Your Record High Playbook 6/30/25
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Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a thing. Give it a try at mintmobile.com slash switch.

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.

Wilfred in the house. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the record high playbook as the second half is about to get underway. We debate the road ahead with the investment committee. Joining me for the hour, Joe Terranova, Steve Weiss, Jim Labenthal. We will go to the markets. We're green across the board. Our question is what happens now? We've been able to claw our way back from those lows in February.

Goldman Sachs' Tony Pasquarello guy says the path of least resistance is higher. Morgan Stanley's Mike Wilson of bearish past says still bullish on a six to 12 month horizon. And even our resident bear has come around. I prefer resident Grinch. You are the Grinch. Dracula, the Grinch, whatever the audience wants to call you today.

They can call you. This is cable, so they can call you anything they want. Anything they want. You've fully kind of capitulated. I mean, you're fully invested. Yep. And whether you are comfortable with that or not, you're playing this game as though the market's going to continue to go up.

Yep, and I've been fully invested for a while, but when I'm fully invested, you know, you get kind of nervous, right? Particularly when you have the amount of beta that I have in the portfolio, given the tech names that I own, which comprise the majority of the portfolio, the vast majority.

But, you know, this is really just an interesting market. And I've talked about it before. I think we have a new cohort of investors, you know, over the last, you know, 15, 17 years are just used to V-shaped recoveries. And that's probably the right thing to do because that means you're always staying invested. You're buying on the dips. Let me ask you this question. Yeah.

I'm going to ask you to be a little introspective. I know it's difficult for you to do that. It's very, very difficult. Wait, let me call my humility. What do you think that you and maybe some of the others who are more cautious underestimated about the market environment from where we were at the depths in February? I think I underestimated their tolerance for chaos, lack of direction, and

and risk. I mean, you still have corporates frozen. We just heard the CEO of HSBC in the US talk about not really a lot's going on. There's a lot of uncertainty among institutional investors. And that preys on CEOs who are loathe to invest major capital into their growth because they don't know where you'd be able to grow. And supply chains are

They're moving. They're not frozen, but they're moving not the way you want them to move. If you invested, and I don't mean you personally, but if the typical viewer invested based on what the average CEO or average hedge fund investor said over the last six months,

you'd have missed a good portion of this move because there's been a lot of caution. Certainly, as you said, on the institutional side, there's been a lot of caution in the C-suites and much of what they've been cautious about hasn't materialized in large respects. Yeah, and to be fair, I don't really care what the average hedge fund match is. But you know what I'm making is where sentiment was from those cohorts. Yeah.

You know, sometimes it takes a while for things to play out. So it's not instantaneous. And that's why I'm still cautious about this quarter's earnings, what the guidance will be.

I do believe they'll get a reprieve, despite Trump saying he's not going to extend past the July 9th deadline. We know what the narrative will be. I've got so many, you know, potential trading partners or ex-trading partners, whatever terminology, that are so close to the deal. They're showing good faith. I want to give them a little more time, because keep in mind what narrative has been too

Two months ago. We have 20 deals that are going to be announced this week. We haven't seen really anything. We've seen some sort of a deal with the UK. Our top trading partner, our friendliest ally out there give us something, but not much. So I think as long as you avoid...

just a really strong case against trade. Right now, people are comfortable with the 10% baseline tariff increase. Joe, so we hit these record highs. We're going to turn the page to the back nine of the year. What are we set up to do?

I think at some point in the second half of the year we'll have a correction. I think you buy that correction. I think we have a much healthier market in 2025 than we had in '23 and '24. At the midpoint of '23 and '24, what were we talking about? We were talking about seven to ten stocks that you can invest in and the struggles for the rest of the market. Now when you look at the market, there is a much healthier, diverse opportunity set.

It goes beyond just equities here in the United States. If you look overseas, you'll see opportunities in Europe. Germany's outperforming up 20 percent. UK up double digits. You've got Spain up double digits. Hang Seng up double digits. Even here, North America, Brazil, Mexico, Canada outperforming the U.S. And we've had these concerns.

about fixed income will taxable fixed incomes doing great so far this year at least not for one minute because you're making comparison you're pointing out how strong things are how great things are in in the market i'm wondering if you look

below the surface, whether it's actually as strong as the record-setting move would suggest it is. And since you brought up 2024, underneath the surface, the number of New York Stock Exchange net new highs this prior Friday only reached 70, plus more than 370 in November of 2024.

