More Volatility on the Way? 11/3/26

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0:58Scott 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.

1:13Scott Wapner: Carl, thank you very much. Welcome to the Halftime Report. Scott Wapner, front and center of this hour, questions about this record-setting rally, whether more volatility is on the way after the midterms, whether the AI trade is breaking down or not. We'll ask the committee all of that. Joining me for the hour, Joe Terranova, Jason Snipe, Jim Labenthal, Josh Brown. Take you to the market, show you what we're doing right now. NASDAQ's green leading the way. Ten-year notes below five. S &P and the Dow are split. Here's where we're going to begin, though, with what Elliott Management has to say and what they are apparently warning of in their newest letter to investors, according to The Wall Street Journal, what they call FOGO, the fear of getting obliterated in the market.

1:56Scott Wapner: They warned that virtually every alarm bell of a substantial bear market is ringing, comparing the market to the roaring 20s that preceded the Great Depression. They highlighted risks building in budget deficits, inflation, private credit, AI hype. They warned about distortions caused by factors they said was more akin to gambling than investing, including traders using zero-day options and betting on meme stocks. I mean, I've heard of FOMO. I've heard of FEMO. That's their fear of missing out on the earnings momentum or whatever Ed Yardenny has coined. But this is a new one. BOGO. Fear of getting obliterated.

2:34Yeah, I don't want to be dismissive of this. There are a lot of headwinds. There are a lot of challenges as we move towards 2027. That's for sure. The only thing that I could think of as you describe that is, OK, here comes a rotation into cash because that's probably the only place I'll get somewhat of protection. I'm not sure what what's actionable off off of that, except it feels very apocalyptic. Now, in reality, I think the other condition that you would need would to see an obliteration of earnings more than anything else and really to go into an earnings recession. We don't have that. So I'll sit back and I'll kind of take the other side and say, I don't think that apocalyptic moment is upon us anytime soon.

3:21And the reason for it is the strength of these earnings.

3:24Scott Wapner: It's obviously a catchy headline, but what is mentioned in here is legit. I mean, we do have high deficits. We do have persistent inflation. We have had questions about private credit. Some say we do have too much hype around AI. We do have zero day options. They've caused volatility at times. We've had meme stock mania at times, stocks that have traded like meme stocks, even though they're not and not supposed to, but they have. I'm not saying to act on what they're saying, but they do, Josh, make some interesting observations about the narrative and about the environment of where they think we might be.

4:1211 years ago, you had Carl Icahn on stage and he was explaining to you his danger ahead concept and all the same stuff was being brought up then. Like there was no AI, but it was like valuations in Silicon Valley. I think people, I don't know. I think people were worried about like Airbnb's valuation or something. He had Larry Fink next to him and he was telling Larry Fink that BlackRock was on the verge of blowing up the world. He was referring to fixed income ETFs as his words, not mine, weapons of mass destruction. He did a very skillful job at taking every negative thing that exists out there and bundling it all into one story where I guess BlackRock was going to be reckless and blow up the bond market, which would that.

5:10And then there were like the political headwinds. Don't forget it was Trump's first campaign. We thought he was the end of the world for the stock market. And people were talking about Brexit around 2015 was when that first became like a story for 2016. So it's like, you know, all reasonable things to be worried about. Like they weren't fabricated. Debt, deficits, demographics, interest rate risk, the Fed, politics. Anybody can do that. Like I can make a list of 10 scary things right now. We have cities around the world being set on fire. So that's not hard to do. The harder thing to do is to look at the last week where we've gotten the earnings reports from the largest companies in America, the biggest index weights, some of the most important contributors to the growth outlook for S &P earnings.

6:03And we sort of are surviving it. I know Alphabet had a rough day. Microsoft didn't. You know, Meta had a rough day. Apple didn't. Look at the candle on Palantir. What are people going to say if that goes green today? Like, I just, I think it's really easy to catalog all the potential negatives and to tell a story where we're on the verge of the crash. But the thing is, what happens a year from now if there isn't a crash? Like, does anyone remember? Does anyone care? and what if you overreacted to it and I don't know, like started buying gold bars and then nothing like what do you do? You just dust yourself off and start buying Apple again.

6:43So I have been very cautious, not thinking that I'm about to predict like the next great financial crisis, but like I was talking about at 5 % two year. Hey, this is a great time to rebalance, take some money away from the tech stocks that you've just written to a 200 percent return in three years and reallocate into the risk free and bring your portfolio back into some semblance of normal. That's one thing that you can do. We run a tactical strategy in house. It's called Goaltender. Been talking about it for 11 years on the show. Goaltender is down from 100 percent to 90 percent equity as of the latest monthly rebalance for November.

