Trading Around the Unsettled Market 2/24/25
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All right, Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the state of stocks, the markets, they still remain unsettled. How about Palantir today? Down another 8%. We're watching it closely. We'll trade all of it with the investment committee. Joining me for the hour, Joe Terranova, Anastasia Amoroso and Steve Weiss. We will check the markets. Some interesting price action at the moment, too. Dow's positive. The S&P barely going positive.

Been an unsettled morning. There's the Nasdaq, which is negative. Joe, we have our mind on the Momo trade because these momentum names, which some had suggested maybe that had run its course, the unwind, still looks ugly today. You look at some of these names. I mean, Palantir is down again.

CrowdStrike was down sharply. Vertiv, Arista, Applovin, Robinhood. A lot of these names that have been right there in the mix are getting hit again. And the fourth quarter strong momentum winners continue to pull back. You see price retreating. Palantir testing the $90 level. I still think there's potential here for Palantir to

fall further towards that eighty four eighty five dollar level i think if you are utilizing what's going on in the momentum factor as a referendum for the overall market getting binary bullish bearish markets going down a hundred

handles or it's going to return to its prevailing bull trend. I think that's a mistake. I don't think that's the game you want to play. I think we are in the middle of a process where money continues to rotate and the money is rotating because we lost leadership five days ago. Momentum was the leadership in the market.

Normally what happens when you lose leadership is the market goes through a very convulsive period where it tries to find where the next leadership leg is going to come from. So while momentum is pulling back, you're seeing the quality factors working. You're seeing that health care stocks are performing well. You're seeing some financials that are actually starting to work today. We're going to hear what

Nvidia earnings look like on Wednesday? Let's keep in mind Goldman Sachs prime brokerage desk reports hedge fund exposure to max seven lowest level since 2023. It's important because in that process of rotating capital after Wednesday, do we go back to the mag seven again? I think that's what's going to be most interesting. We will see. I mean, you have small caps. Weiss are in correction. Yep.

There's a lot of D.C. noise, tariffs, doge, geopolitics. That might be impacting sentiment somewhat. But you have growing questions about the consumer, the direction of the economy, whether rates are starting to go down for the wrong reason. The continued momentum unwind as we begin our show with. Speaking of, you trimmed Vertiv, which is right in that mix. Vertiv last week was down 15 percent. You had added to it a number of times over the last months, and now you're trimming it. Why now?

I talked about this a little bit last week, is that, and Microsoft announcement aside, because we don't know what's behind that, we just mentioned something on air. What do you mean, the data center lease thing? Yeah, yeah. They strongly refuted that, by the way. No, I understand that, I understand. So it wasn't their announcement. I understand, I understand. And...

But the way I look at it is I see so many deals on data centers each week that the undercurrent is starting to be the narrative is are we building too much capacity? That's number one. Number two, Vertov, and you can ask them, but they won't tell you how much they source from China. So with tariffs going on to China with potential...

disruption of that supply chain i just thought it was prudent to take some off the table i'm still there candidly in the 80s today if if i were quicker i would have bought some back because i still think it's a solid company valuation has now become reasonable based upon their growth and i don't expect to see cancellation of orders but we also saw only a one-to-one book to bill it should have been a little higher so so that's why i vert in terms of the overall market

I think stagflation is a real risk. I think the market will start talking about stagflation. Just to remind viewers, when prices go up and the economy goes down. I don't know if people caught it, but Steve Cohen said, look,

If nothing else, we're taking a lot of money out of government budget. We're reducing a lot of spending. And that can't do anything but slow down the economy. You said this was down in Miami you're referring to last week where Steve Cohen basically was like, I'm feeling a little worse about the economy now, just given all the stuff that's out there. Thinks that the best returns may be already been realized in the market. You've had Ken Griffin.

largely talking about the same thing, just elevated uncertainty because of what he sees coming out of D.C. that maybe he didn't expect to this degree. So and when you take a look at that, you play it through.

for CEOs to invest, they've got to know what the rules of the road are. And when you have executive orders, it doesn't give you the same clarity that legislation does because legislation has the background to what drove the legislation, what the logic was, and it also talks about the enforcement. You've none of that here. So you've got, you know, really wholesale cutting of jobs.

Look, the government's bloated, unbelievably bloated, you know, and it's good to attack it, but you need a strategy. And until that strategy is communicated and it's transparent, then you're out of luck. But are you, I mean, is your vertive move, I know you got a little granular on the vertive strategy.

