Half Time Report - Stock picks (07/24) +Stock Market Analysis by Blue Cloud

[00:00:00] Speaker 1: Blue cloud trading through the night. [00:00:06] Speaker 2: Welcome back to the channel, everyone. In just a second, I'm going to play a few CNBC clips from today's episode of the Halftime Report. I'm going to pull up the charts and dive into the technicals of some of the mentioned stocks. We're going to look at the key support, resistance levels, momentum, and see if the price action actually backs up what the talking hands are saying. Hit that like button, subscribe if you haven't already, and let's roll the tape on the first clip. [00:00:33] Dominic Chewin: All right, thank you, Carl. Thank you, Leslie. Welcome to the Halftime Report. I'm Dominic Chewin for Scott Wapner on this Friday. Front and center this hour, bracing for a big week ahead for earnings with a third of the S&P 500 and four mega cap names reporting their results. We're trading the setup for stocks in the days and weeks ahead with the Investment Committee. They are today for the hour, Jim Labenthal, Kevin Simpson, Stephanie Link, and Bryn Talkington. Let's now check on the markets. We are seeing at least a little bit of positivity overall. Fractional gains for the Dow up about 352 points. The S&P is up about a half of 1% as well to just about 44 points of the upside. 352, the last trade there, and the tech-heavier NASDAQ composite up just about one-tenth of 1%, or may call it about 36 points, to a level of 25,170. So that's the state of play right now. We look to close out the week on a slightly positive note. Let's go to the committee, and first of all, to Jim Labenthal, directly to my left. Hi, Dom. We talked yesterday about the market dynamic, and then you kind of juxtapose it to today. It sure seems as though there isn't a feeling that there's a deeper decline ahead. There seems to be some stabilization. Is it something that people can feel comfortable about, or is it too early in earnings season to be able to make that determination? [00:01:52] Jim Labenthal: Well, I think we have to remember where we are in the calendar, kind of mid-getting into late summer. And as much as I think seasonality is inane, should not exist, there's one seasonal pattern that just comes up year after year, and it's this late summer swoon, August into September. Again, should not happen. This should be something that's arbitraged away, but I want everybody to be aware of it. And, more importantly, and to your question, Dom, I think we all have to invest through that. We have to look at what's going on with profits, what's going on with the economy, what's going on with the labor market, what's going on with capital expenditures, which I understand some people are nervous about. I think it's good for the economy. And putting that all together, I see a pretty good end to the year here from where we are now. So just invest through whatever summer volatility happens. Regarding CapEx, because I do think that is at least one, if not the biggest topic du jour, certainly with Tesla and Alphabet yesterday, good results from Intel. I think this CapEx is healthy. I know there is a growing contingent of people who think that all of these hyperscalers are locked in a prisoner's dilemma. Nobody dares to be the first one to pull back on the CapEx. That's what the bear's case is, and that at some point that's going to crack. I take the other side of that, simply saying that these capital expenditures are profitable. They generate a return on investment. This is not the late 1990s and the fiber optic networks that were dark. This is a profitable venture and will be for the next few years. [00:03:22] Dominic Chewin: Kevin, what do you think? [00:03:24] Kevin Simpson: I like how Jim focused on earnings because I think that's the foundation of the bull market that we've been built on for the right reasons. If you look at the headlines and you think about the oscillation of all the narratives, it's pretty crazy because a few weeks ago, we were worried about high inflation. Then we had CPI, PPI, that kind of went by the wayside. Some people may have been worried about the strength of the consumer in the face of said inflation. And then the banks reported, and then they told us about the health of the consumer. And then a few months ago, we were right about geopolitics, higher energy prices, tariffs, things that maybe were Middle East focused. And then here we are again coming full circle. So if we can keep the eyes laser focused on earnings and the actual data, I think that is the right way to approach not just next week's huge earnings season, but to Jim's point, the rest of the summer. [00:04:13] Dominic Chewin: Stephanie, the earning story we're going to get and explore in more depth in just a moment here. But there is a macro state of play right now that's also an influence, maybe on at least smallish in terms of the overall factor fundamentally versus some of these mega cap tech stock stories. One, we have tariffs that are back in focus yet again. They're going right back into play right now. We have elevated bond yields, right? We're talking about a 4.7% for the 10-year thereabouts. We are seeing higher oil prices. And by the way, WTI trading above 90 this week. That's a big deal for the consumer in that trade overall. So how much do we have to reconcile the macro story with what's happening with some of these earnings reports and which is going to weigh out in terms of the overall influence? [00:05:01] Speaker 6: Well, sure, Dom. We're on crude watch again because of the tensions increasing with Iran. And inflation volatility is actually at COVID highs. I think that's extreme. Crude has rallied. You're right. It's up 34% from the lows. But it's still down 18% from the highs. And it can change at any given time. So we have to watch it. But that's the reason why bond yields are going higher. We thought we were at peak inflation a month ago. And then all of a sudden you have oil rising pretty substantially. So the bond market doesn't like that. I get worried at the 10-year at 5% because that's when you normally see switchers. I do not worry about the consumer at all. Listen to what the banks had to say about the consumer. The big six and many other banks said the consumer is quite healthy and credit quality improved. And in fact, so did Capital One. And by the way, so did American Express. So I think you want to use any kind of volatility to be buying the financials, to be buying consumer discretionary. Because those sectors, even though they've done nicely, as of late, they're still lagging. So here are the positives, though. Weekly jobless claims, the best since 1969. That's the year I was born. The AI food chain, we're going to talk about Alphabet and the CapEx numbers. But the food chain, the companies and sectors that benefit from all this CapEx that's going higher, it's very healthy. And you're seeing it in the industrials. You're seeing it in the power companies, utilities and REITs and real estate and utilities, rather. The earnings picture, as the both gentlemen talked about, earnings growth is running up 69 percent. Now, only 15 percent of the companies have reported. But it's very broad-based. I know the big bulk is coming from tech and comm services. They're having enormous quarters. But materials are up 95 percent, financials up 30 percent, and health care and real estate and utilities up 15 percent. So very broad-based. I like that. And if we do get the summer swoon that Jimmy was just talking about, I think you want to be buying the good earnings across the spectrum. [00:07:09] Dominic Chewin: All right. Buying dips seems to be the consensus among many of the folks that we're talking to. And by the way, Bryn, I want to bring it up, too, because Bank of America's Michael Hartnett had some interesting commentary about this as well. We talked about the interest rate story and the crude oil story. With regard to interest rates being a headwind for the markets overall, Michael Hartnett at B of A says he does not yet see the level of interest rates as a threat to the anything-but-bonds bull market in risk assets. This is a story that maybe says that we are in this mode of being able to buy dips despite the fact that interest rates remain elevated. But from a historical perspective, Bryn, are not all that elevated compared to other bull markets in the past. [00:07:51] Speaker 7: They're not. But if you go back to the 90s, I mean, we had a 5%, 6% interest rate. But the difference is the rates 5% and 10 years before that were in the double digits. And so the perspective for the U.S. economy is we had zero rates from forever, for well over a decade and a half. And then we jumped up to 5% and now inflation is here. And so I don't think you can really just go back into history and say they were high back then. It's because the base level was so low. I think that inflation is here. We're not going back to 2%. It doesn't feel like any time soon. That being said, I think that that 5% on the 10-year, I think, you know, we're 35 basis points away from that. I still think rates are well anchored. I do think that the war that we have in Iran is in oil prices are pushing up those inflationary numbers. And hopefully this is not a forever war, because especially as we're getting closer to midterms, there does need to be some type of, you know, resolution. And so I think the market has been well anchored right now. To me, the issue is, like, investors have been much safer in the index levels. The Nasdaq, equal weight, RSP, really the huge volatility under the market, especially the Nasdaq, is to me the real story is where you have, you know, Tesla, which we'll talk about, which has just fallen off a cliff. Meanwhile, Apple is up 