Post-Midterm Playbook 11/4/26

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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.

1:15Scott Wapner: All right, guys, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the post-midterm playbook. Stocks are surging, as you know. Sure, there are some names under pressure. We'll talk about those, discuss everything, and debate your money with the Investment Committee. Joining me for the hour today, Joe Chernova, Steve Weiss, Bill Baruch, and Rob Seaton. We got a huge gain on our hands, obviously. Look at the Dow up almost 3%. NASDAQ's good for more than two. S &P obviously looks great as well. You get the Dems sweep. Gridlock on policy. Clean election.

1:47Scott Wapner: No messy challenges. Hope for a quicker end of the Iran war. Oil down. Maybe rates come down, too, as a result of all of that. And not to be overlooked, the clearing event. that some have certainly talked about. Citadel's Scott Robner today. This sets the stage, he says, for investors to rebuild equity exposure into year-end, combination of light positioning, returning, corporate demand, persistent retail buying, and a historically favorable post-midterm seasonality creates a compelling setup for equities into the end of the year. Do you agree? I like all of that. I like the fact that you said it's a clearing event.

2:23I believe that's absolutely what it is. And I think that inflation lost last night. I think inflation lost and we're seeing it reflected today in the price of energy. I think the fever has broken in the energy trade. I would be very surprised to see oil spike back up to$100 once again. I think it's time to pair back positioning in energy. I also think this is obviously very good for the Federal Reserve. I think this allows them the opportunity to fight inflation if they need to, not with the brushback from the president and his administration. He will have the the Federal Reserve will clearly have the support of both the Senate and Congress.

3:08So I think this is a direct hit on inflation.

3:10Scott Wapner: And I think it's reflected in what we're seeing today. So, Weiss, you've been, you know, increasingly more, I guess, cautious, if not conservative in your view of where you thought the market was going. What about now? I mean, do you agree with Rubner sets the stage for investors to rebuild equity exposure? Maybe he's talking a little bit about you. It's a compelling setup, he says, for equities into the year end. OK, I don't disagree, but you tell me what Trump's going to do with Iran. He's got basically two months to do it. So once the Democrats come in, come in, it's going to be a lot tougher.

3:41My view is that I think there's more than a reasonable probability that he does something aggressive with Iran so he can call that a victory, which he's in sorely need of. So that puts a damper on it. It puts a damper on, you know, on the inflation story. It puts a damper on the rate story. So to me, that's, as I said the other day, a black swan event that's likely to happen.

4:05Scott Wapner: Yeah, well, I mean, you think it's likely to happen? I think it's likely to happen. I think it's more likely than not. If he does that, oil doesn't go down. It goes up a lot more. And rates go up. Right. But I think some others would argue that's the whole point about why he may not do that now. And that some are viewing what happened last night as as a hope now for a quicker end to the war in which oil prices come down, yields come down and then all of that with so many other things just combined for a good year and run. I think it's more likely than not they do something aggressive with Iran.

4:40OK, it's the one victory he has to hold on to. And as Vance said, it's the Iran war. So because the Iran war did it, you've got to show victory there, not leaving there with your tail behind. No, he's talking about, I mean, Vance is talking about the Iran war leading to the spike in

4:55Scott Wapner: gas prices. Right, right. The Iran war led to the spike in gas prices, which led to increased cost of living, which led to the Republicans going and saying, I don't want to vote for this party anymore because it's costing me a lot more money. But let's go to the A.I. trade, because it's not the all clear what it is. And I said this last night to to to one of my colleagues is that and I was skeptical Mark would see it. The market is seeing the Democratic victory as forced control on CapEx. So, in other words, they won't be able to spend what they committed to spending. If there's a moratorium for any period of time on new data centers, particularly in Texas, where 30 percent of all projects are.

5:40So, and if you look at it, that's exactly what the market's telling you. It's not telling you all clear. It's telling you that we want to go back into those companies because they will be what they used to be, not what they are now. Which is why you've got NVIDIA down. Which is why you've got Taiwan Semi down. Which is why you've got all the providers in the supply chain taking on gas today. And the hyperscalers, which buy from that supply chain, doing well. So, look at Micron, about to break 800. When have we seen that? So to me, the market is more discerning. It's not the AI trade is back on because it's not.

