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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, thank you very much. Welcome to the Halftime Report. I'm Scott Walker, front and center this hour. The state of stocks, the winning streak over, the Fed decision now looming, more earnings to debate, and even some moves to discuss. Joining me for the hour today, Jenny Harrington, Jason Snipe, Malcolm Etheridge, Bryn Talkington, and Bill Baruch joining us in just a little bit with those fresh trades I'm talking about. Let's check the markets today. We are red across the board today. So we're pulling back. Gold is near a two-week high.
The 10-year yield at its highest level since April the 23rd. That's something to keep an eye on, too. And we've rallied a lot. So that's all of the things that the market, Malcolm, is contending with. S&P up 16.5% since the lows. Bond yields are backing up. We still have uncertainty over where this economy is going. What do we do with that?
Yeah, I think we're unfortunately in a wait-and-see mode, right? There's so much that depends on whatever the president decides to tell us about these trade deals we've been promised are coming. And so until we get anything on that front, investors, I don't think, can really make any decisions based on information we have now that we didn't have Friday going into the weekend. Yeah, because even some of the information that we've got just isn't true. The Treasury Secretary today setting the record straight, if you will, on the Hill.
I'm quoting here from Scott Besson, "China we have not engaged in negotiations with as of yet." So that's where we find ourselves in terms of the trade situation. We're still waiting. Not really sure what the Fed's thinking in total about where they see the road ahead.
And we've rallied a lot. So what does that mean? That means we're in a really uncomfortable spot. And Malcolm is exactly right. We can't react to news because everything changes and we don't really have anything substantive. But the way I look at it is the market is not pricing in. It's not just pricing in no recession. It's not even pricing in low growth. So we're trading at 21 times. We're back to where we were pre-liberation day. Nothing's better, guys. Nothing's better since April 2nd.
Well, you know what's better? What? I'll tell you what's better. Well, it's less worse. I'll tell you that. Less worse. I'll go with you on better. Nothing's better. The employment report shows you that you still have a pretty darn resilient economy. Let's not act like we don't because we actually do. I'm going to argue that's not better. It's just not worse. Yeah, but I think the consensus was that things are getting worse pretty quick and the economy is kind of hanging in there. One of the reasons why the market has been able to do what it did. But also.
I'll also argue that like every bit of data that we're looking at is pretty stale. And even with even with it, you know, being recent unemployment data, it's not post anything actually starting to happen with respect to tariffs. So to me, there's nothing good. Sorry, nothing better. We're trading at this 21 times multiple. People are still expecting
what is it? Hold on, I've got it here. Still expecting $266 of earnings for S&P earnings this year. Still expecting 287 for the next 12 months. Those seem kind of robust to me. So I look at this and I'm like, all right,
What if, just what if we slapped on 18 times to the 287? That gives you 5,166 on the S&P 500. That's down 9% from here. I just don't see how earnings are higher than 266 for the full year, 287 for the next 12 months. I don't see how we justify a multiple of 21 times or better. There's nothing great out there. You can't justify it, Jason, I guess, if we have a recession. Then stocks are overvalued.
But if you don't, then are they? Are they? I mean, Michael Arrigetti from Aries was on with David Faber today out at Milken. I thought his perspective was interesting. Obviously, you look at a private equity portfolio. There's a lot in it. It shows the economy is really strong, he said. Yes, hiring has slowed down. There's been no big strategic moves. I think we get that. There's a bit of paralysis because of where the economy is. But that can be resolved pretty quickly, he said, with some progress later.
on the trade front? Yeah, so I think, Scott, labor obviously has been positive. We got a good number there. You know, spending was obviously good, relatively speaking. And I think earnings. Earnings have been better than expected, up 13%. The expectation was 7%. They've been better than expected. They had been better than expected. We're seeing some
some removal of guidance over the last few days. Obviously, Mattel this morning, Ford this morning as well, which kind of puts us in a tough base. And I think the big one for me is how quickly we've returned back to pre-liberation day. We got 18% off the lows. And now we're bumping up at a 200-day of 5,700. So what is the catalyst? And I think to Malcolm's point earlier- Yeah, that's what I think investors want to know. What is the catalyst now? What's the deal? Yeah. Can we get a deal with China-
because I think what's probably baked into the cake, this 145% tariff, we will come down from that. I think that is baked into the cake, whether it's 50% or 40% tariffs, but we need to get a unilateral deal that's meaningful for us to move forward. I'm glad you set it up that way because as I come to you, Bryn, Paul Tudor Jones was on Squawk Box this morning, always worth a listen.
and said even with a de-escalation of this trade war with China, it might not be enough. He said that even if tariffs go down to let's just say 50%, it's not good for the market. Listen, we can react on the other side of that.
