Navigating the Risk of a Market Correction: The Investment Committee Weighs in 9/9/26

0:00It's NFL kickoff time. Exclusive NFL team valuations with sports business expert Michael O'Sanius. NFL is by far the most profitable league. NFL team valuations now on CNBC dot com slash sport. Guys, thanks so much. Welcome to the halftime report. I'm Scott Wapner front and center this hour correction risk. Is it rising? Some new calls today suggest stocks are in fact crying for a pull back. Do we agree? We'll discuss in debate with the committee. Joining me for the hour Joe Taronova, Kerry Firestone, Brent Talkington, Steve Weiss along in just a few minutes. We'll check the markets here. Think by now you know we're red across the board and a lot of that has to do with what both oil and yields are doing. Let's show both because oil is higher Brent 101. That's significant in and of itself. There is WTI above 96. The 10 year note yield though is one to keep an eye on today. Basically at 485. So we get more details on the treasury buy back today and what happens when we do,

1:01yields move higher. So that's having an impact as we know. I want to start there because I have highlighted Citadel's Scott Rubner and his notes over the last month. Excellent. He says his highest conviction right now. Why I asked the question at the very top of the program. Are we at risk of a correction? He says the highs are in for the month. Mid month rally starts the seasonal weakness. Blackout window starts on the 12th. Optioned, expiry on the 18th. Quarters over on the 30th. These are all historically very large risk transfer events. RBC today pretty much agrees with that. They say the risks of a garden variety pull back of 5 to 10 percent have grown. For many of the same reasons. They throw in geopolitics. I think we all know what is at stake globally. And what the risks are as we think about the rising price of crude and the hostilities that are taking place within the Middle East. That's kind of the backdrop and the commentary today.

2:04What do you think? So when you have the good fortune to sit on this platform, you listen to what many different people say and you understand who has the hot hand. And Scott has the hot hand. He's been very accurate in his notes. I sat with you yesterday, Scott. And I said the next 50 handles up or down for the S&P. I'm not really sure where we go. I understand, forget the seasonality of September. I don't want to formulate a bias on that. But I understand the headwinds that are in front of us right now. The blackout window for buybacks, rising oil prices, rising yield, CPI coming out. I understand collectively all of that. Then I turn to myself and I say, okay, is that going to allow you to remove your overall bias, which is to be bullish and turn bearish? And what's interesting is what I fall back on is not earnings. But I have this belief and I think a lot of people in the investment industry share it. Do we really think heading into the midterm election yields and oil are going to stay uncomfortably high?

3:05Where they are right now? I would say most of us don't, but guess what? That's asymmetric risk. That in reality is really going to catch everyone off sides if in fact they do stay elevated. Because I think there's so much skepticism regarding where the pricing is right now. So I think you have to be very careful understanding that and to Scott's point, understanding what you're navigating in the month of September. And if you are going to go out and step out and buy something, I think you do it very, very light. There may be asymmetric risk right now around the Fed to ahead of the meeting next week. Care, you may be the argument that for the last many weeks, don't underestimate the Fed raising rates. I get that the market is at 60% or whatever it is. I still think a lot of people don't think that will happen, that they're not going to raise rates and be at risk of making an error. But it's out there. Yeah. It's out there. There are a lot of growing risk that seem to be out there, which are leading those like Mr. Rubner to have the kind of conviction that he does right now.

4:09Yeah, exactly. Well, we had a summer that was quite blissful in terms of looking at earnings that were fantastic. We've seen so many reports about how S&B 500 on the whole, I mean, the broad market has been beautifully earning nicely and numbers going up week after week, for this year and for next year. So if stocks are somewhat priced to perfection and we have this risk, which has grown, which we have expected for rates to go higher. Whether it's this September meeting or the next meeting, there are going to be hawkish noises coming out of the Fed. They are going to be much more hawkish than they have been, particularly with oil prices where they are. The consumer seems stretched. You looked at the reports from the consumer companies, from the retailers. They did not show the type of gains that were expected, particularly with the big tariff returns, the rebates they got from their tariff. Where'd that money go? Why didn't it translate into profits for them?