3% today. So I still think investors, you know, obviously Kevin and I are talking our book, if we start talking about covered calls, high volatility, covered calls, the indexes, to me, you want to have exposure there. Because this individual name, especially in the hyperscalers, to me, the jury's still out, how this all plays out. [00:09:34] Dominic Chewin: What do we think, Jim? [00:09:35] Jim Labenthal: Well, look, I think it's wise of us to talk about the 10-year. We have to at 470, you know, a few weeks ago it was at 430. I think, though, Bryn just did put it into perspective that if you look over the last three years, this is still kind of in the middle to upper of the range where it's been roughly 4% to 5% on the 10-year. So we're not in nosebleed territory. Above 5% is where I get worried. But I think there's also a point that we're all kind of touching on here, and it plays directly to the 10-year, which is economic strength. I don't know if our folks in the control room who are awesome have access to the Citigroup Economic Surprise Index, but it's nicely positive. So, yes, the 10-year is reflecting that there are some inflationary pressures, but it's also reflecting that the economy is strong. And I just don't want to lose sight of that fact as we wisely pay attention to the 10-year, but let's put it into that perspective. [00:10:26] Dominic Chewin: Now, Stephanie, I want to go back to you because you mentioned about the earning strength and the momentum that we are seeing. We know that the interest rate story is one that is signaling, perhaps, there is a little bit of robustness underneath the surface. There could be some inflationary threat. The jobs market is still trying to stabilize and find its footing. But these are all setups going into what will be the busiest week of earnings season this quarter. And I want to know whether or not the setup in your mind for the markets, more broadly speaking, are ones that we think are good for some of the big, most influential reports that are going to come out over the course of the next two weeks. [00:11:03] Speaker 6: Oh, I mean, I think Meta and Amazon are the big ones and Microsoft, of course, too. And I think the biggest question mark out there is how much are they going to increase CapEx? Because they are. And so we just need to get ready for that. And for Meta, they're guiding 125 to 145 billion in CapEx spend for this year. That's absolutely going higher. And there's rumors that they're going to grow 2027, like over 200 billion for next year. Amazon, they're already at 200 billion. They're going higher as well. But here's the thing. The CapExes are going higher. And we don't like to see negative free cash flow. But the fundamentals are really quite good. I mean, Meta is going to post a 26% ad growth number. Now, it's down from 33% the prior quarter. But that's because they have a six percentage point tougher comp. But their AI improvements are helping their business in terms of targeting, in terms of ranking, in terms of creative tools. And so the momentum is there in the business. And it's only going to get better as they spend more. I don't want them to spend more, but they're going to. Amazon, on the other hand, you're going to see an acceleration in terms of AWS because, well, Alphabet gave us that hint, right? But AWS, they grew 28% last quarter, but they doubled their capacity. And this doesn't even include the Anthropics' $100 billion expansion. So their backlog is running at about $350 billion in AWS alone. And it's just money that is just crazy positive in terms of the business momentum. Retail, I think they also have upside, too, especially on the margin side. So the fundamentals are going to be good. The CapExes are going to be higher. Where do you want to go? You want to go to the food chain, like I talk about all the time. You want to go to the industrial companies, the picks and shovels, the power companies, utility companies, the grid companies, because those companies are posting really good numbers so far. And I expect the visibility is only getting better as backlogs continue to go up in those sectors. [00:13:05] Dominic Chewin: All right. Meta is one I want to kind of home in on a little bit here as well, because Stephanie does own Meta. And, Kevin, I want to go to you for this one. You also own Meta shares as well. We've got some interesting analyst commentary coming out ahead of kind of what could be a massive catalyst for this. And this is the team over at Deutsche Bank, who today have trimmed their target price for those shares at Meta platforms to 800 bucks. It was 810. So a small trimming. But they reiterate their buy rating over there. We expect Meta, they say, to deliver another strong quarter with advertising revenues likely approaching the high end of guidance as improving return on ad spend continues to attract incremental budget share. So that's an interesting story. We think that Alphabet's second quarter 26 results, especially the steady QVQ growth in search, accelerating YouTube revenues, are a positive read-through and will carry through for Meta platforms as well. Do you feel positive about Meta as we approach that big earnings catalyst? [00:14:02] Kevin Simpson: I feel positive on everything that was included in that note, Tom. I feel positive about everything that Stephanie said with respect to Meta. But my concern is the spend, because this market now is not just giving away a freebie when it comes to the CapEx. So we learned with Google, we learned with Alphabet that what you spend matters, but what you're going to generate from that spend matters even more. Now, I think that the ad number is going to blow it off the chart. And really, that's the key to the business model. But if the street doesn't like the spend, then the stock's going to get slammed. So I'm of the mindset that it's going to be a good report, that it's going to be a positive reaction. But I'd be a little bit nervous just on the reaction of Alphabet. And if Meta does sell off as a result of that, I'll be a buyer. [00:14:46] Dominic Chewin: Well, while we have you, because we want to alert the audience here to a trade as well. Because of the Alphabet weakness that we saw in the context of the AI CapEx spending numbers, you have actually gone ahead and made a transaction with Alphabet. Let's talk a little bit about why. [00:15:02] Kevin Simpson: So this is pretty exciting, Don. This is the first time that we've owned Alphabet in our flagship dividend portfolio. And what I was trying to say before about the hyperscalers next week, dispersion is creating opportunity. And this was a big sell-off. And I think the street overreacted to this sell-off, in particular because of some of the numbers under the hood. Revenues were up 24% year over year. But specifically, Google Cloud surged 82%. Now, people are worried about the guide. They're worried about the CapEx. But if you look at everything that they're doing, search, Google Cloud, Gemini, YouTube, all of the AI things, not to mention Waymo, I think that there's an incredible opportunity here as an investor. Now, why did we buy this for the first time? In April of 2024, Alphabet announced a dividend for the first time in its history. Now, we didn't just jump in and buy it at that point. But over the past six months, they've had a 22% increase on that dividend. So we look for dividend growers. I think it's a maturation of the company. Similarly to why we had purchased NVIDIA for the first time lately. These are not stocks that are new, but they're very new to the type of the portfolio that we manage. So we have a small position in Alphabet. I think yesterday was a great buying opportunity. And to my point earlier, if Meta pulls back, I think you'll have an opportunity there as well. [00:16:17] Dominic Chewin: All right, Bryn, what do you think? Because I know that you are in some of these mega cap type names. But the story overall is one, it does resonate now with certain other models and certain other factor type investors that they didn't resonate in before. So how does that make you feel about that mega cap trade? [00:16:36] Speaker 7: Well, so I own Google. I own Apple. I own Tesla and NVIDIA. But Google, I think it's really important. I own Google. I also look at the charts, though. Google just broke the 200-day. That is not good. It needs to get right back above there. And I think, to me, as an investor, I still feel Google, of the hyperscalers, is without a doubt the most vertically integrated, from TPUs all the way up to YouTube, to execute and to ultimately win. Because I do think there's going to be winners and losers. And I question Meta, by the way, just because their market cap is the smallest. And I'm not sure, outside of monetizing advertising, which they will do, they're crushing it, what they're doing with all of the other capex, I don't know that. But with Google, I think investors do need to understand, I went back, since 2015, 2015, they've had positive free cash flow. They've now just gone negative. And so for, you know, well over a decade, investors have been pricing these companies, as we talked about, capital-like high margins. And now they're not only issuing equity, which I hate that, they're also doing debt. And then they're also going now negative free cash flow. So they're pushing all of their chips in, in terms of how people have valued these companies. And so I do think we all, as investors, need to look at the market. The technicals are getting worse on most of these companies from a technical perspective. And yes, maybe the fundamentals are still very strong, but to me, that negative free cash flow, the equity issuance, the bond issuance, I do think there's a limit from a stock perspective that the market will allow. So