The Bull Market Backdrop in Question: The Investment Committee Weighs in 10/20/26

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0:56Scott 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.

1:12Scott Wapner: All right, guys, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. The rotation trade as sectors other than tech lead the market yet again. We discuss and debate that with the Investment Committee. Joining me for the hour today, Joe Terranova, Jim Blaventhal, Kevin Simpson, and Josh Brown. Take you to the markets were green across the board. Dow is leading the way, as you see. Good for about 1%. All right. AI stocks, they're mixed. You had the South Korean data center firm Ellis down 32 % in its debut. HSBC today, Joe says Coral Weave is going to drop another 30%.

1:46Scott Wapner: The housing number was a disaster. Oil is around 100%. and yet stocks are up. The curve's flatter. I wonder if part of this is the market saying, you know what, the housing market's so bad, and now we have all these concerns, there's not going to be a hike in October. Maybe there is in December, but we'll deal with that when we have to. Is that what this move is about in any way? Well, I think a lot of it is the price of oil was$110 earlier this morning. We've seen a significant retreat on some headlines that I don't know are true, not true. So I'm not going to go into that. But you can't wash away the price action.

2:23I still believe the opportunity is in the AI trade. You do? I do. I think the opportunity is in the AI trade. It doesn't mean I can't own health care. It doesn't mean I can't own some of the better performing financial services names. But I think from the perspective of positioning lightning over the last month, the hedge fund community lowering their exposure, I still think we set up nicely for that November and December rally. The price action today in CoreWeave, I told you yesterday, look, as far as CoreWeave, understanding from an analytical perspective where the equity should go or not go, I'm not going to weigh in there.

3:00I haven't followed it closely enough. But I do like the price action today that we are seeing bad news, good price action, bad news coming off South Korea.

3:09Scott Wapner: Yeah, but I mean, yesterday CoreWeave was green and then it was red. I mean, you're really going to have your price action today. You had bad news. You had bad news out of South Korea, and it looked like it was going to roll over. It did not. That indicates to me that maybe we've seen enough deleveraging in the AI semi-trade that you could look to rebuild positions and close out strong 2026. So, Josh, I mentioned all of the things that are going on, and UBS today says the bull market remains intact. They don't seem to be wavering. Why? because of solid economic and corporate profit growth, as well as the AI investment and adoption.

3:45Scott Wapner: Monetary policy no longer a tailwind, but we don't expect the Fed to feel an urgency to hike rates aggressively. That's kind of what we were just talking about here. We believe they're still healthy upside for stocks. They maintain their mid-2027 target on the S &P. It's a June target, mind you, of 8 ,400. The point is, they don't think that the story is ending or is close to over. Yeah, well, so I think that they're kind of echoing what we've been saying on the show. One of the most remarkable characteristics of what we've seen over the last year is that when the leadership falls, so semiconductors, the latest example, we find other things to buy.

4:28The rotation has kept us alive for so long now. Now, it's almost pointless repeating that line, but it just happens to be true. People want there to be this different environment, but there really isn't. And think about that backdrop. Profits for the S &P 500 are expected to grow 24.6 percent in the earnings period that we're in right now. That is six basis points above what the estimates were at the beginning of the season. So that part of the long thesis is intact. Earnings are good and surprising to the upside. 79 % of S &P companies have beaten estimates of the ones that have reported. I know it's not that many.

5:09And we're seeing sales growth, too. So it's not buybacks and games. It's 12.3 % year-over-year revenue growth. And that is 20 basis points above estimates at the start of this season. You're going to get increased profits in 10 out of 11 sectors. You're getting some of the highest growth rates, not just in tech, but in materials, believe it or not, and in energy. And if you think about what's working right now, this this huge rally in health care, which I know we're going to talk about later in the show, that is of a piece with how I opened up my remarks here. Like we have found growth stories away from semiconductors and memory and all the things people are worried about with the neoclouds.

5:52These stocks have nothing to do with that problem. So I like what Joe said about AI still being the biggest trade out there. And, of course, I agree. But it's not the only trade. And that's really important for the bull market to sustain until your end.

6:08Scott Wapner: That, Jim, is the question. I mean, it is the debate whether the bull market is unraveling, whether it's about to, whether it's intact, whether it's taking on a new composition. And that's what people are debating. And that's what people like you want to believe, that it's taking on a new composition. Or if not yet, it will. Interesting choice of words, what I want to believe. And I'm cognizant of the wish being the father of the thought. Well, I say wish because I'm not going to make, what are you going to make of a couple of days of a rotation? So, you know, here, I'm looking right now and I can show you later or right now if you want.