70% of Russell 3000 stocks were trading above their 200-day average when the S&P 500 first rallied above 6,000 in November of 24. That number narrowed to 59% into the market's divergent February peak and only reached 45% last week. Those numbers would suggest that this is not nearly as strong a market now as it was in the period that you're pointing out.

You're just specifically looking at the S&P 500. I'm looking at... Well, I said the Russell 3000. Well, the Russell has struggled and has struggled over the last several years because it doesn't have the earnings growth. I don't think just because you don't have...

in equities themselves the type of participation that you had in november and by the way remember in november you had the head fake in the russell in november it looked like healthcare and other sectors that had been underperforming would actually participate and they're actually not so i don't know i'm looking at it from the standpoint of how do you do that asset allocation in a portfolio and it looks pretty good to me because as i said it's

It's not just equities. It's fixed income. And it's a lot of different places that you could go. Also, volatility has basically remained the same. And by the way, as it relates rather to the volatility in the Treasury market, we sit right now for a U.S. 10-year at 4.27. The average for a 10-year over the last 24 months is 4.27. So where have we really gone? Maybe to a lot of different places, but we ended up in the same spot. The point of

me bringing up those numbers is the higher stocks continue to go higher. You're not getting the bottoms-up breakouts. The bottoms-up... Well, momentum's leading. Well, momentum's leading, lower beta, higher beta, lower quality is leading. Sorry, Jim, but just because momentum is leading, that's not an indication that the market is reaching an inflection point. When momentum rolls over, I'll be the first to say...

that you're reaching an inflection point. And yeah, you're right. Some of the quality names are not performing right now. But I don't think we're getting to the exuberant level that we got in '21. - Joe, I'm with you on this. And look, the numbers that you stated are the factual numbers, but there's a lot of stocks that in 2024, 2023 were absolutely left behind, did nothing, that are performing well right now. You can look at sectors.

Financials just as a sector. You can look at more value, and I know this has been talked about a lot in the last couple of weeks, value-y tech stocks like a Cisco. Some of the non-AI chip names like a Qualcomm, like an AMAT, things that really have been left for dead are actually now performing

Industrials. So, yes, there is, Scott, there's absolutely no... I know, but industrials aren't a value. Financials aren't a value. They're both at highs. I would... Both at highs. Factually, they're at highs. I still think they're a value. And certainly, if you look at financials, industrials are a little hard.

to make that case. But financials, if you're looking at a lot of these stocks, you're talking high single-digit multiples, high dividend yields. Yes, a little bit of a premium to book, I'll give you that. Industrials, look, most of them are now in the high teens bordering on 20. If you talk to me, and this is Steve, you know, you talk about a new generation of investors. If you talked to me 10, 15 years ago and said industrials trading at 20s are value, I would have disagreed. But we're now 10, 15 years past that.

And that's where these things trade. And that's cheap to the market. You know, one of the things I put in my note to you this morning was that

The additional comfort in the market is that the rally has broadened. So with that, people that just don't invest in tech because they're afraid of the volatility, even though I look at volatility as risk, now have places to go. Industrials have done well. Financials have done well. The big ones. Right. The big ones. Exactly. If you look at the S&P versus the equal weight, it tells a pretty distinct story. Yeah.

Yeah, and that's where the additional comfort they need comes in. So they want to go into the big names. You know, the small names, they catch up when the markets are correct. And then the junk, I'm not saying they're junk, but generally the ones that are less popular will move and lead that recovery. No, but look, if you look at the gains quarter to date from the high beta ETF, just to show you that.

the kinds of things we're talking about. Popular names that you hear about a lot on this program that many of you may own, either because you've heard a lot about them on the program or you know about the stocks because they play in many respects into AI, Broadcom, Vistra, right? NRG, we're talking about powering AI. Look at the winners quarter to date. Vernova's up 73%, NRG 69%, Seagate 67%, Vistra 66%, Broadcom 61%.

