Trading the Trade War 4/23/25
44:09 Share

The U.S. and China are competing for global leadership. The country who wins will define the world we live in. U.S. international assistance is vital to our national security. It helps prevent terrorism and avoid costly wars. It fights diseases and saves lives. It helps keep America as the number one economy in the world.

U.S. international assistance protects our interests at home and abroad. If America doesn't lead, China will. What does it mean to live a rich life? It means brave first leaves, tearful goodbyes, and everything in between. With over 100 years' experience navigating the ups and downs of the market and of life, your Edward Jones Financial Advisor will be there to help you move ahead with confidence.

Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, member SIPC. I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.

All right, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the new trade war headlines driving stocks all over the place today. Mostly higher, as you know, not as high as we were. However, we will debate the markets. We'll debate the headlines. We'll debate what to do with all of this with the investment committee. Joining me for the hour, Joe Terranova.

Jenny Harrington, Steve Weiss, Surat Sethi. I'll take you to the market. I'll show you exactly what I'm talking about. Yes, we're green and we're nicely green. And the Nasdaq is still a near 500-point gainer today. That's near 3%. Dow is up better than 1,000 points. And it's pulled back off of that. So that's how the market looks at straight up 12 noon here in the east. Joe, I guess I'll begin with you on what we're playing with, OK?

Last night, Trump, no intention of firing Powell. Last night, Trump, tariff rate on China won't remain at 145%. It won't be anywhere near that high. It'll come down substantially. It won't be zero. 9.40 or so this morning, the Treasury Secretary, Wall Street Journal, excuse me, the Wall Street Journal moving a story says, quote, White House considers slashing China tariffs could be by half to de-escalate the trade war. Trump hasn't made a final decision.

Treasury Secretary, within the last hour, no unilateral offer from Trump to cut China tariffs. Full China trade deal may take two to three years. What do I do with all that? This is exactly why we said on Monday it's very difficult, based on where the market was, to think that you could play the market from the short side and expect downside because you get the treat, the tweet rather.

So you have a very clear softening of the rhetoric over the last 24 hours. That is obvious to all of us. Including our Eamon Javers at the White House today who described it as a, quote, tonal change. Clearly. Tonal change. Without question. With that being said, it still remains a highly volatile environment.

that dictates if you are active, you are trading. And I know a lot of people that watch the show, that's uncomfortable for them. I know for some people in our universe, that's uncomfortable for them. But that's what it is. It is a trading environment. Yesterday, when Treasury Secretary Besson's comments came out regarding what he said in a private closed-door meeting, you saw the rally in the S&P, okay?

I was able to buy some S&P futures. I rode the S&P futures along the way in extreme volatility. And then guess what happens? The market literally slams into the ceiling this morning. And we have a chart to show this. So while you have all this crazy volatility, treacherous environment, mercurial nature of markets, you actually have some technicals that you can rely on. So let's show this chart. If you look at the month of March, what you will see that in the low for March,

54.88 is your number for the S&P 500.

That actually, which was the floor, now becomes the ceiling. On April 9th, time to buy, right? Time to buy. The high that day, the intraday high is $54.81. Today we get up to $54.69 and foolish me, I didn't sell my S&P futures there. I'm still sitting with them. I have a stop down below. Can't lose money on them, but certainly I should have been a seller up there. It does appear to me, based on this tonal change,

From the president himself, and I think we can agree if you listen to his comments and you read between the lines and you listen to Amon's reporting, which I advise you do, because his on the ground, boots on the ground stuff at the White House yesterday moved the market. Describing this, Weiss, is a, quote, tonal change that it appears to me that the markets have gotten the president's attention.

Maybe a little bit later than people thought and expected, but there seems to be less tolerance for some level of volatility, especially as it relates to what's been happening in the bond market and the currency markets because of the commentary about the Fed share. So the president softened his tone regarding Jay Powell. Undoubtedly did that.

I'm trying to figure out what you guys are supposed to be doing in this market because on Monday when you were on, I asked you when you were really describing how negative you were. Yeah. Unquestionably. Yeah. Are you 100% in cash, I asked. You said, I'm almost completely hedged. I have very, very little exposure. Right.

This morning, you told our producers, I've kept most of my exposure except for sales in Amazon, Google, due to concerns about cloud and consumer spending. Can you square that for our viewers, please? Sure, absolutely. So when I hedge, I'm hedging with the indices, with the Qs or VOO. And the reason why I do that instead of selling my positions is because I know, as I've said before, this is going to be a headline-driven market.

So, I'm able to take those off quickly and I'll incur my gains on the taxes from short-term trading in those. I did have gains in those. Just keep in mind when I initiated my bearish outlook and went to 75% cash, it was all

almost on the day when he was inaugurated. So none of this is a surprise. So that's how I'll continue to play it. I'm not selling Meta. I'm not selling, even though frankly I've considered because his legal problems, you know, continue to materialize. I do have concerns. I've not sold Microsoft.

