Trading Trump’s Tariff Wars 3/27/25
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Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour of the markets. Once again, assessing the latest tariff news. We will trade it with the Investment Committee. We'll talk about that highly anticipated IPO as well. Joining me for the hour, Josh Brown, Shannon Sikos, Jim Blaventhal. We're all at Post 9, where we are still, Josh, digesting those new auto tariffs. The president says they're going to be permanent. Dan Ives says it's like a hurricane.

A hurricane-like headwind. You know Ford and GM. Obviously, they're down. April 2nd, still looming. What to do with the markets? Well, Barclays isn't waiting around. And I want your reaction to this. They say the markets are underpricing trade risks. They say switch preference to fixed income over equities. Boy, that's a far cry from how we felt just January 20th.

Yeah. So I think a lot of people have already started to price in this trade war a really long time ago. Nobody woke up this morning and said, wait, what, there are tariffs? So I don't know what that is. I don't know. Maybe they're talking to like ultra tactical hedge funds or something like. But that doesn't sound like it's an investment commentary. I want to start my commentary today, though, by giving some credit to Jim.

because Jim did something that's really hard to do in the investment business. He's long GM, he held it for a really long time, and then before this tariff stuff went from fantasy to reality, he came on the show and said, "I'm at a GM." And the other version of that would be somebody doubling down, tripling down,

uh... coming up with reasons for everyone's wrong and they're right i was really impressive to watch him do that in real time i think we were here today did it we were on we you know we we pressed him on it uh... that it was just a mere headline at that point but it was a lot of things either i think that it was enough and here's the thing

Risk is so asymmetrical, something like this, because he also has another risk, which is he blows out of GM. The tariff thing turns out to be no big deal. And then his clients are like, why did we sell GM five sticks in the hole? Like, what were we doing? We could have just held it. It pays a dividend. Mary Barr is still wearing leather jackets. It's like it's.

All right, fine. So he did it. He made the right trade. And now here's the aftermath for the people who didn't, quote unquote, make the right trade. There are 14 publicly traded companies in the auto manufacturer industry classification group between the New York Stock Exchange and the Nasdaq.

It is Texas Chainsaw Massacre. Median year-to-date return for these stocks is negative seven, which doesn't sound terrible. But over the past week, it's negative four. They are all selling off. Even the best name in the group, which is Ferrari, ticker symbol is race, is 17% below its 52-week highs. Stellantis is 60%.

below 52 week highs i don't think you understand how much damage that is to one of the bigger automakers there are five companies in this category um that are significantly below every moving average and that list is growing rivian tesla lucid ford gm and now understand the fundamentals because usually when you have stock sell-off like this you can lean back on the fundamentals you could say you know what

I'm a buyer. I think this is overdone. You can't say that here. Out of those 14 auto manufacturer names, Judge, five of them are not even profitable on a net income basis. And the most profitable, again, Ferrari and Toyota, TM, are

not down enough to be able to say this is wildly overdone. So I think the pain continues. And I know that there's this predilection to buy dips, look for V-shaped recoveries. Yes, we've had a history of that over the last five years. I don't think that's going to be the result here. I'm sorry. If you get an opportunity because Trump speaks out of the other side of his mouth and these stocks catch a plus six, plus seven percent relief rally, I would use it.

What do you think about all of that? Well, first off, thank you, Josh. I do appreciate that. Look, I'm looking at General Motors every darn day. All three of you and everybody who watches know I really like the company. I like the products. I think the management, Mary Barra, Paul Jacobson, the CFO are fantastic.

They can't get out of the way of this. I can't conjure up, you know, I can't come up with the reasons, Josh, as that was a phrase you used. I can't come up with the reasons to be positive here. You know, maybe Trump reverses this, but maybe he doesn't. There's a lot of other stocks that are down as well, having nothing to do with General Motors, where I can come up with positive reasons and we'll talk about them. Can you, if we take that a step forward and say...

If you can't be positive on any of these or the related names as a result of not just the tariffs towards the autos, but the overall environment and the, you know, what others have termed to be the chaos around all of this.

