Debate: Is a Hike Coming? 9/16/26

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1:00Scott Wapner: 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.

1:16Scott Wapner: Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the markets and the Fed decision. As stocks price in a rate hike, we will discuss and debate with the committee, see how they're playing things right now, no matter what happens. Joining me for the hour, Joe Terranova, Jenny Harrington, Jim Labenthal, and Steve Weiss. We'll take you to the market, show you what we're doing. We're 12 noon in the east today, and we are wait and see. I think it's fair to say NASDAQ's leading. There's the 10-year note. The yield is down below 5%, but it is right about there.

1:49Scott Wapner: We'll go to the group. Joe, I'll start with you first. The last hike was July 26 of 23. We got the 10-year where it is. Mortgage rates are above 7.2. the highest since January of 25, 93 % chance of a hike. They're going to go?

2:03Oliver Renick: Oh, yeah, I think they are going to go. I think the market's clearly positioned for it. If you look at the bond market, there's been extensive short positioning that's been established here over the last several weeks. J.P. Morgan put a report out to that effect. CFTC Commitment of Traders report shows that as well. And then the consumer discretionary, Scott, they are really trading awful right now. You have 38 out of the 47 consumer discretionary S &P stocks that are actually underperforming the S &P. 25 % of that entire sector is near a 52-week low. So I think without question they're going today.

2:42Oliver Renick: And my point on the bond market and consumer discretionary is I think the market's positioned for it, and therefore I think it will accept rather comfortably the rate hike.

2:52Scott Wapner: What if, Weiss, the market's wrong? What happens if they don't go?

2:57Oliver Renick: You know, it's not funny you ask that. I'm not surprised with the question. I've been thinking about that a lot since yesterday, where everybody thinks it's a fate of complete. Me too. And I don't know what happens. What I would suspect happens is the market always tends to be optimistic, or usually does. The market rips. And they say, you know what? What the Fed does doesn't really matter. Look, we talked about it on the show the other day and said it's a supply shock that's driving inflation. I wouldn't say entirely due to oil, but that's a big part of it. And the Fed just can't counter supply shocks, not with 25 basis points anyway.

3:38Oliver Renick: So I would think the market takes off and takes comfort in the fact that Warsh, and I don't believe this will damage or kill his credibility because it depends what happens in the press conference at 230. But I believe that's what will happen. I don't see the mark going down. I also see the 10-year declining in yield. So that's a low probability. I actually took off a little bit of my hedges just because, in case I'm wrong, because I do believe, like Joe, that the market already absorbed the 25 base point cut and probably another 25 because they don't do one. Sorry, hike. Thanks, Joe. Because they just don't do one hike or one cut at a time.

4:18Oliver Renick: So it'll be very interesting to hear what he has to say, but it's all going to come down to the language in the press conference afterwards. Yeah.

4:26Scott Wapner: You know, Jim, I know the market is where it is. And I didn't ask that question of Weiss by accident because part of me says, why why would they hike the things that are causing the biggest part of the inflation issue right now? they can't do anything about. And who's decided that they have a credibility problem other than the pundits who listened to what Warsh has said and said, well, how can he say that without hiking? He has to hike to save his own credibility. I don't know whether he believes that. I don't know whether the open market committee believes that. I don't know if they really think they need to before they hear from the task forces.

5:07Scott Wapner: So I'm not sure that it's so much a foregone conclusion. I think our viewers want to know what's the market going to do either way. Yeah.

5:17Oliver Renick: OK. So I do think they're going to hike. And the reason I think that two reasons, one, I listened to the full Jackson Hole speech. And if you just take those words at face value, there was a very distinct logic that he flowed through. Inflation is too high. The Fed is responsible for inflation. The Fed's main tool is interest rates. I mean, there was more to it than that. But the logic to me clearly indicates that based on last week's inflation numbers, they have to go. There's another reason why. And I think you and Steve, what you just said about supply shocks, totally agree. We should not be hiking to cure a supply shock.

5:53Oliver Renick: But there's another reason that the interest rates have gone higher and that the Fed may hike. And that's simply that economic activity is pretty strong. And that could be an indication of why inflation is up, or at least a contributor. And yes, I'm speaking about the data center buildouts. That's a reason why copper and steel prices are high. So that's a ratiocination of why they may hike. I will tell you my belief is that if they do the 25 basis point hike, that you will see downward pressure on 10 year yields. By extension, if they don't hike, I think yields are going to spike and crater the equity markets with it.

6:28Oliver Renick: Obviously, I'm predicting the future and I cannot guarantee those are the outcomes, but I feel pretty strongly in those opinions I just gave.

