The Return of the "Magnificent Seven:" The Investment Committee's Strategy 9/4/26

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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 return of the MAG-7. Big tech taking back its leadership role lately. We will discuss, we will debate, and we will talk about everything moving today with the Investment Committee. Joining me for the hour, Jim Labenthal, Kevin Simpson, Rob Seachin, Steve Weiss. Take you to the markets. We do have a mixed picture, if you include the Russell being green, but everything else is red. You did have a better than expected jobs report. The problem with that is the bond market reacting, too.

1:46Scott Wapner: So the short end is up. Yields are long and down. So we'll keep watching that. There's the 10-year Treasury. But we're watching that as we have been really every single day. I did mention our top story, and that's where we really want to begin today. It is big tech's big move. I thought this point that Mike Santoli made earlier this morning was a great one for us to jump off on. This is a six-month look, MAG 7 versus the S &P 500. And you can see the very end to the right that the MAG 7 has started to outperform again. Look at between June and July. From July to August, you did have underperformance from the MAG-7 versus the S &P 500.

2:28Scott Wapner: Market felt a little dicey at times during that stretch. But as Mike also said, maybe it was earnings from these big technology companies that restarted this outperformance trend. I thought we'd jump off there because I think it's meaningful to the market.

2:45Oliver Renick: I think it is, too. And, you know, where I look in the Mag 7, Scott, is particularly at NVIDIA. I really think, to me, that's where the turnaround in the Mag 7 came. Now, we talked last week about how good NVIDIA's earnings were. We liked the stock response, but that it hadn't flowed through. At least last week, it didn't flow through immediately to the rest of tech space. I think that was just a delayed reaction. And I'm also happy to say that it's not just chips. In fact, it's things like Microsoft. It's things like Meta. So to me, it was really NVIDIA, the clearing event. That was the term that we used that tells us that the AI CapEx is going to continue, that it's profitable, which, by the way, to Mike's points about earnings.

3:25Oliver Renick: That's what we heard in the earnings season is that all of this CapEx is profitable. Andrew Jassy, CEO of Amazon, saying things like it takes less than three years to recoup the cost of a new data center. Excuse me, Alphabet growing its web services at 80 percent. Microsoft Azure at 40%. There are fundamental earnings-based reasons why the MAG7 is performing. And on top of that, the valuations are not too hard to justify.

3:50Scott Wapner: NVIDIA is up 7%. Well, now it's 6%. It's pilled back a little bit off of where it was when we started. It was up as much as 7.5 % this week. They did the hugging face deal. Their investments are growing. I'm wondering how you see. I just think that what Mike took a look at, as sort of he usually does, He has really just great insight into what's really happening underneath the surface. If this is going to be the case, if the MAG-7 has now reasserted itself, what does that mean for where we go from here in a month that has historically been unkind?

4:26Oliver Renick: So I'm less concerned about the timeliness of the market, this being September. One month has to be the worst month, Scott. It just happens to fall in September. So I tend not to trade around the tarot cards or the farmer's almanac. But what I liked about the opening from both of you is you didn't talk about the MAG-7 as an acronym. You both talked about NVIDIA. So what we're doing is we're isolating the winners within the MAG-7. But the reason that they're performing well collectively is exactly what you said. It has to do with earnings. And to me, more importantly, it had to do with the guidance.

4:56Oliver Renick: So we're looking at companies that are improving returns. Yes, they're spending a lot, but we're starting to see a return on that investment. And most importantly to me, we're seeing the valuations from the fundamentals, from the P.E. ratios, we're seeing them stay within range. So the stocks are moving higher, but in essence, they're getting a little bit cheaper.

5:14Scott Wapner: Not lost on us is Microsoft maybe playing the biggest role in this resurgence, if you want to call it that. Let's look at that chart that we've been showing everybody from earnings day until today. Thank you, guys. There it is, 27 percent. This stock got a reboot after, I think, a bit of a squirrely price action, Rob, in this market. Everybody owns that name. I'm wondering what you make of the things that Mike has looked at, but also that maybe this is the one. It doesn't get the headlines that the NVIDIA does. And, you know, we're going to talk about Meta in a second because it's had a week for sure.

5:51Scott Wapner: But this is as important to this trade as anything, maybe more emblematic than anything else to that comeback.

5:58Oliver Renick: Certainly because of its weight in the index as well. It's a significant contributor. It's been kind of a laggard over the last year. It's basically been a flatliner over the last year. It's up a little bit year to date. P.E.'s come in quite a bit on Microsoft. I still think it's one of the highest quality broad-based tech names in the world. you know, their strength was on full display in their latest earnings report.

6:25Scott Wapner: Let's show the six-month now, guys. Go ahead. Go ahead, Rob.