Consolation 59. These are extraordinary gains in a very short period of time. Yeah, Seagate for one, because it's more of a commodity stock. But if you go to the second list here, you take a look at Palantir. Palantir has become the ultimate cult stock here, where you can't justify the valuation, but you know their product and their technology is leading the pack, both in defense. And industrials have had a nice boost from defense companies. So Palantir is right in the sweet spot of all that. Look, to me, it's still a brand name market.

overall. And the biggest brand name of all is you, as you mentioned, is AI. And AI continues to go. And that's ratified by what we're seeing with Meta. Yeah. Meta hit a new high today, by the way. Yep. And that's, I guess, my largest position again. It goes between that, Netflix, and one or two others. But Meta, he sees it

And so for all the narrative that, oh, well, you know, these stocks haven't paid off, they haven't recouped, they're spending in AI, they're not going to for a while, but you've got to invest in the future. So if these companies were not spending what they're spending in AI, I wouldn't own them because they'll be left behind and you can't catch up. Yeah. This is not an exercise to try and, you know, say that this record run is punk in any way. It's obviously not by any stretch of the imagination.

It's also not trying to suggest that we're at necessarily some kind of top because of this kind of behavior. If anything, because of the institutional investor side of the equation that really hasn't fully bought in, it doesn't feel like. Can I just interrupt for one second before you go?

You know, when we talk about the record run, we're talking about recovery of losses and going back to the high. It's not as if we started at a high point coming out of 24. Now we're hitting a new high. No, but the move off the bottom has been legendary. Astounding. Legendary. We're at 6% on the S&P 500 through the first half of the year.

I mean, that's not bad. If you analyze that, that's well above the historical average. I wouldn't sneeze at that. No, but a lot of the later stages of that move happened more recently. I agree. We were sitting like up 2% for a while on the year, and now we've had this little burst.

in the last week and that's taking you even higher than that. There is unequivocally room for areas of this market to catch up. Small caps is a key example of that. If the market is doing what I think it's doing, which is basically endorsing this plan of the budget bill plus tariffs as deficit neutral, economically stimulating, if that's what the

markets are saying, by the way, I'm not going to walk away from that. That's what I think the markets are saying. Then small caps are the area to look at to catch up. So the market has had these series of challenges in front of it in 25 and very quick resolutions. And I think that's been the catalyst. We've had the resolution. We're somewhat desensitized, as I've said over and over again, surrounding tariffs. I know July 9th is coming, but I think very few

believe that there will not be resolutions as we move through the third quarter. You now are pricing in, from my perspective, the belief that on September 18th you're probably going to get a rate cut. I think the challenge comes, and we do a lot of price pattern recognition, if you price pattern, if you do, if you pull the lens back to October of 22,

and see where this all really began and pull it through to today, you kind of go back, there's about 14 or 15 pattern, strong pattern recognition series that you could look at. And it looks like maybe somewhere around March of 26 is where you hit that significant inflection point. And this thing probably rolls over. And probably at that point, you run out of the tailwinds. You run out of the certainty surrounding the tax bill getting extended, the regulatory relief,

the tariff resolutions. At that point in 26, it's kind of like, okay, what do I have? But up until that moment, you've got momentum that is clearly going to market higher. You also have the, if you think that the runway is in fact that long, you have the fear of missing out FOMO, which is still that fact

that's kind of sitting out there and people are wondering, well, when is that going to provide you the next leg? Let me ask you this. As I said, we're going to make the turn. Do I want to lean into the same areas that we've been leaning into now? You know, Pasquarello at Goldman says, look to buy any meaningful dips in tech.

You've had an amazing move for that sector in and of itself. The tech sector is set for its best quarter in five years. - I would. I mean, that's, you know, speak with my feet and put my money where my mouth is, et cetera, et cetera. I think they'll still be the performers. And what I'm comforted by is that, look, they're a little overvalued here. You know, Meta can't keep going up every day like it has.