6:35Scott Wapner: I don't remember a time, Jenny, where we feel so uncertain about, even with a probability over 90, really what's going to happen and then really how the markets are going to react, whether bond yields go up if they hike, whether they come down in relief, the bond vigilantes get off the hot see, how do you see things transpiring no matter what they do in a couple hours? Well, I think I'm actually a combination of Jim and Steve. I think that if they don't hike, I'm in the gym camp of what the market reacts by. Because I think to me, at least as an investor, that would be a message saying like, holy smokes, the Fed knows something, the government knows something really bad that the rest of us don't know.

7:16I would not take it as a positive. Where I'm in the Steve camp is, I think that absolutely the thing that matters most is the language following. So, you know, so I put those two together. And then and then to your point earlier, Scott, you know, you can easily ask the question, does it really matter? Does it even influence yields? And the answer to that's no. And something that I've really been fixated on and struck by right now is thinking back to when the cuts started. So the cuts started two years ago, almost on the nose. We've had seven cuts, 1.75 percent. And in that time, the 10 year has gone The 10-year U.S.

7:49Treasury has gone from 3.73 % to 5%. So that brings up the do you really need to hike? Do you need to cut? Does it make any real difference on the interest rates that do matter? But then there is the credibility thing, and there is the statement that it makes. And I think when you're looking at the U.S. market pricing in a 93 % chance of a hike, you just kind of have to do that. And Warsh has to show us all that he is not a muppet and that he's looking at economic data and trying his best. So I think he's in a corner with needing to hike. I think if he doesn't, the market cracks up.

8:19Scott Wapner: I was down the coast a little bit in Huntington Beach yesterday, obviously, at Future Proof, and we interviewed Rick Reeder on this program 24 hours ago. And he, like all of you, said, yeah, they're probably going to hike. He said he wouldn't. Listen. I wouldn't because I think you're not going to really do much.

8:41Oliver Renick: I mean, talk about moving the funds rate 25 basis points. Are you really going to do anything for inflation? What's driving inflation today is interest rate insensitive. Obviously, you've got war, you've got energy price, you've got education, insurance costs, health care. It doesn't really do much. So what I do it, what it does adversely impact, look at the housing market that's frozen.

9:00Scott Wapner: OK, so that's Rick Reeder. Now let's bring in our senior economics reporter, Steve Leisman. It's going to be in the room asking the chair a question. That's a man who might have been Fed chair. He was close, obviously. He said he wouldn't. Why should Warsh?

9:19Oliver Renick: Well, there's a lot of reasons. I think a lot of them were set at the table there. You look at the inflation rate. It's been over 2 % for quite a while. And the Fed chair has talked tough about inflation and needs to put his action where his words are. The other reasons are that you have these surging oil prices now, including diesel prices, Scott, and it may end up, it may already not be just an energy story. If you look at down into the guts of these reports, it's not just energy that's driving inflation. Now, there are other factors. And when diesel starts working its way into the economy, it could be more inflation to come.

9:56Oliver Renick: I think that's one of the things the Fed is looking at. And I think finally, the issue of the Fed does have a role to play here in supply shocks. And And if you look at the way the Fed responded in the 70s, this is from Neil Kashkari's dissent when he wanted to raise a quarter. He said, look back. The Fed had surging oil prices at a series of supply shocks. And, Scott, we've had a series of supply shocks. And you can look through one, you can look through both. But honestly, when you look at the policies of the Trump administration, can you say that any of these things are truly one off? And that's the problem is you can't.

10:28Scott Wapner: Are you sympathetic at all to the view of Rick Reeder, who, as we both know, might have been sitting in that chair making the same kinds of decisions that Chair Wors and the committee are making today?

10:41Oliver Renick: I am. And I think that what Rick might have said in his next sentence there was a quarter point hike won't do any good, but several quarter point hikes or at least the suggestion that there's more to come might. And that's sort of, I think, getting into what Jenny and Steve were both talking about, which is this idea, a quarter point hike ain't nothing. And if we're really going to have an effect on the long end of the bond market, I'm listening for the word series, campaign, some kind of sense that it's more than just a one off. A one off is probably going to be what I'm calling, Scott, one and mum, because we're not going to get the guidance from the Fed chair that the market wants.

11:21Oliver Renick: But I think he's going to need the market to be higher and to curtail what aggregate demand it can in the face of this supply shock to get inflation down. I think the more he deals with this now, the easier it's going to be compared to dealing with it later.