5:10And the Treasury market has been showing us for months now that it expects the 10 year to get to 5%. So this is not surprising. We have a September correction often. It's generally after you've had a real nice period of rising stock prices and benign earnings. Unless brand people are getting too worked up on the calendar and yields and oil and everything else and taking their eye off the earnings ball. Barclays goes to $79.50 today following earnings. The Mag-7 resurgence has been interesting to watch and watch it play out in this market. All of that started really after the tech led earnings. That's why people remain bullish. B of A is client flow trend. Sixth biggest inflow week in history since 2008. That's where the second straight week clients were net buyers of equities. Why aren't people running for the calendar hills? Because earnings are too good to do that. And the Middle East is going to figure itself out.

6:12Oil prices are going to go down at some point. Eels are going to go down at some point. And you're going to have earnings to fall back on. That's the bullish case. Is that right? Longer term yes. The earnings are behind us outside of Oracle, let's say in Adobe, which I'm sure we'll talk about. I mean, I may not be Scott Rubner at Citadel and have all those GPUs at my fingertips, but I do have history. And if you go back, Scott, to 1962, every midterm, there's like been 16 midterms between now and midterms. We've had a peak to trough decline of between seven and then like in the 70s. It was like 28%. So if history is any guide, we will have a draw down again during midterms. Why it doesn't really matter. But then on the other side of that, going back to like the price targets for year end, after those midterms, the majority of the time, like 95% of the time between November and February, the market's positive. So I think that to Joe's point about if you're going to like add new positions, this is a great talk.

7:12A great time. We'll say to dollar cost average if you have these historical draw downs, which we've had every single midterm. But I think going back to your point, Scott, we do know the earnings backdrop is still very, very, very solid. And it's still very anchored in technology stocks. So I think just like buckle up, don't turn to don't turn temporary, you know, volatility and make permanent losses on that. Just like ride through it because this will pass. But I do think we have a draw down like we've had every single midterm since 1962. I like the JP Morgan note today as well. They look at what's happened with momentum because you know, that factor itself has had such wild swings at times. You had that tremendous run up. You had the tremendous run down around the situational awareness blow up. Then a quick comeback and then an unraveling again. JP Morgan looks at all of that and says it's reassuring that despite big falls in the momentum factor, key equity indices are holding near their highs, right?

8:15Let's keep our eyes on the ball. How far are we from an all-time high in the S&P, 2 and a third percent? That's probably what they would say. They think that the momentum on wind is likely complete. Thus, the downside risk to the overall market should be easing as well. Stephen Weiss is here. I think you've been checked in. It's good to have you. We've been discussing since the top of our program, the idea that there are seemingly a growing number of people suggesting that the risk reward has changed right now in the market. That correction risk is rising. Robner of Citadel Securities is the latest to voice that opinion, though he's been suggesting over the last several weeks that maybe the risk reward has changed. How do you see it? I see the risk reward has changed, but that doesn't mean you sell long-standing positions and pay taxes on them, even capital gains opposed to ordinary tax. I think you hold on to your quality investments.

9:16I also believe, and we've said this before, Joe, when we've been in the show together, that now is not the time to blow a new cap or loss something is really on sale. I did some work over the weekend looking at the correlation between high energy prices, low approval ratings for the administration, and really didn't find much. I mean, if you have sustained higher energy prices, then of course that's going to lead to more tightening. So that will take the market down. So the real question is, is this a spike? Now I think one of the reasons the market is staying in check near the highs, well, first of all, it's AI. If you look at it even today, it's the AI trade. So if that goes away, then the bottom falls out, but that's not going away. But there's also always the risk if you get short and I admit to being short, some cues and VOO and not deploying the cash that I've had, that the president comes out and says, as he said, maybe it doesn't times before, we're close to a deal.

10:18And for whatever reason, the market will believe that the shorts will get nervous and then they'll be carried out in the cart. I'm not worried about that because I just don't see an off ramp for lower oil prices. And that's consistent for everybody I talk to, whether it's in foreign military people that know geopolitical experts, there's no off ramp right now. So despite what happens with the Iranian people, and that's the biggest risk to the market. Now, the Fed can't control energy prices with a hike either. So you can be left with the worst of both worlds, which is higher rates and then higher oil prices. I'm wondering what should inform our views more at the present time in the market? The fact that I think the rising oil and the backup in yields has impacted sectors like discretionary and industrials, for example. So that would make one, I think, predisposed to feel a little bit more negative on the market.