It's also a market call. It feels it has to be. I've been selectively, as you know, cutting exposure over the last month or so. And this is just more of that. I don't know when you want to talk to my other moves. I'll get to those as we go through some of the other stories. So just one final point. Joe talks about health care.

I'm on the board of a health care company, and it's complete disarray. They cut 40% of their AI team to research things. They've put on the device side, maybe on the pharma side too, all upcoming meetings have been postponed. So you just don't know what the approval process is going to be. Well, even so, you can't look at health care and say, hey, but health care is up.

Because you can look and say, hey, well, health care and staples are up. It's like a defensive posture to the market, which people have been speaking about anyway, right? It's a move to quality. It's discretionary coming down. And the two sectors that have only really done anything over the last month are health care and staples. And utilities. Finance is up a little bit. Yeah, but barely. They're barely green. The ones where you've had any kind of return are some of the more defensive places in this market.

Yeah, defense has definitely been the name of the game this month. And, you know, I agree with Steve that there's definitely more headwinds that are starting to form. I mean, you mentioned Doge and, you know, it's true that last year, for example, a lot of jobs were created in government. And maybe that's not going to be the case this time around as well. You know, and Scott, you and I have talked about this on prior shows, which is before we got the benefits of deregulation, before we got the benefits of tax cuts that are anticipated, we're going to get all these tariff headlines. And that's exactly what's been playing out.

But where I kind of diverge a little bit, Steve, with you is that I don't actually think we have the stagflation here that is here to stay. Not yet. Well, last week we sort of had this flavor of stagflation where you've got inflation fears that flared up. We've got growth fears that really came to the fore. But I think this week what investors are likely to do is they're going to look at hard data.

And we got the core PC on Friday, which should come down from 2.8 percent to 2.6 percent. And if I look at the same retail sales that people kind of didn't like, the retail sales were actually up 4.2 percent year over year. So I don't see much problem with growth when we're pacing about 2.3 percent GDP growth, which is the same as last year. You know, if you if you if you're fixated on what's happening with a lot of these momentum names, the Robin Hoods of the world,

The app Lovin's, which continue to get upset. JP Morgan had the following to say about the unwind that really was witnessed last week, but is now bleeding into this. Quote, while the moves felt very, quote, unwinding, we failed to see panic selling. Crowded positions are most at risk, while the beta and momentum unwinds are largely complete. They don't really feel like they're largely complete. By the way, Alex Karp of Palantir speaking at the New York Economic Club said,

And we're going to monitor that for any news that might come out of there. Not necessarily a newsmaking event, but nonetheless, his stock is probably today the most closely watched one in the market. NVIDIA reports on Wednesday, but Palantir had such a tremendous gain and now it's having such a tremendous unwind. Tom Lee says, four reasons we view last week's 5% decline in momentum as just a, quote, flesh wound. Well,

Well, NVIDIA reports this week he cites that likely a positive event. PCE talks about that too. Likely affirms inflation tracking lower. That's what you cited. If Doge leads to an economic softening, you're going to get an increase in the odds of a May rate cut, Fed put. And then momentum, yes, it's seen a decline and it has in the past, but each staged a recovery. What do you think? So...

It's like any other piece of data. You can read it one way, somebody else could read it another way. There are other headwinds. When you're seeing the massive job cuts that you're seeing from the government, which again, they could be deserved, and you're seeing Starbucks lay off people, you're seeing bad news in luxury. 50% of all spending is luxury spending by a top 10% of wealth in this country. So you can't rely on the numbers.

You know, when you're also seeing that Medicare and Medicaid are 40% of the mandatory spend of the U.S. budget and the largest budget spend, period,

that that's gonna cut jobs when you cut that. You don't know how it's gonna cut it. It's gonna mean people have to spend more for their own care. So all those headwinds could offset all that. I don't think it's any surprise if PCE ticks down. That's in the market. I don't believe that's an issue.

But the Fed also said, or hinted at least, we're going to take into account tariffs and economic policy and decide. So that may keep a little race. But what about the point that Tom Lee makes? First and foremost is that NVIDIA is this week. And that is going to, my words, not his, save the day.

Well, you're going to hope that it saves the day. And this is look, we are where we are today in 2025 because of earnings. Plain and simple. Earnings were the catalyst to get us the appreciation that we witnessed so far in 2025. So NVIDIA has the ability to reverse some of the negative sentiment that has crept into the market here over the last several days.

