The Unsettled Market 3/3/25
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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.

All right, Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, this unsettled market. NVIDIA is falling again. Tariff Tuesday looming large. We will debate and trade all of it with the investment committee. Joining me for the hour today, Joe Terranova, Shannon Sikosha, Jason Snipe, and Stephen Weiss. Let's get you set up on the markets here. We are red across the board. Uh,

We did have that big pop, Joe, on Friday. But nonetheless, we've been uncertain and unsettled. And Jonathan Kerensky at BTIG, the well-known technician there, says we're not done yet before we put in a durable low, though he does say that what we saw on Friday could be the start of a bounce. He still says his conviction remains high. We're going to take out or at least test, test the 200-day moving average on the S&P 500. What do you think? Well, test.

Testing the 200 day moving average on the S&P 500 obviously means we've got further downside ahead. And I think what I can agree with is that you use the word at the beginning in your intro unsettled. And that perfectly describes exactly where we are right now on March 3rd. We have a very unsettled market.

You have the loss of leadership coming from momentum names. You have several people trying to say, OK, is that sell-off in the momentum names over? Do you run back towards those names? It is not going to be a V-shaped recovery, and that's important to understand. It's going to look like a U. So if you're focusing on names like Applovin and Palantir, you're not rushing in just yet to buy these names. It's a process of time. Well, Applovin's up, right? They announced a buyback. They announced a buyback that's up.

modestly. I think the low last week was $2.88. We're trading, I don't know, maybe $30 above that. So unsettled is the perfect word. We don't have the benefit of earnings. I keep emphasizing earnings are the exact reason why the S&P 500 saw the gain that it saw year to date. The MAG-7 are underperforming. The rest of the world is

outperforming. And I think if you're going to do anything right now, look at your MAG-7 exposure and say to yourself, am I overweight the MAG-7? If I am, maybe give consideration to some other names in the 493 and at a bare minimum, introduce an equal weighted strategy. Shan, what do you think? Do you feel like we've got more work to do before we can find some stability for the overall market, especially tech?

Well, I think let's talk about tech, Scott. So I think that's really the question here. And you've been asking this question for a couple of years. Can the U.S. equity market do well without tech? And I think the challenge here is that whether you want to call it the cyclical trade or the value trade, you know, it's really moved away from technology. But I think what's important, and Joe just made this point,

If you look at the S&P 500, the S&P 500 overall, we're not seeing a large to small rotation, which you know is what we're looking for. But we're really not seeing that large to small rotation. So if you think about technology and you think about the valuation differential, that vulnerability of those valuations,

potential questions around capex what do the buybacks look like over the next couple of years i think what you're seeing is that you're seeing areas of strength in financials you're seeing credit for instance you're seeing a bit of a rotation to defensive stocks now whether that makes sense for staples over utilities or healthcare over utilities you know we can we can certainly talk about that but i think most importantly scott is what you're seeing is that there is an acknowledgement that this cyclicality this value trade that

maybe these large cap tech names aren't quite as, they're not the bastions of safety that perhaps they were two years ago because they're becoming more asset heavy, because they require a monetization of this theme. So I think what we're seeing now is we're seeing a normalization in some of those names, but are

Our view is that you can see the U.S. equity market perform this year, albeit perhaps, to Joe's point, without earnings, we're going to see a little bit of macro focus in these next few weeks. That micro focus is really what we need to drive earnings forward and then to drive the momentum in the market forward. Weiss, the Nasdaq's down 6.5% from its

high of December 16th. The S&P is down 3% from its high. And obviously, one of the reasons for the weakness in the market at the index level specifically is NVIDIA, which is down again. Take a look at NVIDIA today. It can't get any footing from earnings. It's been down about 5% today. It's off more than 11% year to date. It is the big issue, along with momentum,

You're out of it completely now. - I am out of it. - When did you sell the rest of it? - I sold the rest of it when they reported earnings. So I didn't get it on the upswing of the earnings, 'cause it went into the green. I sold it when it started to go into the red. Look, there are a few issues with Nvidia in my view. One of them being that with Apple, for example, you're starting to see them make their own chip.

and others all have plans to do it. So, got competition. Also, it's been reported that Nvidia is, that China is buying the Nvidia chip.

through other countries. So I think that's an issue for them. And then finally, when you take a look at what tariffs could do, and Taiwan Semi has been called out for tariffs, that stock's really gotten hit. It's not reflected here, but they'll pick up the excess capacity. Well, they're about to announce, we think, according to the Wall Street Journal, a $100 billion investment in the U.S., something you may hear more about as the afternoon progresses. Right.