6:48Show me now? Yeah. This is the equal weight S &P 500 versus the monkey. Oh, you're showing me. Oh, you're showing me. Oh, I didn't realize we were doing show and tell.

6:56Scott Wapner: Go ahead and show your computer. Do you have any passwords? Yes, your social security number is visible on here. Equal weight versus the market cap weight at S &P 500. Can you show up? Can you guys just put up the equal weight versus the S &P so that I don't have to reveal Jim's bank account information to our viewers? I guess I'm doing that defensively. Is that a Costco laptop? I think you're going to say, well, what are you talking about, Jimmy? But here's the simple truth. The equal weight and the market cap weighted S &P 500 are in a dead tie year to date. They're in a dead tie. And there have been many points in time where the equal weight has outperformed, many points in time in the year to date where it has underperformed.

7:34So the new composition, again, I like your phraseology. The new composition has been taking place all year. And where we've ended up is a dead tie. Where that takes me, in case you want to know where I'm positioned and what I recommend clients doing. with technology being 40 % of the S &P 500. Hey, this investor is uncomfortable with 40 % of his portfolio and technology. Where is it for me? 36%. That's still a large amount, but those four percentage points, I get to go and do things that Josh was talking about, like energy, which has been a star, like healthcare, which has been a star and defensive at the same time.

8:12My point being this, you don't have to have every single dollar matched with the S &P 500 in either the MAG7, AI, or technology. There are other places to make money, and it's been working all year.

8:25Scott Wapner: Well, what if I told you we're closer to the end of the AI earnings boom? Do you think that? Well, first of all, I didn't know we were allowed to bring props because I would have brought a chart. Thank God you did. You think we're closer to the end of the earnings boom? If we're going to have X percent of the earnings growth for 2026 come from tech, it's going to be a huge number. But I told you that in 2027, it's not going to be that number. And then in 28, it's going to be well lower than what it is in 26. Wouldn't Jim's thesis remain believable if you think that the economy is still going to remain pretty decent in that period of time?

9:11So I definitely think Jim's thesis is believable when you bring in that narrative of 28 as part of this equation. I brought in 27 first. Well, I still think 27 is going to have tremendously powerful earnings for AI and for technology. So I think you need to be there, but I think there will definitely be a bifurcation, haves and have-nots. There's going to be extremely profitable businesses within AI that are going to be revolutionary because of this. And there's going to be other companies that are leveraged. We saw that last week. We saw a repricing, a reality check. So many companies that are leveraged, that are borrowing, that are reliant on the AI revolution, that I think there'll be a big difference there.

9:49I, too, am light technology. I have only 25 % in tech, so I'm rooting and hoping for a broadening. I'd like the equal weight to perform well. But I truly think that people will always pay up for innovation. And I don't think by any means you want to abandon the tech trade to play the broadening. Where are you overweight? That's a massive underweight. Where are you overweight? Well, right now we're overweight in health care. We're overweight in energy. OK, we're overweight in metals and we're getting involved with agriculture. And so you're on the offense and just not in technology, at least not as much as the S &P 500.

10:23But energy materials, you're playing offense. But what if I told you, though, if I still use the word composition, though, Joe, and I said that I wonder if people are confusing broadening with defensive.

10:38Scott Wapner: makes it feel like there's a broadening that's not really happening in a positive way. Staples, utilities, the health care that all y 'all raving about, those are defensive plays in the market to the point where B of A says they can be bubbles too. From a broader perspective, U.S. equities continue to rotate sharply in times of stress rather than rupture. With the recent outperformance of defensives versus tech, historically extreme. Is that fair? You look at all this money rushing into all these areas, they say, see, I told you the broadening is coming back. Well, I mean, if the broadening is all in defensive areas for the most part, is that really a broadening that you want to hang your hat on?

11:20Very accurate. And I think here's the evidence to support it. In the month of October, when you look at the various factors that you could invest around in the market, low volatility stocks are performing the best that they have performed over the last 24 months. So I do think it's indicative of the defensive nature of the market. I think the consistent theme of 2026 and the reason you're getting this rotation is because the market continues to very quickly vacillate in a mercurial way between fear and greed. There's nothing in the middle. It's fear. It's greed. It's fear. It's greed. And I think the reason why I've identified that I think the market right now is defensive in its nature and the opportunity is in the AI trade, the semis, the memories, the optical, is because we've swung so far in the direction of fear and lightened the position there.