I'm still in it. I love Google, but I'm not feeling great about the trajectory of the stock over the next two quarters. [00:18:17] Dominic Chewin: All right. While we have you, I'd like to just follow up really quickly as well, because a slew of you guys, three of you guys, actually own shares of Apple. We had mentioned it before. We talked about this idea, this notion that Apple had kind of seen this maybe phantom stealth-type rally in the spite of all of the weakness that we are seeing generally in mega-cap technology. I also want to point out that we do have an analyst action today to kind of provide a little bit of that catalyst. And these are analysts over at Baird. They reiterate their buy-equivalent outperform rating. They raise their target price modestly to $330. It was $310 before. In one of the reasons why, they talk about the expectation of solid quarterly results driven by strong iPhone growth and steady services trends. Memory pricing remains a daunting headwind, though price increases should ease the pressure. Valuation looks rich to past trends, suggesting much may be priced in. But we expect the strong free cash flow, upcoming product cycle, and early positive comments on Siri AI to support the stock. What do you think about that, Brandon? Is there a reason for you to feel comfortable about Apple relative to the rest of that mega-cap tech trade? [00:19:27] Speaker 7: I feel comfortable with Apple because you know what you're going to get. To my point about Google, it's like Google was this company with this type of balance sheet for well over a decade, well over a decade. And now it's doing something different to grow in the future. I get it. But with Apple, you know what you're going to get. I think we should retire, like the super cycle word about Apple. I think they have way too many phones out there for us to have a super cycle. But their revenues are growing. The iPhone 17 to me was a home run. I think that the next phones, well, once again, the 17 has AI in it. The 18 going on will have AI. More and more people will want to have just the cool services, the ecosystem. And I feel really confident I do not want a device from OpenAI. I do not want a device from Anthropic or even Tesla. I'm very comfortable with my Apple phone. And I think from a consumer perspective, they're just going to sit back and just win this because we all are going to continue to use their devices. So I think that's just, I don't think it's stealthily going higher. I think it's like in our face, pretty much going higher every day. And I think it will, especially going into next week as we're going to hear Amazon and Meta are just going to spend just like Google. [00:20:36] Dominic Chewin: On the other end of the spectrum, folks, besides that MAG-7 trade on the Apple side, is Tesla. There was an earnings catalyst for that. I know, Bryn, that you are one. I'm going to go to Kevin for this one here. The Tesla reaction has been interesting on track for its worst week, by the way, since March of 2020, going to the pandemic era at this point here. It is not as big of an influence anymore as it once was. But the Tesla story, is it indicative at all of some of the risk appetite or expectations around just what these companies need to deliver to power that next leg higher if there is one there to be had in the coming months? [00:21:17] Kevin Simpson: I think it does. And I think it's very healthy. You know, for years, this company was able to move higher on any hope, any promise, you know, any crazy idea into the future. And now you're more of a demanding Wall Street and more of a demanding investor who's saying, you know, show me. Let's see a show me story with earnings. And this stock is something that is really years into the future. It's not a today story. But when you have the type of earnings report that it did, I think it justifies this type of stock reaction. And I'm a little surprised that the retail trader hasn't come in and bought up some of the debt that you were talking about earlier, Dom. But I think that this is a story not for, again, one or two quarters. It's one or two years. It's robotics. It's energy. It's not the car company. But we've said that so many times on the desk. But if it is that, if it is a robotic story and an energy story, you're making this an investment for the longer term. You're not hoping to trade this in the short term. [00:22:09] Dominic Chewin: If that's the case, let's talk a little bit about whether or not that short term to medium term story plays out for the chip stocks. And I want to do this because this is one of those opportunities that could be a very profitable one if you bought the dip. I don't pretend to know where this chip trade is going, but it's fallen by enough where people are getting some attention from it. Stephanie, the chip trade, is it one where you feel as though this is one that's fundamentally OK for you to start nibbling at right now? And do you have to be a stock picker like yourself to do it? Or can we just feel comfortable saying maybe the SMH, the SOX, some other ETF, maybe even DRAM can be enough for us to kind of get that exposure? Or do we have to be picky about picking bottoms in these stocks? [00:22:55] Speaker 6: I mean, I always want to be picky. I always want to find a good company on sale. And so in the last couple of weeks, I've actually bought NVIDIA. I bought NVIDIA for the first time. You know, I've been an owner of Broadcom for many, many years, and it's been an absolute home run. Never owned NVIDIA. The stock has lagged the group by 53% year to date. It's trading at 18 times forward estimates. It's the number one GPU company in the world. And, yeah, they're going to lose some share, but it's going to be dominant for years to come. They've got a new product cycle, great free cash flow. So I started adding to that. I bought a little piece of Micron. How can you not own something in memory when you're hearing from someone like IBM say their customers are deferring their purchase plans because they're buying memory and they're buying servers and storage? That's the area where you want to buy. But, by the way, I do think IBM is a buy. We can talk about that later. But I do think you want to be particular. I recently sold Marvell because I made over 100% in, like, a month and a half, which is crazy to me. So I think you want to pick your spots, Dom. But I think that there are spots to be had. [00:24:03] Dominic Chewin: Okay. Let's go kind of rapid-fire-esque. We've got a couple minutes left here to kind of go through the earnings setup for next week. We know the names that are going to come up in this process. Jim, I'll start with you. Which of those big earnings reports coming up next week is the best setup in your mind? [00:24:20] Jim Labenthal: To me, Amazon comes to mind. I think on a historical valuation basis, it's very, very cheap. I think we'll see great growth from Amazon Web Services. And I'm sorry, I forget if it was Bryn or Stephanie. I think it was Bryn was talking about Alphabet and all the multiple shots on goal. Obviously, the same thing applies to Amazon. Maybe they don't have their own large language model, but they have chips. They have Amazon Web Services. They have the retail business. They have the logistics. So that's where my chips are. [00:24:49] Dominic Chewin: Bryn, to you, what's your favorite setup of those big earnings reports coming up next week? [00:24:54] Speaker 7: I mean, Apple, to me, no-brainer. We know what we're going to get. No surprises. Microsoft, there's got to be a bunch of landmines in there. Meta, Amazon as well. So, I mean, I think you want a straightforward setup, Apple's the one to pick. [00:25:07] Dominic Chewin: All right, and what about you, Kevin? [00:25:09] Kevin Simpson: I think the most important one is Microsoft, to Bryn's point. There are so many situations, so many problems underneath the hood that we have to worry about. We saw what happened with IBM. We know where the problem lies with software. Microsoft has to come out and prove something with the guidance that this stock shouldn't be left for dead. So I think it's the most important one. [00:25:27] Dominic Chewin: All right, last word to you, Stephanie. [00:25:30] Speaker 6: I think you want to own the derivative plays of the CapEx going higher, and that's the picks and shovels companies. [00:25:37] Dominic Chewin: All right, so there's the earnings setup for next week on MegaCapTech. Thank you guys very much for the committee for that. Coming up here, Kevin's actually making a move in cyberspace. He'll go through the trade coming up next. Halftime is back in two minutes. Keep it right here. [00:25:48] Speaker 2: Hey, everybody. Welcome to Blue Cloud Trading. I'm George. It is Friday, July 24th, 4.35 p.m. We're going to take a look at the stocks that they discussed on the Halftime Report today. It's going to be in two segments. First segment, we're going to cover about 14 stocks and ETFs that you see here that they just talked about. And then we'll show the second clip from CNBC from the Halftime Report, today's episode, of course. And then we'll take a look at those stocks and ETFs. And then after that, we'll take a look at the SPY, the Qs, the Russell, the Dow. All right, so let's take a look at this first list. We're going to go run through these very quickly. I just want to show you guys how the technicals look for these specific stocks in comparison to what the talking heads were suggesting, basically. So Apple, today, up above the 3.17.40. I mentioned yesterday that we broke through that. That was on Thursday, and here we are on Friday. Now, the interesting thing is it came down to that level, down to the 3, close to the 3.17, and then the bulls stepped right back in. So