Most of which, frankly, has been announced already. But the point on Nvidia is that a lot of people didn't even know why they owned it. They owned it for the momentum. And they owned it because they didn't want to sell it because of taxes. And I think part of the hit to technology overall is that those that came into the year saying, okay, I'm going to wait to sell until the next year, 25, and hopefully pay lower taxes,

or just delay my taxes for a period. They said, you know what? I can't hold on anymore. So it's a combination of factors. I hit that in tech. But it's really notable that the only two of the 12 sectors that are down year to date in the S&P are information technology, which is tech,

and consumer discretionary. - Which is obviously heavy weighting towards Tesla and Amazon. - Exactly, and I actually am still negative on the market, not bearish, but still negative, and looking to raise cash. That's one of the other reasons I sold Nvidia. - All right, shareholder snipe. What about Weiss saying, you know what? You got all these cross currents now in the name, hasn't traded well since earnings. The only time it's really traded quote unquote well

was pretty recently into the print, five days or so into the print. That's it. - Yeah. - That's it. - Yeah, yeah. And guess what? The print was obviously solid. It was up 70%. Sales were up 70%, earnings were up 70% year over year, $35 billion in revenue on the data center, which is up 93% year over year. We were expecting $42 billion for the guy, they guy it to 43.

But to Weiss's point, I think export controls are obviously a concern. There is some third party selling via China where folks are buying their GPU chips. There is absolutely continued demand. But I think it's obviously decelerating. We can't see 100% year over year growth on these metrics quarter after quarter and year after year. So I think that's what a little bit of the digestion is.

Adam Parker's kind of seen enough, Joe, to go slightly underweight tech. Now, he had been overweight, especially the mega caps. Then he went to market weight. And amidst today, we didn't...

lower our recommended weighting enough following the initial downgrade in early February. Now he takes it to 28%, slightly below the benchmark. But nonetheless, he continues to think that big cap tech especially, if not overall tech, is going to have a bit of an issue for the foreseeable future. Not a huge sell-down.

but not any kind of performance to make you sit back and say, whoa, that was great. Not the outperformance, not the narrow, concentrated performance of the last two years. Adam and I are in complete agreement. My strategy has a significant underweight to technology at 22%. We rolled into 2025 that way. So we're benefiting from that. Even on a day like today, you could see that.

when technology is clearly struggling. I think it's, and Jason said this, and I keep emphasizing this over the last several weeks, but it's the deceleration in revenue growth. And that's, in fact, exactly what it is. NVIDIA's 79% revenue growth. Okay, one year ago, we're talking about 265% revenue growth. And you look out into the future, four quarters from now, you're talking about probably 40 to 50% revenue growth. So you're not going to pay the exorbitant premium that you did

in 23 and 24 for that slowdown in growth and you're seeing some of that slowdown and growth in other areas of the magnificent seven i candidly think where nvidia is right now and unfortunately it

To a certain extent, it's been gamified. And we've talked about that on the show, these zero-dated options, the intense activity that's going on in the option market that drives it on a particular day. But I really think that Nvidia might just be in a prolonged consolidation phase. And I think the viewers and investors overall are very unfamiliar with that type of a setting. But if you go back through the course of history, it's not uncommon. It's had drawdowns. Tesla's had drawdowns.

Jason, I mean, that stock's been right in the mix, too, of kind of sentiment gauges about where we are. Now, this is somewhat idiosyncratic, has its own issues related to the fundamentals of the business and Musk and all that. Stock's down 22% in a month. It does get some love today, once again, from Adam Jonas over at Morgan Stanley, reiterated as their top pick. But

You can't look for, I don't think, a stabilization in the NASDAQ if you've got Tesla and Nvidia unsettled at the same time. There's no doubt about it, Scott. And I mean, Joe makes a point, obviously, on momentum, which is obviously broken apart. And that story has played out over the last few weeks. That's not new, whether it's Tesla, Apple, and Palantir, MicroStrategy,

to name a few. Arisa Networks is one of the names that we hold. There's been a lot of steam pulled out of those momentum names. The yields have obviously come down tremendously over the last couple of weeks. But I think that the market is obviously resetting on these names that have had –

There's been a lot of multiple expansion. Earnings have been good. We've talked about that in earnest over the last few weeks. Earnings up plus 16%. But the broadening is real. There is a rotation. And that's why you're starting to see other sectors like Staples start to perform. Weiss, Vertiv, Vistra, Dell, Constellation, they're all down again. I mentioned the buyback at Applovin. But Joe's not convinced that that's

that's got a lot of steam behind it right now because the stock's been so dramatically upset. There are a number of names within that universe, but Vertiv is right there too. These stocks, when they go down, they go down in bunches. Yeah. And look, Vertiv's gone down for a number of reasons. It's the perfect storm. And as I think I mentioned last week, I let some go.

