Trading the Trump Selloff 4/4/25
56:00 Share

Your best hotel in Bethesda has every guest raving. How do you make every hotel like your best hotel? Your best plant in Atlanta employs 4,500 people. How do you get 4,500 people working at peak efficiency? Your best data center in Redmond is optimized every drop of water. How do you make every data center the pinnacle of sustainability? The answer is Ecolab. Ecolab, bringing out the best in your business.

As America's leading business lender, Bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn more at bankofamerica.com slash localbusiness. Bank of America, official bank of FIFA Club World Cup 2025. Copyright 2025 Bank of America Corporation. All rights reserved.

I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.

You're listening to Halftime Report In Progress. Well, yes, I mean, I know they're contemplating and we don't comment on fiscal policy, but what I read is that they're contemplating, you know, making the Tax Cuts and Jobs Act cuts permanent and also perhaps some other things as well. We wouldn't be, we have a sort of a placeholder for that too, but that's really not ours to comment on. But that's what I was talking about. Yes. Yes.

So I have a question from a friend in Milwaukee who said she has clients that have deals ready to go. Businesses that are ready to launch from their garage to a private equity deal. And they're just stuck in their garage right now.

How long do you think, what do you think the impact of the uncertainty these days will have on the private equity deals? So again, we're hearing a lot of that. People are just, they're just kind of waiting for clarity, waiting for clarity. And I can't tell you when that will pass, but ultimately it will pass. We know that

you know, at a certain point we'll know enough to know what the new, the uncertainty will decline and we'll be able to see, you know, with real clarity what the policies are and what their effects are. So, but you're right, we hear the same thing from businesses and just from people that they're kind of waiting and seeing. There's a lot of waiting and seeing going on, including by us, and that just seems like the right thing to do at a time of elevated uncertainty.

What economic indicators are you watching right now? Very famously, you look at the CPE and

obviously the CPI and things like that, but are there any economic indicators in this moment, in these circumstances that you are watching, focused on, interested in? - Sure. So the basic two big data pools are the data around prices and around employment. And we get, in the employment area, we get just really, and that's an area where we actually get pretty good data, although the survey response rates have been lower. Nonetheless, we get a lot of different data, and it's not just unemployment.

It's unemployment, it's participation, it's by age group and things like that. It's wages, it's many, many different things.

It's jobs, it's quits, all the job creation quits, openings, all those things. So that's one thing. On inflation, we do, we target PCE, personal consumption expenditure inflation, not CPI. And the two are broadly, they move in, they move together, but 25 years ago, the Fed switched to PCE. The public looks at CPI. It's kind of a little bit of a thing, but because we think, you know,

it's really just a better way to capture the inflation, the cost pressures that households and businesses feel. We think it's a better measure. And that's what we look at. But they're not that different. I mean, they're just, they look at different measures. Ultimately, they're pretty close together. Those things. You know, on growth, you look at what's happening with consumer spending. The economy is overwhelmingly driven by spend, by consumer spending. So you look at

How are consumer surveys? How are they feeling? How are they spending? Sometimes the surveys are very negative, but they keep spending. That happens. That's been happening really for a while. People spent right through the pandemic and they spent right through this time of higher inflation. They kept spending and forecasters kept thinking, like us, kept thinking that consumption would slow down. That's a really critical thing. After that, business investment is a big chunk. And you look at that and that is also susceptible to

sentiment. You know, businesses, if they don't know what to do, they're not going to do an acquisition or they're going to hold off on building a factory or a plant or hiring people and things like that. So we look at, I mean, I could go on for a long time. We look at a lot of data and we try to make sense. We also talk to people who are in the real economy. You know, I grew, my career was mostly in the private sector

talking to people who ran businesses. And for me, the story doesn't come together until I actually hear from people who are in the economy doing things and what they're feeling and seeing. And then it sort of fits together better. Is this like via the Beige Book or...?

The Beige Book, thank you for mentioning the Beige Book. And I hope you read it. I love the Beige Book. See, that's great. Everyone should read the Beige Book. The Beige Book comes out sort of mid-FOMC cycle. And it's all the 12 Reserve Banks and all of their incredible contacts, what they're saying about what's going on in the economy.

So if you want to know, you can look at the national data, but if you want to know what's going on in regions and at different industries, you look at the Beige Book. So it's really a critical, critical thing. And actually, the Reserve Bank system that we have is an enormous strength of the Federal Reserve System. We have these 12 Reserve Banks with their own economics departments and own participants on the FOMC. So that's a great thing to look at. I'd like to ask you about another body of work that

many of us know that you're familiar with, and that's the Grateful Dead. So, question for you, sir. American Beauty or Terrapin Station? American Beauty. That was not even a pause. That was too fast. That's my era. That's my era. Working Man's Dead or Europe 72? Both. Both. We're in the same era here. For me, it's late 60s to mid 70s. Touch of gray. What do you think?

It was their only hit, but it's a good song. OK. Finally, there's-- Are we going to do this? I feel like you're speaking another language. There's a well-known Grateful Dead bootlegger who, with, I believe, the permission of the band, Dix Picks, who's put out--

So what's your recommendation of those hundreds of Dick's picks? I don't have any Dick's picks. Like I said, my real interest was late '60s to mid '70s. And I saw them a bunch of times. And I know every note on every song from that era. But since then, I've been busy, actually. Well, we thank you for taking time out of your schedule to join us here. And we appreciate your work. Thank you very much. Thanks, everybody.

All right. I welcome all of you to the Halftime Report. Good afternoon. I'm Scott Wapner here, obviously, at the New York Stock Exchange, just listening to the Fed chair there in Arlington, Virginia, reacting to those Trump tariffs, just like the markets are.

