Back on Track 1/17/25
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I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.

Sarah, Mike, thank you very much. I am Frank Holland. Welcome to the Halftime Report. I'm in for Scott Wapner today. Front and center this hour, back on track. The down the S&P they had for their best week since November. Rates are falling. Big tech is popping. The committee making a whole lot of portfolio moves as well. Joining me for the hour, we have Bryn Talkington, Steve Weiss, Brenda Vangelo, and Kevin Simpson. We'll get to the markets in just a moment. But first, we have some breaking news out of Washington. Let's get right to our Megan Casella with those details. Megan.

Frank, new estimates from the Congressional Budget Office out just now. They say the federal deficit will hit $1.9 trillion in 2025 and that it's set to climb to about $2.7 trillion by the end of the decade. Now, both of those numbers just slightly smaller than previous estimates from the summer. CBO says that's because tax revenue will now be a little higher than they thought due to expected growth in wages and income. That is about where the good news ends, though, in this report. Total debt held by the

public is set to nearly double over the decade. And as a share of GDP, it'll climb to 118% from about 100% now. It'll keep rising as both mandatory spending and interest costs are on track to outpace revenues. And the US, they say, is on track to spend more on interest over the decade than it does on defense.

The economic outlook looks okay. GDP is set to average 1.8%. Over the decade, PCE inflation to stay around 2%. The unemployment rate to climb a little bit to about 4.4%. Not terrible numbers there overall, but what is clear, Frank, is that this debt and spending trajectory that we're on is forecast to continue. We'll see if this next administration, with its focus on major spending cuts, will be able to make a difference. Frank. Megan, thank you very much. I'm Megan Casella, live from D.C.

All right, time now to turn to the markets. Taking a look, very strong day on Wall Street right now. Strong week, a winning week overall. Taking a look at the markets, we see that the Dow is up just about 1%. The S&P up just over 1%. The Nasdaq composite, the best performer up 1.5%. Also important note, bond yields, they certainly have eased, making a lot of this possible, this rally that we're seeing on Wall Street. The 10-year Treasury right now checking in at 4.617.

It's fallen about 15, 20 basis points this week. Kevin, I want to come over to you. The fall in bond yields, it seems to be a mechanical reaction when it comes to investors. Yields fall. People get a little more bullish about stocks as we're looking ahead to Monday, a new administration. What are you thinking about when it comes to the markets and the impact of bond yields? Well, I think that higher bond yields are an impact, an absolute headwind against equities. And to your point, Frank, we see it. Yields come down, stocks go up.

And the big fear for the markets is not like, will the 5% 10-year happen, but when will it happen? And heading into the week, I think the CME Fed futures had just one cut for the Federal Reserve in 2025. That's why midweek we had such euphoria. PPI came out first, which is kind of unusual, then CPI. Not that the inflation numbers were just

massively positive, the markets reacted to the fact that they weren't massively negative. And the Fed needs inflation to at least hold and modestly come down so they don't have to talk about rate hikes again. So I think that the market can continue to celebrate a lower yield on the 10-year. So, Brennan, coming over to you as kind of a head scratcher, at least year to date, bond yields have risen and tech has been impacted, second worst performing sector year to date. I thought

You know, tech's supposed to be immune to the rise in buying news because they don't really borrow money. What do you make of what we've seen in tech and the fact that following that slightly, very slightly cooler than expected core CPI number that we've seen tech continue to rally?

Well, I think we've seen, A, no, tech does not have to borrow. But valuation there is high, relatively speaking. It's one of the most expensive parts of the market. So I think that is where the sector does have some impact from yields rising. But I think outside of that, we've also had, as Kevin mentioned, good economic data coming out

Fourth quarter GDP is now estimated at 3% from Atlanta Fed. And we've had a string of really good early earnings reports, which really is supportive. And I think for the market to continue to rally, we need earnings to definitely come through.

We won't know about tech really for another couple of weeks, but I do think that the fundamental story is positive. That's great news for large cap tech, although I do think that valuation is a little bit limiting. And I will say, even though they don't need access to capital,

They are planning to spend a whole lot this year in terms of CapEx. And I think that could ultimately weigh on the multiples that they're afforded as well. You certainly know Microsoft, $80 billion in CapEx. Speaking to your point about earnings, earnings so far, it's early.

It's very early, but EPS up 11 percent year over year. Steve Weiss, I want to come over to you. I want to talk to you about not only earnings so far. Again, we want to emphasize it is very early, but also the incoming administration. What's your view on what happens next week when investors, they actually see the reality? This is new administration. Of course, after the election, we saw a big surge in equities and then we saw kind of a cool down in recent weeks as well.