One of the issues is we don't know how much they source from China. So we don't know what the tariffs will be. Now, they won't tell you because I've asked them. However, I believe they could pass on prices. We've seen some hits to the data center theme that I do believe that you could see overcapacity near term for all the projects get built.

They have international exposure as well. So, you know, the market was paying up for international exposure if you take a look at the foreign markets, but I'm not so sure that's going to continue. So it's the perfect storm of everything that started when they reported last quarter, which I thought was a great quarter, but the book

But the book to build going forward wasn't what I thought it would be. So candidly, I don't know what I'm going to do with the stock. The stock's selling at a premium to the market, but the growth is also at a premium to the market. And I do think that is sustainable growth. So right now, I'm staying with the

part of the position I have, but it's not a lot of fun watching it go down every day. Joe, Marvell's down, was down 4% earlier. Broadcom's down again. That, like NVIDIA, hasn't done anything except go down for the most part. It's down 17% year-to-date. It does report, by the way, this week, and JPM reiterates it as one of their topics. It's very difficult to try and identify a name in the technology sector right now that really has strong

momentum. Even just back to the conversation for a brief moment, the MAG-7, I think Meta is the only one out of the seven that's actually higher year-to-date. So it's somewhat...

It's somewhat inconsistent with history. Where you see that universal rotation out of a sector like we're seeing right now with technology, generally, you'll still be able to find some winners underneath the surface in the technology center. CrowdStrike? CrowdStrike's kind of been one. I mean, yes, it got caught up a little bit. Yes, cybersecurity is still doing well. I'll acknowledge that. But I think overall, all

all of these technology names we're talking about, semiconductors, even software names. Software names have held in there over the last several months. They're breaking down as well. And you just thankfully, I think thankfully, the market overall hasn't broken down further. Really, what you're seeing is this internal rotation where money's going out of technology, going into, you want to call them defensive sectors, fine, but it's going into other

into other areas of the market, like financials, like health care, even into real estate as yields pull back to 418. What do you think about CrowdStrike tomorrow after the bell, by the way, which reports earnings? The cybersecurity names have all performed remarkably well in an environment where the rest of the sector has not

done well. And I like that relative outperformance going into the print. I think on any pullback, buyers will resurface just alone on the premise of what they were able to overcome last summer. So if there's a misstep in this quarter, I think

investors are going to look at that and say, okay, George Kurtz and the management team, they recovered from a dramatic misstep last summer. They'll be able to dramatically recover from this as well. So I think on any pullback, it's a buying opportunity. I think cybersecurity, given what we know is going on in the world,

the entirety of it, the Palo Altos, the Fortinet. We'll talk about another name later in the show that I think really wins in the cybersecurity space. That's a mid cap name. Cybersecurity is the dominant theme right now in technology and you have to own some of these names. - It's also the area that the DOD is not cutting.

and funding will increase in cyber. So we know for sure that's the only clear area you would see. - Yeah, I was just gonna say, - Exactly. - It could change in a day or two. - Or an hour. - Right. The other thing, Shan, is that JPMorgan says they're still cautious on this group, I mean, on tech.

that they think the rotation out of tech and the Mag7 and out of the growthy names like the momentum ones that we were discussing is going to keep rotating into software, that the CrowdStrike to the world or the place you want to be. There's some other names we'll discuss later that are getting set to report their earnings, too. What about that call from semis to software? Well, I

Well, I mean, to Joe's point, I mean, you've seen that. And semis are a tough space at this juncture. And if you think about what's the driver for that, is there an inventory glut? What does the spending look like? Is there going to be some of this CapEx oscillation at the hyperscaler? So I think there's a lot of questions. In terms of software, I do think that you want to be thoughtful about where you think companies are sort of going to be forced to spend.

think that you should be thoughtful not just about the u_s_ government but also you know potentially technology spend outside of the u_s_ and in europe and that there's a lot of talk right now in terms of you know potential uh... german investments in defense and infrastructure i think that we spend a lot of time thinking about what is the u_s_ doing and i think more importantly if you think about things like where's the funding where's the liquidity coming for buying technology