Even though I harbor cloud concerns there as well, but I can't have no exposure. I like those for a very long-term play versus the ones that you mentioned purely for the cloud and for consumer spending on both Amazon and Google.

So, look, the way I look at it, my view hasn't changed. You know, one day of him negotiating against himself, as we've seen, should not be applauded by the market. You know, this is more, this market is trading like it's watching Hulu, where there's a new episode dropping every week. And that in a compressed time versus like Netflix, which is what the market wants to see, where all the information drops at one and you know what the story is. So that's a simple analogy. All right, good analogy. I get behind that.

Yeah. It's a rare, good analogy, but...

but nonetheless, we'll run with it. - So I remain bearish and concerned about the economy. - Okay. - Okay, the economy, CEOs are not gonna change what they've already stated is we're pulling back on investing because they don't know where the road is. That's gonna drive the economy into recession. - I feel like anytime people of Ken Griffin's stature speak publicly,

that it's worth bringing the headlines to all of you, obviously the head of Citadel, is speaking at the Semaphore World Economy Summit, in which he has said within, I'm past this, within the last 20 or so minutes, that the trade war has devolved into a quote, nonsensical place, and that the United States is eroding its brand.

That's what Ken Griffin has had to say. I think everybody has been watching. And I bring you this, too, because Ken Griffin, the stature that he has, obviously, the position in which he sits, the company which he runs, and he's been a supporter of the Republican Party, a donor. He's not naive to the issues that have...

surprised a lot of people who have been on that side of the support space. This trade policy which caught a lot of people off guard and it surprised a lot of people in terms of what they thought and what is and how to invest in that environment. What do you make of what Ken Griffin has said in the greater context of what we're supposed to do when you have the president, the treasury secretary making the comments that they did and the market's just reacting to everything? Right.

Well, I think it's a little silly that the market's reacting to everything because we kind of knew, I think at least if you looked at Trump 1.0, you kind of knew that you were going to get this. I mean, I think this is on steroids. But when I think about that specific Ken Griffin comment and how it relates to the market today, that's actually not a new comment today, right? That kind of thought about the trade war is chaotic and it's eroding our brand, that's been out there for, frankly, before Liberation Day.

People have been talking about that and it's real. So he's right, but he's also not telling us something that we haven't known and haven't digested. When we were talking before about the tonal change, how long is that going to last? Like 10 minutes? I've been thinking about how whenever you go to visit a friend in Florida, the joke in Florida is for the people who live there, like, oh, you don't like the weather? Wait five minutes, it'll change.

you don't like the tone, wait five minutes, it'll change. So are you sitting on your hands because you're afraid the tone's going to change for five minutes? No, I'm never sitting on my hands. And I also want to make a point here. When I get bearish and I think the market's going down, it doesn't mean I'm selling out the portfolios or the stocks. I believe that you do not trade in and out to get around bear markets. I believe that you stick it out through them or stick it out through corrections. You think this is a bear market?

like a bona fide bear market? I mean, two-thirds of the S&P is down more than 20%. I mean, David Rosenberg, you know, who I think leans bearish, of the current market setup says, quote, an endless string of volatility in both directions, which is a tougher environment that only happens in fundamental bear markets. Now, I bring that up because I almost feel like

using historical reference in your thought process about this particular market is dangerous. I agree. Why? Because this was a president-induced bear market. But that means it can also be a president-induced quick turnaround. Right. Can it? I think it could, but I don't...

I also think there's a lot of asynchrony here. So when you say, do you think it's a bear market? Like the definition of bear market is down 20% in general. People argue with that. But so you could say, okay, there's a bear market here. There's not a bear market there. As you know, when you say, what do you do? You know, do you sit on your hands? No. What you do as a proper investor is you take advantage of it. And I think...

I'm actually always kind of excited and happy in these environments because there's something to do. So as you all know, I bought two great positions. I bought Ryman Hospitality Properties and I bought the Microchip Convertible Preferred. I never could have done that

had there not been bear markets in those stocks, right? In the microchip, it was down 60%. RIME was down 30%. What's the semiconductor index down, like 20 or 30%? There's a bear market in the semiconductor index. There's not one, technically speaking, in the S&P yet. So we're all over the place. And I think what we need to remember is there's opportunity. Everything's going to be treated differently. There's asymmetry, asynchrony, if that's a real word. But there's

There's a lot to do. And again, unlike a trader, because I am a long-term investor, I just get through it. So, well, I'll tell you, I have no idea, no idea when the tone is going to change. I have no idea what's going to happen with tariffs. I don't know. But the market, the market, the market, the market, though, Surat is proving to everybody who's watching that it's

It doesn't take much and it's not going to take much to get the market into a much better place. You know, you can go up a thousand points like you were earlier today. All right. So Besson's comments maybe throw a little cold water on the extreme optimistic level of today. But nonetheless, you're still looking at a 500 point gain on the Dow and near 500 points on the Nasdaq. That just tells you a lot.