Chair Powell saying the economy is still in a good place. Uncertainty is high and downside risks have risen. Too soon to say what the appropriate path of policy will be. That inflation is likely to rise because of the tariffs, but it is possible that the impact from those tariffs could only be temporary and that he thinks they are well positioned to wait for further clarity. Our senior economics reporter Steve Leisman, of course, watching and listening to all of that.

What was your takeaway from a Fed chair, Steve, who seems to me to be content still to wait and see how all of this transpires? Well, look, he was dovish if you were worried about a rate hike immediately. That's not happening. But I think he was more hawkish in two ways. The first is the market is pricing in and waiting for rate cuts.

When he says inflation will be around for quarters from the tariffs, that tells you he needs to wait a little bit to see if it's temporary. But then the most important thing, I thought, was his really affirmative statement that he is not going to allow temporary inflation from tariffs to become permanent. And that really is a sort of something he did not say at the last press conference or didn't say as explicitly at the last press conference. So

I don't know if we have that sound available or not, Scott, if you want to hear it, but I thought that was the most important thing that he said, was that he's not going to let— that means it's going to take some time for the Fed to figure out which way to go here. So the market, very aggressive. What am I looking at here? I'll give you a current quote.

33% on May. It had been 48. That came down. Notice gold also came down. That's another sign that the market saw him as hawkish. And now you've got July 94% for that second cut. And then for the fifth cut, we had baked it in. Now just 37%. Look, the market got a lot more dovish in its outlook for the Fed. But that took a step back because of what Powell said here today. He just doesn't seem at the current time to be in any way flustered by any of this yet.

And he certainly doesn't seem to be moved in any way by what the president posted on social media

earlier this morning where he said this would be a, quote, perfect time for Fed Chairman Jerome Powell to cut interest rates. He is always, quote, unquote, late, but he could now change his image and quickly. Energy prices are down. Interest rates are down. Inflation is down. Even eggs are down. Jobs are up all within two months. A big win for America. Cut interest rates, Jerome, and stop playing politics. Steve?

I think it's fascinating when I look at that tweet there, I guess that's what we still call it or an X or whatever it is. It was 1108, just moments before he came on. I would love to know if his aide showed him that tweet before he came on. My guess is that Fed Chair Jerome Powell smiled broadly.

and is basically ignoring it. I do not think Powell will be moved by President Trump and what he's saying. I do not think Powell can move and cut rates now, not with this inflationary impulse coming down the pike from these tariffs that could end up being temporary, but ultimately have the danger. And that's one thing he talked about in this speech today, Scott, the danger that there could be a more persistent or ongoing inflationary impact.

from the tariffs. Here's what I'll guarantee you. At the end of the day, when Powell's term is up, we'll be talking about him having acted more like Paul Volcker than Arthur Burns, who is the one who accommodated the inflation of the 70s. I'm sure of that.

also reiterating did the chair that he intends to serve out his term no matter what happens in the rhetoric between him and the president. But we'll see. But Scott, you have to have, I hope you have a conversation. To what extent around the table there

is the old idea of the Fed to the rescue. Should the Fed come to the rescue? Can it come to the rescue? If it came to the rescue, how much would it matter? Those are the three questions I'm asking myself and trying to wonder when it can, if it can, should it, and will it matter? Well, that's why we're happy to have you to kick off our show.

Because you've given us something to talk about here on the desk. Steve, thank you. Our senior economics correspondent, Steve Leisman, reacting to the chair with us for the hour today. Steve Weiss, Jim Labenthal, Jason Snipe, Bryn Talkington. Steve, I would turn to you. I think beyond where a Fed put might be to play off of what Steve was talking about, I think the greater conversation within the market universe is where's the Trump put?

at this particular time if things continue to deteriorate. The president doesn't seem to be very moved by any of this to this point. Pulling into his golf club down in Florida earlier today while the markets are going down, saying that his policies will never change earlier as well.

You can take from that whatever you will, but how would you react as a market participant who's watching stocks plunge yet again today? Well, here's how I reacted. So I have no market exposure at this point at all. I'm completely hedged out, so market goes up.

I don't make money, market goes down. I don't lose money, as you know, since he was elected. And I always looked side-eyed at this when I said very clearly that Trump will not be good for markets, will not be good for the economy. That's in fact turned out to be true. So the way I describe this is that the U.S. has gone from hunter to prey. And despite him being the great negotiator,

which nobody's ever able to point out where he's been a great negotiator. I could point to his purchase setting an all-time high record for a hotel at $400 million, only to turn around and sell it at a loss of $325 million, only for those buyers to turn around and sell it for $600 million, as evidence that he's not. So what I mean by we've gone from hunter to prey is that he underestimated

what his adversaries, which he views as adversaries, I view as trading partners, can do. So they've got their own constituencies. So they cannot be viewed like a weak-kneed law firm as kowtowing to the president because their hell, their referendum is by their people. So look, I think we've got real risks here. I think the market right now, the average 25-year multiple is under 17 times. We

We have only begun to see, led by David Koston, a decline in earnings. If you put a 17 multiple on his, I think he's at about 240. No, he's at 280 for next year. He's down to 269 for next year. I'm talking next year, obviously. This year almost seems like. Well, this year, we're still early this year. And there's so much that could happen. And typically, you would look at another year. But this is not a typical year in terms of the events that happen on a day-to-day basis.

that have to really inform your view rather than, as Jim is likely to point out, and he's a good investor, that the jobs number was strong. That's historic. It doesn't include the cuts. It doesn't include the cuts we're going to see from corporations.

So the bottom line is, I think that next stop could very well be $4,500. It could go lower. Right now, we're still trading near 20 times on a forward 12 basis. You trade at those extended multiples, and they are historically extended. When you have an accommodative interest rate policy, when you have clear strategies and an economy that is still moving forward, here you've got the opposite situation.