6:28Oliver Renick: Yeah, and I just think as we get into this period of, you know, weak seasonality, tougher, coming into a period of possibly tougher comps, you're seeing concentration and weakening breadth in the market. And why is that happening? Because these are the highest quality names in the world. They're actually delivering.

6:51Scott Wapner: See how that trends to exactly what we looked at as the Mag7 as a group? That period, June, July, when you had, you know, a swoon in this name, hadn't really done anything, did a little bit of a sideways trade. They come out with earnings and boom. And Nvidia, right? That thing hadn't traded all that well. They come out with earnings, then boom. Apple, you're less than a week away now from their big event. I said Metta Weiss over the last couple of days has had some great moves. It's had a week in its own right. But what about this notion? What do you think it does mean if this is going to be now something to bank on that big tech's really, really back from a stock performance standpoint?

7:36Oliver Renick: Yeah, look, I think what it means is that the AI trade is still something to focus on and that people believe in the AI trade. but now they're being more selective. So they're going to the companies that have shown that they can generate revenue in ROI, return investment. And that was Microsoft. Meta came out and it didn't do so well post-quarter, but then they talked about, part of that, by the way, was because everybody thought they were going to the cloud business. Those were the rumors. But they came out and they said something different, that we're going to now be in the AI model business.

8:11Oliver Renick: We're going to offer those opportunities. So I think that's had a lot to do with Meta, showing they're still smart, that Zuckerberg can still navigate virtually any troubled waters as far as AI. And also, it's the comfort that you get in these names. So despite that they've taken on debt, their debt costs are very, very low relative to what we're seeing otherwise with other companies. So you've got safety in these companies still. You've also got the known factor of these companies. And you got valuations, Jim points out, that's attractive pretty much across the board. So that's why the concentration is occurring here.

8:50Oliver Renick: And you take a look at others like CAT. CAT, you know, goes here and there. But still, it's well off its highs. GE for Nova, well off its highs, making a comeback. But they really are much more volatile than these names that Max have.

9:05Scott Wapner: Well, because that's like those are the kinds of names that are squarely in the center of the data center debate. and you would expect charts to look like that as, you know, as backlash. I wish you could put a chart up, data center backlash versus AI power names, like a Vernova, for example, because you'd see one going like this and the other one going like this. So that's very much been a story, too.

9:33Oliver Renick: FT-AI, which I own, is the poster child. Take a look at it. They've had great news. and the stock is, you know, hanging around here. Yes, they had a good day, but it got down to 184. On what? On just what you're talking about, data center debate.

9:49Scott Wapner: Yeah, so I think Meta is one of the best stories of the week, Rob. It's up, you know, about 6%. So they, you know, they announced a release of their latest model, Muse Spark 3.1. That was on Wednesday. Julia Boorstin was giving us a rundown last night on Closing Bell for all the reasons why the stock had, you know, had this nice takeoff. B of A liked what they had to say 8.10 is the target. They reiterate that as a buy. Quote, AI progress gaining visibility across models and chips. So that's a positive note there for a stock that's looking pretty good.

10:22Oliver Renick: And this week it's up almost 6%. It's the cheapest hyperscaler of the bunch. Trades at 18.1 times. I think we're already overweight this stock, but you can be a buyer into the weakness. I think that has historically paid big dividends. AI development at Meta has been absolutely encouraging. And I think you can continue to be patient with this name and have a long-term view, even though it's re-rated by 20 % over the last year. These are the type of positions you want to build right now when you're starting to see that turn. And that's what you saw in late 22, frankly. Ask Jimmy about that.

11:01Scott Wapner: Let's put it this way. If the MAG-7 is back, in quotes, and it's going to start outperforming, then the historical analogs of September doing this, that, and the other thing don't really mean anything, right? I mean, how are you going to have a very disappointing September at the same time that the MAG-7 may be reasserting itself?

11:27Oliver Renick: It's impossible. So maybe this puts some of those old wives' tales to bed in the future, and we can worry about October next year or something like that. But I'm expecting September to be strong for these names for the reasons we've discussed. I want to add one thing that you said, Rob, about Meta, because it's not just the AI. They're going to have agents next. And what's really cool about Meta is that they've got billions of users who can distribute this. So when you look deeper into the Bank of America note,$810, I mean, that's almost$200 from here. It's a stretch beyond what I thought it would do, but, man, I hope it doesn't.

11:59Oliver Renick: I think we could see, though, in September your typical seasonal weakness. Your stellar earnings are in the rearview mirror. You have a lot of macro news that's going to drive markets. Yeah, blackout window. Yeah, weakening breath. Round buybacks. Yeah, there's a lot of potential negative macro news. I'm not saying I'm negative. I think I would be a buyer into that with the economic strength we're seeing. But I don't think this means it's all clear for what is typically one of the weakest months of the year. I'm tempted to go with what you suggested, Scott, that this does give us room to say September will not be what it usually is.