6:16Scott Wapner: Well, it depends. Maybe it's a bifurcated AI trade. You look at the hyperscale, which some today view as the incumbents in the conversation, like Needham's Laura Martin. We believe higher regulatory barriers entrench incumbents and increase risks and raise required ROIC, return on invested capital, for new entrants. Hyperscalers are the AI incumbents. B of A, there's potential that companies with the most existing and already permitted capacity, such as Amazon, could realize higher medium term revenue. So those who already have capacity, those who are already permitted to get more are going to be the winners.

6:59Scott Wapner: At least the market's placing its bets. You look at the hyperscaler gainers today. I mean, really? Apple's up almost 7%. So is Microsoft. That's a record high. It's almost like matching gains for Apple, Amazon, and Microsoft. Alphabet's good for four. Meta's sort of the drag up two and a third. And obviously, NVIDIA is probably caught up in a little bit of the data center issue and all the concerns around that. That's because they neutralized the spending advantage that Meta and the others have. So Apple, they haven't spent on data centers. They haven't done any of that. So you've created another moat around them, which is that if you're thinking, if you need to build data centers to affect your revenue target, etc., forget it.

7:44It's off the table. Be satisfied with what you have.

7:46Scott Wapner: Is this a sort of blow-off anxiety thing in the market today? Does this feel like it's going to have follow-through, as I said at the very top? So it was clean. It wasn't messy. You're not going to have challenges for days and weeks. Yes, there's got to be some hope of a quicker resolution to the war. Oil and yields come down. You're going to have gridlock, obviously, on policy. Dems can, even if they have both houses, do what they think they want to do. they don't have enough votes to overcome a veto on anything significant anyway. Yeah, I think everybody's listed a number of reasons. I do agree with one thing that Steve said, which was the CapEx being reined in.

8:25I mean, this build out, and that's why the hyperscalers are certainly capitalizing today. I do think, you know, you've seen the semiconductors themselves struggle for the last several months. And this isn't new news. I mean, you've seen from the odds pricing in, a Dem sweep better than 50 percent going back two, three months ago. I mean, it was upwards towards, I think, 70 percent going back a couple of weeks ago. That's what we're seeing, this AI infrastructure trade, trade very, very heavily over the past few weeks. But I do think there's a lot of tailwinds. I mean, I like to look at it as the uncertainties are now removed, the uncertainties of the election, just simply knowing the results, not that the results are favorable for any one sector.

9:04But I do see they are favorable. You're seeing the names rally, getting the hyperscalers. You're seeing the broadening trade move out a bit. What do you mean, not that the results, just slow down for a second.

9:14Scott Wapner: What do you mean the results are not favorable or unfavorable for any given sector? The market's obviously thinking that it's unfavorable for the data center sector, if you want to put it on that subsect of the AI trade. Yes, I was saying that the clearing event, if you will, or the uncertainties themselves have to pass. So for that, it doesn't matter necessarily what sector. I think getting past the election was going to be bullish. If there was more of a split Senate, I mean, if the Republicans won the Senate and then the market could have rallied and tech could have led to the upside from there.

9:45It was just moving past this event. And then we'll start to see complications in the future weeks. Do we get through the Iran war? I think one of the one great point is maybe Iran achieved what they were looking to do. Drag this war out through the midterms and you start to you see the U.S. public vote against this administration. That could become a tailwind. Crude oil is down to 88.5 right now. You're seeing oil come down pretty significantly. I know Joe cited that. Yields are coming down. I think that's something that as well, it makes inflation not a real problem for the Fed if they're starting to forecast out six months.

10:18So there's a bunch of great tailwinds here.

10:20Scott Wapner: Heard a lot of conversation going in that just get through the midterms and then a lot of the noise around the data center things going to die down. Maybe those people who are saying that didn't anticipate Texas flipping the governorship, obviously there. There's some big implications, especially there. You look at all the AI power names. Let's show them all because they were right as we were coming on there getting hit rather substantially. Virtually every instance where there was a data center measure on the ballot, voters rejected them. And that is why you have what you have, double-digit percentage losses across the board in at least 29 jurisdictions across the country, either past bans or restrictions on data centers.

