tv Fast Money Halftime Report CNBC February 8, 2012 12:00pm-1:00pm EST
>> and i can't wait to catch you at 5:00 to find out what happened with the caesars ipo. >> that's it for us on "squawk on the street." "fast money halftime report" gets under way right now. melissa, thanks so much. four hours to go until the close. on wall street, major averages given a little bit back, modest losses across the board. dow down 39. s&p down by three. nasdaq off by almost six. gold and crude oil, we're waiting on this deal -- ideally it's going to come out of greece. we're watching the commodity space, watching the euro/dollar as well. wti at 98.50 right now. no cracks in the high-end luxury market. coach hitting an all-time high and ralph lauren as well. is there more room to run for these stocks? and the financial rally continues. bank of america pushing above eight. but are the gains getting too hot to handle? the traders take their positions
on two highly anticipated earnings reports at the close, groupon and cicso. welcome to the "fast money halftime report." let's start the trade. blackrock ceo larry fink says investors should be 100% in equities. let's find out if the traders agree with that bullish sentiment. what percent of your portfolio right now, b.k., do you have in stocks? >> very little. the only thing i have, as i mentioned on monday is i have the s&p calls, upside calls. but everything else i took profits on. i don't necessarily disagree with mr. fink. but since we've been up 15%, 20% off the lows, this is not the place to start buying hand over fist. you can buy stocks on a pullback and maybe this is going to be the only pullback we get. but you have to be very cautious here. >> a week ago you said basically just that, buy stocks hand over fist. >> i did. and i have been doing it. and now we're starting to get to a point where you have to be a little bit more cautious. you're seeing a lot of economic surprises.
the economic surprise index is near a ten-year high. you saw in the jobs report while it was good on the seasonally adjusted, three and six-month moving averages starting to turn over. there are some things that could surprise to the negative. i'm just saying you don't want to be starting positions here today. >> weiss, what's your trade? >> my trade is 75% depending upon the account net long equities. the reason is, i'm not looking to time it. i've taken some beta off. how it moves relative to the market, calmer stocks, easier moving stocks, more value stocks than high-test stocks because there's a flood of liquidity coming. and i'm not seeing cracks in the bond market. but credit starts are getting fully valued. when that gets fully valued, the assets go into equities. >> cortes, how do you see things today? >> scott, i'm not in mr. fink's camp here. i think asking larry fink and blackrock, one of the largest equity owners in the world, if they like stocks is sort of like
asking silvio berlusconi, do you like women? we know what the answer is going to be. if you look at a chart of the s&p and put it with blackrock's stock, it looks almost identical. mr. fink has had a tremendous career. i have admiration for him. but i remember an interview on this network in june of 2008 when he said -- he was talking about lehman specifically. he said that lehman had plenty of liquidity, that it was not a bear stearns situation and he said we were near the bottom -- >> let's move beyond sort of that. i don't want to get into either finger-pointing at larry fink or the fact that he may be talking his own book. its irrelevant for this conversation. the fact of the matter is, do you think with the view that equities are a better place to be than bonds? >> at this point, no. i think saying the s&p which has now doubled off its crisis lows, that now is the time to be all in. i think it's very poor advice.
>> brian stutland, are you in stocks? >> one thing we're doing is using a little caution. weiss makes a great point about beta and understanding your risk relative to the s&p 500. what we've been doing is overwriting these stock positions, selling ca still playing for a 4% or 5% up move in the market. selling calls 4% to 5% to the upside. i think the market still has some legs. we've seen nice consolidation where the market's not gapping higher. it's very controlled. a lot of liquidity coming back into the system. i think that's still bullish for equities. you just have to be worried. another 4% or 5% to the upside, you have to reassess that beta risk to the -- >> keep in mind, larry fink is one of the largest managers of fixed income in the world. he's agnostic in terms of where money goes. i try not to focus where the stock has gone from but where the stock is going to.
that's how i'm going to make money, not crying over spilt milk or not crying over things i miss. when things ramp up significantly, you have to take some off the table, which i did, which is why i went to lower beta. >> our next guest disagrees with the world's largest money manager. jeff killber joins us. >> all due respect to larry fink and blackrock, being 100% in anything is not the nimble, prudent way to navigate through these markets. if you rewind a couple of months, we had volatility in the trading environment. right now, i think the bond market continues to indicate volatility moving forward. therefore, i can't be all in in equities. >> irregardless of that, the fact of the matter is, you still think yields are going to go lower, that know that treasuries aren't too expensive. >> let's keep knit context.