I really don't think it's about NVIDIA's fundamental outlook. I think it's about the reaction to NVIDIA and the effect on the rest of the market that overall is going to matter. Well, Dan Ives says it should. Again, he put out a note today. It should calm the nerves of investors. Well, maybe it could stop the selling that we've seen in tech.

Well, if it's going to calm the nerves of investors, okay, that's fine. But you have to, again, look at momentum right now is driving the tape. The unwind and a lot of these momentum names is dictating where price is going. But let's understand something. Applovin, Palantir, they're not even back to their 50-day moving average right now. Vertiv, which you sold 30 days ago, Vertiv made a 52-week high. I didn't sell at all.

It's now below its 200-day moving average. So why do I cite that? Because in the case of Palantir, in the case of Applovin, the longer-term, non-discretionary institutional capital, they're not selling yet. They don't have the reason to sell yet. Vertiv, they're going in and selling. I disagree with that, Joe. They do have a reason to sell. What's the reason to sell, Steve? The reason to sell is that the valuations were egregious. Steve, that's just—

Joe, statistically incorrect. Steve, it's statistically incorrect. A non-discretionary, price-driven momentum fund is not factoring in valuation. They're not. Joe, I'm...

I'm an institutional investor. You're an institutional investor. You're not, Steve. Steve Cohen came out. You're not a multi-billion dollar institutional investor. Don't disagree. That's what I'm talking about. Ken Griffin is. Steve Cohen is. Okay. And so are many others that I've talked to. You don't know what they're doing. I hear what they're saying. You don't know what they're doing at the moment. Okay.

Okay, what do you think they're doing? You think they're coming out and saying that we've got all these headwinds, I'm worried about the economy, and they're leveraging up to overvalue technology stocks? That is their individual macro view. Their macro view informs their equity. They have a team of strategies that is managing multi-billion dollar portfolios. Joe, with all due respect, you don't know. I work for Steve Cohen.

Okay, there's one risk manager there. With all due respect, in this case, you don't know. Well, that's actually not accurate. Anastasia, do you know? Well, I think if you look at the prime book statistics. You're a momentum player. Fundamentals are completely different. You can do your thing out on the street when we're done. Anastasia is going to talk now. Just a little bit of data. I think part of the reason why momentum stocks have been selling off is because hedge fund managers in aggregate have been trimming them.

In fact, we had the largest TMT dig grossing, according to Goldman Sachs. Didn't he point out that data himself? But he says they're not selling. No, no, no. On the other hand, he quotes prime brokerage at Goldman Sachs and shows they are. Well, for one of the books, we're seeing the largest dig grossing since July, which is also the largest in the last five years.

it's not the only data point we also see it in retail investors for example they're not as actively stepping in and trading some of these stocks so you put all that together and then if you look at the aa ii bull bear spread is it it's approaching the 10th percentile which we haven't seen in quite some time so it seems like a whole cohort of investors have gotten incrementally more bearish on tech to me though scott i think that's an interesting and constructive setup for nvidia

because I think they have the opportunity to surprise to the upside. And I think if anything, over the last couple of months, the total addressable market for AI has expanded. That's what they're likely to tell us. So maybe they've gotten more bearish on mega cap tech, but they don't appear to be more bearish on tech. If you look at, for example, as Tony Pasquarello points out, who I will point out, by the way, is head of hedge fund coverage at Goldman Sachs.

He knows more than both of you guys because he's talking to these folks, these institutions. Those folks are telling him what they want him to hear. Whatever. Okay. And the fact of the matter is that the equal weight NASDAQ has performed really well year to date. Don't necessarily look at the top, which he suggested has come off the boil. But if you look at AI software is up 14 percent, cyber is up 13, Internet's up 10%.

Analog semis are up eight. The equal weight NDX is up 6%. That's equal to last year's entire return. What were they up three weeks ago? They've come down. What is a moment in time? It's a year to date. Let's call the year to date is a moment in time. I mean, you see what the trends of the market are.

It's okay to talk about a moment in time. That's my point. The trends have been down. We've seen cyber come down. We've seen every sector you mentioned come down. Yes, last week when you had a momentum on wine. You're at a weight station. I'm looking to the future, and I see headwinds. Now, look, I've still got decent exposure. I have built a lot of cash, so I don't think we're going to zero. And frankly, if you go back to J.P. Morgan's comment—

I'd rather see panic selling because when I see panic selling, I know it overshoots where the reasonable valuation mark should be. Why would you have panic selling? I'm not saying you would. I'm just saying, like, of all of the negative things that anybody can bring up, oh, I'm tired of the tariff talk, doge headline du jour.