11:06Scott Wapner: Even somebody who normally tries to see the glass as three-quarters full, not just half, but three-quarters, Dan Ives says, quote, Democratic tidal wave across the Senate and House was a seismic shift that will have a negative impact on the pace of the AI revolution build out in the U.S. over the next few years. We'll slow the pace of the planned data centers across the U.S. fueling the AI revolution. Some investors will like the quote unquote slower pace. Others view it as adding risk. We estimate 10 percent of data centers will now not happen. Goldman, Evercore, Wolf, Morgan Stanley, everybody is weighing in on this issue.

11:43Scott Wapner: Goldman says it potentially affects 45 percent of planned data center capacity expansion. What do you think? It's clear that those that are that have the commute compute, that those that have the compute being built out currently and already contracted compute are favored over those building out the compute. There's no no question about those that are supplying that. You look at all the neoclouds versus the hyperscalers. hyperscalers. You look at all the chips versus the hyperscalers. Show all those. Digital Realty, which we just showed. There are so many names in this complex today that are reacting to this.

12:24Scott Wapner: I mean, I recall, weren't you? You were one of the people, weren't you? I mean, Vistra is one of your largest positions. It has been for the last handful of years. It has. And this is clearly a huge setback. But I feel like you were one of those who was in part making the argument that just get through the midterms. And I think a lot of this noise is going to go away. So if anything, it feels like maybe now the noise gets even louder. I think it does because of the nature of the outcome. I mean, Texas is great, is a great embodiment of what has happened. Now, the reason you're seeing this favor of a large in the already built out, number one, they have businesses that can support their continued operations regardless.

13:03Their financing costs likely come in because there's less competition for capital with less build-out. You know, it favors scale. It favors the political capital that they have. It favors their flexible capital allocation. And so what's happening today on the surface makes a lot of sense to me, given the outcome. And it makes a lot of sense in financials. It makes a lot of sense in health care. It makes a lot of sense with what is selling off and energy in the others. I mean, I think what's happening should be happening. Writ large, though, when I made that statement, usually when you get beyond beyond the midterms, you and it's and it's divided, you usually have powerful arguments for upside.

13:50Scott Wapner: That is obviously last night's obviously an inflection point of some respects in terms of the, you know, the political wins in this country. It's a clear loss. But is it for infrastructure? You think it's an inflection point for the market itself? Well, no, because look who the winners are. No, but I'm just saying, I mean, the market's obviously ripping. Now, there may be a lot of factors at play there. But think about why that is. It's because of the constituents of the market. What is ripping? 50 % of the market is basically ripping in all the Mag 7. You've got a lot of the health care names doing tremendously well.

14:24You've got some of the financials doing reasonably well.

14:27Scott Wapner: You see, like, the alts managers today? Yeah. Holy moly. I mean, Blackstone, 6 percent, KKR, 6, Apollo, Aries. Go down the list. The big banks. Doesn't that make sense? They look good. JPM up for Goldman, three and a half. It makes complete, complete sense. A, rates came in a little bit. But B, there's less of a financing need if there's a higher hurdle to jump over, which makes the money in the ground more of a support infrastructure because it can allow the price of compute to stay higher. Why doesn't that make sense? It makes complete sense. I know, but I'm talking about an inflection point in terms of the makeup of the market itself.

15:08Scott Wapner: If people like, no, well, I'm actually going to try and make the argument that it's not that, that it allows it to broaden out more. Because if you think that you can't make the argument that, well, it's good for oil coming down and rates coming down and then suggest, well, discretionary. Look at discretionary. Look at housing today. Four and a half percent. Why does it make for a much broader market? So discretionary comes down. If rates come down now that it's a clearing event, the hyperscalers. Those are those are big ifs. The data doesn't support continued rate easing. It doesn't yet. It might.