11:18But then I would turn around and I say, well, remember what I just told you about momentum? Look at the semis. Look at the semis. AMD green by 3.5 percent. Micron green, high-necks, almost 5 percent. Marvel, better than 5 percent. That's key in keeping the market in a relatively good place, even in the face of these added risks that we've just identified and discussed. So one of the advantages Scott Rubner has is identifying exactly where that tactical capital is flowing. And you know I always like to focus on positioning and I love where you're going with this Scott, because if you think about it, I think ultimately that's the most important thing to do is identify the rotation. 2026 has been the story of a rotation. The market just keeps rotating. So we said last week, what did we see in momentum? We saw that momentum was somewhat washed out, right? The sell-off was washed out. We felt like it was stabilizing. That's led to a rotation. Higher energy prices, higher yields, now what is it doing?

12:20It's punishing all the bulls that were sitting in healthcare, that were sitting in financial, that were sitting in the S&P equally, that were sitting in small caps which are down aggressively. So I think you always want to identify where are we in positioning, because when you have turbulence and elevated volatility, like we're experiencing now, that farces the next rotation. And I think we're clearly in the midst. Speaking about rotation, how about the move back to semis, as I mentioned, these names from software? Remember, you've had a back and forth. Right. Tremendous outperformance, SMH over the IGV. Then, you had with the momentum roll, you started to get this big outperformance of the IGV over the SMH. Not just the cyber names, but names like Palantir and others in that group, that had had a huge comeback. Well, now liquid. It's taking place. All of a sudden, the last couple weeks, software earnings have started to come out. A lot of the stocks haven't traded all that well since. And now here we have a resurgence in the semi-trade. So you have had yet another rotation,

13:20this one within the sector of technology, but I think that's something interesting to keep an eye on, as we're going to get Oracle earnings as well. You own that name, but you'll have that tomorrow. You'll have Adobe tomorrow. Has its own issues, idiosyncratic, whatever. Data dogs leading the S&P today, just things to keep an eye on, as we're kind of discussing the internals and the trends that are making themselves known within this market. Well, the issue of software, if you go back six months ago, it just became too cheap. Everybody sold software because you had to get rid of it since AI was going to replace all of the software companies, including Microsoft. I mean, look at every software name, and they all traded down 15 to 40% over the prior year. So then they became too cheap and people started to buy them. And news came out that sounded better and the earnings had been reasonably good. So that made sense. And remember that the semis, the semis are cyclical stocks.

14:21Even if the earnings right now aren't cyclical, the stocks themselves are. People trade in and out of semiconductors. And we've had huge run-in, enormous price increases, 500%, 600% to 1000%, then they drop back. So now that I've got to run up, they are big momentum names. I don't find this surprising. I think that the Oracle quarter will be reasonable. You've got to look at the revenues they're generating, the demand for their products, not the debt that they have. I would just like to point out one thing, Scott. In terms of energy and technology, remember, these big AI names, they don't need energy. This is something I've said before. They are not consumers of energy. Price of all could go to 150 and it really won't affect Google. Google oil. Sorry, sorry. It would not affect them. What they do need is money. And when the price of money goes up over 5%, 6% for them, it will make a difference and it won't be possible. All right, let's talk about Apple because at 1 o'clock today, you do have the event that everybody is looking forward to. Surprise and shine.

15:22That's what they're calling it. The expected debut of a new phone, McKenzie-Sagallos, is in Cupertino this afternoon. It's nice to see you there and what's going to be a big day. The biggest of days probably thus far for John Ternis and his career at Apple as well. Now that he's the CEO and he's got a lot riding on this. That's right Scott, and we're now less than an hour from Apple's main event. And the focus is really on two things. How new CEO John Ternis puts his stamp on today's launches. And whether Apple's first foldable phone can be more than a niche luxury device. Now the foldable reportedly expected to be called the iPhone Duo could start around $2,000 with higher storage versions, approaching $3,000. This would be the most significant change to the iPhone's physical design since the iPhone X and really the first time ever that Apple's changed the basic shape of this product so dramatically. The iPhone 18 Pro and Pro Max are expected to look familiar, though with a fresh set of color options,