And nor, I can't tell you, Microsoft, I'd buy it here because of the valuation. But the good thing about these stocks is that valuation is temporary. So what I mean by that is even if they sell off for any reason, they will ultimately recover because there's such unique value.

businesses and companies and everybody with AI and the productivity enhancements we'll get from AI, which we're already seeing, you're going to rush to these companies. What about this though? Insiders at Nvidia, according to the FT, have dumped more than a billion dollars in stock over the last year. About $500 million worth of sales occurred over the last month. I don't blame them. I would take some money off the table. Keep in mind these people are... And when I worked at Lehman, I told everybody that worked for me,

to long before I left there in '02, sell whatever you can as you vest because you're leveraged, double leveraged, you're working there. So your income, daily income is dependent upon it. So why have everything in one basket? So to me, it's prudent management of their personal finances. - Can you make the statement from insider to the average Joe who loves Nvidia and bought the stock and sitting in a nice game? - No, they're in a different position. I mean, if they have very nice game, sure, I think you should bank some of it.

particularly if you have capital gains out of longer-term capital gains. But remember, we had the same conversation not that long ago when Bezos sold some Amazon and when Zuckerberg sold some Meta. I mean...

They just sell, and that's what it should be. Now, it would alarm me if Jensen Wong found somebody to buy most of his position, right? But that's not going to happen. So that, to me, it's a nice headline, but it means nothing. So to answer your question surrounding technology, what's interesting is that a lot of momentum funds...

mine included, we're really carrying an underweight towards the semiconductor industry coming into this quarter. Now, we have the flexibility in rebalancing on a quarterly basis, and I'm very satisfied with how we've done so far, even being underweight semiconductors. But now you have the participation.

Semiconductors right now are exhibiting very strong performance. And I would imagine that you're going to see a lot of repositioning from a lot of momentum funds into semiconductors that kind of been sitting in software. So I don't think the playbook changes very much in the second half of the year. If there is one area of the equity market I'd be skeptical to kind of buy into, even if you see a recovery, that would be small caps. I just don't think you need it. I think mid caps and large caps are giving you enough.

Have you sold all your small cap position? Yeah, because remember, I got out of Casey's. That was my last small cap. I mean, mid caps, I've got things like, you know, wind resort. But you had like the IJR. I think I took that out. Took that completely. Would you get back into the small caps? I think there is. And, you know, as we talk about this rally and Scott, as you entered the segment, you talked about FOMO sentiment. Sentiment is real. And think about people who are watching right now who are hearing the headlines of all time high second day in a row.

the first thing they do is they get back in the names that they know those are the mag seven but as they get comfortable more and more than markets going higher they broaden out and while that running out may end up or start with large caps of people aren't thinking about it already mentioned industrials maybe goes to health care eventually does get the small caps if and this is the big if if the economy holds in there steve you know i think it is set i don't know about that man you can use the character repetitive yeah just becomes a repetitive

thing. You've been saying that a year. If the economy holds up, small caps are going to do well. Well, you know what? The economy's held up pretty damn well, and small caps have done garbage. Small caps are down on the year when everything else is up, right? So you need something more, obviously. Well, okay. I mean, instead of...

And that might be Fed rate cuts, by the way. It might be Fed rate cuts. I think you said September, or maybe you said September. I'll make the case that they actually should go in July. I mean, all these inflation numbers have two handles on them. I get it. We're data dependent. But we're now talking we've got June in the bag as far as inflation figures go. There should be some tariff impact there. It's just not showing up. Maybe it'll show up in the June figures that get reported in the month of July. But if they don't,

They really should be going in July. There's no reason not to. Let's hit financials again. We didn't really hit it, but they did hit a record high today. Mike Mayo from Wells is talking about how deregulation is real.

Goldman and JP Morgan are both at record highs. Jim, your Citi is the highest since December of 2008. You've had to wait a little bit relative to some of the others, but it feels like you're getting rewarded finally on that one. Yeah, still just a little bit below tangible book value. And I've said all along, I don't understand why it is below tangible book value. I

Look, I think a comparable here, I'm not going to put it on the same pedestal with J.P. Morgan. Nobody's on that pedestal. But Bank of America, Wells Fargo, those trade at nice premiums to tangible book value. And I think Citigroup will get there. Bank of America is a dramatic underperformer relative to everything else this year. Why is that? You know, I still have that stock. I do. I do. I mean, the size of the position is nowhere near what Goldman is, which is also in my top holdings.

