Will Rates & Oil Derail Stocks? The Investment Committee Shares Their Strategy 9/28/26

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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. All right, guys, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the state of the market. Stocks not far from record highs, but big questions looming about that impact of rising oil and rates. We'll discuss and debate with the committee. Joining me for the hour today, Joe Terranova, Jim Laventhal, Stephen Weiss. We are red. Carl and Sarah were just talking about 526 on the 10 year, 95 on WTI.

1:41Scott Wapner: And Weiss, the headline from you is that you're starting to get a little cautious because of this backup in rates, which you don't think is finished. told us this morning, our production team, that you sold Cisco, you paired back Meta, and that obviously is representative of your overall view now. Yeah, I'd say that's correct. And I have been cautious as rates approach 5%. 5 % now seems to be support. And I think you can see a clear path to 6%, some talking 7%, which is typical in rates start move, people pick an outside level. But look, there is no reason for the 10-year yield to come down. And in fact, if you look at the total geopolitical issues, it's in every interest, it's in Iran's every interest to keep oil prices going up.

2:27And I wouldn't be surprised to see we go back to or they go back to really aggressive military action, because you see what's coming from the Democrats and some Republicans is to get out of the war. So right now, while Republicans control Congress and the White House, there's less appetite to do that.

2:47Scott Wapner: I mean, is this the beginning of more sales for you, you think, from your portfolio? Because Bank of America is looking at the yield complex and the relationship on the market, as you say, you know, well, it looks like we're heading to 6 percent. Maybe we go more than that. They say you need to go to or at least approach 7 percent to start putting significant pressure on the valuations of the market. And let's not forget, we're about to embark on earnings season, which is going to remind us why we're still, given everything that's going on, only one and three quarters percent off of an all-time high.

3:22Scott Wapner: Right. So the base case right now is going to be phenomenal earnings season. Right. So that, I think, is a good part if it's in the market. Let's talk about those two names in particular. Cisco I bought after last quarter when it got destroyed. I was hoping for a bounce. Didn't happen. So positions that I'm not in love with are going to hit the exit. Meta is a unique situation. It's still large. It's a still large core position. But as I mentioned last week, that got much too big because of appreciation because I added on dips. So this is more right-sized in that position. And I said I was going to do so when the momentum stopped.

4:00So momentum stopped last week. It got lots of great press, deservedly so. And the future is extremely bright. Now, I'm sitting in cash of about 25 percent. That could go higher. And I just don't see any need to put money to work here unless stocks are incredibly displaced and they're absolute bargains.

4:22Scott Wapner: Jimmy, what's your what's your current disposition around the market? My current disposition is to respect the move and the reasons that Steve is making them. However, I'm bullish. I don't know, and I'm not even going to argue with you about where the 10-year is going to end up. That's my pain point. That's the thing that's bothering all of us. I have no idea. I think you would admit you don't know either. So we're just going to have to see if what I believe, good economic growth, strong labor markets, and I'm just going to pause for a second, strong labor markets, some may dispute that, and excellent profit growth are enough to propel this market higher.

5:01I suspect that it is. Now, I think everybody knows I'm a long-term investor, so I'm not likely to make a short-term move, which, Steve, you may be proven right on. But I don't want to give up those positives that I just mentioned and be on the wrong side of the market if and when it rallies. I do think earnings are the catalysts that are going to project it higher. I have no call on what Iran is going to do or where oil goes from here. I will note, though, however, oil and interest rates have gone meaningfully higher, and this market has hung in there. And that, to me, is a good sign. Yeah, well, first question to you.

5:35In terms of your investment style in managing money, how much does and your need to keep a certain amount of what you manage invested, right? You go to 10 % cash? Yeah, I could go more, but that would be the end of days kind of scenario. Right, right. So how much does a rising yield influence what you're going to do? It does. It worries me. I'm not being, you know, disregarding where yields are. I note that, and you note too, the market valuation has come down from roughly 22 times forward at the beginning of the year to 18 and a half times now. Which still, historically, is not low. Point made.

6:15However, counterpoint that the growth rate of earnings would justify that with the PEG ratio, price to earnings over growth of earnings, well below one, which you know for me, I love that. Now, one other thing. Let me give you one other quick thing here. I do think there are opportunities to trim and trade. I wish I hadn't got out of Cisco, but maybe you'll get back in. Earlier in the year when we were in the parabolas, I took Qualcomm down by half. I think you were here last week when I added that half back in. I think you can do that and still stay within that sort of cash range. I'm not going to go close to 10 % here.

6:46I want to be fully invested.