It tells you directionally the tone is changing, right? And I think what's happening in the White House is they're testing to see when they say things, what is the market going to react? So the whole Powell commentary was to say, what is the market going to react? And they got the reaction and it was pretty bad. So what do they do? They turn it around. The same thing happened two weeks ago when, you know, the yields were going through the roof. So I think they're watching the parameters of this. And to Jenny's point,

you've got to stay invested and upgrade your portfolio. It's just very hard to time this stuff because we don't know where it's going to go. And now we're in that phase where what, 20% of the S&P earnings are coming? What is that going to be? So now you've got

more data coming at us and we're going to hear more from CEOs. So I think you have to really understand what you own in your portfolio. I just want to ask a question. So if you are, which I agree with, you stay invested. If you're a long-term investor, you stay invested. But what are you trying to time then? Because you're just staying in it. So what do you, like, you're not timing anything. You don't care. Or you can say, I'm timing the long run, right? What does that mean? Okay, what it means is that, what it,

- What, it doesn't mean anything? - I didn't say anything, Jenny, relax. Take it easy, take it easy. - Sorry, fired up today, fired up. - Wow. - No, but like if you're timing the long run, here's what you know. You know that over the very long run, the market delivers on average an eight to 10% return. I actually looked at it recently, it's more like 11%.

I know that. But I'm just asking you. That's what you're timing. And you're saying, I'm not going to try to be cute. I'm not going to try and be smart. I'm not going to beat it. I'm just sticking with compounding. I'm just sticking with compounding. No, but Joe's being tactical. Joe bought more. Wait, hold on. Joe bought more of the TLT. Absolutely. It was a trade that he was in. I bought more Netflix. But that's a bet. The TLT is a bet that yields are going to go down. Obviously, the yields had...

been getting away from that trade. But now you must have the belief that we're going to get back into some level of normalcy in quotes as to the way that the bond market generally reacts at times of uncertainty. People buy bonds. If the market is sensing out

sensing a more difficult economic outcome, yields go down, not up. Absolutely. And I also think what's important is that what we're hearing is the messaging from the Treasury Secretary. We're not hearing from Howard Luttnack. We're not hearing from Peter Navarro this week. We're hearing from the Treasury Secretary. And what if we continue to hear from the Treasury Secretary? We want yields lower. And I think that has purpose. I think that has meaning. If there is flexibility, all

ultimately is going to be. Then the argument that tariffs ultimately inflationary and they're going to lead to some permanent inflationary spike I think that completely falls apart. I think the reality is we've got a dramatic shock to confidence. I think it's going to impact capital. I think it's going to impact

I think it's going to impact consumer spending. I think it's going to impact guidance, which really you have to give two sets of guidance right now. Why even give guidance at this point? So I think ultimately it means you get the economic contract. Just one last point. And I do think, look, I understand when we talk about trading, people get uncomfortable, right? I'm sitting here. I'm long futures. I'm probably going to lose money on them. I understand that.

but the ken griffin's of the world the jane streets of the world the virtue financial support they're making money right now they are it's a elevated by the money and i mean i don't know if those farmers make money and any other money and i mean i don't know if that's a pretty good property and you know how ridiculous it is saying that you gotta be long-term best all-time ken griffin you quoted david tapper steve kohne renaissance right

The founders of those companies, of all those asset management firms, are worth between $25 and $50 billion. Maybe one. I'm going to be in all time. Hold on. I let you talk. My narrative is not going to change regardless of what market conditions are. If you have the capability and the mandate, now a lot of people here don't have the mandate because they're not the asset alligators. They have to be in equities. Now, number one. Number two, to think that

To give the administration credit that they're throwing out all these sound bites to test the market acceptance is just ridiculous. I don't think so. You know it. I don't think it's ridiculous. You're not going to play with the markets trading down 1,000 points or up 1,000 points a day. I think administrations, for as long as time has existed, have done that.

have always done that. I'm not disagreeing. There's always a trial balloon thrown out by any administration to see how the market might react. I'm not disagreeing. But none of them are trial balloons of 184% tariffs. They're within the realm of what's reasonable. Well, that's why Ken Griffin said it devolved into a, quote, nonsensical place. It is nonsensical. And think of what the market rallied on. The market rallied on Scott Besson saying, oh, tariffs are going to come down with China. No shit. You mean they're going to stay at 200%?