12:36Oliver Renick: I'll tell you what's actually worrying me. We only briefly mentioned it is I do think the Fed is going to raise rates. Now, I have to point out this is not the Saturday Partners house view. We have a team. We're looking at this together. When? This month? Yeah. That's what I personally think. I think that might be the best thing that could happen at 25 base. I don't think this market is priced for it. I really don't. You know, people that I, you know, we're having a discussion right now. You raised your eyebrow just now at me when I said that. And that's not unusual. Many people still think they won't because what's a rate hike going to do to open the street of Hormuz?

13:07Oliver Renick: Or how's that going to affect tariffs? I get it. My comments, though, come from really listening to what Kevin Warsh said last week.

13:14Scott Wapner: Roof is going to blow off 1600 Pennsylvania Avenue if that happens. I'll tell you that right now.

13:18Oliver Renick: That's a great point, which also means if they're going to go, they need to go in September because if they do it just before the midterms, the roof is going to blow off and get vaporized in the size of the explosion that's going to come.

13:30Scott Wapner: Don't forget, I mean, I bring that up only because the president himself was suggesting this morning after the jobs report that the Fed should cut rates. So no big surprise there. I don't think anybody's surprised.

13:42Oliver Renick: It'll come down to CPI next week.

13:44Scott Wapner: Right. So CPI is looming, too. And that's interesting as well. How about this other stat that we saw from Opco about the Mag 7, that for the first time ever, the Mag 7 is now negatively correlated with momentum. OK, now, is that a maybe that's not a surprise if it's reasserted itself with a little more stability? It's not as volatile now. So maybe then it would be less correlated with how the momentum trade has gone. What does that mean to you? If I say it for the first time ever, it's now negatively correlated with momentum.

14:25Oliver Renick: It certainly doesn't feel that way necessarily to me, because in times that have been tougher historically, you've seen people hide out in these names. Now, I can't point to the statistics that you're talking about, but I will tell you just anecdotally, you focus on quality. And right now it's tough to find a higher quality sector than the technology sector to be defensive, frankly. And they've re-rated down to their pre-liberation day lows. So you have these incredibly high quality businesses. There's a lot of questions around the durability of the earnings, the durability of the spend, the continued ability for markets to finance that.

15:09Oliver Renick: However, I think that is getting done. We have very healthy capital markets. And ultimately, they're the safest house on the block.

15:16Scott Wapner: Let me ask you this. A stock, since you talk about the safest house on the block, the safest literal house on the block for a long time had deemed to be Apple for a variety of reasons. Not, you know, taking out the buyback part of that story, too, has played a large role there. But how about this? So you're less than where you're going to go a less than a week away from the big iPhone event. There's a report today that they're going to unveil their most expensive iPhone ever because of what's happening with memory prices. OK, that's from the South China Morning Post. Thirteen hundred and nineteen dollars for the 18 Pro.

15:57Scott Wapner: I don't know if that report has anything to do with the stock being down two percent. But I wonder how the market's going to react if John Ternus gets on that stage in his first big event and they unveil this amazing looking phone. And then the price comes out and you're like$1 ,300 for the base configuration. To put that into comparison with the 17 Pro, it was$1 ,099. $1 ,319,$1 ,099. What do you think?

16:29Oliver Renick: So the question the market wrestles with, Scott, is this is obviously an attempt to defend margin with memory chip pricing. Obviously, that's a raw material that goes into the iPhone going up. So can they defend margin without killing the customer, without showing the elasticity of demand that comes with a price hike? The market's not short. Now, by the way, prior to today, there was a nice little uptrend developing in Apple. Remember, it sold off meaningfully after the last earnings report, but it's gained most of that sell-off back. Where I come out with this is that history shows that the consumer has consumed regardless of what Apple does with price hikes.

17:04Oliver Renick: And I think this time will be no different. Yes, it matters that the telecoms are still subsidizing this. I know that's been a hot button issue, but they do continue to subsidize it. So I think they'll get through with this price hike and they'll defend their margins and that'll be good for the stock. And they control the customer. When you think about the application layer in using AI, it's kind of similar to the spectrum back in the telecom days. Companies like Apple that controlled the customer were the largest beneficiaries. The commodity businesses, the Cisco's of the world that had the network infrastructure did not have the same experience, ended up not doing as well.

17:44Oliver Renick: And I think that's why you're seeing a premium multiple on Apple right now, because people believe they will monetize that AI with their customers.

17:52Scott Wapner: This, Weiss, maybe you can make the argument that will be the greatest test that this company has ever faced in terms of the pricing power that it thinks it has. Because while at the same time you're offering your most expensive phone that they ever have, they still haven't fully delivered on what is allegedly going to make that phone even greater. and that's their AI and new version of Siri, which plays into the whole story. That raises the bar for Ternus and company.