Geopolitics, we're talking about busting alliances that we've had for decades. Mike Wilson still calls the S&P the highest quality index with the best earnings growth prospects. Quote, it's premature to conclude the rotation away from the U.S. is sustainable. J.P. Morgan today, quote, we do not advocate an underweight U.S. position as we still see wide growth in earnings differential versus the rest.

with tariff escalation a wild card. Everybody knows that it's a wild card. - I agree with all that. We're not talking at opposite ends here, but what I'm saying is that JPMorgan's comment is no panic selling. There shouldn't be any panic selling. My only comment is when there is panic selling on an event, that's when you want to buy. When it's a slow drain down like this, that's when you want to be a little cautious. - True, but there are different magnitudes and I think colors to big sells.

The carry trade unwind, good example. It took the market down, largely, right? That was a market event. Panic selling, market went down, what was that, like in August? First Monday of August or whatever that was. That was a panic selling day. That unwind caused a panic selling day. What happened with momentum? I know, but what happened with momentum? That's just a factor that unwind. The whole market didn't go crazy. I think it's a reset evaluation.

As it should be. As it should be. So Applovin, again, egregiously overvalued. Palantir, egregiously overvalued. The CEO himself is saying that by putting in a selling program. Do you think the S&P at 22 times is egregiously overvalued? No, I don't. That's my point. That's my point. We're talking about a factor of stocks. We're talking about a factor in the market that obviously went straight up and

and to the right, which is now getting tested. Let me just make this very clear, okay? There are times to be all in on the market, and there are times to be, I'm going to sit back and see how these things play out. You contribute to throwaway headlines, and so what, they don't mean anything? I'm telling you, as a bottoms-up analyst that looks at tons of different data points,

This is a time to be cautious. Now, don't take it from me. Take it from Ken Griffin. Take it from Steve Cohen. Take it from whoever you want. But any experienced investor who's been through cycles know there's time to play and there's time to cash in your chips.

On a little bit. OK, so let me ask you this. Is dramatically upping your exposure to Chinese tech because you didn't cite him? Is that cautious? Is that cautious? Again, just I know I know nobody knows. I'm not going to answer that question. Is that cautious? I'm not going to answer the question that way because that's an unfair question. Yes, I dramatically. Why? You talked about him in his hot tub last week. Now you can't answer the question. You want me to?

I can answer the question, but I'm going to answer the question more. I'm going to answer it more intelligently. OK, you asked it. OK, so here's my answer. You know what? Yes, I do. You can't help yourself. You can't help yourself by acting that way when somebody questions you on anything. When you give me a question like that, you can't by you giving a leading question. First of all, that you want to fill your narrative. OK, fine. I'm just telling you, you know what? Everybody up here is tired of that.

BS. Okay? Scott. If you can't have a civil conversation without insulting people, then just be quiet. It wasn't insulting. Just move to the other chair. It wasn't insulting. Just move to the other chair. You asked me a question. When you talk about people's intelligence up here, the way that you debate people, we're not going to do that. We're not going to do that. You said you were going to have an answer more intelligent than the question I asked. Right. To get to the answer. Just slide down one chair or outside. Do you want the answer?

Do you want the answer? Go there or over there. Do you want the answer? So the other thing I want to talk about, Joe, is Buffett. Because we also learned over the—plays perfectly into this. Is it time to be cautious? Is it time to play a lot of offense? Well, they're sitting on a mountain of cash, right? $334.2 billion in Q4. That's a new record high. Quote, "'Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities.'"

that preference won't change quote often nothing looks compelling very infrequently we find ourselves knee-deep in opportunities he's cautious but he has been I guess it's you know it's fine we're going back and forth here but let's talk about the substance of the conversation Steve is mentioning he's cautious I think Anastasia is saying it's it's the time to really be selective I'm saying that as well

I think you're citing that as well. We went through the period. I'm not saying it's time to do anything. You guys are the ones who manage the money. We went through 23 and 24, Scott, where it was kind of easy, right? You were recovering from 2022. You had the acceleration in earnings. You had the new innovation surrounding generative AI, and it seemed relatively easy to step towards risk. You have to acknowledge where we are early in 2025 that it is more difficult.

And I like the strategy that Berkshire is following. I like the fact that they're sitting on their hands and saying, yes, we have a tremendous amount of capital, but we are not going to deploy that right into the market because we don't think there's anything that is compelling. Now, in the letter, in the annual letter, they didn't give you the reasons why people have been speculating, including us. It's like, well, he's sitting on a mountain of cash.

