Playing the Rise in Oil and Yields: Your Next Move 9/23/26

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0:38At Acura, that means looking closely at how every detail could make your experience behind the wheel more rewarding. Every lesson learned and every idea refined becomes part of what comes next, and it lives inside every MDX, ADX, and Integra. That's precision-crafted performance. That's Acura. Guys, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. front and center this hour, higher oil, higher yields, lower stocks. And this is one firm weighs in today on its 8 ,000 target for the S &P. We'll tell you what they're saying about it now. We'll discuss, debate the whole thing with the committee.

1:09Joining me for the hour today, Joe Terranova, Jason Snipe, Stephen Weiss and Rob Seachin go to the markets. You know, we're red across the board for much of the reasons that I just said. There's the 10 year at 508. Oil's up. Global PMIs were better than expected. The Fed's bar on the tape earlier today saying further policy adjustments are likely needed, i.e. hikes. All that's at play. Trump, Xi, summit getting underway. Deutsche Bank talks about their 8000 target on the S &P today. And they say more upside than downside. Despite everything that we see going on from a geopolitical global macro perspective, more upside than downside.

1:52Why? Earnings. No big shock. They say earnings are going to grow 30 % in Q3 following a blockbuster Q2. And until that changes, why should anybody else change? What do you think? Well, last two days I sat on this desk and I was pretty bullish. I think you would agree with that. And a lot of it is based upon what I'm anticipating we will hear for the upcoming earnings season. I think we're pulling forward a lot of potential return. But 508, I mean, that's what it is. A 10-year above 5 % and now sustaining above 10%. That's the problem today that we see in front of us. First of all, my bullishness.

2:32Where do I neutralize the near-term bullishness that I've expressed? 7640 in the S &P 500. That's where you have that gap from Friday when we gapped higher into Monday. But sustaining above 5 % is something we have not done in decades. In 2023, you peaked above 5%, and then quickly that was met with buyers on the other side of that. The challenge we have in front of us right now for the treasury market is the characteristic of who the buyer is has changed dramatically. It's no longer central banks, pension funds who are less price sensitive than the buyer today. The buyer today, it's institutional, it's individuals, and a lot of it is related to the excessive supply that's being issued in the marketplace right now from the hyperscale.

3:18So it's all about what's going on, to me, with Treasury yields, why we're getting this pause and what was a really bullish week. Maybe it is due to better growth, stronger growth in the economy. Fed Chair Warsh said we're accelerating. Weiss, if rates are at 5 % and we have a strengthening economy, I think people can get their arms around that. Sure, the hyperscaler build out and the amount of paper that's coming out obviously has a role in all of that. But I find it interesting that Bank of America's client flow trends, institutions are back to buying equities. It was a record week last week for mid-caps.

3:58What happened last week? Fed raised rates. Tenure didn't back up today. It was already backed up. And yet, you do have clients as net buyers of equities. You had this de-risking event. people got a little bit scared and cautious, and the notes started to come out saying that now the risk-reward wasn't great anymore. But now I feel like we're focused once again on the coming earnings season, like Deutsche Bank is. And we're back to buying equities because we have our eye back on the ball. What do you think? I agree with that, and I think that's what's driven the last couple of days, as well as declining oil prices, as well as Trump saying that we're having constructive discussions.

4:40We've heard that before. What I'm keyed on is that his mission that there will be no cessation to hostilities, no agreement until after midterms. And what that means is that we continue to see oil prices rise, even though we really haven't seen the back and forth of the last few days. I agree that earnings are driving it. And it's a global earnings increase, and that's very powerful. But the double-edged sword there is that gives the Fed license to go to maybe 50, a 50 basis point hike, or at least have an extended period of hikes. And eventually that's going to be troubling. So right now we're at 5%.

5:185 % have been resistance on the 10 year. Now it seems to be working its way to support. And I think that's just problematic because you can invest in a 5 % yield when you're looking at most actuarial, you know, models want to see 7 % 8 % in pensions and in foundations. So at 5 % that's insulated from state taxes is a pretty good return while you're waiting things out. Now, I'm taking the opportunities we'll talk about later on dislocated names to size up on them. So part of my cash has come down, but you really can't buy on days like you saw yesterday in the day before, particularly the day before, because then you're sassy for trouble.