I just think it's too vanilla, that you can't make an exciting story out of it. With Citi, it's the recovery that you're seeing across it with- Even the consumer, you can't make a story on that? I mean- No, not really. Not really. Is that their bread and butter? I think the average consumer is struggling, but so much of the spending, the overwhelming majority of the spending-

is with the top wage earners. So you can't even make that story there and you can't make it in banking 'cause even though they bank a lot, it's diluted by their massive other businesses versus more concentration. - What if everything though now because they passed the stress test with flying colors

deregulation, everything else, you're going to be able to buy back more stock and you're going to be able to increase your dividend. You're going to reward shareholders with more. It's not a distinguishing factor, though, versus the others. They'll be able to talk about as a group. I like all boats as a group. I like the group. You know, I continue to I continue to regret not buying Citi. I was waiting for it to come back down to earth. You should listen to Jim.

I should have, but as you know, it's gotten me into trouble before. No, I'm only kidding. It really hasn't. Goldman Sachs really... It's been a great story. He's been dead on on it. The results of the stress test really signal Goldman Sachs is in a good position. Great position. Boy, cash...

deploy capital. And one of the interesting things is, you know, we didn't talk much about this last week. You had this potential, this rumor surrounding Bank of New York Mellon and Northern Trust, a potential M&A activity. You haven't seen M&A, any significant M&A in the financial sector. And I think we might be at the cusp of that actually. Well, you saw one almost last week. Right. Almost. And I think that's signaling. And it's a good test for a

President Trump's administration and what their flex is going to be towards M&A and the concerns that you might have. But that deal, I think, opens up the possibility that others, Goldman Sachs that are now flush with capital, are going to be going out there and trying to acquire a lot of advancement in technological areas related to the financial services. Goldman Sachs is in every single conversation I have.

with anything in every conversation you're listening to the people you're talking to you or you. So that's why I like Goldman. JP Morgan's there as well. So B of A really needs a strong identity to get it going. Let's get to a move before we get out of here in our A block today. Speaking of a stock that has ridden the market wave, MP Materials, Jim Laventhal. It's up 50% in a month. It's up 105% in six months.

It's up 158 percent in 12 months and you are selling it. This was my trade war play and it played out. I said when I bought it, this was a strategic play on China, rare earth elements. That story's played out. I think this is a fabulous company. I think that it will do well as a company over the coming years as it continues to execute, not just on mining rare earth elements, but refining them and building the magnets. The problem is, is that it's now more than fully priced.

And as you think about the trade war, I think there's more room for trade war news to get positive than there is for it to get negative. I'm not ruling out that things get worse, that China doesn't restrict rare earth elements again, but it just feels like the story has fully played out. It's been wonderful. I've had fun with it. It's time to move on. All right. Up next, Tesla crossing a major market milestone today. But are the company's best days in the rear view or not? We will debate that next. Are you looking to invest in municipal bonds?

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- Hey, it's Ryan Reynolds here from Mint Mobile. Now, I was looking for fun ways to tell you that Mint's offer of unlimited premium wireless for $15 a month is back. So I thought it would be fun if we made $15 bills. But it turns out

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All right, welcome back. Fifteen years ago yesterday, Tesla went public. We want to know what's ahead for the company. Are the best days behind it? Phil LeBeau is looking into that with so many issues to think about. Phil. Scott, do you believe in autonomous and optimist? That's really the question right now. And who knows if that'll be the question 15 years from now? We might look back at this time and go, it's kind of a foolish question.

remains to be seen. Back 15 years ago, a lot of people were saying, well, will Tesla A, be able to make a profit and B, grow the EV market? If you were an investor back then, and you might be saying to yourself, well, yes, if you invested early on, those were great returns. But we broke it down in five-year increments. The best returns were during the first five years,

of owning Tesla shares. A bit of a lull between 15 and 20. A couple of issues in there in terms of ramping production. And then you see what's happened since 2020, up 444%.

Deliveries was what everybody was focused on for a good chunk of the last 15 years. And the ramp up, it played out exactly as Elon Musk said it would. Though keep in mind, and we'll get the latest Q2 deliveries likely on Wednesday, that estimate is 387,000 vehicles. Keeps coming down. It was 393,000 last week. That's the consensus among analysts. For the year, the estimate is 1.65 million for a point of reference.

Last year, the company delivered just over $1.89 million. Nonetheless, William Blair, like many analysts, the analyst at William Blair is out with a note today saying, look, we believe that when you look at the robo-taxi, this is the future. This is where Tesla will make money. It is projecting 35% of the rideshare market will be held by Tesla. It's robo-taxi, cybercab, some combination of that.

near 60% EBITDA margins and $250 billion in revenue, all of this by 2040. So if you believe that, if you think that is a good estimate, yeah, this might be the time to buy into shares of Tesla. Keep in mind, the company also did its first autonomous delivery down in Texas Friday night.