Right. Well, first of all, in expectation of new administration, I would tell you Scott Besson's testimony yesterday, his confirmation hearings, was pretty good. It was very strong. And if he didn't have confidence in it before, and I did, I know Scott back from his days at Soros in London many years ago, you should have that confidence now.

He said that he's going to proceed in an apolitical way, which is very, very positive, because I had big concerns otherwise, and also that he's very focused on the deficit.

Now, what's up for debate, going to your question, is what impact tariffs do have. And I do believe that tariffs will have an inflationary impact. That's, to me, inescapable because companies that are operating particularly with narrow margins aren't going to be able to absorb the costs.

So, and the manufacturers certainly aren't going to absorb the costs any more than they have already. Now, China did cut costs, of course, but, you know, with the last tariffs, they may do it again, and that'd be positive. So that's the best case scenario.

But before that, I think you've got to look forward optimistically into what the new administration is going to do, because the Biden administration did hold back business, did hold back commerce, and frankly wasn't focused enough on cyber except in the last couple of days. All those things damage businesses. All those things add to business costs.

So you've got to be optimistic at this point. So it appears today the Trump trade is back on, nowhere more obvious than in Bitcoin.

All right. So you're saying Bitcoin is a clear sign that Trump is back on. We're going to get to Bitcoin in just a minute. Brent, I want to get over to you as well. Are you feeling optimistic? A data point that I saw earlier today, if you want to look at money market funds, over the last seven or eight days, about $51 billion has been withdrawn from money market funds. I think some questions about where that money goes. Do you think that's a sign of investor optimism, that they're getting out of those cash positions and potentially putting that money to work in the markets? Yeah.

No, no. I mean, I would ignore these money market flows. It's like people keep saying there's trillions and trillions in money market that's going to come into stocks. And that just hasn't manifested. So I think it's just a small crumb of data. So I think it's spurious. I'm paying no attention to it. I think as it relates to one point about technology, you and Brenda were talking about tech starting off with a tough year. If you look at XLK,

Apple is 15%. And Apple's down 8.5%, almost 8.5% year-to-date. That has nothing to do with rates. That has to do with Apple's own weakness, the concern about China, the lack of AI, the concern about revenue growth. And so I think that we're going to continue to see within these mega cap names a really big dispersion of return as

as investors get much more specific on which companies are actually growing revenues, growing earnings, and where do we see a line of sight. So I think that

Although the aggregate for the Mag 7 are expected to grow 18% in Q4, you know, year over year. That is not equally distributed between those seven names. It's like NVIDIA, Meta, I think Amazon make up the majority, while Apple comes in the rear of really not having much revenue growth relative to the other six peers.

You know, Brent, to your point, Apple shares down more than 9% over the last month. I want to come over to you, Kevin. You actually recently bought some Apple. So I think the question for you is, did you buy because of the weakness? Were you essentially buying the dip or was there some other reason to add to the Devo portfolio?

- No, Frank, we were buying the dip. This was a stock that we sold out of in its entirety back in December for the valuation concern that maybe it's just not worth 240, 250, got up to as high as 260 almost around Christmas time. So we were out of the position completely. That was the 10th time that we've sold Apple over the past 13 years. And everyone freaks out when we sell Apple, but sometimes, you know, it's a little expensive. So we try to sell high and buy low. It's not a perfect science, but down here at 230, 12% off those highs,

It gave us an opportunity to just start to slowly rebuild that position. But to Bryn's point, this is not the most growth-centric of the Mag7, but we like to share buybacks. We believe in the Apple iPhone 17 product. The service model is great. So with patience, between 230 and 200,

will rebuild that position. - So people were freaking out when you sold Apple. Are people freaking out that you bought Apple? I mean, some recent reports, that Canalys one in particular about the decline in iPhone shipments in China, Apple now in third place in China, double-digit declines for 2024. Are you freaking out a little bit that maybe the narrative that we saw last year about weakness in China and some people said, "Ah, it's speculation," that could may actually be a reality? - Yeah, I think that their China sales are gonna continue to decrease. They can't put the AI on that product at all.

And who knows, China, I think their GDP came out at 5% today, like how perfect is that? So you can't always trust their economic numbers, but you can trust the sales that we see out of Apple, and we know that that's decelerating. So if you're into the stock or getting into it like we are, it has to be a thesis outside of a China play. So Bryn, you're also an Apple shareholder.