there's a lot of, actually, volatility here in Apple. It moved up. It dropped towards the end of the day. But overall, it's still looking very bullish. I like Apple on the daily and on the weekly. Again, the technology sector is not a particularly strong sector right now, but this stock is outperforming its peers. Here's RSP, the Invesco S&P 500 equal weight ETF. On the weekly chart, it is still holding up above that nine period. That's the green line that you see there. So that nine period is called the Tenkinson. It's part of the Ichimoku indicator. And basically, the way that that's plotted is by taking the high, the low of each of the last nine candles, dividing it by two. So it's the midpoint of each candle. And that's how you plot that. The one below, the 26, same way. Midpoint of the last 26 period, so it's the slower one. All of the elements here are in the correct order. We've got the Sengu Span A, the light-colored blue line, is above the Sengu Span B, the purple line on the cloud. So we have a bullish cloud. We've got the Chikuspan, which is the current price projected 26 periods ago, above the candle 26 periods ago. So that's very bullish, too. I like what I'm seeing here on the weekly. I like what I'm seeing here on the daily as well. It didn't quite exactly close above the conversion line or Tenkinson. It was under it by four pennies. But I'm giving it the benefit of the doubt here that it's probably going to bounce on Monday based on the fact that we see the ADX ticking up here. The green line is above the red line. So I think there's a higher probability that it is, in fact, going to continue to the upside on Monday. Unless some crazy stuff happens over the weekend, you never know, right? The markets can go crazy if some really negative things take place, the geopolitical stuff, for example. XLF, the financials ETF. So this one here is just broke back above the nine period. So it had a little pullback here, very short, brief pullback. It's up 0.86% on the daily chart. It's good on the weekly chart. It's still holding under. This weekly candle, it goes back to January 9th of 2026. We haven't been able to surpass that level. So this ETF here is still, in my opinion, not something that you want to be adding to your portfolio until we break and close above it on a weekly chart. So since it didn't happen this week, I would wait until next week and let's see if it happens. Because, of course, during the week it may, in fact, pierce that level. It may get above it like it did here the prior week, but then you see the bears pushed it right back under. All right. Now, the rest of these guys do not have a blue flag, and that's a reason. Oh, let me show you guys the daily chart. There's the daily chart for XLF. Now, the rest of these stocks and ETFs do not have a blue flag because there's something technically wrong on either the weekly chart or the daily chart. So let's take a look at Amazon, for example. Okay. So one of the rules of this indicator is that price should always be above the cloud if you're considering an entry point. And that's because it's a safe zone. It's basically telling us that, hey, this decline or this consolidation area is now starting to change, right, change its direction and sentiment. And right now it's becoming negative, negative sentiment. In fact, this is the second day Amazon closed under the dotted yellow line, which is the 200-day simple moving average. So I'd hold off on Amazon, obviously. Google is also, for the second day, under, okay, under the 200 after the earnings announcement. It had that big gap down. It did move up 0.65%, but not the time to be adding positions here as far as I'm concerned. You've got Meta also dropping onto the cloud, okay? So the majority of these Mag 7 stocks are not doing well. It's just Apple, really. It's fired up. Let's look at Marvell. This is the semiconductor stock. I mean, it's been in a decline for a little while. So we had a double top up here. We can see the lower high here, another lower high, another lower high. It's just developed. So we've got ourselves a downward channel. And that's, in effect, you really can't predict when it's going to end. And because of that, it's probably in your best interest to stay out of leaning long positions in this or adding new long positions here. Now, if you're a longer-term trader, and you might be using the weekly chart, okay? So what does that look like? Well, at least this week, you can see it actually held its own. So the prior week, the week ending July 17th, it had closed at these levels. This week, it actually held up. So there is a possibility that Marvell could bounce and recover here. But the problem is we don't have enough data, and so you don't want to be adding positions as far as I'm concerned. Here's, again, that daily chart, and it's down 7.21% today. How about Micron? Also in a decline, holding up at least above the cloud. I'm sorry, it entered the cloud. I take that back. But holding up above the nine period, so above that green line. NVIDIA is inside the cloud, still inside this downward channel. So no on that stock as well. SMH down 3.27% today. All right, also starting to develop this short-term sort of downward channel. SMH is a semiconductor ETF. It's inside this box still. I wouldn't do anything here. And Tesla also showing a lot of weakness, down 2.08%. You can see the big gap down that happened on Thursday. And then, you know, on Wednesday, sorry, after hours or in pre-market, and boom, it continued. So I would stay out of Tesla. XLB is the materials ETF. That one is basically just eking its head right above that cloud. But you can see the slower moving average, that 26 period, the red line is still above it. I would hold off on XLB, the ETF. XLI is the industrials ETF. It showed some more strength today. It was up 0.4%. And the directional movement index became positive when the positive DI9 crossed above the negative DI9 down here. But, you know, the problem here is the faster moving average, the Tenkinson, the 9 period is still under the slower one. So we don't have a perfect situation here on the daily. If you look at the weekly chart, it does hold up quite nicely, actually, right? So it's a much more bullish chart on the weekly. So we got XLB on the weekly chart. It's under the 9 period, just so you know. XLI, industrials, on the weekly chart is above the 179.30. So that's also looking more bullish this week, industrials. And there it is again on the daily. And then XLK is inside the cloud. All right, let's look at the weekly. That's technology. All right, so technology has been dropping for a bit. All of this can certainly change very quickly, right? So it's a tight, tight sort of consolidation that's happened here on the weekly, which leads me to believe there's a higher probability it's going to be a bull flag scenario type situation here. And once we break above these levels, we're probably going to see a move to the upside. But right now, we don't have it. And it needs to prove itself, right? So until that happens, I would hold off on XLK. Guys, let's get back into the second clip from CNBC. And then I will go over the following stocks that they talk about, okay? And, of course, the indices as well. So let's get back into it. [00:34:24] Dominic Chewin: Welcome back to the Halftime Report. We've got another committee move to hit on. And, Kevin, it's you again. And this time, it's with regard to cyberspace and cybersecurity and Palo Alto. [00:34:35] Kevin Simpson: Yeah, Dom, this is in our growth portfolio. We started adding to this back in March after the SAS get-in or SASpocalypse, whatever happened. I was really of the opinion that the market was getting it completely wrong with cybersecurity. With more and more LLMs, OpenAI, Anthropic, all the things that were happening, I felt like we needed more cybersecurity, not less. And certainly we were rewarded handsomely for that the way these have traded. Now, most recently, with OpenAI and the way that it's invading Huggaboo or whatever the website was, thank you so much. I think that the stock sold off a little bit and gives us an opportunity to get back in because, again, the thesis doesn't change. These cyber companies, whether it's CrowdSource, CrowdStrike, excuse me, or Palo Alto, they need to integrate the AI to be able to defend against it. And I'm very passionate about it. I know that these stocks have moved really high, really fast, but I think you need to have them in your portfolio. [00:35:27] Dominic Chewin: And, Stephanie, I mean, this was – the Hugging Bear headlines were straight out of an AI kind of sci-fi novel, right, about some computer model jumping out of its quarantine test environment and then hacking another company. You don't do that on your own. Now AI can do it on its own. So, I mean, with regard to you, it's CrowdStrike and it's Palo Alto. Is cyber something that gets propelled because of these headlines this week? [00:35:52] Speaker 6: Oh, 100%. Anything that's tied to AI is going to need more cybersecurity. Cybersecurity, as I've said it many times, is going to be much bigger than AI because of these problems. AI is not secure. And we're coding. We're doing 50% more coding using AI. And that's even more unsecure. So, I think that these stocks are definitely – you have to have them in your portfolio for sure. But I do think that they have re-rated and they are up a lot. So, I think, to Kevin's point, like, use the pullbacks to be adding to the best in breed. And CrowdStrike and Palo Alto are the top two. I will say that this company has – Palo Alto has 10% market share of a $300 billion total addressable market that's growing in a huge way, as I just mentioned. Their free cash flow growth is growing 27%. Their net new next-generation