7:24Maybe that drops down to 70 next month if we get another rough month. I don't know. It's reactive. It's technical. Our porterhouse portfolio, it was 15 percent cash last month. For this coming month, it'll be more cash based on trades that are happening now. So like that's systematic. It's not me being like, oh, I don't like the looks of this midterm election. I just think investors need to have a plan and not react every time somebody makes a list Citrini style of all the scariest possible things that can happen and acts as though they're all going to hit at once.

8:00Scott Wapner: I think, Jason, one of the key questions is whether we've already had enough of a washout in some of the highest flying AI names. And if you look how much some stocks, I didn't list every one of them, but enough that are significantly off their 52-week highs, KLA Corp is almost 50%, as is applied materials in Marvell and LAM. So the chip equipment names have gotten hammered. The memory stocks like Micron, 32 % off the high. AMD reports later it's 25 % off the high. Even NVIDIA is 15 % off its high. You want Alphabet, 32. Meta, 21. Amazon, 14. Those are minimum correction, in some cases, deep bear market.

8:43Scott Wapner: Yep. So I think that's a legit question as to whether we've already had enough of a reset into some of the most, quote unquote, AI hype names. A hundred percent. I think that and I think the big thing for me is don't get too bearish on AI. Right. These names have obviously run a lot and they've come a lot off of their 52 week highs. And I think the other, you know, to the point you were making earlier about kind of this doomsday and the quote from the New York Times, You know, the reality is, for me, why is discretionary net working? Why are financials working? Well, because, I mean, oil prices, you know, went down by the biggest amount yesterday that we've seen some time.

9:20Scott Wapner: That's why discretionary is working. Right, right. But it's still consumer-related. Why are the regionals working? Right? So, I think, for me, that is a little bit hyperbolic. I know we pay attention to headlines like that. But as I kind of look at the earnings picture, to Joe's point, 30 % earnings growth thus far for the quarter, these are really good numbers. And I think as we look through it, and again, the conversation around today being a pass-through event, once we get through the election, everything is all good and clear. I'm not necessarily in that camp exactly, because we've talked about renewed strikes in the Middle East and what that might mean for the economy and the markets.

10:02But what I will say, I still stand steadfast into what earnings have been doing and what they continue to do.

10:10Scott Wapner: Earnings are great. There's no two ways about it. But at some point, the stock market starts to discount what earnings are going to be in the many months ahead of us. And the first sniff of an earnings peak, the stock market's not going to look the way it does. And you're not going to be able to cite the fact that earnings are as strong because people are going to say, yeah, you're right. Yeah. But they have peaked. And as earnings decline, then you can't be willing to pay perhaps the multiples that you're willing to pay today for some stocks within the orbit that I just said.

10:43Oliver Renick: Possibly. Possibly what you just described, Scott, is exactly what's happening right now with the likes of NVIDIA and Micron, which if we would look at their valuation versus their growth rates, I think we would say that they're attractive. But the point you're making is probably what the market is saying about those stocks is that a peak is near. I am not that worried about it. I mean, I want to acknowledge the investing prowess of Mr. Singer and Mr. Pollack at Elliott Management. But I have to also acknowledge that there's been a cottage industry for decades of finding the next Minsky moment, the next Lehman Brothers.

11:16Oliver Renick: And I mean, I'm old enough to remember when private credit was going to do that earlier this year. I'm old enough to remember when Silicon Valley Bank was going to take things down. I get what I do instead of thinking about those things is I think about the core fundamentals, low unemployment, strong GDP growth, strong profit growth, even when you take out the paper gains. And I'll just, you know, I'll end my soliloquy here on NVIDIA. The next 12 months, it's likely to generate 300 billion in free cash flow. So as much as we're agitated properly about negative free cash flow at the likes of Meta and Oracle, that negative free cash flow is creating positive free cash flow elsewhere.

11:53Oliver Renick: There is a virtuous cycle of money flowing through the economy right now, and it's showing in all of the statistics that matter. I can't worry about the debt and deficit when that's been a problem for literally 26 years.

12:05Scott Wapner: So if you take the question I asked, whether you think enough damage has already been done, whether the stocks that needed to get hammered did, and then you're in the slow process of now rebuilding a good part of the AI trade, JPMorgan today isn't so sure. They say we maintain a cautious near term equity stance in favor defensive positioning until the charts show either a bottoming process or capitulation. U.S. large cap indexes are pressing critical support, while the VIX tests a multi year bifurcation zone. The market's vulnerable, they say, to a regime shift if the S &P breaks below seventy five hundred.