Are you concerned about some of the issues that Apple has in China? And do you think it's possibly indicative of this whole Mag7 basket that maybe we've seen the best days from these Mag7 names? NVIDIA comes to mind. I mean, just incredible blowout earnings reports. I think the law of big numbers is how much longer can it last? Right. Well, I think Steve and I actually on the same day, I cut my Apple position in half.

in December of last year, really because of just like valuations. I think there's other opportunities. I bought more Robinhood, bought more Uber. I just think there's other companies where I see earnings growth. I see positive sentiment in the market. And so I think Apple, once again, we all use Apple products. I think Tim Cook is one of the most amazing CEOs.

I just think that there's a time and place for me to have a bigger position in Apple. That place is not today because I really do want to see not their earnings growth because that's financial engineering from buybacks. You want to see some revenue growth. And I just don't see any signs of that to be picking up. And so that's why I reduced the position to add to other names where I see clear growth and I saw much more opportunity to have capital appreciation in 2025.

So, Brenda, I'm hearing a lot of skepticism. Just by the way, Apple named the top pick by Citi, outperformed by Evercore. Raymond James also has it as outperformed. Brenda, you're also a shareholder of Apple. The street seems to like the name a lot. Here on the desk, some questions about valuation and things like that. How do you deal with it? I think it's also important to note that CEO Tim Cook, he seems to have a very good relationship with the incoming president. And I think that's going to be increasingly important as we're seeing all of these tech companies really becoming much more competitive

Washington-centric more recently. But with regards to Apple, I do think valuation is still rich. As we've talked about, I do think that revenue growth is going relative to the other names in the Mag 7 is going to be limited here.

We think it's a positive that they have new product coming out with AI. So far, reviews have been mixed on the product. I think it's further out in terms of a replacement cycle, but we think one is coming. So that being said, we are at neutral weight position. We do own Apple, but don't think it's the right time to add more exposure here. But we are sticking with the exposure that we have.

Weiss, any thoughts about Apple, the Mag 7, the idea that we may have seen the best out of this group, especially as we come into earnings? A lot of weight on those NVIDIA earnings, especially coming up on February the 20th.

Yeah, first of all, I want to call out something that Bryn said. And she's absolutely right. These numbers, like the flow show and all the other stuff they cite, it's cherry picking specific data points to get eyeballs on your written research. In terms of how you invest, those should come into it not at all. You should look at the fundamentals, momentum, whatever your strategy is. That's not part of it. Now, in terms of Apple, Apple is expensive.

It's been expensive for a while. It hasn't had revenue growth. It hasn't had real fundamental earnings growth as opposed to balance sheet manipulation. So those that come out and say, Apple, you have to own it. You can't trade it. Kevin's done the exact right thing. You do trade it because it is expensive. So I do believe you can get better stock performance and better growth elsewhere. And in those names are in the MAG7.

So we've seen them under a little pressure. And I think pressure is an exaggeration. While we're talking about big dollar moves, you're not talking about big percentage moves. That's still where the growth will be. They still are recession resistant. As a matter of fact, they grow during recessions.

So why would I want to give up my positions there? But I would consider something else aside from Apple. You might as well own just the S&P index or the NASDAQ index instead of owning Apple because you get the same performance without worrying about the volatility when they report earnings.

Speaking of earnings, we have Netflix coming up in just a few days. Steve, I know you want to talk quite a bit about Netflix, but those earnings coming up, they're going to kick off big cap tech. A lot of, again, weight when it comes to earnings for mega cap tech, but also for the communications services sector. I'm looking at the numbers right here. The estimate is for 22 percent EPS growth year over year. What are your expectations for Netflix? And do you think that sets the tone for the entire sector?

I don't think it sets tone for any part of the sector aside from Netflix and perhaps Disney. That's really it because the model is so different than the other companies. This isn't really a technology company. It's a consumer facing company with a unique brand and a unique product offering. Nobody can match their content. So look,

Quarter to quarter, it's very difficult to understand what Netflix is going to report. So they've missed some. They've made some. They've surprised big to the upside, big to the downside. But here's what I do know. What I do know is if you've ignored the quarters,

and you've just held onto the stock, you've done very well. If you've used the quarters when they miss as opportunities to buy more trading position in addition to your core position, as I've done, then you've done exceptionally well. So that doesn't work with every stock, but it does work with Netflix.

And if you look at their content, you monitor the content, they're, said the other day, they're going more after with their content non-US speaking countries. So that increases their subscriber growth.