16:22but they will get major up camera upgrades, better battery life. We've seen a range of estimates on pricing, but TD Cowan expects both pro models to rise by $100, which is actually less than some investors had feared given the memory crunch. Be on the lookout for new models of Apple watches and air pods as well with a focus on health and fitness upgrades. But regardless of the splash it makes, Bartley says the foldable iPhone may be too low volume to move Apple's numbers much near term helping explain why the stock reaction has been relatively muted. Heading into the company's most significant hardware event of the year, those shares down around 1% right now Scott. Good preview and we'll see you throughout this afternoon and everything getting underway in about 45. Mac thank you Mackenzie Segalas and Cupertino. For us we follow Morgan Stanley's Eric Woodring quite closely. He is a frequent guest of mine on Closing Bell. He says this may be Apple's most consequential iPhone launch since the X. Apple's first foldable and the largest iPhone price increases in years creates a critical test of pricing power.

17:25Talk about supply chains and everything else. Those are the key issues so everybody here owns the stock. Yes. Yeah and you probably have been Joe the most aggressive Yes. in adding to it over the last six months. And I will continue to be aggressive. I want to read something for you and I really don't understand what the analyst community is focused on. If I look at Microsoft, Nvidia, Alphabet and Amazon, you're looking at a percentage of buys in the analyst community for each one of those stocks above 90%. I can't get Apple above 60%. Apple sits at 58%. There's so much skepticism surrounding the ability for Apple to continue to have price appreciation and revenue growth. The 12 month average price target is $330. This is without question the biggest hardware design that we have seen in well over a decade for this company and it's being led by John Ternus. Now the price point it is going to be expensive and I agree this is going to be a test of the ability for them to retain that pricing power.

18:27But if in fact they are effective here on the innovation which Samsung and Huawei brought to the market in 2019 and 2020, they have the ability to take that innovation and extend it into other areas like the iPad and I think that's a powerful force. That's fine but I feel like you are not mentioning the number that matters more than the price of the phone. That's 33.7. Because that's the multiple that 33.8 now that Apple currently trades at and probably for those analysts that you cite and for many investors who are more skittish on the name, they can't get their arms around why you should pay almost 34 times forward for a stock that's historically traded around 23. That's the number. Full stop. That matters most of all to many right now. You're going to counter that. You're going to get me an evaluation argument because I think you know me looking the way I look at equities, I am not particularly respectful or utilizing valuation as an indicator to get in.

19:32Not even for something like that. Okay, but I don't believe that 33 times for a company of this size with the ecosystem that they have with the extensive balance sheet and the buybacks that they have, I just don't see that as an extreme valuation. That's to me that's not an impediment. But relative to that. By the way, I still don't think you know everyone keeps talking about this underperformance. This stock is not that far away from an all-time high. Well, people have a problem. It's relative to the where's their revenue growth beginning to reaccelerate. So you guys are right in 2020 the end of 24 and 25 it absolutely it disappeared. It flatlined. I acknowledge that. We took it out of the ETF for that very exact reason. It's coming back again getting my double digit revenue growth. Coming back and willing to pay the biggest premium that the stocks ever have been priced at. At least since the first days of being a public company. Right. I think some of that extreme value is sourced. Some of that extreme valuation though I think is a byproduct of the market that we're

20:33in right now, that bull market. I think that's lending itself a little bit there with that. Well, though, how do you say that though? How do you say that? Microsoft's at 25. It's 10 years 27. In video's 19 it's 10 years 36 like. Med is 21 it's 10 years 22. This market isn't just describing astronomical valuations to anything under the sun. Yeah, look here that's fair. That's fair. From a share was expected and admittedly it's small position and I bought it because getting a little squeamish about the market to say place I thought to hide momentum going into the new phone launch which always dissipates and reverses after launch. So comparing to iPhone 10 that launch was a dud. Let's remember so it's been the whole new wave technology didn't happen. The good news here is that there is no expectation on this launch in terms of new product enhancements and things like that. Maybe you get a great Siri who knows. But I wait me no expectation. There's like huge expectations.

21:33I think the market's telling there's not a lot of expectation. Well you already had a huge upgrade cycle in the 17. Right. But I think surprised a lot of people Dan Ives pointing out now you have 25% of the installed base that hasn't upgraded in over four years. And now I would ring says it's the most consequential iPhone launch since the X. And the only reason upgrade is if there's a new Siri we don't need more hands for long the camera. Number of people that are going to buy a foldable phone which doesn't really have a new connection. Well there is a new enhancement on Siri. Right. I know. But that's all ball of wax right. Right. Right. That's the whole reason AI getting the air. My point is that we had a report last week about negative growth in the in the app store. That's not a good thing. That's what everybody's been hanging on to as that's the reason you own it. You know the app store for the margins there. But the company just because they're showing some signs of growth doesn't mean they should get a premium. That's almost twice with the market premium with the market multiple is.

