Can the Bounce Continue? 3/26/25
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All right, Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour, debating the bounce in stocks and whether it is in fact sustainable. We'll ask the investment committee who's making some more moves today. Joining me for the hour, Joe Terranova, Jenny Harrington, Kerry Firestone, Brian Belsky. We want to check the markets here. We've had a little bit of a roll here in the S&P 500 within the last five to 10 minutes.

on headlines related to tariffs in which Bloomberg is the first with this headline that the president is preparing auto tariff announcement as soon as Wednesday. That just moved and the market moved on that. You can see the intraday of the S&P. We could pull up Ford and GM. You can see what is probably an intraday move lower in those names as well. Sure enough, there is that.

We'll watch all of that. We'll have a report from the White House coming up momentarily from our aiming javers. We're getting that set. You already had some weakness within the market today really related to the Nasdaq. Nvidia weaker chips, weaker on some China concerns. Tesla down another 5% today. That was dragging the Nas lower. As I pose the question at the top.

Can this bounce continue? It's been a good bounce. S&P is up 5% or so from the low. That's before the news that is developing here. It did close above its 200-day moving average. NASDAQ up 5% from the low. The Q is up 5%. The Dow up 5%. Best week since January. So you get the idea of what kind of bounce back we've had. Brian Belsky, you know, some of the tariff-related news of late has been more conciliatory than

than not. Yesterday we didn't get any. Whether this is a bit of an attempt to change the subject

from some of the other news that's happening around the White House, we don't know. Nonetheless, the market doesn't like anything that looks like tariffs are coming sooner rather than later. - I think the market's been dealing with recently what it knows and what it doesn't know. What it doesn't know is still this uncertainty surrounding what's gonna ultimately happen with the tariffs. So you start to hear more noise about the tariffs, market goes down. What did the market did know? The market did know that it corrected 10%, which is your classic correction,

the tariff noise went away and markets began to rip. The other thing that the market is starting to sniff out is that if you take a look at the Magnificent Seven, they're down more than 12% year to date, but the other 493 stocks are up. So that's starting to show the signs of stock picking broadening out, markets recovering. And so I think when the market knows something, it likes it, it goes up. When the market doesn't know anything and the uncertainty increases, we have volatility. Yeah. There's...

There's even a lack of certainty in the statement that you make because the market doesn't know anything. Correct. It's what the market thinks. Right. And so that's the problem. That's the problem with a lot of people that do what I do, changing their numbers. They're changing their numbers based on what they don't know. And I think that's a really, really big issue. And I think that's why you have to be consistent. You have to show your process and your discipline. And there's always things to buy. There will always be stocks, Scott, that outperform the broader market trends, period. I mean...

Joe, Barclays today, speaking of changing their numbers, people who do what people like Brian does, Barclays goes to 5,900 from the target of 6,600. So that's a pretty big...

Takedown of what they have it it sort of underscores how everybody is kind of resetting their expectations I point to a couple of journal headlines The first corporate America's euphoria over Trump's quote golden age is giving way to distress You had the op-ed the other day from Alan blinder who's a frequent guest on this network? entitled to quote Trump plays rush recession roulette and

with the U.S. economy. Trump plays recession roulette with the U.S. economy. And then you do have the takedown of some targets. You have had U.S. equities downgraded in the last handful of weeks as well. So it's interesting because I don't even think anyone knows where the S&P Equal Weight Index trades.

We all know where the S&P 500 trades, but the S&P Equal Weight Index, to Brian's point, is probably where you should be focused this year. You know, two weeks ago, I bought Amazon. Amazon is in the quality momentum strategy, the JOTI ETF. If I bought it at 194, if I could sell it today at whatever it is, 202, I would.

but i'm not going to do that i think the real story underneath the market here is that 2025 is about ownership of bonds 2025 to brian's point is about looking away from the magnificent seven ownership of bonds you're bailing you're just all i mean we're what are we two months three months into the three months into the year a little more than two months into the administration

and this is gonna be the year of bonds? We came into the year all bulled up on stocks? - Absolutely. I think there's been a dramatic reversal in the way the administration is administering fiscal policy and the effect on pricing. I've told you for the last several weeks, I think interest rates are gonna be pushed lower,

But the story to me in equities is really about this unwind that continues. And you see it on days like today. What's the reaction to the reintroduction of what's a negative headline for equities? Immediately you see the MAG7, the semiconductor names, the AI adjacent names begin to move lower. And I think you have to highlight that type of activity and understand

You turn your attention elsewhere. You look at materials. You look at energy. You absolutely look at financials, which we're going to dig deeper in later in the show. And I really believe that is where the viewers, that's where the investors have to find the alpha generation opportunities. So, Cara, I asked at the top of the show, our lead is, you know, is the bounce sustainable? Can it continue?