12:44Scott Wapner: OK, so I said seventy five seventy eight yesterday. The market as we sat here was significantly higher. You asked me if I felt as though enough work had been done. I said I didn't believe it did. I do think we have something that you could build upon if you want to be optimistic about the AI trade over the coming month. As I'm speaking, if we could show what the reaction has been, and I've been very focused on earnings and reaction because, Scott, you and I have talked about this. Reactions have been awful to really good earnings. But now let's look at the industrial sector for one second. Let's begin with Vertiv over the last week.

13:22Look at the response to Vertiv's earnings, plus 15 % on the day that followed and subsequent to that follow through. I could make the same case for Quantr, PWR. Eaton. Eaton. Eaton today. That's your electrical equipment related to AI, a really strong response. GE Vernova, the same thing. So that industrial AI segment is maybe giving us a glimpse that we have washed out just enough to get that end of year optimistic bull trend back in place.

13:57Scott Wapner: I mean, some obviously think once you get past today in the midterms that the, you know, AI hate, if you will, is going to sort of die down a little bit. All the data center doomed day scenarios are going to die down a little bit. We do expect more volatility, though, I think. At least many on Wall Street do. Midterms being a risk-clearing event. We think there's more pain to come first, though, says HSBC. UBS, the outcome unlikely to displace the primary market drivers of the moment. AI investment, economic growth, corporate earnings, inflation, and interest rates. Yeah, so I would say this quickly on kind of the data center story.

14:38Listen, week after week, day after day, talk about all the CapEx spending and what those levels are and the numbers. I don't need to repeat them today, right? But what I will say is post-election, that noise absolutely quiets down, right? This is all posturing for the election, blah, blah, blah, blah, blah. Once the votes are in and we're done and we're moving on, that money has to find a home.

15:02Scott Wapner: That's fine. What about that question? More volatility on the way? Is there going to be more volatility on the way? Based on the outcome of whatever happens in the midterms? To the degree that we've just experienced, I don't think so. I think maybe in the short run, but in the longer term, and I'm talking three to six months out, I think the vol starts to come down.

15:19Oliver Renick: So, you know who I think pulls the Santa Claus sled at the end of the Thanksgiving Day parade? It's Anthropic. I think that that is the market clearing event. Look, the midterm elections, who knows if they'll even be done today? Yes, they'll give us certainty, but it's going to be dragged out. I think, though, if Anthropic comes, raises 100 billion, maybe it's not even 100, maybe it's 90 or 80. that clears the market in saying these guys have enough money to follow through on the next couple of years worth of spending plans. By the way, at the same time, we're seeing if OpenAI, I know they've reduced what they're looking to raise, but if in the next couple of weeks they put up a$20 billion print, it just shows that the money is still there.

15:57Oliver Renick: The investor willingness, i.e. the sentiment, is there to continue the AI trade. Those are the market clearing events I think we're looking forward to dampen down volatility. Bring in a Santa Claus rally, Scott. So if that's true, Jim, and I think you have a point, I think people should feel pretty good about the fact that Anthropic is sitting on like$130 billion right now. 146. So I understand that money raised is not the same as money generated. And we're not talking about a company that is generating a lot of free cash flow. But Anthropic has more cash on its balance sheet because of all the raising activity they've done in the private market than every company in the Mag7 other than Alphabet.

16:46This is a company that has already done a really great job at convincing the private market that you want to be a shareholder here. I actually don't think they'd have trouble raising another$100 billion in the private market if they had to. The thing is, what they really need now is public market liquidity and the legitimacy that comes along with having a public ticker symbol and regular SEC reports and filings to investors, et cetera. That's like, I would say more important, as important as the dollars that they'll raise. But I don't think the trouble is, can we raise$100 billion? Because I'm pretty sure they could do that privately, like in a week.

17:31Scott Wapner: I want to ask you about that. Let me ask you about that. I mean, why are you so sure they could do that when you just had the news that OpenAI is, you know, pairing their raise back by$10 billion? They wanted$30 ,000 ,000. They go to$20 ,000. The suggestion on all of this is that people are just tapped out. Resources for capital are already tapped out for all of these. So why do you think that it'd be so easy to raise$100 billion? I don't see it. So here's what I'm not saying. I'm not saying I think Anthropoc comes public, raises$110,$120, does the high end of the range,$2 trillion. and then like the stock goes up another 50%.