Is he more bearish? Does he see something that we don't? Now, they don't sit there and go through the reasons as to why they're sitting on this pile. You have to suspect that that's somewhat... Well, I mean, it could be one of the reasons, but you don't fully get that story. Jonathan Krinsky today is talking about there are enough warning signs to warrant a defensive posture. Yeah.

Yeah, I mean, it's one thing to be cautious. It's another thing to figure out what is it that you're actually going to do about it. You know, I think there are reasons to be cautious because there are more incremental headwinds. And, you know, look, if you're expecting 13 percent earnings growth for the S&P 500, some of it may be shaved off due to dollar strength. Some of it may go away because of tariffs. You name it. But

Do you get out of the market because you're cautious? No. I don't think the answer to that is that. I think you stay long. You stay in your favorite themes. But what you should be cautious about is when exactly you deploy capital. So we debated this whole thing today about, you know, did we have sufficient sell-off? Did we have capitulation? Did we, you know, did we sufficiently reset? And the answer to that is on the S&P 500, on the NASDAQs, probably not. You know, if you look at the relative strength for the S&P, we're sort of middle of the range and the same for the NASDAQ.

So what I think you can do, however, if you look at the dispersion of the S&P, it has been rising. You don't have more winners than losers. If you look at the correlations, they have been falling. So active managers, hedge funds are able to step in and buy those things on the pullback. But you don't do it all at once. Well, the markets had a really remarkable ability to, A, remain resilient and to, B, self-correct.

And each time that there's been some sort of period of excess over the course of this bull market, which is, what is it, two and a half years old? Yes. We've managed to deal with the reset. And now we're witnessing a reset in momentum.

It's not taking the whole market down. We just, even in the face of it last week, we had new closing highs on the S&P. Why? Because of what Mike Wilson and J.P. Morgan and others are still talking about, even in the face of uncertainty. So the word, and I know Warren Buffett doesn't like this word, but the word is diversification. A lot of people don't like diversification. They say, oh, if you diversify, you take away the potential return outcome in the future. You need to concentrate to outperform the market. I get it.

But this is, to me, kind of a moment where you do want to think about diversifying, diversifying by sector, by asset class, even geographically. You could find geographic opportunities. Obviously, BABA is a name that I purchased recently, had the exposure into... Bob is getting hammered today. Bob is getting hammered. So let me tell you how I'm managing BABA. I'm into BABA at $117. That was the entry price. I have a stop in at $119.50. Should not lose.

lose money on it the point of me saying you should not lose money on it is when you have a very significant winning trade like Bob was last Friday when it was up at 145 you don't turn a winning trade into a losing trade I don't care what your opinion is of the valuation the fundamentals

Never turn a winner into a loser. So $119.50, I think that's how you have to risk manage it. But you can diversify here. I think this is the moment for that. All right, we'll take a break. We will come back. We do have our calls of the day. We do have some more moves to get through as well after this break. If your small business is booming and ready to expand, you might say something like, It's an A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A-A

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Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson report.

Acapella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.edu. Number of calls of the day, but first I do have some moves that we didn't get to. Got a little sidetracked. We're back. You trimmed a meta. I did.

I did. Why? I've been saying it's my largest position. Irresponsibly large. I just kept adding to it when it was down. I should have trimmed back, to tell you the truth, during its 20-day run, positive run, when there was no reason for it. So I did cut it back on Friday. It's still my largest position. But given my cautious view in the market, I thought there was a reason to take some off the table. You also...

And you recently bought back Dick's Sporting Goods. I did. Now you reduced it? Slightly, just slightly, based upon the retail numbers. I still think Dick's will excel. The stock's come down about 10% or so. It wasn't a big position, but it wasn't a tiny position either. So I'm looking to add to it as it gets close to reporting earnings. But right now, again, it costs you in the market, not a position I was married to that I'm just trading around the portfolio when I can.

Bitcoin, you trim that too. I cut a little more of that Bitcoin, another 10% of that position. Bitcoin is a risk asset. We saw it in the pre-market when futures were up, and now we're seeing it down. So it goes through these periods of consolidation. I think this could be one of those periods until we get specific laws, regulations from the new head of the SEC. Then it should resume.

But again, just like with Nvidia, everybody believes it's going to be a positive number as the last quarters. So we'll see what that does to the market with Bitcoin. It's no secret that the president has a Bitcoin agenda. So what's new? The only thing could be news, actual action. All right. Calls of the day. Netflix today reiterated overweight Morgan Stanley. The stock's obviously had a huge run. They love the sports media expansion.

