Trade Negotiations and the Market 4/25/25
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Thank you, Carl and Sarah. Welcome to the Halftime Report. I am Frank Holland in for Scott Wapner front and center this hour. The latest on the trade negotiations, key earnings reports, and how to position your portfolio for tech's moment of truth. Joining me for this hour, we got Stephanie Link, Joe Terranova, Malcolm Etheridge, and Kevin Simpson. First,

Quick check of the markets before we start this conversation. A lot to talk about today, certainly. Take a look. The Dow pulling back just under a half a percent. The S&P essentially flat, just fractionally higher than NASDAQ, the best performer up about a third of a percent. And we're starting with Alphabet, the stock that seems to be pushing that index higher. Alphabet also higher, following a much better than expected earnings report. And that's really where we've got to begin, Joe. What did you make of this earnings report? Was the bar low? Is that why we're seeing this response? Or was this simply just a blowout report in your mind? $70 billion buyback.

Clearly, the AI spend is still there, and I think it's indicative of the entirety of this week where, for the first time, we've been able to say, "Okay, let's really look at earnings." And the earnings have been remarkably strong. So, I love the fact today seems like a relatively calm and quiet environment. I think for us to end the week in that regard is extremely positive.

You have the VIX back down to 25. We began the week thinking the president was going to find a way to fire the Federal Reserve chairman. We got through the week with Treasury Secretary Besant being the sole voice, the sole messaging voice on the policies of the administration. And that has allowed for a really good environment. Then you get an earnings report like Alphabet and you say to yourself, OK,

So in my case, I still have my S&P futures. Began to, early on Tuesday, accumulate the S&P futures. You have a nice price gap now, 5309 to 5356. Put a stop in on Wednesday's close, which is 5375. And you just kind of ride

what really is washing away that extreme negative pessimism of last several weeks. Yeah, it's your point, S&P up about 4% week to date. Kevin, I'm going to come over to you. You're also an Alphabet shareholder. What was your take on the report? And I do want to ask you about two key parts. Cloud, missing estimates very slightly. I want to emphasize very slightly. Also, YouTube ad revenues, missing estimates, again, very slightly.

Yeah, I think it's something that we should be expecting in terms of ad rev coming down. But I still criticize Alphabet and Google for not completely monetizing what they can do with YouTube, especially with what they've got with the NFL package coming up. So even though that was a slight miss, everything else was unbelievable. You look at the operating income, net income more than doubling at $2.2 billion. Top line beat, bottom line beat. Joe mentioned the share buybacks. Not to mention, they also increased the dividend by 5%. So

This thing was unbelievable. And I think what's most important, Frank, is that we're paying attention to it. But it's not just an earnings report that came and went, and all we focus on is guidance, no guidance, multiple guidance. So pretty good day here on the floor. Yeah. Stephanie, coming over to you right now, what was your take on this? And does this signal a comeback when it comes to tech, tech having a good week, the defensive trade actually having a bad week, the staples down about a percent week to date? Is this an inflection point when it comes to tech more broadly?

Well, I mean, it's been a nice rally from the lows in the overall market, in the S&P 500, in NASDAQ, and tech in general. Certainly, you're up upper single digits in tech just from the lows. So it's encouraging. I think we got oversold. Technology as a whole is a great free cash flow story. There are a lot of wonderful moats as well. I look at Alphabet, and I actually thought that for the most part,

it was pretty much in line. So like search up 9.8%, good, but in line. YouTube up 10.3%, good, but in line. And cloud up 28%. I think we were bracing for cloud to actually see a deceleration or actually a big miss, and we didn't. I think the big highlight, as Kevin just mentioned, is operating profits. I mean, operating margins were

up over 120 basis points relative to expectations. And so I think that we were bracing for negativity. We got a pretty good report against low expectations. But the big key in my mind, Frank, is that advertising did not roll over. And that, to me, is a big highlight and one of the reasons why I actually have been adding to Meta.

All right, so you added to meta, were the ad results, were those a major catalyst in your mind, or was it this report overall?

Yeah, no, I mean, search is 56% of total revenues at Alphabet, and it accounts for 75% of advertising. That is positive for Meta because last quarter advertising was almost 96% of total revenues. So if advertising just hangs in there, Meta should do pretty well. I think they're going to grow 20% in total revenues this year, 40% operating margins.

And the stock is trading at almost 13 times EBITDA. The historical average is at 17 times. So I think you're getting quality on sale. I may be wrong. They are reporting next week, Frank, I will buy more if the stock is down because I think these metrics are very powerful. And again, it's a big, it's huge moat, 3.3 billion users. So I like it and I've been adding to it for a while and added to it this morning.