How can you have a positive bias towards the market right now? Which goes back to my first question about the note that says, you know what? Equities, U.S., nah, not right now. Hey, Scott, I mean, you're making the right point or asking the right question. I can't sit here with great confidence.

and say that my position right now which is to be fully invested is going to work out it depends on this chaos all use your word it's fine uh... this this policy my word it's not that he's a solid many notes yeah all use it all right it is policy chaos i mean one one day literally this week we're saying okay we're in the flexible on tariffs are gonna be lenient the next day we're saying we're gonna do across the board i mean it changes that fast

What my hope is, and everybody in investing hates using the word hope, okay, but that's where we are. My hope is that April 2nd gives some degree of finality. I'm not so stupid and naive as to think it will be total finality. But if we get some finality on tariffs, and then we get into earnings season and companies can say,

We think we have an idea of what the picture is, and we think we know how to move forward on it. Look, I'm staying invested because I do see valuations being attractive. I do, as a 56-year-old man, believe that optimism works over time, that Americans and corporations move forward. But we need some finality, some degree of finality on tariffs. Where is the...

Well, he said permanent. Where is the uncertainty? He said that yesterday. Where is the uncertainty, the reflection of what the sentiment change is most? I don't know. Gold? New record high?

You can throw gold. I mean, it's still high. You know, it's been going up past 3000, which is an all time record. Yields are up, too. And that is a story to keep an eye on. It's been almost a stealth backup in yields as the Treasury secretary has repeatedly talked about almost their number one number one initiative. Keep the 10 year yield down.

440 almost. We don't want to be having that conversation again about a backup in yield, Shan. Citi says that the 10% increase in tariff for April 2nd equals a 5% to 6% hit to earnings. And that, at the end of the day, is the decider of what you're willing to pay for a stock.

Yeah, and I think all of the points that have been made thus far are good points. But, you know, Scott, I think our view is predicated on two things. Number one, we do not believe that we're going to get the top end of that tariff range, which would result in the type of EPS deterioration that you just cited. Number two, our view is that

in the second half of this year, focus of the Trump administration is going to switch to Congress and taxes. And those things are likely to create a more steadying force. Our view on tariffs is that we will have increased tariffs, but they are going to be more specific, more prescriptive, and more clear in terms of the concessions that the Trump administration is looking for as we move into May and June.

if that is your view and you had you know mike mail was on with you a couple of days ago he made a great point about deregulation because we've stopped talking about that

Expectations for deregulation were really strong going into this year. We thought we were going to get this immediate transmission of all of this pro-business sentiment. That is where we are in that in this short term, we feel very uncertain about the path. But our view is that this will be softer and that we will go back in the second half of this year to really focusing on China, which, Scott, I believe that companies have mitigated that already.

over the course of the last eight years. Josh, earnings expectations, estimates are already coming down. January 1st, you're looking for 12.2% earnings growth.

Today, you are below 8, 7.7, as you see on your screen. S&P Global Ratings says there's now a 25% chance of recession within the next 12 months. Remember, Gundlach telling me 50% to 60% was his number. Sock Gen today, we could already be in a new bear market. They say that the recent rally from the March 13th 5,500 low to just back above the 200 day may prove to be only a technical rally, just from oversold levels. I

I called this a bear market two weeks ago, possibly prematurely, but I was talking about the median stock in the S&P 500 being in a 19% drawdown. I'm not one of these people that sits at the magnifying glass and needs it to be exactly negative 20 to make it official and wear the sash. That's not what I do. I would just tell you this is a bear market. If you look at your portfolio and you look at your individual stock holdings and even a lot of your ETFs,

That's what we're in right now. And I don't think it's over. And I think it's okay for it not to be over. I would point out the last bout that we had with the global trade war in 2018, we were negative 18% through the end of February. And that felt really bad, probably felt as bad as this does. Then we had another one that culminated with the Fed changing its mind

on not christmas eve at the end of december but from september into december that same year twenty eighteen we did this all over again we recovered from the tariff concerns and then they came roaring right back in the fed was scaring us uh... it's a little bit of a different backdrop this time but i want to address that that mini backup it yields that you cited scott because

That's tied in with the tariff stuff and the trade war stuff. I'll give you an example. The Wall Street Journal wrote this up over the weekend. You take a BMW 3 Series, okay? They're making these in Mexico. BMW spent a billion dollars on a plant in Mexico that they opened in 2019. So it's really hard to just say, "All right, forget it, close the plant." Okay.

so make the three series there to bring that back into the country they used to pay a two and a half percent tariff no big deal nobody noticed to be a w uh... now twenty five percent but they're saying uh... toward whatever the numbers twenty seven percent so now we've been talking at twenty five on top of the two point five that speaks a sticker price on a base model bmw about three series uh... from forty seven thousand closer sixty thousand dollars

And people say, well, you're in Spartanburg, South Carolina. Just move the production there. MAGA. No, they're making the SUVs there. They don't have the capacity to do that. That's one story of one auto manufacturer, one specific line. But it's a microcosm of what now has to get priced into the stock market and not only into the stock market, but into consumer expectation. BMW said we'll eat it.