22:35So at some point every stocker understand valuations not in what you really look at in your ETF which I'm a holder of. But the fact is most I think of active managers more it to what the historical valuation is and it should not be a 50% premium here. Bren, how do you view that question? Yeah. Well what did the stock should trade at 32 or 34? That's like missing PEs. There's no way this event is going to even remotely give multiple expansion. I think this is like a vision pro event. It's a big event for Apple to say oh can you make a phone that doesn't freeze down the middle. I think McKenzie said it perfect. It's going to be a luxury niche product like the vision vision pro which they haven't sold very many of those. And so I think that to Dan I was point about there's you know people wanting to upgrade but not going to upgrade into this phone. They're going to upgrade into like the 17 which is getting cheaper and cheaper because the 18 is going out. And so I mean ultimately it does deserve a premium multiple because they have amazing balance

23:39sheets, very little catbacks, free cash flow, buy back shares and so you're going to keep like a Costco, you're going to keep that premium but I do not think this event is even remotely relevant for anybody outside of Apple and us getting the tone and tenor of John Turner's which is really fascinating. But a $3,000 phone even with the AT&T T-Mobile rebates and the foldable phone is like old. Like you said we've had it since 2019 with Huawei and Samsung. I just think it's a vision pro day. So to me it's a nothing burger. I think the stock is stuck here. It's made like a head and shoulders technically and so I don't think it's going to raise to all time highs probably until later in the year act we get through midterms. Let's talk meta. I want to move. I want to talk meta. Because I don't want to lose sight of the fact that stocks are better than 6%. It's having a huge day and it's had a really nice couple of weeks. They launched the Musei agent. It was a big deal yesterday. Top pick carry reiterated at Morgan Stanley. $77.75 is the price target over there.

24:44Mizzouho today says it was more promising than we expected. But that chart says more promising than we expected and maybe investors are a chorus on that because they seem to agree. What do you think? I think meta was a buy. Metagot hit hard, sold off, underperformed the rest of the mag 7 all year and it's starting to catch a brick and catch momentum and it deserves it because it's multiple as low. Its earnings are growing. They have their debt I think aligned in the right place right now and this is a big announcement. So if their agent can perform the kind of task that people need using AI then I think it proves the point that the large incubators of venture capital ideas are the mag 7 and the hyper-skillers. They're the ones that have the ability, the know how and the money to develop these products internally. This isn't a part of Facebook. It's not Instagram. It's a new product that is really going to expand their markets and draw people into

25:47their ecosystem. I think this is an enormous opportunity for meta and it shows the strength of these companies relative to I'd say the broader class and development of ideas that we've traditionally thought of. Venture capital is providing and now we're seeing more of them being developed in the class. How about this stock go go sorry. I'll give you the ball in a second. How about this stock over the last month? You want to talk about outperformance? That is up better than 10% over the last 30 days. Amazon's down 8. Alphabet's down 7. Microsoft's down 1 in 3 quarters and Nvidia's a flat line and so is Apple. The stocks come back to life. So here's what you have to know about meta. I've said before I'm going to say it again. Zuckerberg knows how to navigate these markets. If you look at those companies you just mentioned. They're all in the second generation founders. They're all of the operators. They're with professional operators. Zuckerberg has never lost that start up mentality where he identifies a problem and finds

26:52a way to fix that problem and that's what he's doing here. Find a way to take advantage of the holes in the market and the opportunity. The others don't do that. They're more focused on let's run the business as we inherited it. Let's grow where we can versus having that founder that start up mentality which is critical in troubled waters. So that's what I attribute this to in the moves they've made. The last several quarters the last comment that we're going to show the last several quarters the criticism has been on the spend and not seeing something tangible in which they realize they're monetizing the spend. This is something where you say okay they're spending money or monetizing it here something tangible. This is really good. This agent can actually be powerful for the consumer. Okay. We're going to take a break. When we come back we're going to highlight one of Joe's new moves. Kind of surprised to see it and we're going to debate that. There's no question about that. Calls of the day ahead as well. It's NFL kickoff time.