18:19I'm not cheerleading what looks like it's going to be the number one or two largest IPO of all time and saying like, this is gonna be amazing. I'm just making the point. I don't think the world is tapped out. Part of the problem here with prices in the economy is that there's just too much money. And it's not just US money. You think about all of these billionaires in Asia who own these memory companies and the semiconductor fabs. They're the ones sending capital back into the United States, and they're not buying treasuries. They're reinvesting in tech. Then you've got the whole Saudi, UAE contingent, and they're not done investing.

19:05So I think this is Jimmy's point. It's a market-clearing event. I don't even think he means financially. I think emotionally, like, oh, they did it. They pulled it off. Exactly. Yeah, I think that's it. I think he I think he has it right. It doesn't mean I think the stock's going to open at a premium or the people should pay two trillion dollars. I didn't buy SpaceX when it came out at one hundred and seventy five.

19:29Scott Wapner: No, I wasn't questioning that or I wasn't insinuating that you were were hyping it up in any way. I was just challenging the idea that they could, quote, easily go out and raise another hundred billion dollars if they wanted to, because I think that the evidence would suggest that maybe that's not true. So that's all. And I don't want to get bogged down in that either. I don't want to get bogged down in that. We'll find out. You might be right. I want to I mean, I'm just using the evidence and the anecdotal evidence from others, you know, obviously adjacent like an open A.I., which, you know, and some have suggested, obviously, that certain, you know, capital streams are a little dry.

20:03Scott Wapner: Whatever. Let's talk about Apple. Shares are down. Service revenues slowing. Margins, not great. Guided below the street on that. Slowest services growth since 22. Revenue is strong. But the other worrisome, more worrisome metrics are what seems to have gotten the streets focused. Granted, the stock's only down 2%. We're not talking a big deal. However, the commentary is around services and margins from even Eric Woodring. He's a bull. Morgan Stanley. strong top line services and margin headwinds. Gil Luria price increases and Duo may not be enough. Melara Martin, she's been negative the name for a while.

20:41Scott Wapner: Supply constraints, risk apples, moat. You know, obviously Dan Ives is on the other side of all of that. Everybody owns it on the desk. You've been buying it aggressively over the last year. What was your takeaway? way? In terms of the specific price itself, I think you can anticipate that running in place might be as good as you get here over the coming quarter. I said yesterday, I thought we go to 400 before I get stopped out at 275. What do I see in front of me that's making me believe you might run in place? I think if the market has kryptonite, it's built around two words, diesel and memory.

21:19And I know a lot of people are excited today because the memory stocks got a lift off of what they heard from Apple last night. Your Western Digital, your SanDisk, your Micron. You got a modest lift. But if memory prices are going to continue to be a challenge, there is going to be a pass-through effect, just like there's a pass-through effect for diesel. And I think Apple is very clear in telling us in the coming quarter that's what they anticipate. I still believe that my position will work as we move towards 400 for the reasons that I described yesterday. I think this has a variety of characteristics that are appealing to an investor.

21:55You have the skepticism, you have the safe haven appeal, and you do have a revival of the revenue growth. But if there's one word I'm going to focus on from last night, it's memory. And there clearly is a effect that is not going to be positive as we move forward.

22:11Scott Wapner: The word I think that matters most to more people is valuation. If, you know, yes, you have the revenue growth, fine. But if you have the slowest services growth since 22 and then your margins are taking a hit 36 times, it's troubling for some. It's a mountain that's too high to climb. Now, there's many, everybody on the show already owns the name. And nobody I know is selling any of it today. But I continue to press on justifying 36 times against what we found out from services growth and from gross margins. Yeah. Yeah. I mean, it's definitely an issue to your point. 36 times forward, decelerating services growth.

22:5816 percent two quarters ago, 12 last quarter, 10 in line, which is what they guided towards. And, you know, part of the story is for the holiday quarter, gross margins. Obviously, Joe, you just chatted about that, came in, was a miss, right? So I think for me, I'm actually focused on consumer AI. We turn this now at the helm. Siri ramp is still in the very early stages. I feel like we hear that quarter after quarter after quarter. When is that going to get going? So for me, that's one of the things that I'm acutely paying a lot of attention to, you know, as I kind of evaluate the stock on a going forward basis and obviously the revenue growth and what's going on with the service.