All right, so, Steph Link, adding to Meta, a lot of confidence from this Alphabet report. I should say, Malcolm, I want to come over to you. Can you take the opposite side of the argument? I want to ask you about this ad business. This really stuck out in my mind. Alphabet said that finance, retail, healthcare, and travel will run the top industries advertising with Google. I mean, two of those, retail and travel,

they could face a lot of headwinds going forward. Does that make you concerned about Alphabet going forward or other companies depending on ads? - Yeah, I actually, you didn't even have to ask me to. I feel differently about it than it sounds like Stephanie does. I'm actually concerned about both Meta and Alphabet in the sense that they are reliant on

uh... the consumer and so i do want to be owning tech here i do want to be adding to take here at this moment of weakness but i don't necessarily want to be on the tech that so directly tied to the consumer especially with those that sells because we know at the enterprise level as soon as it looks like the road is getting a little rocky the first thing to get an adjustment on the ballot on the uh... income statement is going to outside on the uh... uh...

spending plan is going to be advertising, right? It's the first thing that you cut. And I think that they could be negatively affected in this current quarter's earnings, but we won't know until we get into the July period. So you think there's latency in the ad spending? We're looking at a quarter where you really didn't have a lot of the negativity reflected in the overall environment? A hundred percent. I think the trade we're seeing right now in tech has a lot more to do with not as bad as feared, especially when we talk about the tariff war. And I think that

Tech is responding this week and will probably continue to respond next week, too. Not as bad as feared, as long as we don't get any more announcements out of the White House next week during earnings. But I think that looking forward to this current period, that's where we'll get that adjustment. Yeah. Steph, go ahead. No, I was just going to say, I mean, Meta is down 26 percent from its highs. And as I just mentioned, the valuation has actually come down dramatically relative to its historical average.

And we did see pretty resilient results in advertising. I have no question that if the economy goes into a recession, advertising certainly will take a hit. But I think a lot of bad news is already reflected, especially in meta, which, by the way, I've only been adding. I bought it back just about a month ago when it was down 30 percent from its highs. So I think the risk reward here is really very good. The free cash flow is phenomenal.

wonderful for all of these companies by the way and the margin upside is really material in and that's despite the fact that these companies continue to spend a ton of money on capex on AI and so I think that these are opportunities for the long term that you want to take advantage of

All right. Malcolm, I'm going to come over to you. We've got more mega cap earnings next week. Microsoft, one of your holdings coming up next week. The concerns that you mentioned for Alphabet, do those also kind of loom over Microsoft as we wait for their report? No, I think Microsoft is in a different situation. They're less reliant by a long shot on the consumer. They're a lot more reliant on enterprise customers that have longer-term contracts that don't tend to make quarter-by-quarter decisions on how they're going to operate.

roll out their tech spend. And so I think Microsoft, Nvidia is another. Companies like that are in a pretty prime position when it comes to weathering a storm if we are going to get a recession soon versus anything that's reliant directly on that consumer. I want to talk about a stock that's especially trade sensitive and growth sensitive. That's Amazon. Joe, you own this one.

You mentioned the president and Jay Powell earlier this week. What did you make of the comments earlier today that were in Time magazine? The president saying he would see it as a total victory of tariffs a year from now. We're at about 50 percent on foreign imports. That certainly would have a big impact on Amazon. I imagine just from a growth standpoint, when we come to the economy, it would have an impact on all these names. Well, I mean, it continues a very mercurial nature of communicating how we're going to go about trade negotiations.

global fair trade. So, you know, that's the comment that we're reading today. I think a comment that we could read two days from now might look a little bit different because certainly in the last 48 to 72 hours, we've heard things that have been different as well. My feelings as it relates to why I think Amazon is something that you should be holding for the long term is I

I think that obviously they have strength in AWS, but I also think that they are going to continue to take their business and move it very similar to what Netflix has done, more towards entertainment. I think that's going to be valuable. I think they're going to get into a lot more live events, whether it be sports or other types of live programming. And I think that's going to allow for substantial revenue growth in this company. This is a company, remember, that they have been able to turn the dial

on that revenue growth over the last several years. And just when the street questions their ability to actually exhibit the revenue growth, there they go. They show you that they can actually do that. Steph, you also hold Amazon. Considerable ad business, obviously a lot of exposure to tariffs through the third-party sellers. What do you make of the earnings that are coming up? What are your expectations? And again,

also, not again, but also the biggest cloud computing player. If you were worried about Alphabet, where do you stand when it comes to the cloud business when it comes to Amazon?

