The Trump Bump and Stocks 12/12/24
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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.

Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. The president-elect in the markets. A historic day here, setting the stage for stocks in the new year. We will discuss and debate the road ahead for your money with the Investment Committee today. And joining me for the hour, Josh Brown, Jenny Harrington, Jason Snipe, Jim Labenthal. We're all at Post 9. Want to show you the markets today. We are red across the board, though we are hanging around the rim, if you will, at some round numbers. You know about

The Nasdaq closing above 20,000 for the first time. It's a little below that. We're trying to eke towards 6,100 on the S&P. A little bit of work to do there. But we do want to begin with what happened here earlier today. Really, you could say American exceptionalism on full display with President-elect Trump here talking about what is coming for investors with our very own Jim Cramer.

I think you're going to see some very good days ahead. A lot of incentives are going to be given. You saw yesterday a billion dollar investment that we give you very fast approvals. Nobody's come up with that one yet, although it seems pretty simple. I think you're going to have some great days ahead. We're going to do things I think that haven't been really done before. We're going to

be cutting taxes still further. You know, we got it down to 21 percent. We're going to bring it down even below that. You pay 21 if you don't build here and meaning your product or whatever it is you're building. And if you do, we're going to try getting it down to 15 percent. But you have to build your product, make your product in the USA. OK, that's the president elect right here on the floor earlier today. Josh, it is optimism about the economy and Trump policies.

why investors are buying into this market like they are. Yeah, we've had almost two months of this. We had a month leading into the election as people started to believe it would be Donald Trump and his policies coming in. And then, of course, we had a furious rally immediately following the election. And there has been followings.

through and you don't have to love the political outcome here to recognize that even people who voted the other way are saying all right you know what it is what it is and my job now is to maximize for my business or for my customers or for my family what the opportunity set is in front of me and I

And I think overall, that's where we are sentiment-wise in the market. Maybe we've gotten a little bit carried away. And so when you just think about the internals here, I have a little bit of bad news, but then I have some good news. And by the time I finish talking, everyone's going to feel great.

Bread for the S&P 500 has now been negative on all eight trading days of the month of December so far. Not great. Eight days in a row, more stocks fell than advanced. And if you have a portfolio and you're logging in to your Schwab or your Fidelity or whatever, I know you're feeling that. I'm just giving you the data that backs it up.

Longer term breadth metrics are still all okay. 68% of S&P 500 constituents are still above their 200-day moving average, what we would consider to be a bull market for those stocks, but only 51% are above their 50. Okay, technology breadth is the best. 70% of tech names are above the 200. But when you look at leadership, Judge, and this is really what I want to key in on,

leadership names are working. You should expect this going into the end of the year. This is partly driven by the ETF effect. We're breaking daily records of money pouring into ETFs. Look at the way these names are trading. The top 10 market caps in the S&P,

Apple, Microsoft, Nvidia, Amazon, Google, Meta, Tesla, Berkshire, Broadcom, and Walmart. They have a median RSI, relative strength, of 73. The median percentage among those 10 names is less than 1% off the 52-week high. Look at a chart of Walmart. It looks like they just cured cancer. These stocks are ripping higher.

Only two of these names are below their 50-day. The rest are on fire. And that's enough to move the chains. You might want better participation. Maybe it boomerangs back around and you get it, but for right now, the index level that

the biggest names that matter the most are doing what they need to do. Records, Alphabet, most recent high yesterday. Amazon, most recent high yesterday. Meta, most recent high yesterday, along with Apple. Your point is well made. And Jenny, UBS says there is more room for this rally to run. You get everything that's going on. We mentioned the optimism around the new administration, as we said, that was on full display here on the floor of the New York Stock Exchange today.

And you have price targets that are eclipsing 7,000. You have optimism about rate cuts, albeit fewer and slower. Doesn't matter. People think that next year is going to be a really good year for stocks.

Right. And so, so far, you know, I think like overly cautious has been my middle name. So I hear that and I think, okay, we're at 6,100 now to get to 7,000, that's plus 15%. We're still at 22 and a half times broadly on the market. And then I think to myself, if I've been so overly cautious, like what can I do to get myself comfortable with that? And

And the only way I can get comfortable with that is to really go beneath the surface and say, all right, fine. There are a lot of overextended stocks out there. There's a lot of 30 and 40 and 60 times valuations. There's things that are up several hundred percent year to date. And while the stories are good, the valuations aren't working. So how do I get there? I frankly go to my portfolio and I look at things like UPS at 13 times and Devin at seven times and Bristol-Meyer at 11 times and Conagra at 10 times. And I say, those are good companies that have, I don't know, six, seven, 8% earnings growth ahead.