Stagnation remains the most important word. And to Steve's points, and Steve is must-see TV because he's one of the best thinkers on the network, present company excluded. Thank you. Those are the questions. No offense taken. The Fed can't do anything. There is no Trump put. Trump's not going to back away. And if he does, it's not good either. It just breeds the uncertainty.

So bottom line is, I'd rather miss 10% up than catch another 10% down, because this is when you protect capital, not when you make bets, because you think that's what your clients want you to do. Tony Pasquarello's call of a week ago seems so prescient in terms of preservation of capital, right? The game has changed. I'm paraphrasing from his note that he put out last week.

or maybe it was at the beginning of this week, I don't remember, but the point was clear. Preservation of capital, the game has changed. A game in which Jim, RBC's Lori Calvacina has now cut her S&P target for the second time.

She's at 55.50 for the year. UBS joins the parade of firms that have downgraded U.S. equities. They cut their price target as well for the second time. They're at 58.00. JPMorgan talks today about there will be blood.

The odds of a global recession this year to 60%. Mohamed El-Erian, uncomfortably high. The risks of recession. Jeremy Siegel, biggest policy mistake in 95 years. Ed Yardeni, I pointed out earlier this week, you lose him, you lost it. Because he's, you know, he's just bullish.

Getting harder to be optimistic, he said. When you lose the editorial board of The Wall Street Journal, they've been critical of tariff policy from the outset. Quote, Mr. Trump is acting with little understanding about the damage his tariffs will cause. The quote unquote disturbance might not be as little as he imagines. The FT says it's America's astonishing act of self-harm.

What do you do with all that? What do you do? I think what you do is you ask the question, what is the market pricing in at this point in time? Clearly, the risks have risen extraordinarily. My take, and this is very subjective, is that today's actions combined with yesterday's action is the market's way of embracing all of

the negative and not even the slightest possibility that this could work. What is this that I refer to? This is the new economic ideology. It's very clear what it is. I don't care whether you agree with it or not. The ideology is we're going to replace income and corporate taxes with tariffs, and we're going to do that in the context of a smaller government. I have no idea if that will work or not, nor does anyone else. That's the bad news.

The good news is we're going to find out. We're going to find out pretty quickly. As far as the Trump put goes, and I'm in agreement with you on this, Steve, I would not want to see the Trump put in play because America wants to right now know what the rules of the road are and go forward with them. I was at a client dinner last night with 25 clients, many of whom were business owners, and most of them were talking about, oh,

Okay, if these are the rules of the road, then let me adjust to it. Let me adjust production where it needs to be. Let me control costs where I can and move forward. That is American ingenuity. That is American drive. That is ingenuity and drive that far surpasses ingenuity and drive anywhere else in the world. It is what has always come to the rescue in moments like this. It may take time.

It may take time. I'm not saying that today is the bottom, but I will say that down 15% in the S&P 500 is not a point at which I want to sell. There are some things, Bryn, that investors are going to look at and say, you know, it's so bad, it's got to be good or close to it at this point. I point out your move today in Nike, down 15% this week, right in the crosshairs of tariffs related to China. And you bought it.

You bought the stock. Why? Why now? Really more Vietnam. I bought it yesterday. And really, it's in relation to Vietnam. And so I think that whoever made that board that Trump had out should be fired with the math. Vietnam does not have a 90% tariff. It's absurd. They have a 5% tariff. And so...

What we have to decide as a country is what do we actually want to manufacture here and what do we actually want to manufacture in great countries like Vietnam? Nike, Restoration Hardware, Wayfair all moved much of their manufacturing out of China during Trump's first presidency into Vietnam. Vietnam is happy to make these...

Nike pays these people probably like $5,000 or $6,000 a year. They're happy to make them. And we do not want to export those jobs. My sense is there is going to be a reckoning

between the U.S. and Vietnam. And actually, I think 20 minutes ago, Trump posted on his True Social that he just had a conversation with the general secretary of Vietnam, and they want to bring down their tariffs, which, once again, are 5%, not 90%. And so, to me, it's like a beaten-up name. I just think it's overdone. I think the stock could trade back up to $6.

$70 pretty quickly because we do not want to import these types of manufacturing to America. No Americans want those jobs. So to me, it was a trade. I think it's a fat pitch. I think Wayfair, Restoration Hardware, I think you're going to get some reprieve from these types of American companies doing the right thing. You got anything, Jason, on your list in the spirit of what Bryn is doing and looking at in the market? What do you think?

Yeah, so I mean, there's a couple of things for me. As it relates to retail, obviously, you look at the RH blowout yesterday. I mean, the stock's down almost 40% in the last two days. You know, in American Wayfair, there's a number of names that I think have gotten really punched in the mouth. For me, I think about Apple.

Right. 90 percent of Apple's assembly and supply chains are in China. The stock was down almost 10 percent yesterday. It's down a lot today. Below 200 bucks. Below 200. It's felt a lot of pain. We came into this year talking about the blunders in AI. And that was the concern. That was the weight on the stock. Then we start to look at the multiple and then we look at the earnings growth.

And obviously they've been moving their supply chains to India. They've been trying to figure out other things. But when I think about companies like that, they're the greatest companies in the world that sell premium products and continue to monetize their services business. I think that this move is somewhat overblown. And those are the types of names that we'd like to take. I mean, the MagSavvy collectively yesterday lost $1 trillion in market cap. To Jason's point,

A lot of these stocks have gotten obliterated off of their 52-week highs.