So everything about Netflix is going in the right direction, including sports. And let's not forget, they're still one of the cheapest, one of the least expensive streaming services out there. So why wouldn't you want to own it here? They've still gotten only the pricing levers, but the content levers to pull.

You also recently bought more, but it sounds like it's a long-term hold. This isn't a trade because you're saying the volatility quarter to quarter. And again, after earnings, it is one of the most volatile stocks on the street following earnings. But you're saying it's a long-term hold. You can't hold it quarter to quarter. It's not a trade. Kevin, you also own some Netflix as well. One more thing, Frank.

Frank, one more thing, if I could. I don't look at volatility as risk. I look at volatility as opportunity. And the opportunity is, if you want it, the stock moves quite a bit, and it really skyrockets, take a little off. If it goes real low, then buy a little. So volatility can be your friend if you know how to manage around it.

Speaking of shares up about 2% right now, Kevin, you also own Netflix. Yeah, if they had a sell-off here, Frank, I would be a buyer into any type of weakness. Steve talked a really, really long time about Netflix, so I won't go into all the detail. But I think the live sports and advertising is the key that we really want to focus on moving forward. The Tyson experience, the NFL on Christmas Day, and Raw is Netflix. I mean, if you've got Rhea Ripley, this isn't a company you want to bet against.

I think you're also a big fan of the world wrestling entertainment. It's not sports exactly, but it is live programming. We're all as Netflix, man. WWE, let's go. Speaking of mega cap tech, you're also buying more meta. So obviously we had some big news today when it comes to TikTok potentially getting banned on Sunday. Did you buy the meta in anticipation of that decision or was there some other reason? No, we didn't, Frank, and we're not understated.

of the mindset that that's really going to happen. It would be a great catalyst for the Meta and some of these other companies if it does. But much longer term, and talking about some of the Mag7s that have lower valuations, cheaper companies, and as good as this stock has done, and it's amazing how well it's performed over the past 18 months, it's still relatively cheap. They're spending a lot of money on CapEx. You touched on this earlier, Brenda. But

This is a stock that makes a lot of money. It's very diversified. They have another opportunity with advertising and YouTube that they haven't touched or really tapped into like Netflix. And lastly, their hardware is incredible. It's affordable. It works really well. And I think it's as good as anything that Apple puts out. Brenda, you also own Meta. Do you think they're a beneficiary of...

either a TikTok ban or just the threat of a TikTok ban? So many people going on TikTok to use the TikTok shop and use what people call social commerce. Do you think Meta is just a beneficiary? Just the threat of disruption leads to more buying of Meta? Potentially. The company definitely stands to benefit if suddenly we don't have access to TikTok anymore because it's become such an important...

means of advertising and of social trends happening on TikTok. So certainly you could see that some of that pick up with Reels or Instagram. So I think there could be a potential benefit there. But I do think to Meta's benefit in general, even if there isn't a TikTok ban, it's just that the company has really been able to utilize AI and really push through

great content to the users of the platform there that is as it was welcome even though it's advertising related so they've done a tremendous job on that on that front you know while we're talking mega cap tech uh you have pretty broad ownership apple microsoft nvidia also owning the triple q some notes out about the triple q's i want to get your take on the triple q's first and then get your reaction some of the notes out about moves in the triple q's yeah sure i mean yeah sure i think that

First of all, as we come out with earnings this quarter, I'm going to reiterate, I think there's going to be a lot of dispersion. When you look at Microsoft, which I think got an upgrade recently to over 500, Microsoft is going to grow revenues around 11%. So I don't think that co-pilot, we've seen...

real adoption. I question that. We use Microsoft Enterprise, and I just think at $30, it's really expensive. That being said, on last quarter's call, they said that the cloud revenue was going to reaccelerate in the back half of the year. And so I think for that, Microsoft continues to get a bid and probably does well through this earnings if that reacceleration in Azure

actually starts to come true because that's the majority of their returns. And so I think that as you see Amazon, Microsoft, you're going to have strong numbers. I do question, as I said before, I just don't think Apple is going to be reflective of the performance of the other six names this year. All right. What about the overall basket of the NASDAQ 100? Any thoughts they might be hitting an area of resistance? BTIG putting out a note believing that they may be hitting resistance at the level that they're at right now.

Yeah, well, I mean, the NASDAQ, you know, the QQQs have been one of the best performing asset class over the last 20 years. So for me, it's a core holding. And I think that if you want to be defensive, you can buy JEPQ, which is the Qs and sells calls against it. And so I think, you know, they added Palantir. They added MicroStrategy inside of the NASDAQ 100. So I just think this is an exciting opportunity.

asset, sliding ETF to own because you get the best growth companies in the world in one simple low-cost ETF. Yeah, right now, triple Q's up about one and three quarters of 1%. I'm going to get some more committee moves. Brenda, you sold AMD, American Tower, and Mondelez. You also trimmed your Adobe holdings.