And if they can expand their multiples by two, three, four times, right? Maybe that's what gets us there. So when I look out to next year, the only way I can get behind the market actually being supported and actually being up is if everything that didn't really do the hard work this year starts to do the hard work next year. And I think that's possible. But I think why is that the only way you can get there? Because it's like you're trying to you're like you're you're you're trying to trade in cards.

when you already have a good hand ready to be played in this market? No, I think it's because, you know, it goes to the conversation we were having two days ago where I said, first thing I read Monday morning were two things. One was a journal piece that said dividend stocks are poised to work. And then at the same moment, almost, I read a piece from Bloomberg that said,

As high-tech growth earnings are slowing, investors are looking for other places to invest. And then Steph was saying, look, I'm taking my money out of this, and she was putting it into, I can't remember which, but this hasn't worked as well. So I think there's a shift out there, right, that money is coming out of the things that have, frankly, gone up, in my opinion, what are too much. And this is where you said to me, do you really know they're up too much? No, I don't. But when you're playing the board game Clue, what is it you accuse or you suspect? I suspected.

they're up too much because I don't see how some of these companies and we'll get into some later. I don't see how if you're only growing at eight or nine percent earnings, I don't see how a 34 times multiple is justified. I don't see how a 60 times multiple is justified. And so I think to me, it's more trade around. And as we go into the year end, I

I think I'm really representative of people because my clients are pretty normal and they've got these big positions that are making them quake in their boots. And they don't want to realize the capital gains until next year. I don't know that you're representative of a lot of people. I feel like you're almost becoming more of an outlier in terms of being overly cautious in what feels like a pretty decent environment.

But let me go there. I talk to individuals all day, every day. And they're normal retirees. They're not the mega, mega wealthy. They're people of just normal portfolios. Well, they're primarily dividend investors. Not necessarily. Yes, those are one big sleeve of our client base. But I talk to a much wider swath. I talk to friends because people just ask. I talk to friends. I talk to friends' husbands. I talk to clients' clients' kids.

And they're nervous. She talks to angels. I talk to baristas. Here's my point. But they're nervous when they've got a position in NVIDIA that's suddenly become 12% of their portfolio. And they don't want to realize that gain this year. And so they're looking out and saying, hey, if I can just make it three more weeks, I can take a little bit of that off the table and put it into things that don't make me as nervous and rebalance the portfolio. Let's just address it this way. Jason Snipe, is there reason to be...

Pretty optimistic. I'll just say it that way. Pretty optimistic about what lies ahead. The president-elect, right over there, said there was. Investors are playing it like it is. Corporate America assumes it will be. That's why you have price targets in some respects that are $7,100. Or why Tom Lee told me yesterday that you're going to hit $7,000 by mid-next year. Here's what he said.

The reason I think markets do better in the first half is that there is going to be a lot of enthusiasm about a new White House, some of the headlines that come, whether it's deregulation, etc. And we know there's still a ton of cash and a lot of low leverage on the sidelines. That's why stocks can rally. And by the way, 11% in a few months, we've seen that routinely the last couple of years.

What do you think? Yeah, no, I think there's plenty of reasons to be optimistic. Obviously, the Nasdaq hit all-time highs yesterday, over 20,000. You know, and I think about sentiment. And to Josh's point, I mean, we've had negative breath over the last eight days, but the generals have obviously come to play. Amazon, Google, and Meta all up 10% this week with earnings, but earnings

earnings deceleration going into next year. So when I think about the market going forward, I do focus on earnings now. I focus on earnings going into next year, which we expect double-digit returns.

uh ppi was a little warmer than expected today cpi yesterday was in line uh labor is still somewhat benign i mean labor is relatively strong so for me i think there's a lot to like sentiment has pulled back i think a little bit with where breath has been over the last few days um but i think you'll have some tax selling in the beginning of the quarter uh next quarter but i think

In terms of just steam engines going forward, I think the market is strong. There's a lot of undercurrents that are pushing it. B of A says the best is probably behind us. Bannister at Stiefel says it's overextended. The S&P is. Expect a correction to the mid-5,000s in 2025. What do you think of that?

I honestly can get completely behind that. Let's start with the first comment that you made there. The best is behind us. That may well be true. That doesn't mean that bad times are ahead. It means we're going to be good going forward. You say I could get behind that. What do you mean? Don't you agree with it? That's your call? Yeah.