11:35Scott Wapner: The one in mom. That's clever. I like that. We'll see if it turns out to be just that. I just wonder, why would you hike more than one time, irrespective of what central banks normally do? If they simply need to preserve their credibility, they can do that theoretically by at least hiking once. But we don't really have an overheating economy that needs to be slowed. The things that are hot are not affected, really, by what the Fed can do at this point.

12:10Oliver Renick: Well, first of all, Scott, I wouldn't overstate the credibility issue. I don't think Kevin Warsh and the Fed are going to hike today simply because of credibility. I think credibility is a marginal issue that if it's a close call, I think that plays a role. But I don't think it's the central reason why you hike. I think the Fed has an awful lot of credibility. You can see that in reasonably contained inflation expectations. When you look at the five-year, five-year forwards in the tips market, that's a cue to the guys in the back. I have a chart on that. It is elevated. Look how good they are.

12:41Oliver Renick: It's elevated relative to where it's been, say, since July. But it has been higher. It's been a feature of, say, this year to date period we've had and since December. It has been higher. But but look, the reason why that's contained is because the Fed has credibility. And Kevin Warsh is able to draw on the credibility of the Powell Fed. And now he's got to establish his own credibility. And that will keep inflation expectations contained.

13:09Scott Wapner: That's going to be so interesting. I just don't remember a time where I feel like it's still reasonably uncertain, even though the market's at 90 plus percent. And we look forward to your question.

13:19Oliver Renick: I just had one thing, Scott, which is this is a chair who has told us he's looking to the market for signals. I don't believe the market signal could be any more clear, not in the 90 percent, but also look at the two year running over 100 basis points higher than the Fed funds. The market's telling the Fed chair something. We'll see you.

13:38Scott Wapner: We'll see you later. And I look forward to speaking with you after the news conference ends. That's our Steve Leisman. All right, guys, Joe, you know, what do you make of the Leisman logic? Let's say we get a one in mom. I love the way he he put that. What do you think the market takes from it?

13:56Oliver Renick: So in 2015, December of 2015, that's exactly what Janet Yellen embarked upon. She had a rate hike in December of 2015, and then over the next 12 months just kind of sat on the sideline to see what the data would do. I think the best thing that could happen today is that Steve's thesis plays out. I agree with Rick Reader and what was stated previously. I don't understand why we're raising rates, but the market's saying we're going to go do it. Let's go do it. And if yields fall, they raise rates and yields fall. Well, if we're listening to the market and the market is telling the Federal Reserve and speculators they are comfortable with one rate hike and it's not necessary to embark on a rate hiking cycle.

14:39Scott Wapner: Jenny, Jeremy Siegel says market will shutter. This is if they hike. Market will shutter, then recover. City says wobble, then climb. I've got Ed Yardenny out cutting his S &P target. not necessarily directly related to the Fed, although it is a bit related to the backup in bond yields. He cuts his estimates for the forward P.E. of the S &P. So he's looking at a, you know, a multiple contraction in some respects. He says 7 ,900 from 8 ,400 is his new number. That makes sense? Okay, the shutter and recover doesn't. We've also heard wobble and climb. OK, so here's how I've been thinking about it.

15:23I've been thinking about it that it's going to yawn and wander. And that does sync up a bit with Yardeny, where he's cut his estimate. And if we think about what the market's done for the past three months, it's just wandered. It was at 7 ,600 on June 2nd. We're right about at 7 ,600 on the S &P now. And I really believe that this is all about earnings. And I think until we hear earnings that start to come out in a month and change from now, it's just going to wander. So even with one rate hike, that doesn't really matter. and to the conversation we've all been having, it's digested. It's in there.

15:54So why should we shudder? Why should we wobble? I don't think we're going to. I think we're just going to wander around until those earnings releases come. And even the numbers on earnings, I don't think that's going to be what's so important. It's going to be the projections and the outlooks and what people say. And I think that's when we start to get real movement. And that's when we move out of this kind of 7 ,600 band on the S &P that we've been stuck in. So yawn and wander. How about that? I came up with my own. All right.

16:18Scott Wapner: I'll put that on the list with Leasmans. That's pretty good, too. Well, his is better than mine, but. You make it towards the top of the list. Maybe not at the very top, because I like Leasmans a little bit better. No disrespect, but we'll keep you right there, I promise. In terms of what, Steve, sectors could move the most on a hike, if in fact that is what happens, B of A says banks are going to get a boost. EPS and margin outlook should receive a modest boost, they say, from rate hikes, given that most banks remain asset sensitive. A flattening yield curve could challenge bank stock performance.

16:51Scott Wapner: So, you know, maybe they get a steeper yield curve. That's good for the banks. They liked what JP Morgan had to say at the conferences this week. Citigroup as well. What do you think here as you have some ownership in the space?