Come on, everybody knew that. For Trump to say, I'm not going to fire Powell. Really, he has no ability to fire Powell. So that just shows the market is, to your point, very nervous and that the headlines drive. But ultimately, the direction is the direction because the smart people in industry are not going to deploy billions of dollars in CapEx.

on headlines. They're going to wait to see what sells. Now, if he fires Lutton, which he should, if he gets rid of Navarro, which he should, and brings in people there, then it could be a different story. But tone's not changing while it's all sycophants there. Okay. We're going to spin this now about the tone changing just maybe towards Tesla.

See how I did that? That was good. Take a look at the stock, because the company obviously had an earnings report last night. Sales down 20%, net income down 71%. Musk saying the time he spends at Doge is going to drop, quote, significantly next month. He had barely taken, put the phone down, and Dan Ives put out a note raising his price target to $3.50.

Tesla gets back Musk was the headline there while acknowledging, does Ives, that the brand damage caused, and I'm quoting straight from the note.

The brand damage caused by Musk and the White House doge over the past few months will not go away just by this move, and some of the damage will be sustained forever in Europe and the U.S. But Musk recommitting as CEO and basically leaving his doge role over the next month is the biggest and best possible news Tesla investors could have heard last night. So again, he raised his price target to $3.50 from $3.15 yesterday.

You still have the stock. Yes. The stock is still in the ETF. April 30th, we rebalance. Everyone can guess what's ultimately going to happen. Let's talk about the earnings. Let's talk about the condition. I don't know if everybody can guess. Okay. When do you have to make the decision? April 30th. Okay. So what happens is today's only the 23rd. You're telling me that if this doesn't initiate a return of momentum to the upside in the stock...

that you wouldn't necessarily keep it? You're leading on people to believe that it's bounced come April 30th with your comments now. So there would have to be, how do I couch this properly in a compliant way? There would have to be a dramatic...

there would have to be a dramatic bounce to restore positive momentum in this stock. In addition to that, remember, something that we do is we prioritize in the definition of quality revenue growth. Their revenue growth is flatlining. You're seeing in the totality of the MAG-7 a moderation in revenue growth. I think that's why the street is repricing a lot of the MAG-7. So I

I think this is a company that is fundamentally challenged. I also think in terms of the softening of the rhetoric, wouldn't be surprised if the next thing that we hear is exemptions being handed out that ultimately could positively affect a lot of these Mag7 companies. Because clearly the...

Need to import graphite from China, which is the world's largest exporter of that Tesla is reliant on that the tariff is challenging right now. It's margin. Let me ask you this has the tone Let's keep this theme going of tone changes. Okay tone change around trade war tone change around Musk and Tesla perhaps tone change around data center we had some concerns recently about hyperscalers and

Scaling back, maybe not spending as much on new data center investments, keeping the current ones in place, but maybe dialing things back. GE Vrnova today, big power orders. The CEO of that company is on Mad Money tonight, don't miss it. GE Vrnova is a big winner, 4%. Vertiv, strong outlook for data centers.

Vistra, Eaton, Constellation, all higher. We can cycle through all those and you can see what I'm talking about. Oracle, Dell Technologies, also higher.

tone change around data center? Yeah, I think it was becoming so negative because people were picking on, well, Microsoft's going to slow expenditures and Amazon. There is still demand for this, and we just don't have enough supply. The question is going to be pricing. And I think these things were just being sold so fast. We own Equinix in the data center, which also has co-location, and that stock's also been sold off. So we have Vertiv, but the only question I would have is, do we really have

a proper reflection of the demands after what was it april second was liberation day quote unquote that's the problem you know you're you're talking about earnings that really don't affect uh reflect rather this new environment so i don't know i'm skeptical there that's the total crux of the problem that's the crux of all of earnings season right is what we're hearing does not reflect what's going forward and there's no way to extract and they have now with the 90-day moratorium

They have a 90-day moratorium and having to offer real negative guidance, hoping that things will change, things will be positive. So there's no percentage for them to come out and talk about, to Jenny's point, the reality. What about tone change around Bitcoin, right, which had a pretty big drop down from its high and has been on the move big time again? Yeah. You're pushing up against 100K. Yeah.

You know, it's decoupled in many respects from the NASDAQ. As the dollar has had its issues, Bitcoin's gotten a bid. I think you'd see it through 100. I mean, you will see legislation come out. We know that's going to happen. You've got a pro-crypto chair of the SEC. You've got a president who has significant family interest in it being approved. So that alone is going to get it through.

But the other problem with crypto is you could also see it move down significantly. And that's the problem with it because there's no future stream of cash flows that you can look towards to value it. There's still no business case. Right. And there's also still a huge component of the market that's wrapped up in excessive risk and excessive risk-taking and concentration. And if things go south, they get squeezed. They may need to sell those holders. Yeah, but for now, the momentum is in place clearly. The resiliency is something that I think people are applauding. God.