Well, the cloud business at Alphabet was 28.1% growth. It was in line. It was no worse than feared, but it's still really good. I know it's a decel from the last couple of quarters, but still 28% is still very impressive. I would say that I think the quarter overall for Amazon is going to be just fine. I think AWS is going to continue to be the behemoth. I think retail will gain more market share. Remember last quarter, they gained $1.

420 basis points of market share in the retail business relative to everyone else. And they are definitely just one of the halves in retail, along with Costco and Walmart. The big question in my mind is going to be operating profit guidance for the second quarter. And that is definitely going to be impacted by tariffs. So do they lower that number? It's $17 billion. So that's your number that you're looking at for the second quarter in operating profits. Do they lower that number?

If they do, the stock is not going to respond favorably. If they just hold it, I think the stock will hang in there and actually do pretty well. This stock trades at 23 times estimates, 26 estimates, which is a discount to Microsoft. And it's also a discount to Walmart. To me, that just doesn't seem reasonable given the long-term growth algorithm that the company has.

Steph, isn't there a tremendous amount of variability, though, even if they do lower something that it's a moving target? One quarter later, you can see the acceleration once again. You just don't know where this is going to go with tariffs. I mean, we don't know anything about tariffs and what the implications are going to be for all of retail, especially because they're so sensitive to it. So that's why I say, like, the guidance is going to be very important. And

can they dial it up can they cut costs can they do other things to offset yeah I think that they can but I if they give that you know it's it's gonna be hard to get around it for most discretionary companies I think the point being though I think the demand is there so to your point Joe yeah if they have one hit this quarter the demand doesn't go away

It probably is delayed another quarter or two. But I own it and I continue to like it. The stock is down 22% from its highs. And if it's weak on next week's report, I'll be adding more for the long term. Kevin, coming over to you. You own Amazon as well in the QDVO ETF. We do. That's in our growth strategy, Frank. And good news, we're rolling it out as an SMA at Raymond James starting on Monday. So congratulations. Thank you so much.

for the Raymond James Advisors, ETF and an SMA. The one thing we do know about Amazon is that 30% of their margins come from China. So whatever the tariffs turn out to be, however it plays out, it's going to affect them. They're going to have to guy down. So I would expect good numbers, but to Malcolm's point,

Don't put too much stock into that because it's probably the next quarter that's going to be a lot more important. All right. What about Apple? You also own Apple as well. What are you expecting from that? A lot of questions about that Apple supply chain. Of course, some news today related to making iPhones in India, but a lot of exposure to China. A lot of questions, just a lot of questions in general also about Apple intelligence. I could keep going on a list, but you own it. What are your views when it comes to that report?

You know, we loved Apple in the 170s. We added to it at 177. It's probably up around 205. I don't think I'd be adding to it in anticipation of good earnings, but I like the news today. You know, they've been doing this ever since COVID, trying to expand where the manufacturing comes from. I'm sure India is a better place from the government's perspective than China at the moment.

But at this point, I think the stock's pretty fairly valued up here. We have a $213 covered call against it. And I think writing calls is probably a better way to play Apple at the moment. Malcolm, I know you own Apple as well. By the way, just a quick side note. B of A says six straight week of inflows in the tech stocks. I would imagine Apple would be a beneficiary of that as well. What do you expect from this report going forward? Yeah, I've been paying attention to what retail is doing. And I think Apple is one of the recipients less than a lot of other names you could name.

Why would you say that? Well, if you look at the major companies that have been bought by retail this week alone, it's the usual hits. It's Tesla, it's Nvidia, it's those kind of names.

it is leaving Apple out of the equation. So I think that Apple is going to have to innovate its way out of this rut that it finds itself in. I've been making the case for a while as an Apple shareholder, someone who intends to continue to own these shares long term, that what we've been seeing is a dislocation between its share price and its reality within the company. And I think that we've been giving it a pass for a couple of years now where we've been looking at negative

numbers as far as iPhone sales and I think the market is finally starting to lose its patience as far as Apple's concerned. So it's going to have to innovate its way out of this rut that it's in. I'll say it again, and I think that a lot of the excitement about Apple around AI has just not panned out and that's why we're seeing the sell-off we're seeing. I think everybody agrees Apple intelligence hasn't been quite what it's been and also people like Dan Ives calling for the super cycle. That hasn't happened when it comes to iPhones.