They see the possibility of a broader WWE contract.

They believe that it could become the home for F1. So they're giving you a list, Joe, of all the reasons why they continue to love this stock. And I think all of these are known by everyone who owns the stock, who has accumulated the stock over the last year. They saw the building momentum towards their engagement with live sports. The stock is in the midst of a little bit of a minor pullback.

It looks like it wants to touch the 50-day moving average. Understand that's not something that's done in a very long time. And I would expect there to be a tremendous amount of support, rather, given the understanding that this company has very strong fundamentals. Speaking of live events, Live Nation priced target $175 at B of A. The old one was $149. What do you think?

I think they blew it out of the park beyond what I even expected when we discussed it last week. U.S. inventory for 2025 tickets, 75% of that inventory sold out in one week. Here's how the analysts reacted to that. They raised the price target 12% from $160.73 up to $160.75.

6.17. I think that's warranted very strong momentum. All right. Contessa Brewer has the headlines for us today. Hi, Contessa. Hi there, Scott. The U.S. is siding with Russia to vote against a U.N. resolution condemning Russia for starting the war in Ukraine. The U.S. had authored a resolution calling for the swift end of the war with no mention of blame. But when the General Assembly amended the resolution to add language condemning Moscow for its invasion of Ukraine, the U.S. abstained from voting.

The U.S. is imposing new sanctions on 22 people and 13 vessels for their part in selling and transporting Iranian crude oil as part of Iran's shadow fleet. The Treasury Department said the entities being sanctioned are located in the United Arab Emirates, Hong Kong, India and China, as well as Iran, and added that the sanctioned ships move crude oil valued in the hundreds of millions of dollars.

New York City Mayor Eric Adams will close the migrant center located in the Roosevelt Hotel, which was a frequent target of criticism from both Elon Musk and the Trump White House. In a statement today, Mayor Adams pointed to a decrease in migrant registrations for the reason behind the move. Adams has promised to close 53 other emergency shelters in the city by June. That's the news. Scott, I'll send it back to you.

Contessa, thanks so much for that, Contessa Brewer. Up next, a sign of the times in the ETF world as retail investors take on some new risk. Bob Pisani is standing by with some new numbers you need to see. It's in today's ETF Edge next. New job? Growing family? Need a change of scenery?

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If your small business is booming and ready to expand, you might say something like, It's a ding! B-b-b-b-boo-yah! Crushed it. But if you need someone who can actually help protect your growing business, just say, Like a good neighbor, State Farm, he's there. And just like that, your State Farm agent can help you get the coverage you need for your new space. For your small business insurance needs, like a good neighbor, State Farm is there. Papazani has today's ETF edge, Bob. I'm not good.

Good to see you. It is a sign of the times as risk appetite has grown. Assets under management of leveraged and inverse ETFs has grown dramatically. It was about 2% of ETF assets in 2016. It's almost 8% today. More importantly, the trading volume has exploded on any given day. Dollar

volume and leverage in the inverse ETFs are among the largest daily dollar volume leaders in the ETF space. So what is behind all of this? Who's doing all of this trading? Let's talk with Douglas Jonas. He's the CEO of Direxion. You're one of the big guys in this space. You're one of the largest providers of the products. Every day I look at

at the volume charts. I see your semiconductor bull ETF right at the top of the volume charts. It gets three times the return of the semiconductor index on a daily basis, along with your three times S&P products. Who is doing all this trading in these products? Yeah, Bob, I mean, it's no surprise to us when there's individual investors, and we'll talk a little bit about retail, institutional investors, folks who are

moving money and need to do so quickly and with leverage. They're leaning towards the direction lineup of ETFs. And, you know, we talked a little bit about this, right? It's hard to know exactly, but we think about three quarters of that movement is coming from retail, maybe a quarter coming from institutions. And there's growing use cases. You know, historically, it was really about people making short-term directional bets on the market.

