Fed and Tech Earnings in Focus 7/29/26

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The board recommends approving...

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Regarding that seat on the committee, we're promoting...

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to boost quarterly earnings...

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**Scott Wapner** (0:56)
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All right, guys. Thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour. What a day ahead. The Fed meeting, earnings from Meta, Microsoft looming so much more happening in these markets today. We're trading all of it, of course, with the Investment Committee and joining me for the hour, Joe Terranova, Brent Talkington, Steve Weiss, Kevin Simpson, to the markets. We're getting hit pretty hard here, 12 noon in the east. That is the picture today with Dow down one and two-thirds percent. The S&P is now off almost one percent. NASDAQ selling has picked up a bit. The chips are getting weaker as we speak. And part of it has to do with the fact that there's that big spike in crew that you saw at the bottom of your screen, at least where some of the green on the board is today.
Sarah was just talking about yields. We're watching all that. There's the chips picture at 12 noon. So we do have one heck of a day. And as single days go, this is a pretty big one, with everything that's looming in the hours ahead.

**Steve Weiss** (2:04)
Well, it's big for me personally because of Microsoft and Meta. Yes, the Federal Reserve is critically important. Is there a surprise there? We'll see. The market will react one way or the other to a significant surprise. But back to Microsoft and Meta, clearly the theme has been about capex. We heard that last week with Alphabet. For the first time, they were free cash flow negative. Obviously, the street punished them for that. So each one of these stocks, Meta and Microsoft, I utilize momentum as a factor and a strategy. Neither one of these names, Scott, whether you're looking on a 12-month basis or a six-month basis, can be defined as a momentum stock anymore. Let's get that out of the way.

**Scott Wapner** (2:41)
Take Microsoft first. I mean, everybody on the desk owns it. So there's a lot at stake. Obviously today, Brian, the stock's underperformed. It's the worst of the hyperscalers year to date. Maybe that limits some of the downside, as some are suggesting because it already hasn't done anything. There are a lot of questions out there. If they're going to raise their CapEx guide, are they going to maintain their guide on Azure?
That's going to be a really interesting dynamic to watch. If they don't lift cloud and they lift spend, stock's probably going to get punished. But how do you see it here?

**Brent Talkington** (3:14)
First of all, you have from a momentum perspective, it's below the 200, 50 and 100 day. So it's the opposite of a momentum trade right now. The stock is making lower highs and lower lows. So that is not a good setup. I don't think in any, going into any earnings report of being, let's say, washed out. I think that whereas Google Cloud grew at 85% year over year, albeit it's much smaller than Microsoft, I still think that the jury's out because ultimately, I'm still reflecting on, you know, China clearly owns the open model.
Okay, and with Kimi spending whatever, we obviously know they're probably distilling, entropic, et cetera. Nonetheless, they are crushing it on their open models. I think the question that we're all dealing with is, what the heck are these hyperscalers spending all this money on? And what are the results? Because I think whereas Google, you have these verticals of their chips, YouTube, et cetera, et cetera, we use co-pilot and co-work, it's still mediocre. And so to me, I think when you have these Chinese models working very well, very inexpensive, the US models, especially Microsoft, is still quite clunky.