We're not going to raise the cost on our dealers. We'll eat it until May 1st. Tell me, what happens on May 2nd? They're going to keep eating it? They're going to lose another billion dollars on this for two months? So this is the chaos that you reference, and this is why you're getting that backup in rates, because this is the inflation story writ large if that's the repricing that has to happen on a lot of things we buy here. So if it is, the...

nascent stages or whatever, however you want to characterize it of a new bear market, the kind of which Josh and Sakjan are talking about. What gets us out of that? One of the reasons it's been hard to do anything is because there are serious questions about tech, right? Does tech hold the key? Does tech hold the key to the whole thing, the whole story right now? Consumers hold the key for me.

70% of the economy is consumer-friendly. Tech does not hold the key. But for the market, right? The consumer is not necessarily the most tied thing to the stock market. If you say the performance of large-cap tech, that probably is in terms of the near-term direction of stocks. You have to get these stocks working again. As long as you have all these questions out there, don't you?

Well, I think that why you've needed them to work over the last couple of years is the concentration that's been built up because of an absence of growth in other parts of the economy. And if you don't get, you need to have the broadening out of this market as necessary in order for us to create an environment of success for the stock market in the second half of the year. Scott, I'm not...

I'm not arguing with you that tech is important from a concentration perspective. But we don't think that you can have another year where tech is the arbiter or the barometer of stock market progress because

It's, you know, it's tired. You know, you need to see CapEx industrial impulse hiring out of other parts of the economy in order to create an opportunity for the stock market to succeed in the second half of this year. It can't be these seven stocks again. It cannot. Let me take what you're saying and, Josh, what you said.

Let me take the other side of why we might be positive here. I mean, look at energy stocks, look at financials. I mean, these are stocks that are tied to economic growth and they're doing very well. Energy is not doing well based on economic growth.

It's not. That's actually not my point. My point is that if we're in a bear market and if we're worried about a recession, which generally goes hand in glove with a bear market, you don't see energy stocks outperform. You just don't. You also don't see copper making new highs, which it is. Yeah, exactly. I agree with that. I don't think you have to have a recession to have a bear market. I just...

In 2018, we did not have a recession. 2022, no recession. I think we're in a bear market right now based on the... Just on math. Not feelings, just purely on math. The median stock is in its own individual bear market. We're very fortunate that we still have...

these tentpole tech companies, ex-Tesla and Nvidia, that are hanging in there. They look much better than they are. We're also very fortunate that healthcare stocks have caught a bid this year. Bingo. Bingo. But the thing is, they're not big enough to do it on their own. Consumer discretionary actually looks worse than tech. That's Tesla. But I'm just making the point. Look at these names and listen to the commentary. It's not just. Listen to the commentary coming from the CEOs last time. You think it's going to get better in April? No.

Listen to what they told us. Listen, on that, I agree. And that's why I really would like to see some finality on April 2nd, if not before. I don't know why you think you're going to get that. I hear you, Josh. I mean, I'm saying what I'd like. I'd also like a pony. To Josh's point, sorry. Tesla's 43% off of its high. NVIDIA's 25%. Alphabet's 19%. Meta's 17%. Microsoft's 16%. Amazon out of the discretionary. So Amazon's hurt. A lot of the retailers have hurt.

Some of the more travel related names have hurt. Apple's been down 14%. New questions about that. That has hurt. Part of my point here is you cannot have the AI trade fall apart.

You're probably going to get a pretty darn good sentiment barometer related to the CoreWeave IPO, which comes tomorrow. We get more details tonight after the bell, pricing, size, but there are already some speculative reports out there about what might happen. Leslie Picker is following the money for us here.

And it feels like the money might be changing, the dynamic might be changing, even as we have this conversation here, Les. Oh, it's changing very rapidly, Scott. I've been speaking with sources close to this one all morning. It sounds like final, final decisions around the deal have not yet been made.