Individual investors are just trying to digest all this news. Institutional investors are looking at their cost of capital and seeing where should I put my money now that it's a little bit more expensive, especially with the unwind of the carry trade. So the answer to your question, Scott, is there probably are opportunities and software you need to be

But I think more importantly, this rotation from semis to software, we probably haven't quite hit the bottom of that or the apex of that particular rotation, at least for the next few weeks. And by the way, there are more strategists who are coming out when they sort of look around the world to think what's going on, other markets versus here, that appear

appear to be moving closer to Weiss's point of view, that it's time to be a little more cautious on US equities. Last week, it was Lerner, Keith Lerner from Truist,

He took down U.S. equities. Today, BCA Research downgrades U.S. equities to underweight for their first time in more than five years. Now, you could say, obviously, it's because of the uncertainty created by tariffs and other things, which we think are going to go into effect tomorrow. So-called Tariff Tuesday, Canada, Mexico, China. We'll wait for the final announcement on whether that's actually going to take place and then the number that corresponds to it.

Weiss, the administration continues to try and make the case that tariffs are not going to cause more inflation or slow growth.

you got some pretty smart and successful investors who disagree with that i mentioned the comments a couple times over the last couple of weeks because when citadel's ken griffin talks people listen it's not like he's a foe of the administration um quite obviously by virtue of his support and his dollars but yet he made the case a couple weeks ago quote the uncertainty and chaos created by the tariff dynamics between us and our allies is an impediment to growth

Warren Buffett weighed in this weekend. He doesn't talk that often. Well, he did this weekend about tariffs. Listen. Tariffs are actually, we've had a lot of experience with them. They're an act of war to some degree. How do you think tariffs will impact inflation?

Over time, there are attacks on goods. I mean, the tooth fairy doesn't pay them. You always have to just, and then what? You always have to ask that question in economics. Always say, and then what? Prices will be higher 10 years from now and 20 years from now and 30 years from now. All right, Wes, what do you think? So I agree with both people excited, Warren Buffett and Ken Griffin.

Look, here's how I look at it. I really believe that there's a strong possibility of stagflation. Stagflation is when the economy slows and inflation increases. We are seeing the economy slow. And when you take a look at what the tariffs are, and I'm even assuming that the 25% go to 10%.

But even if you assume that, the margins on a lot of the companies that make up the S&P just won't be able to accommodate that. Costin at Goldman today lowers S&P earnings estimates. Yeah. And he gets a little more defensive in his sector play. Do you see Atlanta Fed GDP today? Yes. Last week was a big deal when they went negative to negative 1.5. Well, they saw the ISM today, which was a miss, a manufacturing PMI.

And they take first quarter down to eight. Yeah. So look, you've got, I believe, a very nervous consumer. The consumer, we keep talking about resilience of the consumer, resilience of the economy, earnings growth. But that was then. What we're seeing now in the in the

in the last 30 days or more since this election is 75 executive orders that we don't know the impact for. The problem with executive orders versus legislation, legislation gives you a clear insight into the rationale. It's what they think will happen into enforcement. So we can follow the rules of the road. Here we're not even sure that there is a road. So that makes the consumer nervous.

Add on to that the cuts you're seeing in the government, the cuts you're seeing at Starbucks. Right now, you basically, where companies didn't necessarily want to come out and say we're cutting, now they've got cover because you're seeing the very government where you've seen the most stability in jobs. Your point's well taken because if you look at what's taking place so far,

with, you know, Doge and all of the things that they're said to be doing, because you say that Congress normally has the purview on a lot of this stuff, you neither know the rules nor the road, right? There is a road. I mean...

You're trying to figure out what are the actual rules of the road if some of the cuts right now are being made outside the purview of Congress. But all that's just adding to obvious uncertainty for CEOs, for investors. With CEOs, definitely. Steve Cohen talked about that a week or so ago. Ken Griffin's done it a couple times. Buffett weighs in on...

on tariffs and other big name investors clearly have as well. Can I just say one more thing? So if you take a look at the margins of GM, they're 6%, right? We've got retailers that are around 10 to 15%. We've got grocery stores that are single, low single digits. How can they absorb the price increase? They can't. GM's not going to manufacture cars at a loss. So prices will go up. It's an inescapable logical conclusion.

And I think what's important to note is personal income was up 0.9 percent and spending was actually down 0.2. That was a big miss. And that was the big surprise of last week. You got it. So the consumers absolutely being more cautious. We're hearing it from the guidance. The big one for me was obviously Walmart, a stock that we don't own, which has done very well in their consumer base. But they are guiding lower. So I think that's important to note.