Kind of, but it just throws around. Well, that's what it lists. Jenny, if you want to make an omelet, you've got to crack some eggs. I mean, you've got to step forward and take a little bit of risk sometimes. There are very few owners of Bitcoin you're going to scare out because of volatility. Well, right. I like calculators. All right, let's do this. Let's take a quick break. When we come back, we have more committee moves. Surat has a new buy, a new sell to tell you about. We'll do that when we come back.

Businesses come in all shapes and sizes. Maybe you're a small business expanding into a new space, a mid-sized company planning for the future, or a large operation investing in the latest equipment. Whatever your needs, Atlantic Union Bank is here, providing easy access to knowledgeable bankers with local market insights and the right digital tools to keep your business moving forward. Because you deserve a relationship manager who cares.

Call, visit us online, or stop by a branch today. Atlantic Union Bank. Any way you bank. Parents of tweens, if you're familiar with far-off drop-offs... Stop, stop, stop, right here. Or get DMs about what's for dinner, you may be experiencing tween milestones. For your son or daughter, these can start at age 9. HPV vaccination, a type of cancer prevention against certain HPV-related cancers, can start then too. For most, HPV clears on its own. But for those who don't clear the virus,

It can cause certain cancers later in life. Embrace this phase. Help protect them in the next. Ask their doctor today about HPV vaccination. Brought to you by Merck. Growing a business can feel impossible. But with HubSpot's built-in AI, you can get more done than ever before, which means anything's possible.

Breeze agents help you do things in seconds that used to take hours. Providing the customer support of five yous. Generating the content of ten yous. And Breeze Co-Pilot keeps you two steps ahead. Giving you the right insights at the right time to close more deals than ever. HubSpot. Impossible growth made impossibly easy. Get started today at HubSpot.com slash AI.

All right, we're back above 40K, back down below, excuse me, on the Dow. So we're well off the best levels of the day. Surat, new move. You bought Zoetis. I did. Leader in animal health care. They don't have the pay air regulatory issues that some of the other big pharma do. And upgrading from Elanco. So my theme for the last few weeks is upgrade your quality of your stocks. Elanco is a good company, but four times levered. Zoetis has a strong balance sheet and global presence. Ever owned it before?

I have not. No? All right. Thank you very much for that. Stocks on the move we need to get to. Bristol Myers, their schizophrenia drug falling short of the main goal, phase three. Jenny, you own the stock. Bristol Myers reports earnings tomorrow before the bell. We can take a look at what the stock is doing after it.

did fall short, phase three. Right. So I think a lot of the information will actually come from the call tomorrow, so it's hard to say too much right now. But when I bought this drug about, I don't know, nine months ago, when I bought this company, sorry, it was trading at a 5.5% yield. It was trading right about here at 48. And it was not purchased for that schizophrenia drug. What it was purchased for was the fact that it was minting about

$10 billion a year of free cash flow, and we thought that they would ultimately be able to buy their way back to growth. So then maybe six months ago, they announced this CoBINFI drug stock popped up 10%. Now they're getting less great news on it. Stock drops a little bit. I didn't buy it for this. I think they'll still figure out a way to buy their way to growth. But I am curious what they have to say on the call. So I'm kind of like, fine, great, you get to buy it where I originally bought it. What about Thermo Fisher? Let's look at that stock today. Their earnings did beat. Let's see what it's doing. What do you think?

I think this is a really interesting example of how government policy is really impacting businesses. And to your point about not needing to say anything positive. So they beat, but they lowered full-year guidance. They lowered it from 2330 to 2230. And they said, by the way, and Q2, it's like 10%...

Hello. So they highlighted things like macroeconomic uncertainty and muted U.S. purchases. They're taking proactive mitigation actions to navigate near-term headwinds. Core business is resilient still. So when you hear people say that, when you hear the CEOs say that, they're taking the exact hall pass that you said they would. They don't want to be too bullish right now. The other thing about ThermoFlex, we own it too, is they're also an acquisition machine. So they're going to look for things on the cheap.

And it's a great management team that's been there for many years. So it's one of our core holdings. And when things like this happen, this is when you add to a stock like this. - Right. It was super rich for a long time. So now you've got it-- - Well, it had a COVID bump to it because all their products were used in COVID. Then it came off, and now I think it's a great time. - Yeah, so now you're trading back at 18 times earnings, 5% free cash flow yield. That's getting more reasonable.