6:48Scott Wapner: When you say you're bullish, because you made a sort of blanket statement, I'm bullish. I am. what are you bullish on and where are you expressing that the most? Because for an investor like you, who is less skewed towards being overweight tech and has a much larger, I think, arc around other parts of the market, the other parts of the market month to date don't look good. They don't. I will agree. I mean, from industrials, real estate, financials, discretionary materials, sort of where you make your living, so to speak. The median stock is down 60 percent. That's why we've had stats that you've had more 50 two week lows than highs, even as the market has gone up because it's a much more highly concentrated market again.

7:38Scott Wapner: So how would you how would you answer that question? Are you bullish on industrials? Are you bullish on discretionary and financials and materials? I maintain my belief that the rally is going to broaden, acknowledging at the same time what you've just said, Scott, that for the last month or so, the rally has narrowed tremendously. Now, I do think that you can find bargain individual names across all of the sectors. So whether that's in technology, I would put new money to work in Cisco. Again, respect your decision to sell. Outside of tech. I want to know outside of tech. Energy. And I know that we've got crude oil approaching$100 a barrel.

8:13I know that the XLE is roughly 10 % away from an all-time high. But on a valuation basis and based on what needs to come whenever this war ends, filling strategic petroleum reserves, rebuilding refinery and infrastructure across the globe, that that is going to be a place that you're going to see outsized earnings growth for quite some time. Healthcare has had this interesting sort of dichotomy to AI where some people say it's AI-enabled and that's why it's rallying. Others like me say, you know what, It's a cheaply priced defensive sector. In case I'm wrong, hey, I'm going to get good dividend yields and attractive valuations in the pharmaceutical space.

8:50But you're picking smaller. My overall point, just really quick, is that I do believe the rally is going to broaden. I do believe this is an equal weight S &P 500 time, acknowledging it hasn't been for the last month.

8:59Scott Wapner: Did you agree with that? I mean, that's a pretty bold statement in a rising oil and rising rate environment to suggest that it's going to be an equal weight S &P moment. Why would people move away from what now has become offense in terms of reliant earnings growth, multiples that in some cases have compressed from where they were, and the fact that these are also viewed, the mega caps is where I'm obviously going, as defensive in this kind of tape? That's why the stocks have traded better than the other parts of the market, at least in part. So what's your view? You've heard a pretty good amount here.

9:41So here we are coming up on the end of the quarter. I'm thinking about how the market is positioned going into October. Jimmy's perspective, his point of view and his positioning coming into the month is where everyone got caught off sides. Most people anticipated the price of oil as we moved into Labor Day would fall ahead of the midterm elections. Most people anticipated that there would be actions on part of the Treasury and others to keep yields suppressed as we moved into the midterm elections. What has happened over the last 30 days is that positioning is being neutralized. The interest rate sensitive areas of the market are under pressure.

10:22There is a clear, significant downtrend in place for real estate, for utilities, for consumer discretionary, for financials. And, Jimmy, unless you tell me that there is some form of a resolution to this conflict in the Middle East in the coming weeks, unless you tell me that yields are going to fall back below 5 percent, I don't know how you get positioning to return to the areas of the market where everyone was caught offside coming in.

10:50Scott Wapner: Fair and obvious question, because I think a lot of people are thinking, listening to all of it, saying, yeah, I agree with Joe. How? Yeah. And first off, Joe and Steve, I mean, the argument is buttressed by the last month's worth of market activity. I am being prospective in what I'm saying. And I would point out that there are some fundamental drivers here. Take the financials, which, of course, are a very large portion of the equal weight relative to the market cap weighted S &P 500. Down 5.5 % month to date. Yeah. And this is happening in an environment where unemployment is very low, 4.1%.

11:23You're not really that worried right now about the consumer's credit quality. Maybe that will change, but not right now. You do still think, one does still think that there are these IPOs coming. Now, that's a question. All right. We're predicting the future. But Anthropics still thinks November is an IPO date. You've got other IPOs that are out there. All of this rate volatility also helps their trading activities. I would submit to you as just one sector of a broadening rally.

11:49Scott Wapner: Didn't we already hear, though, from Bank of America at the conference a couple weeks ago about trading activity. I mean, there's also a view, and I think the prevailing view, if you look at the way that the XLF has traded over the last month down almost 6%, it's watching the flattening yield curve and suggesting that profits in this area are peaking or have peaked as a result of what rates are doing more, especially on the short end than the long end, because that's critical. And that's what's caused a more flat yield curve. So very quickly, glad you brought this up. The yield curve has flattened roughly 30 basis points now between the two year and the 10 year.