17:08Oliver Renick: You know, I do have ownership. My ownership's in Goldman. And if you take a look, Goldman just hasn't performed that well. And I attribute that really to talk of delaying IPOs and a slowdown in the AI spending. But yes, as you get a steepening yield curve, you will see the banks benefit, as well as the insurance companies that make a lot of their money off of their assets, policyholders, deposits and payments. But here's the thing. If I'm right, that you get the hike, yet yields come down, I don't think they're going to go higher on the hike. Again, depending on what's said, then you just don't know what's going to happen with the bank.

17:52Oliver Renick: So the real money, the real yields, the real rates, which are the yield, the Treasury curve, yes, that'll benefit. But overall, and again, I think this is day to day. You can't count on a long-term impact into the market from what the Fed says or does, because you've got so many other data points. You've got what's happening in the Middle East primarily there. So, and then earnings. I think rate hikes will hit earnings because the earnings right now are mostly in financials. That'll be good. And in the AI names. But that's going to be it. The rest of the companies, that's generalization, will suffer from it.

18:35Oliver Renick: And that may affect their appetite for lending from the banks. So it's really a mixed bag. And as you pointed out multiple times, this is the most confusing set hike that I recall living through.

18:48Scott Wapner: Yeah, because I don't think anything is going to surprise me later this afternoon, no matter sort of what they do. I could see both sides of the debate. We'll just have to wait and see. We're watching tech, obviously, today. Long duration assets are going to be watched closely, depending on what yields do as a result of whatever the Fed does. Interesting in the last 24 hours, Jensen Wong of NVIDIA was with Jim Cramer. He said, Anthropics proposal for AI safety antitrust waiver, completely unnecessary. Don't need any new laws, have plenty of laws, have plenty of regulations. Then Mark Zuckerberg, he weighed in on the safety debate as well.

19:28Scott Wapner: And Julia Borsten is here on set with me with a little bit more on that. It's nice to be in your neighborhood. It's great to have you on set here in Los Angeles. So Zuckerberg's now weighed in. Tell us more. Now, shares of Meta are higher after Zuckerberg came out in opposition to Anthropics, Dario Amode, and OpenAI. Sam Altman's call for a slowdown of frontier models as well regulation. Instead, Zuckerberg says companies should effectively self-regulate, saying they're incentivized to prevent AI problems due to their legal liabilities and that aligning models with people's needs is a competitive advantage.

20:01Zuckerberg writing, quote, my view is that trust and alignment are quickly becoming the most important capabilities that will differentiate agents and models. Now, MetaShares are outpacing the market today and they're up about 18 percent Just in September, this morning, Citi reiterating its buy rating on the stock, citing the company's product cadence ramping and saying its AI roadmap is becoming clearer. Part of that, yesterday, Meta launched AI subscription tools. And next week at Meta's annual developer conference, we'll hear more about Mark Zuckerberg's ambitious strategy to own the mass market AI experience.

20:36Scott?

20:37Scott Wapner: This stock's had a nice rebirth, if you will. It's up 15%, by the way, in the last 30 days. Are you surprised at all by Zuckerberg's take here? I think it very much aligns, to use that word that we've heard so much about, with his strategy to really own his ecosystem. What we saw with the mobile experience is that Zuckerberg and all of his apps were at the whim of the app store owners and the product makers. And here he says, we want to own everything. Part of that is he's saying we're going to open source, open weight some of our models. and he has always argued that it's not that AI you have to be afraid of, it's that you have to be afraid of AI's concentration in just a couple of players.

21:18So what he said very much flows from his strategy of trying to do everything for everyone when it comes to the AI consumer experience. And the fact that he's aligning with Jensen Wong and not with these other guys who are his rivals says a lot about his ambitions right now.

21:32Scott Wapner: Yeah. All right. Good stuff. Julia, thanks. Thanks for joining us. That's Julia Boorstin. Jenny, you own the stock. What's your take? As I said, stock speaks for itself. It's up 15 percent in the last 30 days. Now, Zuck's weighed in as well in this in this debate that we've been having. Yeah. So with respect to Zuckerberg weighing in on the on the safety debate, like that part doesn't have any impact on my investment thesis. The investment thesis part is still the same, which is it's huge free cash flow generative. The earnings growth is significant. And, you know, they've gotten out of out from under things like there was the youth safety issue that that put kind of maybe a wet rag on them for a while.

