Deep Dive
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Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour, repricing the Fed, rethinking your portfolio. We will discuss where this market might go from here with the Investment Committee. Joining me for the hour today, Josh Brown, Liz Young-Thomas, Steve Weiss, Jim Labenthal. We are green across the board, at least trying to get a bounce back from that deep sell-off we had yesterday post-Fed.
Not a great bounce. I mean, it is what it is. It's green, but I wouldn't call it, Josh, all that strong. BTIG's Jonathan Krinsky today said, can't rule out some further downside, but that felt more like the end of a move than the beginning. Ed Yardeni says, can't rule out a correction, but I'd be buying up. It's a buying opportunity. Tom Lee, back up the truck. Bottom line, this is a buy the dip moment. Are we a little skittish to do that today? I love to buy the dip.
when the dip is happening because people are worried that things are too good. And that's exactly what yesterday was about. Oh no, we don't need three doses of medicine this year. We only need two. If that's the reason why you're puking up the best stocks you own, I really don't know what to tell you. These are the types of dips you buy. And again,
That doesn't mean you can rule out more down courses. You can never rule out more downside. This could get worse. You could have people that are just too over levered to the biggest momentum stocks in the market. They have more to sell. You get people with redemptions. They're forced. They have no choice. Any and all of those things should be in the back
of your mind but in the front of your mind should be people yesterday were taking profits you got stocks that are up a hundred percent this year that fell six percent yesterday and we're going to say like the sky is falling absolutely not and if the worst case scenario is the labor market is too strong for the fed to be able to deliver on three cuts like if that's what you're most worried about I would say you have no real problems right now what what are you looking to buy then if you should if this is a buy the dip
Moma, you just said you should be buying the dip. Are you? I'm fully invested. There's really nothing that I'm out there saying I wish I owned, I need to own. But as always, I'm watching hundreds of stocks. And at all times, I'm waiting for setups and some of the best names in the market.
And I would also take advantage of dips in stocks I already own that maybe I want to add to. Hasn't happened yet. Yesterday was not a correction. We're down 3%. It's a big move relative to the rest of this year when the VIX has been pretty much anchored between 12 and 14. We haven't had a correction this year. Yesterday wasn't it. Maybe it's the start of one, but we really haven't gotten to the point where you could say materially the best stocks in the market have been affected. What's really getting hurt are the homebuilders,
But those stocks have been selling off since September. What really got hit yesterday was the Russell. But those stocks haven't really performed up until recently. They've been dogs all year. The really, really good stocks have not materially come in to the point where you want to say, that's it, I'm planting my flag right here. I'll tell you what, Jimmy, I'm going to you because the Russell, the small cap trade looks specious. I mean, it just does not look great.
Great. Josh made the point. But if you want to think the most acute places to see a repricing of the Fed in this market,
Bingo. Yeah. Well, it's been back and forth all year. I do think, I mean, there's been some progress to the extent that the Russell is up on the year, but obviously well below the S&P 500. To me, the fundamentals make sense. Josh, what you were just saying about, hey, the economy is strong. That's what the Fed was saying. That should beget top line growth in the small cap sector. You know, interest rates, at least on the short end, are coming down. And I've said for quite some time, the issue with interest rates and small caps is
is not interest expense. It's the issue that perhaps higher interest rates tip us into a recession. I know of no one who's calling for a recession right now, and I'm certainly not. In an economic growth environment, you should see top line growth occurring at small businesses. You've seen small business CEO optimism tick up. I know this is one heck of a weight, but I do think it's better to be in it than out. And just I'll summarize by saying when you have two steps forward, one steps back.
When you have that one step back, it feels like the bottom's dropping out. But just look at the chart over the last year. It goes up and down and up and down, and it makes progress. I think it will continue to do so. You would agree, though, that that theme requires lower rates. And now you're probably not getting rates to as low as what we had originally thought. And so from that standpoint, throw the homebuilders into that conversation, too.