Listen, tariffs are inflationary. The consumer doesn't want to eat that whole pill. Yeah. I mean, the other place to look in this market for insight into risk appetite is clearly Bitcoin, which was upset all last week. It has not traded well, as you know, lately. It did get a boost over the weekend, though, as the president.

announced plans for a strategic crypto reserve. Mackenzie Segalos following that money for us. Mackenzie? That's right, Scott. The prospect of President Trump's new national crypto reserve sent Bitcoin from 78K on Friday to over $95,000 this weekend. It's also been pushing crypto-aligned stocks higher, even as token prices begin to slip. Coin

Coinbase and Strategy, as well as Bitcoin miners Mara and Riot, are all in the green as investors react to plans for a U.S. reserve of five digital assets, Bitcoin, but also Ethereum and three high volatility tokens, Solana, XRP and Cardano. Now, this is uncharted territory. The U.S. doesn't buy stocks or other investment assets, though that could change volatility.

with the country's new sovereign wealth fund. But as of now, traditional reserves, gold, oil, even cheese, serve strategic, economic or security purposes. But these tokens function more like tech stocks than sovereign assets to be held on the country's balance sheet. Now, critics argue this is speculation, not strategy.

especially with a $2.1 trillion deficit. Even industry bulls are questioning whether taxpayer dollars should be spent accumulating volatile digital assets like Cardano, which surged 70% on Sunday. Now all eyes are on Friday's White House crypto summit, where investors are looking to see whether Trump's AI and crypto czar David Sachs unveils a digital asset buying strategy. Scott.

Mackenzie, thank you for that setup. That's Mackenzie Segalis. Weiss, I'm curious as to you, you trimmed the iBit ETF. Yeah, it's getting my holding is getting down pretty low. I would have thought maybe you're reinvigorated as a result of what Mackenzie was talking about and maybe buy a little bit more. If for no other reason, even though you've never gotten your arms around the fundamentals or your

brain for that matter. You just don't believe in the fundamentals around it. You were in it for a trade on the momentum because of the new administration's apparent love affair with it. And I stay too long. Look, I'm still up on the trade marginally. You know, I have been selling on the way down, stopped out. But here's how I look at it. First of all, states' reserve currency is ludicrous. Reserve currencies are stable.

There's not a lot of volatility in it, and they're not risk assets. This is purely a risk asset, as has been proven out over the last number of months a year. Number one. Number two, you can't use it for trade. So reserve currencies are used to trade around the world.

and you can't use it for trade because of the volatility. So to me, this is purely, to me, this is pure corruption, right? Trump's got a crypto business. That's why he's doing it, also to appease his voter base.

call it for what it is. Now, we don't even- You can call it for what it is. I am calling it for what it is. And I think most reasonable people- Your opinions are representative of, Steve, we should need a little disclaimer to bottom. Exactly. No, I don't disagree with that. Steve Weiss's opinions are representative of Stephen Weiss only and not in any way an indication of what CNBC, Scott Wapner, Jason Snipe, Jen Zagozier, or Joe Terranova think about. You're absolutely right. You're absolutely right. But we don't even know if he has the power to name a reserve currency.

to declare this a reserve currency. So we have to see. Now, given what his mandate has been with Congress, maybe he can, but...

I'm not there. Real quick, because I've got to go. I heard this news this weekend, and everyone said to me, oh, this is a reason to buy Bitcoin. I mean, are you kidding me? This is nothing different than what we knew going into the election and on Election Day. Yes, you have an administration that looks to be favorable towards Bitcoin and cryptocurrencies. But that doesn't mean today you're buying it on this announcement. Let's get to Dom Chiu. He has a news alert for us regarding Anthropic. Dom.

That's right, Judge. So the Amazon-backed AI company has closed a funding round raising $3.5 billion that now values Anthropa at $61.5 billion in a post-money valuation. That round was led by Lightspeed Venture Partners, also Salesforce Ventures, Cisco Investments, Fidelity, General Catalyst, D1 Capital Partners, and Jane Street, amongst others.

They plan to use the money to what else? Advance their development of next-gen AI products and services. So an interesting move here. Amazon-backed Anthropic, $61.5 billion company for market value. Scott, I'll send things back over to you guys. I appreciate you, Dom. Thank you. That's Dom Chiu coming up. Told you about that new ETF to capture investor interest in private credit last week. Well, now the SEC is raising the red flag. Bob Zani has new details just ahead. First, though, we have calls of the day. We are back on the half right after this.