22:07So they're out from these. I think Zuck weighing in is interesting in the bigger context. Yesterday, I read an article by Shyam Sankar, who's the CTO of Palantir, and he's weighing in on the ideology behind these AI warnings. So I'm trying to think of it, you know, where do I come out on it? And where I come out on it, both a human and an investor, is I don't know. You know, I don't know yet where it ends up. Is it amazing for humanity? Is it terrible for humanity. And the big question needs to keep being from all of us, why? Like, why are you telling us it's dangerous, but you're still building hand over fist?

22:42Why are you moving so fast? I don't know that there's an actual answer that can be attained right now, because we're in this wild period in time where everything's unprecedented, and it's changing, and it's changing on a daily basis, and it's moving faster than even those who are building it, Dario and Sam and Elon, even faster than they ever anticipated. So I don't know, but the bottom line is from an investment perspective, Mark Zuckerberg coming in on this, it's like, of course he has to.

23:08Oliver Renick: Mark Zuckerberg is the only one that still has the founder's mentality. So founders typically are great at seeing the future and building to accommodate that versus the others that are running these. And I'm only talking about the public companies. I'm talking about Amazon. I'm talking about Alphabet and Microsoft. They're the second generation. They're professional managers that came in. So that's why I've said Zuckerberg will be the best at navigating the AI trends. Now, in terms of the safety implications of slowing down, keep in mind, everybody's got a bias in this. So you've got Jensen Wang, who makes the leading manufacturer of chips, right?

23:53Oliver Renick: So he's obviously got a bias. I'm not saying it's a dishonest bias, but you got to take all that with a grain of salt. But guess what? Just like we don't want to slow down the U.S. from developing and lose competitive edge versus China, none of the A.I. company spending, public or private, want to slow down and lose the edge. So disregard what they're saying. They're all advancing.

24:16Scott Wapner: Yep. All right. We'll take a break. Coming up next, sports broadcasting icon Al Michaels. He joins us live ahead of Amazon Prime's fifth season of Thursday Night Football. Kicks off Tomorrow evening, we're back in two minutes.

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26:28Scott Wapner: Tomorrow kicks off Amazon Prime's fifth season of Thursday Night Football. Should be a great game, too, as the Bills open their new stadium against the Detroit Lions. Al Michaels will be on the call, joins us now live. Good to have you. As always, though, it feels weird. I'm on your coast and you're on mine. What's up with that? You're telling me. But this is a treat for me because we've done this every year. I can't believe it's been five years now since we started this package. And a beauty to start with tomorrow night, as you know, Scott. Brand new stadium. Two teams that escaped last week with victories.

27:03The last time they met, it was 48-44. So I anticipate we're going to have that same type of a game tomorrow night at the over.

27:11Scott Wapner: We're coming off the most watched Thursday night football season ever. And it feels like forever ago when people were saying that the Thursday night slate of games wasn't all that good. Now it's like every game is good. Somebody got the message and now it truly has become must see. As I said, the ratings speak for themselves, Al. Yeah, I mean, the league did us a solid after that first year kind of testing the waters. I mean, you go back to last year. Look, you don't know the way these games are going to play out. But probably the most exciting game of the regular season was the Rams against Seattle toward the end of the year.

27:50They wound up in overtime. That got, I think, ranked by most people as the number one game. And then in the playoffs, we wound up with Chicago against Green Bay, with Chicago affecting that tremendous comeback and knocking off the Packers. So you look at our schedule this year. I mean, tomorrow night's going to be terrific. A little later on this season, we've got New England going into Chicago. On December the 3rd, Kansas City at the Rams. San Francisco will meet the Chargers later on. So we're very happy. I mean, the league has a tough decision to make because you've got all of these partners and you've got to try to give them some very good games.

28:25And they've given us our share. We're very happy and very proud of it.

28:29Scott Wapner: You've got some elite quarterback showdowns. You alluded to one Mahomes against Stafford. Goff versus Allen is coming, as we know, this week. Drake May, Caleb Williams, you alluded to that. Lamar Jackson, Burrow on New Year's Eve. The holiday slate looks like can't miss as well. Yeah. And, you know, last year, I think we averaged about 15, 16 million people. So every year it has grown. And, you know, we've got a great group of people, I think, on our pregame and halftime with Carissa Thompson leading the way. So we're happy with the way things have evolved and where they've come. And I think the league has shown us that they're pretty happy with the way Amazon's been telecasting and producing these games by the type of schedule that we've been given over the past couple of years.