Even when he does that, you've got those tariffs, the equivalent of a 2%. It'd be the largest. There are taxes that like the largest tax increases, the 60s. So you can kind of take two to three percent off growth. And then you've got the Fed who's unless they got really dovish and really, really cut. You're probably going to. Yeah, you're probably going to new lows. And then when we're in new lows.
The hard day will start to follow, and it'll probably create the Fed to move, create Trump to move, and then we'll get some kind of rally.
So, Bryn, what do I do with that? You can't dispute really what Paul Tudor Jones says. Tariffs are a tax paid by somebody and maybe multiple parties. That's not a political statement. It just is. You can, depending on what side of the political aisle you might be on, you can say, well, it's worth it because I believe in what the administration is trying to do in the big picture. But in the here and now,
We're dealing with the situation of tariffs, which are, as he said, attacks. And it hurts growth. So what do I do?
I think you have to look at, first of all, Paul Tudor Jones, amazing investor. So I think when you get the opportunity, you have to put what he says is one of the scenarios, is one of the outcomes. And so but I do think it's important because, you know, Besant, especially in Besant, we trust has been very clear about the importance of Main Street versus Wall Street.
And those tariffs, Scott, are a direct tax on Main Street, not Wall Street. And so when you already have the lower 90% of the consumer spends over 30% of their income on goods,
Well, if all of a sudden when those tariffs become in the U.S., that is going to hit Main Street. And so that's where I think that I think it was Besant that said to Sarah Eisen yesterday, like, I have information that you don't have.
And so I think that Paul is absolutely right. He said he had asymmetric information, right? Which he should. I hope he does. Yeah. And so to that, investment we trust, I think that when you just play this out, this is not about tariffs. Okay? I have a
a chart that shows all of the tariffs we have with every country. Net tariffs in the U.S. are 2.5%. There's some low-hanging fruit like India, which is around 12%. China is a whole different thing. But if you go down the list, we basically have reciprocal tariffs already. These are about these non-tariff trade barriers, which I think are very complicated outside of India. And so I think that
You know, Besant's saying I have asymmetric insides as asymmetric. I think Paul Tudor Jones has a scenario which you can't dismiss, but I do not think we even remotely are going to get there. I think the challenge is from a market perspective, we're below the 200 moving average. So for the viewers out there, that 5750 is a ceiling and you're going to need a catalyst
And I don't think that catalyst is going to be a Vietnam or a small country Bangladesh trade agreement. You're going to need, to me, something meaningful to actually get the S&P to move up there, but also understand who's going to short this market. So for the CTAs and hedge funds, very, very dangerous scenario to try to short the market. And so I think the energy is actually to the upside.
you know, later on this year, because we all know one tweet and one big announcement, the energy is gonna be to move higher. So I think in the meantime, we have a 2018 scenario where there's lots of volatility and a range bound, but this is not a time to me to get negative and be a seller of stocks. It's like buy on the weakness. We will get through this. And I think that going into midterms next year, don't forget about that. Congress does wanna get reelected, the Republican members. They're not gonna let Trump have emergency authority and torpedo the economy.
for some Peter Navarro isolationist viewpoint that none of us in America have. Yeah, you look at, I mean, the flows are pretty representative of Brin's point of view. According to Bank of America, their client flows, institutional flows, shows buying across nearly every sector, led by the obvious, maybe,
tech, clients bought stocks in 10 of 11 sectors. They say the greatest breadth of sector buying in some 10 months with only utilities seeing outflows. So where the market had taken a more defensive profile, maybe there's a little bit more optimism to what's gotten a little bit better. Sentiment's gotten better.
utilities are seeing some outflows now you have rates moving back up so you know maybe you wouldn't get as robust of buying in a bond proxy area like a utility for example but nonetheless people are buying in and retail's hanging in those are two important aspects of this market well not only is retail hanging in there they're rushing it right 40 billion dollars worth of purchases throughout the month of april that's pretty much the momentum
that pushed what we're talking about, the positive momentum since so-called Liberation Day. But I think it's important to focus on something you just pointed out, Scott, which is that utilities are the one sector that it seems like nobody wants to be buying right now, which is interesting for a market that is convinced that recession is right around the corner. Usually, utilities are a thing you'd be looking for as folks are not going to be cutting their power in other things that fall into that category, even in the worst of times.