Out of the Mag 7, if you include Tesla, which is the worst by far, down 50% off its high, but Nvidia is 37%, Meta is now 31% off of its high, Alphabet 28%, Amazon 27%, Apple is 25% off of its high. Its market cap is now once again below $3 trillion. You do not think that these tech stocks have corrected enough

You told us before the show that you short the Q's, which one could surmise you think that this trade has a lot lower to go, potentially. So I am short the Q's, and I'm short the Q's as a hedge against my long exposure in meta, my long exposure in some of the other trades.

I did sell NVIDIA, I did sell Vertiv, and I did sell Schneider Electric because, you know, economies are going down, and they're for a robust economy. NVIDIA and Vertiv, which I just got back into, were small positions, and they were more trading positions. So I got stopped out of them at losses, of course.

The stocks traded down through their stops overnight. And I remember Gerstner telling us yesterday, right? Well, Timeter saying that, you know, I was a buyer. I'm a buyer of NVIDIA yesterday as this stock has gotten crushed in its own right. Down 30% year to date. It's traded horribly, as all of you know. Broke below $100. It's at $94.19 as we speak. You're just not moved by those declines enough to...

to buy an ad to an Nvidia rather than selling out of it? No, because the narrative that I have is that we're going to recession. Trump will definitely be moralized for the only world leader to put the entire world into a global recession. And that is my concern. I think that's a more likely reality than anything else. In terms of Apple, you know, we've got to...

And this is with a lot of stocks. And again, you're also a great investor. I've known you for a while. I know that you think about things very clearly and make decisions for the long term. Here's how I look at it. We're in such a unique period of time. And I said this the other day when people were saying, oh,

This is going to be a by-the-news event. But this is not a by-the-news event. It wasn't because it wasn't a single instance. Like the financial crisis, we knew a massive injection of liquidity could cure that. We knew that, like Brexit, that that was a one event and they would be just—you knew what the clarity was. We didn't know in the depths of the financial crisis, however, that a—

bazooka times a thousand's worth of liquidity was going to come into the market, which goes to the question I've asked people this week. In these types of times, over the last two days, how much the market is down, it's the worst time in your head to buy. You have to get beyond that if you're a longer-term investor and think that better things are coming down the road.

The chances of you timing it perfectly are minuscule, but that's not what the game's about. You can't time it perfectly. No. Market's down a lot in the last couple of days. Right. And just to be clear, I was not predicting the bazooka. You know, what I was saying, there are market-clearing events like the bazooka that would be all clear. We have nothing here because of the mass uncertainty that's going to be ongoing. So, yes, so you think about these times and reflexively, okay, wow, the market's down.

You know, down big. I should buy it because I know in a year or two we'll finish, Jim. But you could have made that case over the last month virtually any day, and look where you are. Any sale you've made to this day has been a great sale. And my view is that any sale you make now is still going to be a good sale because the market is overvalued on any historical measure without taking into account that

Contrary to what you said at your meeting is that there are no rules of the road that have yet been defined because those rules, in fact, there's no road because it changes every day. You made the position very clear. I'm going to take the other side somewhat surprisingly, right? Look, every time we have a big market downturn, the reason is always different and it's always

always unprecedented. You talk about COVID-19. Scott, you mentioned the great financial crisis. And honestly, the sentiment, the emails that were coming in to me yesterday, the calls I was getting were frankly reminiscent of the fall of 2008. It's always unprecedented. But Scott, what you were referring to about the timing is something that I have said time and time again. I've said it on the show. I've said it to clients repeatedly. And I'm going to give you some stats right now.

The 50 best days, which you know, if you miss the best days, you cut your returns dramatically. And they tend to come on the heels of absolutely terrible period of times. So the 50 best days since 1975, so over the last 50 years, are preceded by an average downturn in the month preceding of 6.7%. An average downturn in the two-month preceding, 10.2%.

It's tautological. It is a historical truth. And those people who will say, "Well, this time is different,"

It's always different. I've been doing this. I've been investing for 45 years. OK, it is always unprecedented. It is always different. But what's not different are the figures that I just told you. And it's so hard to buy back in at times like these. That's why I don't try to sell out in time. Well, Bryn, you bought more of the J.P.Q. Speaking of these big names in the market that gotten have gotten crushed. I know you wanted to take part in what we were just discussing. What's your point?

Yeah, well, so JEPQ is just the QQQs. So whereas Steve would go short, you know, to hedge his technology exposure, I think JEPQ sells—well, I don't think. It does sell calls against the Qs. So the premium's going up. These are great companies. Again, we don't know the E right now, and so that's where the P is coming under question. But I think that, to Jim's point, don't forget, we don't have an autocracy here, OK? Trump just can't do what he wants.

the Republican Congress has been incredibly quiet. I promise you, they do not want to be one-term Congress people. And so as they go back home to their constituents, to small and medium-sized business owners who actually take advantage of the global supply chains, I think level heads will prevail. And so I think if we were under a Xi Jinping regime, yes, you could say this narrative is negative, we're going into recession, but we are not. And I think Trump

ultimately has these growth policies. We have a Congress, don't forget. And I think they are very, very quickly going to change the narrative or they will just get crushed in the midterms, which I get is not until November. And so I do think this is an opportunity because whereas COVID March of 2020 and 9-11 Scott, those were exogenous events where none of us, there was no playbook here. This is a self-inflicted wound.

100%. And so at this point, I think that you have to think level heads will prevail. I totally get Steve's point. He did make a lot of good points. But I think that this is an opportunity to start nibbling here and stepping in because we are not going to go into this global recession that he's going to torpedo in order to refinance rates 100, 200 basis points lower. I just don't buy into that. OK. I mean, it remains to be seen. And we're not going to know the answer to that question for many months.