security annualized recurring revenue – that's the thing that this stock trades on – grew 60% last quarter with acquisitions and 28% organically. So, you're getting the growth. You're getting the execution. So, you pick your spots and you buy on the dips. [00:36:55] Dominic Chewin: Bryn, you have been in the GlobalX cybersecurity ETF ticker BUG, BUG, for quite some time now. It's on pace, by the way, for its worst week going back to April. But, to Stephanie's point, it's on pace for its first down week out of the last five. There's been some near-term, medium-term love for cyber. Do you feel comfortable with that near-term momentum continuing? [00:37:18] Speaker 7: Yeah, well, I've owned this for multiple years. I agree with everything Steph said. This is a secular trend. This probably is bigger than AI because, as we saw with Hugging Face and OpenAI, that is just crazy. And so, I think these are secular winners. I'm doing it via BUG. I'm not going to get shaken out of an individual name. So, BUG owns Okta, Fortinet, Palo, CrowdStrike, et cetera. So, I won't get the highs of the best ones, but I also won't get the lows. And I feel really confident that I can stay in this long-term just because I have a basket of these names. But, yes, I think people should buy these on dips because it is clearly going to be a secular winner. [00:37:57] Dominic Chewin: All right. And one more point to make that's outside of cyber but is in software overall. Oracle, one of those big names that we're talking about in the news today because Oracle has now signed a 10-year software contract with the Pentagon worth up to around $7 billion. The Pentagon announced this deal on Thursday, the contract with Oracle. This is a big deal for a company that's been taken well off of its highs. Does the Oracle trade feel like one to you that can be a turnaround trade for the back half of this year? [00:38:27] Jim Labenthal: Yeah, very much so. Okay. So, I'm very much a believer, Dom. Let's go through the two big risks for Oracle. One is the backlog, $636-odd billion. Roughly half of that is OpenAI. Okay, maybe OpenAI only comes through for half of that. If that's the case and that backlog goes down to, say, $500 billion, that's more than the next three years' worth of projected revenue for Oracle. And, you know, who knows how OpenAI is going to come in, but my point is the market is discounting something very drastic in terms of those contract obligations going forward. The other issue is, of course, the debt level, the negative free cash flow. Well, you get a deal like this from the Pentagon, and what I'll tell you is the Pentagon and the government is not worried that Oracle is somehow not going to have the financial wherewithal to see it through the 10-year contract. And, frankly, neither do I. Now, if you're a portfolio manager, and I am, you have to have space for something like this that's more volatile, potentially a lot higher return. You have to have the stable stocks like the J.P. Morgans and the Apples, but you have to have room for something fun that could do a really good job like Oracle, I think, will. [00:39:31] Dominic Chewin: All right. There's the cyber trade and Oracle all wrapped up into that block. Thank you very much for that. Up next, we got how much do you have to be a stock picker when it comes to energy, Bryn, for you? [00:39:41] Speaker 7: Well, I mean, I own individual names, I own Energy Transfer, Viper, like the mineral rights. I think that you want to have this yield. I think the yield component is very important. I don't think it was on people's dance cards that energy was going to have this great year. It did not do well in 2024 and 2025. But if you had that yield component, you could just still collect that income. And I think everyone now knows energy is incredibly important. And so I like buying the RSPG, XLE, have that diversification, but ultimately also like the mineral rights, because you get that really nice 6, 7, 8 percent yield, as you do also on the toll companies, like the pipeline names, like Energy Transfer. [00:40:23] Dominic Chewin: All right, welcome back. Let's hit some committee stocks on the move today. American Express, the worst performer in the Dow today after a revenue miss. Kevin, you own it. [00:40:32] Kevin Simpson: Yeah, and I think this is saying everything that I'm talking about with respect to guidance and expectations, their numbers were very, very good. But the price had rallied into the quarter, and looking at it, I mean, essentially the revenues were in line, a slight miss. EPS was up. Their top-end consumer was amazing. The aspiring Gen Z, Gen X, platinum card was up. But when you talk about a guide and a little revenue miss, you're going to be punished. And I think that's what the precursor is, Dom, for the rest of earnings season. [00:41:01] Dominic Chewin: All right, let's stick with the financials here. Bank of America is hiking its dividend by 14 percent to an annualized rate of just about $1.28, Steph, you own it. [00:41:11] Speaker 6: Yeah, I mean, the profit growth in the quarter is up 27 percent. The ROTCE up 17 percent. And the fundamentals are very, very strong. This isn't really that surprising, Dom, because they were the only one that didn't announce a dividend hike when the stress tests came out. But I'll take it. And in addition to the dividend increase, they've got $22 billion left on their authorization to buy back stock out of the 40 billion that they announced. [00:41:36] Dominic Chewin: All right, let's turn now to the earnings setup for next week. Very busy week for stocks that are not mega cap tech. Jim, two of these names are health care related, reporting next week in AstraZeneca and AbbVie. What do you think? [00:41:48] Jim Labenthal: What I think is health care, Dom, to use your term earlier, has had a stealth rally over the last few months. And pharmaceuticals in particular. I like both of these names. AbbVie is just a warhorse. Year in and year out it produces. It's had a little bit of a lackluster return over the last 12 months on competitive concerns about Skyrisi and Renvoke. But those are fading. This is an absolute ad right now at 15 times earnings, 3 percent dividend yield. AstraZeneca, even more interesting because they had a heart drug fail its late stage trials two weeks ago. Stock went down. That gives the entry point. This is also 15 times earnings, 2 percent dividend yield. The space is a good space to be in. I like both these names. [00:42:28] Dominic Chewin: All right. From financials to health care to real estate, CBRE Group also reporting next week. Brynn, you own this one as well. [00:42:35] Speaker 7: I do. Two earnings quarters ago, the stock dropped from about 170 to about 135 because somehow the market thought AI is going to take over all of the transactions that they do, which makes no sense. They are taking advantage of AI. This company consistently reports 25 percent year over year earnings growth. The market's expecting 24 percent, so really solid. They are in the epicenter of these data center transactions. And so I think it's a good setup. The stock's starting to recover. So I think it looks good going into earnings next week. [00:43:07] Dominic Chewin: All right. Non-tech earnings setup there. Thanks very much for those. Stay with us here. Final trades are coming up on the Halftime Report. All right. Welcome back. We're back with our final trades. Brynn, we're going to start with you. [00:43:19] Speaker 7: GPIQ. It's one of my favorite covered call ETFs. Besides Kevin's, it sells calls on the NASDAQ. Typically only 20 to 40 percent covered. Good way to play tech. [00:43:27] Dominic Chewin: The NASDAQ with income. All right. How about you, Steph? [00:43:32] Speaker 6: IBM down 30 percent from its high, 17 and a half times earnings. The reaction to their negative pre-announcement is way overdone relative to where the numbers settled out. I like it here. [00:43:41] Dominic Chewin: Buying the dip in big blue. Kevin. [00:43:43] Kevin Simpson: Google. Search remains one of the greatest businesses ever created, and AI is making it more valuable. [00:43:49] Dominic Chewin: And let's finish off with Jim. [00:43:51] Jim Labenthal: Yeah. Sometimes we can hit the easy button, and I think that's Amazon. I know earnings are coming up, but at this valuation, I think it's a buy right here. [00:43:58] Dominic Chewin: All right. Markets are positive, fractionally so. That does it for us here on the Halftime Report. The exchange with Brian Sullivan starts right now. Have a great weekend. [00:44:08] Speaker 8: And welcome to the exchange, everybody. Happy Friday. I am Brian. Kelly is off today. She will be back on Monday after a rough week. A pretty nice turn today, at least for the industrials. We are right now just at or near the highs of the day, at least on the Dow and the S&P. Real estate, communications, consumer staples. Some of the leaders, the MAG7 and the NASDAQ, though, they're a mixed bag. Big earnings from Intel, not enough to bring stability to a volatile trade. Apple and Netflix are higher. Tesla down again. Some good news around oil prices, a little bit lower today, but overall, still at $20 a barrel since the July 3rd low. What's not easing? The price you pay at the pump, the national average, now at $4.10, a $0.12 jump in just a week. All right. Hi, everybody. We have got a big hour ahead, and let's kick it off with your money and what may be a make or break week next week. Because not only is next week the busiest week overall for earnings. Look at all those names that we're showing you there. It's also arguably the most important week for earnings because you've got Meta, Microsoft, Apple, and Amazon all reporting. Oh, and by the way, you've also got a Federal