Scott, the bottom line is this. Do you believe in autonomous? And if you think Tesla, with its vision-only approach, is going to win that market or at least win a big chunk of it, well, then maybe now is the time to say, okay, I think the next 5, 10, 15 years will be a good investment. So if I am a true believer in autonomous, Phil, like I'm sure many investors in the name currently are, does that mean that the delivery numbers which remain

pretty bad, let's be honest, in Europe. Yes. If they continue to get worse or at the bare minimum don't get any better, does it even matter? Because when people like Deutsche Bank today, they look at the projection and they say the brand damage has been done the most in Europe and competition over there is intensifying as well. Does it even matter if I am a believer, as you say, in autonomous?

It probably doesn't if you are a true believer in autonomous. But Scott, you got to have, I mean, if you were a true believer in autonomous, you have to say to yourself, this is one of the bets that Elon Musk is making that will pay off. And remember, over the history of Tesla, there have been bets that have not paid off. Remember the solar roofs? Remember that? That was supposed to be a big market.

Remember Tesla Insurance? None of those have contributed to the bottom line in significant manner. And so the question becomes, do you have the gumption to hang on to these shares if deliveries do not improve and it takes a while for autonomous to pay off? Because while they say they're going to have the future and a lot of people believe that Tesla will be the future, it's behind Waymo right now. And there are more than a few questions about how long it will take to ramp up.

Hey, Phil, it's Jim Labenthal. I want to hear your response to what seems to me to be obvious. Those early returns you mentioned were when Tesla was the first mover in electric vehicles. They're not the first mover. Right. They're not the first mover in autonomous. Waymo is kind of killing everybody else with it. They're not the first mover in some of the other areas that you mentioned, whether it's robotics or AI. They have heavy competition. Doesn't that fact sort of

mean you should drag down the multiple. It's just it can't do what it did when it had the EV market all to itself. You are hitting the exact argument, Jim, in terms of why people should be cautious about shares of Tesla. That as optimistic as Elon Musk is regarding autonomous or optimist robots,

Most people in the auto industry look at where Tesla is with autonomous vehicles and they say, you know what? It ain't a straight shot. As you mentioned, they are not with the first mover advantage. And the competition, look at the competition when it comes to autonomous vehicles in China. That's in China. I mean, we focus on what's here in the United States so much because it's our backyard.

If that's happening in China, how do you think it's going to play out in Europe? You think that Tesla is going to have first mover? It's not going to have first mover advantage. So it gets to your point in terms of. I'm sorry. You know the competition. You know from your business acumen that competition kills margins. Five years ago, the margins on Tesla vehicles were extraordinary. They're not anymore. That's how competition works. Right.

Right. And look, there are more than a few who have said that when it comes to the ride share market, are people really going to sit there and say, oh, yeah, I'm using Tesla instead of Uber or instead of Waymo? You know how this works. Once you get into a certain app, whether it's Waymo, whether it's Uber, whether it's Lyft, you generally continue using that. And that doesn't mean that Tesla can't take some of that share there. But there are more than a few who look at that market and they say,

Tesla is not a slam dunk to get 35% of the market.

Phil, thanks, man. We'll see you. That's Phil LeBeau. You bet. With that story. You are the stock. You're the only one here on the desk today. You have it in the ETF, which you're making a decision these days to, you know, in your rebalance, what to do with it. I'm going to share a remarkable statistic in a moment. But first, let's talk fundamentally about this stock. There is clearly fundamental challenges when you look at EPS, when you look at revenue, when you look at free cash flow. All of it is decelerating. J.P. Morgan puts a note out today saying,

talking about Q2 deliveries, which they expect to be down similar to the way that Q1 was down. So fundamentally, there is weakness, there's softness, they have to revive growth. Here's the challenge for someone like myself who holds it in a momentum fund. A 12-month time period in a momentum fund is significant. Over the last 12 months, if I take the MAG7,

Tesla has the highest performance. It's up 52 percent, which no one would really think about. You would think of the other names and you expect to see them outperforming. Meta is up 46 percent. So that's where time frames kind of matter. And on a 12 month basis right now, Tesla's outperforming all the other seven. I acknowledge fundamentally it has challenges as you roll all

as you roll off the period between June into the fall, then those numbers are going to look significantly worse. So they probably have about three months to revive some of the growth and get the fundamental story going. Okay, you'll let us know what you do in the rebalance. Silvana now has the headlines for us. Hi, Silvana.