12:15Jimmy, you're referencing 40 % weighting the technology in the S &P. I don't think anyone disputes the premise that you want to own Apple, NVIDIA, Microsoft, the Mag7, because that really is the lion's share. I love that you went here. That's the lion's share of what the S &P 500 is. I'm talking underneath the surface and finding the opportunity in that pure AI trade that's stalled out since June. This is beautiful. I agree with you. Thank you, Jimmy. No, but we're all stock pickers here. We're all stock pickers here. So you led with Apple in terms of the AI trade. I'm a believer in the AI trade.

12:51We had the discussion yesterday. I'm not going to rehash it, but take Apple. You don't have to own a market weight of Apple at this multiple. I mean, I know we've talked about. I do overweight Apple. Okay, good. You and I, that's what makes a market, right? I am at half market weight of Apple, and I sold it before two earnings releases ago around 330. Yeah, it's up at 340. What are you sorry about? That it's up late? Okay, good. All right. Well, you're good at that. Look, my point being is you don't have to match the S &P 500 weighting in every darn stock. Microsoft, sure. Market cap weighting, even overweight.

13:22Google, Alphabet, same thing. Amazon, same thing. But, Scott, you asked a great question. Is this defense or is this broadening? Look, it's a great question. I'm not going to always plug you up. A lot of emotions flowing today. It's a great question. He's on a roll. Just leave him alone. Was it over when the Germans bombed Pearl Harbor? No. But here's the question, or here's how that answer will resolve itself. Do financials rally? Do industrials rally? Because, yes, you've got energy and materials rallying, and that's exactly my point. You need to see it, and maybe you will if Anthropic goes public.

13:55If OpenAI raises the money that they're looking at raising, maybe you'll see the animal spirits come back to financials, but that's your tell. You need oil lower, and you need yields lower for that to happen. Yields are not a problem. I'm coming out and saying that. What are we at, 5.10 on the 10-year? Tell Corweave. Oh, OK. I'll tell Corweave. How about if I tell the other, you know, 499 stocks of the S &P 500? You should see your eyes glinting right now. Yes, there will be some stocks that are having trouble whenever interest rates rise. However, they have adjusted. The market has adjusted now to 5.1%.

14:32And nobody is going to look at 5.1 % and say, that is a nosebleed, turn off the lights rate. It's not. It's a normal way.

14:38Scott Wapner: Unless they're going down for the wrong reason. Josh? It helps them. It helps. The higher rate. This is the funniest part of 2026. The higher rates help the market. How? They don't help the internals. Everybody. It's a flight to safety. Everybody buys the companies that are impervious to higher rates. And those happen to be 40 % of the stock market. Google, Apple. You think NVIDIA cares what the interest rate is other than, oh, no, we might have to invest more equity capital into some of these neoclouds we're supporting, they don't care. Apple definitely doesn't care. They laugh at AI CapEx expense.

15:18So actually, perversely, the high interest rates, they're making the rich richer because all of a sudden, money market funds become money geysers again. So that fuels consumer spending at the upper end of the K. And they drive people in the stock market back to the MAG7, which pushes the S &P up. So this idea that, oh, no, 5 % run and hide, it's the opposite of what people think. I don't think you want to see plunging rates. That would be way scarier to me.

15:48Scott Wapner: Why are they plunging? No, that's my point. If they're going down now for the wrong reason, you're suggesting, oh, well, this is where they should be. So everything's now fine again. Because why have they gone lower? Why do you think they've gone lower? Because they went too high. It's as simple as that, Scott. If we're going to say that the decline in the 10-year from 5.3 to 5.1 is anything other than a removal of an overshoot, if we're going to say that that's some slow economic activity, well, guess what? You don't have to take my opinion for it. Look at the numbers. The Atlanta Fed GDP today came out with a revised estimate for this quarter, 3.5 % real GDP.

16:24We can look at weekly jobless claims, industrial production, anything you want. To say that there is some disastrous or bad odor in the economy that's causing a 20 basis point decline. No, see, there isn't an odor now.

16:36Scott Wapner: But if you get a bunch of AI stocks to go into the dumpster, suddenly you get an odor coming from the dumpster that sort of permeates the whole area around it. Wait, wait, wait. OK, AI stocks in the dumpster. I mean, Meta's having a fabulous rally. Google's off its high. Fine. Wasn't Amazon up 5 % yesterday? No, but I'm not talking about the mega caps. I'm talking about the other ones that are in the sort of eye of the narrative storm. Give it time. And I'm not being flip when I say that. I've said today, I said it yesterday, I'm a believer that we are not at peak spending in the AI trade. I could be wrong.