23:41Scott Wapner: Let's hit semis. Let's just keep moving the ball. AMD, it's peculiar, right? They report later the stock is already up almost 6 percent going in. It's 22 percent off of its highs as well. That does a bar lift of some sorts, I would think. Lisa Suh is going to be on Squawk on the Street tomorrow, 9 a.m. It's a first on. We look forward to that. What do you have this stock? I do. Here's your numbers. 41 % revenue growth, 92 % on earnings growth. Obviously, the lift that we're seeing today, I think it's part of this universe of AI that is rallying along with the memory names. Maybe there's one thing that really has advantaged AMD, and that's what happened to Intel on Friday and Monday, because there were sympathy sell-offs, Scott, with AMD.

24:29I think it was down 10 % on Friday. It was down another 7.5 % on Monday. So yeah, you had the sympathy sell-offs. It was almost as if AMD was reporting alongside Intel and you had that negative reaction. Keep your eye here on the revenue directly and attributable to Meta. We all know there's excitement surrounding Muse. Meta is the second largest revenue customer for AMD. It sits at around 5.5 % of their overall revenue.

24:56Scott Wapner: Let's see if they benefit in that regard. You have a move today that will leave right until now. You bought Teradyne. Yes. That's a new buy? That is a new buy. It's a personal buy. It is a semi-equipment name. And Josh has used the word cautious. I've heard so many on the desk use the word be cautious where we are right now. And I like that. And this is not a semi-equipment name with an unreasonable valuation. This is an upper 20s valuation. It is a company that is part of the testing environment for hard disk drives and the data center surrounding memory. You need to go to them first to test the AI chips.

25:37Had a strong quarter recently with 82 % revenue growth. I've liked this name for many, many years. And you're seeing that you're getting this stock on a significant retreat. If you could pull that back, I think it was close to$500 that you go earlier in the year. So I feel like getting this stock on a discount. I wanted some exposure to the semi-equipment, and I wanted to do it with what I would believe is a reasonable valuation. Wow.

26:03Scott Wapner: I mean, we're not even talking that long ago that it was north of 400. So you don't even have to go back earlier in the year. That's a pretty brutal decline. That's some bubble. Hey, well, that's exactly why I raised what I did at the top. But it's a good juxtaposition of what's actually taken place. The points that were made in the letter versus the pulldown that a lot of these stocks have already experienced. That's why I think that conversation is relevant. Has there already been? Maybe there was signs of bubble, but it's been deflated. Yeah. So this market topped in July. It's very hard to have a bubble if no one else is willing to play along.

26:47Um, bubbles aren't historically, at least known to coincide with, uh, 16 months of multiple contraction. The, if you think about the semi semi equipment group that Joe is talking about an AMD, um, they are 33 % below their highs. The SMH itself is 24 % below its highs, which is right about when situational awareness blew up. The semi, uh, stocks were in a 25 % drawdown. So we're in that same drawdown that we were in then without another situational awareness thing happening. NVIDIA is 14 times forward earnings. The S &P value index, by contrast, price earnings is 17.9. So NVIDIA is selling at a discount to value stocks.

27:37DRAM, which some would say is the epicenter of the bubble. Well, if it is a bubble, it was a bubble. It's 41 % below its highs. Can you make the argument that it'll end up 80 % below its? I guess you could. But let's not act like people are frothing at the mouth for these stocks. They're not. I'm going to go. Last quick point. You know that in the past, I've been dismissive sometimes based on my momentum focus. All the time. All the time. All the time. I'll tell you 24 hours later, I am more aware and more concerned about the valuation of Apple. And I want everyone to try and appreciate what I'm doing here with this semi-equipment name.

28:19The valuation, Jimmy, it is reasonable on this company. This is not an 80 or 90 times company. I love hearing this. You're more aware that you've been dismissive? In the past, I know I've been dismissive of valuation. This is a self-awareness moment. When you have a momentum focus, you're going to be dismissive. But the moment we're in now, I think, requires paying more attention and being more respectful of valuation than in the past. We all learn from each other.

28:44Oliver Renick: He shows me a chart. I learn.

28:45Scott Wapner: All right. We've got committee stocks that are on the move. We'll kick those around. Got some calls of the day. Best stocks in the markets just ahead. We're back after this. Legacy credit scores only look at a brief snapshot in time. And that limited view often leaves millions of qualified credit seekers out of the picture. Vantage score is changing that by modernizing credit scoring. VantageScore uses 400 % more credit and alternative data to create a fuller picture of financial behavior, including trended credit data, rental payments, and timely utility payments. VantageScore safely broadens access to the credit economy and brings 5 million mortgage-ready borrowers into the market.