6:03So on balance, I think that, yeah, when you have the kind of moves we've had, everybody cheering for what I'm saying. It sounds like a football game. They're about to break the huddle or something in the post behind us. So that wasn't for me. So in other words, look, I think the market can pause, but the overall longer trend is higher. You're going to do it again? Whatever gets you going. It might be to distract you, Steve.

6:39What do you think? Yeah, so I think a couple of things. You ready to run through a wall for this market? Always. You know, a couple of things for me. I think one of the, you know, as I've seen breath, obviously slow down. We've been talking about the RSP and what that price performance has looked like. Obviously, over the last month, the SBY has dramatically outperformed the RSP. And we're seeing sectors like real estate, consumer staples, industrials now oversold. And we have two sectors that are overbought with the SBY. Well, tech and communication services make up most of the market. Also, I'll say the mags.

7:18The mags have obviously done a lot of the work so far this month, up 8%. But for me, as I'm kind of going through between now and earnings, right, which, again, you mentioned earlier, 30 percent growth rate. We were up 50 percent this past quarter. I do think it's going to be murky. I'm trying to find some of the catalysts in between time. But I do think this is an opportunity potentially to put some capital to work as I see kind of the pullback. Not really for, in my opinion, very good reason. With the MAG7 doing better, I feel like the bulls feel like they've got their mojo back. They feel like they've got their momentum back, figuratively and literally, pardon the pun, but momentum's come back to the way that semis are trading better than they had in the prior few weeks.

8:08Should they feel like they've gotten their momentum back, the bulls? The market's doing exactly what it should. You get a rate rise, who's the least impacted? those that have the strongest balance sheets, those that have the best earnings growth. And so you have an environment that's redirected back to that in an area that is 33 percent of the market, the MAG-7, that had already re-rated. Yes, we're having a good month, but we're still not even close to touching where we were, Scott. So that's the right area of the market to be focused on when financing gets higher. It's no surprise to me that the equal-weighted index has weakened.

8:46Not at all. I'm not ready to chase that. I'm going to chase the momentum area that I think the earnings are going to be the strongest. I think the businesses are the best. I think we're in the early innings of that. I think the Fed does have control of the long end right now. They might need another tightening. I don't think that's any big deal for these companies. It's more a big deal for some of the other companies. But this is what the index is made of. They're gigantic constituents. And when you talked about that mid-cap rally, that mid-cap rally was all in growth, all in growth. It was not related to anything that, again, is a value-oriented name, dividend-paying name that requires some level of financing.

9:28So you have a lot of noise right now. We're in a period of seasonal weakness. But we've re-rated. Where I'm looking for opportunity, frankly, is in the fixed income market. We've been buyers of municipals aggressively. You're a New York City taxpayer. Your tax-suggested yield is over 10%. Think about that. That is unbelievable. And yet you barbell that with these high growth areas of the market. They don't care if yields are up 200 basis points. They do not care. They're going to continue to build out because the consequence of not financing this buildout is a train crash for them. This seasonal weakness idea, the S &P is 1.3 % off of its high, and September has only days to go in.

10:20And so we're going to end up, unless something happens, obviously, over the final handful of trading days that you have left, get through the first part of this historically seasonally weak period. There's a lot of commentary, once again, about concentrated market, top heavy again, as all the money has started to come back into the mega caps and reignited that trade. Does that matter at all? And I bring it up because BTIG, I think it's Krinsky, is out with something today. I'm not sure if it's Krinsky or not, but it's BTIG, so we'll go with it anyway. It's hard to fight the tech momentum right now, but we also can't ignore the extreme dispersion an increasing number of stats that rhyme with 2 ,000.

11:04For the near term, this likely means more chop, but we remain cautious over the medium term. So when he talks about the increasing number, whoever the he is, or she, who knows, an increasing number of stats, is it Krinsky? Can we find out if it's Krinsky, please? Thanks. Yes, we can find out, or yes, it is. It is Krinsky, thank you. Thank you, it is Krinsky. All right, thank you. It's important, I want to know. Now, he's looking at stats like the following from Monday, where the S &P was up more than 1%, yet more stocks had new 52-week lows than highs. The last time that occurred was in December of 99.

11:42People hear that, and they're like, oh, it's another one of those moments. Whereas others, people have heard that yesterday when I read it, sort of scoff at it like it means nothing. All it is is representative of the fact that we're just back into a highly concentrated, top-heavy market. You had the outperformance now of the mega caps, which we keep showing. There it is. Thank you. The lull in the summer, the mid-summer, and then now the outperformance. So if you have at the far right, if you have that level of outperformance of the mega caps versus the S &P, you're going to have stats like this, right?