15:45What do you mean? If oil comes down, you don't think is oil the only thing that goes into pricing that? The answer is no. So spending, the labor market, those type of things will impact rates for sure. I do think the biggest catalyzer for getting rates down is a sad one. And that's the rollover of the largest constituents in the indices, because that has a wealth effect that has supported spend. You have to know that the reason people are spending is out of their portfolios. Spending growth is outpacing income growth. So where are they spending from? Confidence that comes from the portfolios that they own.

16:27Best views up 2%. Yeah, I just want to try and simplify this. Look, earnings are still good. I think it absolutely was an inflection point last night. I don't think very many priced in the fact that Texas, the incumbent governor would lose. That is an inflection point to Steve's earlier comments. Without question, it affects the industrial power names. Yes, I'm long those names via the ETF. They're all down greater than 10 % today. Do I think they're going to recover anytime soon? No, because there's been this paradigm shift. But I do think that we are introducing something that can support the market through the end of the year.

17:04And that's the narrative of lower oil prices. I know you disagree with me, but the narrative of lower oil prices, relief coming to the consumer, relief coming in the form of maybe lower interest rates.

17:14Scott Wapner: How about relief coming in the form of maybe no more tariff talk? Look at Ford and GM today. No more tariff. Is that a coincidence? Absolutely. No more tariff talk. Consumer discretionary rallying. You're seeing the housing stocks, the Pulte, Lenar, they are rallying. So I think the thing simplistically that you have to think about when you talk about the market is the market is once again doing what it's done all year. And it's rotating. And it's rotating away, to your point, from that AI trade that had the data center build out being the catalyst for it. And it's broadening, to your point, it's broadening out to other areas.

17:51Look at the discretionary space.

17:52Scott Wapner: Nike's up six. Disney, retailers like Target, Walmart, you could say yes, but those are more staples than not. Nonetheless, the gains are significant. Look at Dix. It's up 8%. Hotel chains, housing names, sharply. Dix is not just up on the Cate and Clark signing. You know, it's not driving at 8%. That's positive. You know, but it's up because of that. And it was down because oil was higher. But look, you know, as professional investors, all of us here, right, you don't get too high and you don't get too low, right? Today, the market's arguably, I think, too high. What? I'll tell you why. Because I think that the reaction in each of these areas is not well-deserved.

18:39And I'll tell you why. Trump never went to Congress and said, approve my tariffs to all these countries. Do you have any reason to believe that he's going to back away from it? Steve, I disagree. I mean, let's not avoid the fact that the S &P is up 130 points today. Last night, it was down 130 points. This is a massive swing. Everybody's looking for a clearing event. Let's not overcomplicate this. The S &P last Wednesday closed at 7755. I agree to clear you a bit, but we have different time breaks. We have to get through there. I do acknowledge that we have to get through 7754. We could be off to the races.

19:12There's definitely a tremendous rotation taking place right now. The move in the high beta names, I mean, there was a chart going around from Morgan Stanley earlier this week that these high beta names down 60 % was worse sell-off than the dot-com bubble. The rotation's coming out of the day. None of that's news, Bill. None of that's news. You get past the Mitchelts and they think their positioning bounces have these. The polls all show that the Democrats are going to have at least take the House. And then polls had shown, including in Texas, there was a likely— There was a 70 percent probability they would take the Senate.

19:44The only surprise last night, ultimately, was Texas governor.

19:48Scott Wapner: Guys, if you're going to make a point, make it. Let him make the point. Just let him make the point. Let him make the point. Just let him make the point. I don't think he made the point. Make the point. We've had a clearing event. If we see the S &P futures close above 7 ,800, I have to say we're off to the races. And that's a low end for the year and the post midterm rally is going to take place. This last night, this thing was down 2 percent. It looked extremely ugly. The Nasdaq tested the 200 moving average and we're seeing some stability today. So you're the question. One second, Steve. The question that I would have is, does that come with a re-concentration in the strongest areas of the market, which have included health care, are resurging because of a revaluation level in the largest constituents, the MAG-7, or a broadening out trade.

20:34And I would argue that you might get a brief burst in the broadening out trade, and then I think you're going to see a revisit in a more concentrated market that may leave the semis behind. I agree with that. But it's going to focus on those. My point.