Joe, what's your take on this report and what's the meaning of it? I mean, Apple doesn't seem to have the same weight on the market as it used to. It seems like Nvidia has more of that weight now. But what does this report mean? Well, first of all, we sold out of Apple from the JOTI ETF in October. I apologize if I got this wrong, but I don't think Steph owns it. Kev, I think you accurately described how you feel about it, which is it's kind of fairly valued. So if you think on one hand, right, Malcolm, the revenue growth has been the challenge. Yeah.

because the revenue growth has been absent and when you actually believe that you were getting revenue growth then they disappointed you in the following quarter so that that's the one element to this that i really call into question but be careful getting too negative on apple because guess what

they're still out there the possibility that they are going to be a significant beneficiary from the exemptions, which we know ultimately will be coming. Well, tariffs aside, though, if we consider that to be sort of a short-term headwind, longer term for Apple, when we look at the explosion that happened with DeepSeek,

That has that traffic has to flow through that Apple App Store where they collect their toll every time somebody downloads a new app and apps are being built with and for AI right now that we won't see come to fruition for another year or two. But all of that traffic is going to flow through that App Store and they own that highway. And so I think, you know, longer term, yes, AI will pan out for Apple in that way.

That's going to add to that services revenue that we've all been looking forward to grow for quite some time. But right now, here today, the story is just a little bit stale. We've also been missing for many quarters now the contribution geographically from China. And certainly given the environment that we have right now with the trade war, you have to call into question how long exactly it's going to be that China is really going to be sitting out contributing to the revenue growth.

very quickly you have a lot of confidence in an exemption for apple is it based on the news today where china's considering exemptions on medical equipment industrial chemicals is that an olive branch in your mind that's going to lead to that again i use the word before mercurial it's a very mercurial environment and one would have to assume when things look really bad

You're going to get some form of an announcement that exemptions are coming. All right, so we're in a darkest before the dawn type of situation. That sounds like what you're saying. As long as we're getting the messaging from Treasury Secretary Besson, we'll be okay. All right, there we go. Speaking of not getting too negative, let's talk about IBM very quickly. New popular position for the investment committee today. Stephanie, you actually bought

more. Obviously, the stock took a big tumble following earnings, and it wasn't really the numbers. It really seemed to be based on what they were saying about the consulting business and government cuts when it comes to spending in that area. What made you want to buy? What did you see or what did you hear that gave you the confidence? Well, I

Well, I've owned this stock for a couple of years now, Frank, when no one was owning this name. And I have a lot of confidence in this management team. The CEO has done over 30 plus deals since he's been CEO. And he's transforming this company into more growthier areas. So it's not just a mainframe company anymore. It's actually focused on data center and cloud, AI, technology.

blockchain, et cetera. And so the setup, though, was so bad for this name because it's been a safe haven. It was up 10% year to date. At the same time, semiconductors down 18% year to date, software down 18% year to date. So people were hiding in this because they really don't have a lot of tariff exposure.

The quarter itself was good, up 13%. It was the mix. Everyone's focusing on consulting. Consulting and infrastructure actually were better than expected. It was software that saw a de-sell. It was 9%, but it's down from 11%. I'm not that concerned about it.

because Red Hat, their hybrid cloud business, actually has annualized bookings in the high teens. So I think it's a timing thing. I think people were kind of obsessed with this number. It's about 44% of total revenue is software. So there were high expectations.

And so that's why the stock fell off, right? It had to be perfect. But the margins were up 50 basis points. Free cash flow was the best it's ever seen in a first quarter in their history. And they guided free cash flow of $13.5 billion for the full year. So to me, down 7% was a gift. And so I continue to add to it.

Yeah, by the way, we're showing that week-to-date chart, talking about getting very negative on a stock very quickly. Malcolm, you also added to the position. Agree with Steph's thesis, or you have one of your own? Yeah, I actually initiated my first buy of those shares into that sell-off, and I think Stephanie might have been looking at my notes with that one. I was thinking the exact same thing. Consulting revenue doesn't scare me. It actually encourages me a little bit because this is a company that grew that consulting revenue significantly.

related specifically to artificial intelligence over the last five quarters to about six billion dollars out of nowhere. And so I think if we consider what the knock-on effects of the artificial intelligence boom really is going to be away from the hyperscalers who had to build in order to get us there, and then the semiconductors and maybe the data storage companies that had to be able to

create the compute and store that data. Next is companies that need someone to teach them how to actually incorporate that AI into their own companies and their own tech stacks. And I think IBM's perfectly positioned to be able to step in and fill some of that need. All right, Kevin, you actually trimmed going into earnings. What made you want to trim ahead of earnings and now that the stock's dropped?

quite considerably this week, considering reentering a position? Yeah, 100%. And Stephanie and Malcolm covered all the bull case. We still have a 4% position. Owned the stock for years. Really love it. It's been one of our best performers. But just pure active management, position right sizing, going into earnings. Stock, we got out of it around 240. We just had too much of it. It's done too well. IBM went up. Everything else went down. And absolutely, at this point, it gives us opportunities to redeploy that capital back into it for all the reasons that were just mentioned.