12:20You are. The market is doing exactly what I believe the market is supposed to do. I like some of the points that Rob made specifically as it relates to growth. The market is returning to growth once again. It's returning to growth because you are in an environment where you have yields moving higher and sentiment and positioning over the summer became depressed relative to the story surrounding growth. And I always think it's so critical to kind of understand where we are as it relates to positioning. We are now rebuilding the positioning, and we are moving away from where the capital sat in the summer as we kind of built that bridge.

13:00Remember something. The index didn't break down over the summer. The index kind of maintained in a very choppy capacity a higher level, but it didn't get the thrust move higher because it wasn't participating with the memory names and the mag seven names. So it kind of sat in the financials, and we talked about health care, and we loved biotech, and it sat there. So what happens now when you return to growth is there's this equilibrium where you're going to see capital continue to go into the MAG-7, go into the momentum, tech-oriented growth names, and capital on the other side is going to move away from financials and health care.

13:39And that's what we're seeing. Why is discretionary week the way it is today? one of the weaker sectors. If you have an economy that's gaining steam, PMIs were strong. Are we worried about rate hikes? Oil prices and rates. That's it. I mean, it's simple. It's that simple. Higher real cost. I mean, a lot of this is trading shop, right? But I do believe there's headwinds for the consumer. You can see it. You can also see it in financials, right? Because especially banks, because the net interest margin, the curves flattening in which you can borrow from on the short end versus lend on the long end has compressed.

14:20So, you know, that obviously can turn the other way. Right. It can. But I don't think it's going to because I think the sole mission for the Fed was to get control of the long end. And they did it through a rate hike and strong rhetoric. It's good. This is an AI driven economy. So because the economy is strong, it's AI and the spending on AI, infrastructure, everything, filtering through to everything. So it's leaving the consumer behind because of high rate. Is it leaving the consumer behind? I mean, look at the most recent retail. You bring up a really good point. Hold on. What are we talking about when we say the consumer?

14:58Consumer discretionary serves who? Steve's not going to McDonald's. Okay? Why is McDonald's true? Lower end of the K. And that's who gets punished right now. Consumer discretionary, the construction of consumer discretionary, is geared towards the lower end of the economy. I don't know if you've had people come out and say that the case-saved economy is over. And if you look at what the most recent retail sales report delivered, and then if you tune in today at the 3 o 'clock hour and you hear Brian Moynihan, Bank of America, who's going to be on with Leslie Picker, he's going to continue to talk exactly like he's talked about the consumer for the last many months.

15:33I'm sure he's going to say that from their data, what they see, and he sees it through a magnifying glass, right? The gigantic disconnect between the consumer and everything else is simply the stock market has been the underpinning, and it hasn't weakened. It's been sitting near its all-time highs. So spending of the higher part of the K is driven by that, and guess what? There's tertiary benefits to the lower part of the K. I can tell you that if we get any rewriting in this market, the consumer economy is going to fall apart, period. It will quickly. But I don't think that's going to happen.

16:12So let's let's switch the conversation and back to the concentrated nature of it. But through the lens of meta, because as meta has taken off, that's gotten a fair amount of bullishness for the group. There's another two and a third percent today. Their meta connect is today comes amid this run stocks up 12 percent in a week. If you look over the last two weeks, do a two-week, because when they first introduced Muse, the stock just blew out and has had a nice move. There it is. That shows you pretty well. You own the name. Key Bank goes to 900 from 780. They reiterate they're overweight. It's Muse's moment is what they say.

16:57Now, we had a debate yesterday on the show as to why it's so hard to find people in our orbit who own the name. Now, you guys happen to own the name, but few others do. I own, frankly, too much of the name given the run, if you recall. I bought it down when it really traded lower around, I think it was 560, 570, where I really added that super position, that trading position, and I've kept it. And candidly, I don't know what to do with it. I'm tempted to sell that over position. It'll still be one of my largest positions because now there's a lot of hype on there. And we've seen that the AI lead changes repeatedly.

17:35One day, Google's in front with Gemini, new release. Now it's meta because they've stayed at the top of the app store, you know, for now a week since the launch. Next will be Anthropic. Then you'll have OpenAI. But the difference with meta is that it's purely targeted right now to the consumer. It's also an enterprise model, of course. Let's not lose sight of that. But the reason I bought it is because, and I kept saying that of the MAG-7, that the one that has not lost the founder mentality, the founder ability to navigate and create opportunity and execute that opportunity is Zuckerberg. All the others now have caretakers or they have business people running it.