it kind of made sense for people to take profits there. Sure, but I don't agree with the thesis. I mean, I agree with what you said, that it makes sense that profits came out yesterday on the presumption of higher rates and look at the 10-year at 4.5%, which traditionally over the last year has been a trigger point. However, you know, apropos of what I just said, these levels, just think about it, Josh, and you're old enough and I am and so is everybody on the desk. 4.5% is not an absolute level where the economy turns off. We have said many times that it's the path
that you're going through. We got to 4.5% two years ago. This is a level in interest rates that the market, including small caps, is adjusting. The thing I think we need to, Liz, get our collective arms around, perhaps, as an investor group,
is what might be a new phase. I'm using the words a new phase because those are the words that the Fed chair himself used yesterday when describing what the Fed is doing going forward. They've entered a new phase where they're not necessarily
only worried about the labor market at this point, right? They were worried about inflation. Then they were worried about the labor market. Then the risks seemed to be more balanced. I think that Powell made the point yesterday that maybe the onus has swung back to worrying about inflation because it's been a little bit stubborn is how he characterized it. So as we think about a new phase for the Fed, do we need to think about a new phase for us as investors? I want you to listen to what Jeffrey Gundlach told me yesterday about inflation.
The right portfolio which reprices the Fed. Listen.
I would actually hold about 30% in cash right now because you're not giving up much yield versus other assets that have volatility and risk. I like that bond portfolio that I described, obviously, because that's how I'm managing my money and my clients' money. And I would have half of my money in that at about 30% in cash, waiting for volatility to give you better entry points and to risk your assets. And then 20% I would own in bonds.
Basically at this point, I would own US stocks. - All right, Liz, so do we need to think about a new phase for our own portfolios as viewers? - Yes, I think we need to think about a new phase, but not just because of what happened yesterday. We're entering perhaps the third year of a bull market. So the chances of us having another 25 to 27% year are slim. And even if we can kick out, let's say 10 to 15% next year on the S&P, it's probably gonna come from some other places. So that is a new phase.
To Jim's point, he's right. The economy doesn't shut off at 4.5% on the 10-year. But I have been a believer that above 4.5% is when stocks start to get worried about it going up for the wrong reasons, right? We've gotten to 4.5% because we've been optimistic about growth. We've felt like everything is pretty stable. You get above 4.5% and people are nervous about inflation reigniting, debt becoming a real problem in the U.S. Those remain worries. And we're in this in-between time
where we don't know what's going to happen yet in 2025. So I do think it's a new phase. What I heard Jerome Powell say yesterday was, OK, first of all, yes, it was a hawkish cut, but that should not have been a surprise to anybody. What I heard him say was we are still
pretty confident that we're on the right track, but you're not getting another cut until we make further progress on inflation. I didn't necessarily hear him say inflation is out of control again. No, no, no. But I think the market interpreted it that way. His using the phrasing like the risk on inflation to the upside. I mean, the balance of their battle feels like it's wobbly.
again that they have it in the back of their mind that we need to be really cautious at this point because we're not exactly sure what the new administration's policies are going to be and if they further reignite what is already sticky inflation. I don't really want to debate inflation or the Fed. I want to debate whether whatever happened yesterday means that we need to rethink the kinds of places we're putting our money in the market.
Yeah, you know, I'd say yes or no. Look, the...
Yesterday was emotional, right? And just as I've been saying that we've pulled forward some of the impact of Trump's pro-business policies, yesterday we pulled forward some of the selling from profits because stocks have moved to Josh's point pretty significantly. People wait until January and they woke up and seeing this market and they said, hey, you know, maybe I shouldn't wait because who knows where this goes.
so the knee-jerk reaction in terms of selling quite a bit. However, I describe today's move in the market, the recovery, which is small relative to what happened, as actually like your wardrobe, muted and uninspiring. So that's troubling to me that you're not seeing a bigger bounce. Whatever I would say would pale in comparison to the look.
to the look which speaks for itself. But please, I digress. Let's talk about the market. Yeah, so here's my point. So I think, and you'd have to be, I think, somewhat ignorant not to consider this, that part of the committee's thinking went into what could happen to inflation next year with Trump's policies. I mean, I can't think of more inflationary statement than he made with, let's get rid of the debt ceiling. I mean, think about that.
You know, think of how inflationary not having a debt ceiling, no regard to your corporate balance sheet, which essentially what the U.S. is, corporate balance sheet. So I do think that informs where you go because you cannot go in cycles. And again, I'll get chastised for this by Patty, but I did sell VONG.
So, Vong was my mid-cap sort of Russell movement into that sector. I just don't think, you know, that that's going to work so well going forward. Well, I mean, do you take issue with Jim? I think Jim... Yes, I do in that because I do think that the Russell was like value. Everybody jumped into value and then value underperformed, you know, up to this point.