20:49Scott Wapner: Real quick. I want to move on. Go ahead. You made a lot of points. Go ahead. Don't give me that. Let's just do it. You don't get too high. You don't get too low. You like euphoria. You embrace it because you look at technicals. I don't use technicals. I don't think we're out of euphoria. We're still finished, Bill. You talk. What I do is I'm a bottled-up investor, and I pay attention to risk. So I think there is a market-clearing trade here. What I'm saying is that I doubt the extent of it in terms of longevity because I see risks there. And if you ignore risks, that's where you run troubles of money management.

21:20Scott Wapner: All right. So you guys are talking about the chips. We have to hit AMD. D. We can take a look at the stock right now is up quite nicely, obviously, after the print, a little more muted today. How do we how do we see that? You know what I see? Fairly mixed reaction in terms of target raises, some raise, some cut. I'll tell you what I see. I see a really strong report. I see really strong Q4 guidance and I see terrible intraday price action. I don't like that reaction. On a day where the market's so strong, that stock was up near earlier today, close to, I think, 514 was the high. So that's the thing that stands out to me.

21:58Scott Wapner: Well, do you think the chart would look like that if you didn't get the Texas result last night? Well, that's part of the whole changing dynamic that we're seeing in the market right now. Look, I suggested it to you before. You just have to look at two things simplistically today. On On one hand, momentum's down 2.5%. On the other hand, quality's up 2.5%. There's some form, the market is giving you some form of a paradigm message in that, for sure. If there's going to be less data center build-out, which there may be, there's going to be pressure on the chips. It is not a mystery. They sell into that ecosystem.

22:37And those that have the built-out ecosystems are going to maintain premium pricing for a while longer. That's what's happening today. It's that simple.

22:47Scott Wapner: That's what I just said. The other thing we had was— I didn't hear it, though. You know— Go ahead. No, that's just— That's a new one. All right. I mean, the other thing—I was giving you a license to, you know— To hammer me? Go ahead. I'm saying the same thing, Rob. Okay. Take a look at Marvell and Lumentum. That's obviously been a huge story this week, and maybe more so from the stock reactions, both, in both cases. Marvell, give me a week to date, if you guys could. That firstly shows it. Because it's been ugly. That's better, thank you. The way the market has received this has not been great.

23:25Scott Wapner: Jones, Marvell didn't like it. You bought more on the decline. Why? Yeah, I want to package this in looking at last week and the prior couple weeks into that rally. We trimmed 3 % of our technology from NVIDIA to Micron to Broadcom to Meta. And then prior to that, cut names like ARM three weeks ago. So we took 5 % from our tech. And Marvell was a name at the bottom. And we added that as a new name at 225 previously. And the goal was to find a reason to continue to add to it. So when I looked at everything coming into last night or yesterday, Marvell was down 30 % from last week's high. And the acquisition news was announced.

24:05I looked at it. We like the acquisition. It's not going to close to 2028. It's going to drag out. But we looked at this as this is a great way to buy 30 basis points of cash that we raised as 5%, 30 basis points into Marvell. I mean, the company itself is great numbers. I mean, their multiples compressed from 45 to 24. They're growing EPS 40 % year over year. Next 12 months, it's 78%. So I think this acquisition news, obviously, was a reason why it sold off a little sharper over the past week. But here's the thing. We know why Marvell and all the names are down, because of the Texas governor race.

24:39Why do you like the deal? I think margins can compress over time. You liked it. It's all stock. What is it? Margins expand over time. What is it? It's$115 billion in stock. I don't necessarily love it, but I think the market was pricing it in. This was rumored around over a week and a half ago. And I think over time, you're looking at bringing photonic materials into it, combining that as with Marvell. That could be a headwind to a name like Broadcom and eating into some of their business as well. So I think this helps really, you know, what they're what they're going to do over time as the AI theme plays out.

25:14But it's taking a big hit today. It was defensive acquisition. There's going to be it's going to be a no man's land until the deal closes. There's going to be a heavy Arbonne into it. And you've significantly diluted the Marvell shareholders because of defensive acquisition that they bought something very close to the peak in the market, as we're seeing today. So I'd say that there are some opportunities. I look at FTAI Aviation, for example, and I'll buy more. It's pretty full position. But the stock is dirt cheap. Now, it's selling off on. And I traded extremely well by originally in the 40s and selling it, you know, much higher than a year.