29:19Scott Wapner: Let's talk some business of the league. Are you, like all of us, just shocked? I guess is shock the right word when you see what valuations have done, Al? And it's not just in the NFL, but it's really all of sports. You know, obviously in your hometown here, what the Lakers just went for to Iger and company. But the NFL valuations have just surged. We need to keep updating our CNBC official team valuations list every year because the numbers keep climbing beyond our wildest imagination. Yeah, I watch very religiously, and it seems as if every time somebody comes in, it's another billion dollars.

30:00And I saw there where Dallas was 16 billion. So we had Jerry Jones at our seminar earlier this year, and I mentioned to him that he bought the team for$140 million back in 1989. And if they were worth, let's say,$15 billion, that's 107 times rate of return. And I happen to think that if the Cowboys were sold, they might go for closer to$20. I don't know where it stops. Scott, it's been crazy, but it's in all sports now, too. I mean, you've got the Angels just went for$4 billion, and you had the San Diego Padres going for$3.9. It's up all over the place. Of course, the Lakers situation, we know what that is.

30:41It won't stop. It won't stop. It's a great thing to have gotten into before this big jump evaluation. And, you know, you wonder where it will stop. I don't know. But remember now, you've got two universal languages as far as I'm concerned, music and sports. And you're seeing it now in spades in sports.

31:01Scott Wapner: Yeah, there's no question about that. I wanted to ask you about all that's been going on with AI. And we all remember from the Paris Games in 2024. I mean, you're the AI OG, right? AI Al. They used you. Or the DOG. They used your, you know, an AI generated voice, of course. I'm just wondering, you know, as you sit as an observer, as somebody who has literally had part of them used through AI, what you're thinking about this revolution we're watching? And we talk about it playing out in the markets, of course, as you think about that angle of it as well. It's a day to day thing. I mean, we all know what's going on right now with AI.

31:47Do you slow it down? What do you do? Do you stay ahead of China? Of course, this is this is what's the number one financial story of this particular time. I don't know. In a way, I think it's good. It can be good. But, Scott, it's also pretty scary. But I was amazed when I wound up doing that for the Paris Olympics, the fact that I'm listening to myself going, wait a minute, I didn't do any of this, but that's me. That's crazy. So where this goes is anybody's guess.

32:14Scott Wapner: Lastly, I know you've got to run, but what's your take on the market? The one thing I have to do, you know, this is part of our annual thing here. Farmer John is back there. Farmer John is back there eating Farmer John, but it's Farmer Jim. I want to know if Farmer Jim, I'm looking at Cleveland Cliffs, it's up 60 cents today. Farmer, are we getting back into this thing or what?

32:41Oliver Renick: All right, Al. Thanks for the correction. You know I can't avoid this. You know, I'm always honored when you call me out, and it's my fervent hope that at some point it will be on a discussion topic other than Cleveland Cliffs. But I do think they're turning it around here. They've made a prediction that next year they're going to be over$3 billion in EBITDA. They had a very good quarter last quarter, and if they have a good quarter this quarter, which will be end of October, I think they come out of the penalty box. I really do. They've been in the penalty box for a long time. One good quarter isn't enough.

33:15Oliver Renick: You get two good quarters. It should be enough. Look where hot rolled coil steel prices are. Well over$1 ,200. They make a lot of money at that level. Let me translate that for you. It was on the one-yard line with 99 yards to go. Now it's on the 10-yard line with 90 to go. That's Steve Weiss, in case anybody didn't know who it was. Steve Weiss, everybody. Farmer Jim, you have convinced me not to short it. That's what you've done. And apparently you're listening to Steve Weiss.

33:48Scott Wapner: Al, you're stealing my thunder, but I appreciate it anyway. You'd be well. You too, guys. Thanks. All right. You have a great call tomorrow night. We'll see you soon. That's Al Michaels, of course. You can catch all the kickoff. You can catch the kickoff Thursday Night Football tomorrow, 6.30 p.m., of course, on Prime Video. Up next, a check on the crypto trade. That key Senate vote failing yesterday. Plus, we'll debate our top calls of the day. Joe's got to move as well. Hit that as well. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that.

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36:04Oliver Renick: Welcome back to the Halftime Report. I'm Dominic Chiu with a CNBC News update. An apartment building in Gaza City collapsed overnight, killing more than 20 people, including nearly a dozen children. The seven story building was unstable because of damage from previous Israeli strikes. Nearly 100 more people were believed to still be under the rubble. Rescuers say people sheltered there despite the dangerous conditions because they had nowhere else to go. President Trump's pick for surgeon general was confronted on Capitol Hill this morning about her stance on vaccines. Dr. Nicole Sapphire said she has not seen reputable evidence that would suggest vaccines cause autism and that she believes the measles mumps rubella vaccine is our greatest tool for combating measles.