All right, taking a look at IBM shares right now, up under just about a half a percent right now. All right, coming up, more committee moves, four new ideas for your portfolio. Stephanie Link is ready with her new buy. Bill Baruch is standing by with a few more trades. Halftime back in just two minutes. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast Business helps turn today's enterprises into engines of modern business, powering the engine of modern business, powering possibilities. Restrictions apply.

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And we are back on Halftime. Steph, Link, coming back over to you. You have a new buy for us today.

Yeah, Intuitive Surgical. It was my final trade on Tuesday. I've never owned this stock, but it's down 20% from its highs, and it's a great management team with phenomenal products in robotics and in software, and they have many years' advantage in terms of their technology products. So the quarter was very good. I wasn't buying it for the quarter, but the quarter turned out to be really good, up 19%.

in terms of total revenue. EBITDA up 22 percent. Margins also expanded over a hundred basis points and so the quarter itself was good. We were kind of waiting for them to give us tariff guidance and they did. And I kind of feel like now it's de-risk because we now know what margins look like in this tariff world and if for some reason we don't have these extreme tariffs then you might have some upside. In the meantime, the most important thing to me is procedure guidance was up

15 to 17 percent. That was prior 13 to 16 percent. So clearly they are seeing momentum. They have 30 percent of the market. I think that's going to expand over time. And so not cheap, Frank, but I think this is also quality on sale.

Joe, you own this one as well. One thing to Steph's point about the tariff guidance, the company did say trade policy is going to lead to some shifts in manufacturing. They have to change some strategy. So they do have some tariff exposure, even if so far it doesn't seem to be weighing on the stock. But what's your view on Steph's buy, the company overall? They've done a great job in telling you what the worst case scenario is. Look, for the last five years, this stock has overpriced.

overwhelmingly been part of the etf port um joe t etf uh april of 2023 we put it back in after taking it out in the middle of 2022 got it somewhere around 300 steps right i mean this is arguably one of the highest quality healthcare names that you can own it's a company that delivers a growth growth

gross profit margin of mid 60 range 65 66 67 revenue growth is strong and it is really the the intersection of technology and healthcare being combined into one so it's been a phenomenal name a company that you've wanted to own for many many years now and i don't see why when you look to the future that that should change at all

Intuitive shares up about three quarters of 1% right now. We're going to hit some more committee moves. Bill Baruch, he joins us now with his latest trades. Bill, you got a bunch of them. Eli Lilly, McDonald's, also seeing more Palantir. Why don't we start with Lilly, if you don't mind.

Yeah, we are underweight, have been underweight healthcare in general, about 5% between AbbVie and Amgen. We wanted to add a best-in-breed name. What got us excited was last Friday had the news that the GLP drug and pill form is testing better than expected. The stock jumped really well, and we waited until Monday and settled in a little bit, and that's when we added it as a new position to portfolios. It's closing the week out right now, back above the 200-day moving average, so we're excited to get a little more information

the healthcare exposure, but it's all drug manufacturers that we're leaning into here. All right, speaking of, so you're a lot of confidence when it comes to GLP-1s, and then you bought some McDonald's, a stock that could be impacted by GLP-1s. What gave you the confidence to buy some McDonald's in this current environment? By the way, Staples is having a terrible week. I know McDonald's isn't a staple, but similar. I mean, people kind of go to McDonald's, you have your kids, you want something quick to eat.

Yeah, it's a little bit of a fair trade. But the thing is here is you referred to it as a staple, and we're looking at this as a defensive name. With multiple in the mid-20s, you know, a lot of these traditional defensives are mid-20 multiples now. The thing about McDonald's is the relative strength against other names and how it's levitated. We really like that. But the franchise model in this environment, you know, I think that will really keep margins, you know,

keep them firm. And I think it's a little bit recession proof, you know, as they continue to develop the menu. But it's also a lower cost price point to continue to bring people in the door. So we really like McDonald's. Love to see if this thing can get above $320 and really break out.

Kevin, you also own McDonald's earnings before the bell on Thursday, by the way. Your view on the company, the outlook as we go forward? Obviously, we're worried about recession, things like that, economic slowdown. We actually added to this stock as well, Frank, really for the reasons being that if we do go through a recession, which is a real possibility, I don't think anybody is going to argue that there's a coin toss there. The consumer trading down to McDonald's is a beneficiary. They've navigated really well the rise in inflation that was

massive. And I think at this point, you can really look at this stock longer term and feel that there's a solid investment thesis here, plus a dividend grower that we really like. Shares of the Golden Arch is obviously up about a quarter of a percent, about 9% year to date. So, Bill, I'm going to come to your other buy. You bought some more Palantir. Now, earlier, we were just talking about IBM being a beneficiary of training people to use AI. This is a company that just does it themselves. And I've talked to a lot of people, I used to cover it, but a lot of people just say that their offerings are

are very unique and they also do a great job with their boot camps. Why right now though? Stocks certainly well off of the ties.