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30:04required. It's the holiday season at House of Burl, which means that it's the perfect moment to review some key rules. Rule number five, more style means more celebration. Number four, buy gifts, but remember to treat yourself too. Number three, there is no dress code, but always leave them talking. Number two, show off different outfits. No party remains unattended. And rule number one, have it all without spending it all. Happy holidays from House of Burl, Burlington.

30:48Scott Wapner: All right, welcome back. Stocks on the move. Let's talk about Apollo first. Let's see the stock today. They did have a net loss, 52 % drop in revenue. Stocks down 5%. Retirement services, one of the issues amid higher rates, but they are, they're bringing in the cash still. Total AUM increased to$1.074 trillion, inflows of$53 billion. You got the name.

31:15Oliver Renick: Yeah, I'm going to lead with the punchline, which is I'm sticking with the name and I do think you can invest in it here. You're not flinching. No, but I'm not happy about this report. I mean, there's a lot to not like about this report, including the base earnings, but especially the loss at Athene, which has been a source of, dare I say, controversy about Athene funding the various investments, particularly in private credit. Just not the time that you want to see a write down within that unit. Hopefully that's behind us. In terms of why I still lean into it, why I still like it, if you are a believer, as I am, that we're not at the Minsky moment, that the AI trade, the AI build-out is going to continue, when we talk about who's providing picks and shovels.

31:56Oliver Renick: Yes, NVIDIA, but Apollo is providing the financing, period. And they're making money.

32:01Scott Wapner: You weren't even tempted to flinch.

32:02Oliver Renick: No, I'm tempted to be annoyed. I mean, look, as an investor, you can't look at this report and be happy.

32:06Scott Wapner: Annoyed that I'm asking you about repeated flinching or just annoyed at the stock down 5 percent? I'm not flinching. Or choice C, all the above. You go drink your water. We'll move on. It feels like we're at that moment. You go ahead. Vertex, mixed earnings guide was light, a light guidance hike. Joe T, take that. Cystic fibrosis franchise continues to dominate in terms of market share. This earnings report was good enough, but it wasn't perfect. And this stock is clearly priced for perfection. Do I guide getting out of the stock? I do not believe so. I think there's a lot of wind at the sales here from that cystic fibrosis franchise.

32:48I think this is nothing more than kind of shaking the trees and letting a lot of those recent longs move to the sidelines.

32:57Scott Wapner: What about Expeditors International? Hit a record high yesterday, did have earnings and a revenue rise. Great franchise benefiting from the hyperscaler spending, benefiting to a degree from tariffs and the business model itself. Understand for freight and logistics, they're a broker. So it's not as if they're stuck with the cost of ownership. They're acting as a broker and they are in extreme demand right now. OK. D.R. Horton, underperform, Raymond James. We've talked about a lot of these stocks relative to where mortgage rates are, where the housing market's been. It hasn't been pretty. Yeah.

33:34Scott Wapner: This is following the earnings myths and their guide. What do you think? Yeah. And that continues to be the story, obviously, the rate story, what's going on with mortgage rates, and the giveaways, the incentives that are kind of pulling away on the profit margin. So this is in a review moment for us as we kind of continue to follow the macro and what's going on with the 10-year. But it's a tough story right now in terms of how to move forward. It's in review? Yeah. How long has it been in review? It's been in review for the last three months, at least. Three months. Okay. That's a long review process.

34:05Scott Wapner: When do you think we have an answer on the review? Shortly, before the year end. Definitely, They probably want an answer. Many times you get a performance review, you kind of you don't want to hang it out there. Right. Before you're in. Absolutely. All right. Pippa Stevens has our news update. Hey, Pipps. Hey, Scott. Greenland's parliament voted today to ratify President Trump's security deal, which expands the role of the U.S. military in the self-governing Danish territory. The agreement will pave the way for two new military bases and the installation of President Trump's Golden Dome missile defense system.

34:35The Danish parliament is due to give the bill of first reading next week. The jury and comedian Russell Brandt's rape and sexual assault trial began deliberations today. The charges stem from complaints made by six women who alleged he committed sex offenses between 1999 and 2009. Brandt has denied all of the allegations and said all of the encounters were consensual. And the U.S. Space Force says a NASA telescope that has been in orbit for 22 years will come crashing back down to Earth tomorrow. Most of the one and a half ton Swift observatory is expected to burn up in the atmosphere. But NASA says some pieces may survive reentry and are likely to fall into the ocean.

35:15However, there are parts of Africa, Australia, India, Southeast Asia and Central and South America in the reentry zone. Scott. All right.