12:27One of two things is going to happen with that. Either it's going to flatten and it's going to be a predictor of a recession. I don't know if that's your call. Maybe it is. It's not my call. My call is that you've got great economic growth and that the yield curve may well steepen on a bull basis of the short end coming down if we don't have to have as many right now. Now, that's a big if. But right now, the two-year is pricing in at least four rate hikes.

12:52Scott Wapner: At least four. But if I told you that the likely— I don't think you're going to have four rate hikes. Well, you may not have four, but as long as the market's convinced that you're going to have more, it's not thinking about three or four. This is a great point, and I don't want to make it the Jimmy Laventhal show, so I'm going to say this and I'm going to shut up, OK? Believe me, nor does anybody else, but go ahead. OK. Especially me. Right. The two-year is overshooting, as the markets always do. And I think all four of us would agree with that. So you're asking. I don't think you know that. I'm not agreeing with that.

13:21I don't think you know that. That the markets don't overshoot in general. You just said you can't predict. Let me finish this thing. Hold on, Jim. Hang on. You just said you can't predict where rates are going. And you just predicted where rates are going because you said it's overshooting. Well, OK, Steve. I can't predict the level at which the 10-year is going to top out. But I can look at the two-year right now, which is definitely pricing in four rate hikes. And to the question, Scott, that you asked whether it's the number or whether rates are going higher from the Fed, no, right now it's the fact that the two-year is pricing four rate hikes and it's simply too many.

13:53Now, Steve, maybe six months from now you're going to look at me and say, hey, remember when you said four rate hikes is too many and I'm proven wrong? That could happen, but I do think four rate hikes is way too much. I don't care all I care right now. Markets are directional. The direction of the yield curve is flattening. Some say it may go inverted. And we could all say, well, inverted yield curves called X of the last recession. Since 1960, all eight recessions were preceded by a yield curve. It's not a perfect measure of when you'll get it. But the point is, banks make their money on a yield curve that's steepening, not that's flattening.

14:32Right? So right now, I can only go by the direction of oil, of inflation, and then rates. And that's fine. You do a lot more short-term trading than I do. 80 % of my portfolio is long-term. Very long-term.

14:50Scott Wapner: Let's move to the other story of the day, which is undoubtedly NVIDIA. $150 billion to this buyback. It's the largest buyback ever. We can take a look at what the stock is doing as a result of this news and show you a wall that we've made, which is representative of how this buyback stacks up with the others, the largest others of all time. And they just out-appled Apple, which was talked about maybe not in the out-appling Apple ahead of earnings when there was speculation on, well, dividend, could they increase the buyback? Yeah, they increased the buyback during earnings, but it was by small amounts, relatively speaking, compared to a bazooka buyback that you announced today,$150 billion.

15:41Scott Wapner: We showed you the wall to put it into perspective, because when people talk about Apple, they're like, well, they got the biggest buyback ever. That has, some always argue, against, well, the stock's too expensive. Well, their growth is at a declining rate from where it was. And they say, well, look at the buyback. That's somewhat of a floor under the stock. I think people believe that. Joe has said that on numerous occasions. As he's added to Apple, I don't know, a half a dozen times over the last six months, maybe, you know, ballpark area. So what about this news? Seven times added to Apple.

16:19You know, several years ago, we used to talk about as these companies approach a trillion dollar valuation. And we would say, well, now a trillion dollars, which was the market cap ceiling, becomes the floor. And then it was two trillion. And I think what's happening here with buybacks is initially it was 50 billion or 75 billion was the ceiling. And I think the ceiling is now because of these mega cap conglomerates rising, 100 billion, 150 billion. We are ultimately going to be talking about a$250 billion buyback by one of these companies in the coming quarters. It's interesting because when you hear this story, I would have finished Jimmy's thought before where Jimmy said, I'm bullish.

17:03I would have said I'm bullish against, as I came on the show last Monday and said, 7640 in the S &P 500. Because you have Apple and NVIDIA and these mega caps showing the resiliency, and mathematically that equates to an S &P 500 overall, that's going to look a lot better than it is ultimately underneath the surface. So the money is clearly, you could call it defensively positioning in that direction. Whatever argument you want to make. No, I made both. The point of these stocks is you get both. You're getting the offense. You're getting the defense. It's a great place to be. But I will tell you this.

17:42For a money manager, it's going to be a difficult environment if we're returning to the days of 2023, where we're getting that narrow, concentrated performance from a handful of multi-trillion dollar companies. And it could be exacerbated after Micron on Wednesday.