17:13We will see. But this does not feel like 1999 to me. These data centers are still profitable the moment they come on. And if we're not near, as in within one year of peak spending, then just give time for these core weaves and oracles to come. But just finish the thought. You don't see me selling Oracle. Finish the thought, though, because this began with Scott asking the question about financials, about sectors X technology. If yields stay high, you're OK that financials can rally in that environment? Absolutely. OK. Absolutely. And by the way, I mean, it's not just yields. You're saying yields staying high.

17:45I'm saying yields are fine where they are. 5.1 percent. I'm not thrown by that at all. To Josh's point, they're fine for the S &P. If they resume their march higher, then I'll get worried again. If you look at a chart of the 10-year yield, you see it has these pronounced spikes, and then it comes back into a range. I wouldn't be surprised if we're settling into a range between 4.8 % and 5.2%. By the way, to Josh's point, if you do go below 5%, there will be a lot of handling, oh, my God, what's going on in the economy? I think we're just in a new range.

18:15Scott Wapner: Let's talk about some of these other areas, because we do have moves related to them, and I do want to get to that. As health care does hit a new record high today, Josh, you have a new buy. It's West Pharmaceutical. It is on the best stocks list. Tell us why you bought it. Joe T also has that in the ETF. But now you're in. Why? Judge, we did West Pharmaceuticals on this show on October 1st. And instead of talking, I should have been pulling the trigger. I framed it as a breakout in progress. The breakout actually happened. I'm paying up a little bit for it. but there's an even bigger breakout versus the highs of almost five years ago.

18:55Give me, pull this, pull this, pull this thing back. I want, I want you to really get a look at this wombat. West makes the rubber stoppers, seals, and plungers on vials, syringes. They make auto injectors. They're selling to every pharma and biotech company, making everything from biologics to, of course, the GLP-1s. The entire country is on these things. I was at Jared Freed's stand-up comedy show. The whole thing is about being on Ozepic. The entire audience is nodding along. This is a huge growth business. West Pharma had been a boring stock. Now it's a stock on the verge of an even bigger breakout.

19:35I added it to my portfolio. It is not.

19:42Scott Wapner: We took a hit on his audio. Well, we fixed that. You want to talk about this name that you've had? Bought it back in April at around 296. Josh is correct. They're seeing an acceleration in the revenue growth, and it is based on not only obesity drugs, the growth of peptides, the need for better equipment and technology as it relates to the medical services itself. Very strong company, only a$27 billion market cap. Okay. You have a move, too. We still don't have him back, right? We still working on that? All right. Let me know. Thanks, please. You got to move to right. You mentioned health care earlier is a sector that we're all enthusiastic about.

20:25And I don't know that it's necessarily broadening, Scott, but I think it's a flight to quality. Quality can be subjective, but there's a lot of opportunities in the health care sector. We added to United Health Care again. This is the third time in the past month that we've been rebuilding this position. We emptied, jettisoned the name last year. Obviously, it suffered for many, many reasons. that they had earnings last week that just validated our reentry. Their earnings were up. The Medicare ratios were up. Their guide for full year was up. There's definitely problems when you're dealing with UnitedHealthcare.

20:57Everything is not in the rearview mirror. I don't need it to be perfect. I need it to be improving. That definitely happened last week with earnings. We like this name. Last time we owned it for over 10 years. I'm hoping that will be the case again now. But this is trending in the right direction, and it's a marriage of momentum and quality. I like that. You got something else you want to say? I do. And let's talk about the one health care name that is just incredibly resilient, trades like a biotech,$1.2 trillion. And guess what? Lilly? Once again today. Lilly? All-time high, Scott. Eli Lilly, all-time high once again.

21:31So many people have pushed against the narrative that this company could not continue the rate of appreciation. They are the dominant force as it relates to GLP-1. And what they're doing with the revenue growth is going out with$20 billion worth of acquisitions in 2026 to diversify the model. I want everyone to go back two years. Just go back two years and think about the race for GLP-1. On one side, you had Eli Lilly at that time sitting with a market cap somewhere around$750 billion. On the other side, you had Novo Nordisk. Remember Novo Nordisk? Jimmy, in June of 24, Novo Nordisk had a market cap, Scott, of nearly$600 billion.