25:58But the point is, is that their core business, which is engine repair and maintenance and building them, is what the stock is trading on in terms of earnings. What's influencing it today is their business where they've got two and a half billion of confirmed orders in data center generation. So power generation. So the point is you can take that out of the equation and you've got a stock at 10 times next year's earnings. All right. We're going to take a break. How about that? I was going to ask Steve if I'm allowed to buy more Apple.

26:31Scott Wapner: You're not. You're not allowed to ask him that. We'll add more on the market rally. I got another move from Bill Baruch that I want to get to. Stocks on the move, calls of the day. Who knows what else?

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28:33Scott Wapner: All right, committee stocks on the moon. McDonald's, take a look. Earnings beat. Traffic in U.S. restaurants, though, did fall. Stock's up, though. on a day like today when so many names like this are up. Baruch, this is you. Yeah, this was an ad recently when we were selling the tech that I cited. It's a name that the sentiment was just absolutely bludgeoned on. It was everybody hated this name. For us, it's a rotation. It's a state. We look at it as a state-ish type name. And you know what? They're a real estate company, too, with rates coming down. That's been a tailwind for this. I think the bottom's in a McDonald's.

29:08And I think we can see this. We have a great 2027.

29:11Scott Wapner: Robert, Amgen raised their full year outlook. That's probably the headline on the top and bottom beat. That may be the headline, but the entire health care space, it's a net positive. The election results. Yeah. New record. I'm sorry. I mean, it might a lot of people say it's already been priced into this. evidently not. Democrats are likely to push more subsidies and outlays specifically for managed care. But this company's firing on all cylinders. So very big fan of Amgen and the pipeline of drugs that they have. You want to take Suncor too, which beat? Raise your dividend as well. But also having a little bit of a tougher time today because, again, I don't think anything matters as it relates to the earnings.

30:01This is all about the election outcome. You know, this is a company that is also doing really well. Obviously, Canadian oil sands business, but we're not near at a price level for oil where there's going to be any pressure on them yet.

30:17Scott Wapner: Joe, Lockheed called a buy today at Guggenheim,$735. That's a nice upside there. What do you think? Taking the other side of the sell-off, most of the defense names could no longer be characterized as momentum names. They're relying on their quality factor themselves. I think there's a lot of challenges you can look forward in the defense spending budget that will impact the defense stocks. I see these moving just sideways to lower. How do you see Edwards Life Sciences, which hit a new 52-week high today? It does report after the bell, and ahead of that, Truist says it's a buy. 113 is the new target.

30:53Scott Wapner: Blue passed the old one. In fact, it did that today because it was 95. And they just like what they see for the next several years. Yeah. And I like what I've seen in this owning the stock here over the last year. It's consistent with Rob's remarks. Healthcare is seeing a revival. It's seeing a revival in a very broad based way. And the life sciences are part of that. It's biotech. It's big pharma. And it's the life sciences names. I heard that agreement this time. I heard it. I heard it. I heard it. Look at Moderna. I mean, And Moderna's trading up every day, you know, 5 % to 10%. And I'll tell you, it's ahead of itself.

31:28And I own it. It's a big position. But it's just the momentum of the biotech trade that keeps driving it. Now, it deserves it at the end game because of the 39 drug and vaccine pipeline. But it's really people trying to get in the market and play momentum in a different sector than data centers. Go ahead, Cowboy. What do you got? Edward Clemson. I mean, that's been a multi-year compounder. And it's been a sleep. We own the name. And it's really just breaking out right now. If they're looking for good years to come, this is a name that could really be alive. Bill loves that name.

31:58Scott Wapner: We'll get Santoli's take. It's got to be a big market memo today. We'll find out what it is next.

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33:56And we're back on Halftime. I am Frank Holland with a CNBC News update. Lockheed Martin agreed to pay$30 million in a settlement over its diversity, equity, and inclusion practices. The Department of Justice claims the defense contractor falsely certified it complied with anti-discrimination laws and received federal contracts while favoring non-white workers in hiring, promotion and pay decisions. Lockheed denied the allegations and said it's settled to avoid prolonged litigation. Ukrainian President Vladimir Zelensky says the death toll from a Russian strike into a former school and nearby aid center on Monday has now risen to 40.