17:59Scott Wapner: Remember, I told you about in sort of the idea of being able to play both offense and defense. One of the characteristics of offense that you're able to play besides the tried and true earnings growth is the fact that the multiples in these names have compressed. If you look at the year to date highs, for example, I hope we made this up. The year to date high on NVIDIA was almost 26 times. That was in May. Stock is at 19 times now. OK, the 10 year average, 36. Amazon's year to date high was almost 32. Thanks, guys. 32 in April. Today's 26. Apple, 37 year to date high, which is where it is now.

18:44Scott Wapner: Alphabet's is lower. Meta's is lower. Microsoft's is lower. And now you throw in this NVIDIA buyback. What do you think about that, Steve? Yeah, look, I think financial engineering, which this is, and I'm not saying that in a disparaging way, is positive for stocks. Because these companies, it's not as if they're borrowing cash, as some companies do for a buyback. They've got the cash. And they are also finding ways to deploy it by buying companies, making acquisitions. So for NVIDIA, that's a great thing to do. They should be doing that. And I much prefer stock buybacks as opposed to dividends.

19:22So because you think one has a greater impact on the stock price than the other? I do. You know, I definitely do. And then when you look at the valuations, some of those valuations, the 10-year is a little misleading because they're somewhat inflated the 10-year because of what we saw in other years, like 23, where the only thing that was going up was the MAG-7. Nonetheless, I think that you're in a new age. That new age is driven by AI spending. So I think there are opportunities. I'm full in Alphabet. I'm full in Meta. I've got a decent position.

20:00Scott Wapner: A little less so in Meta, obviously. It's still my large, well, next to Taiwan Semi, it's my largest position. As they poached the MongoDB CEO, by the way, that's another move of the day. You know, Mongo obviously is paying the price for losing that sort of brainpower from the firm. You can show the stock. You'll see what it's doing as a result of that. And I'm actually surprised that the shares are down 4 % today, because that's a clear message they're going into enterprise. You're not bringing the MongoDB CEO on to just go after the consumer. Yet the stock's down. So I think it's a good opportunity.

20:34Well, Meta, I mean, you're surprised Meta's down?

20:39Scott Wapner: It's just a give back. I mean, you've got to give a little bit back, don't you? What I'm saying is, I thought that making, look, it's not been, nobody was sure. OK, there's some signals they're going into the enterprise business. They've been a consumer-facing company. Now, bringing the MongoDB CEO on, it's stating very clearly enterprise is our next area. It was up on the consumer news. It was up on the fact that Muse had the largest number of downloads in a record time. So this is just another piece of the puzzle. Melius says, by the way, that Muse, speaking of Meta, is great for Micron, which reports earnings this week.

21:18Scott Wapner: Jimmy, you got that. That's Wednesday after the Bell. Overweight today at Morgan Stanley. I've got a meaningful position in Micron relative to the S &P 500. I bought some immediately after the last earnings report. It went down. I bought more. I'm now in the green on the combined position. I think it's going higher from here. I think we're going to be hearing more about these strategic client agreements that are long-term contracts. I think we're going to see that pricing is still going up because supply just hasn't come online. And every indication from the hyperscalers and others is that the demand is still there for as much memory chips as they can get.

21:52Add on top of that a little secret sauce. And I'm glad to hear you say you're positive on share buybacks. I do think that they are coming up in December. I don't think. I know they're coming up on the two-year anniversary of the Chips Act, after which they are going to do share buybacks. and they've said they're going to do share buybacks. They're going to do that at a current valuation of about six and a half times forward earnings. Great. Buy those shares back all you can at that valuation. I think we're going to get the first indication about the upcoming earnings season if, in fact, the market is ready to reward really strong earnings.

22:27We know Micron's going to have strong earnings. We're talking about margins in the mid-80s. We're talking about historic revenue growth. But is the market going to respond accordingly? Are we going to see good news, bad price action? I will say the semi-equipment names really need Micron to come in and tell the story about CapEx increasing. We could show six-month charts while I'm speaking.

22:49Scott Wapner: Lamb Research. Yeah, I'm looking at Lamb. Quarter to date, Lamb, to your point, down 29%. Yeah, and that has really come on the back of Micron having that parabolic peak in June. We've seen those semi-equipment names have struggled since then. KLA down 39, AMAT down 34. I think it's incredibly important for those semi-equipment names, what we hear on Wednesday night. I think there's a danger of any read-through to a disappointment in Micron into the rest of the AI complex. It may be because, and this is what it's been before, whisper numbers are too high. People expect too much from them. But any growth they show there, or any report route they report, is still going to be good for the industry.

23:31They're not going to come out and declare that CapEx has slowed down. That's just not what they're going to do.