18:20Oliver Renick: Yeah, for sure. But I think the reason stocks down today, B of A was out with a note. I haven't seen it, but I've heard about it. Talking about negative revenue growth in the app store. So we've seen app store revenues and growth declining. Well, not revenue decline, but growth factor declining. So that could be a big reason why the stock's down today. In terms of the appetite to buy the phones, that's purely going to be a decision that's made by the telcos. Are they willing to continue to subsidize the growth in Apple phones, new phones? And I think that's going to be a chapter given what's happening with their business.

19:00Oliver Renick: So when they launch the phone next week, they're going to have to show really, really good progress with Siri. And that's what all eyes are on. So if they do show that, they do exhibit that, I think the launch will be successful. If they don't, I think it's going to be problematic.

19:17Scott Wapner: Let's talk about some software names. The IGV has had an amazing comeback. I think most people would agree to that. Down 4 % this week. There's even some of the names that had pretty good earnings didn't trade all that well. I mean, Zscaler is the latest name, I guess I would put in that category. They had a B. Guidance was upbeat. Stock down. Palo Alto down about 10 percent this week. It's not like their report was bad. Fortinet down. Adobe is down. And they actually had news that Jim was looking out for a new CEO. They they announced internal person that they picked. Let's take a look at that on Adobe, guys, please, because the stock reaction to me is is telling.

20:08Scott Wapner: Why is the stock down 6 %? The market wanted an outsider. I mean, it's just that simple. That's what I thought.

20:13Oliver Renick: Yep. I wanted an outsider, too. Now, that doesn't mean that it's a sell, okay? And we do have earnings coming up next week. What we talked about two days ago, Scott, was using the CEO change or the announcement of who the CEO would be as a catalyst. What a catalyst does is it speeds up a reaction. In this case, the reaction that I'm talking about is the recognition by the market that this stock is truly undervalued. That is clearly not going to happen with the selection of an insider. Might have happened with the selection of an outsider, but we're downstream of that. Where this is going to have to come from is good earnings that, frankly, in my opinion, the earnings have been good all along.

20:49Oliver Renick: The stock has been sold regardless of the earnings. So we'll see if that continues next week. But as I look at a company that not only has grown net income nicely, it's grown free cash flow very nicely. And they use that to buy back shares, shrinking the share count down 15 percent, excuse me, 10 % over the last year and a half. I expect that to continue buying back shares at 10 times forward earnings. I'm going to take it. This is a meaningful concentration of the earnings power in the shares that I retain.

21:14Scott Wapner: But that's the financial engineering move largely that doesn't deal with the fundamental questions around the name.

21:21Oliver Renick: Okay. So let me take your - Is that true? Well, I don't see it that way. I don't see that share buybacks equals financial engineering. Financial engineering to me is a negative statement. Now, if they were doing that on the back of, say, issuing debt to buy back shares, I'd say, hey, we have a problem. What they're doing is they're using free cash flow. And Scott, at the same time, that free cash flow, which has been growing at over 10 % for the last few years and is projected to grow again over 10 % in the coming year, also has gone into R &D. So it's not, when you talk about financial engineering, you talk about, are they juicing the earnings per share at the expense of some other intrinsically fundamental valuable part of their business?

22:00Oliver Renick: That's not happening. But I look at it as. Go ahead, Weiss. That's not accurate. You know, financial engineering is not necessarily negative, but you're shrinking the stock, the share base. So you're retiring shares, which drives your earning growth. And you just say by 10 percent in this case. So the question is, what is the growth without that? Also, they did cast a very wide net looking for a CEO. So the question has to be, was there no CEO that thought they had a better opportunity at Adobe than they did at their present role? So that's a real question. Could they not attract an outsider that they thought was better than the insider because they didn't want the job?

22:44Oliver Renick: So the questions for Adobe just haven't been answered. And still, it's in the crosshairs of the AI boom. It could be, Steve, that there was. And I thought about this, too, because the point that maybe no outsider wanted the job. That could be the case. There's no way you and I are going to know. However, to the point of financial engineering, I'll just you know, the facts are that they've grown net income at 15 percent net income, 15 percent over the last three years annualized. That's what they're projected to do over the coming year. So I hear you. What I'm trying to make a distinction on here is that when one says financial engineering, there's a negative, at least that I perceive in that.

23:23Oliver Renick: And what I'm saying is that negative is not necessarily justified if they're doing it from free cash flow that's coming from net income growth. I agree with you, however, if it were coming from, hey, we're robbing Peter to pay Paul. We're cutting back on R &D. We're cutting back on sales. Then I would agree with you. That's not what's happening here.