The best is probably behind us. Okay, everybody stop for a second. I'm going to drive the conversation. Okay, well then let me respond. I asked you the question. And you interrupted me in my response, so let me respond. No, because I'm trying to clarify what I'm asking. Okay, so let me respond. Don't tell anybody to do anything. Just answer the question for me, please. Okay, look.

that you've had two years in a row of 25% plus gains. That may be the best, okay? That doesn't mean that we're going down from here to one year from now. It means you might get 8%, 7% in the 12 months ahead. And along the way, just to the question as you phrased it, Scott, you might get a correction. That usually happens once a year. We didn't have one this year. I think everything in the setup to the question is perfect.

perfectly reasonable it doesn't mean sell your stocks and head for the hills it just means be responsible going forward at a balance to your portfolio yes mag seven has done fabulously this year it doesn't mean go out and sell all of them it means add something that's not back seven to it as you go forward into the year and maybe even in the new year prepare yourself for correction by adding some cash i think you're right i think you're right i agree this is because we're not just talking about security selection

We're talking about position sizing. And to Jenny's point, when you have people that are long NVIDIA and it goes up, I don't know, it goes up triple as fast as everything else in the portfolio, you have to revisit the

the size. You may not have to make a decision long, long or out of Nvidia, but you have to say like, is, is this stock now at a point where I have a material risk of one position wrecking my 2025. So I think that that's the, the mentality you want to go into any new year, regardless of how great the gains were. It could in,

entirely be that 2025 is a consolidation year where the earnings growth is not quite as fast. The multiple growth isn't there. We have a flat year. That happens. Maybe the earnings growth is terrific at the 15 percent projected, but maybe that's already been priced. Right. So so so I think what you're doing now is you're saying, OK, I probably put on a lot of positions this year at a FOMO. A lot of stocks were going up. I just added things.

maybe i don't need them all that's one way to tackle it another way is position size this thing has gone up a hundred percent this year do i still want to have as many shares as i had when it was half the multiple the answer is usually for most people no so i think it's entirely reasonable um but i don't love the framing that because we're up a lot this year that's going to have some impact on how much we could be up next year because we have seen time and time again that's not how stocks work and

And it's very frustrating when you play that kind of game like you're at a roulette table. You say, oh, it was red this year. Next year, it's got to be black. No way. You've said multiple times on this program, I don't care what a stock's done over the last five years.

five years. It's what it's going to do from here. But then you're using that same logic in reverse, saying, well, now stocks are up 20-something percent back-to-back years. So I don't think they're going to be as good. Now, I'm not suggesting they are. Who knows? No, look, we're all sitting here trying to predict the future. There's an element of error to it. And yes, you're correct. I don't look back

and say, hey, just because a stock or the market's done this, that means it has to do this going forward. What I do look at is valuation. That matters to me a lot.

Josh, you just mentioned, hey, maybe earnings aren't as great, but I think we're all going to acknowledge that earnings are going to grow next year unless something cataclysmic out of the blue happens. Earnings are going to grow and they're going to grow nicely. My comment about looking about what's happened over the last two years is we're not at the same multiple that we were at two years ago, just flat out not on the market overall. Now, what it tells me, and I know this is where Jenny is, is that pick your stocks.

And I will make choices. Not everybody will agree with them. I am underweight the Mag 7 as we go into 2025. I'm making a move today, Scott. I hope you don't mind if I bring it up right now. But, you know, trimming Microsoft, not because it's a bad company, but because I want to buy something else. I need some funds. I'm staying fully invested for now. We'll see what happens in 2025. Why are you trimming? I need funds.

I need funds to buy United Health. I know, but you have a lot of other stocks. You could trim something else. Why are you trimming that one? Right, because in this business, you've got to sell high to buy low, right? And at 35 times forward earnings, I think that Microsoft is a little pricey. I'm not saying it's a bad company. I'm not saying that a year from now, two years from now, it won't be higher. But what I'm saying right now is as I need funds to buy something else, that's a very inviting target for me. What are we to make of what's happened with the mega caps recently?

Josh, I'll throw that to you. It's Apple trying for its 10th straight day of record intraday highs. Okay? That's never happened before. $4 trillion in market cap is on the doorstep. We can show what the market cap is now. It's not on there, but hopefully it's not.

Hopefully we'll get that on there because it's close. Closing in. Alphabet, best week since April. It's up nearly 11.5%. Meta's best month since February. Amazon gets its target raise today. It's also been hitting record highs. Oh, I want to answer this one for you. By all means. Thank you. But correct me if you think I'm wrong. Well, I'm just going to jump in the middle. Okay. I got like six words. Late stage FOMO and professional window dressing. Yeah. Yeah.