Speaking of things that are down a lot, you play off the tech names that I mentioned to you. The chips are down a bunch. Lam, Plaid, KLA Tencore, Broadcom, Micron, Taiwan Semi. What do we do with some of these names? You've got chip exposure, obviously. Yeah, yeah. I think for me, you know, take...

Taking the longer view, right, and thinking about NVIDIA, obviously, which is our largest semiconductor exposure, and look at the 30% drawdown we've obviously had throughout this year. You know, expert controls was obviously a concern coming into this year. You know, that has been, at least for now, you know, semiconductors and big pharma has been excluded from the tariff discussion. There will be something that will happen there.

But when I get past the carnage and everything that's going on and I see through the forest, I still like NVIDIA. I still like the fundamental tailwinds that are there. I still like the AI story. I still like them as the beltway on infrastructure for all that will happen in this space. And I perceive this as a longer-term opportunity, even if you need to average down for the next few quarters or few months. Just to update.

DATE JOHN WHERE EVERYTHING STANDS AT THE MOMENT WE HAVE A NASDAQ THAT IS DOWN BY NEARLY 5 PERCENT

today, down more than 9% on the week. It's really been the epicenter of a lot of the selling. I should also point out to you that the VIX is above 40. That's a 35% jump today. And the Dow Jones Industrial Average is down by about 1,600. I do have some breaking news. I want to get to Steve Kovach with that. Steve?

Hey, Scott, I'm here at Microsoft's headquarters in Redmond, Washington. This is their 50th anniversary party, and part of this whole event is some new features for Copilot. That's, of course, the app that they use, the chatbot AI app they use to compete against ChatGPT and DeepSeek and so many others. Two big features here to talk about. One is memory. This app can now remember a lot of personal details about you and use that in its answers to come back.

at you with. And another one is actions. This is actually kind of the hottest area in artificial intelligence right now, this idea that agents can act on your behalf. And we have Microsoft partnering with a bunch of different partners here that will work with Copilot now so it can take actions on your behalf. 1-800-Flowers, Booking.com, OpenTable,

companies like that. So the idea here is Copilot can go out there and order your mom flowers for Mother's Day, for example. I will note, though, that a lot of these features might sound old to people who have been tracking all these AI features. That's because it's largely reliant on OpenAI's technology. Some of these features were announced months ago by OpenAI to put in their own ChatGPT app. Microsoft, of course, has to wait for that to come out, put a little bit of their own AI flavor on top

of it and then make it happen. At the same time, Microsoft is still ahead of some of the others. That includes Apple, which remember, they tried to have that

that personal Siri assistant that does much of what Microsoft is launching today, Scott. And Microsoft is ahead there, of course. Amazon had Alexa Plus, which is supposed to have rolled out last month. It seems to be a little stumbling out of the gate there. But look, this is a big launch for Microsoft on its 50th anniversary. And we're going to keep the coverage going because over in Power Lunch, we have our own Andrew Ross Torkin. He's going to be speaking with Microsoft

CEO Satya Nadella. You're not going to want to miss that at 2:30 PM Eastern about this 50th anniversary. I'm sure they'll get into tariffs and so forth. And I'm going to be speaking with Microsoft CEO for Artificial Intelligence, that's Mustafa Suleiman on closing about overtime. That'll be around 4:10 PM Eastern about all these new co-pilot features, competition with OpenAI and so much more, Scott.

All right, Steve, good stuff. We'll look forward to all of that from you guys. That's Steve Kovach out there, as you see. With a lot of ownership of Microsoft, there's some thought that they were sort of first in, first out. The stock has not traded well, but it's traded better.

more recently than some of the others. It has. How would you view this? I mean, whether the 50th anniversary or these advancements related to AI and Copilot move you in any way? Yeah, so I think, you know, as it relates to Copilot, obviously the story has been how have they been able to monetize Copilot, which obviously hasn't happened year to date. I think these new advancements as it relates to Copilot, I think is a positive thing.

And then broadly speaking, when I think about Microsoft, I just think about their product, their suite of products are aimed for efficiency. And they're the perfect set of products for me in this type of cycle when folks and companies and small business enterprises are trying to figure out potentially how they need to cut costs. This is a company that they can turn to.

Okay. Thank you for that. We'll take a quick break. Josh Brown joins us on the other side. If you recall yesterday on the program, he looked at the market sell-off and the steep one that it was and had a lot of things on his mind about what you could buy, what he was thinking about. He's made some moves, more than one. He'll tell you them next.

How will you shape the future of industrials with confidence? Whether you need to define your strategy, optimize your supply chain, or keep pace with data-driven manufacturing, EY professionals understand industrials and the sectors they supply, bringing the insights that deliver real outcomes. With a full spectrum of services, EY helps strengthen your business from factory floor to product development and beyond. So when the global market shifts, your business is agile enough to adapt. EY.

Hello, I'm Ben Rizzuto, Wealth Strategist at Janus Henderson Investors. Is a brighter future possible? At Janus Henderson, we think it is. We've worked to help clients achieve superior financial outcomes and fulfill our purpose of investing in a brighter future together.

We never forget that this means our thinking and our investments are helping to shape millions of futures. At Janice Henderson, we're committed to helping you invest in a brighter future. To learn more, go to JaniceHenderson.com. As a salesperson, the search for the right buyer or buying groups can feel like you're endlessly sifting through leads and hoping they're ready to buy. Thankfully, LinkedIn Sales Navigator is more than just a tool. It's your strategic sales partner. LinkedIn Sales Navigator is a sales intelligence platform that helps professionals affect

and get right to the right conversations.

We're back with more breaking news. Our Becky Quick joins us now on the phone. Bex, what do we know?