we have a big ten-year auction coming here. the ten-year's at 2%. we still look to europe for the headlines. right now, the ecb has put an enormous amount of liquidity into the system via that ltro. at what point does that liquidity get deemed by the market -- at what point does bubba come knocking on the ecb's door? >> you can buy both bonds and stocks here. in fact, the lower bond yields go, the better for the stock market. the federal reserve has said, your cash is going to lose 2% over the next year. as long as bond yields are at 2% or below, that's very bullish for the stock market and the fed is going to keep that 2%, effectively what they've done is cap ten-year yields at 2%. you can buy bonds here. i'm long bonds. you can buy tlt right here to that. >> you wonder what happens if the stock market starts to pick up a little bit more steam whether you get a heavier
rotation out of bonds into stocks f that really worse. >> that's the reason for the heavy rotation into stocks. i believe there's going to be more q.e. because the economy is weakening. >> judge, i think you're absolutely dead-on. it's about asset allocation. that money has nowhere to go for return but in equities. it's been very, very long in coming. people looked for it last year. starting to see money, net inflows into equity funds. my guess is it picks up steam because people can't pick up their 401(k)s or the monthly bond statements and see, i'm not earning anything. >> killer, i think ultimately the bottom line of larry fink's point is just that, it's the exact point that stephen weiss is making. you're not getting any money or return in any of the other asset classes so you better be in equities because it's the only place you're going to see it, his take. >> well, judge, i've had this opinion. we've talked about it on "fast money" the last six months.
there's a rotation out of treasuries. but you can't fight the fed. bernanke's commitment to keep the rates low for some time -- yields are going to go back after that. as soon as we see a headline, we need a catalyst for them to come in and grab these treasuries. right now, they need to keep the costs low. and the fed is committed. he's not taking his finger off the trigger >> that's exactly the point. there's lots of money on the sidelines. i don't even think you need the rotation, although i expect it. i think money comes in off the sidelines into equities. >> that's why you can buy both of them. >> i'm bullish treasuries. we have a critical auction coming up. >> ten-year. >> yes. since labor day, the ten-year stayed essentially unchanged at 2%. stocks have gone up 15% since that tom time. stocks have not rallied at the expense of treasuries. in fact, they've rallied to the expense of other bonds, of high yield. they've drastically outperformed credit markets but not treasuries. that tells me particularly if
you want to play risk-off, the way to do it primarily is not by shorting shares but by buying treasuries. >> what's scary about what the fed is doing, they're making people take risks. it's working now. it's going to work until it doesn't work. that's why you have to have hedged positions and be careful. volatility can certainly spike. vix futures all the way out to june trading at 25, well above where the vix index is right now. people expecting some volatility. maybe this summertime, you have to be careful. >> good stuff, guys. killberg, good to see you in the house. morgan stanley soaring about 60% since the end of november. but one analyst says it's time for the stock to cool off. colin stewart's analyst made the call and joins us on the "fast line." is that what this boils down to, stocks had a great run, get out now? >> we haven't cut to it a sell. when we upgraded it to a buy in mid november, it was trading at,
i think, about .4 funds. and given the run we've had since then, it's now trading relative to its -- what i would call its global peer group. it doesn't offer exceptional valuations anymore. we've got a target price of 23. that still gives you about 14% upside. i think the banking sector still has upside in general. but i would just expect morgan stanley to trade more in line with the sector going forward here. >> i'm glad you made the point. you have raised the price target as well even though you're downgrading the stock to a hold from buy. got a number of traders who want to get in on the conversation. weiss is one of them. >> yeah, frankly i've never seen a stock underperform where consensus estimates are low. your estimates are higher than consensus. so if your estimates are right, you're going to be wrong on the stock. how do you explain that disconnect? >> well, i look at it in a global context. i am a little bit higher on consensus right now. but i look at the reporting
season we've just been through. i look at my returns over the coming two to three years. and i simply see more value in some of the european names, at least in one other u.s. name at the moment as well. >> i'm looking at your picks here in terms of u.s. names. goldman sachs is at the top of your list, right? >> goldman sachs is my only buy in the u.s. right now, yes. >> make the case why we should own shares of goldman here. >> goldman, again, as i look at it in the peer group, it's a relative value call. i've got better valuations on goldman. not a huge difference. not a tremendous amount of upside. but yo if you look at, at least my forecast, the return on tangible shareholder funds for morgan stanley, 2012-2013, i'm only up about 8.5% to 9.5%. goldman, more in the range of 11% to 11.5%. may be trading a little bit more expensively than morgan stanley