- Yeah, I don't hate that, but I would throw in one more thing. The number one factor of the best performing stocks for the last couple of years, in addition to earnings growth rate,

is earnings consistency and high margins. And Apple answers the high margins part in spades. Maybe the best business ever created in the history of the world. It's a one decision stock. It always has been, even when it's going down. People say, all right, it's been going down. That's a reason to buy. Now it's going up. They say, oh, it's going up. That's an even better reason to buy. It's a high margin company that's gone through a couple of years of pretty weak growth. And now the page might turn next year. I

I think it's crazy that this stock is now at a 78 RSI for the first time since July. And if you just were trading on headlines, there's really nothing in the news that would tell you why all of a sudden this thing's gotten re-rated, but undoubtedly it has.

uh... i think it's a stop the people just want to make sure they have in their portfolio as it uh... melt tire if they're underweight and a lot of people are underway because huge waiting in the index so i think that's a a pretty good explanation are we really i mean we could tap this debate to

Are we late stage? Are we as late stage as we thought we were months ago? What if we're in a renewal because we think that earnings are going to grow more than we thought, that the economy is going to maintain its strength for longer than we initially expected? Top sectors on the year. Tell me this is late stage. Communications tech up 47%.

Tech up 39, discretionary up 37. Does that sound late stage to anybody? Jenny says we're late stage. I think it's late stage. I've heard we're late stage for months. Financials number four. Okay, well, I think it's late stage. Based on what? Based on the multiple. Because to me, there needs to be just some reasonable thought in this. And even if you look at Apple, it's trading at 40 times earnings now, right? And what are earnings growing at? No, late stage for Apple or late stage for the market? I was talking about for Mag 7. Oh.

Oh. You know, that was the question, right? Mag seven are all up this much. I'd be really honest with you, though. You seem to be very skeptical about AI and you have been for years. Oh, no, no, no, no, no. Hold on. My skepticism on AI is only on the companies that have had all the benefits so far. But you were skeptical before they had the benefit, too. No, because I just think it's too narrow. Like I was at the Goldman Financial Services conference this week and you have everything from American Express to Regions Financial.

talking about how amazing AI is going to be to improve their businesses. What if they're right? I think they are right. Then are we late stage if they're right? No, but all the money has been concentrated in a few names where you have them up three and four and five and 900% this year. Spread it out. Oh, because there are a lot of companies that are... Financials are up 40-something percent. You don't think it's spread out? They're 13% of the S&P now. And they're still trading at like 13 times multiples. Okay, but my... So they have more room to go. But they're spread. But they're

they're like the best. You own these stocks. They're doing well. But here's my point. Like, sorry, financials and healthcare, those should be some of the best beneficiaries of AI. Why are there these huge multiple differentials? By the way, you can take a financial with the same earnings growth as Apple. What do you think? You think a financial stock should have the same multiple as one of the...

one of the hyperscalers in AI? Well, let's just go. Let's look at some of them. Hold on. But I'm talking about Apple, for example, if I'm saying late stage. And so is a is Apple a hyperscaler? And I don't think so. But let's just say Apple's got what is it like nine percent earnings growth trading at 40 times. American Express has like twenty three to twenty five percent earnings growth ahead, trading at about 24 times. Which of those do I want to buy? And by the way, Amex is a total

beneficiary of AI. So that's what I'm saying. Like, I think it's late for the companies that have

high single-digit earnings growth and trading at 40 times. I think it's early on other things where the money hasn't gone in, but they're going to benefit. Let's talk about a stock before we go that has not gotten much benefit, if any, from AI, Adobe. Throw it up, chart of the day. Because they're tumbling today. The guidance was disappointing. It's the worst day since March. Five price target cuts, a downgrade. You own it.

Look at that. That's 12.5%. If you lengthen out the chart, if you show me a year to date,

as well, which tells a better story than that one, you'll see what I'm talking about. Because it's like this. This happens once a year. Do they need leadership change? Well, OK, that's actually a great question because people who are on the call will say, look, this is boring. There's nothing exciting. It's not like when you talk to some of the tech leaders and you come off of those calls like, you know, Mark Benioff and you're like charged up. All right. Mark Benioff says whatever the agent, you know, I'm not in the stock. You know what it is. And like the stock goes nuts the next day. You get off Adobe's call and you're like that.

What do I do here? What's their answer to Sora and all of these things that seem like they're going to eat their lunch? I don't think anything's going to eat their lunch. I mean, we can have a debate about that. I think we would all agree we use Adobe. I think their Firefly product is showing a lot of growth. And look, their annualized recurring revenue is up just north of 10%.