But I'm wondering if what we're seeing is maybe a reshaping of what we consider to be defensive in moments of panic, where we saw initially Apple and Microsoft in the 2022 scenario where investors were piling in their sort of the safe haven trade. I'm wondering if we don't see that shaping up again, where the safe haven trade is hiding within tech. Maybe it's a Netflix, which is not
directly tech but it's pretty closely related maybe it's a microsoft something like that where we look at those fortress balance sheets and say even in the worst of times i at least know that these companies won't stop investing in growth they won't have mass layoffs and they won't have the pullback and earnings growth that i expect across the board in other sectors i think those are all good points brin that netflix to some degree has become a defensive play
And if anything, last week, we were reminded by the mega caps of why all that money goes there in the first place. Why they have what some would suggest to be justifiable valuations that are higher than a lot of other stocks within the S&P 500. They showed you why. Mm-hmm.
Yeah. This is why U.S. exceptionalism is alive and well. We have these companies that, for the most part, are capital-like companies, have tremendous amount of flexibility, operating margins. And so I think that you're going to continue to see investors look at these companies, look at all of the earnings of these companies. I mean, Netflix aside, with the movie tariffs overseas, I think that will—that's a—
headline for the day. But I think these companies are why America is exceptional. We have Silicon Valley, we have VC companies, we've got these mega cap companies that continue to innovate. And so, yeah, you can go to international and buy British Petroleum or Hershey's or one of the other names in the IFA. But ultimately, how much multiple expansion are you going to get from those? I think there's a cap.
So I think that's where assets will continue to flow to these big names that have, by the way, low multiples. Jenny should like that with like a Meta or an NVIDIA, low multiples for growth or value investors. Well, she perked up for a minute, at least at Meta. But then she just quickly faded on everything else because Meta, Meta. We're going to go. We'll come back. We're going to go to the White House. The president is speaking now with the Canadian Prime Minister, Carnegie. Fairly shortly.
It gets renegotiated very shortly. But I thought it was a very positive step from NAFTA. NAFTA was the worst trade deal in the history of our country, probably in the history of the world. And this was a transitional
And we'll see what happens. You know, we're going to be starting to possibly renegotiate that if it's even necessary. I don't know that it's necessary anymore, but it served a very good purpose. And the biggest purpose it served is we got rid of NAFTA. NAFTA was a very unfair deal for the United States. Very, very terrible deal. It should have never been made. It was made many years ago, but it should have never been made. Mr. President, you're in Canada and the United States. Would you like to see your first trade deal be with Canada or India?
I would I would love that. Look, I have a lot of respect for this man. And I watched him come up in a sense through the ranks when he wasn't given much of a chance. And he did. He ran a really great campaign. He did a really great debate. I think that debate was very helpful. I was going to raise my hand. I don't know if that's good or bad. I shouldn't say that. But that might hurt you.
But, no, he ran a really great election, I thought. And, yeah, something could happen. Something could happen. Yeah, please. Concession? Yes. Friendship. Oh, just, I just, we're going to be friends with Canada. Regardless of anything, we're going to be friends with Canada. Canada is a very special place to me. I know so many people that live in Canada.
My parents had relatives that lived in Canada, my mother in particular. And, no, I love Canada. I have a lot of respect for the Canadians. Wayne Gretzky, I mean, the great one.
You happen to have a very, very good hockey player right here on the Capitals who I have a lot of his years, a big, tough cookie to just broke the record. And he's a great guy. And, you know, we had the we had the team here and I got to know a lot of the players. But now Canada is a very special place. Yeah, please. Mr. President, Mr. Prime Minister, I'd like to get your response to this, too. Mr. President, you have said that the government is going to be responsible.
No, no. Well, I still believe that. But but, you know, takes two to tango. Right. But now I do. I mean, I believe it would be a massive tax cut for the Canadian citizens. You get free military, you get tremendous medical cares and other things. There would be a lot of advantages, but it would be it would be a massive tax cut. And it's also a beautiful, you know, as a real estate developer, you know, I'm a real estate developer at heart.
When you get rid of that artificially drawn line, somebody drew that line many years ago with like a ruler, just a straight line right across the top of the country. When you look at that beautiful formation when it's together, I'm a very artistic person. But when I looked at that beauty, I said that's the way it was meant to be. But, you know, it's...
I just, I do feel it's much better for Canada. But we're not going to be discussing that unless somebody wants to discuss it. I think that there are tremendous benefits to the Canadian citizens, tremendously lower taxes, free military, which honestly we give you essentially anyway because we're protecting Canada if you ever had a problem. But I think, you know, it would really be a wonderful marriage because it's two places that get along very well. They like each other a lot.
Well, if I may...