Yes, so we were pretty active yesterday, much more than usual. But, you know, when we look at AMD to start, you know, the stock has lagged, certainly, the broader market. They do have about 50% of revenues coming from PCs.

um pc chips uh think there is an opportunity in gpu which has been growing but when you look at something like a broadcom we think it's much more apparent how broadcom is going to win in this environment how they are winning in terms of their much more specific platform related offerings where it's chips and software and really catering to companies that are going to really develop their own ships in this market

On the consumer staple side, we did exit Mondelez, really moving away from processed foods, even though there is a growth story there internationally. I think some of the trends in the US could spill over to international. But Kimberly-Clark, which is a much more traditional staples company, but there is a story there with some reorganization that they've done internally, which should drive margin improvement and overall earnings growth in the double digits.

Also, trimmed Adobe. Adobe has been, I think, in part misunderstood, but gave some really conservative guidance. But is it a trim? I mean, you cut half the position. That's a bit more than a trim. We cut half the position. I think still a very viable, important company within the document space. But when we think about overall growth, management gave guidance for high single-digit growth this year, which is a disappointment.

So we felt it made sense to trim the position and establish a new position in Snowflake with the proceeds. You were very busy. I want to get to all your buys. Kimberly Clark, you mentioned. Broadcom, you just mentioned. You alluded to it at least. Snowflake and also Wynn Resort. So you're getting into the gaming space. We added to Wynn Resort. So we already owned Wynn. We increased our position size there. So of the brand new names to our portfolio,

Snowflake was a new one. Broadcom and Kimberly-Clark were the three brand new ones. Just curious about Wynn. Why Wynn right now? I mean, so much, it seems like geopolitical shifting going on, especially with the new administration coming in. Obviously, you know, Wynn has casinos all around the world, but a big part of their business is over in Asia. Yeah.

Yeah, so there's been, you know, Macau is still in the process of recovering from the pandemic time period. We do think that is going to continue. Meanwhile, the company has a new property that's going to come online in 2027 in the UAE.

The Vegas properties continue to do relatively well. The stock is really undervalued and has not performed well. So hence our decision to add a little bit to the position size there. But we do still think there's an opportunity in our portfolio and the way we construct our portfolios. We certainly want to have some exposure to names that are down and out where they're just the market has not recognized the value there and think that Wynn definitely falls into that category. So, Kevin, you've also made some news covered calls in Caterpillar, Freeport, Mac Moran and UnitedHealth.

We had very limited volatility in 2024. So the option premiums that we generated were a little bit on the lower side. If we expect higher volatility in 2025, and certainly we've seen that out of the gate, we should be able to take advantage of that. For time purposes, Bryn, I'll just highlight our UnitedHealthcare trade because you'll love this one. We wrote a covered call on Tuesday on UnitedHealthcare, so it had a

three-day expiration expiring today, Frank. It's a 545 strike price, so the stock would have to go up to $545 before today's close to get it called away. And we brought in $10.80 a share. If you annualize that out, it's a 1,500% annualized premium. And even on a real return basis, just for a few trading sessions, Frank,

2.86% real yield. So covered calls are great when there's volatility. All right. Coming up here on halftime, our calls of the day, including a top pick for one stock that Kevin Simpson is making a move on with the call and his trade. That comes up next. Halftime back in just two minutes.

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And welcome back to Hatton. Let's get to our calls of the day. We're going to start off with Robin. You can see shares are up over 5.5% right now, named the top pick at Morgan Stanley. And Kevin, you bought more of this stock, so good on you today. Listen, we bought this stock last Friday at $40, and it's almost $49 today, so...

Nothing to sneeze at right there, but we think there's a lot more potential for this stock. There's a maturation that's going on within this company. This isn't kids running around trading NFTs on their phone, although that's the infrastructure that's there. They made an acquisition for Trade PMR, which is a custodial platform that a lot of RAs are using. They're building out education within their site, retirement plans. This is a company that's amazingly growth-oriented. And when there's a transfer of generational wealth

It's the folks on Robinhood that are going to be the beneficiaries of that transfer. We really like the stock in our growth portfolio. But Kevin, in all fairness, you've all known this great wealth transfer is going to happen for quite some time. Is this a deregulation play in your mind, the idea with less regulation that this company has more room to grow, more room to expand into new markets and new businesses, like one you just mentioned?