Joe, Capital One, they beat, they missed on revs. They did. Bank of America reiterated a buy today and they call it a consumer staple. What do you think? Largest credit card holder in the country now with the integration of Discover.

stock gap to open higher here. Financials, the entire sector is really trading with a strong degree of resiliency. Just pull up Berkshire Hathaway. But in the case of capital- - I mean, but you're leaning on the insurance side of the financials universe to say that. - Clearly, Travelers, Chubb, which reported also a strong quarter. You could group that all collectively together, progressive put in that basket. But I do think financials as a sector,

has less exposure to the tariff volatility. I do think there's been a degree of surprising consumer resiliency. And to Jenny's point, I don't think we see the real effect of that just yet. But it appears as though whether it's Visa, MasterCard, Capital One, or even to a certain extent, American Express, these stocks are stocks that are finding support within the market. You've got buyers that are stepping in and wanting to own them. What about CME Group?

They reported as well. Yeah, down slightly. I think they needed a little bit of a stronger beat than ultimately they got. There's a lot of enthusiasm surrounding the exchanges on the expectation that volatility remains high, net interest income is going to be positive. Good for trading. Great environment for trading. So I think they needed a little bit of a stronger beat. But down tape, I wouldn't sell it here.

Okay. We down tape for that stock. Yeah. Okay. Let's get the headlines now with Silvana Henao. Hi, Silvana. Hey, Scott. Good afternoon. Senator Dick Durbin of Illinois just moments ago announcing he will retire after 44 years in Congress. Durbin, who has been the number two Senate Democrat for 20 years, said, quote, it's time to pass the torch. Several Illinois Democrats have signaled their interest in running for the seat, including Representative Lauren Underwood and Lieutenant Governor Julia Stratton.

The families of the Uvalde school shooting victims have reached a settlement with the city. City council members on Tuesday voted unanimously to approve the settlement. The details which have not been released. The mayor of Uvalde said the city will also work with the families to create permanent memorial. An attorney for the families could not immediately be reached for comment.

And in New Jersey, 3,000 residents have been forced to evacuate as a massive wildfire continues to burn after igniting yesterday afternoon fueled by strong gusts of wind and dry conditions. The New Jersey Forest Fire Service said the Jones Road fire has burned 11,500 acres and is now 30 percent contained, Scott. All right, Silvana, thank you. Silvana, now coming up.

Betting like Buffett, there's a new ETF, believe it or not, that lets you do just that. Bob Pisani explaining all of it in today's ETF Edge. Amazon has everything for every kind of Mother's Day, whether that's a massage gun for an at-home spa day or new shoes for her favorite salsa class or gifts like a biker helmet to unleash her inner daredevil. From hot stones to helmets, shop everything for Mother's Day on Amazon.

If your small business is booming, you might say, cha-ching, but you should say, like a good neighbor, State Farm is there, and we'll help your growing business. Like a good neighbor, State Farm is there.

We'll go to Bob Pizzani now with today's ETF edge. Hey, Bob. Hello, Scott. Good to see you. The Berkshire Hathaway annual meeting is 10 days away and anticipation is already building around what Warren Buffett might say. There's now an ETF for that. Last month, VistaShares launched the VistaShares Target 15 Berkshire Select Income ETF. I know it's a mouthful, but it holds direct exposure to Berkshire as well as the 20 largest whole

Holdings of Berkshire later on top of that is an option strategy that targets annual income of 15 percent. This is very interesting. Let's talk to the man in charge of that fund, Vista Share's CEO, Adam Paddy. Adam, good to see you. You say you can now invest like Buffett and you can get income. So what's in this? How does it sack up against a simple 500 S&P 500 index fund?

Yeah, I mean, look, we've been running, you know, the market's been momentum driven for many years. The switch has flipped. We're looking at quality and value tilts right now in terms of factor exposures. And Berkshire Hathaway has certainly performed incredibly well this year, handily outperforming the S&P 500. It's a really well diversified portfolio chosen, of course, by the best investor the world has ever seen in Warren Buffett. And you've got everything from Apple and Amazon to Coke and financial

financials such as Bank of America and Citigroup. So really well diversified and it's performing really well in this market. So I think the time is right. Yeah. And Kroger, I see here all sorts of stuff here. And this is why you're diversified. Buffett doesn't just hold Magnificent Seven stuff. He is a well-known diversified investor. He's known for a value tilt and that has paid a lot of dividends this year. So I guess the message here is diversification and diversification

Berkshire's attitude towards investing pays off. This year it is. Yeah, stable, stable companies that are hopefully undervalued with that value tilt, as you mentioned, I think is important. And your prior guests, one of them mentioned, you know, the financial exposure that Berkshire has and perhaps financial companies have a little less exposure to tariff, the tariff issues that are, you know, kind of going through the economy. So, you know, we've got a lot of that in there, which is really well positioned.

Now, Berkshire does not pay a dividend, but you've added an option overlay to this that does pay a sort of synthetic dividend. Now, how does this work and why did you add that into this mix here?