Hey, Scott, just wanted to let everyone know that Berkshire Hathaway is now responding to a post that was reposted, a video that was reposted on Truth Social by Donald Trump this morning. The president put out or reposted a post that was originally posted on X yesterday by a user named American Papa Bear.

out a video saying that Trump is playing chess while everyone else is playing checkers, saying that President Trump is intentionally crashing the stock market because he wants to see lower interest rates and many other things that he thinks will come, benefits that would come from that. As part of that video, it included some video of Warren Buffett with the proclamation that Warren Buffett was saying that Trump was making the best economic moves he's seen in the last 50 years.

Berkshire Hathaway responding to that this morning, saying that reports that are currently circulating on social media, including Instagram, TikTok, Twitter, all such reports are false. It was a very brief statement from Berkshire, but I have just spoken with Warren Buffett.

He says the reason that he is putting this out is he wants to make sure that in an age where misinformation can be blasted around instantaneously, that they are very alert and critical in making sure they're knocking down misinformation. He says that he's not talking to anybody about anything related to the markets, the economy, or tariffs, and that he will not be doing that between now and the annual meeting for Berkshire Hathaway, which takes place on Saturday, May 3rd.

on saturday may third eight thirty a m they will hold that annual meeting that typically draws forty more forty five thousand people maybe even more lots of people who will be watching will be broadcasting and not only on c_n_b_c_ but on c_n_b_c_ dot com but he will be taking questions from shareholders at that point but he wants to make it very clear that anything you see uh... purporting on social media coming from warren buffett about the market that the economy about what's happening with care

is not from him he will not be making any commentary on that between now and the annual meeting on saturday may third let me just follow up with you if i could becky because nobody knows this man uh... and his investing prowess over the last decade at least as as you uh... it seems clear to me that they have maneuvered their way

through these choppy markets better than most. They're up 11% is Berkshire year to date. A lot has been made of the fact that they've been sitting on a mountain of cash. And when the markets were at the highs, they couldn't find really anything that looked attractive enough to them because of the fact that so many things were at high levels. They had taken down some of their positions in bank

Bank of America and Apple, for example. I'm just wondering from your own insight what you take away from the fact that they have been able and he has, which is why he is the oracle to begin with and the greatest investor who's ever lived, to maneuver their way through times of turbulence and what you think it all says about what is happening at Berkshire Hathaway now.

Well, look, he has done this in the past, said that he's going to be very patient, look for the slow pitches. He doesn't mind doing nothing for years at a time if that's what it takes. And that's certainly what it seems like recently. He'll say that he won't

be able to time the market, that that's not his game. But he knows when stocks look expensive, and he knows when things look like bargains. And my read on this, at least, of the $330

billion dollars that they've amassed, sitting around $300-plus billion, is that, yeah, they're waiting for the slow pitch, ready to be doing things. And when you start to see activity like we've seen, where stock markets start to drop with the S&P down 12% or 12.25% as of yesterday's close, then add on the losses from today, sure, I would imagine that things start to look better at those prices. But it's just not going to be somebody who

overpays in his estimation for anything. He's not desperate to do things and will be there when he thinks the prices are right. We'll see what clarity we get out of the annual meeting, which is coming up, as you said. Thanks so much for coming on with that insight, Becky. Appreciate that.

Thanks, Scott. All right. Josh Brown joins us now. By the way, I'll just get a comment from you, too, Josh. We're going to get to your moves in a moment. But you are a shareholder in Berkshire Hathaway and you have such deep knowledge as well about how they operate and, you know, what he must be thinking at the current time watching this kind of destruction that we've had over the last couple of days in this market.

I would just say that whatever people are betting he would do is probably not what's going to happen. He has a tendency of surprising the market of late. He's not doing obvious things like adding to existing holdings. The last major thing that we saw him do was acquire stakes in five Japanese trading firms, and that was so far off everyone's radar.

uh... i think he's up fifty percent on that back it so it was a great move it just it didn't make the playbook of even though it was the most ardent brookshire watchers so

don't play the game of thinking that you're going to think of what Warren Buffett might be thinking of because you'll probably be disappointed. Yeah, well, as I said, maybe we'll get some clarity on his direct thinking at the annual meeting. Let's get to you because yesterday you went through the market and you saw a lot of things that were up.

in a down day. You tried to think of things that might be able to work in this kind of disruptive environment. You bought Rocket Companies, RKT. Let's start there. Tell me more. Yeah, I bought in the pre-market as soon as I was watching Squawk and heard Steve Leisman come out with the new market-based projections of how many weight cuts we might get this year.

the number of the the probability of five rate cuts is now according to people in the bond market on the table and i don't know if that's going to be the reality and uh... you know we with so early in the year uh... still in so much could happen but just thinking about dot the next the next level is like i will

who benefits the most if we were to see five Fed rate cuts, or even directionally if we got three or four? And the answer is obvious. You're going to get a refi boom. You're

you're going to get action in the existing home sales market. And you're going to see people take advantage of that, especially if they're struggling in the economy. That's exactly when you would get a refi boom. Happens every time. So Rocket is uniquely positioned.

and they're very they're they're very aggressively position themselves on for for what could be they've announced two acquisitions in the last month one of them by the other day is mr cooper which is the are one of the largest mortgage servicing companies in the country and the other is redfin

which gets 5.5 million unique users on the website. It's a business of selling leads to realtors, but also that's a huge funnel for Rocket to sell mortgages to the consumer through. So this is the type of company that benefits if mortgage rates come down.

meaningfully and we get a refi boom and we break that log jam of all of these homes not on the market that need to be so that seemed really obvious to me i'm upping it right off the bat and i'm planning to stick with it you've added as well to amazon uber and chevron give us a little insight

These are core positions. These aren't short-term trades. I think of all three of these companies as being companies that will be standing at the end of the trade war.

uh... i don't know that this is the bottom for any of them but buying amazon of the thirty percent by drawdown seemed like a smart decision if you're planning to be a long-term shareholder chevron the lower it goes the higher the dividend goes and i don't believe we're going to be the level of demand destruction for uh... for gasoline

that the current pricing improved uh... would reflect that it's an overreaction we've seen the price of oil go to negative numbers so we know you can get overreaction in commodities so i i thought that was a layup the stocks that hammered over the last couple of days uh... and then over i think the truck for the hundred bucks right now so when they take it down from seventy five to sixty five i have to do something

I got you. You spoke a lot yesterday as well about some exchanges. You singled out the CME group specifically, but that leads me to something you sold, which is NASDAQ, NDAQ.