Reserve meeting on Wednesday as well. And who knows exactly where the Iran war might be in just five days. Joining us right now to talk about all of it is Ellen Hazen, Chief Market Strategist and Portfolio Manager at FL Putnam Investment Management. Ellen, it's good to have you on the program again. We're not looking past today to next week. But right now, what are the most one or two important things on your radar? [00:45:45] Speaker 9: Well, it's great to see you, Brian. Thanks for having me. So what we're looking at more than anything else is, number one, AI hyperscaler CapEx, because that is still going up. And that is driving so much of the economy and so much of those earnings estimates right now. And number two, of course, the price of oil and the degree to which that flows through to higher gas prices at the pump. And then whether or not that ends up impacting the consumer hasn't happened too much yet. But those are the most important things we're watching. And, of course, the way we monitor those one way is just through earnings estimate revisions. [00:46:19] Speaker 8: And how have those come in so far? [00:46:21] Speaker 9: Earnings have been great so far. We've had about a quarter of the S&P reporting. We've had 70 percent revenue beats, 80 percent earnings beats. It looks like earnings are going to come in at over 20 percent year-over-year growth, which is also going to set us up for over 20 percent year-over-year growth for the full year. And even next year looks pretty solid as well. So, so far, so good. Still early days, but very happy with what we've seen so far. [00:46:44] Speaker 8: You know, it's interesting because we've got three of your picks, and I love getting these stock picks. I kind of colloquially call it Opportunity Friday. Why not? Two of them are directly tied to the consumer. You've got Brinker International. Ticker is EAT. Their main company is Chili's, the restaurant chain. And you've got Target as well. These are direct consumer names, which I believe should be impacted by consumer spending and the price of gas. You're obviously, at least not now, Ellen, not that worried. [00:47:12] Speaker 9: I think that there, in fact, I would look at it the other way. There might be upside from here if oil comes down, if peace breaks out, if the hostilities decline, and if gas prices come down. So I think that we're already pricing in a little bit of hesitancy. But if you look, for example, at Brinker International, they're growing earnings solid double digits, maybe even as high as 20%. And it's trading for 15 times earnings. They're gaining market share. They're putting up over 6% comps. It's really hard to see how a stock like that doesn't work. And any lower gas prices would be a bonus. If we look at Target, they had four straight years of declining earnings estimates. But in the last four months, they've started to turn up again as the merchandising has really taken off. And you're seeing positive estimate revisions, very reasonably valued. And that's a franchise company that has a long history of management execution. And it looks as though they're exiting their long winter. [00:48:06] Speaker 8: I want to go back to Brinker for a second. You said lower gas would sort of just be a bonus. So even with gas where it is right now, Ellen, doesn't sound like you're that concerned. [00:48:16] Speaker 9: Of course, we all want lower gas prices. But right now, if you look at Chili's, right, that is a value casual dining opportunity for the consumer. And comps have been solid. And as you look at their record over the last several quarters, it's been beaten, raised, beaten, raised, the traffic is there, the ticket is there. And so, of course, we would rather see the consumer in even better shape than the bar. Even in a neutral gas environment, they are executing. I think that bodes well for the stock. [00:48:46] Speaker 8: Yeah. You know what? And McDonald's hitting, like, multi-year lows. You wonder if people are shifting to more of the fast, casual than fast food. We mentioned Target as well. I want to go on Target. No doubt gets a lot of its stuff from a rail company, a Union Pacific, another one of your picks. Do you think pricing power is finally back for a lot of these railroads? How come? [00:49:08] Speaker 9: I'm just looking at the numbers, right? I'm looking at estimate revisions, and I'm looking at what companies are saying on their conference calls. And finally, pricing is turning around. So will it continue? Remains to be seen. But as we look at it, again, rail is very oligopolistic, generally good margins, as long as you have pricing. I think the declines in coal volumes are long behind us at this point. So volume is OK, and pricing is getting better. And of course, that drops straight to the bottom line. [00:49:33] Speaker 8: And again, I'm not trying to talk my book here as the energy person, but I would say that this is a diesel fuel, in some ways, related play as well. Higher fuel, lower margins, I think. [00:49:46] Speaker 9: Well, that's true. [00:49:47] Speaker ?: Well, that's true. [00:49:47] Speaker 9: That's true. Of course, it helps that we are energy independent in this country, so that helps a little bit with the fuel costs. But that's a risk. If we see Brent go to 120, the way I think Goldman called out recently, or even higher, then, of course, all of these are at risk. I don't know if that's going to happen, but I think that what we've seen over the last four months has been on again, off again, on again, off again. Right now, oil's at the high. I think it's more likely to bounce down for a little while than to go even higher from here, absent an escalation of the hostilities. [00:50:19] Speaker 8: OK. So outside of that, we've got Brinker, we've got Target, we've got Union Pacific. I love it. Next week, all the earnings we just referenced. Also, though, the Federal Reserve, Kelly and I, will be in D.C., special two-hour show on Fed Day on Wednesday. Great. I don't think we're going to get a rate hike, but what do I know? What do you think? [00:50:40] Speaker 9: I think that I agree with you. I think it could go the other way. We could see a hike, but I don't think it's likely to. I think that so far, what Chair Warsh is attempting to do is to establish his inflation-fighting cred. However, he has bought himself some time with these task forces, and the labor market looks healthy, so there's no reason to do anything because of that. And, of course, the key question is, what happens with inflation? And one of the task forces is looking at inflation and whether or not we're measuring it correctly. There are arguments to be made that inflation might fade in the second half of the year, first of all, because year-over-year rent increases have already declined, and that will be factored in, and also because the government is recalculating the PCE formula, and that's going to just mathematically, because of the adjustments, cause PCE to decline a little bit personal consumer expenditures, which is, of course, the rate that the Fed prefers to look at. So I think that the most likely outcome is that they will give it some time, and I'm very much looking for an update on how the task forces are doing and when he expects to hear final results. [00:51:46] Speaker 8: I guess no hike is the new cut. It kind of feels like where we are right now. Ellen Hazen, always love having you on. Thank you. Have a great weekend. [00:51:55] Speaker 9: Have a great weekend, Brian. All right. [00:51:56] Speaker 8: Thank you. All right. Now, let's hone in on the semiconductor sector, because Intel today is down 5%. It's not getting any love at all for a big quarter. Company topping second quarter expectations. It reported its fastest revenue growth in 15 years, and the stock is down almost 5%. Some of that weakness spreading across the group today, Broadcom, Micron, they are both lower, but remember, folks, context is always key. And let's remember, Intel has already soared 161% this year. For more on all of this, let's bring in Stacey Rasgon of Bernstein. Stacey, is that kind of the story? Listen, sales were great. I mean, it blew estimates away. Gross margin blew estimates away. Stocks down. Is that just because it's had such a big year or something else? [00:52:47] Speaker 1: Yeah, and it's maybe a little of both. And you have to remember, it's not just that it's down. It was up, you know, 10% or so in the aftermarket at one point. So it's like a 15-point swing off of where it was. And it was up that much at first, because you're right. Like, the numbers were really good. It was actually a fantastic quarter on a reported basis. I actually think it's two things that are causing this. It's the CapEx outlook and some other comments they made that I'll get to in a minute that relate. But CapEx is going up. And it's really funny, because if you fundamentally believe in the Intel story, CapEx going up should be a good thing for you. They've been very clear. They're not going to invest unless they think that they can utilize that capacity at a very high ROI. And they took the CapEx for this year up to $20 billion, I think from up from 16 or so before, so 20 now. And all they said for 27 was it's going to go up significantly in 27. So that's part of the problem. We don't know actually how much it's going to go up in 27. And CapEx stories in general, this earnings cycle of the hyperscalers and some of the others have not been all that rewarded. So I think that's part of it. [00:53:55] Speaker 8: Well, let me stop there, because I'm starting to feel a little bit like Yogi Berra. If you remember Yogi Berra, where he said it's deja vu all over again, right? I feel like we just talked about this, not you and I, but on this network like yesterday with