23:43Scott Wapner: B of A reiterates their underperform on the name. Citi reiterates neutral. While JP Morgan, they remain overweight in aggregate. We believe the announcement, this is, of course, talking about the new CEO, is a positive in relation to addressing the uncertainty that has plagued new investor interest in the shares. I mean, that's an interesting take. Okay, yes, it does address one bit of uncertainty in terms of a corner office and a backside in the seat. But I don't think, and I think you would admit, it doesn't do anything to address the broader concerns that have circled around this company and have led to a stock chart that has looked the way it does.

24:24Scott Wapner: That test has yet to be taken. Yes.

24:27Oliver Renick: And so just to put the bull thesis into the full context here, my opinion is that the stock is trading as if there's an existential threat to Adobe, right? That AI is going to come in and just decimate their business. I submit to you that the numbers that we've seen and that I think we're going to see next week, I may have to change my tune if the numbers don't come in as expected. But the numbers over the last four years since ChatGPT was introduced are actually quite good. But all of that stock chart is on the supposition of what's to come, but which has not yet come.

24:59Scott Wapner: Talk Tesla before we take a quick break. So they had their cyber cab event. I think a narrative, the takeaway was that it failed to impress. Stock's down six and a half percent. I think reflecting that the safety regulator, NHTSA, they're evaluating the rollout as well. You own the name. What do you think?

25:15Oliver Renick: Yeah, I think there was a lot of hype and it turned out to be a big fizzle yesterday.

25:19Scott Wapner: So you think that too as a shareholder?

25:21Oliver Renick: With respect to the cyber cab event? Absolutely. Yeah, for sure.

25:25Scott Wapner: What else would be respect to?

25:26Oliver Renick: Well, when you're thinking about this name, cyber cabs are a really big deal because you're betting on robotics, you're betting on autonomous driving, you're betting on cyber cab. So it would have been nice to see something that was a little bit more impressive. All this does is delay the reality of that coming to fruition, if it ever does. Remember, the technology that they use is different than what we see with Waymo. So at some point, you're going to want to see these things out there with paying customers. Yesterday wasn't quite the day we were hoping for.

25:51Scott Wapner: Okay, we're going to take a break, as I said. When we come back, Kevin Simpson's got a couple moves to tell you about. So we'll do that and much more ahead.

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27:47Scott Wapner: All right, welcome back. Let's talk about these moves from Kevin Simpson. Gather yourself. We're coming over to you. You bought more Freeport and Agnico Eagle.

27:58Oliver Renick: Yeah, I think this is really consistent with our theme, Scott. We began it last week adding CF Industries, really looking at hard commodities, nitrogen fertilizer. We own both CFX and AEM. These are positions, but there's been a pullback in the metals. I really think that's an opportunity to add to them. I like the city note being bullish on gold. But here's where I could go wrong. If Jim's right about rate hikes, if we get a rate hike in September, October, December, then forget the gold trade. I mean, I'm completely off base with this. So we'll see how it plays out. But I think long term, there's a lot of value here.

28:31Oliver Renick: They're inexpensive. And I feel like any time you get a pullback here, it makes sense to add to them. What if that uncertainty is not tourniqueted, but persists, just the uncertain part? You don't get it, but the uncertainty around it persists. Well, I think that's why it's down already.

28:46Scott Wapner: Yeah. The city, you referenced the city note that they're bullish on both gold and silver into year end. Metals in general, but those two specifically, relatively resilient, they think, to rising energy price scenarios from here. More gold and silver than copper and aluminum.

29:05Oliver Renick: It also backfires if you get higher interest rates, too. So, I mean, there's a case for the metal. But why I like copper, maybe even a little bit more than gold in these two trades, is that you've got an application for them with respect to electrification, if you believe in the data center build-out. We talked about Tesla a minute ago, someday electric vehicles kind of coming back into vogue. So I think that there's application with copper, and I think gold is just something that you can absolutely lean into for the long term.

29:31Scott Wapner: Okay, Bitcoin's had a great month, last month anyway, better than 23%. there's a correlation maybe with, let's take a look at Bitcoin first. And let's look over the last month, I don't know, and then put it against Robinhood, maybe see what happens with that. Target goes to 136 from 115. Deutsche likes it. Kev, you own that. And Robinhood was up a bunch yesterday alone.

29:55Oliver Renick: Yeah, I'd be careful chasing it here, Scott. I mean, I really love the name. I've been talking about the company for years. They're doing things now with tokenization. There were some things in Twitter yesterday and X about some of the things that they're doing overseas with tokenization, specifically with AMC that made the news. Also not a reason to buy the stock. But this is a maturing financial company that's a fintech that's well beyond the crypto, well beyond the Bitcoin trade. Is it?

30:22Scott Wapner: Because that would suggest a reasonably tight correlation still between the two.