JP Morgan's trading desk addresses that where they say for the second day running, they're pointing to yesterday, long only in fundamental hedge funds appear to be selectively adding decent size. Behaviors changing around the edges, but given the recent scar tissue and some of its deep,

There isn't enough confidence for a pile in before April 2nd. So April 2nd, of course, is the tariff day that's looming. Wolf Research says it's going to be more severe than expected. Now you add the headline that we just got right before we came on the air today. How would you answer the question? Is the bounce that we got, 5%, which is not small by any measure, sustainable?

In a word, I would say not necessarily. This is a market that reminds me of a roller coaster in the kiddie park of an amusement park, meaning it's moving pretty fast, but not with a whole lot of

and not with a whole lot of down. It's within a range. We have had very few years in the last 20 where the market is up or down 3%. It's always been more. We've had so many good years and the bad years have been bad. This market can be flat.

for the year, up 2%, down 2%. And it can keep doing that all through the year just based on the news and what we're hearing from the Fed and what we hear about tariffs and whether there might be a recession. There's a lot of news. But the economy is relatively strong. Earnings are reasonably good for many companies. And you can just

do this back and forth every single day or maybe go to sleep and wake up in nine months and it'll be exactly where we are today. - Jenny, Piper sticks with 6,600. I mentioned the Barclays cut from 66 to 59. Piper's sticking with 66 as they say they are, quote, "This is them, not me," marching through the madness. We believe the weight of technical evidence now suggests an intermediate term low may be in place and stocks have room to run.

So 6600 seems ambitious to me. And what I've really been struggling with when I think about what Joe said about maybe you look at bonds, when I think about what Kerry said about corporate earnings are still good, the economy is still strong, what I struggle with right now is let's say the market's down 10% more from here. Let's say it's down 20%. Then does that manifest in a rotation, which is what we've had so far, where you've got things like energy up 10% on the year, financials up 6%.

Do some things go up? Well, you see tech and consumer discretionary plunge. So does a

broad market correction from here manifest a rotation where you can actually just switch areas and benefit? I mean, look at international. International stocks are up 10% too. Or does a broad market correction say, okay, everything's going down and maybe energy's down 5% from here if the broader market's down 10%. So I think 6600 sounds ambitious. And I'll tell you, the thing I'm struggling with also is I don't

I don't see anything good out there in the near term. I don't see anything terrible either, but I don't see anything good. We've seen corporate earnings actually, the S&P earnings estimates are down about 2% compared to where they started the year. The multiple of the S&P is still at 20 times. The long-term average is still only about 17 times. So everything's rich, nothing's great.

and uncertainty prevails. All right, let me get to Eamon Jarvis now, who is at the White House, who can give us some more details on that headline that undoubtedly moved the market. Eamon.

Scott, that's right. Bloomberg now reporting that there is a preparation underway for auto tariffs here at the White House as soon as Wednesday. That coming from Bloomberg News. They're saying the president is readying an announcement on auto levies as soon as Wednesday. They're sourcing people familiar with the matter. They're saying that would escalate the president's fight with global trading partners. That confirms what the

president has said earlier this week was he was expecting auto tariffs to come perhaps before that April 2nd tariff deadline. Now we know that could come as soon as Wednesday. We'll see whether we get an announcement from the White House. I've texted a couple of officials in the building. No confirmation of that just yet. I expect that might be coming fairly shortly. But a new report now from Bloomberg. Scott, back over to you. The other issue, you know, as I mentioned,

You know, you have the national security question about the Atlantic story sort of swirling around the White House again today and dominating the conversation in which we have said over the last couple of days, frankly, that it's been all quiet on the Western front of the White House as it relates to tariffs. Yesterday was a very quiet day. There wasn't a single headline really related to it.

And now as we have a deeper move really by the Atlantic to publish more of what they had learned, you get this headline now. Yeah.

Look, the White House is in charge of the timing of these announcements on tariffs, and if they want to change the news cycle, they can certainly do that, Scott. We did get a little bit more clarity earlier this morning on what the president said on Newsmax last night, which was that he would be a little bit more lenient than reciprocal next week in terms of the reciprocal tariffs. What does that mean? I asked White House officials. They're telling me that what the president was signaling in that interview last night is that they're not necessarily going to go as far.

as they said they would in terms of the non-tariff barriers to trade. So they had said earlier in February they would take into account VAT tax, currency manipulation, wage suppression, all those kinds of things as they calculated the tariffs. And that would give you a very high tariff back against the other countries. Now they're saying they might not go that far. They might dial that back, not take all of that necessarily into account and come up with a lower tariff number next week on April 2nd.