I really think this is overdone. But I think the point that it's a boring stock really looms large here. Now, let's just talk about it. At the midpoint of the guidance that they gave, and Scott, you're right, the headlines are disappointing guidance. You know I'm going to put perspective on it. It's less than 1% below where the estimates were. So I'm trying to, you know, does that merit a 13%, 12% drop? But I put perspective on it.

which I think is more important when you give me a year to date again, please. Look, it is what it is. Right there. So you go to the top of that move at the beginning of the year to like this, culminating to where we are today, when every other AI-related heavyweight is like this. Yeah, Scott, I hear you. I mean, you're speaking facts, and it's pretty frustrating for me. But what does give me comfort, and this is where Jenny might come in, I don't know, but this is now trading below 24 times earnings. So I told you a minute ago that I was trimming Microsoft's

At 35 times earnings, you know which one has a better projected growth rate going forward? It's Adobe. But nobody cares because it's like, it's Adobe. I got it. And Josh, you made a point earlier. You know, the bigger are going to get bigger as flows come into the market. I think this is what you're saying about passive ETFs. That's not going to go to Adobe. I will say this. I'm not adding to it right now for very simple reasons. There's just no catalysts for here. But I am going to hang on to it.

But I am going to hang on to it because really, to Josh's point, I don't think anybody's going to come in and eat their lunch. Maybe I'm wrong. I just don't see that. Adobe's everywhere. Let them grow. But I think the reason for that multiple in a market where software stocks have been rallying furiously is that there are legitimate concerns.

that some of these new AI visual tools are going to enable people to work around the Adobe ecosystem that's so core to the creator economy. If there are ways around that now being created and Adobe doesn't have like this kind of electrifying presentation about their answer,

Maybe it's time for somebody else to be in the seat. I want to say one more thing. I'm sorry. But, you know, this is a stock that has surprise to the upside on earnings 20 quarters in a row. This is what they do. And it bothers me. OK, they guide below again, less than one percent versus expectations. And then they exceeded. I really wish they'd stop it. And Josh, you're making a fabulous point. Maybe it is time for management change. All that said, I'm comfortable holding it at now 23 and a half times forward earnings. All right.

Last point, go ahead. Okay, but maybe it's not that they actually need management. And maybe this goes back to me saying FOMO, right? There is a group of stocks out there that just have like zhuzh factor, that people just like owning. Are you speaking Yiddish now? I like it. I thought I was speaking like hipster. I like it. But here's the thing. Like if you were just to take the numbers on Apple and Adobe on paper, right, 24 times, they both have a 9%, 10% earnings growth.

growth, like Adobe is more attractive. But nobody cares because it doesn't have that like cachet. No one wants to talk about it. And there's something that's kind of broken out there, both in the stock market and I've heard, you know, I read an interesting thing the other day about politics where once you turn these things into entertainment, right, you start personifying companies or politicians or whatever it is. And if we've personified these companies, then there's a lack of objectivity. And the objectivity would tell you Adobe is the better buy. You...

Want to play? Yeah, no, I mean, I think it's an interesting conversation. Like the part for me that I take in consideration is what's, as an example, what's going on with software versus the semiconductor industry. Right. What's your favorite software stock? Because it's not this one. ServiceNow. ServiceNow. Right. Because I think when we came into this year, it was all about where the CapEx was going. Right. And the idea was that the CapEx in the software industry was going to slow. And that hasn't happened yet.

Instead, we've talked about a lot of the CapEx from the hyperscalers and what they're spending. Now we're talking about profitability and use cases. And that's why I like companies like ServiceNow and other software names that are really here to play. What a run that stock has had this year. ServiceNow, incredible. Yeah. Yeah, I think it's very easy to look at this multiple is lower than that multiple. The harder part is why and will it persist? I'm not saying I have the definitive answer, but at least

at least identifying why don't people care that Adobe keeps beating earnings? Why are they selling it off when it barely misses? I think it has nothing to do with the earnings. I think it's concerned about...

future earnings being impaired by a competitive disadvantage. If that market narrative proves to be wrong, there's a lot of money to be made. Hold on, hold on. Not to put you on the spot, Jay, but I want to go back to that service now chart. I don't have this off the top of my head, so forgive me, and I don't mean to make you come up with an answer if you don't know off the top of your head either. What happened in...

It looks like the beginning of the summer where this stock took off. Was it an earnings report that set this thing off on fire? Look what it was in the summer. Let me help you. Just say AI. It's so much easier. No, and that 100%. But earnings have been solid. Bill McDermott has done a number of partnerships that have obviously continued to drive the stock. And I think it's about use cases. I think workflows are – everyone's trying to figure out how to –

optimize my business. And I think ServiceNow plays very well in that space. All right, good stuff. We are just getting started right here. We've got a lot coming up. Jim just adding to a beaten down healthcare name. We will discuss that. Plus a big call on one of Jenny's best performing stock this year. If you missed the run, don't worry because Goldman says it's going to go another 30%. And later, an update on the committee's top contrarian ideas for this year. We're back in just two minutes. Get the Honda of your dreams during happy Honda days with a sporty new Civic, Accord,

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Visit chevron.com slash anchor. At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.edu. We're back. Eamon Javers has breaking news for us. What did we learn?