I think you see the same thing for Russell, frankly, because you do need lower rates to make Russell work. Let me say this, and it's not just to argue with you, but let me just say this. Inflation might be a problem next year. And I was one of the ones saying right after the election that I might get worried about rate hikes coming this year. I have now, with a couple of months behind us, almost a couple of months behind us, thought about this more fully. And I've come to where I think most of us are is you've got to wait and see.
You've got to wait and see what the tariff policies are, what they're used for. Are they used for long-term changes in behavior or are they short-term bargaining chips? And also, and I really can't state this point strongly enough, there are going to be counter-effects. A strong dollar is one of them, which frankly may negate the effect of tariffs. Now, Steve, it's not that I'm being totally argumentative with you, but what I am saying is we have to wait and see. And this directly informs the answer to the question you were asking, Scott.
Do we have to change our outlook? The answer is, I'm sorry, it's maybe, but you have to wait and see. One second, just one second. To the extent that we're worried about inflation, let's be like the Fed and be data-dependent.
Yeah, that's fine. But in order to outperform in a market, you've got to make bets on where you think the puck is going. If you rack to where the puck is, you sell down 1,000 points like yesterday. Do you need to, Josh, think about Tesla and Broadcom? I just use those as examples of stocks that have...
have had sort of asymmetric moves, right? Tesla undoubtedly since the election has been a rocket ship, no pun intended towards Musk and the other businesses he has obviously. Broadcom was up like 40% in three days. So those stocks rolled hard yesterday. They tried to get a bounce today and they are now red. There are a lot of stocks that you could look at in the same type of basket of Momo names that had a lot,
that seem to be sucking a little bit of wind. Look, I think, and I think everyone on the desk will agree with me, anyone that's spent any time around trading or trading floors understands sometimes there's no rhyme or reason and you just sell what you can.
It's so easy. If you have a huge slug of Broadcom and you need to let something go, it's the easiest stock on earth to sell. It just gave you, to your point, a 40% return in a couple of days. Yeah, I can sell that. I'd rather sell that. It's an easier sale. You don't have to answer to anyone. You're going to sell down something like CVS at your 50% in the hole? Probably not, if you can help it. Guess what? Here are the top five names in the market.
yesterday while all hell was breaking loose uh...
United Health, plus 3%. Congratulations, Jimmy. CVS, plus 3%. CI, plus 6%, another healthcare nightmare. It's not an accident that those stocks were not for sale. Those are the hardest names to sell. Everybody's got losses. Everybody looks and feels stupid pulling the trigger. So sometimes in a day like yesterday, there's not a linear rhyme and reason that we could say, why is Tesla down 6%? Why...
It's because those stocks are a layup. You have to get lighter. I think there is a little bit of a rhyme or reason, though. If you look at...
Just break it down. It doesn't have to be by stock. It can even be by broad index. How much of this run has been due to multiple expansion? How much of it is a lot of actual stocks? How much of it is due to earnings growth? So the most fragile part of return is the multiple expansion piece. So then you have to look at the stocks that have pulled so much forward in pure multiple expansion. That's going to get sold. What's driven the market? That's exactly what's driven the max. That was a multiple expansion.
Sure, you've seen some better performance, but when you take a look at Broadcom, that's all multiple expansion on what was not a spectacular quarter. Sure, but it's not a mega cap name. No, I'm not talking about that. It's two separate topics. I got you. But let me say this. There is a rhyme reason for health care to move because the algos all have health care as a defensive sector.
and defensive against what could be declining economy. By the way, UNH is down again today. I mean, it's down 8% since you decided you wanted to buy more. You know, I look at that and I'm like, that's like a, feels like a pick six to me. Like,
You're looking at the outside receiver trying to break something deep. And, you know, you laid one right out for the corner who's taking it to the house. Okay. James Winston style. Yeah. I'm not going to go with the metaphor. I'm going to be literal here. I think when we spoke about this last week and Josh, you were on, one of the things that we talked about is, hey, these guys are going to be brought before Congress and they're going to be lit up and they're going to be lambasted. That may or may not happen. Frankly, Congress has a lot to do, but let's say it does.
I've got to tell you something. I think this whole story is wrong. We're talking about the 7% denial rate. I'm not going to be an apologist for UnitedHealthcare. It's not my point. But there's 93% of claims that are approved, and a lot of those are life-saving. Okay? They are. And so when we talk about congressional testimony, this is not going to be tobacco companies found out to be hiding their marketing strategies to children. It's not going to be the automakers flying in for a bailout on private jets.