So we'll see where that lands. So clearly they're signaling at least a dialing back of the ambitions. A lot of those ambitions had been criticized by economists for going beyond just a reciprocal tariff into punishing countries for other trade machinations that they might engage in. So now they're signaling that they might dial that back a little bit as well. So we are getting some movement on the tariff front today and through the morning, Scott.

Appreciate the insight from you, Eamon. Thanks so much. Bring us more headlines, of course, as you get them. The market, Brian, will continue to go through all of that. But we have had a number, as I said in the weeks prior, of targets come down. You still have Oppenheimer, which is at 7,100. You have some 6,800s. But to Jenny's point, 6,600 at this point,

900 points on the S&P? I mean, that sounds like a lift. It sounds like a lift. Now, the other issue I raised the other day is it sounds like a lift today in the messiness of tariffs and trade wars and all the other stuff. Does it sound like a lift if you get to the good stuff later on? Tax cuts, deregulation, deals, all the things that we came into this year bulled up about?

I think so. And we remain at 6,700. Nobody believes us. And the more people that cut their targets, the better. The more Jenny talks about how she doesn't like anything, the more bullish I get. If you take a look at post-great financial crisis earnings, we're still above those earnings numbers. Down 2%, it's nothing. If you take a look at the 500 stocks...

In the S&P 500, we've seen zero negative revisions for FY2. If you look at energy up 10%, energy, consumer staples, utilities have been more of a momentum trade. Just as Europe has been, I don't buy stocks based on price, I buy stocks based on fundamentals. How can energy continue to maintain its positive performance if WTI is going to be down?

95% of the time, 95% of the time when WTI is neutral or down, the energy sector underperforms the market. That's where we're going at the end of the year. So guess what? Our theme remains resolute. I'll quote the great philosopher Ricky Bobby, or he said, "If you ain't first, you're last."

meaning we were the first people to put out our target number. We're not changing it. Everybody else is going to change their number back up again when the good news comes in. We have been underweight the MAG7, overweight the constituents of the three sectors that make up the other stocks and the three sectors that make up the MAG7. That's why our stuff's outperforming this year, and that's why I think our portfolios will continue to outperform. The good stuff is coming. I'm with you. How do you get to 6,600 without the MAG7? Because to go to 6,600...

I'm telling you that the MAG-7 are a screaming buy right here. Well, NASDAQ's down 300 points, almost 2%. Certain parts of the MAG-7 are screaming buys. But how did the market go? I disagree. I disagree, and here's why I disagree. Because if you take a look at the performance of the MAG-7, Joe, as you know this, in the fourth quarter, they actually underperformed. What outperformed in the fourth quarter?

Small cap, financials, things that have not been working. So I think that we're going to see massive rotation still into the areas that have been oversold, that aren't necessarily in the X7. Even if we're asking ourselves whether this is a slowdown in the economy or something worse, like a recession, the reason why that all worked...

There are no signs of recession. We didn't have recession questions then. There are no signs of recession. That I agree with. There are no signs of recession. Are there signs of slowdown? There's not no signs of it. Yes. There are no signs of recession. There are signs of slowdown, though. A slowdown is not a recession, and a 10% correction is not a bear market. We're acting like it's a bear market, and it's not. We're not seeing substantive signs in the economy of a recession, period. Oh, by the way, Paul said that, too. So is he wrong?

So are people wrong? They're seeing the stuff that is not bad in the answer? Why is the Russell down 7% on the year? Because the Russell, there's 400 companies in the Russell 2000 that don't even make any money. Guess what? The other ones that do make money are actually really, really good companies. So it's not about buying the index, it's about buying the company. And by the way, when you say, you know, Jenny doesn't like anything, pay attention to what she does, not necessarily what she says.

Without any, I don't mean that disrespectfully. I mean, look at what you just did. Don't tell me you don't like anything. Don't tell me that you feel so bad about where this market is or where the economy is going and then buy more Disney and TripAdvisor. Right, but so here's the thing. I didn't say I don't like anything. I said I worry. And I said what I worry about is, is it the market corrects more and it takes everything or is it rotation? And if it's rotation, there's a lot that I do like. And then you ask me, okay, what do you like?

What I like are things that are really well priced, which are Disney and TripAdvisor. Highly leveraged to the consumer and the economy. Ah, critical nuance there. Highly leveraged to the high-end consumer. Disney's highly leveraged to the high-end consumer? Yes. It's a very different consumer who goes to Disney than who shops at Dollar Tree.