30:27Oliver Renick: If you stretch that chart out, it's going to continue to look like that. I mean, I'm thinking in terms of the longer trend moving forward, because when it started, it traded in lockstep with Bitcoin. Over this short period of time, we're seeing the same thing. But I think there's so much more under the surface with Robinhood as an application. We could be 10 years into the future where Bitcoin doesn't exist. Robinhood will.

30:49Scott Wapner: So Morgan Stanley's out today talking about energy, which obviously had a great year. They see value in Exxon, Suncor and Chevron. Oil's been back towards$100. Take a look at WTI, please. Because that's where they're sort of looking at as they continue to like these names. You own Exxon. You own Chevron. You own Suncor. So how about that? You first, former Jim.

31:17Oliver Renick: Exxon, I've said this many times. I'll say it again. If you're going to own anything in the energy patch, if you're starting to build your energy portfolio, I think you've got to start with ExxonMobil. And the reason why is because it does everything. It does exploration and production. It does distribution. It does refining. It does chemicals. It does retail. And it makes a lot of money doing all of those things. It's been a great stock, by the way, not just this year, but over the last six years, it's outperformed the S &P 500 by twice what the S &P 500 has returned. Chevron's production was up 20 % last quarter.

31:48Oliver Renick: They've captured about$1.5 billion of Hess's synergy. I like Chevron a little bit better.

31:55Scott Wapner: Nice suit, by the way, dude. Thanks, Scott. I like that. Nice. Notice? I didn't notice. Guy's got a whole new repertoire going. He's got it going on. In case you haven't noticed.

32:04Oliver Renick: He's got the haircut, everything. He's changed it.

32:08Scott Wapner: Yeah.

32:08Oliver Renick: We're going to keep embarrassing him, too. I've got to sit next to you. Suncor quickly. Yeah, Suncor. Listen, energy has been the bright spot. Suncor has been particularly the bright spot. Once again, proving that owning in this space is a hedge against rising rates. There's been an incredible correlation there. I would personally be inclined to start to take some chips off the table here because I think we've run quite a bit.

32:34Scott Wapner: Okay, we'll take a break. We're going to come back. Bill Baruch is going to join us. He's got a flurry of moves that we'll document for you next.

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34:17Oliver Renick: Welcome back to Halftime Report. I am Frank Holland with your CNBC News update. The judge in the Lindsay Clancy murder trial in Massachusetts says he plans to declare a mistrial after jurors remain deadlocked on a verdict following seven days of deliberations. However, he gave the defense an hour to request an emergency stay on that decision from a higher court. He made the announcement after jurors sent a note saying that, quote, with a heavy heart, They were unable to reach a verdict on whether Clancy should be held criminally responsible for killing her three young children. Romanian prosecutors indicted social media personality Andrew Tate today on charges of trafficking minors, sex with a minor and money laundering.

34:54Oliver Renick: Tate and his brother Tristan are currently in the U.S. fighting extradition of Britain on similar charges. They have denied wrongdoing. And a judge ruled that two players are eligible to play for Coach Lane Kiffin at LSU, despite signing pro contracts and spending most of August in NFL training camps. The NCAA and Southeastern Conference, they strongly oppose that move. SEC lawyers say they plan to appeal. Scott, back over to you.

35:16Scott Wapner: That's a big story. Haven't heard the last of that. That's for sure. Frank, thank you. That's Frank Holland. Bill Baruch has said he's making some new moves in the consumer space. He joins us now. He's on the phone. So it's good to have you. So you're out of Amherst Sports. Done. Goodbye. Why? Out of it. Well, we like the name a lot. I mean, the brands that it holds, we see secular bull trends. Wilson for pickleball and golf and tennis, Arcteryx, Solomon, both on the ski and hiking for consumers. But the problem is this stock took off. We were long at$19, and we saw the consumer in China continuing to grow and being targeted by the government with stimulus targeted at consumption.

36:04Scott Wapner: That was a big tailwind for the stock. A lot of that has been eaten away from tariffs, which has also compressed margins. And you look broadly, the retail space itself is struggling. I think there's an undertow in there. The stock had been consolidating nicely above$30, and it has really started to break down. We're going to step aside on Amber Sports and just take the win that we've had over a long term. So we're showing the one year down 20%. It's down 20 in six months, 15 in three months, 18 and a half in a month. I get that you owned it from 19, so you made some money. What's surprising to me, you just talked about the consumer being weak, but a lot of their marquee brands play at the top end of the K, don't they?