23:36Scott Wapner: No, they're going to come out and declare that they can't meet the demand. Exactly right. Exactly right. That's been telegraphed already, basically. Yeah, exactly. So my point is, the stock trades down. You'll see the rest of the group trade down, and that's the time to buy it. I think they'll talk about how tremendous demand remains. They just can't meet it. They can't meet it. And that's why their pricing remains as elevated as it does. Look, I agree fundamentally with everything that you're suggesting. But what I'm saying, this is a great read into how the market is going to respond on the upcoming earnings season.

24:10Bullish? Bullish for different reasons. Bullish more on technology and AI. But bullish, why? Because we think the upcoming earnings season is going to be spectacular. Remember, the market was caught off. The market was caught offside coming into Labor Day because it thought you'd get lower oil and lower yields. You didn't. The market is going into October expecting what? Blowout earnings. Once again, it's positioned for that. So I'm just saying, as the market gets cut offside, maybe you get a little glimpse of how the market's going to trade from micro. Let me tell you one other thing. Real quick, because I want to hear one more story.

24:43Don't rely on the fact they have long-term contracts. First of all, nearly 50 % of their contracts aren't long-term, number one. And on the margin, that could really hurt earnings. Number two, long-term contracts have never meant anything in this industry.

24:57Scott Wapner: Let's talk Berkshire. for a moment before we take a break. More directly, let's talk about Lenar, because you have to talk about the two in the same conversation now, because Berkshire continues to load up on Lenar. Now it's bigger than 10%, which is why we've learned about it, because they had to file, obviously, with the SEC once you get over 10%. And they've been buying it consistently several times last week alone. You own Berkshire. I think this is interesting for many reasons. the bet that they seem to be making on a longer term bullish housing story, which is about as negative right now as you could ever imagine in an environment of rising rates and backing up mortgage rates, et cetera, et cetera, et cetera.

25:38Scott Wapner: Everybody can see the story. Yeah. I mean, it's clearly a bet on their part that interest rates are going to come down at some point in time and that that will lift the housing market. Now, we already had a very vibrant debate just now about where interest rates will go. The only thing I can point out on this is as investors, whether it's Steve, whether it's myself, whether it's Joe or whether it's Berkshire, we are making predictions about the future. They may be right. They may be wrong for any one of us, including Berkshire. But it's clear what their bet is. It's that interest rates are going to come down and that the housing market will get in gear.

26:13Scott Wapner: You had Berkshire. A couple. I had Berkshire going into the spring. Yeah. We sold out of it on the momentum factor itself. Look, I think in the rebalances ago, two rebalances ago. Look, I think in the long run, I think they're going to be right. I think they are. I think there will be a recovery in housing at some point. I don't think we're going to have this frozen transactional environment that we're seeing currently right now. I'm sorry, I'm watching oil as it's moving lower as I'm talking. Oh, I thought you were watching the Vikings trading J.J. McCarthy to the Giants. Oh, really? Interesting.

26:45Okay. No, I'm all about the Yankees right now. But anyway, crude oil is moving lower as we see. I think they're going to be right on housing. I really do. I don't think that the state of housing right now, where it is, where you have this transactional recession remains in place. But in the interim, there's no doubt about it. There's going to be challenges on margin and revenue for these companies. Yeah, look, they will be right. The market will go up again. If you took a long-term look at a chart going back whatever, 50 years, you'd say the market never went down. So yeah, so you got to be long-term bullish.

27:19Berkshire has the benefit of timing. This is a relatively small position in terms of what their overall assets under management are. But nonetheless, they don't care that much about point of entry. They get in when it's cheap enough and it's their screens and their analysis. So it doesn't mean that you should get in.

27:35Scott Wapner: I think you get another buying opportunity. All right, let's take a break. When we come back, while the former Disney CEO Bob Chapek is speaking out, he did so on CNBC earlier today. Ahead of the release of his tell-all memoir, he's not holding back either. on what he thinks of Bob Iger and much more. It's coming up next.

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29:42Scott Wapner: Welcome back. Markets made a little bit of a move here. S &P moving higher. We could show you crude oil, too, because I think that's part of the story here. Oil taking a big turn into negative territory. Remember, it was positive, you know, approaching 95 right around there, and then it's come negative. There's going to be rumors in the market, obviously, about any sort of inching towards whatever kind of development you may get between the U.S. and Iran, a ceasefire, et cetera. Anything concrete, we'll let you know. But that seems to be the story right now in the market. We'll just keep you up to date on that.