As the Senate votes on amendments on President Trump's tax bill, a senior White House official tells NBC News the president is set to meet with Senate Majority Leader John Foon and House Speaker Mike Johnson. The official said President Trump made calls to lawmakers and monitor developments on the Hill over the weekend.

The Supreme Court has rejected an online censorship claim brought by anti-vaccine group formerly run by Robert F. Kennedy Jr. against meta platforms. The justices decision leaves in place lower court ruling that tossed out the lawsuit, which claimed Facebook worked with the federal government to restrict access to its content.

beginning in 2019. And after seven weeks of testimony from 34 witnesses, jurors are now deliberating in Sean Diddy Combs' sex trafficking trial. The music mogul faces five federal charges, including racketeering, conspiracy that, if convicted, would give him life in prison. Combs has pleaded not guilty to the charges. Halftime Report is back after this break.

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All right, we're back on the Halftime Report. Dom Chiu has today's ETF edge for us. Hey, Dom. All right, so, Scott, with the markets on track to close out the second quarter at record highs, one fund that's riding the wave also now holds the record just six months of the fastest to reach a billion dollars in assets in more than 20 years. But its biggest holdings might not be what you expect.

Why? How does it work? Joining us now is a familiar face, Tom Lee, CIO at Fundstrat Global Advisors, to take us inside the Granny Shots ETF. And for a lot of folks out there who don't know this, this is you are an advisor, the sub-advisor of record for this Granny Shots ETF. I would like you to take us through what exactly is a Granny Shot and what methodology goes into identifying what those Granny Shots stocks are.

Glad to. The granny shot is named after Rick Barry's and basketball's unconventional way to do a free throw, underhanded, NBA Hall of Famer. And what we wanted to do was to buy the 35 most important stocks in the S&P 500. So 465 matter, but we want to get you the most important ones. And we said, there's seven themes that are driving these markets for the next five to 10 years. Millennials, AI security, cybersecurity,

monetary policy, global labor shortage. And we said, find the most important stocks in the S&P in each silo. And then we said, you know what, if you just take one silo, that's like trying to do a cool shot. We said, we want to buy a stock that's in multiple themes. So the more themes it's tied to, the more it's like a granny shop. So the higher conviction to trade it is. Correct. The more ways you can win. Because if something's, nothing's ever been seven of seven, but if it's in seven of seven,

then it's probably going to work because one of those seven things is always working. Okay, now if you take us through the 30 to 35 high conviction plays, you said the more boxes it checks off, the higher conviction trade it is. Which are then the highest conviction trades within the Granny Shot portfolio? Today, the names that are five of seven is Google and Meta.

And it makes sense because, you know, they're both giant companies tied to so many things. They're tied to millennials. They're tied to AI. They really are tied to cybersecurity in their own way. And they're very leveraged to things like monetary policy and also the business cycle. All right. So the granny shots, high conviction when it comes to those, those two meta platforms and Google parent company Alphabet. Tom Lee, thank you very much. And by the way, we're going to continue the discussion.

and conversation over at ETFedge.cnbc.com. Tom's going to be joined by financial futurist Dave Nadig to talk all things, not just granny shots, but all the sector flows as well. Scott, tune in online. I'll send things back over to you. All right, Dom. Thanks so much, Tom. Thank you as well. Your call today is next. Wall Street getting bullish on a big media name, hitting a 52-week high. We do have ownership here. We'll debate it next.

Our call of the day is Disney, and it got upgraded today to buy from hold. The target 144 from 100 at Jefferies obviously blew by the 100. Four primary reasons, Jimmy, okay? Limited risk of a parks shutdown, more positive on cruise upside, continued direct-to-consumer margin expansion, and we view the next six months of content and sports slate favorably.