Scott, that's right. The Department of Justice and the FBI are hosting a news conference right now in St. Louis, Missouri. They're announcing the indictment of 14 North Korean nationals in a long-running, years-long scheme to send IT workers into American companies in order to generate profits for the North Korean government. This is a fascinating scam, Scott, because it involves

subterfuge global intrigue and lots and lots of money that the u_s_ government says is going to the north korean regime out there in what the way this works is the north koreans are desperate for money they take their very advanced highly trained cyber uh... team

send them into corporate america to apply for jobs remotely and then they earn money doing the actual work inside corporate america up to about eighty eight million dollars in this particular case the department of justice says

And then while they're inside the IT systems of major American companies, they also are giving access to that information to North Korean intelligence. They are in some cases planting malware, conducting cyber attacks, and it's all because

Major American corporations, particularly in the IT department, Scott, have gone fully remote in many cases. And so they're not even interviewing people in person for jobs anymore. The way this works is the IT workers in North Korea apply for jobs remotely. They might get a Zoom interview or something like that. They obscure the fact that they're in North Korea. They have accomplices in the United States.

The companies hire them, send laptops to the accomplices' addresses in the United States, and then the North Koreans access those laptops at laptop farms inside the United States in order to do the work. So an advanced and sophisticated scheme that really takes advantage of this push to remote work we've seen across corporate America. I'm told, Scott, that this problem is impacting companies across the Fortune 500. Back over to you.

Really, really incredible story. Eamon, thank you for that news. That's Eamon Javers in Washington, as you see. Seema Modi has a news flash for us now on Intel. Seema, what can you tell us? Scott, we've been watching the Barclays Technology Conference on the West Coast where Intel co-CEO David Zinsner just spoke. He said they've kicked off the process to potentially take

Altera Public and that his team is engaging with outside investors. He also said that they're looking to probably sell some of its position and mobilize. So two of these companies that it's been growing internally now looking to free up some cash and streamline the business further, which I know is something that investors have been pushing for. We're looking at shares of Intel trade closest session highs at around up about 2.3 percent on the day. Scott, we'll keep you updated.

All right. Appreciate that. Seema, thank you. That's your moment. You're buying it back. No, it's frankly exactly why we sold it, which is that it sounded like the new board, like the board was really short-term focused. We were in it for a long-term win. Let's talk about a new purchase from Jim. It's buying more of UnitedHealth.

So can you tell me a little bit more about this, please? The answer is probably obvious. I mean, to start with, I was pretty surprised how much it was down last Friday. It's continued all week. Look, we can talk at length about a broken American medical system, how difficult insurance companies are to deal with. The answer to that is not.

what happened to the UnitedHealthcare CEO. That is flat out wrong. I am a capitalist. There are other ways of fixing the problem. And in the meantime, as a capitalist, this is a company, whether you like it or not, that is likely to make a lot of money. It was getting back on its feet from a share price perspective before this happened. Now it's 12% cheaper. I'm adding to it. I needed to raise funds to do that, which is why I sold Microsoft. So this is more of a tactical trade. Obviously, there's a societal aspect in this. I

Look, I don't believe we should be killing people if we disagree with policies. Let me ask you this. We tried to have this conversation in a smart way since this whole thing happened. The stock's down 12% since the shooting. What if, and I've asked this to other shareholders because I think it's important to discuss, that it feels like you're a little dismissive of the issue that has bubbled over

not only on the surface, but into the zeitgeist here now of insurance company practices and the debate and the discord that's developed now as a result of that.

and what that could potentially mean for the long-term performance of some of these companies. I think that's where I'm going to say it. I don't mean to be dismissive. Everybody, just for a second. I don't mean to be dismissive. It's a great point. I didn't want to flood the airways a second ago. For those business practices to change,

I think what people are expecting as they sell the stock is that the government's going to get involved, Scott. I think they're going to say that government is somehow going to put their finger on the scale to go against UnitedHealthcare. My response to that is, regardless of whether that's right or wrong, I don't think it's likely to happen for a very practical reason. This government coming in in January of next year has got a lot on its plate. I mean a lot.

I don't think they're going to get through all the things that they planned to get through a month ago. And I don't think this issue rises to the top. I could be wrong. I could very well be wrong. But I don't think it rises to the top versus other things that this government is going to try to attack in the year 2025. The lawyer for the young man is going to put the system on trial. This is going to be in the headlines for the next 18 months, almost relentlessly.