22:13The race was like, you know, for the pennant, two games separating two teams with 12 games to go. Now you're at$1.2 trillion. Novo Nordisk is less than$200 billion. Lilly has absolutely annihilated the competition. They are in the clear position as the winner for GLP-1 and the diversifying. I continue to maintain ownership.

22:39Scott Wapner: Goldman goes to$1 ,413 today on Lilly, and B of A goes to$1 ,397. So they're both looking at gains ahead. You have the stock. Josh, I'll just come back to you as we've got your audio back, I'm told. West Pharma, again, just finish your thought because you broke up a little bit as you were, I think, rounding third base? I think the key thing here is very simple. You've got this perfect combination of fundamentals, which are gaining traction, and obviously on Wall Street they're starting to notice, and you've got this impending breakout versus the highs five years ago. High-value components for West Pharma grew 19 % in the latest quarter they reported.

23:28It's now 49 % of sales. So people historically thought of this business as like they're making plastic pipettes, and that is not the case. GLP-1s are 18 % of revenue, and gross margins are expanding, 200 basis point growth in gross margins, to now 37.7%. So this is high-value sales to all of the pharmaceutical companies, Eli included. It's global. It is somewhat impervious to the economy. And these are the stocks. Beckton Dickinson is ripping. Waters, which we'll talk about later. There's a whole host of names in this space that are just absolutely ripping. They're popping up on more and more quant screens and trader screens than we've seen in years.

24:13And I think that's positive. All right.

24:16Scott Wapner: So let's do this. Let's take a break. So we didn't even get to SpaceX yet, which reports. Oliver Rennick later in the show is going to tell us what the options market is betting on. We'll talk to you about the name as you own it. So we'll tease that just ahead. We have another move from Josh to tell you about. We have his best stocks in the market as well. So we've got a lot ahead. We'll do it after this break.

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26:21Scott Wapner: All right, welcome back. as more evidence today, the recent housing data has been horrific. I don't know how else you could say it. Today was a huge miss. And now, Josh, you've sold the rocket companies. Is this just white flag? I'm out. This trade is this sector. This whole thing is just a mess. Yeah, exactly that. I got out of most of my stock a long time ago. I held a stub, hoping that at some point, if in fact rates would retreat, that these companies could get off life support. But I just I don't know what it's going to take for that to happen. It's almost not worth it. There are too many winners and productive things to do in the market.

27:04There's an old Apache proverb. When you find yourself riding a dead horse, the best strategy is to dismount. I think this is a fantastically positioned company. but it's not good enough to overcome the housing market recession that we're experiencing. And it's not going to get, there's almost nothing they could do. I've spoken with the CEO. There's nothing they could do differently. It's just time. At some point, housing-related, mortgage-related plays will come back into favor. Today is not that day.

27:39Scott Wapner: Yeah, it's down 42 % year to date. You have housing exposure. You have housing exposure. I want to hear from both of you first. Well, first, I'm at Home Depot, Scott. That's also a retail name. It's an inverse play on interest rates. So I hope Jimmy's wrong. I'd like to see rates come down. But to Josh's point, even if it doesn't, there's a super cycle that takes place in housing. During COVID, we all refreshed our homes, wall coverings, floors, appliances. At some point, six, seven, eight years past that, we've got to do that refresh again. So I'd say if you're holding on to Home Depot or Lowe's, it's not a 2027 story, but 2028.

28:13Pulte Group, that's the exposure that we have. It's one individual name. Over the last 52 weeks, it's down 7%. Five days ago, it was on a 52-week low. That is not momentum. Okay.

28:23Scott Wapner: Let's do some calls. Live Nation is a name, Josh, you've owned for a very long time and have been, as long as I can remember talking about it with you, bullish. It goes to sell today. CFRA does. Target to 167. They were at 175. So it's breached that. It's right in the pocket between the two. They talk about venue expansion costs. They talk about ticketing, adjusted operating income growth, rising debt, and on and on and on. What do you think? I mean, for the period of time I've been invested in this stock, it's been downgraded a million times. This one is hilarious. It's$174. They're cutting it to a sell because they think it's worth$167.