30:16Scott Wapner: Contrary to what you guys were thinking, it's not the J.J. McCarthy coming to the Giants that has gotten Giant fans off the mat, feeling a little bit better about things. optimistically buying S &P futures? Actually, there is a report by CNN that is just moving that the president is said to be open to Iran sanctions relief for, quote, concrete progress on nuclear issues. A White House official is what CNN is reporting and quoting. So that would likely be why you're seeing the movement in the market that we have. But again, anything more concrete or substantial, we'll bring it to you directly. Let's talk about the former Disney CEO, Bob Chapek.

30:57Scott Wapner: He was on Squawk Box this morning to discuss his new book, one that holds little back when describing his rocky relationship with recently retired CEO Bob Iger. Mr. Chapek claims he was undermined almost from the beginning, telling Andrew and Becky this morning that he wrote the book to preserve his legacy. In one exchange this morning, Mr. Chapek talked about Disney's stock price. The stock has been stuck for a long, long time. Stock's been stuck for 10 year. As a matter of fact, the stock's about the same right now, four years after I left as it was when I was there. It's one of the many points, Jim, that Chapek made this morning as he claims he was undermined as CEO almost from the beginning by Mr.

31:37Scott Wapner: Iger, but did note the stock then and now. You've been a shareholder that entire time, I think. Yeah. I mean, we had a nice little rise under Mr. Chapek. Then we had a lot of give back under Mr. Chapek as well. I'm not going to get into the power struggle there, I'm relatively certain that he was undermined. I don't think Bob Iger, as the chairman at the time, really gave him the free reign. Mr. Chapek wanted to go in certain directions that were more cost conscious and less creative focused. Look, the stock price did not perform under his regime and he was ousted. Look, it's a cutthroat business, Hollywood.

32:11To speak to the stock right now, though, you've got a stock that's trading at 14 times next year's, next fiscal year's earnings. Great brand. I think Josh DeMauro is the leader for the next 10 years. Obviously, there's been a lot of secular change going on, but what they've done with Disney Plus and with ESPN, I think positions them to be successful at a time that their stock is very, very cheap. Also, regarding the cheapness, let's just face it, the consumer discretionary has had a very rough time this year. Maybe the gasoline prices have something to do with that, but I'm comfortable holding this stock here for the long run, just saying that it's too cheap.

32:49This is an opportunity to get a great company at a great price. Doesn't happen that often.

32:53Scott Wapner: Weiss, you've been sort of leaning more into the Netflix side of that, because all roads inevitably seem to always lead there. Disney versus Netflix, Netflix versus Disney. Who's got more mojo right now around their stock price? Remember, Jenny and Josh have their own bet, which is going to have a better total return from whatever the point in time was. I guess it was April 9th until the end of the year. That's where it currently stands. And Disney's still outpacing Netflix, which I think would have surprised people at the time that that wager, that friendly wager was made. But you continue to, you just bought last week, I think, didn't you?

33:29Scott Wapner: Yeah. More Netflix? I added to it. I bought it in the low 70s, added to it slightly lower. It's not particularly good right now. I mean, And there was another downgrade last week to a sell. But I still believe, right now, I think it's inexpensive. They are the leader. Everybody says they don't have any hit shows. Yeah, you know, maybe they don't. I think they do. You know, I like the content. But I think over time, this will do pretty well. I can't imagine they're going to miss for a third quarter. I just can't imagine that. So I'll play it through the quarter. If I'm wrong, then I'm probably out.

34:07But right now, I think that this is a pretty good value here. with the negativity like I haven't seen on most stocks, no less this one.

34:15Scott Wapner: It shows you kind of the, you still, you don't own this anymore, right? I don't want any of the streamers. I don't want the streamers right now. It just shows you the disbelief, like how much of, if anything was ever a sure bet, there were people who believed that this name was a sure bet, that it was undoubtedly the king of the business that they were in. Yep. Right? And then you've had a series of moves, and the stock has made people like Weiss say, I can't imagine they missed three times in a row. Well, let's try and uncover why. First of all, a valuation on this stock is probably the cheapest that it has been in over a decade, for sure.

34:59What does it run, about 20 times right now? Which is remarkable to think of for Netflix. But Netflix has positioned their growth in live entertainment and sports. And that comes with a significant cost. It does. And I'm not sure if they're yet seeing the profitability in that regard based on what they're going to have to continue to spend to acquire the content. So I think that's the challenge that's in front of them. I think it's a very clear margin challenge. And in the case of Disney, yeah, the streaming is turning more profitable. But I think a lot of what's going on Disney right now is financial engineering.