36:49Oliver Renick: Trump's latest pick stalled less during the confirmation process because of her controversial vaccine stances. The previous pick did. And the U.S. House passed a bill that would require all new vehicles be equipped with AM radio. Lawmakers say it's needed to push out emergency broadcasts and other local programming. The bill requires the transportation secretary to come up with a rule within a year, which would then take effect two years later. So, Scott, what's new and the old ways maybe can coexist every once in a while.

37:19Scott Wapner: Yeah. All right. Tom, thanks. Tom Chu. All right, Joe, let's talk about this move, because Morgan Stanley's Eric Woodring looks at the iPhone, the 18 lead times, and says flat year over year is actually a good start. We're, what, a week from the introduction of the new phones? You bought more of the stock, which is interesting. You've been consistently buying this name, but why more right now?

37:42Oliver Renick: This is the sixth consecutive purchase since late March that I have made. Let's take the viewers back to July. The last purchase I made was on July 7th, Subsequent to that, they reported earnings. You had a big sell-off from the$330 level. What has happened since then is a series of higher lows. In fact, after the Worldwide Developer Conference on the 9th of September, it challenged the 100-day moving average at$309. It held exactly there. It has now recovered everything that it lost post-earnings in July. And I am playing the very strong momentum that exists in this name right now, looking for it to break out to an all time high above 345.

38:26Oliver Renick: This is a technically oriented purchase. This is the sixth purchase, as I said. And I think the stock continues to move higher. And thankfully, it is showing resilience and helping out the overall market while we go through this period of elevated volatility.

38:40Scott Wapner: OK, thank you very much for that. Let's hit some stocks on the move and some things that are in the news for certain crypto. We're watching, obviously, given the cloture vote that failed in the Senate yesterday. Weiss, I mean, you've been in and out of Bitcoin at times. I'm wondering what you think this means now for not only the currency itself, but for the names that are around it, whether it's the Coinbase's, the Robinhood's, the strategies and others.

39:05Oliver Renick: Look, this is surrounded by true believers. You've seen major outflows since yesterday when the bill stalled and looks like it's not going to pass. At least it's not going to pass for a while. this path back, but it's unlikely. Look, there's no there there, in my view. I've yet to see a business case, business use case that makes sense and has come to reality, despite the decade they've been talking about them. I think there's no utility to it. The banks are coming after them from market share with tokens and with stable coins. So it's going to remain a trading vehicle. And I think the bias is lower.

39:40Oliver Renick: And that as long as Trump's in the White House, because of how much he said he made last year,$1.4 billion on the crypto assets, that people that are running in the midterms and then will be running again later, don't want to answer to, okay, why do we support him with this immense wealth? So I just don't think there's anything there.

40:04Scott Wapner: Okay, we'll do one more. AstraZeneca reiterated by UBS, Jimmy. Pullback's overdone, they say. What do you think?

40:12Oliver Renick: Yeah, the pullback was on a failed drug trial for a heart treatment that they were working on. That was about two months ago. And when that happens with a quality pharmaceutical company like this that has a lot of different strategies that they're working on, a very full pipeline, it's a time to buy. So I agree with the call. Very attractively priced. Good dividend yield. And I like the space. I think this is a space that does well regardless of what rates do.

40:36Scott Wapner: All right. We'll take a quick break. We'll come back with Mike Santoli. His market memo. is next.

40:56Scott Wapner: We're back with our senior markets commentator and the overtime co-anchor Mike Santoli, his market memo. OK, how are you thinking about this market right now?

41:05Oliver Renick: I mean, I think it's pretty well set up to kind of pivot in either direction on the Fed. I think it's mostly priced. Look, we have to look at the whole mosaic of evidence. I don't think the economy and the markets are screaming out for aggressive change in monetary policy. But the whole weight of the evidence does point in that direction. Keep in mind, they're going to raise most likely by 25 basis points to a level that will be 50 basis points lower than we were a year ago. A year ago, CorePCE had been running under 3 % for several months. It's now running comfortably above 3%. The unemployment rate in 2025 had gone from a low of 3.7 up to 4.4 when they started cutting those three cuts last year.

41:50Oliver Renick: Now it's back down to 4.1. It's kind of central banking 101 that if you're going to turn the dial on policy a little bit in reaction to all of that, you would snug it up just a little bit. I do think it's interesting. We have all these asset markets at these kind of fight or flight thresholds. You have the 5 % tens. You got the S &P 500 right on top of its summertime range high. You're going back to June 1st levels, obviously oil at 100. So I think there's room for relief in the markets because internally the stock market's gotten a little oversold. I'm fascinated to see how the long end of the Treasury curve reacts to this, because that's going to be the tell.