Those use cases are expanding. We're seeing institutions looking to hedge. We're seeing individuals looking to offset some of their positions and avoid maybe selling due to capital gains. And some of this is overseas investors, you were telling me. South Koreans, Japanese, small retail investors doing this. Yeah, that's right. I mean, there's a lot of individual investors as well as institutions worldwide who have very large positions in a lot of

fast-moving stocks. And they want to take advantage of momentum plays. They also want to use the ability to hedge their positions. It's not just a leverage and inverse index ETF. Single-stock leverage ETFs are growing fast. You've got this Tesla bull ETF that shows up all the times, two times the daily leverage of

of Tesla. There's a two times long Nvidia one as well from the competition. So when you talk about institutional investors, who are you referring to specifically? Is it hedge funds, trading desks, brokerage firms? Yes. Yes and yes. I mean, the reality is, Bob, I mean, we know this. The market moving headlines are happening fast.

faster. They're happening on a daily basis. It's not years ago where companies would move just basically based on earnings or some major report. We're seeing a daily basis, whether it be issuance out of the White House. We might be seeing tariff reports. We might be seeing suggested earnings.

NVIDIA is coming up Wednesday. People want to be able to make positions. They want to do it short term. You'll get a lot of volume around that event. Retail investors in the past have had a very hard time with these products, a hard time getting around the products because of this daily reset. They reset every day. So if you hold them for more than a day, your returns could vary wildly due to compounding. What percentage of investors hold these for more than a day? How would you grade the business, the ETF business, on educating people about it?

Absolutely. Because you can get wildly different returns. This is the most important thing any investor should be looking at. The most important thing. They should be checking their ETF positions. Anytime you're using leverage whatsoever, you need to be looking at that daily. That's something that we're very focused on. They can go to our website at Direction ETFs. Education comes first. People need to understand what leverage means.

what that impact can be in your portfolio, how you need to check it. But you're right. It's really a daily basis that people need to be checking these positions. We're going to have a lot more coming up on how to use leverage and inverse ETFs. That's coming up on ETF Edge at 1.10 p.m. Eastern Time. Doug will be joined by Todd Rosenbluth. He's the head of research at Vetify.com. A lot to discuss around this. And, Scott, the volumes have just been exploding in the last five or six months. Back to you. All right, Bob. Thank you very much for that.

That's Bob Pizzani. We do have more committee stocks on the move. Weiss has another move to tell you about. And I told you Alex Karp, the Palantir CEO, speaking at the New York Economic Club at this very moment, will tell you what he just said after this quick break. We're watching shares of Palantir closely today, as we have been for the last couple of weeks. The CEO, Alex Karp, is speaking as we speak at the Economic Club of New York. Seema Modi has been monitoring that and joins us now with the highlights. Seema?

And Scott shares of Palantir off the lows of the day after CEO Alex Karp at the Economic Club of New York is basically defending the U.S. government's efforts to review and cut costs on its budget, saying ultimately what is good for this country is good for Palantir. Listen in. The single best thing that helps my company is meritocracy. Pen test everything.

I don't know, we have hundreds of contracts. Maybe, I don't know, maybe there's a contract that doesn't deserve to be renewed. Great, maybe there's a contract that does deserve to be renewed that gets canceled. Penn tests everything. Tests the unit economics, tests the unit economics, and unit economics in this case also include general good, like the PG product stops terror attacks and augments civil liberties. So it's like there's a double good.

Those comments again from CARP defending what the U.S. government is doing on looking at different programs to cut its budget and says ultimately that Palantir wants what is best for this country. It comes following that report last week that the Department of Defense is looking to cut its budget by 8 percent this year. Scott, you'll see shares down 7.8 percent. We started the day down as much as 10 percent. Yeah, we'll watch them closely. Seema, thanks so much. Seema Modi with the update for us there. Santoli is next with his midday word.

Senior markets commentator Mike Santoli is here at the desk for his midday word. I mean, at some point, the momentum unwind is going to be done. It doesn't feel like it's fully flushed yet. No, in some respects, although a lot of these names are off their lowest levels of the morning. They are. You never quite know. I mean, look, if it's I saw JP Morgan this morning talking about how largely it looks done. And then the charts were basically right in the middle of the range. So in other words, it's no longer extreme in terms of crowding and in terms of how extended they are.

But you never know when you're done until you maybe get a full purge. I don't know if that's the whole story. I mean, obviously, underneath the surface alongside that was what's becoming evident, which is a mini soft patch growth scare getting priced in.

Don't think anybody's panicky about that. It's funny, the last two years at least, we've had stronger than expected January, February, and everyone was a little bit wrong-footed when you had some maybe it's weather, maybe it's just hangover from a strong fourth quarter consumer. It's looking a little tougher. But then you get

You know, the two-year back below 4.2, you're pricing in some more cuts. So the market has a way of playing defense for a while and trying to heal itself that way. Unless, you know, does NVIDIA give you the catalyst to play some offense again? And then does PCE give you all the reasons to back that up?