Well, who doesn't want to invest like Buffett, but with income, right? So to your point, BRKB does not pay one. Warren likes to keep his cash on hand for repositioning the portfolio. So we did a lot of research and we found that investors in BRKB would like to get that dividend exposure. So

If you own BRKB, you buy a little of OMAH to add to your portfolio, you'd get that synthetic dividend exposure. We use an options overlay. We're selling calls and call spreads. And it's a 15% target income annually, which we pay out monthly at 1.25%, which is the goal. Right. And you would rebalance quarterly, quickly, right? How often do you...

You've rebalanced on the equities. And of course, the options are run daily. It's an active process.

Adam, thank you very much. Interesting product. Of course, we'll keep an eye on Buffett next week. Remember, you can see all of our shows, ETF Edge shows, on our website. That's ETFEdge.CNBC.com. Scott, back to you. All right, Bob. Thank you. Bob Pisani. We have a special programming note, of course. Next Saturday, May 3rd, Bob mentioned, we'll be bringing you the entire Berkshire Hathaway annual shareholders meeting live on CNBC, streaming on CNBC.com and CNBC+.

We will hear directly, of course, from Warren Buffett himself as he takes the stage to answer questions for over four hours. Our Becky Quick and Mike Santoli, as always, will be live in Omaha beginning 8.30 a.m. Eastern time. Up next, a big cell call today on one of the committee's energy names. We will debate it in our calls of the day, and we'll do that next.

All right, welcome back. I want to call your attention once again to CNBC's newest subscription streaming product called CNBC+. You can stream Halftime Report, all of your favorite CNBC shows, anytime, anywhere, and also on demand. That's what the data feed looks like on your screen. Headlines and stock movers, of course. Speaking of, let's get to our calls of the day today. We do begin with Chevron downgraded to a sell. Surat, it is your core holding in energy. Redburn today says, get rid of it.

What do you think? Oh, well, I like I mean, you get a 5% yield. The stock's down 6% for the year. And by the way, as oil stays where it is, it goes lower. And Exxon and Chevron are in the perfect spot to do acquisitions. So, you know, the big boys are going to get bigger. And I want to hold this because at some point when oil turns around, these, you know, the Chevron's the world. You think they're going to be allowed to get bigger? I do. I think there's questions about, you know, what was thought.

would be the case to what maybe is the case. Because you're putting that ahead of the slide in oil prices, which they, according to this firm, the most oil levered of the super majors. That seems to be trumping, pardon the pun,

what you're suggesting. - I think it's a very different time than it was in the last downturn because the balance sheets of the chevrons in the world are very strong. And to your point of acquisitions, they're gonna go after pockets of shale, pockets of the small companies that can't survive. So I don't think you're gonna see a multi-billion dollar acquisition, but you're gonna see private and smaller acquisitions that will just bolt up their assets.

So it doesn't matter if oil stays in this range? I don't think so. To me, oil in the 50 to 60, they're fine. If it goes below, I think they're all in trouble. But then the economy is in trouble, so there's a bigger thing. But you're also getting paid 5% to sit on this stock. Okay, paid to wait. Northrop, price target cut today to 550 from 575. RBC still likes it. They outperform, reiterate it.

What do you think? They trimmed their outlook, obviously. What do you think? So they announced earnings yesterday and the stock was down almost 13 percent. And all they did was they guided EPS down 10 percent below consensus. And the reason they did that. That's all? What do you mean that's all they did? That's all they did. Guiding 10 percent below consensus? And the stock went down 13 percent for like one. That's a big whoop? Yeah, it is a big whoop. And I'll tell you why it's a big whoop. Because the cost increases are not expected to be recurring. It was due to production increases. And by the way, they do also have a complex cycle.

supply chain. But here's why it's not a big whoop. Because they have a record backlog. They have $92.8 billion in backlog. Their international sales were up 11%. And it's not a big whoop when you think about investing for the long term. We've owned this stock since 2013. It's up 400% since then. It's got an annualized return of 14%. And when you look through that, like, okay, here's a one-off down 10% revision because of momentary cost increases, you look through that.

And when you look through that, you're a tax efficient because you haven't had to pay capital gains along the way. And you stick with this company. It's, by the way, trading now at 17 and a half, 17 times earnings, 5% free cash flow yield. To your point, all the time you always talk about permanent compounders. This is a permanent compounding poster child. I want to own that. This does not rattle me. Joe, CrowdStrike initiated, excuse me, buy at Roth today. We believe that CrowdStrike is one of the best positioned companies in security.