29:08I mean, what are we even doing here? It could be$167 tomorrow for no reason. And then bounce back to 187. It's just, to me, I tend not to pay attention to stuff like this. But then they're going to put it on a buy. Well, right. Exactly. The big picture here is very simple. This is a one-of-a-kind, crown jewel, live entertainment asset. There is no other publicly traded way to express this idea that people like to be together. They like to have experiences. They like going to shows. they've enjoyed listening to music for most of the 100 ,000 years of recorded human history that's probably not gonna change and Live Nation is the best in the world at what they do managing the venues now they're building venues handling the ticketing process working with the artists the merch etc etc I'm a I'm a never sell so it almost wouldn't matter what this analyst put in the report it's it's more likely I would eat my breakfast on top of it than actually

30:09Scott Wapner: spotify overweight morgan stanley 640 is the target josh owns it but so to you kev so you go kev yeah i mean i think we've always liked this name as a alternative to netflix in the streaming space for audio they're much more global company there's still a lot of runway here i'm surprised that the stock has stalled to the extent that it has i think it might be a little extreme the price target but i do see the stock moving higher from here let's do one more black rock upgraded to a buy from hold cow and does it today? 1405. 1405 is what they're looking at. 1212. $1 ,212. That was the prior target.

30:43Scott Wapner: So it's a nice increase. They're looking to a visibility of more than$100 in EPS. Jimmy. I think this is a good long term hold, but I have to acknowledge I've said that many times over the past few years. And as you can see from that chart, which is only about six months, it gets going and then it sputters. Ultimately, this is an asset aggregator. The AUMs go up. And as the AUMs go up and the market goes up, so should the earnings. So I do think this is going to be a long-term compounder, but so far it's been kind of tepid. OK. Dom Chu has a CNBC News update for us. All right. Good afternoon, Judge.

31:17Defense Secretary Pete Hegseth reportedly made a surprise visit to Israel yesterday. According to Reuters, he discussed Iran with Prime Minister Benjamin Netanyahu. A spokesperson for the prime minister confirmed the unannounced trip, saying they met at an Air Force base in southern Israel. The visit comes just before next week's high stakes parliamentary elections in Israel. President Trump and Vice President Vance are set to announce a new program today encouraging whistleblowers to come forward to expose alleged fraud in the federal government. Under the$25 million Justice Department program, anyone who submits a tip that leads to a conviction or significant federal enforcement action is eligible to receive up to$30 ,000.

32:00And Canadian voters overwhelmingly rejected a proposal that would have set Alberta on a path to seek independence from the country. Two thirds of voters backed the remain side of the province's first ever referendum on separation. Canadian Prime Minister Mark Carney says he spoke to Alberta's Premier Danielle Smith today about moving forward after the vote, including on things like immigration. I'll send things back over to you, Scott.

32:25Scott Wapner: All right, Dom, thank you. That's Dom Chu coming up. We'll do best stocks in the market from Josh Brown. Just added a new name to the list. He teased it earlier. If you didn't catch it, you'll see it coming up.

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34:15Scott Wapner: Let's do best stocks in the market according to Josh Brown. Waters Corp is new to the list. Please tell us more about this name. Yep, got more health care on tap for you. Waters makes the instruments and software that labs use to separate and identify molecules. It's an unbelievable business. Q2 revenue was$1.65 billion. Adjusted earnings of$3. Both beat the street. Management took that opportunity to raise full-year earnings per share guidance. Company reports next on November 3rd. This stock is up 57 % from its March low. It's just been an absolute horse. We're telling traders the rational stop here is 420.

34:59That is the early October lows and the 50-day. Investors can give it a little bit more room, 390. That's the August and September lows, and it held twice at the same level. There's memory in that price. The other one I want to talk about is Thermo Fisher. And he showed you this stock in the best stocks in the market list last November. So it's almost a year later. And at that time, it was a potential breakout. And I said, gun to my head, I think it goes. It went up 19 % since the call. Thermo Fisher is the largest company in life science tools. $46 billion in trailing revenue. Revenue was up 10 % on their last report.

35:40The stock gapped out of a long base at the end of July, has not been back below 555 since. And after a pullback, it broke out to a new record on Thursday, hit 703. So we got another mini pullback here. But RSI, still 64, very strong stock. We're telling traders, look at 650 as a stop. That's the bottom of the recent range before it broke out. Investors can use 600, a weekly close. So check it on like Friday afternoon below 600 tells you that that big uptrend might be coming to an end. And that's the rational place to be managing risk.