27:53Exclusive NFL team valuations with sports business expert Michael O'Zania. NFL is by far the most profitable league. NFL team valuations now on CNBC dot com slash sport. Welcome back. I'm going to move a mention so you personally sold Costco. I did. Don't tell me it was because of valuation after you just made the case that Apple deserves it. I can't do that. You got me on that one. Come on. Let's go. July 7th purchased the stock at 9.65. I'm going to take you through why I purchased it in a second. But let me first share with the viewers why I exited. There's two reasons to put a stop in. Number one price. Number two in time. Where at 60 days I was down somewhere between five and six percent on the position. So I time stopped myself out now. Why did I buy the stock? It's interesting because in the ETF I observe at all points how we do on particular names and sectors. I told you consumer discretionary. I don't think the ETF does a good job there. But in Costco we purchased the stock back in July of 21 at 429.

28:59We sold the stock in April of 26 at a thousand and fourteen. And I said to myself at that point we still own Walmart. I've gone Walmart for the better part of the last several years. I want to maintain ownership. I'm going to buy this back personally. I should have listened to my own rules which exited in July at a thousand and fourteen. And that helped me this morning when I said to myself, okay, let's go with this time stop because this stock is going nowhere. By the way, Walmart is not trading well either. So the rules dictated that it had lost both quality and momentum characteristics. In the case of Costco it was more momentum to a lesser extent the three year growth rate on revenue had moderated to six percent. So there was a little bit of moderation there as well. How do you feel about the valuation? No, it's a legit question. People bring it up all the time. So I think valuation for both Walmart and Costco was an absolute concern six months ago. And I think people for a consumer staple company that were trading twenty one times.

30:03Well, I think at the highs it got into the low fifth. What is it normally? What's like the historical upper upper upper upper upper 20s around low 30s. Low 30s I think is more of a comfortable area to be in. And the multiple has pulled back for sure but there's something about each of these individual names where the dynamic is actually it's scarcity but their operating margins are pretty narrow for a company with that multiple. Yeah, well, but they have the membership fees, the annuity. Yeah, but so they're in the premium valuation that they do, right? Subscription models always give you premium value. So let's talk about a stock in your orbit that I don't know it looks. D'Arisa broken. I don't know. Dick sporting goods. Yeah, give me a longer than an intraday. Guys, please. I don't know a year to date. Maybe. Yeah, there you go. Thank you. Down 33%. So the stock went down a bunch on the last earnings report blamed mostly on footlocker. Yeah.

31:03Well, what's going on here? Because BMO today initiates it with an underperform 110 is the price target. This is one with every tick up in energy prices, oil prices, I say, should I be selling this. But here's why I have number one. Let's not forget that I put it as a high risk trade at the end of the show right before they blew the earnings. It's a bit like it was supposedly turning, but then on the quarter we on the call we heard that didn't. I bought a lot more of the stock in the 20s, not the day it fell, but the next day. So I'm up a little bit still losing some pretty good money. You mean the 120s? In the 120s. Okay. In the 120s. It's problematic. I think any consumer, any retail stock is problematic at this junction. Well, apparently in this space, like you look at the charts don't look so dissimilar. If you pull up, Nike is a little more dramatic, but on Nike, you could probably pick others

32:03in blue group too, that kind of look horrible. Right. That's true, but they have buying power number two. They're redoing all their stores and their stores really becoming destination locations. So right now it's an expensive stock. The question is do the earnings continue to decline because they come down by 20%. So it was very reasonable the stock itself went down 20%. So that's where it is and I don't know how to think about it. I can tell you I wouldn't be surprised. You shouldn't be surprised. If on the next show I come out and say I've sold it. You know, because you'll be inclined to sell it rather than buy more at these levels. I'm not buying more at these levels definitely. You need a significant change in material costs. The price of rubber is at an all time high right now. I think you need the consumers to start feeling more. Spend. Yeah. And just a head job. The other one I look at which is broke is FTAI. That's pretty broken.