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With new line on my plan, service plan required for watch and tab. Additional terms apply. See Verizon.com for details. All right, welcome back. We have a number of calls to get through today. Checkpoint Software, Joe, upgraded to overweight. That's at Piper Sandler. They take the price target up $40 to $2.60.

from 220, they like the momentum, they think it's gonna improve, the narrative's gonna get better, and they might be able to get double digit growth in the future, which will drive increased multiple expansion. - And this is the cybersecurity name that I was referencing at the top of the show. It kind of flies a little bit underneath the radar. Israeli-based company pressing towards what is an all-time high reasonable value, reasonable valuation rather, somewhere around 30 times

It's a mid-cap size company at around $25 billion. Since the election, by the way, the EIS, the Israeli ETF, has been very strong. Israeli, second leading exporter of technology in the world. Checkpoint is playing

squarely in the cybersecurity theme that's right now dominating the bullish narrative of markets. Jason, Joe and Steve all own Uber. Jason, I'm going to give you this. Reiterated over outperformed, excuse me, at Evercore today. You can take a look at the stock as well. 115 is their new price target. They believe in ride sharing. They think it's going to kickstart the physical AI revolution.

And they are bullish. And they also, by the way, are bullish on the long-term growth prospects of Waymo. What do you think? I would agree with this call, Scott. I mean, obviously, it was a really strong quarter, in my opinion. Revenue was up $6.8 billion, which is $5 billion more than it was year over year last year, which was a really strong number. Gross bookings were up. The guide was 17% to 21%. Now, the street...

viewed that as being conservative. So the stock sold off around 8%, which I thought was a tremendous buying opportunity. They're converting cash flow at 90%. So I think this stock, the ecosystem, this robo-taxi news was a little bit of an overhang early on, but I think the street is starting to understand that story, and that's why I continue to remain bullish on Uber. Weiss, as much as you're getting a little more cautious on the market, and you've made that clear through many moves that you've made, what about Uber?

Well, as you call, I sold some of it, I guess, a couple weeks ago after Hackman came out and I agreed with his tweet, but moved it up. I don't see him taking over the stock, but it brought attention to it, taking over the company rather.

So look, I just think the economics, the good news is on robo-taxis, I don't think they're going to be for a while. The bad news is I can't figure out the economics. It's going to cost somebody more. And that cost is either going to hit margins for Waymo and for Uber, I mean, Waymo loses money, or it's going to increase the cost of a ride. Either way, you know, we'll slow down the growth of those companies.

Do you think if the economy slows that Uber will feel the effect of it? Or do you think because it's a fluent rider, if you would, that they're impervious to that?

I think that they've got some cushion against it, some protection, such as business riders and for the affluent. However, I do think the marginal buyer is going to think twice about that. And where there is mass transportation, go to that. Yeah, I don't know if we've seen Uber really go through a weak economic period that they had to navigate. Chipotle upgraded today, overweight price target 70 from 65 at Morgan Stanley. What do you think?

And this is where the tariff conversation comes into play. CEO Scott Boatwright saying, no, we're not passing on the effect of tariffs to the consumers. Chipotle, we're going to eat the tariff ourselves individually. So I think this stock is kind of novel. I mean, how many times have they raised prices? A ton. Maybe more than any other quick serve, whatever you want to call them.

have had the ability to raise prices over the last five years more than anybody else. And if they don't, your avocado push has got to be a lot smaller. I was getting to that. And there's your ability to say, OK, no, we're not going to pass through the tariff effect. But guess what? We raised prices on you three months prior. And six months from now, we're going to raise them again. They've amortized the price increases over the last five years. They've gotten in front of it. Allstate.

Joe, I'll tell you what, insurance companies' stocks have done well, obviously. This gets upgraded at Argus. It just gets upgraded now, huh? Look, we talked about just anyone who's got homeowner insurance, auto insurance, you're paying those premiums, you know the pricing power that these companies have had as it relates to inflation. And collectively, whether it's Chubb or Progressive or Allstate, Travelers, they're all

all working really well in a financial sector that's taking some form of leadership in the market here over the last six months. - All right, Courtney Regan has the headlines for us today. Hey, Courtney. - Hi, Scott. Well, the death toll has risen to two people in the suspected car attack in the West German city of Mannheim today. Police say the public is no longer in danger in the city center, but wouldn't confirm if the incident was an attack. The state interior minister told a German news agency the suspect was detained and is being treated at a hospital for his injuries.