It's not. It's going to be talking about preventative medicine, whether it's cancer screening, cardiac care. So look, right now-- You're fine with holding this move that you made?
I, well, I am holding it. I mean, when we say, when we say fine, I mean, let me not, let me not appear to be casual about the fact that it's down. I'm irritated, but look, I think it's absolutely a travesty that the murder of the CEO has knocked this stock down 20%. And we don't have time to go into how wrong that is, but that is wrong. And it's reflected in the stock price. And that's an opportunity, my opinion. The,
You may think it's a travesty, but the events, the event, and the subsequent debate that has emerged about the practices of these companies is not neither trivial nor a travesty. I mean, it's out there now, and it's just beginning. Yeah, let me just say this. Insurance, medical insurance, is a better option than paying for it yourself.
flat out. We're not debating the merits of health coverage. I don't think you and I are. I think the world is right now. I think the market for UnitedHealthcare is talking. They're not debating the merits of health coverage. They're debating the practices of companies like this. So let me give you insight into that. You disagree? I think this is absolutely a referendum on health insurance because what we're talking about, taking the stock down 20%, is saying their profits should not be had. These companies should not make profits. That's what we're
That's what we're basically saying. That's not true, Jim. What they're taking a look at is, and here's some inside baseball talk, actual facts rather than speculation. They have revenue cycle management companies that what they do is they collect
on behalf of hospitals and patients for claims that were denied. And you know what they have? It's not just putting out collection. They've got teams of doctors on their staff that say to the company, you can't get away with this insurance company. When you also take a look, they've taken pain out. So you've got to have pain. So it's a real debate. We bring it up because the Dow is in the midst of a historic losing streak, right? Right. One that you haven't seen since the 70s.
And this is the biggest loser over that period of time. It's price-weighted. It's price-weighted. And this stock becomes more important than it otherwise would be. That's right. Because of the way the Dow was calculated. With a different character of the Dow than we had years ago. It's not just old manufacturing. But this is a larger debate that I don't think our viewers disagree on in any way that...
That's why the Dow is not the place to look if you really want to know what's happening within the market. Because it's price weighted and not market cap weighted. But when you say travesty, this is people deciding to sell the stock. It's not an act of government that took 20% of the company's market cap. It's people like you who said, I'm in this and I changed my mind. I don't want to be.
that's like other free wills are working for the news but absolutely will be going to grow because i thought it was talking to me you brought this up actually last week when i added to the shares you said hey this is going to be in the limelight this is going to be in congress i believe josh i believe josh that that is exactly why sellers are outweighing buyers in the name right now what do i want to do with other uh... you know large
larger cap, large names. I mean, mega caps, for example, a good place to look today. You want to own them. You want to own the mega caps.
Dan Ives says that the sell-offs are buying opportunity. You agree with that? I wouldn't call it a sell-off. I mean, people think it's a sell-off. No, no, but I'm talking about yesterday. I mean, Amazon, Alphabet, Apple, they've all been hitting new highs of late, right? You don't get an opportunity that much to see stocks like this down 3%, 4%, 5%. Amazon was down 4.5% yesterday. That's my point. Yeah, I don't believe that. But it's up like 20%. I don't believe you've got the opportunity yet. You may get the opportunity.
But it's exacerbated when you see a stock like Netflix down 25 points, you say, oh my God, it's down 25 points. That was two and a half percent. It doesn't matter. So this is not a buying opportunity. I think you get a better buying opportunity. And that's when you step in. You still think you'll get a better opportunity to get into these names? I think you could. But look, I'm full in those. They were all big positions. Did a lot of trading around yesterday to the upside. Forget you per se.