18:21So that's what separates Meta. That's what will continue to separate Meta because you need to think like a founder and he does. You're only 2 % off of a high for Meta. So Meta's obviously not done well over the last year relative. It's had a great little run here. We've been long it since December of 22 when it hit its last low. AI development at Meta is clearly underappreciated. And this proved that that was not the case. Not by those who know. No longer underappreciated. I said it yesterday. what Jensen Wong told me at the Super Bowl, sitting there. And he says nobody does AI better than Meta.

19:02Maybe you didn't see it to that point. I would say the market didn't see it as it was evidenced by the way it was trading. So you have one week where they get 2.5 million subscribers for Muse when ChatGPT didn't get that in its first launch back in 22. OK, this is something that was they went to a cap intensive model. And that cap intensive model was being questioned by the market. Well, they just delivered an outcome on that. And I think this is one of the great stocks to own, one of the great stocks to be overweight. You mentioned versus chat in those. This doesn't trade at 90 times sales, my friend.

19:41It trades at 20. It's a completely different animal. Completely different animal. OK, well, it's still cheaper. And you're nervous about it? I think that's misplaced. Keep it. There's a what's good for Meta may not be. I'm not nervous about it. You said you're nervous about what to do with it. Well, only because this position was oversized. I didn't use the word nervous at once. You know, I said I've got an extremely large position that may be irresponsible to this portfolio management. No, you don't let it ride. Let it ride. You don't let it ride. What's the most powerful force in the market?

20:09What's the most powerful force in the market? Momentum. Rob, then why don't you put all your capital in one position? Joe T. You know, sometimes it would be grossly responsible. Right? All right. Are you done? Are you both? I don't know. All right. I have to be done. He keeps talking. You'll let me know. Took one out of your playbook. All right. Where I was going is what's good for meta may not be good for others. Because as you saw the muse mania in the market, it hit a number of stocks, whether a bunch of financials, some consumer names, insurers, online travel agents, what some refer to as consumer inertia stocks, which are stocks that consumers have the tendency or investors have the tendency to keep buying something out of habit, even when a better alternative exists.

21:10Goldman has a basket of these kinds of names. LPL Financial, Allstate, Schwab, Expedia, Charter, H &R Block, Huntington Bank Shares, TripAdvisor, Netflix is on that list. There are a number of stocks that you own in that. Are you thinking about what's good for Meta and Muse may not be good? We're in one of these getting disrupted by AI moments again. Yes. Of course you're thinking about it. And I think for me, it takes you directly to the financial stocks. I was not unsurprised, but obviously somewhat frustrated to see the performance of insurance companies, which I've advocated for candidly over the last month.

21:53Allstate, Chubb, Progressive, all down significantly. So it would be foolish to ignore the possible impact to these businesses in the financial services industry. I will say this. I'm even more frustrated about what I missed, which was the positive effect of what Muse is going to do. It's on one of my favorite names. Can we pull up a chart of Twilio and see what it has done over the last month? Steve, guess who is the software communications provider to WhatsApp? Twilio. What does that mean? That means now with Muse and this AI assistant, you're going to have more active communications. You're going to have more reservations that need to be confirmed.

22:36You're going to have more activations that need to occur. Twilio is the software that's doing it. I missed that. I shouldn't have. You know, nobody wants to be the next sector who wants to be the next software, the next sector who gets disintermediated. So they're going and shooting first, selling first, and sitting back. And I think that's a mistake in a lot of them, like Goldman Sachs, Morgan Stanley. Their spend on AI and look at their models. First of all, Goldman doesn't have a pedestrian wealth management model, so they'll be safe. Right? Morgan Stanley has some one of it, but also has the effort.

23:08But when you listen to these companies talk, what they spend on AI, they're going to be toe-to-toe with a muse or anybody else, and you're still going to trust them more. Back to the Netflix thing as being on this list, what is suddenly a hotly debated name, I think it's fair to say. You, Weiss, bought more. I did. By any short to medium term chart that we put up, it doesn't look good. Looks terrible. Year to date, throw that up. Three months, throw that up. I mean, one month, there you go. It doesn't matter almost what you put up if you stay within a reasonable time horizon from the past until now.