U.S. airline industry group wants helicopters to be barred from some routes near Washington's Reagan National Airport, with exceptions for essential military or medical emergencies. Reuters reporting that according to written testimony ahead of a House hearing tomorrow, the group will call for requiring military aircraft to use a key safety program near larger airports.

And instead of boycotting President Trump's address to a joint session of Congress tomorrow, some Democratic lawmakers are inviting former federal workers to the speech to protest the mass layoffs. A White House spokesperson told The New York Times the Democrats were, quote, exploiting the American people for political points. Scott, back to you.

All right, I appreciate that. Thank you, Courtney Reagan. Up next, new developments in the story. We brought you last week about that first of its kind private credit ETF. Well, we'll see. There's some issues around that. Bob Bazzani is following that money. He'll tell you exactly what's going on next. Ben hadn't had a decent night's sleep in a month. So during one of his restless nights, he booked a package triple broad on Expedia.

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We're back with an update to a story we first brought you last week on a new private credit ETF. All the rage, of course, is private credit. Bob Pisani has some new details as the SEC says maybe not so fast. Talk to us. Well, no.

Exactly, Scott. But we want to bring you an update on this story we brought you last week. The Spider SSGA Apollo Public and Private Credit ETF, that's a mouthful, but it launched last Thursday. It allowed retail investors to buy into private credit assets. And late on that day, the SEC sent a letter to the company saying there was, quote, significant remaining outstanding issues, close quote, and listed worries centered on the fund's liquidity, its name,

of its use of the name Apollo in the title and its ability to comply with valuation rules. State Street did respond Friday night saying they would revise the name of the fund as soon as practicable, presumably removing Apollo's name, clarified that the fund's illiquid products will not be exclusively tied to Apollo and that other broker-dealers can provide quotes, and finally, that the fund's

net asset value, or NAV, will be calculated on a daily basis. State Street told CNBC they would have no further comments at this time. Still trying to get private credit and private equity into an ETF wrapper is all the rage right now. Let's talk about this with Joanna Gallagos. She's the co-founder of BondBlock. She recently launched

A competitor, the BondBlock's Private Credit CLO ETF. Joanna, I want to talk to you about your fund, but I got to ask you about this. You had a lot of experience filing ETF registrations. You know a lot about this. You know a lot about the SEC. It seems to me unusual for a fund to become effective

and then get a lot of questions after the fact from the SEC. Is there any sense of what happened here? I know this isn't your fund, but can you educate us a little about the process? Yeah, it's very notable. It's not that it has never happened, but it's a notable part of the process where usually issuers want to satisfy those concerns of the SEC,

as they're bringing them up in the registration process, that makes sure that in the way you're going to run your compliance programs, the way you're going to run your portfolio, everything's buttoned up before you go effective. So while it's a technicality that you could go effective before you satisfy some of those questions, it's more of a standard best practice.

good relationship with the SEC and also sort of translates to investors due diligence that they understand that everything went through to the satisfaction of, you know, the oversight of the SEC. And people have to understand, normally when you apply for a fund, you have...

it's seventy five days usually it will become effective unless there is issues that the s_e_c_ might have they did have some issues and they were extending a few times but then they just went public went public and then afterwards they had all we have other issues that's what's a little unusual it's it's a like i said it's a technicality in the registration process

And, you know, I think that State Street did address those issues the next day. I think this whole part of the registration process and, you know, putting private assets into an ETF, it's really important to satisfy those liquidity and those valuation issues so people understand how it works. Let me talk about your fund. You've got a competitor, Private Credit CLO, Collateralized Loan Obligation ETF. It invests 80% of the assets in private credit.

collateralized loan obligations. Just very briefly, how does this work? Why is this a good way to get at private credit? Right. So PCMM holds CLOs and CLOs are packages of loans to small and middle mark and mid-sized companies in the United States that happen to be private. Um,

These loans are used by these companies to run and operate their businesses every day. In a CLO, you might have about 100 of these loans. PCMM owns 42 CLOs. So this packaging of these private credit loans into the ETF allows investors, in the case of our product, PCMM, to have direct exposure to over 4,000 of these loans. The coupon payments that are much higher

in these loans. And so higher coupons, low duration, ultra low duration, and true diversification. This is a hat trick of a product.

In lightness, when you buy into private credit like this, what exactly are you getting? How do you use something like this in your portfolio? What place does it have? For the viewers, explain this. So first, it has a very attractive yield profile. This portfolio is yielding over 8% at this moment. But that true diversification point, I don't want to over... I want to pause on it because...