35:38And it is about cost cutting. And at the end of that cycle, it's where where does the handoff go? Where does the handoff go to the growth? Let me ask you a question. One question. Because we got to bounce. Look, I've gotten price increases from Peacock. I've got them from. Yes. From Apple. You get from all of them. But the question is, as prices go up, and they've held price recently. Yes. And as the affordability keeps being unaffordable, don't you think they cut other streaming services and go to Netflix? Last word, you. Disney's not financial engineering. Come on, building the cruise ships, building the theme parks, continuing to expand, continuing to improve Disney Plus.

36:16What they're doing with ESPN, just really quickly, it's not financial engineering. You left out the cost cutting. Okay, any good company should be doing cost management. Any good company.

36:26Scott Wapner: Brandon Gomez has our CNBC News update. Hi there. Hey there, Scott. British police say they released on bail the five men who were detained near an air base in England used by the U.S. Authorities say they remain under investigation. The men who police say are all British nationals were arrested on suspicion of planning a terror attack. Iran has said it categorically rejects speculations it was involved in the suspected plot. Saudi Foreign Minister Prince Faisal bin Farhan is in Washington today for talks with Secretary of State Marco Rubio. It comes after Saudi's crown prince asked President Trump for military help this month to counter the Iranian-backed Houthis in Yemen.

37:02But the U.S. declined to launch strikes. And the re-release of Avengers Endgame topped the box office this weekend, a good sign for Marvel's upcoming Avengers Doomsday. The film grossed$26 million in the U.S. and another$60 million overseas, according to studio estimates. Only the re-releases of Star Wars A New Hope and The Lion King have opened higher than the Endgame Encore in U.S. theaters. Halftime is back after this break.

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38:02Scott Wapner: Oh, look, you just got added to a meeting about coordinating another meeting to prepare for the pre-meeting ahead of the follow-up meeting, which will, of course, require a recap meeting. And then another meeting. Hit your booking point, book with Southwest, and enter airplane mode. Tired of the same old game night? Switch things up with Chumba Casino. Play over 200 free online social casino games. From classic slots and blackjack to exclusive in-house favorites you won't find anywhere else. However long you got, you can play your way, anytime, anywhere. Make your next chill night a little more fun with Chumba Casino.

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39:17And welcome back to the Halftime Report. I'm Dominic Chew with today's ETF Edge. Tokenization of securities is here, sort of. To explain, we've got Nick Cherney, who's the head of innovation over at Janus Henderson, a guy who knows a thing or two about tokenized securities because Janus Henderson actually has, Nick, tokenized funds. What exactly does that mean? Yeah, I mean, we sort of see tokenization as this huge evolution that's coming to financial markets. And so we're trying to incrementally find our way there. And really, all we're talking about is making it possible for people to invest in traditional funds, but do it like they were investing in crypto.

39:52So on a blockchain, in the same kind of infrastructure, using a wallet, however, they might access their crypto assets, but doing this for traditional funds. Now, when you say traditional funds, you mean things like mutual funds and exchange traded funds. So what types of funds do you have that are both available to traditional ETF investors as well as tokenized securities investors? Yeah, because of some of the regulation, et cetera, we've really experimented and pioneered in the offshore market. And so really that's similar to some of our core funds that we offer to U.S. investors, but offshore.

40:27And so that's some of our kind of flagship strategies around AAA CLOs, as well as some money market like funds. but really today to focusing on institutional investors who are outside of the U.S. All right. Well, this is an interesting. We're going to continue this conversation, by the way, over at ETFedge.cnbc.com. Nick is going to be joined by Gabor Gorbach, who's the founder and CEO of Open Assets. Big discussion, Scott, about what tokenization is and how investors will change with it. I'll send things back over to you.

40:57Scott Wapner: All right, Tom, thank you. That's the domino, Dom Chu. Coming up next, Anthropics CEO Dario Amode getting the SNL treatment. over the weekend, just as he has a high stakes sit down with President Trump. Kay Rooney, following all of that, brings it to you next.

41:31Sam Altman, myself, all the major AI players, we have talked about this extensively, and we are all on the same page here. We do not condone what we are doing. shouldn't you be talking about the pros of ai i mean don't you guys keep saying that it's going to cure cancer yeah so put it this way in 10 years there's about a 10 chance that cancer won't be a problem for anyone all right snl having some fun with anthropic ceo dario amade

42:00Scott Wapner: that was cast member jane wickline on the show's weekend update meanwhile we're learning about a private dinner the real Dario Amadei had with President Trump. Our Kate Rooney joins us now with more on both stories, I guess, if you want. That's right, Scott. We'll get to both. Well, a source did confirm that Anthropix CEO Dario Amadei did dine at the White House last night for a private dinner with President Trump. This was their first one-on-one meeting from what we're hearing. Amadei was also notably absent from the state dinner last week with Chinese President Xi Jinping and other industry leaders.

