Nothing is really getting in the way of the idea that you got oversold enough at the lows. This is a pretty credible rebound rally over Friday and Monday.

You probably have to chop and test this around a little bit. This is a process, not a moment. But I keep pointing to the near-term hurdle in the S&P, 5,700 and change. It's been the ceiling three days this week so far. And it's seen as one of those areas that needs to kind of be cleared. So it's not the most assertive comeback, but maybe you wouldn't expect it to be given all the overhangs. I mean, you can't look past the fact that the Fed took its outlook down on the economy. That's right.

Okay. Powell still says, yes, it's solid, but they still took their outlook down because of all of the uncertainty. So if there's a reason to think that the market can still go up in the face of that and the weight of April 2nd and more tariffs, it's Fed put.

Yes. I mean, what are you buying? What are you aging on? I mean, I think the reason the market's hanging on to it okay is because that was really the Fed just marking its outlook to market. You know, I mean, I think it baked into...

into financial markets were, you know, maybe sub 2% GDP growth this year, given the start that we've had. But you're right, it makes it a challenge. Second half earnings estimates, you know, they're going to have to prove it here at this point because they are still pretty elevated in a kind of muddle through slow growth economy. Plus the best case scenario for the first base case, at least at this point, base case is that, well, the tariff price hikes will be one-offs. They'll be transitory and you can look through it. Of course, there's a lot of risk

on that, too. There's a lot of risk on all sides of it. And, you know, we have this two weeks worth of suspense in terms of even knowing what we're dealing with and trying to quantify. So that, to me, is makes it a little bit soft footing as well. All right. Good stuff. I'll see you on closing about three o'clock. That's Mike Santoli straight ahead. We have some new reporting on that blockbuster deal for the Boston Celtics. Just how high the total valuation might actually reach. Details are next.

Welcome back to Halftime. Some very big sports business news today. A deal for the Boston Celtics has been reached, and it is a record amount for an NBA franchise. A group led by the investor William Chisholm has agreed to buy the team from Wick and Irving Grosbeck in a two-stage transaction, the first of which values the team at $6.1 billion, the most expensive

ever paid for a North American sports franchise. And according to a source familiar, the total valuation has a chance to reach $7.3 billion by 2028, depending on how well the NBA does over that time period. Wick Grosbeck will remain the franchise's governor through the 27-28 season. Mr. Chisholm is a Massachusetts native. He is the co-founder, managing partner, and chief investment officer of STG, based out in Menlo Park, Tennessee.

California CNBC sports senior sports reporter Mike Ozanian joins us now. It's good to see you.

We knew this was going to happen. We didn't know the exact number we would get. It just shows that putting a number, putting a valuation number on a team is an inexact science. Because in a case like this, in a case like this, it's going to go for whatever somebody is willing to pay for it. And this is a trophy franchise in all of professional sports. No question about that, Scott. And it's great to be with you.

What surprised me about this, and we at CNBC valued the Celtics recently at $5.5 billion, is that the price from a valuation standpoint works out to 13 times revenue.

Now, the Phoenix Suns, which were the previous record price for an NBA team, also sold for 13 times revenue. But the Suns, unlike the Celtics, control their arena. They get all the money from the arena, even from non-NBA events. The Celtics building is controlled by the owner of the Boston Bruins. So the Celtics rely very, very heavily on ticket revenue. They don't get much in the way of hospitality revenue.

Yes, but the Celtics, unlike the Suns, have that thing called titles. Many of them. And those are worth a lot. I agree. Especially when you consider that they're pretty set up to be successful into the future. I mean, their best players just got huge deals and are now locked up for some period of time.

Yes, and to further your point, Scott, unlike, say, Los Angeles, where you have two NBA teams, or New York, where you have two NBA teams, the Celtics own their market. There are no other NBA teams. I think that's part of being an elite brand as well, besides those trophies. But going back to your original point about the inexact science, here's a team, the Celtics, that likely could lose a lot of money this year. So...

What is it that the buyer is cherishing more the NBA titles or

operating profits. Clearly, it's the titles and the brand power that goes along with that, I'd argue. Yeah, I mean, it's the whole thing. It is unique, too, in a two-stage transaction. You don't always see that in sports, how a valuation can potentially go higher depending on how the league does overall. And the fact that Wick Grosbeck is going to stay around for a while and be the governor for another three seasons.

Well, look, you know, he's brought championships to the Celtics. I think what this does is...

It alleviates some concerns that fans of the Celtics may have that somebody's coming in and paying so much money for a team. Is he going to cut payroll or other expenses to help him pay for the team? Maybe cut some operating losses. And I think with Wick there still running it, I think that those fears can go away. This is a team that's going to put titles ahead of profits. Yeah.

I mean, not a bad trade. The Grosbeck family pays $360 million in 2002. Two championships later, you restore the greatness and glory of the Boston Celtics, and now you command the highest valuation ever paid for a North American sports franchise. Truly remarkable.

Thanks for helping cover it. Mike, thank you. We'll talk to you soon. Thank you. I'm Mike Ozanian. Be sure to check out our CNBC Sport newsletter. To sign up, you can scan our code on the screen. It's the QR code, of course. You can go to cnbc.com slash sports newsletter as well. We'll do finals next. Wanted to hit a call today from Mike Mayo, influential banking analyst, because he has a new note on J.P. Morgan. He calls it the NVIDIA of banking. Interesting note. Interesting call. Josh Brown, you own J.P. Morgan.

yet doesn't he work for a wells fargo they must have a strong i'd like to be i'd like to let's not say wells fargo is the a_m_d_ of banking that would not be cool all right i'd like to know what we have a visualized either the matter at the met a bank all right fine that's pretty good then okay i've been stuck idea behind what he's what he's saying and you know

This is the type of bank that I think works in either environment. So if you genuinely think that we're going to rip down this economy via tariffs and that's what, like, you're most worried about, that's the reason why you're selling and you're nervous, okay, that's fine. I don't think J.P. Morgan puts itself in a situation where they have, like,

materially huge write downs or losses as a result of that. This company has been through much worse than tariffs. And Jamie Dimon has been out in front of the fact that inflation might stay higher for longer. So I think he'll be right with this call. What's your final trade? Chevron, sir. All right. Thank you very much. That's Josh Brown. What's your final trade, Jason? Five serve like this one here.

Jimmy? UnitedHealth Group, you really have to respect the relative outperformance as the market's down from this name. Obviously, a battleground stock. It's doing well. All right. So let's see what this market does between now and 3 o'clock when I see you on Closing Bell. Jeffrey Gundlach with his first reaction to the Fed meeting. He'll join me. 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.

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