Basically, we haven't seen this refiling of an S-1 that indicates a downsized offering, but there have been conversations with investors about a potentially smaller deal here. The $40 per share number, that's out there as it pertains to NVIDIA's willingness to anchor the offering with a $250 million order at that price.

That's according to a person familiar with the matter who I spoke with earlier this morning. Nvidia already owns 6% of CoreWeave, which would have been diluted down to 5% after this offering. There's also a call scheduled after the market closed to determine the official, official price tag. But at $40, CoreWeave would be pricing 15% below the marketed range. The company and some of its selling shareholders are planning to offer 49 million shares, according to the S1, although that number could be reduced further.

of course, if there isn't enough demand. CoreWeave provides software and cloud services to manage AI infrastructure. IBM, Meta, Microsoft, NVIDIA, and OpenAI use CoreWeave's technology. And while its revenue has skyrocketed from just $16 million to $2 billion from 2022 over the past two or three years, its losses have widened. Some analysts have suggested that creative accounting has led the company to showcase higher gross margins than they actually enjoy.

And, of course, we've got just this whole backdrop of market volatility, concerns around the AI supply chain, concerns around data centers, as we saw from Josiah earlier in the week. None of that is good news for a company that's marketing itself in this world while it's on the road, Scott.

Hey, Leslie, when you think about red flags in a large-- this is going to be the biggest IPO of the year, unless, I guess, SpaceX or Stripe come out of nowhere and decide it's time. So when you look at the largest IPO of the year, and the first thing you're hearing the day they're going to price is downsize the size of it. So red flag one, red flag two, their number two customer is Nvidia.

and Nvidia gets a ton of their revenue by selling GPUs to them. So it's a related party transaction on steroids. And now we're hearing that we need Nvidia to take down even more equity size in the deal. Again, not great. $10 billion in debt, negative $6 billion in free cash flow, negative $900 million in net income. Microsoft articles on Bloomberg pretty much every day now, walking away from this, walking away from that, lesser spend.

like these are this is not the cloud through which you want to cut through and price a deal. So I want to ask you, like, are these the things that you're hearing as you report on the story? Like, is everyone kind of starting to realize that these are what the red flags are? I mean, especially in this current market environment, you have a very sizable deal. It requires a lot of demand to get the to get the deal done.

And then when you add on top of that what's going on in the market, that's a risk in and of itself, all the uncertainty that's out there. I think going into this deal and why it ultimately decided to come out when it did, because that also begs the question, why even go public in this market at all?

I think at least people close to this deal believe that the AI trend and the AI story was strong here. But when you kind of dig beneath the surface, there are some issues as it pertains to defaults that have been reported or at least in the FT about some of the covenants that they had as it pertains to their debt. Now, this is a company—

we just found out from the S-1, too. That's also not like the best sign ever. That when the three founders, the larger shareholders who have all the votes, have sold half a billion dollars worth of their own stock,

within the months leading up to the IPO. Like, that's not a great story either. All of those things are concerning, especially for an investor that's looking to take on an untested, a new issue into the market. It's a business model that they don't really have much in the way of comparing currently to pure plays right now. All of that is concerning, and sometimes you have to offer a discount in order to get people on board. Whether $40 will do the trick, whether downsizing the amount of shares that they're offering does the trick,

I mean, this is a company that has a lot of debt. So they do want to maximize that primary issuance to get more money, to get more cash to pay down some of their debt loads. That would be beneficial for them. Being public would be beneficial for them, regardless of the price. Whether that is ultimately, you know, achievable here is, you know, the question. Yeah. Leslie, you let us know the very latest as you get it. Appreciate your reporting on that and following this for us. Thank you.

very closely watched IPO for so many different reasons, guys, as it relates to the current state of the AI trade. You look at the deep seek day was kind of the earthquake that got everybody, oh, what was that shaking up this trade?

Joe Tsai's comments the other day got everybody really thinking about the data center side of it, some of the stocks most directly related to that. The data center stocks, the power providers to the data centers, they've traded terribly. And now you wonder, is the IPO and the lack of a truly successful offering, certainly to the degree that it was once thought to be,

Is that the straw that breaks something? It ain't good. In this story. It reminds me of the snowflake IPO from what you're saying. Okay, which was not fatal. No, it's great company, Snowflake. Just the timing. It came right at the end of 21. If we talk about the timing for a second, just for a second before we answer your question, Scott. You know, remember Monday we were talking, and I'm not being facetious here. We were talking about the potential for a face ripper rally. Not all of us believed it, but I think, you know. Well, we had it. Yeah.