Yeah, look, Matt, I have a small gain, and I've been in it for a long time. The original thesis was that 2025 would be the year we would see the return of the IPO and a lot more capital formation. And that's a really important part of their business. About half their business is listings. So they also have some fintech and other stuff they do. But the only way that stock works is if the capital markets are unfrozen and we get deal volume back.

obviously the events of the last couple of days, they have to change their mind about that. So I think NASDAQ's fine. Fantastic company. I may revisit. But right now is the greatest hits moment. You want the greatest hits in the set list. You don't want your ninth or tenth or eleventh best idea. You really want to be focused on things like

uh... long-term core holdings that have come down fifteen twenty percent where if you're going to be in any way you might as well have more stock and lower your your average price i want your your take to uh... i see the j_p_ morgan minister trading desk says that retail investors bought four point seven billion dollars worth of stocks on thursday the largest level over the past decade uh... so clearly there are others who see opportunity

And, you know, I've had people tell me, well, one of the reasons why you haven't had a greater flush in the market as bad as this has felt is because retail hasn't thrown in the towel yet. And in fact, there are retail investors out there who saw the upset yesterday and maybe today as well and say, like you, there's this opportunity to be had still.

I mean, I'm 48 years old. My time horizon is decades. So if I like a stock and I was comfortable owning it 15%, 20% higher, like, this is a no-brainer. And I can confirm this from multiple sides. I spent two hours yesterday with Steve Quirk, who is the chief brokerage officer at Robinhood.

uh... young people thirty million client their typical client is roughly thirty years old people in the accumulation phase of their life they should be buyers we have a business at at red hall it's called good advice where we cater to people with account sizes between two hundred fifty thousand and a million those people are asking about how they can get more money into their into their accounts

uh... we're not seeing the panic we are absolutely seeing implosion and people looking to take advantage of the dislocation that might not make sense for everyone and of course people that are already in retirement are probably not throwing as much money if they can into more stock exposure but the demography of this country is important to understand

The most common age to be in America right now, I think, is 30 and 31, meaning we have the most amount of people who are 30 and 31. They don't need to be tactical. They have the next 35 years to work and accumulate assets and make more money. Those people should be buying, and I'm pretty sure they are. I don't think that that cohort of the American investing public is looking at this like, oh, no, the world is coming to an end.

Yeah. Jimmy? Hey, Josh, it's Jimmy. I got a question. I think this is important. I love what you're saying about the young people. Are they getting the message that you're supposed to go to your best hits, as you just said it? I mean, that is so important. Quality is on. Everything's on sale. So why not buy quality? I hope they're not buying, you know, ZTE options. You know what I'm saying. Are you seeing them get the religion of buy quality?

I think one of the most interesting things that I've learned in the last day or so, and people at retail brokerages, not institutions, people at retail brokerages would confirm this. What's interesting is that in bull markets and when the tape is ripping higher, there is a much higher likelihood that retail players are buying individual stocks. When we're in a huge correction or a massive bear market, it's the opposite. They go to ETFs.

I don't know why that's the case. I just know that it is. And so, Jimmy, there might be a higher likelihood that somebody looking at the market down 3,000 points in the last 48 hours just says, you know what?

I don't know what to do here, but I'm pretty sure the Qs are offering an opportunity or SPY or maybe, you know, there's a tech ETF they like. So I think that is a version of going for quality because you have to assume the largest holdings in those ETFs are the highest quality companies in America. Josh, thanks. We'll see you next week. Good weekend to you.

I appreciate you coming on and telling us that. Courtney Reagan has the headlines for us. Hey, Court. Hi, Scott. What a day. Well, at the top of the hour, a federal judge is set to hear the case of the man the Trump administration admitted had accidentally sent to a notorious prison in El Salvador. In court filings earlier this week, the White House said Kilmar Abrego Garcia, a protected legal resident who has lived in Maryland since 2011, was sent to El Salvador in March because of, quote, an administrative error.

British police charged actor and comedian Russell Brand with rape and multiple counts of assault today. According to a statement, four different women have made a number of allegations dating back to a period between 1999 and 2005. Brand has previously denied allegations, saying that all his relationships have been consensual.

And Disney paused the making of another live-action princess movie as its Snow White remake flounders at the box office. The studio halted all pre-production work on the remake of 2010's Tangled. This is according to multiple reports. Snow White opened last month to a $43 million box office and then dropped by 66% to just $14 million in its second weekend. Scott, back over to you. All right, Court, appreciate that. Thank you. Courtney Reagan, much more on the sell-off and the setup next.

Let's say your small business has a problem. Like maybe one of your doggy daycare customers had an accident. You might say something like, Doggone it! Hi, Chihuahua! Holy schnauzers! But if you need someone who can actually help, just say, Like a good neighbor, State Farm is there! And get help filing a claim from your local State Farm agent. For your small business insurance needs, like a good neighbor, State Farm is there!