36:19Scott Wapner: OK, so they report tomorrow and the CEO is going to be with Jim tomorrow evening at 6 p.m. I think this is a carry. I think she has it. You do you used to have this thermo? No, TMO. You used to. Yeah. I mean, it's gone through a multi year consolidation. It is obviously breaking out, Josh, in the short term. But if you look at like a five-year chart of this thing, it went nowhere. I don't know if we can pull it back further than that. Yes, that's the story over two years. You go five years, you can see it went nowhere for a long time. Prior to that, it had a great run. But what's that, buddy? It was digesting a big merger.

36:54And I think that's really what's changed here. It's a high-quality name. Trades at a premium multiple. I think you're going to be right. I have a hard time getting back into it at this multiple. But I think you're going to be right.

37:05Scott Wapner: All right. So let's do this. Let's take a break. Netflix after the bell today as well. So we'll get Josh's take. We have some movement around that as well. And then we still have that Oliver Rennick options action on SpaceX. We'll hear from Kevin, too. So we'll be back after this.

37:36Scott Wapner: all right spacex after the bell oliver renick is at the sebo global markets in chicago with some options action on what the tell may be what do you see hey scott not quite as optimistic as it looked in August. It's been a huge three months for SpaceX. They sent astronauts to the space station, expanded their broadband spectrum, and apparently eyeing debt for NVIDIA GPUs. So it's interesting that the options market is fairly quiet. Right now, pricing just a 6 % swing for the stock after today's report. That's roughly half the amount it moved after its inaugural earnings in August. Volume today is below average and a little bit more bearish than what we saw yesterday.

38:19Today's most actively bought contracts were the 140 strike puts expiring tomorrow and Friday, which are not cheap contracts. So reflects some last minute nerves, it seems like here. Yesterday was more of the hallmark speculative call buying you've seen in the stock since its debut. But what stands out most to me right now is a lack of big money put sellers. That was the tell back in August. Big money traders betting against further downside, and that's what's missing here. So perhaps it's a wait and see if this company shows real earnings trajectory to invigorate the bulls again, Scott.

38:58Scott Wapner: All right. Thank you for that. That's Oliver Rennick. Kevin Simpson, you're on. Scott, we own SpaceX, but not for 2026. I think that the option market is getting it right. I think there's a tepid move at best after today's report. There was incredible enthusiasm last time because guess what? That was our first earnings report. But I think that this is a story, much like a lot of companies we talked about in the A block at the opening of the show, they need to prove monetization and they're not going to be doing it this quarter. OK. Netflix is also after the bell. So, Josh, you sold half of your half of what's left of your position because what was it, eight months, nine, ten months ago, you had sold, I think, half at that point, right?

39:39Scott Wapner: So now it's another half. So I, I was buying back and it was a mistake. And I, I think, uh, I think I would, so I got my average cost down below 80 and I felt really proud of myself. And then the stock, then the stock hit 69 and I was less, less proud of myself. I, I think I'm just wrong on the stock. I'm, I'm maintaining half my position because it's already had so much damage and I don't, I don't think financially the company's doing poorly. This is a company that did$3 billion in profit last quarter. That's not the problem with the stock. The problem with the stock is they are now making wholesale changes.

40:18This is what's changed. They let go of 1 ,000 people the other day. They got rid of Bella Bajaria, who runs content. They got rid of Dan Lin, who's the head of the movie studio, and a couple of other people that were the decision makers. And now they're sort of going to start all over again. And that's fine. and maybe that's what the company needs, but I don't think that bodes well for whatever they're going to report tonight. Historically, companies that have a great report on tap aren't announcing snap layoffs and getting rid of the three most important people at the company. So for that reason, I wanted to go into the news tonight lighter.

40:56I reserve the right to buy more if it gets unfairly punished for a good report, but I have no read on how bad things must have been. for them to do this last week.

41:08Scott Wapner: Yeah, I don't know. I don't think anybody really does know sort of what to expect. We'll explore more of that on Closing Bell later this afternoon with Jason Snipe, the shareholder, Alex Kanchewicz, big technology. I think everybody's trying to figure out what in the world is going on with a stock that seemed to be so loved. Tesla, tomorrow. You got that, right? Yeah, I think Tesla is the same narrative that we talked about with SpaceX. We had an amazing display of what could come, what the future could be. Yeah, we should have done those together. I don't know why we didn't, because that's where the speculation is, that they're going to be together.

41:40Well, I do. I'm of the opinion that they will come together at some point in some fashion. And I think that's going to be really accretive to their bottom line. I think it gives Elon Musk more control over the entities. I'm not sure exactly how or when that happens, but I think it's constructive for both companies, a merger or a combination of some sort someday.