Right? It is. I think Disney is leveraged to every consumer. Disney is leveraged to every consumer. Why don't you say that if you're looking at credit cards, which I know we might talk about later, like American Express is more of the Disney customer versus, say, a Discover card that might be more of, you know, a Dollar General. I mean, I get the point you're making. Okay. And so, yeah.

When you buy Disney, are you buying the growth story or the value story? Because to me, the growth story went away. Wait, the growth story went away? The growth story of Disney. Disney was supposed to be a growth stock. Let's say it's mean reversion to more of a historical multiple. So you've got Disney right now trading at 17 times EPS. EPS growth for the next three years is expected to be 11%, 13%, 12%. That's pretty decent. Foot traffic, Goldman just put out a report. Foot traffic is holding up.

in the U.S. parks. Summer bookings are looking really good. So there's part of the consumer that's fine. And this goes, Belsky, actually to exactly what you were saying, which is there's other areas that can do well. And that's what I think. And that's why I brought up international. International is doing well. Jenny, I threw you a bone because I know you like dividend income. I think dividend income is going to be great this year. I think it could be. TripAdvisor. What do you have? TripAdvisor is really unique. So that's trading at 10 times earnings. They've got

The Viator business, which is growing like gangbusters, no one's paying attention to it. It's on track to eclipse the actual historical legacy TripAdvisor business. And the big thing here is that the Liberty Media overhang, that overhung the shares for years, is gone. Like, that's, you know, that's on...

that's fixed or it's in the you know very very short term of being fixed so you've got a stock with about 11 15 22 earnings growth in the years ahead trading at 10 times earnings huge free cash flow generation with a really underappreciated growing business so you can look at those and say hey

there's areas of value out there. And I don't mean value stocks, areas where stocks are trading at a fraction. If we look at those versus the MAG7, you have very... Some of them are trading at a fraction because they're for a reason. Okay, but let's just... You better have a good summer travel season. And it might be. Well, there are questions of whether there will be. But so far, and this goes to what you were saying when you're saying there's no signs of recession. And I say yet, right? What we see still is consumer spending is holding up. The consumer is holding up. All sorts of...

So far it's holding up and I think what's making this a really hard market to deal with. Is it holding up? It is. Like PCE in January was still five and a half percent year over year. I'm excited to see what the new numbers come out. I think, when is that, tomorrow or the next day? When PCE comes out again? So I'm excited to see what those are. But this is the challenge. So when you're talking about, you know, can the things that we were bulled up coming into the year, like regulatory reform,

All of those, they're going to take a long time to play out. Tax cuts. We're not even really talking about tax cuts. We're talking about extension of the current taxes. But so the positive things, I think... Well, you're either... Yeah, or you're talking about a tax hike. Maybe, but let's presume we're not getting a tax hike. Let's presume no one out there wants to. But we're talking about the corporate salt. They either get renewed or taxes go up. One way or the other. All right, fine. So...

all I'm saying is we're what we're in this challenging period of is like long-term at well long-term outcomes and near-term excitement and that makes it hard so I'll just give you like another example what I'm not buying

is I'm not buying Target and I'm not buying Ford. Those both have huge dividend yields right now, are trading super cheap, and I have zero visibility because of tariffs, because of the regulatory environment on what the earnings of those really should look like. I'm just not sure what visibility you think you have on Disney, that it makes it such a sure bet in your mind, even if you think it's cheap. I think when you can look at what current summer bookings are now,

and is trading at a multiple that's fair relative to the broader market, relative to what else is out there, I think you've got a decent margin of safety. So that's what Joe said, are you looking for growth? And I said, no, I'm looking for valuation mean reversion. It's part of the comp services sector.

which is the third worst this year, and it is trying to avoid its sixth straight weekly loss. On that note, Dom Chiu has some sectornomics for us on commservices, of which Meta is a part of too, which is a big story, which I'm sure you will include in part of your reporting, Dom. Sure, absolutely, Scott. So this year, the worst three sectors of the year are those Mag7-type names, consumer discretionary, which is down 9.5%, technology, which is down nearly 8%,

and then communication services, which is pretty much flat. So that is the focus for Sectronomics today. We're going to dig into the content and cable company side, which make up almost half that sector. Now, this part of the comm services trade is actually doing pretty well. At the top, you have Fox Corp up about 13% so far this year. Netflix, by the way, on the streaming side of things, up 12%. And even Paramount Global, which was an underperformer over the last 12, 24 months, is doing pretty decently as well. Now, that's 5%.