33:04I don't know what to do. It's dirt cheap. It's not affected by consumer prices. Air line leasing. But don't know what to do with it here. All right. We'll go to Christina now for a CNBC news update. Hi there. Hi Scott. Well, the Kremlin said today at Hope's US mediated negotiations with Ukraine. Mediation's actual resume soon. There have been no talks actually since last February. They renewed interest in bringing the nearly five year Ukraine war to an end comes after US envoy Steve Wichkov and Jared Kushner traveled to Russia and Ukraine just over the weekend. The Kremlin said Abu Dhabi is its preferred venue for negotiations. Norway laid King Harold V II rest today culminating 13 days of national mourning. He died late last month at the age of 89 after spending more than 30 years on the throne. A number of dignitaries were among the guests, including Sweden's royal family. Britain's Prince William and Ukraine's president Vladimir Zelensky. And opening statements will begin today in New Mexico where Facebook owner Mehta is on trial over privacy concerns tied to the Cambridge Analytica scandal.

34:04The state claims the tech giant failed to protect users from a personality quiz on the platform that harvested data from roughly 87 million users. The data was then sold to a political consulting firm for targeted ads back in the 2016 elections. Got it. Christina Parts and Elvis, thank you very much. Up next, ETF beds with the dominoe. What do you have coming up? It's been dormant for months, but a slew of different catalysts have woken some traders and investors up over the last few weeks. Can that momentum actually last? And is it still all about Bitcoin or other parts of the crypto market? Take the leadership brains. We're going to tackle that coming up on ETF edge on the halftime report. Keep it right here. It's NFL kickoff time exclusive NFL team valuations with sports business expert Michael Zania NFL is by far the most profitable league NFL team valuations now on CNBC dot com slash sport.

35:08Welcome back to the halftime report. I'm Dominic Chiu with today's ETF edge bitcoins on a tear up 22% in just the last three weeks alone right now. We're just hovering right around the 80,000 mark. Michael Buccella is managing partner over at neoclassic capital has been around this crypto currency ecosystem for a long time. So Mike, I wonder in your kind of opinion, is this something where Bitcoin's surge is indicative of the rest of crypto and then can it last? Yeah, so I think we're in an interesting part of the market right now. So we've seen Bitcoin surge primarily on a short cover back on August 19th when the treasury and answering be buying substantial amount of long duration treasuries. And so the good part about this is we actually seen spot buying support the moving Bitcoin. So the initial spike was on a liquidation of shorts. And we've seen a follow through on the spot side where we've seen open interest grow is on the option side with calls queue, meaning people are buying upside.

36:11And the actual futures volume or the futures allies come off. So it's kind of been a healthy rotation for Bitcoin. The rest of the market has seen a substantial amount of leverage enter the system. So open interest again, this is the leverage implicit leverage in certain assets is incredibly high in altcoins broadly. So expect coin. We're approaching leverage levels last seen in October 2025 just before we had a very large liquidation and a pretty substantial move lower in the market. I'm not saying that this move isn't sustainable. I'm just saying you should proceed with a lot of caution. Don't fall into this feeling of I've missed the move. Let me pile in now. It's, you know, we should be treading cautiously but optimistically. And Mike, is it just Bitcoin or can we feel comfortable a little bit more with other parts of that crypto sphere as well? So I think Bitcoin strength, we'll strengthen across the board. We've seen leverage move down the wrist stack, meaning, you know, we've seen Ethereum has been a massive alt performer. You've seen assets like hyper liquid alt perform.

37:11You've also seen a lot of their fundamentals grow alongside that. You're seeing enormous leverage and anything attached to Robinhood chain, which has had enormous growth over the course of the last few weeks. And anything from lighter, which is their derivative exchange or perps exchange, you've seen Uniswap, Morpho, you've seen a lot of these names attached to Robinhood chain, which is kind of this sort of indication of animal spirits as ponds, which is a launch pad. Token launch pad is really taken off with volume of mean client launches. So we're starting to see parts of the market that we haven't seen active in quite some time, really start to accelerate for better for worse. Again, Bitcoin looks relatively strong. The other rest of the market starting to look a little more risky. All right. Thank you, Buchella, over at Neoclassic Capital. Thank you very much. We are actually going to continue this conversation on the crypto surge over at etfedge.cmbc.com. At 1 p.m. Eastern time, Michael is going to be joined by Zach Pandell, the head of research over at Grace scale investments.