34:29It is one of the deadliest strikes in Ukraine in nearly five years of war, dozens of people are still missing. Russia has denied deliberately targeting civilians. And climate intelligence platform ClimateX says California could sustain$2.8 billion in flood damage this season because of the El Nino weather pattern. That's according to estimates Los Angeles County could account for $1.5 billion of that damage.

34:53Scott Wapner: Scott, back over to you. Frankie, thank you. That's Frank Holland, And senior markets commentator and overtime co-anchor Mike Santoli joins us now. Just give us, I don't know, just give us a memo. I mean, go ahead, Riff. Absolutely. I mean, look, I think very important to kind of concentrate on where we started. Once we got these results coming in and it was a market that was sold down and hedged up. And you're seeing a bit of the unwind, the exhale from that process. And as part of that, we're lucky in this index construction that you have all of these MAG7-type names that are now suddenly being considered to be net beneficiaries of a data center spending slowdown that just reported earnings that can certainly support these lower valuations and are pushing the index around.

35:39I think it makes a lot of sense, too. Now, consumer cyclicals, I was looking at the equal weight of the RSPD. It is just whistling higher. It's going back to like seven-month highs. it's super overbought, but probably in a good way, which means it's gathering momentum. But you have to be aware that it's running hot already. And that suggests that the market is at least making a bid that the economy, the economic growth composition is going to rebalance away from just AI CapEx. So there's some hopeful things in there. But you have to be aware of where we started and even where this rally has taken us.

36:11You guys were talking about levels. 7 ,700 is where the S &P 500 rally has kind of paused a few times today. We'll see if it can get past there. Even on NASDAQ 100, which, you know, went into the results last night right at the 200-day moving average, kind of, you know, daring the news to give it a reason to have a little bit of an inflection. It doesn't look like a lot on a longer-term chart, just this rally. So it's absolutely a start. It's absolutely constructive. It's going kind of textbook in terms of seasonals. But we'll see if you can get any fall through. I'm really suspicious of a rally's ability to sustain very long if semis are sitting it out the way they are today.

36:48Scott Wapner: Yeah. All right. Good stuff, as always. I'll see you later this afternoon, Michael. Thank you. Mike Santoli. Options action with Oliver's next.

36:58Scott Wapner: Oliver Rennick joins us from the CBO Global Markets in Chicago for our options action today. And it's housing related. That's right, Scott. Traders seeing a proxy play on crude oil, inflation and interest rates. through beaten down mortgage lender and Redfin owner Rocket Companies, ticker RKT. Shares were up 8.5 % to the highest since July, and the options trading, nothing short of a bullish bonanza here. Of the 81 ,000 contracts traded so far today, 71 ,000 are calls, and it's on volume that's about double the average. About$10 million in options premium has traded. 90 % of it is on the call side.

37:37We do see some call selling against the bullish flows. At least one big trader took off a chunk of 17 strike calls on this pop, but bulls like the 14 and 16 strike calls expiring November 20th, as well as the 16 strike call expiring in December. That contract is about twice as expensive as the one expiring this month, but buys traders some more time for housing to kick into gear.

38:02Scott Wapner: Oliver, thank you. That's Oliver Rennick in Chicago. It's a perfect name to bring up because you bought it. Yeah, we bought it yesterday. And, you know, again, selling tech, 5%. We've been rotating and buying names outside of tech, ready for this environment. Rocket was one yesterday that we were kicking around. We wanted to get home builder exposure. But we like Rocket because the light business model is going to benefit from the lower rates. You're going to get that oomph that the home builders are also seeing today. But the difference is there's not all mortgages on new home construction. It's refinances, refinancing homes.