As you know from real estate, there are some places that are never for sale. That's true. We're sitting in one right now, Buckingham Palace, that you visited as well. That's true. And having met with the owners of Canada over the course of the campaign last several months, it's not for sale, won't be for sale ever. But the opportunity is in the partnership and what we can build together. We have done that in the past. And part of that, as the President just said,
is with respect to our own security. And my government is committed for a step change in our investment in Canadian security and our partnership, and I'll say this as well, that the President has revitalized international security, revitalized NATO, and us playing our full weight in NATO, and that will be part of it. They have, I must say, Canada is stepping up the military.
participation because Mark knew, you know, they were low and now they're stepping it up and that's a very important thing. But never say never. Never say never. What will it take to get the tariffs top of Canada? Well, we'll be talking about different things. You know, we want to protect our automobile business and so does Mark.
But we want to protect. We want to make the automobiles and we want to, you know, we have a tremendous abundance of energy more than any country. We have just in Alaska alone, Anwar has been reopened now. Anwar is probably the largest find anywhere in the world. They say it's larger than Saudi Arabia. I don't know, but it's a lot.
but we have tremendous amounts of energy. Other countries don't. We're both lucky in that way. They have energy. We have energy. We have more than we can ever use and more than we could ever sell, actually. And you have the same thing. So we're two countries that are very lucky. If you look at China, they don't have that. You know, it's a big disadvantage. Other countries, most countries don't have, you know, most countries don't have that. So Canada and us, we have a lot of energy.
A lot of advantages over other places. When you consider what Mr. Carney just said, that Canada is not for sale, does this make the discussion a little more difficult to start on? No, not at all. No, not at all. No, time. Time will tell. It's only time.
But I say, never say never. I've had many, many things that were not doable and they ended up being doable and only doable in a very friendly way. But if it's to everybody's benefit, you know, Canada loves us and we love Canada. That's, I think, the number one thing that's important. But we'll see. I mean, over time, we'll see what happens. China. China. China.
They want to meet and they're doing no business right now. And those ships are turning around in the Pacific Ocean. Big turn. Those are big ships. Those ships take about 10 miles to turn. And, you know, we lost a trillion dollars to China on trade because of an incompetent president that we had who preceded me, grossly incompetent. You're finding it out more and more now.
And by not trading, we're losing nothing. So we're saving a trillion dollars. It's a lot. But they want to negotiate and they want to have a meeting. And we'll be meeting with them at the right time.
I have not met with them, of course. You would know if I met. I'd tell you they want to meet. But, you know, we are right now. Look, they're suffering greatly. Their economy is suffering greatly because they're not doing trade with the U.S. And they made most of their money off the U.S. Don't don't kid yourself. They don't make the money off other countries like this. And they were making we had a trade imbalance. We had a.
a deficit or they had a surplus, another way of saying it, of more than a trillion dollars. Think of it, more than a trillion dollars. And because of 145 percent, that's the only reason, but because of they have now 145 percent tariff, there's no trading. You can't trade with 145 percent. We are therefore making in a certain way, I guess, 1.1 trillion dollars
In other words, we're not losing one point one trillion dollars. A deficit is much better. When I started, I say we were losing billions of dollars a day on trade. That's rapidly turning around. We looked at numbers this morning. So we were losing the United States during Biden was losing more than.
I won't even give you numbers because they're so embarrassing, but billions of dollars a day on trade. Those numbers are rapidly turning between the tariffs. Don't forget, we're now getting 25 percent on cars, 25 percent on aluminum, 25 percent on steel. And maybe more importantly, massive numbers of companies are moving into the United States.
Honda. We have tremendous the car companies are moving in at levels we've never seen before. The biggest investment ever made in the United States is being made right now. Trillions of dollars. I would say we could be at nine, nine trillion dollars. You could go back to other presidents. They haven't had anything.
$1 trillion for their entire term. Look at Biden. He had bad numbers. People are leaving. They weren't coming in. They were leaving with Biden and he didn't know the difference. The only thing he knew is people coming in. You know who they were? Illegal immigrants. OK, from prisons, from mental institutions, from all sorts of places that weren't good, from gangs, from Venezuela, from
They were coming in and there were criminals and murderers, 11,888 people that murdered and at least half of them murdered more than one person. This is what Biden led into our country. I'm bringing in big companies. We have Apple is investing 500 billion dollars.
We have Jensen, as you know, is gonna be 500 biggest chip maker, or chip thinker, I call him. He's really a thinker more than a maker. But we also have the maker, Mr. Wei. I get to know them all in the last -- it was a cram course. But they're all moving into America because of the tariffs.