38:12A big chat about the exchange traded products market, these of the crypto Scott. I'll send things back over to you. Domino, thank you. That's Dom, Chiu, Mike Centoli. His market memo is next. We are back with Mike's market memo from senior markets commentator and overtime co-anchor Mike Centoli, Zach at post nine. Okay. What would the memo be writing today if you had to publish it now? Well, I would turn it around and say, bonds keep getting cheaper and nobody wants to buy them. I mean, that's another way of framing yields going higher. Obviously, a little bit of modest, intraday disappointment with the impact and size of this market, charge-reviewed buy-back announcement. But I do find it interesting that just when we have pretty generous yields and based on recent levels at an initial level, they should provide a little bit of cushion for the market. Everybody is pretty well exposed to stocks even at a time when they're saying stocks are

39:16unusually susceptible to bonds going higher. You know what I mean? So it's a little bit dissonant to say stocks are going to get hurt if bonds keep selling off. So I'm going to buy the bonds. I'd rather own the stock. So it's kind of an interesting one because you are starting to hear conversation and read. Okay. Now you have bonds as legit competition for stocks. That's really what you're talking about. Yeah. But you still can't get a bite. I don't want that. I never think of them as competition for the same kind of role it plays in a portfolio. It's much more about is it going to provide a little bit of support under certain adverse scenarios. And I know everybody wants to say, well, they're not correlated, you know, inversely anymore as they were before and therefore bonds are not a great hedge. Well that's the post 2000 reality. As if 6040 didn't work before 2000. I went back and look in the decade up to the peak of the tech bubble in March of 2000, the 6040 portfolio gave you like 70% of the S&P return. You get less, a smaller percentage of the S&P return this time because the initial yield

40:20was so low. So when the initial yield is up here, it's not you can't get hurt as badly in bonds. I guess it would be the way I would put it. But it is telling that if you allegedly have trillions and trillions of dollars in money markets that you can't entice a greater portion of that money from cash into treasuries with yields as attractive as they do. That is very true and I do think that partly it's because the margin you're getting to go out the curve. But relative to T-Bells, it's just not that fat based on historical norms. So eventually you'd get there, I don't know what we kind of have because if we tear through 5% on tens and can the market handle it. But I do think that there's something to think about when everyone believes that higher yields are only a matter to be feared and not something that you could lock in now. Good perspective as always. I'll see you at three. Mike Centoli, don't forget about his market memo. We'll still ahead options action. We're playing it with Oliver at the SIBO and we're talking Apple.

41:21What is the market suggesting? He'll tell us next. All right, we're less than five minutes away from Apple's big iPhone event. John Ternas is first as CEO. What are traders betting is going to happen today? Oliver Renek's live at the SIBO Global Market in Chicago with options action for us. What do you see? Hey Scott, Apple's defining characteristic this summer was its inverse correlation to the AI trade. But options today look priced for something very different. Apple implied volatility has been very low compared to the rest of tech and the Nasdaq 100. But today the zero data expere options are trading with a vol of 85. Right now market makers are pricing in more than one and a half percent swing in Apple stock by the closing bell. About more than three times the typical move, that looks a lot more appropriate for a big

42:23AI event as opposed to just a phone company updating its phones. $200 million in options of traded today and the heaviest volume is on the call side with the most popular contract currently the 320 strike call expiring today, which trades at roughly 60 cents and needs a 2.2% rally from here to pay off Scott. All right good stuff. Oliver, appreciate you as always Oliver. Renek final trades after the break. All right, three o'clock Adam Parker, Christopher O'Rone, Dan Ives, Rick Heitzman, Shadcon. He's the Jacksonville Jaguars owner. We've got CNBC's new valuations list out today for the NFL. Don't want to miss that. Bren, final trade. I NFL up 25% I think it has more to go. Vice don't own it. Wells Fargo. Gary. Thermo Fisher picking up momentum. Try clarified and say don't own it. I don't know if I think it's great. Thank you. Stay with nutrient. OK good stuff. I'll see you three. All opinions expressed by the halftime report participants are solely their opinions

43:24and 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, such opinions are based upon information the halftime report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries poured its completeness or accuracy and it should not be relied upon as such. Do you the full halftime report disclaimer please visit CNBC.com forward slash halftime report disclaimer. It's NFL kickoff time. Exclusive NFL team valuations with sports business expert Mike Lose Aeneas. CNFL is by far the most popularly NFL team valuations. Now on CNBC.com slash sport.