Yeah, we initiated as a new position a few months back when it around 85, $88. And it really held extremely well technically when the whole market fell out over the past few weeks. And it's levitated. I mean, this is, again, a name where the relative strength to its counterparts is telling us price is telling us something here. But, you know, at the end of the day, some of these big defense names,

where they were trading pretty poorly this week and their budgets are getting slashed. But I think what you're going to see is continue to lean in the AI-driven defense spending. And I think Palantir is going to be a big beneficiary, continue to be a big beneficiary, not only in that narrative, but with the administration at the forefront right now. All right, Bill Baruch, three big buys. Eli Lilly, McDonald's, and Palantir. Bill, great to see you as always. Thank you very much.

Joe, going to come over to you on Palantir. Shares up almost 2% right now, up about 1.75% or 1%. Your take on the buy, your take on the company overall in this environment? This company has had a remarkable rebound from the April 17th low at $66.12. Look, we added luckily, nothing more than luck, we added Palantir at $16 to the ETF, and we've rode it higher.

So here's what happened towards the end of the year. You had this narrative where people were saying, okay, this is the purest form of quote unquote momentum. And then you have another name that is also well-defined as momentum and that's app loving what has happened subsequent to that. And what we are seeing in the last several weeks is,

is that Palantir is actually giving you the fundamental reasons why it is appreciating the way that it has. It is not just about government spending. It is about the commercial division for Palantir, which is contributing significant revenue growth as it relates to AI. It's NATO using the Maven smart system.

So that's where Palantir has differentiated itself as, no, it's not just a momentum name. It is a momentum name that actually has some qualitative characteristics and strong fundamentals behind it. And just pull up a chart of Applovin, and you can see the difference where Applovin's kind of wallowing

at the bottom after a dramatic sell-off. That's a momentum name. To your point, even if U.S. government spending on defense pulls back, we know Germany's upping its spending, Spain's upping its spending. This is a company that works with a number of different nations around the world when it comes to defense. And now, as you said, growing that commercial business. And CEO Alex Karp is doing a really good job looking and saying over the last several years, we need to pivot away from reliably selling on the government. Let's move more to commercial. And I

actually expediting it and doing it very quickly. So the all-time high at 125.41, I think that's February 19th, that looks like it's in jeopardy. I think they report earnings on May 5th, Monday, May 5th, somewhere around there. We'll hear more. Yes, to your point, shares about 12% off their 52-week high, but right now up just about 2%. Time now for the headlines with our Silvana Hinal. Silvana.

Good afternoon. The FBI today arrested a judge in Wisconsin on obstruction charges. In a now-deleted social media post, the agency's director, Kash Patel, said the Milwaukee Circuit Court judge allegedly helped an undocumented immigrant evade arrest. The FBI has yet to respond as to why the post was removed, and the judge's chambers declined to comment.

NBC News has learned Senator Tommy Tuberville is telling fellow senators he is planning to run for governor of Alabama. Tuberville is rumored to be considering a bid to succeed the term-limited KIV rather than seek a second term next year. When asked for comment, the senator's office pointed to a social media post from yesterday that said, quote, when I have an official announcement, you'll hear it directly from me.

And disgraced former Congressman George Santos just moments ago was sentenced to 87 months in prison for wire fraud and aggravated identity theft. Santos pleaded guilty last year to conning political donors and became only the sixth member in history to be expelled from the House of Representatives. I'll send it back to you. Silvana, thank you very much. Our Silvana Hanao back at CNBC HQ.

All right, coming up here on Halftime, we've got our calls of the day. We're going to debate the bullish analyst activity on a few of the committee stocks. Halftime coming back right after this break.

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And we are back. You want to call attention to CNBC's newest subscription streaming product. It's CNBC+. You're looking at it right here. You can stream Halftime Report and all of your favorite CNBC shows like the Worldwide Exchange Show anytime, anywhere, and also on demand. Now, let's get to our calls of the day. All right, first call of the day.

We're going to get right to it. Train Technologies, actually. This one, this is a pretty good one right here. Jyoti, you own Train Technologies, HVAC player, a lot of exposure to data centers and things like that. What do you think about this one? Going to report earnings, I believe, next week. And that's really going to tell the story. Stocks were down 5%. It peaked in November.

along with some of the other industrial stocks, really hasn't been able to recover since then. I kind of would identify it as a wait and see. I wouldn't really look at the stock right here, get very aggressive buying it ahead of earnings. And certainly if you're concerned about the decline so far year to date down 5%, I wouldn't take action. Let's hear what they say next week as it relates to earnings, and then we'll go from there. By the way, you can hear what they say on Worldwide Exchange, having the CEO on a week from today.