And I don't think people have appreciated it. Some people do. Some of the smart people do. So we have more money coming in. It's really an amazing thing. We have
More money being invested in the United States now than at any time ever before in our history. And it's not even close. And I think the real number could be nine or 10 trillion. We don't know everybody that's doing it. We have many. I just heard about a plant that's being built right now. Very, very top of the line company. And they didn't come to the White House. They're just doing it because they're making it because if they build here, there are no tariffs.
And this is the big market. This is the market that sets us apart from it. This is the market where everyone wants to be. Now, if I didn't come here and do this, all of a sudden, we wouldn't be the market where everyone wants to be. So we were able to do it in time. But we're going to have a great announcement. And I'm not necessarily saying it's on trade. Going to the beginning, we're going to have a great announcement over the next few days, an announcement that will be so incredible, so positive. And I'm not saying -- I don't want you to think it's necessarily on trade.
Just to finish, we also have a situation because everyone says, when, when, when are you going to sign deals? We don't have to sign deals. We can sign 25 deals right now, Howard, if we wanted. We don't have to sign deals. They have to sign deals with us. They want a piece of our market. We don't want a piece of their market. We don't care about their market. They want a piece of our market. So we can just sit down and I'll do this at some point over the next two weeks.
And I'll sit with Howard and Scott and with our great vice president, who has done a really good job. We have some good news to report on a lot of fronts. But J.D. will be there and Marco. And we're going to sit down and we're going to put very fair numbers down. And we're going to say, here's what this country, what we want. And congratulations, we have a deal. And they'll either say, great, and they'll start shopping or they'll say,
Not good. We're not going to do it. I said, that's okay. You don't have to shop. Now, we may think, well, they have a right, you know, that maybe we were a little bit wrong. So we'll adjust it. And then you people will say, oh, it's so chaotic. No, we're flexible.
But we'll sit down and we'll at some point, in some cases, we'll sign some deals. It's much less important than what I'm talking about. For the most part, we're just going to put down a number and say this is what you're going to pay to shop. And it's going to be a very fair number. It'll be a low number. We're not looking to hurt countries. We want to help countries. We want to be friendly with countries. But you keep writing about deals, deals. When are we going to sign one? It's very simple. We're going to say...
In some cases, we want you to open up your country. In some cases, we want you to drop your tariffs. I mean, India, as an example, is one of the highest tariffs in the world. We're not going to put up with that. And they've agreed already to drop it. They'll drop it to nothing. They've already agreed. They would have never done that for anybody else but me. So we're going to put down some numbers and we're going to say our country is open for business and they're going to come in.
And they're going to pay for the privilege of being able to shop in the United States of America. It's very simple. It's very simple. So I wish they'd keep, you know, stop asking, how many deals are you signing this week? Because one day we'll come and we'll give you 100 deals. And they don't have to sign. All they have to do is say...
All right. We'll continue to monitor the meeting between the president and the newly elected prime minister of Canada, Mark Carney, in the Oval Office. But I will bring you the headlines regarding China first, obviously most important to the market. And while you may have seen that turndown, as you do here on the S&P 500, when asked to
directly about talks with China. The president said, "I haven't met with them. They want to negotiate. They want to meet." But as you heard at the very top of our program today from the Treasury Secretary himself on the Hill in front of Congress said, "Talks have not begun yet." That's really the headline of the day. And it was reiterated just now by the president, who said he hasn't met with them. And the Treasury Secretary, who was said to be running point on that part of the trade negotiation, hasn't either.
In terms of the relationship with Canada, which was the reason for this whole event in the Oval anyway, what has been an extremely contentious relationship, I'd say, over the last couple of months for certain, the president saying we're going to be friends with Canada. I love Canada. So we'll continue to monitor all of that.
Keep it into the context of what is driving the market here. But you do see a little bit of a turn lower, whether it's on that remark about no talks yet with China. Hard to know for sure, but it was coinciding the move with the comment there. We'll watch all of that. What do you guys want to do? Take a break or you want to keep going? I want to keep going. OK. I always want to keep going. Yeah. Steve Leisman joins us now, our senior economics correspondent.
Steve, so that's the latest there. I really wanted to talk to you about what the Fed finds itself in. And it plays off of what you just heard from the president and the Treasury Secretary today, that there are no talks as it relates to the most important counterparty in this trade war, that being China. At the same time,
You heard Mike Arrigetti of Aries with favor this morning that the economy's good. Sure, no one's really hiring that much and no one's really doing that much in terms of big capital deployment because there's this paralysis to some degree. So the Fed is watching all of it and comes away with what?