35:24Scott Wapner: But thank you. That's Pippa Stevens. Josh Brown's best stocks in the market. He has focused on three energy names. Tell you next. To every clinician finishing notes at 9 p.m., there is a faster way. Whisperflow is a voice-to-text app. You talk, it types in your EHR, your email, anywhere you type. Say the progress note, the referral letter, the patient instructions, and it comes out clean and formatted with your terminology spelled right. Four times faster than typing and HIPAA ready. Whisperflow is free. Get it at whisperflow.ai. That's W-I-S-P-R flow dot A-I. If you're a parent and want to help set up your child for success, then IXL is a right for your family.

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37:21Scott Wapner: All right, best stocks in the market according to Josh Brown. The spotlight is on three stocks in energy. We've done energy a bunch. Why are we doing it? Why is the spotlight on these names? Well, you have a nice pullback here, probably as part of the last day of electioneering. It seems like maybe there was more talks with Iran and crude oil pulled back and all these stocks got hit yesterday. So we wanted to revisit because we've been talking about these stocks for, I guess, the last 15 months or however long we've been doing these segments. and they've been winners. And they really, for the most part, have nothing to do with the AI trade whatsoever.

38:02They sort of exist in their own world. ConocoPhillips COP has already broken out. This one's already a huge winner. We've written about it multiple times. We've done it on the show. RSI is 74. So I know it's pulled back a little bit. Maybe give it a second. Let's see how it handles coming back to that old breakout point. If it comes back on lower volume and hangs in there, maybe that's a better entry. Devin hasn't broken out yet, but I think this is the one that could go. We do own this for clients in our Porterhouse concentrated momentum strategy, full disclosure. Basically, Devin closed a merger with Cotera in May.

38:43They added a ton of assets in different shales. And it's oil and gas, but the stock primarily moves on the price of oil. So yesterday was a pretty severe pullback, but it pulled back right into former support, kind of laying on that line right here. This is a great test. If it doesn't break below, I think I want to give this one – give me the five-year chart. I think I want to give this one the opportunity to break out to fresh highs. That$52 to$54 level is meaningful. Thank you. And I think we've got a really big base here. And technicians say the bigger the base, the bigger the space, meaning the space above that it could break out into.

39:25Lastly, Oxy. Occidental is 26.5 % owned by Berkshire Hathaway. They also have warrants where they can buy more shares. Those are now in the money. Occidental basically has been a story of deleveraging and getting rid of non-core assets like chemicals and really becoming more of a pure play. This is another one. Looks just like Devin. Could break out. RSI has already cooled off to 64. The price has been sideways. I think the March high of 67 is the level to watch. If we get a clean break out there, there's no telling what the upside for the stock can be. These are not expensive. They do have some vulnerability if there is some sort of like a negative supply shock in oil.

40:12I don't really foresee that as being the thing that brings this complex down. And once this one really goes, it's going to go.

40:19Scott Wapner: Okay. Joe, what stands out to me is that of all the names you have, and I don't know, I've got like a dozen or so on my list. These three are not in there. No Conoco, no Devin, no Oxy, right? We do own Conoco. You do? We do own Devin. You do? Yes, we do. We own 13 names, 13 energy names. My bad. earlier in the year we increased the weighting for energy over to above 10 percent oh yes you do you do on conoco we've maintained that position by that currently um i think we stay anchored to it i mean look scott these energy names they are really the definition the signature of 26 as it relates to momentum the valuation was nice and cheap coming into the year the thing that troubles me about where we are right now in this moment is i don't know what's going to happen in the Middle East.

41:06Last night, we had the news about some bombing in the strait, and the price of oil really hasn't responded to that. It's actually a little bit lower. So I think you're up in the air, the direction from here. Therefore, I wouldn't take action in this moment right now. I just stay anchored to what I have.

41:22Scott Wapner: Okay. We'll take a break. St. Tully's Market Memos next.

41:41Scott Wapner: Senior markets commentator and overtime co-anchor Mike Santoli sat down at our desk. So, I mean, I could ask you about the Elliott thing. I don't know what your sort of reaction to that would be relative to what you think needs to happen in this market to have a little more conviction behind kind of everything. Yeah, I mean, the Elliott thing strikes me as a little bit of a reiteration of somebody who's been fighting the trend for a while and thinking that there's actually a little more danger to it in the moment. I do think it's been de-risked versus what it was on a valuation sentiment positioning level.