I mean, that's already known. Yeah, look, I think everyone knows that collectively we all believe that the investment thesis surrounding cybersecurity is one of the strongest investment thesis that you can maintain in the market, whether it's CrowdStrike, Fortinet or Palo Alto. These are the vehicles to get you there. I will note you have Check Point, which is down today.

after earnings and that's really because there was exuberance in the stock very long positioning didn't really deliver the blowout quarter that was expected that said i take the other side of the down market and checkpoint all right quick break we come back sent only he's on the other side with his midday work we welcome in our senior markets commentator mike santoli for his midday word now i mean what a session already

Yeah, for sure. I mean, it made maybe some sense. The pre-markets were up 2% on some less bad or incremental moderation in the trade and, you know, the sort of hostility toward Powell. We extended on more, you know, kind of maybe insubstantial headlines about what China tariffs might look like.

This environment, I think most of what you have to understand is we're under a tremendous amount of stress. The market did get very oversold as an initial condition. How much we can make use of that in terms of running to the upper end of this range is the question in the short term as people get chopped up trying to chase the headlines and you have this whole kind of squeeze dynamic that gets in place as well. So I get it that the market in the short term is very tactical and it's going to essentially try to say,

Is the latest headline less bad than what was priced in five minutes ago? Bigger picture, you obviously need broader resolution. You obviously don't really want a market that's popping around 2% and 3% a day in whatever direction. It's just very agitated, and it's not usually a market where you can build fundamental conviction. No, but this idea of needing broader resolution, I'm not sure how much of a resolution you necessarily need.

I'm not suggesting you need, you know, the finish line, which the Treasury Secretary himself says could be two to three years. You need a meaningful reduction in the tariff rate on China. And then don't you have a feeling that this market would probably take off on that definitive news about that?

outcome? I think it would certainly make that attempt. It depends on when. It depends on whether the window is still open for the real economy to kind of weather this reasonably well. Look, the 90-day pause on the extreme version of tariffs sliced off that left super negative tail.

Can we slice off another piece of the probability spectrum by saying here's the range of potential tariffs or negotiations that are underway, whatever it might be? That's probably the next thing to look for. The other thing I can't lose sight of is when you see these clusterings of really broad daily rallies,

around a market low usually means good things for a multi-month forward look. I don't know if you want to really rely on that, but it's hard to ignore the way the market has acted is sometimes building towards something that says maybe we have a decent low in place. Yeah. All right. Good stuff. I'll see you at closing bell. That's Mike Santoli. We'll do the setup next.

All right, let's do this setup. We're going to start with Chipotle. They report today after the bell. You own that stock. Really interesting to hear from them now. They do. The pressure is somewhat on Scott Boatwright to reverse some of the negative momentum. It looks like Q1 traffic is a little bit on the decline. Analyst community has come out. They've downgraded the expectations here for EPS. Same store sales for the year. That might have to be cut. Okay.

United Rentals, that's today as well. Jenny, you own that stock. So yesterday, one of their competitors, Herc, reported and they had a rotten quarter, but they reaffirmed their full year guidance. United Rentals is a much better operator, so we're looking for good numbers from them.

All righty. Merck, tomorrow morning, Surat. Another disappointment here, down 20%. It's going to be about the pipeline and see what they have to say, what's coming down and what they're going to get through. Otherwise, you know, this is one that's on my watch list. What about Pepsi? That's tomorrow morning, too. Yeah, so Pepsi is interesting, right? So Coke's been doing really well. Pepsi's got their food side that they need to show, you know, two things. One is revenue growth and also expansion in terms of cost. So we'll see what they have to say about that. All right. We'll do finals next.

We'll talk to Dan Greenhouse, Lori Kelvis, seeing the Jeff Richards today on Closing Bell. I hope you'll join me. We'll see what this market does. And it's anybody's guess at this point. But I'll see you at 3 o'clock Eastern time for that. Surat, what's your final trade? Salesforce. I love that stock and I think productivity is going to be there. Stephen Weiss, who's left an indelible mark on everybody today. Yep. Steve, what do you have? UnitedHealthcare. I think the stock's bottomed. It's gotten the B2B.

beat out of it. Now I think it's positioned well to move higher. Yeah, twice in one show is gratuitous. The first time was perfect. Another time was just, you know, like I said, not necessary. All right. Try not to get too excited about this one. Western Union, they report after the close, I think the stock is overly sold off on irrational fears. Nine and change percent yield. Great looking chart. How about aerospace? HWM. Okay. So we're holding on to a nice gain. Nonetheless, I'll see you for the final stretch. The exchange begins now.

You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC. All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or to make a decision.

or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash halftimereportdisclaimer. If your small business is booming and ready to expand, you might say something like... Evening! B-b-b-b-boo-yah!

Crushed it. But if you need someone who can actually help protect your growing business, just say, Like a good neighbor, State Farm is there. And just like that, your State Farm agent can help you get the coverage you need for your new space. For your small business insurance needs, like a good neighbor, State Farm is there.