It's a pickle. It's a dilemma. Find your right word there, Scott. I mean, I guess I would argue a little bit with Michael Arrighetti. Hard to argue that the economy is good if nobody is investing or doing CapEx and if they're not hiring. That is not my idea of an ideal economy. I saw a report today from Reuters that M&A is about the worst it's been.
had the worst month since 2009 that's also not a good development so um the the the uh a standstill is not a positive for the economy it's not a positive for stocks uh right now the belief among respondents to the cnbc fed survey
is that the fed is going to look at all this and it has this issue of higher inflation on the one hand and weaker growth on the other and it's going to side ultimately with weaker growth but that comes with a belief scott that the inflation impact from tariffs will be something that hurts this year but goes away next year it's going to be key for that to happen if the for the fed to believe that and for it to actually happen
if the Fed can actually cut to address that weakness. - I mean, there is the idea too of, you know, as Nick Timberose was talking about in the journal today, and I know you've been thinking about as well, the idea of the Fed being in a lose-lose scenario.
thinking that they're either going to have to navigate a recession or stagflation, neither one is going to make Jay Powell and company very sanguine about the situation.
No, and people should not be. I mean, there was a fascinating conversation you guys were having as to whether or not the stock market has embraced the outlook here. And I thought Bryn's comment was really important, the notion of the extent to which
small businesses taking this on the chin when Besson, the Treasury Secretary, says this is for Main Street. Well, Main Street's about to get hit the hardest of anybody. Think about a large company. Scott, they go in there, they can negotiate for an exemption, they can borrow money, they can reduce a dividend, increase a dividend, do all kinds of stuff. The small folks are just going to let people go. They're going to shut down their businesses. This is a very bad situation. And the
The reality is that catches up in the statistics later. So I don't see how the Fed has a good choice here. I think it has to take what's coming to it. And I can only follow what Powell said
Fed Chair Powell said is the way he's going to address it. Look at our mandates, each side of it, figure out which one is furthest from our goal and address that one. That's what it has to do. There are no good choices here, Scott, only the least bad ones.
Yeah. I mean, they say patience is a virtue for a reason. And he probably still has the luxury of patience. And the jobs report maybe gives him a little bit better feeling about that, too. We'll just have to see. The commentary tomorrow down in D.C. when you're there is going to be really, really interesting, along with the questions, including the one I know you're going to ask, too. Steve, I got to bounce.
catch you later for sure. We'll see a lot of you over the next 24 hours. That's Steve Leisman, our senior economics correspondent. I mentioned Bill Baruch has some new moves. We'll take a quick break. He'll join us on the other side with those new trades.
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We're back. I mentioned top of the program. Bill Baruch had some moves. They're related to mega cap stocks for the most part. Joins us now. These are moves that were made yesterday. Are you getting a more bearish on the market in general? It's nice to see you. I mean, you trimmed Alphabet, Apple, Nvidia and Broadcom. Why did you do that?
We're not bearish per se. And here's the thing, though. I've joined the show in the aftermath of April 2nd, the week in the following week after that. And we put about 9% of our cash level, 9% down to 3%. And really what we're doing here is this market ran up to a big level of resistance. I heard Brent cite that level to 5750, the S&P. And it got there last week. It had a lot of good news. The White House had softened its tone on trade.
that was a big tailwind along with earnings. But I would be realistic here we have a big run a nine day win streak. At all when it comes to Alphabet the DOJ and antitrust I think is a headwind. If the EU and friction starts the trade there and there's there's targeting on services or the content of competitive anti competitive this of their business. Alphabet is
Alphabet and Apple, Apple as well with a little bit of a shrinking revenue and the headwind from the margins potentially shrinking on trade. All of this are headwinds here. And Apple as well had the most shallow run up from the bottom. So I think a little worry just trimming those to be underweight. But when it comes to NVIDIA and Broadcom,
We're still facing what could be talk on tariffs on semiconductors coming later this week. And I don't want to sit here and wait to see if it comes harsher than expected. Broadcom's traded very, very well. It's out above the March highs, and we love their business. We're actually double the index's weight on Broadcom still. But NVIDIA, we want to use this opportunity to trim that. Their earnings for both these are way out, a few weeks away.
There's going to be a lot of volatility, I think, in the coming days, coming weeks as we get through the Fed, too. Interesting that you added a little bit to Tesla. Today, we got even more bad sales news from Europe. UK sales the lowest in more than two years. Sales in Britain down 62% year on year for the month of April.