What we saw immediately following the killing, and I know there are people saying it's unrelated, LOL, sure it is, is a change in the policy of how much anesthesia people are getting during procedures. The question is not, is UnitedHealth good or bad, like good or evil? That's not what we're debating. What we're debating is, will the company itself choose to proactively undergo

a business model change so as not to appear in the headlines as the villain for the next 18 months. And if so, what will that mean for profitability? Because right now, you're right, this is an extremely profitable business. That might not be a great look for them to be that profitable. Look, I'm sorry to be cynical, but I don't think it's going to change. Let's hear from Jenny. So this is another one where when we get new portfolios a lot, they come in with a huge UnitedHealthcare position.

You see it in Nvidia, you see it in like Pfizer, ExxonMobil, and UNH. I don't know why. But for years, one of the first things we do is chop a big part out of UNH. And the reason's been outside of all this, here's been the rationale. Right now I think it's trading at about 34 times earnings, right? That's rich. It's got nine percentage earnings growth ahead of it. And we've taken that because it's always been rich.

And we've taken that and we said, in addition, they create $400 billion a year in revenues and $25 billion a year in income. And there's no way that whichever administration it is, and this is years back, there's no way that the government's not going to look at that. And at some point, it's going to become under attack. How much revenue comes from the government here? Well, some.

The Medicare Advantage. I mean, it's not almost a reveal. Here's the point. There's no way this stock— You're going down a deep hole here. I'm just saying. Okay. But in our opinion, this thing was always going to be a target. Never in a million years would we have gotten this way. What if the Doge Boys— But it's too expensive and they make too much money. So this is important, actually. Right. To the Doge Boys. There you go. What do the Doge guys love more than anything else on Earth? It's to be retweeted.

What if they decide that this is going to be their next cause celebre and they want to look at Medicaid, Medicare, the government paying for health care companies to be as profitable as this one? I'm just I'm not going to happen. It's not going to be great for the stock. Clearly a target. And I think it's been a target for way longer. OK, but the point you're bringing up, which is absolutely valid, has been weighing on the stock for two years. Unquestionably, we're showing here United Health down 10 percent three months.

It's down 12% since the incident, which was, what, a week or so ago, 10 days? But if you can, can you expand that chart out for the last 10 years? Because it is a hockey stick, if you look at it over a long time period. It looks like a tobacco stock, quite frankly. It's straight up. Yeah. It's remarkable how well this company has done. Right, and I think it's a victim of its own success in that. It's just too expensive, it's gone up too much, and people don't like this kind of business. All right, let's...

Let's stop there. Contessa Brewer has the headlines for us. Hi, Contessa. Hi there, Scott. Great to see you today. OK, so an ex-FBI informant accused of lying about President Biden and his son Hunter has now agreed to plead guilty. Court documents show that Alexander Smirnoff plans to enter a plea at a hearing next week. He was indicted in February for claiming the two Bidens accepted five million dollars from a Ukrainian energy company. Prosecutors say those allegations are

which became a centerpiece of the Republican investigation into the Bidens, the allegations were fake.

Meta announced today it donated $1 million to President-elect Donald Trump's inauguration fund. That donation comes just weeks after Trump met with Meta CEO Mark Zuckerberg at Mar-a-Lago. Inaugural donations are a common way that businesses try to build a positive relationship with incoming administrations. And checkmate, an 18-year-old just became the youngest ever world chess champion. Gokesh Damaraju of India defeated the reigning champion this morning in administration.

in a $2.5 million battle in Singapore. He's a teenager. The two duked it out for 14 games. Halftime returns right after this.

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All right, welcome back. I want to show you some stocks on the move. Steel stocks, take a look at these today, because a lot of them are selling off in a reasonably big way. We can take a look at Letter X. Can we show those? Letter X, U.S. Steel, Cleveland Cliffs, New Core, Steel Dynamics. The latter two, the bottom there, were downgraded today at UBS. But Cliffs is down 8%. That's the biggest loser. I don't know, Jimmy, if that's in sympathy with Letter X.

But, you know, since it's come out more definitively in the last couple of days that, you know, the current administration, the next administration, the Nippon U.S. steel deal ain't happening. Right. Okay? As we figured it wasn't going to anyway, but now it's like kaput nailing it. Okay?