We had it, right? We're up 5% from the bottom. Yeah, I mean, but we were talking about it on Monday, potentially continuing. I didn't think it would, but if it had, I don't think we'd be talking four days later about downsizing this very important IPO. And I do think it's very important. We know there's been an IPO bust here that we haven't had enough of them. And I'm very long financials, and I'm looking forward to that happening. But I'm not...

I'm not quite ready to give in to the overall pessimism that I feel kind of brewing about the AI trade, about IPOs. I don't think this IPO doesn't sound like it's going to do too well. You're looking to buy more Nvidia. Right. You are. But that stock can't get out of its own way. But at the same time... For all the reasons that we just discussed.

I got it. And those are, to me, more technical reasons when I look at the fundamental reasons. And of course, I'm looking at you, Josh. You know, I see a stock that's trading at 24 times forward earnings. And I really don't question that much. The 50 percent earnings per share growth that we're looking at this year. You think that NVIDIA has been trading lower for technical reasons? It's been all about fundamentals and it's been one thing after another.

Okay, when I was saying technicals, I meant the technicals of this week just being up, down, tariffs, and who knows what's coming out of Washington. Regarding the fundamentals, I actually think the fundamentals are very much stronger. I don't think deep seek is some death knell here. It moves them from large language learning model training to inference where they probably are going to do pretty well. Here's the way it's going to be. Here's the way it's going to be. And I'm long. He's like the godfather of NVIDIA. I'm long. I'm not. I'm like...

I'm not negative on NVIDIA long term. I'm telling you what I think the risk is right now. This is the part people don't understand. Last summer, a press release went out from Blackstone gloriously announcing this massive infrastructure investment that they were making. And this is where the money comes from. When you hear the breathless reports that CoreWeave has acquired 300,000 GPUs, where the hell do you think they got the money to do that?

They're getting the money from these huge pots of wealth management capital that's going into AI infrastructure funds. And Blackstone's not alone. Everybody has one. It's the hottest product for people in my seat to be selling to their clients. It's billions and billions of dollars in debt financing so that CoreWeave can buy all this NVIDIA product.

That's great. Here's the rub. If for whatever reason the demand doesn't materialize fast enough to please the investors, then all of a sudden there's less money for the next AI infrastructure fund and the next one and the next one. And all of a sudden CoreWeave doesn't have the capital to buy more GPUs, which is where NVIDIA really at the end of the caboose of that long train I've described, that's where they finally come out and say...

Turns out we may not have much more demand for the next version after Blackwell as we thought we did. Everything's still great, but it's a little bit of a dial down. How do you think Wall Street's going to take that calmly? Disastrously. Well, and here's the thing.

Nvidia is going to be right with their vision of where AI is going in the same way that all the companies laying broadband and fiber were right 25 years ago, the timing. All that fiber was worthless until YouTube came along in 2005. It took a long time to find a use for all that dark fiber. That's the worry here. All right, so here's what we'll do. We'll take a quick break. This Coral Weep story...

impacts financials too. And some are moving today on the whole IPO conversation. We're going to discuss that and what one firm's commentary maybe means for the whole space. Plus, drill, baby, drill. I know you've heard that, the thought that this is going to be a boon for energy-related stocks. Well, not so fast. We've got some interesting stuff on that as well. We'll do it all when we come back.

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All right, welcome back. We did talk about the Coral Weave IPO, as you know. Aside from the obvious story about AI, it certainly is a good test for the capital markets and the current state of, which maybe should be defined by the great reset in expectations, if nothing else. Jeffries, on that note today, that stock was lower before we came on the air, said policy uncertainty in Washington's hurting business. Last year's, quote, momentum has been slowed by the uncertainty that has arisen

as a result of the policy statements and actions of the government and geopolitical events. There's the stock down some 10 percent. You can put Goldman and Morgan Stanley on the screen and it will show you red as well. Financials are still one of the top sectors of the year. Shan, I'm wondering how we should think about all of this in what has been a less than exciting capital markets crisis.