And that's even as demand for EVs rose. That pretty much tells you what the story is around this name of late. Why'd you buy some? So in our concentrated portfolio where we own no more than 10 names, after trimming Apple there as well and Alphabet, and we wanted to really kind of even out, broaden the weightings of the bottom half of that portfolio, right around 7%. And Tesla, given some of the weakness it's had in the first half of the year,
it was a little bit underweight of some of the other names. So we added to that. I also like a little bit of the base that it's building. I have a feeling here that we're going to see a better second half of the year at Tesla than it's coming out of here. So I really think that we could trade higher, especially comparing it to some of the other EV traders like a BYND that is breaking out kind of. So I think Tesla right here
bringing that up a little bit from the weighting it's lost in our portfolio. All right. Thanks for joining us. I appreciate you going through all this. I wanted to make sure we fit that in. That's Bill Veru. Let's get the headlines now with Silvana Hannau. Hi, Silvana. Hey, Scott. Good afternoon. A new report from House Republicans released today accuses the FBI of jumping to conclusions
Over the shooter's motivation in that 2017 congressional baseball practice shooting, the report argues the FBI ignored facts that the shooting was politically motivated. Three people were shot at the practice, including House Majority Leader Steve Scalise.
The legal defense fund for Luigi Mangione, who is accused of fatally shooting UnitedHealthcare CEO Brian Thompson in December, hit $1 million in donations. The fund's organizers said today more than 28,000 contributions were made with an average donation of $20. The funds will cover expenses associated to the three criminal cases against Mangione.
And travelers who aren't real ID compliant by Wednesday will still be able to fly. But federal officials say they should expect extra security steps. Homeland Security Secretary Kristi Noem said this morning there will be checkpoints to accept passports and tribal identification. For those who don't have the ID, she added 81 percent of travelers are already real ID compliant, Scott.
Silvana, thank you. Silvana, and now we still have Mike Santoli. We need to trade Palantir, too. That is a big, big story today. Bryn owns that name. We'll do that coming up as well.
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We are back. Our senior markets commentator, Mike Santoli, is here at Post Nile. We've been talking a lot about catalysts. I mean, you heard directly from the Treasury Secretary today. They haven't even started talks with China. So that's not a catalyst. Fed doesn't seem poised to do anything anytime soon. That's not a catalyst. What is? Good.
There's not much that's identifiable. I do think we're going to be kind of sort of swinging from vine to vine, which is the macro data, right? It's like, what's going to catch us next time? Now, I do think that the way we entered the week is relevant, right? You're on this rare nine-day win streak.
short-term overbought at the index level, definitely up into some obvious resistance, right back to the April 2nd level. Just makes all the sense in the world to churn and chop around a little bit. I would note that today you had a down open bought for the second day in a row. Yesterday we rolled over into the close. I think it's all dependent on
whether retail or whoever decides to keep buying the rumor of deals, of imagined trade deals, and how much institutions feel compelled to ramp exposure because they really did not
aggressively buy the debt. Is there anything in the Palantir move today that gives you a bit of pause? I mean, obviously, the stock was up 40-something percent in a month. You know, there are other stocks in this market that have gone sort of parabolic as well. And I'm just thinking this is not like it was a bad report. It wasn't a bad report. No, I think you have to be at least on alert here for what it could mean for flows and for retail sentiment. Retail, I
is all part of that. That's who did buy the dip. In fact, they never really got scared out of the market. JP Morgan this morning talking about that. So the degree to which it destabilizes other parts of the market, I mean, I was looking at Apple oven, it's up today. It's not as if this seems like it's really creating some kind of a further unwind. The stock was up 400% in a year.
giving back just a tiny piece. Yeah, and also, this was up a ton into a print. I'm thinking of, you know, Netflix has been up a ton, but it already reported. It's not like we're waiting for some event now that it has to live up to. The move is the move. Netflix, you almost think the bear case in the short term for Netflix is we have a risk on market because that's kind of been what people are hiding and thinking predictability and safety. Yeah, all right. I'll see you on Closing Bell.
That's Mike Santoli. We're back. Got some calls of the day to go through and some committee stocks on the move as well. We're back right after this. All right. Let's talk about Palantir because Bryn owns the stock. I want to just bring you in right away, Bryn, and get your reaction here to what was not a bad report. They raised their full year sales and free cash flow guide. The biggest issue is the stock was just up a ton going in. Which is more of it.
Yeah, I mean, the stock made a classic double top. It was at 120 just in February of this year. And don't forget, the stock was at $25 this time last year. It's just had a monster move. I know everyone says this is just a retail stock, but I do think even though it's trading at 64 times sales, which is nosebleed territory, in the SaaS business, a lot of investors look at what's called the rule of 40.