Well, I think that they're going into the right businesses, not sports betting. So deregulation is going to help lots of companies within this space. But you want companies that are growing and it's a huge, huge market share and they only need a small portion of it. All right. Brent, you also own Robinhood. I want to get your take on what Kevin has to say. The idea is that they're growing into the right businesses. And I also want to get your take. Do you believe that deregulation, is that a tailwind for this business long term? Of course, again, it seems like the elephant in the room, the inaugurations on Monday.

I mean, I really think crypto, the crypto market, specifically around the regulatory framework within crypto. So maybe it's not a deregulation. It's a regulatory framework, which we didn't have before. And so I think that will benefit both Coinbase and Robinhood. But because I think Robinhood has so many more public assets that are like stocks, stocks

And they are doing so much. They're giving money back for IRAs, giving you a lookabump. I think it actually is going to infringe on Coinbase. And they can both be winners. And so I think the regulatory framework around crypto will be incredibly positive for Robinhood longer term.

Weiss, coming over to you while we're talking about crypto, you made some moves on crypto recently. You actually trimmed some of your crypto position. Just curious why, as we go into the inauguration, the administration of Donald Trump expected to be a very good one for crypto, expected to have an executive order on crypto potentially on day one as well.

Yeah, so that was just over 10%, and that was just triggered by a stop. It's actually still my largest position at this point, but it's still speculative. So I keep tight stops on it on the market. But those stops, unlike on stocks, have to have a wide berth because of the volatility in it. But look, you've got a president who's got interest in crypto.

And we've seen that he will work in his self-interest. So on that alone, now when he says day one, he's going to announce a federal stockpile in crypto, it doesn't make any sense. I don't think it's a store of value. I don't even know what that means in relation to crypto.

The animal spirits here are alive and well. The momentum will continue. You still have halving where you cut the capacity it's available to buy. So everything is working right for momentum trade. I can't tell you what my target is, as I've been asked in the past, but...

you know, I'm going to be there. And Robinhood, frankly, is where I first started trading crypto because they weren't charging versus Coinbase charging 5% per trade. So to me, it made infinite sense. And as far as Robinhood goes in generational wealth, if Kevin keeps putting lids on my stocks like UnitedHealthcare, I hope that generational change in the wealth ownership will happen sooner than later.

Always switch gears a bit, going from crypto to CRM. Upgrade of Salesforce today from buy to a buy from a hold at TD Cowen. Britt, I'm going to come over to you. You own Salesforce. Just your thoughts on this, the whole agentic AI. Oh, excuse me, Brenda. I'm sorry about that. Brenda, you own Salesforce. Just the whole shift to agentic AI and this upgrade from TD Cowen. Also, price target raised from $380 over to $400.

Yeah, I think that Salesforce continues to be really well positioned and with their agent force, which I think we'll see more and more adoption as companies really look to leverage their existing salespeople and their ability to service customers and bring in new business. So I do think that Salesforce is well positioned. And there were some questions about that not too long ago.

But I do think that they've really taken great measures to be competitive and offer really interesting tools for their clients, their customers to use. - You know, we heard Mark Benioff here. He actually spoke to our Sarah Eisen about the difference between agentic AI and AI co-pilots. So he seems to be maintaining there's a big difference, but when it comes to adoption, do you see a different story? Because AI co-pilots, they just never quite took off.

No, and I think if you have a co-pilot that's actually adding value and it's very apparent in how it's doing it or even taking the place of a person along the process of the sales process, that is much more valuable and tangible for companies to be able to see and use. All right, Salesforce shares up just about 2.5% right now. Time now for the headlines with our Bertha Coombs. Bertha, good afternoon. Good to see you. Hey, Frank.

In a post on Truth Social, President-elect Trump said the inauguration ceremony will be held indoors in the Capitol Rotunda due to a frigid weather forecast for Monday. Trump added that the Capitol One area will be open for a live viewing of the event and to host the presidential parade.

The last time the ceremony was held indoors was for Ronald Reagan's second inauguration back in 1985.