Another call of the day, we got Spotify. Taking a look at Spotify, reiterated to a buy at 7.30 at Jefferies. Malcolm, you own this one. Yeah, this is one, to me, anyone who looks at Netflix and loves the fact that it looks like defensive, recession-resistant company to own, Spotify, to me, is in the exact same camp. I can't see exactly what the numbers look like, but I bet there's an overlap between their customer base that looks pretty attractive.

So if you're thinking, man, I really missed it on Netflix, this is a company that also is going to perform very well. It's already shown how inelastic the demand is for its subscription-based entertainment service in bad situations. This is a play to me to ride whatever storm might be coming. All right, another call today. We've got Procter & Gamble upgraded to outperform at RBC. Kind of a tough week for Staples overall, Kev, but you own this one.

Yeah, they put a price target of $177 in December. We got out of it a little bit above that. We've been buying it back since. 52-week low yesterday. They had earnings which, as you would expect, had horrific guidance. You're going to see absolutely a continuation of that next quarter. I agree with the call, but I'd be patient reentering the name. All right. Also, GE Aerospace, price target raised from $225 up to $230. Also called a sanctuary stock by Bank of America. Steph Link, you on this one.

Yeah, it's better than a sanctuary stock, Frank. It's up 19% year to date. It was a great quarter. They beat earnings and they beat total revenues and margins. Margins actually grew 220 basis point year over year. Their guidance was in line despite the tariff issues.

They're just handling the situation a lot better, being more proactive, moving supply chains all around the world. And the free cash flow guide of 6.3 to 6.8 billion is better than expected. And that's also up from 6.1 billion last year. So they are really humming on all cylinders. I will say I prefer Boeing versus GE at this price, but I still like GE. It's a core holding, has been for a while.

All right, shares up about three quarters of 1% right now. All right, straight ahead here on Halftime, the state of the financials and the private equity space. We've got Dom Chiu following the money for us, plus the committee is ready with their strategy. Halftime back right after this. Stay with us.

And welcome back to Halftime. Private equity stocks, they're feeling the pain in this volatile market. Our Dom Chiu joins us with a closer look at that space. Dom. All right. So, Frank, in this episode of Sectronomics, our focus is on the financials. We're going to drill down this hour into the publicly traded private equity firms. So the big private equity stocks like KKR, Apollo, Ares Management, Carlyle, Blackstone, as you can see here, are the ones that are going to be the most important.

All of the above were expected to do well in a new Trump administration. From the tailwinds on deregulation to merger activity and beyond, most analysts had predicted a pop instead of a drop for these names. But things have not quite worked out as expected, now so far at least. All five of these big names are down since the inauguration on January 20th, with Carlyle Group and KKR at the bottom of that particular list.

HSBC just made a move in this space, upgrading KKR to a buy from a hold last week. Now, in that note, the firm said despite higher uncertainty, they see opportunities. HSBC also said share prices have corrected, meaningfully so. The firm is also maintaining its buy rating on Blackstone and Brookfield Asset Management as well. With regard to Brookfield, it's down about 5% since the inauguration, but it's also up

34 percent over the past year, 12 months. The rest of the group is also up in the last year, except for Carlyle. But the financial sector at large is outperforming most of the group overall. So as we talk about the dynamic in financials, we often think, Frank, just about the big banks, maybe even regionals. But these private equity firms play a big part of that story, especially these days, Frank. I'll send things back over to you.

Yeah, absolutely. A growing interest in alternatives for investors at every end of the spectrum right now. Or Dom Chiu with Sectronomics. All right, Joe, coming over to you. You own Apollo and the Jonti ETF.

part of a very large weighting towards financials. We have nearly 30% weighting, and that has allowed us a very strong degree of relative outperformance. Unfortunately, though, when you look at the sub-industries within the financial sector, you see very strong performance from the insurance industry, strong performance from a lot of the money center banks.

But private equity really is the prime example of the exuberance that was in the market at the end of last year. And a lot of the exuberance surrounding private equity, as Dom said, was really related to the potential sequencing

of the incoming administration's fiscal policy. And that's where I think the consensus was thrown completely off sides. Because if you think about that sequencing, everyone believed, well, first you're going to hear significant regulatory relief, then you're going to hear about an extension of the tax cuts, and oh yeah, we've got these tariffs coming and they're not going to be 60% universal or as bad as feared. Well, guess what?