followed by the Charter Communications trade, also Warner Brothers Discovery and News Corp. Now, Comcast, which is, of course, the parent company of CNBC, Live Nation, Disney are all negative so far this year. Disney's down almost 9%. Now, back to the Netflix trade for just one second here. One of the sector's biggest wins this year, Moffat Nathanson published the stock

last week saying that Netflix had won the streaming wars. They upgraded that stock to a neutral from a buy to a buy from a neutral. They also put a $1,100 price target on those shares. But you mentioned the meta and alphabet trade as well. The meta and alphabet trade

are ones that are going to be interesting because Meta has seen some of that kind of upside move off the recent lows that we saw in the Nasdaq 100 since the 13th of March. The question then becomes whether or not this buy-the-dip mentality and muscle memory still carries for names like Alphabet and Meta on that comms services trade. Scott, I'll send things back over to you guys. I appreciate you, Dom. Thank you, Dom Chu. Meta, by the way, the only of the mega caps that is positive.

year to date. We should note that one of the big drags, I mean, NASDAQ, as we said, down 300 points and it's approaching a 2% decline. NVIDIA is going to take a lot of blame for that today as it faces a threat from Beijing and environmental curves. A lot of the chips are down as a result of that. You

You do have the Tesla shares, which are down again. I mean, how are we thinking about meta here as it relates to, you know, what Joe said, no mega caps, no 6,600. Yeah. So this is our only mega cap down 14 percent from the high. But like you said, it's the only one that's still up.

The thing on this is it's kind of tough. The valuation still looks okay. It's trading about 24 times, which is richer than the market on average. But you've got expected earnings worth of 7%, 15%, 16%. They came into this year super strong with revenue growth up, shoot, what was it, like 13%? Earnings growth up 50%. So they came into the year strong.

And I think it might just be a math equation. The 7% expected earnings growth for this year, I'll bet you that comes in light. And I think this is one that you don't have huge tariff risk. You've got a management team that continues to prove itself successful. I think the earnings growth is reliable here.

The question is, is the capex reliable? That's the tricky part. That is entirely the tricky part on all of this. And you just wonder if there's going to be this efficiency once again, if in fact this is the environment that MAG7 continue to trade in over the next several months. Just look as an example what we heard today.

from Jack Dorsey and block. 931 employees let go, unfortunately. Why? Because they're looking at performance and they're looking at reducing headcount because they know that's going to lift margins. And I just wonder if that's the story we're going to hear if the Mag 7s stay in this kind of

correct. Discipline, right. And so that's been the challenge for the last two years, kind of, of us owning Meta is when Meta was trading at 90 bucks, Mark Zuckerberg got super disciplined, right? And then we've been saying, all right, with the stock at 500, 600, 700, will he still be disciplined? And to the guy's credit, he has been, remarkably so. So, so far, so good. But you've got to watch it carefully. We've had a busy 25 minutes thus far. We have more news. Leslie Picker.

has that for us. Hey, Les. Hey, Scott. Former U.S. Treasury Secretary and Fed Chair Janet Yellen joining the Global Advisory Board of PIMCO. That is, according to a person familiar with the matter. Now, I'm told that the former governor of the Reserve Bank of India, Raghuram Rajan, will be joining alongside Yellen. The former U.K. Prime Minister Gordon Brown will become chair of the board, replacing former Fed Chair Ben Bernanke, who is retiring after serving a

A decade in that role, Mark Carney had already stepped down to serve as the prime minister of Canada. PIMCO manages $2 trillion, much of which is in active fixed income. The Global Advisory Board beats at least four times a year to talk about their macroeconomic outlooks and advise PIMCO's investment committee, as well as participate in subclient events. Scott.

All right, Les, thank you. Leslie Picker coming up. We do have more committee moves. Kerry's going to kick us off to start this next block. A number of moves to talk about there. Jenny's got more as well. We are back on the half right after this.

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EY, shape the future with confidence. All right, welcome back. I said we had some moves from Kerry that was going to start our block here. So you bought more. These are health care related, your wheelhouse. You bought more health equity and you bought more Amgen. Tell us. Yeah. So health equity is in the health savings plan business. They had a cyber attack, not directly at them, but at one of their partners. And the stock came down as a result of that when they announced it at earnings.

We had trimmed the stock twice, 20 percent lower than where it was. We think it's very attractive. We think the administration is inclined toward this business. And we believe there's a long runway for future growth. So that's health equity. On Amgen, this is a stock that has been in the news because of Meritide, which is one of the GLIP-1 and GLIP agonist drugs. We really feel that it's got an attractive balance sheet. It's got a

a good profile of its pipeline. It has several cancer drugs. Bimerituzumab, I know you like it when I say the whole name of the drug. That's a cancer, gastric cancer. You have a very rare skill of being able to pronounce all of the names. I have.