23:54Why did you buy more now? I bought more. It's a small position. I exited a while ago and entered it recently at higher levels. I bought more because it traded down on first, I think it was Wells Fargo, downgraded to a sell. And then, to me, that was just piling on, that the stock's already had a tough time. And I thought that for trade, it'll bounce. Now, you know, last quarter, we all thought, OK, including me, they can't miss earnings two times in a row. They can't have a better quarter. I thought it was actually a good quarter, but it doesn't matter what I think. It's what the market thought, at least on a short-term basis.

24:33So it's one of those names that I bought that's been tattooed pretty nicely. And I just thought it was, with everybody so negative on it, I mean so negative on it, I thought that the bad news was all on the side. I agree with you. They still have margin of strength. They still have 330 million subscribers. The ad growth business will continue to accelerate. And I think the other thing that's important to know with these rich content players, their cash generation has been more positive than it has been recently. So I get it. Slower engagement. I got the call from Wells Fargo. You know, rarely there's a sell call that we got for those guys.

25:12But those are some of the drivers that I think can be accreted for them longer term. I think YouTube TV is absolutely biting into their Apple. But I think they still have enough to keep this moving. You sold it in June. I did. Personally, it's down 17 % since. Yeah. I'm not feeling particularly good about any of the streamers. What I'm seeing is that they're getting challenged on margins. They're getting challenged on margins because the growth opportunity is in live entertainment and sports. And we're learning how expensive that is. Number one, to acquire it and then to actually deliver it to the consumer in an efficient way.

25:51In addition to that, how do you defend against that as a streamer. Look what Disney announced today, 13 % increase to Disney Plus. So you're going to continue to see that they're going to raise prices. Is there a point where consumers step back and no longer pay that price? We'll find out. But for sure, right now, they are margin challenged. I think streamers will pick and choose rather than having all those options, they'll narrow the options. And which options they can narrow to? They'll narrow to Netflix, will narrow it to Disney. I agree. And they'll narrow it to YouTube. I agree with that.

26:27And that's it. And so they still have price, you know, pricing ability. So maybe short-term dislocation, but ultimately, who can buy the sports properties? Who's going to buy the eyeballs? Netflix. All right, we'll take a break. When we come back, Weiss got another move. We'll tell you about it. He's selling one of the names in his book. And there's news in the space today, too, to go along with it. And we'll talk about all of that coming up.

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27:30With higher predictability and greater access to credit, everybody wins. Get started at VantageScore.com. Some of the most important design choices are the ones that go unnoticed. The details that together make an experience feel intuitive, comfortable, and above all, exhilarating. At Acura, that means looking closely at how every detail could make your experience behind the wheel more rewarding. Every lesson learned and every idea refined becomes part of what comes next, and it lives inside every MDX, ADX, and Integra. That's precision-crafted performance. That's Acura. Something amazing is happening in animation.

28:06Studios are processing data faster. That's because CDW showed them new ways to maximize their infrastructure, Then built a flexible Dell Technologies data solution. More automation led to reduced maintenance times and greater efficiency. So that creativity stays the star of the show. Dell Technologies and CDW. Make amazing happen. Learn more at cdw.com slash Dell Data Center. All right, another Weiss move to tell you about. You sold Valero. I did. All together. Why? Look, the stock was up. I was up 35 percent a month. I thought that was pretty good on a commodity stock. You can't stay there too long.

28:48Where are you welcome? I'm not a long term believer in energy stocks. Just look at how they've basically done over a decade. So I knew I was getting out a little early because I don't expect the war to end anytime soon. So that creates risk. But at the same time, you know, in a commodity name, you got to book it when you can book it. And that's pretty good return for commodity stock. I'm still sitting with the position. I've been long since 144. Should I sell some? I probably should. You're probably right. It is a little bit... Not right today. It's a little bit parabolic, and the nature of which positioning has gravitated towards the refiners is becoming somewhat exhausted.

29:23I think everything rides on if we're actually going to go forward with this diesel export ban, which the energy secretary has said he's against. I think you have to be very careful. Goldman Sachs put out a great note today talking about what that does to gasoline supplies, you are really going to create some pain at the pump if you tell me, okay, we're going to lower diesel prices. Well, all right. You bundle diesel and gasoline as a refiner. You make both of them basically at the same time. That means you're making less diesel, making less gasoline, higher pump prices. Short, medium, and long-term.