36:55Scott Wapner: Arcteryx, Solomon, Wilson. I mean, you're selling$300 tennis rackets to somebody. Absolutely. It's at the high end, but you look at the margin story, and the big hail wind that took this stock above 20 and through 30 was thematic, but it was also with the China stimulus in the back half of 2024. And though it started to play out, it did not play through with the tariffs in 2025. The stock continued to do well, and we wanted to get through the most recent earnings report. We saw it as a really good earnings report, and the stock responded favorably. But in the aftermath of that earnings report over the last week and a half, two weeks, the stock has gone lower.

37:38Scott Wapner: And we see, looking across the space, from all angles of high-end to low-end, you look at Nike and Lululemon and other names, they have struggled. And I don't want to hold on to Amherst Sports and see that it can continue to deteriorate. I'm going to step aside here. I love the name. I love the portfolio of brands. it just may not be the right time to hold this name. Well, why is it the right time to buy Walmart, which you did? Maybe you did with the proceeds from this. That stock hasn't been trading all that well either. So what's up here? Well, we do see it as a trade down in consumers, for the consumer.

38:14Scott Wapner: And I think that's a great thing. In our portfolio, we're underweight consumer staples. We really don't have a true consumer staple name. Walmart's down about 25 % from its highs. I see technical support here. If you look back from the pre-tariffs 2025 high, a lot of volume is traded at this$100 level. So if you want to buy Walmart, this is the place to step in. But listen to some of these stats. They're reaching 94 % of the U.S. population in a three-hour window. 30 % of the same-day orders pay an elevated fee, and that helps margin expansion. And I think the unknown or unsaid enough is that they're eating into Amazon's core business largely unnoticed.

38:52Scott Wapner: And Sam's Club is a legit competitor to Costco with same-day delivery at a better multiple. So I think there's a lot here with Walmart that if you like Walmart, this is the time to be a buyer. And here's an interesting thing from a technical standpoint. The 200-week moving average, this is a high-quality name. The 200-week moving average is at$80. It's a ways away. But if I'm buying here, worst-case scenario, which I don't think it's going to go to$80. I think it can hold$100. But if something happens, I would be going heavy into Walmart at 80 bucks. Good stuff. Thanks for joining. Appreciate that.

39:27Scott Wapner: That's Bill Baruch. It's interesting. So if we pair the conversation, as he did, Walmart, Sam's Club versus, let's say, Costco, which you own, the Costco target today gets cut to$1 ,144 from$1 ,194. So we're talking about 50 points lower,$50. outperformed, though, still. But people who look at the valuation of Costco have a problem with it. What do you think?

39:55Oliver Renick: I think you have to be used to paying a very high multiple for Costco, similarly to Walmart. If I had to pick one of the two, I would go with Walmart at the moment. We have a larger allocation to Walmart than we do with Costco. But even with that note, when you look at it, a$50 price drop, the stock's still got$100 to go from where it is now. And I think$50 on an$1 ,100 stock is somewhat meaningless. But for me, if you're going to pick a name in here, I would definitely go with Walmart over Costco at the moment.

40:23Scott Wapner: Where are my buyers of Lulu today? Crickets. Nobody interested? Take a look at that stock. Right up there with Nike.

40:30Oliver Renick: I made that mistake one time and got punished.

40:35Scott Wapner: And you're on holdings, by the way.

40:37Oliver Renick: We're done with, right? I mean, look, something's going on with the space.

40:40Scott Wapner: Oh, yes, you sold it in April.

40:41Oliver Renick: Yeah. I mean, something's going on with the space where what used to be a strong, stable business has become very fickle. I mean, I know with Lulu, there's talk about changing fashion trends. This used to be different from, say, you know, an Abercrombie and a Fitch or a Gap Stores or something like that, where if white T-shirts were in, then, hey, the stock went up. Now there seems to be a secular decline in these businesses that they can't get out of the way of. Is it competition internationally? way. Remember, there was, for a lot of these stocks, there was China was going to be the next great market.

41:12Oliver Renick: Now there's up and coming brands in China that are taking that business away. A lot of DTC brands, too. Whether it's the business or the stock, these are no touch.

41:21Scott Wapner: Let's touch one more before we go. You trimmed TJX. Why'd you do that?

41:26Oliver Renick: It hurts me to do it because it's one of my favorite stocks. We've owned it for a really long time. I was on with you when we had earnings and we had covered the position, and worried a little bit about what the numbers might look like. And they beat on the top line. They beat on the bottom line. At a cursory look, I thought, man, this stock's behaving completely wrong. It should be moving higher. Until you look at the core business, which is Miramax, TJ Maxx, Marshalls, they were up 1 % on the quarter versus a 6 % previous quarter. Now, there can be some seasonality with these things. And if there is a K consumer or a K economy, both sides of the K go to TJ Maxx.

42:00Oliver Renick: Both go to HomeGoods. Both go to Marshalls. We still have a 3 % position. The stock's breaking down. I'm going to have to react to that and respond. All right.

42:08Scott Wapner: Break. And then Mike Santoli with his midday word.