The sequence was the complete opposite of that. That's where everyone was thrown off sides because what did we do? We first went after fair global trade. We put on the back burner a lot of the fiscal policies surrounding the extending the tax cuts. We'll get to it at some point. So I think that's placed private equity in a somewhat perilous position right now. We're down to owning one name. And when I look at the performance of the financial names that we own in the ETFs,

Only PayPal and XYZ block is worse than what we're seeing from Apollo. Malcolm, you own PayPal, but actually during the break, if you guys don't mind me saying, we were kind of talking about SoFi versus Robinhood. You also own SoFi, Malcolm.

Yeah, so SoFi has actually been one of the best performing holdings I've had in a long time. I've owned it since it was in the $4 range. But to me, the thesis around SoFi has a lot less to do with the traditional banking system, as it were. They're doing a great job, I think, of adding additional services to each of their holdings.

customers that they have on the platform. But the goodie, if you will, that's baked inside of SoFi's story right now to me is really the banking as a service technology that they use and they lease out to companies that want to look bank-like and want to perform bank services without having to go through all the trouble of getting registered as a banking institution. And I think that's where the real opportunity for this company continues to stay. Kevin, very quick word. We got to go.

Robinhood is a great trade. I think it's a similar market to SoFi. The young investors are just taking over the world. And this is a real business. I love the stock. Yeah, by the way, SoFi up about 5% right now. All right, coming up next here on Halftime, Mike Santoli joins us with his midday word. And we are back right after this.

And we're back on halftime. Senior markets commentator Mike Santoli joins us with his midday word. Mike, I usually kind of bounce a word off you. I don't have one for today's markets. What's your word? What's going on? I would say breather. And I think it's actually a refreshing change that we actually have this relatively muted action.

Not only because obviously the market's been under a tremendous amount of stress, but even the up days have been these furious chases and squeezes and up, you know, one and a half, two percent. And while that's great for making up a lot of ground, we've made up half of what was lost between the peak and the April low. It's actually not the healthiest thing in the world for the market to be really flying in all directions.

every single day. So you want it to get a little bit of traction here. I do think we're kind of at that border here, the frontier of, okay, we had this capitulation at the low by a lot of the bulls. You had this snapback rally and then a little bit of incremental hope that the worst-case scenario for trade is not going to be the likely one. Nah.

Maybe you're getting toward that level where you're pricing in some de-escalation, some tangible progress along trade. We'll see if we get that. Mike, is it me or is it...

equities are comfortable moving higher as long as bonds go with them. It seems like that right now. Yes. Within a band, I think yields are comfortable right here. But dollar bouncing and gold selling off, I think it all tells you the fever is broken just for now. Yeah. To your point, Joe, the 10-year right now at 4.26. All right. Coming up on halftime, more of the day's biggest movers. And we will be right back after this.

And welcome back to Halftime. We're taking a look at the transportation space, specifically SIA. Take a look at these shares. They're down more than 30%, sinking as first quarter results, mixed expectations. Shipments down big. We're also looking at some bigger names related to SIA that are also under pressure in the less-than-truckload space. We're talking XPO, Old Dominion, and FedEx. All of them are lower across the board. Now, FedEx, of course, also an e-commerce player, but still the biggest LTL trucker in the U.S. They're about to spin that business off.

Something to think about coming up next week. We have earnings for XPO, also earnings for CH Robinson, and also UPS. Three big earnings coming up next week. When you're looking at the Sire results, one of the reasons that they saw a big slowdown seems to be a slowdown of imports. Two of the big customers for Sire, that's Home Depot and Lowe's. Stephanie Link, I want to come over to you. Just get your take on what we're seeing from Sire today.

Well, the stock is down 54% in the past year, Frank. This company has had a lot of execution problems balancing growth, profitability, and then new expansion. On top of that, you have a freight recession for the last couple of years, no pricing power whatsoever. I think you stay away from the group. XPO, I like for the long term. I think they have better pricing power, but I'm not involved.

Yeah, one other quick thing. Old Dominions had earnings earlier this week. They beat on EPS. Their revenues came in in line. Question, is it a SIA issue or a freight issue? With that, Final Trade's coming up on Halftime. Stay with us. And we are back with Final Trade. Steph Link, you're up first. Quantum Services electrification theme remains very strong.

Kevin. TJ Maxx, the best off-market retailer and tariffs play a little part in this story. Malcolm. Digital Realty. Most companies are expected to pull or adjust guidance. These guys turned in a massive surprise beat in the race. Joe T. Republic Services as an alternative waste management. All right, there we go. That's going to do it for halftime. Thank you so much for watching The Exchange. It starts right 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.

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