President Biden said today that he considers the Equal Rights Amendment to the Constitution is, quote, the law of the land. Congress passed the 1970s era amendment, but it took until 2020 when Virginia finally ratified it for it to reach the required threshold of state approval to be added to the Constitution. The National Archivist still needs to publish it for it to go into effect. But

but legal challenges are sure to follow and the biden administration announced the next 15 drugs for medicare price negotiation this morning combined the drugs cost medicare 41 billion dollars over 12 months according to the agency the lion's share of that on novo nordisk so zempic and wagovi medicare says it spent over 14 billion dollars to cover 2.3 million beneficiaries up

up nearly tenfold from 2020 just on those drugs. Novo Nordisk tells CNBC it disagrees with the decision. It already has a pending lawsuit from last year's drugs that were selected. Frank? All right, Bertha Coombs. Bertha, thank you very much. Coming up here on Halftime, your energy playbook. It is the best performing sector this month. The committee debates if you should be in it. Halftime back right after this.

At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.edu. Global markets, up to the minute, front page news. Wake up to Frank Holland and Worldwide Exchange. Weekdays, 5 a.m. Eastern, CNBC. Live ambitiously.

Welcome back. Energy is the leading sector so far in January on pace for its best week since November the 8th. Kevin, you own Texas Pacific land and you're also adding to that position.

Yeah, this stock is almost as fun to talk about, Frank, as Robinhood. We first bought this in the end of the third quarter last year, and it had been up 100% when we got into it. So it started the year at 450. We finally made a position in our growth strategy at 900. It then got included into the S&P 500, immediately ran to like 1600, and we trimmed the position up there. I mean, at some point, it's okay to take profits.

So just this week, we added to the $1,300 range some of the shares that we had exited around $1,600. They own about 830,000 acres in the Permian Basin. Bryn knows this company far better than I do, but it's a royalty play. Water, natural gas, solar, oil, minerals. It's an incredible landlord and a wonderful stock. All right, shares up 26% year-to-date, so a big riser just in 2025. Weiss, coming over to you, you also made a move. You bought SLB.

I did. So I bought it this morning. I paid up for it, but I'm not concerned because it's still an inexpensive stock. Look, it's

Trump's been very clear he's going to open up federal land offshore to more oil drilling. I don't want to worry about whether that's going to be absorbed by exporting it or whether the market internally in the U.S. can absorb it. So why not be agnostic, really somewhat agnostic, to fuel prices, to oil prices, energy prices, and buy one of the service companies? So I think the service companies are the way to go. Now, of course, if

If the commodity drops to a certain level, then drilling drops. But in the short term, that's not going to be the case. So they've got a big buyback. A lot of buybacks are announced and they're not executed on. I think theirs will be. And again, I think it's cheap stock and it's a starter position. Got to do a lot more work on it before I really size it up. But I'm comfortable with it.

Yeah, to your point, Trace, about 13 times forward earnings today up about 7.5%. Bryn, your thoughts on energy, the leader this year so far? I know it's only early in the year, but still by far the leader when it comes to sectors.

Right. So earlier you were talking about deregulation. So this is really, I think, in the crosshairs of deregulation. You have streamlined the permitting process, increased federal lands, and then increased production. So when I look at those three, to me, like from a first principles, I'm saying the pipelines. Pipelines, we're going to have more oil coming through the pipelines, better or less regulation, more oil going through, more gas and oil. And so I think energy transfer,

Kendra Morgan, which both had really banner years in 2024, you know, unlike some of the other names. And you also get a nice distribution yield. So I think if you want to just to keep it down the fairway, stay with the pipeline plays. And those are my two favorite ones. Energy up about nine and a half percent year to date. Coming up next, Mike Santoli joins us with his midday word. We are back right after this break.

And we're back on halftime. Senior markets commentator Mike Santoli joins us with his midday word. Mike, obviously, Dave, for the inauguration, we're seeing a bit of a bounce back on Wall Street. What do you make of all of it? I think it's a big exhale that we've had this week. And I remember we got clenched up because it seemed like Treasury yields were going up too far, too fast. Good economic news was hard to celebrate because of that. People were afraid that the bond market was really going to test itself.

the ability of the economy to absorb that. And we went six weeks, and the average stock took a pretty good little pullback in that time, and that has reset expectations, reset price action and valuations enough so that we can kind of

get back in there and say, maybe not that much has changed. I mean, I think that's fundamentally what we're doing now. Interestingly, yesterday, you had a better market breadth, more stocks up versus down than you have today. It's just that yesterday, Apple was down 4%, covered up in strength. And you still have...

pretty decent bid in the average stock out there, even though NASDAQ 100 type names are leading today. You have had this subtle broadening of strength that people have been calling for. Yeah, I got to join you on closing bell yesterday. You pointed out the S&P equal weight outperformed the regular S&P yesterday. S&P actually went low. And by an alarm

Like the S&P was up by eight tenths of a percent. The S&P down a quarter of a percent. You almost never see that spread. That's the result also of having a hyper concentrated index. All right. Mike Santoli with the midday word. Mike, thank you. Coming up, we're taking you inside the quantum computing race. These stocks, they've seen some big runs despite a kind of recent crash. Our Kate Rooney is standing by with a behind the scenes look at the tech and its potential. Halftime back right after this. And we are back on halftime. Let's get to our Julia Borsten with the news alert. Julia.