41:58Scott Wapner: What about United Airlines after the bell today? Yeah, this is a tough one. Look, I like Delta better than United, and it's because of fuel-related concerns. You need to see fares about 25 % to 30 % higher from here if fuel stays elevated for United. The problem is capacity continues to grow. So if you're going to grow your capacity, you're going to have an inability to realize those higher fares and offset the fuel cost. So the last 52 weeks, United, unfortunately, I think is down about one or two percent. Delta is higher during that. I like Delta much better. It's been Delta and everybody else has just been watching the dust at Delta's heels.

42:41United is actually a good airline. I think it's attractively priced. And if you get any reduction in oil prices, any any piece, you know, real lasting piece in the Persian Gulf, United Airlines should take off, pun intended.

42:53Scott Wapner: All right. CME Group, that's before the bell tomorrow. You have that. I mean, CME Group is going to trade on volatility. If we see more volatility heading into the end of the year and into the first quarter of next year, it's going to translate to more trading. There's a lot more products, daily expiration, single hour expiration, all kinds of things happening here. I like the space. I don't know that you need to buy it before the earnings report, but I think this is a good name for the next two quarters. Don't you have this? I'll see your CME, and I'll raise you a CBO. I bought CBO back in June at$263.

43:24The stock is breaking out. If I'm speaking, if you could show a six-month chart on it, we're extending hours for option trading. I think this is the one exchange that you want to own.

43:35Scott Wapner: OK. So we have a lot of earnings movers as well today. It's just a stock-heavy show. We'll do a bunch next. OK.

44:02Scott Wapner: All right, welcome back. Stock's on the move. You know what? We're just going to start with Steel Dynamics. How about that? Because Jimmy's been talking about it since before the show started, given his victory lap. It was a good day yesterday. And then you're around Cleveland Cliffs, like the guy who hit the home run on the race. Jimmy was doing that. Jimmy was doing that. Jimmy was literally doing that for 10 minutes before the show started. Yeah, and Steel Dynamics is down about 1.3 % today. Don't even compare it. Cleveland Cliffs is down 4%. Where do you want to go with this? It was 16 % yesterday.

44:36Okay, do we want to go back and travel through time in terms of performance? Do we want to go back to August when you told me I should own Steel Dynamics? And I'm going to tell you today you should still own it. It's a better balance sheet. I'm going to tell you you should own Cleveland Cliffs. Okay. You're right. Steel Dynamics does have a better balance sheet, undisputedly. But there's a very strong path to deleveraging at Cleveland Cliffs. You could drive a truck between analyst estimates for next year EBITDA and where they think they're going to come in. I'm not saying Steel Dynamics is a bad stock.

45:03That's not what I'm saying. I'm saying you have the potential to make a lot more money in Cleveland Cliffs. Now, the problem today was the aluminum business for Steel Dynamics, okay? Switch, you don't have that significant challenge with Cleveland Cliffs. But for Cleveland Cliffs, it is the turnaround story on a volatile small cap company. What's the market cap,$7 or$8 billion? $7 billion. Right. So I'm more diversified with a$35 billion company at Steel Dynamics, better return to the shareholder in terms of capital allocation strategy, better debt levels, and rewarded on a five-, ten-year basis, clearly.

45:39You want to do a cheeseburger and a beer bet about a year from now, which has the better return?

45:44Scott Wapner: I mean, we don't have much time to wait. I mean, one year. Can I give you these statistics? No, you can give Jimmy them. We'll do finals next. We got to go. The last hour of trade during closing bell. Again, we're going to walk you up to Netflix and SpaceX 2. So you don't want to miss that with Liz Thomas, Chris Heisey, Alex Kantrowicz, Jason Snipe, and Mike Mayo. Just dropped a new note on the banks. Now that earnings are out of the way, we'll tell you all about what he thinks is going to happen from here. Josh Brown, what's your final trade? I want to talk about Amazon. The stock has been making a pattern of higher lows and higher highs headed back toward the earlier summer high.

46:30And I think we'll break through when they report earnings. Thank you very much.

46:34Scott Wapner: United Health Care must be Kev. Yes, United Health Care, Scott. I think the turnaround will be worth the wait. Farmer Jim. eBay. What a beautiful chart. Just look at this thing. All right. Promises made. Promises kept. Yes. Yesterday on the close, purchased personally Twilio 258. the turnaround story is in play. All right, good stuff. Thanks, everybody. I'll see you on the bell. 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. 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.

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