I do think at any point in a decline here that you can buy these and they will grow into the multiple, but there is overvaluation. My point is, I think it's a sector, the narrow sector of the mega caps, would be least impacted by Trump policies, pro-business, or by Fed policies. Anybody looking at Micron today and saying, you know, I can't say what I...
pop up and want to say but you know you know my point as we're sitting here we watch in video every day we're like man the chips have sucked it's been a really bad trade uh... micron is certainly not going to help sentiment on this you know you see this blow up today down down seventeen percent are you how you think about that look it was not a bad earnings report it's crazy what they put the shareholders through in in this name
the they did it by eight point seven one billion verse eight point seven expected and earnings per share beat by two cents and they absolutely demolished stocks that another sixteen percent i just was terrible fine but i'm terrible i'm just i'm just saying what one of the interesting things about my crime is that unlike a lot of these companies we call about bellwethers it actually is and it's a read-through to companies like apple and i do think it has the market's attention the thing is
It's not guaranteed we're going to get two more of these. Micron might be a Micron specific, and it doesn't mean that you're going to see two more companies in this space say anything even close to similar about the forward outlook. So I wouldn't throw myself off a bridge over Micron, but I also wouldn't ignore it, because if that commentary is repeated again, then it's not a coincidence. Then we might have a demand issue on our hands.
How was that? You used to own it, didn't you? I did. I like that. Like multiple times. Despite what I think is very, very good management.
not even good management can help a commodity business. So their AI business is doing well like everybody else's, but their commodity business, it goes into phones, it goes into laptops, that got crushed. So they took down their guidance meaningfully, and that's what really took the stock down in my view. Now, you can't, in my view, you can't get too high in this, like when they blow out a quarter in guidance, the stock will have a monster move up. That's the wrong time to buy it.
If you were to buy it, now's more the time to buy it if you believe the consumer electronics business is going to recover. I think Micron also reminds us not all of tech is a secular growth story. A lot of tech is extremely cyclical, and this is like a poster child for the cyclicality that historically we've always had in semis, in memory, in devices. It's like a wake-up call for people that thought this was just like
AI, secular trend by 2030, blah, blah, blah. They don't all work that way. Speaking of secular growth trends in tech, right? Cyber, CrowdStrike was a big loser yesterday, down 7%. Getting a little bit of a lift today, but not that much either, right? You're watching Palo Alto over the last couple of years. Palo Alto's flat crowd, getting a little bit of a bump higher. But, Judge, it's so easy. Again, it's
This is a stock that has just gone on an absolute rampage since August. The last tough day we had in the market was, I think, August 4th or whatever it was. Whatever that yen thing is, I already forgot about it. August 5th. Look at the performance in CrowdStrike from the summer through now. Easiest stock in the world if you need to take some profit somewhere. Everyone in that name has profits.
Yeah, that started coming down yesterday. It was down about 3% before Powell even spoke. But you're right. Wasn't that like 7% yesterday? Look at this chart next to Weiss right now. I mean, if you have to lighten up,
That's like in the basket of stocks you could very easily sell. But for the fact that cyber, in my view, and talking to lots of people that are involved in, will be the best area in defense and in corporate America to invest in for next year. We've held, Biden administration has held back our cyber capabilities, not viewing them as a defense of which they are, but he won't even let...
You know, the CIA, the FBI, the DOD matched the negative impact of cyber coming from the big four. So those gloves are off now as they should be. So you want to invest in cyber, the question is what price. Coming up, we are trading a bunch of committee stocks on the move today and later.
Well, they say the sequel is never as good as the original, but Josh Brown is wondering if this time will be different. We'll explain coming up.
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Got a number of committee stocks on the move today. We will start with Vertex Pharma. It's 52-week low today on mixed data for its non-opioid drug. Jimmy, you own this stock too. This is an important drug, so I'm not going to minimize it, but I do want to put the facts out there. So the phase three trial that they're talking about, the drug met its primary endpoint. The weird thing is the placebo was similar in its efficacy. Now think about
and understand what pain medicine trials are about. It's about doctors talking to patients and getting a subjective evaluation of how they feel. You've seen those charts in your doctor's office with the sad face and the happy face and where are you on a scale of one to 10? It's very subjective. It's not like, hey, did the tumor shrink in size or how much of this protein is in your blood?
This has been known to happen, including with opioid drug trials as well. This is not game over for this drug. There are a number of trials that have already happened and will continue to occur. Many of them have been very positive, but on the margin, this is a piece of bad news. I'm not selling the stock. There are many other shots on goal that this company has, but it is a disappointing piece of news. Yeah, you just don't want too many own goals.
You don't want these own goals. Go ahead. Is that like where the cornerback runs the wrong direction? No, that wasn't the wrong direction. That was dead on.
I was talking about a pick six that you potentially had thrown. I know. I was trying to say something funny. It wasn't, but that's okay. It's all in the attempt. It's in the attempt. He's really got to stay in his lane, which is in humor or health care, apparently. Shake Shack target 147 from 144. Truist, reiterate buy. They raise their estimates, too.