TikTok CEO Shou-Chu responding to the Supreme Court ruling upholding the ban on TikTok. Shou-Chu posting a video on TikTok in which he thanks President Trump, saying we're grateful and pleased to have the support of a president who truly understands a platform. Take a listen. On behalf of everyone at TikTok and all our users across the country, I want to thank President Trump for his commitment to work with us to find a solution that keeps TikTok available in the United States.

Chu saying that Trump's defense of TikTok would be a strong stand for the First Amendment. He also says stay tuned. So we are awaiting more, obviously, from incoming President Trump as well as from the company itself, which may have to decide whether or not to suspend the app as it awaits executive action from the incoming president. Frank? Julia Borson with the very latest on TikTok. Julia, thank you very much.

Turning back to the markets, the rally in the recent crash in quantum computing stocks, it's really brought this tech into the mainstream. But what exactly is it? Our Kate Rooney is standing by with a behind-the-scenes look. Kate. Hey there, Frank. Yeah, so we did go behind the scenes at PsyQuantum. It's a venture-backed startup here in Silicon Valley. It's building high-powered computers that investors expect to be the next transformational technology after generative AI. The hype around this industry, as you mentioned, it's been based on technology.

its potential to solve complex problems that wouldn't be possible with classic computers. It all hinges on quantum physics, hence the name quantum. It uses quantum bits, also known as qubits, to make it possible to explore multiple problems at once, which would really be groundbreaking for complex math problems, for example.

It could also be applied to drug discovery, think of things like aerospace encryption, material science, energy genomics, and a lot more. And in order to make the physics I mentioned work, these machines need to be stored at some of the coldest temperatures on Earth. They use liquid helium to get these to around negative 455 degrees Fahrenheit. That's just about as cold as it is.

in deep space and the cost of building these, as you can imagine, is also stratospheric. You got Amazon, Intel, Google also racing for a commercially viable quantum computer. And Google's recent breakthrough in the fall did spark some of this mania

We've seen in public markets names like Rigetti and IonQ were up as much as a thousand percent last year. And then videos Jensen Wong took some of the air out of that, saying that it's as far as 30 years away from actually being impactful. The co-founder said,

Of this company, Pete Shadbolt thinks the timeline, he says it's more within the current decade. And while the opportunity is huge, these computers aren't actually live. The consensus is that in order to have a working version, it's going to take one million qubits. Today, for a little bit of context, the most advanced quantum giants are closer to 100 qubits, Frank.

Wow, wow. Our Kate Rooney there in the field. That's really interesting stuff. Kate Rooney, thank you very much. Weiss, I want to come over to you. You have some thoughts about quantum computing. Do you have thoughts about the trade or the actual technology?

Both. So in terms of technology, you heard Kate lay out what the barriers are to this happening. Now, of course, those will come down and it's probably not 30 years. But what I've heard, what I've read, it's at least 10 years. Say that comes down. But so many of these companies that are there now won't be around at that point.

because they are capital intensive. Number one. Number two, if you do believe in it, play it through NVIDIA. Play it through Taiwan Semi. So they're the same ways to play it. All right, Weiss, thank you for that two cents on that. All right, stay with us. Final Trades here on Halftime coming up. We'll be right back after this break. And we're back on Halftime with Final Trades. Bryn, you're up first.

NVIDIA. As you know, I like to sell calls against the position, so here's an idea. You can sell the May 160 calls. You get $7.45. If it happens to get called away, you have a total return of 21% for around four months. Kevin. Robinhood. We own this in our growth ETF, Qdevo. Also a great name to write calls against. You want to go where the money's flowing, and it's flowing here. The fact that Steve Weiss has a Robinhood account almost makes me want to double down today. Brenda.

I'm going to go with Snowflake. So really well positioned from a fundamental standpoint to benefit from all the data that's moving to the cloud. The aforementioned Steve Weiss, last word. Okay, actually, I don't have an active Robinhood account. I did. My final trace, CRH, I added earlier in the week as rates starts come down. All right, that's going to do it for halftime. We have the exchange coming up right now.

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At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.edu.