I said it was your wheelhouse. Thank you. So it's a cheap stock, 14 times earnings, 3% yield. And Joe owns it also. So give Joe a plug for the Amgen. Do you think that, I mean, do you have any confidence that the early year gains in health care, which was a standout, and it still is relative to many of the other sectors, can be sustainable in its own right? Yeah. Yeah.

I think that they can. This is a group that has underperformed for two years now. These all sell at very attractive multiples. If you're talking about valuation, they have valuation. They are coming out

out of what is the worst period of losing exclusivity on many of their drugs. And so you're starting to see pipeline of phase three trials conclude new drugs emerge in the market. And so this should carry them for the next several years. They're also working off difficult comps as it relates to COVID and they're beginning to grow their revenue once again. In the case of

of Amgen, you're talking about 8% revenue growth over the last three years. Look what they did over the last year, 24% revenue growth. So the revenue growth is coming back once again. And that's where you pay the premium. What do you think? I remember going to Fidelity talking to you about Amgen and Biogen and Genentech. Oh, oh.

Back in the late 90s, early 2000s. I love the biotechs. I love the biotechs. That's where we're overweight in health care. We're actually underweight health care because of the COVID overhang and the big pharma. But we love Gilead, Amgen, and UnitedHealthcare. What do you mean the COVID overhang? The COVID overhang. COVID overhang of the big pharma stocks. Like Pfizer. Pfizer, Merck.

You hate the whole healthcare space because of two stocks? No, no, no, no, no. Scott, you know the largest company in the S&P 500 healthcare sector? Lilly. Lilly was the number one performing stock last year. Why? Because of one particular drug, period. So you talk about the Magnificent 7B concentrated. Lilly was concentrated, and people were concentrating on their healthcare positions. We like biotech because of the cancer. We like devices like Medtronic, and we like the payers and the systems like UnitedHealthcare.

Yeah, I think that makes sense. That's the right way to look at it? Yeah. Well, I think that Brian is talking about where is growth going to come, and that's more from the biotechs. I think that some of the big drug companies, not all of them, still have attractive valuation. They de-risk, they have dividends, and they're selling extremely defensively. And so that's attractive in this kind of market. You think, I mean, you better be watching rates then if you like the biotechs. Higher rates, not good for biotech stocks.

Well, rates are probably going to go lower, number one. Number two, if you take a look at the dividend growth and balance sheet strength and free cash flow yields of Gilead, it's a monster. And then their drug future, their pipeline is amazing. And so I think people, what happened in the two years that they underperformed is everybody went into Lilly,

rushed into Lilly and they sold their Gileads and their Amgens and their AbbVies, the names that we own, because of the pipeline, because of the growth, and because of the valuation. And because of the fact that interest rates went up. The cost of capital increased dramatically for companies that have to spend. The cost of capital goes up for those companies that- Wheelbarrows full of money. But they don't have to because they've got tons of cash on the balance sheet. That's what they're using. They're not going out in the open market getting loans. Well, you're talking about the biggest of the big biotechs. Correct. Correct.

Would you buy it? That's the distinction. Would I buy what? Biogen? No. Well, it's still decelerating. Bertha Coombs has the headlines for us. Hey, Bertha. Scott.

Tesla is bringing its electric vehicles to oil-rich Saudi Arabia as global sales continue to fall. Tesla made the announcement today saying it will open pop-up stores in three cities there on April 11th. According to consultant PwC, EV sales make up just over 1% of auto sales in the kingdom.

Steep cuts could be coming to the Treasury Department. According to a court ruling, or filing rather, the agency is planning to furlough a, quote, substantial level of its workforce as it complies with Elon Musk's efforts to shrink the federal government via Doge. Treasury currently employs more than 100,000 people. And bonuses for Wall Street bankers?

Jumping more than 30 percent to an average just shy of $245,000 last year. A report by the New York State Comptroller out today shows the bonus pool for employees in New York City's securities industry surged to a record $47.5 billion, the highest on record, as the world's top

financial center. One in every 11 jobs in New York City is directly or indirectly associated with financial services. So when they do well, the city often does well. Back over to you, Scott. All right, Bertha, thank you very much. Bertha Coombs, we'll take a quick break, come back. We'll get to that Jenny move that we didn't have time to document, but we certainly will. We'll try and fit in some calls. And then a little bit later, we have one firm talking about where to shelter during the tariff storm.

And they're talking dividends. We'll get some top picks from Jenny as well. Coming up.