Private assets, like these private credit assets, have no correlation to public markets, either fixed income or equity. This is a powerful diversification tool that wasn't accessible by investors until PCMM came to market. This portfolio is also 80% private credit exposure. So that's important. In comparison to competitive products, delivering a full portfolio of this exposure is incredible. The higher yields and the low

duration also means that it's a low volatility product and that's what clients are looking for right now investors are so big trying to scramble to get access to these to private asset okay this is a lot to digest folks we're going to have a lot more coming up on the use of private credit and private equity

in ETFs. That's coming up on ETF Edge, 1.10 p.m. Eastern Time. Joanna is going to be joined by Todd Sohn. He's the head of ETF at Strategas. We'll talk about the risks of investing in private credit in ETFs and whether all this interest represents some kind of peak at all. Interesting debate here. ETFedge.cnbc.com. Scott, back to you. All right, Bob. Appreciate that. Thank you very much. I mean, that's the obvious thing that would have you think of is, is this some sign of, you know, peak in

private credit, to which those who are in the business of private credit would laugh and say, not even close. In fact, we probably aren't even in the middle innings of it. What's your thought on all this? Private credit is a real asset class, and it's grown as an asset class because banks have really cut back on their lending because of regulation. What could happen is if Trump does loosen the regulations on the banks, you could see them getting into it. But I don't see them going to the risky side of it.

Now, there are so many private credit funds out there that... Not ones that have been highly accessible to retail investors. So you have to ask yourself,

You know, for ETFs, yeah, you're not completely agnostic as to how they perform, but you are somewhat less concerned if you've got to build your next fund off your performance. So I would not invest in it in this type of economic environment if I were a retail investor.

If you're getting a yield so much higher than what treasuries are giving you, you've got to ask yourself, what's the risk I'm absorbing for that? And to me, I just don't think retail should play. Retail should be. I'm sorry, Weiss. We do have more moves from Steve Weiss to document. We'll tell you about him next.

All right, a couple more moves to get through. Weiss, you trimmed PDD and the K-Web. Yeah, look, not a lot of thought went into it, unfortunately. But the reason I did it, I've stopped. Yeah, I was just opening myself up. It's a short-term intermediate trade, a term trade. And when I have those, I put stops in because I don't want them to be permaholds. You sold SLB.

Yeah, so SLB never got to be a full position. Yeah.

You know, I bought it because of the quarter and then because I thought with the deregulation on drilling, that would be good. But I just don't think that the oil company is going to drill that much because they'll lower the price of the commodity. That won't be good for SLB. So that's why I'm out of it. Plus, they've gotten used to not drilling as much as people thought and doing other things with the capital. Exactly, like giving it back to shareholders. Like Jason, who owns those stocks. Santoli, we got him next with his midday word.

Senior markets commentator Mike Santoli is here with his midday word. So we have tariff Tuesday looming. We had a really big bounce on Friday, which you've been wondering whether that was legit in any way. Sure. What do you think today? I think it's legit in the sense that, look, it's it's it could have been swamped by other factors just because there was a mechanical month end bid. And it's interesting to me that we're kind of holding right there, at least testing and testing, figuring that out. The tariff.

deadline, the jobs report, the idea that we're looking at a perhaps pretty likely government shutdown within a couple of weeks. I don't think that means it's necessarily all bad or the pressure is going to keep piling on, but it does keep...

investors from feeling like there's an all clear moment out there. And so you kind of shortly, shortly, how much has been priced in? Let's look at where things look vulnerable, where they look like they've been overdone. And I think that's what the market's doing right now. Bitcoin's 4% off the morning high. Tesla's only up 2% after down 30. And

And it's kind of like the market's trying to find a way. NVIDIA, if it cracks 115, that doesn't look great. It's obviously above there right now. But that's kind of going to get you below the deep-seek low. And yet, the rest of the market is trying to hang in there and not really give full credence to the macro downgrades we're seeing. I'll see you on the bell. Finals are next. We'll take you through the final stretch today. Bryn Talkington, Malcolm Etheridge, Dan Greenhouse, Jeff Richards of Notable Capital. Shan, what's your final trade?

Healthcare. There's offense and defense here. Okay. Weiss? Taiwan Semi. I think it bounces and news will be good this week. Jason Knight. At these, Guy Rizzi continues to work. Joe T. In the financial sector, the sector should be focusing on trade web. All right. We will watch the markets. Keep your eye on NVIDIA. Lows of the day. Tesla is now negative. All things that will follow into the final bell today. The closing bell. I mean, the exchanges 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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