42:35Anthropic has also been very much at the center of this entire AI safety debate, as you heard on SNL, that has also spilled into the mainstream lately with SNL on the weekend. Update mentioned Amadei has been one of the loudest voices calling for industry and international standards and for U.S. regulation as well. Amadei did appear at the United Nations and the Security Council last week reiterating that entire message, but it is in stark contrast to what the president has talked about publicly. President Trump wants zero new regulations. He's talked about existing law enforcement agencies like the DOJ that he says do provide enough oversight, and he doesn't want to slow the U.S.

43:12down and risk losing out to China, according to President Trump. Anthropic's relationship with the administration has also been fraught. Scott, Anthropic is still technically labeled as supply chain risk, and a panel of judges in D.C. did uphold that designation last week. In the meantime, I should also mention this company is still on file with the SEC in what could be the largest IPO in history, Scott.

43:36Scott Wapner: Clock's ticking on that. So we'll see. We're about August, I mean, October 1st. So we'll see. It's getting into the fall. There's some calendar issues that they're going to have to contend with. No doubt. We'll talk to you this afternoon as well. Kate, thanks. Kate Rooney. Oliver Rennick, he's tracking some moves in the metals today. Options action. We'll play it. We'll do it next.

44:10Scott Wapner: Let's play some options action with Oliver Rennick at the Cibo Global Markets in Chicago. What do you see today? Hey, Scott, traders seem to have their finger broken on the buy button when it comes to gold. Despite a 4 % sell-off in GLD, there's twice as much call buying as put buying this morning. Similarly in SLV, total call volume is more than double puts. The biggest trade in GLD was a seller of 2 ,375 strike puts for almost$6 million, either taking profits on a bearish position or making a bet that gold finds a floor. This hopeful response to higher interest rates is not translating to the high-yield corporate market, where we see a surge in put buying activity, pushing volume at HYG to more than three times the 30-day average.

44:55Bears continue hammering this trade, buying three times more puts than they did calls, with one trader spending about$4 million on the 78-strike put, expiring November 20th. Scott.

45:07Scott Wapner: Oliver, thank you. I'll see you this afternoon. We'll play it again. Oliver Rennick, Chicago. Newmont, gold, silver, what do you think? I think gold and silver are another example of traders coming into the month of September, caught from a position perspective off sides. I think that's what's going on currently. I think gold and silver are a little washed out. I wouldn't take a position here long, but I wouldn't exactly be betting on either one of them to continue the downtrend. I think this is a little bit of a wait-and-see approach. It's near a 52-week low, very surprisingly. Yeah, look at that.

45:41Scott Wapner: Silver down 5%. All right, we'll take a break. We'll come back. We've got more ahead. including finals.

45:53Scott Wapner: Well, we have big news to report. Next month will be the 15th anniversary of halftime. But we've reached an even bigger milestone today. One of our committee members has been immortalized as a horse. He is Farmer Jim. That is real. It is a real horse. Jim, give us more. Well, I have to give a hat tip to Barry Schwartz, co-founder of Calvin Klein, big friend of the show and fan of the show and just a great guy. He called me up a couple of weeks ago and said, I've got great news. I'm naming a horse after you. He's a big horse racer, and he's run one race so far. I'm looking forward to a long career.

46:33Scott Wapner: So one race in the career so far. How'd the horse do? Came in sixth. It was his first race. He looked good to me. How big was the field? I thought he looked good. Eight. All right. Well, I think you'd come in sixth today. Stop, stop, stop, stop, stop. We love that. Farmer Jim in the starting gate. I'll keep you posted. I'll keep you up to date. Many races in Farmer Jim's future, we hope. And we'll track the success, we hope, of the horse. Big moment for the show. Final trade, Weiss. You go first. How do you follow that? I don't know, but just go ahead. How do you follow that? United Health. Look, I think it's safe stock in this turbulent environment.

47:08Okay. Farmer Jim. AbbVie has just been solid all year. new Parkinson's drug was approved today. Octo must be you. It is refiners, cybersecurity. Those are the two investment themes

47:20Scott Wapner: to anchor your portfolio on right now. Okay, so we got a two and a half percent winner there. Market's still red. We'll track it and take you through the final stretch on the bell. The exchange is down. 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. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion.

48:01Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer. The quarter pounder with cheese is made with 100 % fresh beef, cooked when you order it. Add hot crispy fries and an ice cold Coke, and hopefully a lot of napkins. All for$8. Right.