42:19I think we are at a point now things have gotten, you know, pretty sold out to the level where if this is just a bull market gut check, it's time to respond. It's time for the NASDAQ 100 to respond pretty soon if we get through the election. If it doesn't do that, I would say maybe we're dealing with a little bit something worse. If you just look at basic like RSI stuff on the NASDAQ 100, it's exactly where it was in late July at the low. Now, it's not quite as oversold as it was at the March 30 low, but it just tells you we're getting in that direction. So action like today, very tentative bounce in things like the semiconductors, the AI trade.

42:54And what happens? Yields go up, even though oil's it. That's all working together in this understandable way. Apple down, semis up. So we're now comfortable with these rotations. I think the defensives have done as much as they can do for you at this point. And it is time for the AI trade to re-engage in growth, to come back just a little bit at least. But the bar is high. You need a 10 % rally in the Sox to be anything more than a dead cat right now. For the NASDAQ 100, it's probably a 5 % rally. But before you could say it's just nothing but pure reflex.

43:24Scott Wapner: Well, I mean, you do have a couple of big events. It's obviously AMD. AMD's tonight. So that's important. That's interesting. The stock's up a lot today into the number. And then we have to wait for NVIDIA. It's below where it was when Intel reported. So I think you're kind of working in that zone. But yeah, no, it all it's all there lining up. But, you know, it's we're kind of two to three weeks into the period when the seasonals were supposed to have started to turn better. And the market is, you know, it doesn't have a firm hold on the benefit of the doubt, but it's got time to respond. All right.

43:56Scott Wapner: Good stuff. I'll see you later this afternoon. That's Mike Santoli. Options action with Oliver's next.

44:18All right.

44:18Scott Wapner: Let's go to Chicago. Let's play some options action with Oliver Renick from the CBO Global Markets. You got Uber for us? That's right, Scott. Options are not brimming with confidence for this stock after a 20 % decline the past year. 50 ,000 options traded today, more than half of them puts and more than twice as many puts as calls likely bought. So it looks like speculators and bears. It also looks like a lot of call traders were initiated by sellers. It's not hard to see why the bias is bearish. Uber stock has dropped after six of its last seven earnings for an average move of 5%. And right now, options are pricing an even bigger one, almost 7%.

45:00So far today, four of the top five most popular contracts are puts. The number one contract being the 60 strike expiring Friday, which trades for 35 cents and needs an 11 % sell-off in Uber, which is down 20 % this year. Scott.

45:18Scott Wapner: Josh, what do we think here? Yeah, I think this is one of the worst stocks to get long ahead of an earnings call that you could possibly come up with statistically. And just anecdotally, even when they have a report that people are happy with or guidance that people like, and we've seen the stock pop 12, 15 percent over the next two weeks, the whole thing goes away. They're not buying back enough stock to offset the fact that nobody believes their strategy to seed all of these other autonomous vehicle, autonomous taxi companies is going to succeed. And frankly, as a shareholder, they haven't shown us yet.

46:00So they've announced a lot of press releases, but we we don't we don't know because they haven't shown us a thing. So I totally get it.

46:08Scott Wapner: Jason, eight negative weeks out of nine. Yeah, hasn't been good. Obviously, you know, they need they need to see 20 percent bookings growth. They need to see continued momentum in Uber one. I mean, they surpass 50 million users in Q1. But I think also the story with DoorDest potentially acquiring Instacart is a threat as well. So this stock is in a weird spot. Are you are you what are you doing with it? Yeah. So, I mean, we're holding it for now. We're holding for now. But again, it's just there's a lot of headwinds. I mean, all the partnerships for autonomous vehicles, I think, has been a good story, but it just hasn't played through in the stock.

46:45All right. We'll do finals after this.

46:49Scott Wapner: I'll see you at 3 o 'clock. Dan Greenhouse, Cameron Dawson, Rich Saperstein. See what this market does over the final stretch. Josh Brown, what's your final trade? Don't tell anyone, but Amazon has now ripped 19 points off the post-earnings low two days ago. Thank you. Farmer Jim.

47:10Oliver Renick: Really could pick any large cap financial, but BlackRock is just one of many that's forming a big base here, ready to break out.

47:16Scott Wapner: When is the horse race again?

47:17Oliver Renick: It's not on the schedule yet.

47:19Scott Wapner: You let us know? I will. You let America know? I will. All right. Jason Snipe. Eatin', clean, beaten, raise. Yeah. Oh, look at that. Nice move. Joe T. Pfizer. Surprised Jimmy doesn't own it. Jimmy.

47:30Oliver Renick: You know, it could happen. Things could happen. I've owned it in the past. Great company. All right.

47:35Scott Wapner: The exchange is now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.

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