If you think about what's happened with this company, the transformation currently underway, they had an amazing CEO who took the company public, Randy Garuti. He steps down, they bring in a new CEO who had grown and scaled Papa John's into one of the largest, most successful quick service restaurant businesses in the country. And that process of scaling Shake Shack is now underway. I agree with the call. And I
And I think this is the type of stock that really it's not a macro concern story. It's not interest rates. It doesn't really have those drivers. All they have to do is to continue to execute on opening new stores, raising same store sales, and the stock should continue to work. OK. Looks like it's getting a little bit of a lift. Is this a new 52-week high-ish, I think? Maybe a new all-time high?
Raise the roof. All right. Zoom Video upgraded to a buy. There's Shaq. Zoom Video upgraded to buy from Holden Jeffries. Target increased to 100 from 85. That's a 22% upside they see.
Yeah, I've been in this stock before. I think it's too cheap. I think it's 16 times forward. And the thing about Zoom that not a lot of people have accepted yet is that they are using the video business as a way to lure in enterprise customers for some of their other offerings. We're a customer of Zoom. The telephony solution allows us to compliantly carry on text conversations with our clients, which you can't do with your personal cell phone.
And they've
unveiled a whole lot of things this year in the AI world. And I think that they're starting to get credit for that. The stock is acting better and better. It's a slow grind higher, but it is moving higher nonetheless. Liz, what about housing? I mean, Lennar's down after its earnings and revenue missed. I mean, these stocks have been really bad. It's a 52-week low. Anything housing is down today. Sherwin's down. We can show that. We can show Depot is down. This is down 6%, this being Lennar. What do
What do we make of this trade? Higher rates and if you have CEOs of real estate companies talking about mortgage rates staying above 6% for the next couple of years, like I think it was the Compass CEO on the network said, is that a problem?
It's a problem for the housing market. I mean, it's been frozen for a while because of where rates are. And now we've got a 10-year that during the show has moved to 457. So usually you can think about it as 300 basis points above the 10 years about where mortgage rates tend to fall. So we're still well above 7% in mortgage rates. And that's not going to encourage a lot of transacting. So the existing home sales number is going to stay tight.
We've had some pretty bad housing starts data. You've got construction numbers slowing down because of this.
The biggest concern that I have about the real estate market is that if there aren't projects being undertaken, if things are being finished and there aren't new ones coming, what happens is construction unemployment falls. Construction unemployment is a leading indicator of the rest of the labor market. If construction unemployment goes up, then the rest of the labor market usually follows six to nine months from then. So we do need to unlock the housing market. I'm sorry. And obviously, he talked very...
glowingly, I think I can say about the economy at large, right? How remarkable it was doing, certainly relative to everywhere else. But he did call out the housing market. I mean, right? Of all of the things that are good in this economy,
That's not it. Right. Well, the other thing is shelter is such a lagged component. It's not something that we can really affect on a month-to-month basis. And obviously, if we're worried about inflation in housing, raising rates is just going to keep the market frozen longer. So the effect isn't the same. Same with car insurance, a very lagged component.
it moves very slowly the reaction function is much longer than the rest of inflation if you strip out both both of those shelter and car insurance inflation actually looks fine so and and they know that right there aware of that the issue is that the reality for the american people is that you still have to pay for car insurance and you still have to check for shelter so they've been trying to control for all you like to get the housing market
sort of moving again. Silvana now has the headlines for us. Hi, Silvana. Hey, Scott. Good afternoon to you. Representatives from Germany, Sweden, Finland, and Denmark were allowed to board a Chinese flagged cargo ship today that's suspected of intentionally cutting two undersea cables in the Baltic Sea. Authorities say they were only allowed to board the ship as observers while Chinese authorities conducted an investigation. The ship has been held in the waters off Denmark for more than a month as
diplomats have been negotiating access to it. The Biden administration is working on a plan to allow data centers and power plants to be built on federal lands. Officials tell the Washington Post the White House is concerned the U.S. could fall behind in the race to dominate artificial intelligence and is prepping an executive order for President Biden to sign before he leaves office.
And two NASCAR teams, including one owned by Michael Jordan, can compete as charter teams in the 2025 season after a U.S. district judge granted a preliminary injunction. The ruling allows the teams to sign charter agreements as they continue ahead with their antitrust case against NASCAR and its chairman, Nascar Haziat, to respond for comments. Scott. Silvana, thank you. That's Silvana Henao. Coming up next, Mike Santoli is here with his midday word. We're back right after this.