environment since the beginning of the year, far from what people thought this might look like. The challenge is that, and Josh mentioned consumer confidence earlier, consumers generally, I don't want to put words in his mouth, but the difference between consumer confidence and business confidence is that business confidence is a much better leading indicator of activity. And what you're seeing right now is that you're seeing businesses not necessarily pull back on CapEx, but they're not

announcing at the same pace that was anticipated capex hiring and a move towards potential m a that was expected when we came into this year however if you look at sentiment around business business confidence

And certainty is high in the short term. Optimism remains high in the longer term. And I think the problem is, is that there was a move into financials coming into the end of the year, in the 24. Positioning for what they thought. Positioning for what was going to be this, like, overnight explosion. Yeah, Trump wins November, right? You pile into the stocks in December and January ahead of the inauguration, private equity,

these other financial stocks and then here we are having a different conversation that we anticipated ceos just went through the last couple of years of not really doing much in terms of capital capital expenditure which is by the way why hyperscalers have benefited because they're investing in future growth so if i'm a ceo though especially if a small business got why am i going to jump into the fray right now in terms of transactions when i could just wait six eight ten twelve three months

and see if there's more certainty. But I don't think it detracts from the longer-term second half of the year 2026 story about this inflection higher in activity. This market just doesn't have the ability right now to look that far ahead. It just doesn't. There's too much flying in its face on this road that has hurdles now. And you've thrown one of those strips across the highway that you thought you're going to be cruising by with nails in it.

Now we have to deal with all that. That's a great description. And eventually we will get through this. I don't see disaster afoot, even though I don't like this core weave IPO timing. And what you just said is accurate. But, Scott, I do think there will come a time. I don't think we're measuring it in months. I think we're measuring it in weeks or days.

where we do start to focus on what comes you talked about the economy earlier in the second half when we look forward in the second half and get through however long this pair of stuff talks but takes you're gonna look at lower capital requirements michelle bowman is the fed chairman for supervision of banks absolutely wants lower capital requirements whether you like it or not scott besant the treasury secretary is gutting the consumer finance protection bureau leave aside would you know i would you would you buy bank stocks today

hundred percent if i have new money coming into an account i am filling up on okay and it's because the cost of doing business is going down that's where i was going with the consumer finance protection bureau we've all heard jamie diamond over the years and years talk about lament how his uh... expenses that don't lead to revenue compliance have gone up and up and up guess what they're now going to go down one of the themes that i've been talking about all year is you can be in the financials but not be not necessarily have to bet on

uh... the the m_n_a_ trend or whatever that's not happening yet working regulation at the banks so recent weeks through my on best stocks framework we talked about the intercontinental exchange it's making a record high right now so but congratulations if

If you're in that, we talked about CME for the same reason. These are companies that make money on high trading volumes and volatility. They're not waiting for an M&A boom that may not come. We also talked about insurance. Berkshire Hathaway is a trillion-dollar market cap, the only non-fang in that group.

And by the way, new record high right this minute as I'm speaking. So you're making money in insurance. You're making money in exchanges. These are in the XLF, guys. You don't have to just pick the same four stocks and wait for them to go up. All right. Let's get the headlines with Bertha Coombs. Hi, Bertha.

Hey, Scott. A New York state court just blocked Texas from filing legal action against a New York doctor who prescribed and sent abortion pills to a Texas woman. The ruling sets up a high-stakes battle between states on either side of the abortion issue. The case is widely expected to end up before the Supreme Court.

Meantime, a federal appeals court in California refused to halt a district judge's order requiring the Trump administration to rehire thousands of federal workers. In a two-to-one decision, the order requires reinstatements for some 16,000 employees terminated in mid-February from the Departments of Veteran Affairs, Agriculture, Defense, Energy, the Interior and Treasury. The administration has also appealed to the Supreme Court.

And Sam Bankman Freed is on the move. The disgraced crypto exchange founder is now at a transit facility in Oklahoma, which often houses inmates being moved across the country. Until yesterday, he had been in a prison at a detention center in Brooklyn. Bankman Freed's legal team has asked that he serve the rest of his 25-year sentence in California to be closer to his parents. Scott, back over to you.

All right, Bertha, thank you. Bertha Coombs coming up. Josh highlighting one of the best stocks in the market. A name he says is on the verge of a big breakout. We'll tell you what it is next.