Very simply, you take the year-over-year revenues, which were 39%, add it to their operating margins, and if it's over 40, this is a great company. Well, theirs was 83%. And so I think you're going to continue to see investors play this AI name. Their corporate, their commercial business, Scott, was up 19%, just quarter over quarter. And so I think that from a technical perspective, the mid-80s, give it close to the 50-100 day,
But I think as a new investor, if you don't own it, you've got to look at the technicals because it is at 64 times revenues, which is a special situation to say the least. Okay. I mean, Malcolm, the take I get there is if you don't own it, don't buy it here. Yeah, I don't think this is the territory you want to be buying it. But at the same time, it is one of the most beloved stocks owned by retail. So maybe there is enough momentum online and everywhere else.
folks gather to send it further from here i mean brent obviously likes it and says that right that technically speaking it's probably set up for a little more downside just simply because the run into the number was so extraordinary as she said better than me the double top in the stock it should be but nothing about this stock and the way it's moved in the last two months has made a ton of sense to folks who are trying to follow it based just on the technical so
I don't know. It's a trade. It's not an investment. All right. Well, there's a chart that exactly tells what Bryn's talking about and really tells the whole story. We're back after this. Let's start with Netflix today for our calls because they got another one. The stock's been unbelievable. Reiterated by UBS. I think you know all of the reasons why people continue to like this name, UBS included. Jason, you own it. They did break the 11-day win streak yesterday. Yeah. But it has been the best performing comms services stock year to date and over the last one year. There's no doubt about it, Scott. I mean,
You see the price action stocks up 28% year-to-date. You know, the EPS growth is over 25%. REV growth is above 12%. And I think to the points earlier, it has proven to be a safe haven in this market. And I think that's what's been positive. The optionality from premium to ad-supported tier, there's a lot of spread there. And I think that's why people like the stock. How about ServiceNow, reiterated by B of A? That's yours, too. I should also mention that
Bill McDermott and Jensen Wong are going to be with John Ford today on Power Lunch together. So you don't want to miss that. About 2.30 Eastern. That's from their ServiceNow's annual knowledge conference. So it's a big interview coming up. But what about the stock? They had a really strong report. Let me say that. 19% EPS growth, 18% revenue growth. I think the concern coming into the print was their government business, which is continuing to grow given all the changes.
that this administration has made, they're still growing there. So I think that's why the stock has bumped nicely. Brynn, what about Diamondback, which beat today? Yeah, I mean, they're the best operator in the Permian. I will say, Travis Stice, the CEO, says at these prices, it just doesn't work. And I think you also see the rig count is down
To pull oil out of the ground is becoming more expensive. And so technically, all these stocks look the same. They're making lower highs and lower lows. So you just have to have that settle out. Trump's been clear he wants energy prices down. OPEC wants more production. So it's really a perfect storm where these names have just been under pressure and probably will be for the rest of the year.
Let's look at Marriott before we take a break here. They cut their full year guide by 50 bps due to a more cautious outlook, they say, in their U.S. and Canadian regions. Stock's positive, though. And that's interesting to note. Jenny, you own that name? Well, I think we've been talking a lot about expectations versus reality. And expectations are probably for a worse cut, given how much uncertainty there is. But here's the thing on Marriott.
What I like about this is it reminds you that there's still things to do, even in a very uncertain environment. We've owned this since 2013. It's got a 9% annualized return. The earnings growth ahead is totally decent. It's 8%, 13%, 12% for the next few years ahead. It trades at a little bit higher than a market multiple. This is something you can own for a long time. You don't need to worry about the next year. You worry about the next five years. Okay, up 1.25% today. We'll take a break. We've got finals on the other side.
I hope you join me three o'clock on closing bell. Looks like it's going to be an interesting last hour of trade. Ed Yardeni, Stacey Raskin, Jim Stewart, New York Times is going to be with me, too, as we look ahead to Disney. And I hope you'll join me then. Bryn, what's your final trade today?
Robinhood, this stock will break above 50. Tons of call premium to buy on the stock as well. All right, going a little bit in the opposite direction today. Malcolm, what about you? Yeah, I like Zscaler, ZS. It's been range bound for the better part of a year, but I think it's going to break out heading toward earnings at the end. All right, much love CyberStock. Speaking of, Jason Snipe.
Palo Alto, I think their new platform strategy is gaining momentum here. Jenny Harrington. Letter O, realty income, no tariff exposure, 5.7% dividend yield. All right, good stuff. Good day, everybody. I'll see you at 3 o'clock. 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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