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Accura, precision crafted performance. 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. All right, welcome back. Senior markets commentator Mike Santoli is here now with his midday word. You're thinking about what you characterized as a sudden tantrum yesterday on the after pastime.
Powell was finished speaking. Yeah, it was sudden. I think it was extreme probably because of the market at the index level had been lulled into this sense of stability. There was this equilibrium. We had enough stocks going up. We thought we had in hand exactly what was going to come out of the fed meeting. Obviously pretty decisive hawkish shift below the surface in the committee. Uh,
I do think that the good news or maybe silver lining is just as you guys have been talking about, so much of the market had a head start on this pullback. Breath was already nasty for a couple of weeks. So therefore, maybe you're that much closer to having a little bit of a climactic flow lower. And we don't think we have
to have anything major here. We're only a few percent off the highs. But there's a challenge here, right? Because if you were to come into this month, you were saying, sure, valuation is stretched. Sentiment is getting a little bit too happy. But the seasonals are strong and the trend is solid. The trend is now wobbling a little bit at the index level.
You still have the stronger seasonals, but you have air pockets. So I get why the market is a little hesitant here at the 50-day moving average for the S&P. One final point, though, is good news for the economy is now more than ever necessary and good news for the stock market, because if the Fed's going to do less, you have to make sure that you feel as if the economy's hanging in there and housing's at the center of it. We're going to be obsessing again, though, over the 10-year, 457, as I ask you that question.
Right. That's exactly it. And that reflects this sort of dynamic of is it just because the economy is hanging in there or we're just saying 4% is as low as we're going to get on Fed funds? How much lower do you expect the 10s to get? We are at levels where the buyers have come into treasuries, I would say, going into next week. And at the end of the year, we'll see if you get major rebalancing flows. That was the story. You know, in a lot of these kind of late quarter sell-offs that sometimes happen,
That comes to the rescue. All right, Mike, I'll see you on closing bell. Thank you, Mike Santoli. Coming up, it's a bird, it's a plane. It is the latest stock on Josh Brown's radar. We're going to reveal the name next.
All right. Welcome back. The official Superman trailer dropping this morning. Got Josh's attention. Warner brothers, right? It reminded me of how bad I am at value investing. Um, I, I got long Warner brothers this past March and I sold it right before it almost doubled. Um, I forget why I got out of it. Probably, uh, it was breaking to new lows and, it just got thrown out with the bath water, but the stocks back on my radar, um, a couple of days ago, uh,
David Zaslav announced a corporate restructuring that's going to finally take the quote unquote bad part of the business out of the equation and let investors focus on the growth part of the business. So they're going to take the linear TV networks like CNN and package them into a spin co. They'll put that spinoff out and the people that want to own that because they're maximizing revenue.
profitability without growth can own that piece. What's remaining is the better part of the business. That's the studios and the streaming business, both of which are not setting the world on fire in growth, but have a lot of upside potential. The Superman film will come out. This is James Gunn, the director of the Guardians of the Galaxy franchise for Disney and Marvel. Fantastically successful properties. He is now running
the DC cinematic universe going forward. And I think people are gonna get excited again about the potential for the streaming business and the studio, and that that piece of this thing will be worth owning. - Are you saying that you are gonna get excited again for this stock? That you're looking at an opportunity to get back in? - I might, 'cause here's what happened yesterday. The problem with Warner Brothers, they could chop it up into 50 pieces, it's not gonna change this problem, is the debt.
still have like 40 something billion dollars worth of debt from when it was spun off of AT&T back in 2022. The problem with higher for longer interest rates is that it lessens the company's opportunities to refinance that debt at lower rates. So they whacked the stock yesterday, one of the big losers on the day, and took away almost all of that rally from the restructuring news. So now it's back on my radar. I don't often buy single digit stocks, but I think if it gets back below 10%,
I'm probably going to give it another shot. So giving you guys the heads up before I do anything, I think that there is going to be shareholder value unlocked in 2025 with this situation. And I think we're going to start thinking about the company's prospects on the streaming side much differently than we have been up until now. OK, you'll keep us up to date on what you decide to do. Thank you very much. Up next.