That's a pretty good lineup. And I agree with it all. Let's start with, I'm going to lump the parks and the cruises together. That's the entertainment segment. For the last couple of years, as we've worried off and on about the economy slowing. Go ahead. I think I said parks shut down. I meant parks slow down. If I said shut down, I meant slow down. I read it wrong. I was like...

I was thinking about a shutdown. Like, why would the parks shut down? You know what? There's been times in the last two years where it's felt like the stock price was indicating the parks were going to shut down. That wasn't the case. There's been concerns about pricing on the tickets, on food and everything. But at the end of the day, consumers keep coming back to Disney. Now, the cruise lines are really the strength in the experiences segment. But

But they're still building out the parks. They're going to build a new one in Dubai. They're expanding Florida. So it looks very good in terms of the juggernaut that is the entertainment sector. I think where we're underestimating things is direct-to-consumer, Disney+. That has been outperforming. I think it will continue to outperform. Now, this is important, not just because it's replacing linear, which is in secular decline, but because with Disney at the share price that it's at right now, you actually have to be looking for earnings outperforming

performance versus earnings estimates. And if you're going to get that, I really think the direct-to-consumer segment is where it's going to come from. They just closed

closed Hulu or rather they got the final negotiation on that. So that's one other piece of the haircut. It seems like it's all together. How about this? No competition first half of the year, Netflix versus Disney and stock performance. Similarly, how we looked at Tesla and Uber last week, right? It's been no contest. No contest for the first six months doesn't necessarily mean anything for the next six months. So

Disney's got 79% of analysts with buys. Netflix has 69% of analysts with buys. Next six months, Weiss, for the next six months, you have Netflix, Jim's got Disney. Which is primed to outperform given the run that Netflix has had and the one that Disney thinks it can still make?

- You know, it could be Disney because they have really beefed up their offering with Hulu, the acquisition of it. But, you know, it'll just be a moment in time. I still think that if you're playing streaming

that Netflix being the pure play is going to do quite well. So I say with very, very little conviction that it could be Disney. I see no reason to replace Netflix with Disney. Just one small thing here. If you look at the chart, there's a three-year channel that it's right at the top of. It looks like it's going to break out when it does. Katie, bar the door. When did you start talking technicals?

I'm just listening. It's so obvious. It's right there. The momentum is really strong in this name. Just took out the March of 24 high, 123.72. Next one you're talking about.

August of 22, 126.48. Gets above there, it could go 145, 150. You know, the other thing is that even though it shouldn't, because it's the same dollar amount, that having a stock selling at $1,300 plus versus Disney at 123, again, makes no sense. But that's where retail investors will likely go first. All right, Santoli's next with his midday word. We're back right after this. Santoli is here at the desk for his midday word, which is what? What do you think about this market? So you kind of, once you make the new high, you go back to

back to the sort of principles of how you should deal with it, right? It's not an immediate fade. Usually, it's more positive on a forward-looking basis. What I think is interesting now, though, is you can also do a pretty good side-by-side of where we are now, which was, you know, two-thirds of a percent from where we were at the prior peak in February. So, you know, earnings on a 12-month forward basis are higher. Fed's closer to a cut. Keep reciting these things. Treasury yields are lower than they were then. So is crude oil. So is the dollar.

So you have better financial conditions. And then the question is, has the market been just kind of stress tested for a potential worst case trade scenario and what's priced in now? So I think you come away with it saying you give the market the benefit of the doubt as you wait for signs of maybe near term exhaustion. Because I see some technical stuff saying it's tired. We should probably cool off and pause before too long or until sentiment gets out of hand. We really haven't seen that except.

Somebody has to explain to me why Robinhood is up 10% on this set of announcements the company's made today. Weiss, why don't you explain it? I've left him speechless. I'm still joking with Jimmy's tech. I couldn't help myself. Do we need a defibrillator over here? Only for Cleveland Clips. We'll do finals.

We'll do finals next. Let's do final trades. Farmer Jim.

We talked about catch-up earlier, and I mentioned it then. Applied materials, that's catching up. Okay. Weiss, you able to do this? Yeah, unrelated to the cough I had. UnitedHealthcare. So I'm not going to talk their MLR. Well, I hope they cover whatever you have. Not a member, unfortunately. Mercado Libre. All right. So we'll see you at 3 o'clock for Closing Bell. We are green across the board as we try and extend these record highs even further. That does it for us. The exchange begins right now.

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