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Talk about a cyber name. It's not CrowdStrike. It is that one, though. It's Zscaler. Yeah. What do you want to hit on this? So this is a cybersecurity stock, and I'm not in it, and I don't have any trade on right now. But I wanted to highlight it because it's on the best stocks in the market list, and it's really on the verge of a decision point. It's been challenging this same level of overhead resistance for the better part of, let's say, 14, 15 months. And I think it really looks like it wants to punch through. This is an RSI of 55%.

So not overbought. It's 4% below its 52-week highs, while most other software stocks are way lower. 10% above its 200-day moving average. It's bounced off of that 200-day moving average four times this year already. The buyers are coming in where they should be coming in. You've got this range between 180 and 220 going back to the election.

And I think if it can hold this level and you get a little bit of cooperation from the NASDAQ, a little bit of a better tone for tech, this will be one of the first names to break out. So I'm not in it currently, but I wanted to put it on people's radar because I think there might be a trading opportunity here. All right. We'll keep our eye on that. Can we get an intraday, guys, of that, too, instead of sitting on that other one for a moment, just to check it out on a more tick-by-tick look at that stock? Well, that's not it. But anyway.

Let's talk about that energy because it is the best sector year to date. Interesting development though.

There was a Dallas Fed survey which shows U.S. shale executives alarmed at tariffs and Trump's rhetoric on oil prices threatening drilling plans. Here's a quote from a story in the FT. "Drill, baby, drill is nothing short of a myth and populist rallying cry," one shale producer wrote in a submission to the Dallas Fed in the survey that I mentioned. "Tariff policy is impossible for us to predict and doesn't have a clear goal. We want more stability."

The thing is, if you drive oil prices lower and lower, it is actually a negative for production, especially shale, because it drives up the cost for producers and is a very heavy capital intensive area. It's somewhat counterintuitive to think about because the president has talked so supportively of drillers. I'm wondering for those of you who have exposure, Jim, into nat gas, drillers, oil,

What do you think? Well, first off, State, what I think we all know, the first Trump administration was a horrible time to be invested in oil companies. And the idea of drill, baby, drill means that profits go down for these companies. Most of the management of the exploration and production companies know that and are not likely to simply go along with what the administration wants. They have shareholders. They want to drive profits.

But you were talking about tariffs, Scott, and that actually is a very big problem for the industry. And some people know this, some people don't. Yes, we are energy independent, but we vitally rely on Canadian oil, this heavy, sludgy stuff that comes from the tar sands, to be run through the northwestern and northeastern refinery system that is set up for exactly that. It's not set up for the light, sweet West Texas intermediate oil that we ship overseas to other refineries. This may sound esoteric.

It's not. Tariffs really matter. Yes, we are energy independent, but the idea that we can just do everything within the borders of the United States is a fallacy. Do you worry about any of these names that you have as a result of this? I worry about them if we're going to have a recession. I think you know I don't think we're going to have a recession, but the risks are there. Besson, very specifically, in multiple interviews and in an hour-long podcast with Chamath and the All In guys,

laid out the fact that lower oil prices is like a cornerstone of what they're trying to accomplish. I don't think they, it's not drill, baby, drill. Yeah, let's buy oil stocks because we're going to get crude at 80. It's the opposite. I think nothing can make them happier than seeing a trading range for crude. West Texas, 50 to 65. They'll call that a victory.

That might not be great for the stocks. The stocks won't. That's part of the point of this. That's part of the point of this Dallas Fed survey, which just makes you think about it potentially a little bit differently. All right, straight ahead. We'll take a break. We'll come back. Robinhood moving beyond its core focus. It's all grown up, so to speak. Kate Rooney is following that money for us. We'll discuss next.