42:26Oliver Renick: I don't expect a major rally that drops yields significantly and have them stay down there. I'm not even sure you'd want that, because that's how the market might react if they thought the hike was a policy mistake.

42:37Scott Wapner: What happens if they don't hike, do you think?

42:40Oliver Renick: I think mass confusion, right? I think it would be like a very gyrating market. I don't know. I don't think 5 % tens is really mostly about inflation getting de-anchored. You know, it's just not. So I don't know that we would get the market selling off even more because of that. I think it's probably moved. I think it would basically be seen as an act of hostility by the chairman on the markets once you're priced for 90 % of one thing and you give him another.

43:06Scott Wapner: That's going to be so, so, so interesting. Mike, thank you. That's Mike Santoli coming up next. Options action. Oliver Rennick. He's following some notable activity in the energy trade today. We're back right after this.

43:32Scott Wapner: Time for options action. Oliver Rennick joining us live from the CBO Global Markets in Chicago. What are we looking at today?

43:39Oliver Renick: Hey, Scott, it's pretty amazing how consistently we see options traders fading big moves in oil. Trading in both USO and XLE lean bearish today, with notably bearish trading happening in the energy stocks in particular. Volume 70 % above the usual, and more than twice as many puts traded in XLE than calls. Nine of the top 10 contracts traded were puts. There were also a lot of puts sold, but perhaps that just means traders are hedging bearish bets. We saw a lot of put buying in the 57 strike expiring one month from today, which needs XLE to drop 12 % to pay off. The exception to the action was some heavy call buying activity in the 65 strike call expiring today, which is just out of the money.

44:29Oliver Renick: So perhaps some are saying that today's sell off in oil is overdone, but the activity does lean bearish long term, Scott.

44:36Scott Wapner: OK, Oliver, thank you for that. That's Oliver Rennick, CBO Global Markets in Chicago. Of course, Joe, you've got J.B. Hunt and we know the toll that these record high fuel prices, diesel and everything else are taking.

44:48Oliver Renick: $6 diesel. We need to bookmark today and revisit it. Is this the beginning of hearing the story about earnings degradation across the board, attributable to rising energy costs? We purchased this at the end of July for the ETF at$271. So we're basically down on what we've lost today. I don't advocate stepping in here and buying it. I think you need stability. There's something about this that is troubling to me. to hear the CFO come on and say earnings are going to be down 5 % to 10 % because of those high diesel costs and because of driver costs. This is problematic. We also have Washington International and we have Old Dominion.

45:30Oliver Renick: Freight stocks are down across the board. But do not dismiss this. Pay attention to what's going on here. Maybe this is the beginning of something. Hopefully it's not.

45:38Scott Wapner: Jimmy, how are you thinking about this space right now, given the holdings that you have?

45:41Oliver Renick: I think energy stocks are going to make a lot of money for the rest of this year. We're going to be refilling inventories across the globe for months and quarters to come. When this conflict ends, which is very much unknown, these stocks, these ExxonMobiles of the world, these Cheniers, these Fangs, these Transocean, these stocks are going to be making a lot of money for a long time. And if I look at ExxonMobil, it still is not at the peak that it was at back in March. It's attractively priced. Say the same thing about Chevron. This is just obvious here. Okay. When we come back, we'll do finals.

46:44Scott Wapner: We'll be back in a couple hours. Jeffrey Gunlock, the double line CEO and CIO, joining us right after Chair Warsh finishes his news conference. Will they or won't they? We shall find out. We will do final trades, though. Right now, Jenny Harrington, you can start us off. All right. Schwab trades at 14 times earnings, has 20 percent plus earnings growth ahead. It's the kind of stock that you can literally hold forever in your portfolio. So Farmer Jim, Farmer Jim, you just had to do. I knew you were going to do this.

47:14Oliver Renick: You know, yeah. I mean, I don't care if it's Farmer John or Farmer Jim, just as long as Al Michaels isn't shorting Cleveland Cliffs.

47:21Scott Wapner: I love it. OK, this stock's up 5 percent. Touche. All right. Good for you. Steve Weiss, what do you got?

47:28Oliver Renick: Yeah, United Health. It's been a rough time lately, but I think it's on its way to recovery. And Scott, I'm feeling very generous. So let me give you FTAI also, which announced a large buyback. The stock has been trashed. I think it moves back up. Joe?

47:41Scott Wapner: Insight Corp. Get back to New York safe, Scott. All right. Thanks, guys. The exchange is now. See you in a bit. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC. All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion.

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