Alphabet, where basically, you know, basically raised capital spending and the stock fell 5%. But we kind of established to other people that if they didn't, if they cut spending estimates, it would have fallen even more. Like, is there a just right level here, Stacey? [00:54:24] Speaker 1: Look, you know, at the end of the day, you know, investors, we want all the growth for free, right? And it just doesn't happen like that in the real world. Like, if you're going to grow, you have to invest. And at least Intel, like I said, if you go back a few years, Intel was much more non-conservative on their outlook. It was, they very much had an if we build it, they will come perspective. And that bit them. And you can see it on the stock chart. That's part of the reason it was trading where it was. The new Intel under Lipu, the new CEO, is much more cautious. They've been very clear that they will not invest if they don't think they can use that capacity. And so the fact that they are investing does suggest that they see a need for it. So that's all good. And fundamentally, that's good. But at the same time, you know, investors are like, they want it for free. And like, the real world just doesn't work like that. They have to invest. You know, that's a really, really interesting point. [00:55:17] Speaker 8: And listen, I'm not an analyst, obviously, but I've been doing this a long time and you deal with companies. And I'll say it if you don't want to. I would say that maybe the old Intel got cocky. [00:55:29] Speaker 1: Oh, they absolutely got more than cocky. I mean, like, arrogant is absolutely the right word to describe how they were. Again, they've had a change of heart, I think, on that. Like, they're turning over a new leaf. The culture there is changing. But I mean, I think they clearly were arrogant. I mean, look, I think I used the words in writing to describe their history. I think I used the words fat, dumb, and lazy at one point. And that's really where they got. That's no way to go through life, by the way. [00:55:59] Speaker 8: No way to go through life. I think that was a movie line. But do you like the new quieter, a little more humble Intel under the helm of Lipu Tan? [00:56:12] Speaker 1: I do. Look, look, it's always better to under-promise and over-deliver. I think Lipu recognizes that. And, you know, I even wrote this in today's note, and I've said this before. I mean, my career being negative on this stock. We're not negative on it right now, per se. We're neutral on it from a rating standpoint. And I think I wrote this in today's note. I feel better about it than I have in a long, long time. Because, again, you can kind of see what they're doing, and they are executing it. And they've got some things going for them. The market is working for them. I think they actually got lucky, frankly, on the server upside that is really helping them right now. But, look, take lucky over good. I mean, they were maybe due for a break. It's been a while. Let me take that. I also think the narrative is also working for them. The fact that supply right now is very, very tight. It brings the foundry narrative back into play. And, look, I'll be honest, customers are probably giving them a harder look than they ordinarily would because of the nature of the current supply situations. All those things, I think, are lining up for them. It is still a bit of a slog, right? They've got a lot of work to do, and they have not denied that at all. And I think they are trying to under-promise and over-deliver against those expectations. And I think the fact that they are now putting the CapEx in place does suggest that they are kind of more positive about the trajectory. But, you know, I'm not – maybe in my heart of hearts, I'm not surprised with the reaction today either. I mean, it's going to be what it's going to be. [00:57:34] Speaker 8: Yeah, and again, stock up 161% this year. It's had a heck of a run. It's made a lot of people a lot of money. Stacey Raz, got a Bernstein. Appreciate it, Stacey. Thank you very much. You bet. All right, folks. Hold on, everybody, because we've got a news alert right now on Anthropic. Kate Rooney, what's going on with Anthropic? [00:57:51] Speaker 10: So, Brian, Anthropic just released its newest AI model. The headline here is really about cost. The company claiming Opus 5, as it's called, performs within 0.5% of the best AI model that it's got out there, but about half the cost when you look at cost per task. This does appear to be Anthropic's response to growing complaints that we hear from CFOs, CEOs as well, around the price of tokens and building on AI. It also comes as Anthropic now fends off new open-source versions out of China, which the company has accused of copying its own technology. Anthropic product executive Diane Penn told us that the feedback the company is getting from customers is more about value at this point. She said if it's just a cheaper model, it's not accomplishing a quality outcome, it's actually not useful. So she called this model a, quote, daily driver for many enterprise customers out there. Anthropic does have the most expensive option out there on the market right now. There's also a wave of cost pressure coming for a lot of the AI giants. A lot of those are coming out of China, Brian, specifically. Back to you. [00:58:53] Speaker 8: Yeah, what do we make of this? First off, we've got a lot of new models rolling out, but I think the question now becomes, Kate, when do these companies that are spending all the money, the alphabets of the world, the metas of the world, when do they make money on AI? They're spending hundreds of billions of trillions of dollars. When do they make it back? We want price increases, not cuts, I think. [00:59:13] Speaker 10: The thing about Anthropic that's been interesting is its revenue growth, and there have been reports, especially early this quarter, we have talked to sources who say that they were on track to turn a profit. So as far as making money on this technology, Anthropic has actually been seen as one of the leaders here and has had the revenue growth that just has not existed at any point in Silicon Valley. The thing about it is now that there's more cost pressure and more of a realization from a lot of CEOs that, while Anthropic may have the best model, they want to look to other cheaper versions. That's where the tension comes in and the threat comes in. Anthropic has figured out ways to monetize AI, but there are so many new entrants, this threat out of China. And also, we mentioned big tech, Microsoft is one of the companies out there, Google as well, that are trying to undercut on price. So they're seeing it from all areas. I should also mention, this is an almost trillion dollar company that's going public at some point in the next 12 months, we're hearing, and that's on deck. [01:00:06] Speaker 8: Kay Rooney, I'm guessing, knowing a little bit about Kay Rooney, that you use, you know, like Spotify and, you know, stream a little bit, right? [01:00:13] Speaker 10: Streamer, yeah. [01:00:14] Speaker 8: Every couple weeks, somebody's raising their price. Nobody's cutting prices. [01:00:20] Speaker 10: They are, well, it's interesting, they are, well, if you look at streamers and tech in general, they're trying to raise prices to raise margins. On AI, I would say the opposite. [01:00:27] Speaker 8: Shouldn't AI be the same thing, is my point, right? As it becomes more ubiquitous, raise the price. [01:00:33] Speaker 10: For consumers, so we are, as consumers, if you're talking to Chachi, PT, or Claude, the price has been pretty stagnant, around 20 bucks a month. For enterprises, they're really doing this complicated way of essentially charging enterprises, and that's been where the rub is. That's the most profitable area for these companies. [01:00:52] Speaker 2: Okay, so let's go ahead and start off with XLE, which is the energy sector ETF. It did decline a little bit today. The price of oil dropped a little bit, and remember this trend line that I talked about yesterday and the day before that? I created this back on July 22nd, and basically took the high here from that level and that level and drew this long trend line. Now, the problem is, yesterday, it did surpass, got above it, but what happened was the bears basically pushed it right back under that level of resistance, right? So as it was coming up, guess what? It was pierced again. Again, the bulls tried to push XLE up again, but then the bears pushed it right back under that trend line. So we've got a shooting star candle. This is a reversal candle. I'll show you guys what that looks like on this cheat sheet that I like to use. Let me show you guys that cheat sheet here. On my X page, it's under at Blue Cloud Trader. All right, you can find this X page here, my Blue Cloud Trading. Click on Highlights, and when you do that, you scroll down a little bit until you find this, which is the candle pattern reference sheet. Let's click on it, make it a little bigger, and let's take a look at the shooting star. So under the bearish column here, all right, what we're looking for is the single candle pattern. It's this specific. Let me just go ahead and put a square around it so you can see it better right there. So you see the long wick, a small little body, okay? That's what they call the shooting star. After price has been moving up, if you see that type of candle, expect price to drop, especially if it gets under the low of that candle. Higher probability, no guarantees in the market. Here's a few other single candle patterns that you may want to memorize. The Hanging Man, it looks like a long wick with a small body after a move up. The Gravestone Doji, it's a long wick with a small, I'm sorry, very flat body