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Let's talk about this move that we have from Jenny. You bought more Cisco, the food company, S-Y-Y. Tell us why. This is the last of the three that we picked off when the market pulled back over the last couple weeks. So S-Y-Y, that's the food service company where you see their giant trucks always delivering food to restaurants. And what we've seen in the past, well, really this year, is that the consumer staples, with the threat of GLP-1s and RFK as head of...

HHS, is we've seen a huge pullback in consumer staples. People are worried that people are going to eat less calories. So the stock's now trading at 14.5 times earnings. They've got earnings growth in the 6% to 9% range. Historically, it's traded in a range of 19 to 21 times. It's a great company. They had revenue growth last quarter of 4.5%, and we think it's overdone.

That's it. Not that exciting. Yep. Cheap with earnings growth ahead. All right. Let's do some calls. CarMax top on our list today. Upgraded to overweight at Stevens. Price target 90. Was 86. They say management's well-tenured and disciplined. You've owned the stock for a while, right? Yeah. It hasn't been a great stock. So we think that business is starting to improve. We've had nine quarters now where volumes, volumes of used cars, which is what they sell, have been up.

positive growth. You're also starting to see prices of used cars come down. During COVID, of course, prices went sky high and it was ridiculous. No one bought used cars. No one really wanted to buy cars. They weren't driving that much. And then they started to and the new

car market moved much faster. So we see this as an opportunity in the stock because it's starting to act better and volumes are picking up and that should be good for the next several quarters. All right. Trade Desk upgraded today. CFRA, Joe. They're bullish on the valuation.

The stock's pulled back a lot, right? Oh, the stock has pulled back. Okay. So the valuation is more attractive at this point, according to them. They also say potential Alphabet ad tech sale could create upside. Okay. So, of course, the valuation is going to be more attractive when the stock is literally in free fall. We had this conversation coming back from President's Day when I returned from Minneapolis. Josh, yourself, and I had

We talked about this and I said you have to have a risk management strategy. Now, it is in the JOTI ETF. The ownership there is 43 basis points. It's the third smallest position we have. When a stock goes from 120 down to 80 after earnings, sits at 80 on February 19th, and you don't acknowledge that you have to do something with your position, I'm sorry, that's not implementing a risk management strategy. Here we are today at $59. Okay, you could say the valuation looks good.

I disagree with that. The only thing good about this is the revenue growth. And I can't wait. Maybe at some point it comes off the books on the JTETF. I was going to say the only good thing about this is that we're almost at the end of the month, end of quarter.

You staying with this thing? Yeah, it's in our small. He dogged it out so bad. I know he dogged it, man. I said last time I was on that this company is officially in a two-quarter penalty box for us because in their quarterly earnings, the CEO and their CFO were not great about vision going forward.

And that really worries me. But we love the longer term thematics of that type of business with the Google business and the online advertising. We think that's where this is going, this future. And we think they're one of the best at doing it. So we're going to wait and see. Okay. Two quarters. You let us know. Total Energy is upgraded to buy at Citi today, Jen.

Right. So Total and Shell, both really great global energy leaders, and they benefit from Europe's demand for energy. They're really focused on LNG. But here's, again, not that exciting, but what's important about them. Shell trades at nine times earnings with a 12% free cash flow yield and almost 5% to 4% dividend. Total trades at

eight times earnings, 10% free cash flow yield, and a nearly 6% dividend yield. So they have huge free cash flow. They can buy back shares. There's not a huge earnings growth story here, just free cash flow and endless demand for what they produce. Give me a quick, oh, I'm sorry, I just want to get Shell in there too, because that was buy at B of A. Yeah, sorry. It's kind of the same story, just Europe demand for energy.

Okay. We'll take a break. And then stocks offering shelter from the tariff storm. One firm with a list of dividend names you can hide out in. We'll talk about them next. All right. Welcome back. Stocks lower today, as you know. April 2nd looming large. Headlines from the White House coming today regarding tariffs. Wolf Research has

has a list today of a dozen dividend stocks they say could offer shelter during a tariff storm. They have names like Walmart, Procter & Gamble, ADP, Cintas, Fastenal, Ecolab, Sherwin-Williams, Grainger, Chevron, Lowe's, Coca-Cola, and Caterpillar on the list. Jenny, I'll just go to you first. What do you think of the list?

You don't own any of those names, but you do have your own picks. Yeah. Because this is your wheelhouse. It is. So those names are really dividend aristocrats. And dividend aristocrats are stocks that have paid and raised a dividend for 25 years straight. And the dividend aristocrat ETF, the ticker is NOBL.