How does that play a role in this, if anything? But the downgrade seems to be today's drawdown news. Yeah, we just got the downgrade. I haven't had a chance to read it. I mean, in the overall steel sector, there's been a lot to be negative about, most notably pricing for steel and the demand from the auto sector. A downgrade today kind of catches me by surprise, Scott. I mean, really, is there something new in this that we didn't know? I don't think so. Regarding your question about U.S. steel. Weaker than expected fundamentals.

and also valuation issues that's for a new core uh... margins to remain pressured i think it might talk about still prices you've been making the case i think all year long that still prices are depressed they are depressed so this is got by i don't wanna say something stupid but this has got to be close to trough in terms of steel pricing again i just don't think there's anything new in the report but you asked a good question about u_s_ steel it does appear that's dead i wouldn't want to own u_s_ steel right now i mean it looks like they're just gonna get picked up

apart, or even worse, just left to go to their own demise and have mills and furnaces closed down. Regarding Cleveland Cliffs, which I own, they just made a strategic purchase. They're making money. Obviously, steel prices and demand weigh on them, but they're trading at a multiple 6.4 times enterprise value to EBITDA.

that to me says there's a lot more upside. I will say this, and this is important. For the next couple of weeks, there's going to be pressure on Cleveland Cliffs from tax loss harvesting. No question about it. And that may be why it's down more than the rest today. Well, it's down. Wow, it's almost cut in half this year. So it's been tough. Tax loss harvesting is going to work here, unfortunately work against it. All right. Mike Santoli is next with his midday word.

We are back. Our senior markets commentator, Mike Santoli, joins us now. You know, I'm sure you have some thoughts on the breadth of this market. Underneath the mega cap surface has not been great for the last week. No, that's right. In fact, we're working on the ninth straight session of negative breadth today. So essentially every trading session in December, you've had more stocks down than up. So what you have is a kind of subsurface pullback. This is that soft patch that, you know, a lot of the historical markets

trends will tell you occurs in the first half of December. I think bigger picture, you know, the market's not like intense selling pressure. It's not as if people are necessarily really revising their general outlooks. But, you know, we're trying to table the hard questions until early next year. In other words,

Yep, Fed's going to cut next week, even though the data are ambiguous and maybe we're kind of going to be stop-start when it comes to Fed policy. Weekly claims, let's not get excited about a little bit of an uptick, but you do have a deceleration in the economic surprise index in the last few weeks. So all that stuff is in the mix, and it comes down to a matter of whether you think policy is going to really extend or hypercharge

this current economic expansion, or if you feel as if, look, earnings are going to broaden out and the old story is going to kick in and it doesn't matter that we already had two straight 25 percent up years and valuations are elevated. All right. Thanks, Mike. I'll see you in a couple hours on Closing Bell. That's Mike Santoli. We're going to take a break. We come back. We've got an update, a trade update on some under the radar names that Josh flagged for us last week. Go through a number of other stocks that we want to trade to. And we'll do that after this break.

Give you an IPO update. It's service tightened right there. It is now open for business. Going public today on the NASDAQ, you can see the current price is about 105. It did open at 101. It priced at 71. So it's up almost 50% in the early trade here. And we'll keep our eye on that. Final trades next.

Oh, you know what? Nope. I'm sorry. We're going to talk about it here. My bad. Well, I think there's two things worth saying. This year, we've had about $28 billion worth of IPO activity, which is a pretty big improvement over last year, but still way too low relative to the average. This deal is interesting to me because of the area of the economy it addresses. This is software for companies that dig swimming pools, landscaping companies. My landscaper, Frank Paccioni,

I would show this to him and say, how can we... Shout out. I would say, Frank, maybe this could help you manage your business better so that you could scale. And he would say, Josh, get the hell off my truck. These types of businesses have not been technified historically. Service businesses. I love the story. I'll be watching this stock with great interest. Shout out to Frank Pacione and son. We love you.

I'm debating whether I should have really just gone to break. Yeah, what is it that I want? We did a commercial anyway. How about that? We'll do finals next. All right, 3 o'clock Eastern. I will see you on Closing Bell. Looking forward to that. I'm Chris Crawford. Rick Heitzman. We'll talk some tech. Chris Heisey. Max Kettner as well. Let's do some final trades. Farmer Jim. Cisco Systems. Look at what it's done over the last three months or so. Compare it to the last two years. I think it's a good analog for what Adobe may do. Jason Snyder.

KKRPE exits will double next year. I like this one. All right. Jenny Harrington. Dominion Energy. I bought this earlier in the year. It took off like a rocket, and it's since faded. So now you can get back in with a 5% yield. Okay. And Josh Brown. I bought the Uber dip yesterday. Felt much better after hearing from the CFO at Barclays. All is well. Don't really think the stock should be in the 60s. Yeah. I mean, the stock has not had a good run, really, since the election, getting a little bit of a lift.

All right, we're going to follow the market. I'll take you through that final stretch. We're hanging around the hoop, as I said, on some round numbers. 6,100 on the S&P. We'll see if we can get back to 20 on the NAS. I'll see you then. 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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The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals, like business management, strategic planning, and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella.edu.