at the bottom. And the Red Spinning Top, that's also something to watch out for. Now, ironically, if you see that exact same candle, all right, any of these candles on at the bottom of a move, meaning price has been declining. And then you see that same candle, which it was back here was considered the hanging man. Over here, it's considered the hammer. So there's a higher probability it's going to move. They're basically reversal candles. And so it changes, or it should change the direction. It's a higher probability chance that it's going to change the direction of the move, okay? Same thing here. All right, let's get back. And you should definitely check out this part about understanding how candlesticks work. The opening, the close, the high of the candle, the low of the candles, the wicks. If it's a red candle, the open is up here, the body, and the close is at the bottom. And the wick, again, on the top, represents the high and the low. All right, so let's get back to the charts, guys. So XLE, I'd hold off on energy, this ETF, for the time being. On the weekly chart, you can see here, it's looking quite bullish. It's the only one of the ETFs and stocks that are mixed up in here that have a blue flag, because price is technically above all the correct moving averages and in the correct order. AXB, American Express, big gap down today, down 4.27%. It was holding up above the 200 yesterday, but it was still under these moving averages. Now it drops more. The momentum is increasing for American Express. See that volume also increasing? See the ADX moving up? That's the white line. That represents momentum. And the red line here, the negative DI9 is moving up. The green line is moving down. We don't want that. That's not a good sign. We want the opposite. When the green line is above the red line and the ADX is moving up, it can lead to a nice move to the upside. Next, AZN, which is AstraZeneca, under the cloud. It's in a series of lower lows. We do have a higher high here from the prior one. But it's still technically in a downtrend. I'd stay out of that one. BUG is the cybersecurity ETF. And so the Global X Cybersecurity ETF, it's under, I'll take that back. It just got back above the Kegens in the 26th period and it developed a bullish pattern called the bullish Harami right there. So we've got our large red candle followed by a small little bullish candle. Higher probability it's going to move up. But I wouldn't be adding a position because it's still under the nine period here on the daily chart. Let's look at the weekly. On the weekly chart, it's stalled right at the nine period. So nine period on the weekly. Let's take a look at, and if you guys want to see this pattern, again, just go to that patterns cheat sheet. You look under double candle patterns and there's the bullish Harami right there. Large red candle followed by a smaller bullish candle. Okay, let's get back. So here's CBRE. It gapped up. This is also another, a three, see these three candles that you see here? Let me show you guys what that is. That's considered, it's a bullish pattern. It kind of looks like a bullish abandoned baby. Okay, so do you see down here under triple candle patterns right there? The red candle, the small little candle. It gapped, so it gapped down, then it gapped up, leaving the smaller candle down below. All right, let's take a look at that whole situation again. It's very similar, right? So this is a bullish pattern. Gapped down, gap back up, leaving the baby down below. And now it just needs to break through this, the cloud here on the daily. What does the weekly look like? Well, it's stalling right at the bottom of the cloud. So I'd hold off on this too, right? We've got a series of lower highs, lower lows. You might get some bullishness next week on Monday potentially because of this pattern, but it's got a lot more difficulties above because it's got resistance to the 200 day. And you can see all this other resistance going on here on the weekly. So GPIQ is the Goldman Sachs NASDAQ 100 core premium income ETF. This one here for the last couple of weeks now has been dropping. Okay, so NASDAQ has not been performing well. Here's a daily chart. I would not be, I'm not quite sure why they're picking that as a final trade. You can see the symmetrical triangle that's been broken here. Technically, it's unsound. It's something that I wouldn't touch right here because it's still declining. IBM is also very bearish. It's under the cloud as well. You can see the lower high here. A gap down. It moved up 3.69%, but it just stalled right at that nine period. Nothing good going on here. Oracle, forget about it. It's still dropping. I watched Donnie Brasco the other day, so I was like, forget about it. You want to stay out of this one, guys. Stay out of this one. It's on a downward channel, and it's a very steep, steep decline that doesn't seem to want to end. Look at that red line. It's still above the green line. SLB, on the other hand, the energy sector, oil and gas equipment services, up 11.08%. Even though the oil stocks did drop a little bit today, this particular stock actually jumped. And so this one looks more interesting. You can see how it was finding support here and here on the 200-day moving average. It broke above this level right here, so it gapped up. It's a higher probability. It's going to continue moving. The directional movement index looks very bullish. The volume with this pop-up looks good. That's the daily chart. Here's the weekly. It broke above the nine period, so there's a high probability that this is going to continue to the upside. Let's take a look at the indices now. We're going to look at the SPY. Still in a box. Okay. Consolidating. Nothing happening. Up just 0.10%. That's the weekly chart. Here's a daily. Very bearish still. I mean, when I say bearish, it's just stagnant. Okay. The Qs are still declining. In fact, today, they dropped under the low of this 686.32. I'm sorry, 686.37. From this candle, going back to June 9th, this is what I'm talking about. Technology, which is what QQs are primarily made up of. I mean, there's a list of some of the stocks that are in there. Even Apple's in there. I mean, but some of these stocks are, okay, they're up today. But it doesn't mean necessarily that this is a strong area to be in. You look at the Dow, DIA ETF. That's looking interesting here in the daily chart. I found some support. Up 0.49% today. But it's bearish on the daily, for the most part. On the weekly chart, it's still holding above the 10%. Russell 2000 on the weekly chart, holding up above the 9 period, but still stuck in a box. And on the daily chart, same thing here. It's under the moving averages. The VIX dropped a little bit, 1.02%. It's at 18.58. So that's not a bad thing. We want to see the VIX dropping. FEZ is the Eurostoxx 50. It's inside the cloud. Again, just consolidating here. Gold is also still consolidating inside this box. It was down just, I'm sorry, it was up 0.10%. Silver is also consolidating, just up 1.02. Stuck in a box. Oil K is just entered the cloud. Again, this is the ProShares K1 Free Crude Oil Strategy ETF. Now, the majority of the day, oil was dropping from the open here. There's the opening price, and it dropped approximately. Let's see how long. How much did it drop? It dropped around 0.9% before recovering, and it moved up 1.03%. So that's interesting. It did gap down after hours, too. Let's look at the 30-minute chart. So right now, we did have a negative crossover for Oil K, and it's still under that 26 period. Bitcoin. IBIT on the 30-minute chart is underneath the cloud. On the daily chart, it's under the cloud. On the weekly chart, it's under the cloud. So Bitcoin is not something I would be touching. Ethereum is also under the cloud on the weekly. On the daily, it's inside. On the 30-minute, it's under. On the 30-minute, it's under. So no on Ethereum. COPX, which is the copper miners ETF. COPX is the ticker symbol, is inside the cloud. So on the 30, on the daily chart, it's under. And on the weekly, it's right under the moving averages. And that, folks, so this is going to be a short video today. But what I do want to do is quickly just tell you guys how you can support this channel. If you like what you're seeing, consider subscribing. It's free to hit that subscribe button. Make sure you also hit the notification bell so that if one of my videos pops up, you'll be able to find it up here, okay? And if you want to get access, I'll be putting out another members-only video this weekend. I do it every weekend. I go over my entire portfolio. I share about 20 to 30 stock ideas for the upcoming week. I focus mostly on the strongest sectors and industries. Today, there were some new industries and new sectors that started to pop up, okay? Because it was a bullish day. I'll be talking about those. Try it out for a month. It's not that expensive. $25 to become a Blue Cloud Trader, okay? So if you click on the Join button here, you click on this right here, Blue Cloud Trader, $24.99. And you'll be able to see four videos, four exclusive member-only videos each month under this level. Under Blue Cloud Legend, you'll also get those videos. It is a little bit more expensive, $49.99 a month. But what I also do is share my trades each day, all right? So once you become a member, you'll be able to access the posts that I post before the market closes. Today, I posted it at 1 p.m. I shared some of the trades that I closed out of and added. Okay? Guys, hope you all have a great weekend. Enjoy yourselves. You know, the summer is... We've got one more month, August. So have a good weekend. I'll catch you all in the next video. [01:13:51] Speaker 8: Bye. [01:14:07] Speaker ?: I'll catch you all in the next video.