29:55Bannie exporting is bad. Agreed. So to LNG now, because there's news regarding Devon Energy, This was a Faber scoop today that the activist at Tom's Capital urging Devin in a letter to explore alternatives, including a sale. We have ownership on the desk as well regarding that name. Rob, you want to take this this on? Sure. I mean, listen, that that's only good from from my standpoint. This company has been an unbelievable performer, still very cheap for P's nine nine and change time. So they have low production costs. They're an incredibly efficient producer. It's a name we added last year. They are the best in the Permian Basin.

30:39And I think if you have somebody advocating to unlock value, that's only going to be good for the name. My friend Jiminy Glick here, those glasses. If you take a look at the long-term performance of the stock, you'll see that going back to 2006, It's right where it is today. So I take Gishit. It's been a great performance. It's been a horrendous performance. Sorry. You've got to change it. How would you describe yourself to the world? That's the question that I have. You dashingly handsome fellow. Thank you. Thank you. I want to hear the answer. He just gave it to you. That was good. He's too quick for you, man.

31:21I doubt that. Coming back, Devin. Go ahead. Oh, yeah. So very diversified asset base. Eagle Ford is where they could create some value. There's probably about$2 billion to$3 billion that could be for sale there. There has been activists in the past that have talked about them actually doing that, pay down some debt. So I don't think it's a reason to move away from the stock in any regard. I actually think you're going to see something happen. I would stay with it. You guys see Royal Caribbean. Let's do a couple of stocks on the move as well. So Contessa Brewer was talking about this yesterday during closing bell.

31:59Maybe they were for sandals. Well, they're acquiring a stake in it,$3 billion. What was interesting yesterday, you see the drop off in the name. That's when the report first came out. Market didn't like it, obviously. And maybe it doesn't like it even further here if it's directly related to that rather than the rise in oil prices, or maybe everything just hitting it at once? You own the stock. What do you think? I don't know. Tell me what you would do if you had it in an ETF. It was down 17 % year-to-date and 31 % over the last 52 weeks, and you're going to rebalance at the end of October. Something is particularly troubling.

32:37The stock, it's had a significant inability to reverse the downslope. And what is amazing is we were talking glowingly about this stock just 18 months ago because they really were in the sweet spot and they had the earnings growth. But as you mentioned, the lower end of the economy is struggling right now. That's obviously impacting their ability to grow the earnings and the performance is awful. OK, you'll update us when you rebalance. Do I need to? No. Thank you. Always appreciate the Telegraph. Seema Modi has our news update today. Hi there. Hey, Scott. Here's what we're watching. Disgraced Hollywood producer Harvey Weinstein has been sentenced to 15 years in prison.

33:14It comes after a jury found him guilty last year of sexually assaulting a TV production assistant in his Manhattan apartment in 2006. He was originally found guilty of the crime in 2020 and sentenced to 23 years, but New York's highest court overturning his conviction, which forced last year's retrial. President Trump pushing to attach his name to the Kennedy Center. Administration officials are reportedly circulating a list of other government sites that could bear his name. According to our sister network, MS Now, Ford's Theater, where Abraham Lincoln was assassinated in 1865, has emerged in the discussions.

33:49It's unclear how seriously, though, it could be considered. And the University of Oregon receiving a historic gift from Nike co-founder Phil Knight and his wife, Penny. The couple is donating$1 billion to establish a new engineering school. Phil Knight is a University of Oregon alum. The university says it's the largest gift of its kind ever made to a public university. It's been very philanthropic as of late, even giving a billion to Oregon's premier hospital there. Scott. Yep. Seema, thanks so much. That's Seema Modi. Up next, Dom Chu. He has today's ETF edge. Domino. All right. What do you got coming up?

34:20Scott, we got oil and gas. You guys are talking all about it. Remains the focal point of the natural resource investing kind of landscape, given what's still happening in the Middle East. But are some investors looking beyond the first order effects of geopolitics and getting back to finding ideas about powering the future of AI? We'll explore some of the stocks at the center of that trade. That story is coming up on ETF Edge on the Halftime Report. Keep it right here. Some of the most important design choices are the ones that go unnoticed. The details that together make an experience feel intuitive, comfortable and above all, exhilarating.

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36:18All right, welcome back to the Halftime Report. I'm Dominic Chu with today's ETF Edge. Oil prices are stealing the headlines lately, but there's a larger upheaval happening in the energy sector. Joining me now is Tyler Rosenlich, the Cohen and Steers head of natural resource equities, a guy who knows a lot about these types of stocks. Tyler, we talked a lot about oil and gas in the last segment just before us here. Take us through what exactly is driving the next leg of natural resource investing. Yeah, so we'd start with we really think regime change is upon us and the playbook from the last last decade is not going to be the one that works for the next decade.