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.

All right, we are back. I have another move I want to get to. It's interesting to me, given what you just said to Josh, you're talking about, I hope they're buying quality. I hope they're buying quality. You've been telling me for weeks that a certain stock is quality, despite all the noise around it. That's UnitedHealth. And now I find out you sold it. Yeah, I thought actually you were going to—

I didn't have time to do it then, so I'm going to do it now. No, no, no, I got you. And I thought, let me address this. I'm not talking out of both sides of my mouth when earlier in the show I said this is not a time to sell. This is an offensive move, okay? UnitedHealthcare is up 4% over the last two days while all sorts of quality companies.

Companies are down 10%, 15%. This is a move to free up some cash so I can buy things. I'm going to put that money back to work. I mean, Friday afternoon with a market tape like we've got, it might be this afternoon. I'll be on the show Monday. I'll tell you what it is. But this is a move of offense. Don't mistake it.

And sorry, UnitedHealthcare, you did great over the last two days. You did exactly what healthcare stocks are supposed to do in a downturn. You held up. I hate to shoot you, but there's just too many other opportunities, and I need the cash. I love that long-term approach. I think it remains a quality. Probably a bad choice of words, too. What? God darn it. I apologize. Look, sorry.

We do have breaking news of another company that is looking at these markets and delaying its IPO. Leslie Picker joins us now. Leslie? Hey, Scott. Yeah, this one, according to The Wall Street Journal, citing sources familiar with the matter, is Chime, another fintech company, reportedly delaying their IPO. At least they're filing their public filing to get that process really starting. These markets clearly kind of the nail in the coffin, whether they're a temper

Temporary nail in the coffin for the capital markets or a more permanent one remains to be seen. But we've seen a whole host of companies really kind of pausing their plans to go public. We had Klarna and StubHub, according to people familiar with the matter, that were set to start their roadshows just next week, now have put those plans on hold. Hinge Health is another one that has filed its prospectus online.

publicly, they had a kind of a longer timeline. They weren't looking to launch their roadshow until later in the month. So those plans are kind of up in the air, remain to be seen just as we watch this market volatility unfold. And talking to sources, the key issue here is that investors are really so distracted by what's going on in their own portfolios. They don't have time in a market like this to take meetings and talk about prospective new issues, new companies tapping the public

markets. And so that dynamic is difficult. And then also, you know, just kind of the overall recent IPO market and how things have unfolded there. Performance isn't amazing. So it's not one of those things where one could say that the IPO window is dramatically open. But this is important for the revival of the capital markets. It's something I'm sure will be a topic of conversation as banks kick off earnings a week from today. Scott.

All right, Leslie, thank you. That's Leslie Picker on that note, Weiss. I mean, bank stocks have just gotten hammered, and they're getting hammered again today, down 6% and 7%, respectively, for a lot of the names there. Yeah, and I think part of that is not just the market, but credit quality. So I would look at some of the...

you know of of the stocks that are out there based upon private lending and also what is typically you know higher risk high yield lending because you will see and we've heard them come on the network a lot of these companies are going to have major major liquidity issues and some may go bankrupt so it's not a time to be involved in that sector of the market okay

uh... so we got the news there of the reaction here uh... i know you didn't mean it for to come out that way i i just wanted to get a chance to of all the exit just because i don't want to hang there thank you like that uh... uh... but we we we know we know you we know certain times things come out of all of our boston like i wish i could have that you know we're really still in about all weekend you don't have to because we just we just took care of it uh... leave us speaking of the weekend with something to think about for the other side

Yeah. How this day might end, what you'd be thinking about in the last couple that we have. I mean, yeah, I think there's a great give and take between Steve and I, and we've done this for 12 years now, and you're seeing both sides of the coin. So Steve just said something, and I think it was very insightful, about credit quality. And you said something earlier about my talking about jobs reports, which I didn't talk about.

So this is where we are. Everything is on the come in terms of the negative news. If the recession hits, if employment falls out of bed, then Citigroup's going to have a really big problem with the credit card receivables that it has.

The problem I have with that is it's a hypothetical. It's an if. Right now, we just had a great jobs report. I get it. I get it. It's backwards looking. But do bear in mind that this was a period of time where Doge was in full effect. We were supposed to be seeing the effects of layoffs at the government now. And weekly jobless claims still hanging in there. I get it, Steve. I can feel you rustling.

I get it. Things can change. They may change. Right now, they haven't changed is my point. Well, our job is to really look at, as investors, what can happen and then to handicap that probability.

I put a much higher probability of that occurring. Now, where can I be wrong? I could be wrong. Trump fires Lutnick, uses him as a scapegoat, and retreats from it. He's done that before. He just did it with the deputy head of national security. So anything's on tape. I don't think that will cure this situation. All right. Give me a final trade. Two-year treasuries. In light of what I just said, J.P. Morgan. Okay. Again, those stocks have not traded well. Jason Snipe, what's yours? Amazon, 30% off the 52-week high. How about you, Bryn?

Restoration Hardware, another name I like in my Vietnam basket. Well, the CEO, by the way, is going to be on with Jim tonight on Mad Money. So that's a must-see interview, given what the stock has done, the comments that he's already made this week around earnings. I'll see you on the closing bell of the exchanges now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.

Thank you.

but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer.

This episode is brought to you by Freshworks, AI-powered service software that makes work easier and processes less complex. Are you working harder than your software? Uncomplicate your business with fresh service for IT and fresh desk for customer support. Stop wrestling with clunky tools and start focusing on what matters, delivering exceptional employee and customer experiences that drive ROI in weeks versus years, all with no hidden fees. Start working smarter, not harder, with Freshworks uncomplicated service software.

Learn more at Freshworks.com.