It's actually up year to date. It's up about 1.7%. If you look at the Dow Jones Select Dividend Index, that's up 2.3% year to date. And why? Because I think it's just a quality play. The other interesting thing about the dividend aristocrats is they don't actually have a terribly high yield. The average yield of the NOBL ETF is only 2%, right? So you're really looking for those for dividend growth, for quality. But I think quality is the key.

If you've paid and raised a dividend for 25 years straight, you've got such great control over your business. A lot of them trade with a slight premium valuation. So I'll tell you which of those. - Well, Cisco falls into the category that you like. - Yup, it is. - Right, the one we just documented. - Yup, and there's about 68 actual dividend aristocrats right now. Cisco's one of them. It's paid a dividend for 56 years and has a 3% yield. Other ones we like are your Medtronic, Brian.

right thank you which has a 3.2 yield now those two are actually in our discipline growth strategy because that's what they are they're disciplined growth companies and they pay dividends too in our equity income strategy the two dividend aristocrats that are there are realty income letter o and stanley black and decker and those have yields of 5.8 and 4 they've paid dividends for

32 years and 58 years, respectively. But they're all just solid, high quality, well managed. You know, take shelter in the storm is exactly the right way to say it. You wanted to hit Walmart on the list? Walmart right at the 200 day moving average, a very interesting spot, down 6%. I think this is the spot where you could buy it. But there's a larger conversation there. The fact that all of these companies, Syntas, which is on the list, talked about it.

Costco is talking about it, certainly Walmart. You're seeing an inventory build, a natural inventory build because of the tariffs. And that calls into question, what happens in the direction of the economy? If the economy deteriorates significantly further, you're talking about companies that are sitting on inventory now, that's a margin drag. You own several stocks, including Walmart, Procter, Chevron, Lowe's.

Yeah, we're going in the opposite direction because I'm Polish. So we own Lowe's in the Valley on our dividend growth because of the dividend. We own Chevron because we believe the move last year was out of Exxon into Chevron plus those companies with respect to the dividend growth. On the Walmart thing, we talked about Target earlier. Target has massive operational issues, massive.

A much higher yield, we own it in our value, but Walmart is the way to play consumer staples with Costco because they're the two best companies in the world with respect to that. And I think the food companies in particular are going to be in trouble for a while. So that's why Walmart, I think, is the place to play there. All right, we'll come back with Santoli and his midday word next.

Senior markets commentator Mike Santoli joins us now. There he is for his midday word. I mean, we're up 5% off the bottom. We weren't just going to continue to go straight up every day. No, unlikely. And of course, you know, pure V bottoms are the exception, not the rule. Today, you know, you have to keep in mind it's a pretty top heavy decline. You know, the NASDAQ 100 type names obviously leading it. And it really is this ongoing rethink of the AI infrastructure build semis.

continue to act pretty poorly. That's been kind of that bleed hasn't stopped in that area. With the overall S&P 500, though, I think it's relevant that we backed off right to last week's high. It was one of those threshold levels that a lot of the kind of people looking for the mechanical buy and sell points were interested in seeing the market clear. And we're staying above that a little bit for now. It feels still like as we

discussed yesterday afternoon, Scott, that, you know, we've kind of made use of the oversold conditions, the sentiment drop, the positioning reset, and the fact that the economy is probably less bad than we were pricing in at the lows. And now at some point, you have to have the baton pulled by actually affirmative better news or maybe some moderation on tariffs. So I think that's the zone we're in right now. But, you know, we really are just kind of

churning just in this, you know, plus 4% off the lows level. Nothing too alarming, but also not too convincing in terms of upside thrust. We'll see what PCE delivers and if that, you know, brings what you're talking about or not. I'll see you at 3. Closing bell. That's Mike Santoli. Finals are next.

Lows of the day for the Nasdaq. You can see the decline here. Yields ticking up a bit. Nasdaq stocks continue to go down. Nvidia's down 6%. Tesla's down 6%. A lot of the chips are off. We'll watch all that, and I'll pick it up for you at 3 o'clock on Closing Bell. We'll have Adam Parker join us, Morgan Stanley, Sherry Paul as well. Let's do finals. Good having you. What you got? Hey, thanks a lot for having us. Chewy, C-H-W-Y. Care?

Wabtec, number one maker of rail cars and rapid transit. All right. Thanks, Jenny. Crown Castle, over with a huge management transition, sold off some things. Zero tariff risk, zero economic risk. The Joe T. Still like financials, J.P. Morgan. All right. Good stuff. 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.

Thank you.

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Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.

It's time to make America affordable again. It's time to support the President's plan.