36:52And we have this convergence of really strong demand for the resource economy. It's energy, it's copper, it's metals, you name it, coming at a time when the ability to sort of add supply is really challenged. So strong demand, really tough to bring new capacity online. That means higher prices. That means it's going to cost more for a CapEx in investment. And we do think that's going to be a handoff from winners of the 2020s to the 2030s. Tyler, what types of companies are you looking at that go into those portfolios that want to capitalize on some of those more secular long-term trends? Yeah, I'd say the big trends that we're focused on, it's obviously digitalization of the global economy.

37:30And so, hey, how are we actually going to see data moved and increased and so forth? Decarbonization still does matter. So what energy companies are going to help the energy transition as we move from what has been more traditional resources to more alternatives over time? De-globalization, clearly it's about nearshoring. Where can you control your own resources? Advantage production from the U.S., from Canada, from other sort of local sources. And this is coming at a time when global debt is very high. And so it's really going to be about how can you turn a lot of these industries back on. We're seeing opportunities in lots of different places, in traditional energy, in copper miners, in gold miners, even in some alternatives as oil prices have risen so much.

38:08And so we really think there's a lot of great things happening in the resource economy today. All right. So we're going to continue this conversation over at ETFedge.cnbc.com and take a look at some individual stock picks in these portfolios as well. Tyler is going to be joined by Adam Patti, the CEO of VistaShares, another big thematic investor. Scott, I'll send things back over to you. All right, Dom. Appreciate you. Thanks, Dom. Still ahead. Options action. We go to Oliver Rennick in Chicago. And later, a few more moves from Stephen Weiss. Back after this. Options action time. We go to Chicago.

38:39the SIBO Global Markets, and my man Oliver Rennick. What do you got today? Hey, Scott. This morning's hot PMI print is causing problems for bonds, which is causing problems for gold and Bitcoin. One small silver lining might be that traders in long-term bond ETF, TLT, are gravitating more towards call selling than put buying. But six of the top 10 trades were bearish or neutral. It's the same case for GLD, where the top three highest volume contracts were puts, including some heavy buying of the 380 strike put expiring October 16th, which is still 3 % down from here. Stakes are also high in Bitcoin with volume twice the average, but options evenly split.

39:24Where we do see conviction is in U.S. oil ETF USO. Call buying is double puts, and the most popular trade buy volume is the 185 strike call expiring a week from now. It's a 10-cent flyer betting on a 24 % rally. Yikes if that happens, Scott. Appreciate that. Oliver, thanks. He talks oil and other commodities. What's up with Newmont Mining if you talk gold for a minute for our viewers? So it's interesting because the correlation between rising yields and rising precious metals has broken down. Candidly, it's been the opposite. Precious metals has responded better to actually a move lower in yield.

40:06So a lot of people think an inflationary spike, your defense mechanism against that is precious metals. In fact, that is not the case. We talked about gold a couple of weeks ago. I said we had a little bit of a recovery rebound, and I didn't trust it. That's ultimately proving to be true. We do have one holding in the ETF, Newmont Money. OK, we'll take a break. We've got to get to your moves. You still have three. Steve Weiss will tell you what they are coming up. All right, we're back. Let's get to these moves. I'm going to start with the one that's last on my list because I think it's the most interesting to me anyway.

40:41Dick's Sporting Goods. So you bought more. I did. I did. What's going on here? Stock. So if you recall, it was my disastrous final trade. right before earnings, something I never do for good reason, like this. And the crater, trade down over 20%. So I bought some more then. Stock had a nice recovery. And then it traded back into the 120, 122 level. Yeah, let's back this out, guys, a lot more than that. Please. So I thought the 122, the negativity was so much. I still believe they have a unique value proposition for the consumer. Basically, they have the market to themselves largely. The partnerships they're creating, including with Meta and Muse, by the way, I think are very attractive.

41:23And I think it's a very inexpensive stock here. This can't be just a Foot Locker issue. No. Well, no, it's not. But they had been signaling up until the quarter, Foot Locker was turning, was turning, was turning. So the news in the quarter was disappointing. This is also an oil issue. It's also a consumer issue. All have conspired to really crush the stock. But as I said, I think it's a great long-term play, and I like it. Yeah, it's been kind of stunning to watch sort of everything in the space. There will be winners in the space. Generally, I think Dick will be a winner. I don't think the market knows which is going to be a winner and what isn't.