Right. So that lurks out there. I doubt you want to get super negative on semis after what they've done into NVIDIA. I have to imagine that we're never going to get back to the leash being as long on the AI infrastructure theme as it was last year. That doesn't mean it's over. It just means everyone kind of assumes there's going to be an overbuild at some point. We just don't know where it is. All right. I'll see you on Closing Bell.

A couple hours from now, that's Mike Santoli. Up straight ahead, CNBC Pro did a screener on the most overbought and oversold stocks in this market. We're going to reveal some of the names next.

Still have a move to get to that we didn't have a chance to do yet, so we'll do it now. You trimmed Uber, which has been a pretty hot debate within this market over the last month. Yeah, and there's no mystery here. The reason I did it is that I have a really good gain in a very short time on it. I also think there's some hype in the stock.

from a recent tweet by a well-known hedge fund manager. I still like it. I still think it's going to do well. I just thought it was prudent to cut it back to the position size when I entered it. I mean, it's not lost on me at all, right? Trimmed, no buys today. You trimmed Vertiv, Meta, Uber, Bitcoin.

exporting goods. Yeah. You're just trying to go across the portfolio and lighten up where you can? Yeah, look, you know, there's no excuse for this at all, but, you know,

Last week really caused me to pay attention and not be so complacent with the portfolio. I was aware I had what I had to do, but look, you tend to get, when things are going up and everything going your way, you tend to let things ride for a little longer than they should. And I did that with Meta.

But again, Meta is still perhaps my largest position. I just got to check, see where everything is. And the others, it was right-sizing the position. That's just what it is, portfolio management. In a cautious album. I got you. I mentioned CNBC Pro did a screen on the most overbought and oversold stocks within the market. On the most oversold list, interesting to us is Decker's.

Those all on that list, on the most oversold, they have an RSI below 30, which suggests oversold.

25.5 is Decker's. So let's take that one first, because this is a classic example of how you cannot assign automatically a high valuation to a momentum name. Decker's trades at a reasonable valuation in the mid-20s. Decker's made a 52-week high on January 30th. It is now approaching a 52-week low. It has had a dramatic reversal. It was overwhelmingly owned by

by all of the momentum, non-discretionary funds. They're all discarding it right now as it breaks below all of the moving averages, most recently the 200-day. Weiss, UnitedHealth Group is on the list. 27.8 is the RSI, again below 30, suggesting oversold.

I believe it's oversold. I also think that this is going to take a long time. This being the case that was brought against him on Friday, it's going to take a long term to play out. And frankly, as we've seen with some of the crypto cases that were brought, you know, it's not unlikely for this to be resolved without any action taken.

Welltower is on the most overbought list at the tops of it, in fact, 76.5, an RSI above 70, suggesting overbought. Is this overbought in your mind? Yes, it is. Healthcare REIT, we own it, had very nice price appreciation, but it is in overbought territory. All right, look at this.

I think it's a really good exercise to do right now because when you look at the S&P 500, it's not overbought, it's not oversold, but there's so many stocks underneath the surface. What I will say is that you can't just look at RSI and make a trade based on that. You have to look at technicals, which is the RSI. You have to look at positioning. And most importantly, you have to look at the catalyst. Is there something to unlock that value? So if you have all three, then I think those stocks are a buy. All right. Check out the full list, by the way, of overbought and oversold names at CNBC.com.

slash pro. We're back with the setup and final trades. So a quick setup, Joe. Diamondback, that reports today after the bell. Working off some difficult comps, revenue growth should be strong. CEO transition is in place, and they just acquired about $4 billion of very valuable Permian assets. Okay. Of course, before that, we do have the closing bell at 3 o'clock Eastern, and I hope you'll join me with Lauren Goodwin, Matthew Boss, Doug Clinton, and Alicia Levine.

3 o'clock Eastern time for Closing Bell. Weiss, what is your final trade? K-Web. Look, I think that what hit the stock today was Trump's new order.

It's got nothing to do with these companies that operate internally in China, I don't believe. So it's a good opportunity. Well, these stocks have been on the run of late, that's for sure. Anastasia, great having you. Good to see you. Data centers, there's been some nervousness about the CapEx numbers, but vacancies are super low at 2.8%. So I'm a buyer on the dip. Okay. And Joe T? The low-hanging fruit continues to be the insurance companies. We all know the reason why is we pay those premiums. Progressive Corp.

One name you could own. Two and a half percent up. All right. Decent move here in the market. We'll see what the last hour brings. I'll see you then. The exchange is 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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