42:16Scott Wapner: Welcome back. Senior markets commentator and overtime co-anchor Michael Santoli here at the end of our desk, Post 9. It's good to have you back. What do you think of this market today reacting to the jobs report?

42:27Oliver Renick: Yeah, I mean, it's a little bit fatigued. It doesn't really seem like it's a real assertive reaction, in other words, reacting to anything in particular, aside from perhaps, you know, we did hold up pretty well throughout the week in the face of what was going on with yields and oil. So maybe there's a little wear and tear there. We are, I guess you can't escape it, going into a Fed meeting at a coin flip odds. I don't know if it's make or break. If they hike, they don't hike. But that is the reality that we are there. I mean, the data put us there. I think it's probably a net positive thing if you might get a hike to have the labor market in good shape as it seems to be today.

43:04Oliver Renick: But, yeah, beyond that, it's hard to necessarily isolate what's happening, except we have been just sort of oscillating in this range. You know, we've kept it pretty much, you know, on the rails this week in terms of not going down below those levels that would have broke the range and really not getting a lot of momentum on the upside either. So, you know, VIX below 14. I think a lot of people are saying we know that when people come back, often you have a little bit of bumpiness in September. And maybe it's, you know, hedging's cheap. We'll see if anyone takes the market up on that.

43:38Scott Wapner: CPI takes even greater meaning now. Yeah, for sure.

43:41Oliver Renick: CPI and PPI, as people say, because it feeds into PCU. I thought it was interesting that the probability spiked this morning. Fed funds futures went to 70 % chance and then came right back in. Yeah. Yeah, I mean, the wage growth isn't there. The unemployment rate's unchanged, really, and that's the Fed's, I think, beacon when it comes to the labor market. See you at three? Yeah.

44:00Scott Wapner: All right, good stuff. Options, actions, next.

44:11Scott Wapner: Let's go to Chicago, CBO Global Markets. Oliver Rennick playing options action for us. What's the name today?

44:19Oliver Renick: SpaceX, Scott. It looks a bit like a caged animal right now. Hundreds of thousands of options contracts are trading on a daily basis with hundreds of millions of dollars at stake. But the stock's been trapped in a 10-point range for almost a month, compressing options prices down to what we see in stocks like Apple Oven or Builders First Source. I'm not convinced that's right. When SpaceX breaks out of its range, it will likely do so with noise. Right now, there's 11 put contracts open for every 10 calls. And working in Bears' favor is that there's not a lot of hedging below$142, which means if it slips through that level, it could get ugly fast.

44:58Oliver Renick: But almost all the puts out there are for strikes below 150, which is right where we're at right now. That means Bears need to sell off faster than Bulls need to rally.

45:08Scott Wapner: All right, that's a good setup for a trade on the desk. Oliver, see you at three. Thanks so much. Oliver Rennick, what do you make of what the options market is suggesting?

45:17Oliver Renick: I think it's too much too soon. I think this is a great investment long term. We do own this in the growth portfolio, Scott. We love the Starlink, the Starship, even the AI component to it. If it trades up, that's great. But I think this is something we're looking years into the future, not weeks or hours.

45:32Scott Wapner: You own it privately, right? And you have for a long time in the private markets.

45:35Oliver Renick: And now publicly, and we're taking advantage of the price move we've seen when we have episodic windows to get liquidity. But I still think the stock's going through price discovery. But let's remember, there's an evangelical level of support for this stock. And I can very easily see that if there's incremental positive news, it's going to generate huge price movement for sure. I'll just point out, Rob, what you know, which is that evangelical support at times withers. And look at Tesla over the last week or so.

46:09Scott Wapner: All right. Thank you for that. We're back with finals.

46:19Scott Wapner: Closing bell. See how the week finishes. The professor, Jeremy Siegel, is going to join me. Walter Isaacson, as well, on Big Tech's role in the data center debate. We'll kick all that around. Weiss, what's your final?

46:30Oliver Renick: FTAI data center debate is misplaced with this stock. It's very cheap. Robbie. KLA still off 30 % since the June peak. NVIDIA, we like the hugging face acquisition. Oracle's got good momentum.

46:43Scott Wapner: All right. Good weekend, everybody. I'll see you on the bell. The exchange is now.

46:50Scott Wapner: You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern, only on CNBC.

47:24Oliver Renick: 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. I've given my blood, my sweat, my tears to this island. What happened here? We came here seeking a great treasure. We've been out here for 14 years. After centuries of mystery. You have to hold the proof in your hands. The blood-flung quest. Time to go get it.

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47:53Oliver Renick: has finally paid off. You found that in the money pit. This is what we've spent our entire lives searching for. The Curse of Oak Island. New episode, Tuesday at 9, only on History. Next day on the History app.