42:00I mean, obviously, it's deemed Nike to be a loser. It's thought that Onn was a winner, and that stock's looked terrible. Right. I don't know if Mbappe is going to make a big deal globally. certainly it'll help. But that stock's been terrible as well. FTAI and Madonna. FTAI is one of my favorite stocks. They've disintermediated airplane maintenance and repair. So you drop it, you're an airline, you drop your engine off there, they exchange it out. The others, they drop the engine off to be repaired or for maintenance, and they're out of service, the airline. So they've really disintermediated it.

42:43It's a great company. It's got a billion dollars in IPTA. It's come from nowhere. It's a battleground for hedge funds. They love shorting it, making up BS stories, now saying oil, lower flight miles on engines. That's crap. It's a great story. It's grown like a weed. Why is it down the way it is year to date? Because oil. It's saying oil, you'll put less miles on your engines as an airline because prices will go up. And I'm telling you, everything is positive. They've got a private credit fund, which is, you know, I'm not going to say it's riskless. Nothing's riskless. But they're lending to airlines where the lease is paid monthly.

43:25And so they are doing it 60 % to 70 % loan-to-value. It's a great product generating return. What about Moderna real quick? Moderna, look, you know, it's doing exceptionally well. Well, the cancer drug is only one in the pipeline. They've got a lot going through the pipeline. I think it's an extremely compelling story. Boncel's done a great job turning it around. And now not just making it, obviously, a COVID company, but it's also got the flu COVID vaccine. It's going to do fantastically well. All right. After this break, we're going to get Mike's market memo with Mike Santoli next. Mike Santoli joins us now, our senior markets commentator, the overtime co-anchor.

44:05The author of Mike's market memo. It's a big resume, so I have some big questions. 5-10. 5-10 on the 10-year. Is that now needs to be our focus? I think it's the market's focus right now. I heard Rob Seachan earlier say that this is the Fed getting control of the long end. I don't know. We're up 40 basis points since the Jackson Hole speech. We're up 10, 12 basis points since the Fed hike itself. Now, it could be this is maybe sort of an accelerated capitulation type move in treasuries here. I find it interesting we're getting this move on S &P PMIs. Like, that's not really a top-tier indicator of economic momentum.

44:47And yet you have a skittish market that is repricing there. And it's being felt, as you guys have been saying, in the majority of stocks, not as much in the mega cap dominated indexes. I think it's significant. I hear what you're saying about earnings maybe could be the next savior for this market. But earnings were up 30 percent in the second quarter plus. And these equal weighted S &P is where it was on June 15th. The S &P is up one to two percent. It's not magic in the near term to have earnings be fabulous if I think people are worried about what the what the bond market's doing and what you're going to pay for each dollar of earnings.

45:20Well, no, that that's completely fair. I mean, it sort of steals the show. Yeah. The move in oil and yields. And we'll have to see. And I will say the market is absolutely absorbing this as best as you can expect it to. Mitigating the moves at the index level, rotating around, doing all the things, keeping the VIX under 15. But it gets harder if you have further wear and tear on the majority of stocks in the equal weighted index. All right. Good stuff. I'll see you a little bit later this afternoon. That's Mike Santoli. I'd like to get a comment from you, but I'll do it on the other side of this break.

45:51Sure.

45:56You want to respond real quick to Mike's comeback about that? Markets are trying to push the Fed around. They did exactly what they needed to last week. They're continuing with the rhetoric this week. This is one of the final pushes. They've indicated that they'll do it more. Okay, final trade. Final trade is Halmet. FTAI. Microsoft. LNG. Chenier? Chenier. All right, so we'll watch yields, obviously. and I'll take you through the final stretch at 3 o 'clock. Don't forget Brian Moynihan joining us as well. The exchange is now. 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.

46:38You 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. Such opinions are based upon information the Halftime Report participants consider reliable, But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer.

47:04Some of the most important design choices are the ones that go unnoticed. The details that together make an experience feel intuitive, comfortable, and above all, exhilarating. At Acura, that means looking closely at how every detail could make your experience behind the wheel more rewarding. Every lesson learned and every idea refined becomes part of what comes next, and it lives inside every MDX, ADX, and Integra. That's precision-crafted performance. That's Acura.