We're breaking out our report cards again. It is the end of the year. We'll go through the best and the worst of the trades from the committee next. Report card time as we check in on the committee portfolios. Looking at some of the best and the worst of the picks. Matterport, and in a perfect world, these are stocks that all of you have owned all year long.
Like Matterport, which you have, it's up 82% on the year. Oh, that blue chip? Okay. It's up 82%, but I'm down 50%. And the thing with Matterport is that it's got acquired, and I'm just waiting for the deal to close. CoStar Group is buying it, and once that deal closes, I'll sell it. Uh,
Nobody should think this has been a winner for me. It's one of the worst stocks I've ever owned. Okay. Trade Desk up 78%. Well, that is a winner. Okay. You bought it in August. Yeah. You raised your stop on December 3rd. Yep. What do you think now? I think this is one of the cleanest stocks.
growth stories in all of media. Everybody is looking for ways to reach the Netflix viewer, the Disney Plus viewer, the person who has opted for an ad tier of a streaming service. And what Trade Desk allows advertisers to do is connect directly to the viewer who has the specific attributes that they're looking for. You have this duopoly of Google and Facebook for a very long time, and now the Trade Desk is empowering
another way to reach people and know exactly who you're reaching and why. And as a result, this is a great growth stock. It's been working. I'm staying long. Be real quick on this one for me. Pfizer, you bought it January the 9th. So presumably, I mean, you basically owned it all year down 11 percent. Just didn't do what you thought it was going to do. This is my worst performing stock this year. Totally wrong on it. I mean,
I would charitably say I'm early, but early is wrong. If you're sitting in something for a year, the S&P goes up 30% and you're flat to negative. It's not great. Jimmy, Oracle up 62%. You have owned this name all year long? Yep, I have. Going back a couple of years, just an AI story. One that started out the year as unloved or unsung, shall we say, and it got a lot of attention this year. Wabtec up 50%. You bought it in September. Yep. You bought more on December the 2nd.
How about that one? I mean, Cleveland Clips is obviously on our list. It's just been a dog. It's a new 52-week low again today. I'd actually like to talk on that if I can. Please. I know we don't have a lot of time, but if you actually just do the numbers. If our viewers can bear it.
Yeah, no, no. It's a nine dollar stock. I know. If you actually do the analysis of now having acquired Stelco, they're probably going to do about 24, maybe 23 billion in sales next year. Five years ago, that was two billion. But just go ahead and assign the middle of the cycle multiple EBITDA multiple of 15 percent gets you to three billion in EBITDA. Put a seven percent. That's a historical multiple enterprise value. EBITDA gets you to 21 billion in enterprise value. Back
out the debt of five billion at sixteen fifteen billion dollar market cap versus five billion today. The only way that doesn't work is it think we're not going to build things with steel anymore. I think we are. Is this a fumble on your own goal line potentially or a fumble or or this is just or a fumble on the one yard line of your opponent when you're about to go into score and it gets returned all the way.
I actually sincerely appreciate you putting some humor to it. I like the football analogy because it works for Al Michaels, who I know is watching right now. Yeah, and he probably thinks I'm like the Dieter Brock of the team. Dieter Brock. Look at you. Well done. Well done. Wow. All right. We'll take a quick break. We're going to talk Bitcoin next.
Well, we, like you, watching Bitcoin almost every day now down below Weiss 99000. Yeah. Hey, look, if you've invested in Bitcoin, volatility is nothing new, particularly a leveraged asset. But this goes to my point. The only utility here is as a trading tool. That's it. All right. We'll watch it. I mean, it's down three percent. It got hit really hard yesterday as well on the Fed and the spike in rates. We'll take a quick break and we'll do finals on the other side.
Hope you join me. Closing bell, 3 o'clock Eastern. We've got Rick Reeder of BlackRock today. We'll talk about what the Fed said, what they may do, where stocks and the markets in general go from here. Look forward to that. Jimmy, Farmer Jim, final trade. Chenier, LNG, liquefied natural gas. We're going to be exporting it all over the world. Mr. Weiss. QXO, look, we didn't make it yesterday because it was only up 60% versus my other winners. So they're about to make an acquisition. We'll be great. Liz.
Cybersecurity, long-term story still intact. Pullbacks are opportunities. Shake Shack. It's not just a stock. It's a lifestyle. All right. I'll see you on the closing bell. Look forward to that. We take it to the final stretch. 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.
Thank you.
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