Hi, welcome back. Robinhood gearing up for a more mature investing base with a new low-cost wealth management tool in private banking. Our Kate Rooney following that money for us and joins us with more. Hi, Kate. Hi, Scott. Yeah, so Robinhood is rolling out a robo-advisor, private banking and wealth management. It is the latest signal this company is growing up with their client base. When Robinhood went public, if you remember, it did have the reputation for being sort of for the meme stock trader crowd. Now it's looking to court more high net worth, sophisticated investments.

investors. They are undercutting on fees here. So the robo advisor charges zero point two five percent annually. That is capped at two hundred fifty bucks a year. But it's only for gold subscribers. They're also offering certain transfer incentives.

the subscription is a key way that vlad tena the ceo says they are going to break even but there's some skepticism i caught up with him here in san francisco he admitted subscriptions haven't worked that well historically in financial services says they're using amazon prime and costco for inspiration robin hood's got about 200 billion dollars in customer assets

that pales in comparison to competitors think of schwab vanguard fidelity it's also now going up against some of the banks on private wealth kind of telling me they are trying to position for that massive wealth transfer from the baby boomers he's also looking to differentiate with an ai research assistant they just rolled out the bar he's

He says it's high still for using AI around investment advice. It is known still for hallucinations, still not generating investment ideas, though. Stock is off the lows. It's up more than 120%, though, if you look at the past year, Scott. All right. Kate, thanks very much for that setup. You, in your most recent blog,

This is no surprise to you in any way because you suggest wealth is on fire as you've been talking about and you watch really closely Yeah, this whole industry. We're the best business on Wall Street We're the most reliable most profitable every CEO is referring to their wealth business as quote a crown jewel on their quarterly conference calls Robinhood is incredible at bringing on new users to their platform Maybe the best I've ever seen

And they've got really great user interface, really great tech.

And it's smart. Like, now you have all these users. Why would you let them grow up and graduate and go elsewhere? So I understand the impulse. It's a horrible business, though. $250 for quote-unquote wealth management. That's like gas station sushi. I think what's more interesting that they're doing is the acquisition of the RIA custody business. That one I actually think is going to work. And we might even kick the tires there. So...

I wouldn't get too excited about $200 wealth management, but get excited about Robinhood turning its technology on some of the thornier problems that advisors face when trying to service their clients. Retail's also getting more ways, for lack of a better word, of...

Just being invested in eToro, for example, we talked about the other day. They're just more platforms. Too many ways, I would say. Maybe. But it just shows you the interest and opportunity that some of these companies think exists. That's right. All right. Santoli's next.

We're back. Senior markets commentator Mike Santoli, as you see here, post nine. We talk a lot today about CoreWeave, what it means for the IPO trade. Obviously, there's capital market ramifications, too. But it really is a barometer at the current time when many are questioning where we are in the lifecycle of this whole process.

I think it's sort of concentrating all the attention on this, maybe creating a little bit of a crescendo of anxiety around this whole idea of overbuild and whether we're going to get a return on the investment. This first, when the window opens up for IPOs, the first ones to come are the ones that need to be sold, that the sellers need to get out the door.

That's always the way it is. That's why they've been pretty lousy so far. I'm not saying this is in that category, but they're sold and not bought at this phase. And so I think you have to reflect on that with all the specifics of whether, in fact, this deal works, if there's too much hair on the finances and all that stuff. I do think that it could get us clear.

of this concentrated moment of do we really need all these GPOs kind of question? Because you've seen it already in NVIDIA shares. I'm not saying it's going to be up and away from here, and I don't think that that trade's going to be kept on a long leash like it was last year, but

At least we're sort of reckoning with it as opposed to everyone assuming it's nothing but good things. Yeah, we'll see final size, price and all that. We'll start to get some better answers. By the way, the investment bank stocks weakened, but mostly because of Jefferies. Yeah, exactly. Exactly. That was sort of the second derivative look that we took on the core we've IPO. I'll see you at three. That's Mike Santoli. Finals are next.

See you at 3 today, closing bell. With those two gentlemen among my guests today, Rick Reeder of BlackRock and monumental sports and entertainment founder and chairman and CEO Ted Leonsis. Wizards, Capitals, all sorts of other stuff. What a lineup. Aswath Damodaran, Dean Evaluation, Lauren Goodwin. So I hope you'll join me.

for that last hour of trade. Farmer Jim, final trade. Long-term bullish, short-term just a little nervous, playing a little defense with a great pharmaceutical vertex. Thank you very much, Chad. Josh talked about this earlier, but there's a lot of places to play in financials, offense, and a little bit of defense. Okay. There's only two subscriptions the American people will not cut, almost regardless of how bad the tariff thing gets. Netflix? Costco and Netflix. Okay.

I'm picking Netflix here. Look at the strength of this stock. Look how close it is to its 52-week high. Good stuff. Thanks, everybody. I'll see you on the bell. 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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Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.

It's time to make America affordable again. It's time to support the President's plan.