38:39And so that's going to be a big tailwind as rates come down. I think Rockets are in a great position to capitalize. They reported last week. So we bought it. The stock was down about 30 % on the year. And that includes a 10 % rally off of the lows last week after its earnings report. It had a solid earnings report. I think this name is what rates keep coming down. It's going to be a leader to the upside. All right. Pulte Group, NVR. Those are two home builder stocks I would look at. Second derivative trade would be LPX. Rob asked a great question before. If you believe that there's sustainability in this recovery, I think it has to prove itself over time.

39:15But certainly something changed. Now you're patronizing him. You're patronizing him. This could be a little bit. Also, Finance of America. A little bit. There's leverage plays. Just a little bit. Leverage plays in these. If you look at Rocket, you look at Finance of America, FOA, they're both ripping the door. Afforded QXO? No. Which is being destroyed. Affordability was the issue last night. This is the one issue that you could get some bipartisan action with the president and the Democratic House and Senate. I think you will. I think that's likely.

39:44Scott Wapner: Gold's less affordable today than it was yesterday. It's facing for its best day since August. I like that. That's good. We'll bring it down next. All right, we'll do the setup. HST, that is host hotels and resorts. 52-week high today. Reports after the bell. Robert? incredible K-shaped beneficiary, obviously the top of the K. It's up 50 % since we added it last December. They continue to be very well positioned for this market with brands like Ritz-Carlton, Hyatt, Marriott. We think they're going to continue to do well. They did put a dividend in place, buyback in place, and the balance sheet repaired significantly since COVID, which hurt them pretty bad.

40:31Scott Wapner: All right. Cummins is tomorrow before the bell. Joseph Terranova. Yeah. No good on this one. Basically, no. It's not looking good. You're sitting near a one-year low. Why? Well, because this is part of the AI story. It's about power generation, and they have diversified their business model, obviously. I think of them as engines. You think of them as engines. You think of them as trucking, but they've diversified the model. They've gotten involved in power generation over the last 18 months. If you pull the stock back, you'll see the benefit from that participation in the AI data center build out, but now being punished on the other side down 5%.

41:07Cummins Energy has been a big part in company for a long time. Yeah.

41:12Scott Wapner: Thank you. You're welcome. Thanks, Vice. He always adds value. Yeah. Wisdom, you can't get anywhere else. No. Conoco. That's why I'm in the middle seat. I don't know. After today, you might be on the end. ConocoPhillips before the bell tomorrow. Jyoti. Going to be a record quarter, I'm sure. Let's see how the stock responds, given what we're seeing. Is there continuation selling overnight in oil futures? That's obviously going to have a negative effect, despite what's going to be record earnings. Parker Hannifin before the bell tomorrow. That's you as well. That is. Does Weiss know about all the exposure that you have to all these areas?

41:45Scott Wapner: Yeah. As an investor in the Jyoti? Are you still in the Jyoti? Absolutely. Big believer in the J.T. method. Thank you, Steve. Buy high. Continue to buy higher. I'm not a big believer in that, but yeah. Momentum. No, you don't want to talk about momentum today. Not today. No, you don't. Anyway, Parker Hannibal. Yeah, look, the revenue is going to come in strong, nearly up 20%. The challenge might be, though, some supply constraints specific to the aerospace industry. All right. Good stuff. We'll take another break. We'll do finals on the other side of that. All right. We'll continue to surround this day after the midterms at three o 'clock with Lizanne Saunders, Tom Lee, Mark Okada, Mike Rode.

42:29Scott Wapner: So we'll get after it this afternoon. We obviously have a strong stock market to talk about. We'll see if we can finish as strong as we look right now. Let's do some final trades. Mr. Seachin, What do you got? Got Amazon. Existing compute capacity is going to be more valuable tomorrow than it is today. Another front runner. CDE, Coor. This stock has been beaten down, piggybacking our conversation in gold and silver. There's a lot of upside here. They report after the bell today and they last missed their reports with these one off events. I think this would be a great report. Twenty dollars. The Weiss.

43:08Stock's down 7.3%.

43:10Scott Wapner: Picks a stock, bucking the trend to the downside. Because consistent with my philosophy, buy low, sell higher. FTA, I can sell aviation. Was that a shot? By the way, Apple most valuable company again. Go ahead, real quick. Let's go for the seventh bite out of the Apple. Seventh bite. I'm going to buy it again. 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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