on that multiple but it's more than justified by the better returns i see there. >> matthew, great to have you on the show. thank you so much. >> thank you. >> let's trade the banks here. cortes, i'm going to you first. correct me if i'm wrong, yesterday you said that if bank of america hits eight bucks, you start shorting it. >> yes, sir. >> do you put your money where your mouth is? >> i did short it. i'm a tiny bit under water right now. >> that's my guy, cortes. want to make sure you followed through. >> this is my nicholas bradford eight is enough trade. i think this stock has run enough. my bet, this is very much the same bet as treasuries. i'm hoping jeff is right on treasuries. if yields stay low, i think the yield curve is a serious problem for bank of america. the stock's had an enormous run to the upside. i've been patiently waiting for it to hit eight. it finally did. the risk/reward is tilted toward the short side. if you're willing to risk it to 8.25 or so, i think we have a chance to get back into the low
sevens. >> way to follow through on that. what do you think? >> i'm not in the banks at this point. i'm waiting for just an opportunity to get in because they have run despite what i said to cortes about not where they've come from, where they're going to. >> i've been in the regionals and xlf for a while. i sold those all on monday. that was more just because they've had so much of a run. you're going to need another catalyst to say here's the next place these banks can earn some money. >> and you were beating me like a dog last year when i owned jpmorgan. so i'm a little gun shy. i don't want to make the wrong move here. >> how about you, stutland? >> we're all in agreement. just yesterday for clients, we sold calls on the xlf after a nice move up, specifically the june 16 calls. it's a time to take profits in some of these napz. i find interesting the life insurers, the met lives of the
world, the lincoln nationals, these stocks got hammered after the federal reserve came out and said they were holding interest rates low. people worried that life insurance wouldn't be able to make do on some of their policies. but the stocks have reversed. i'm still in lnc and met life. but i'm looking closely to see if analysts change their estimates. >> take a look at shares of computersciences today. surging more than 17%. almost 18% here on better-than-expected earnings. steve weiss, you've been talking about this all morning. >> yeah, computer sciences, i owned the stock. i sold it around $27. but the consummate value play. horrendous ceo. now the news today that mike laurie comes in as the ceo. he's a 27-year ibm veteran. here's where it gets interesting. he was a ceo of a company in the uk.
it sold their health care to all scripts. i think there's a possibility all scripts can be acquired by csc. >> you think that in part has something to do with that chart we see there and the spike in the shares? >> the shares are spiking because of the ceo and the quarter wasn't that bad. it's a cheap stock. same space as ibm services. same space as accenture. i like the stock. next on the "halftime report", we have a lot to trade. more on the "halftime" show in just a second.
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welcome back to the "fast money halftime report." high-end retail appears to be holding up quite well. coach hitting an all-time high and ralph lauren shares surging after posting better-than-expected earnings suggesting the troubles that tiffany's flagged aren't a broader consumer problem. let's bring in michael binetti. does this report put to bed any of those concerns about a
blanket issue over the high hef end consumer that tiffany's seemed to rise that, that was more of a tiffany's problem, that the high-end retailer is holding up just fine? >> i think that's safe to say. they had very strong holidays. >> forgive me for interrupting. i know you don't cover tiffany. but you cannot tell me the day that tiffany came out and gave the report that they did, that that didn't spook you a little bit based on the companies that you do cover. >> it did, in fact, in early december. we were a bit concerned about that. but as the month went on, the channel checks -- the industry people we talked to said the trends had been better for names like ralph lauren and coach. that became less of a worry for us for the high-end consumer at that point. but it was a worry early on in december. >> what's ralph lauren doing right? how are they holding up? >> they've invested heavily in the brand over the last ten
years and they're starting to bear some of the fruit from there. they're taking share in traditional u.s. apparel. new businesses are coming online with handbags and footwear. they've been investing heavily internationally for the last decade. that has been -- that is starting to bear fruit for them. they have a hell of a good growth opportunity around the world at this point compared to the peer group. >> they're looking for a flagship location in hong kong and beijing and shanghai -- or shanghai as well. is the bulk of their international growth r they going to be more exposed now in asia? is that a good thing to be going there where perhaps china is slowing down a little bit and how much exposure do they have to europe? >> they have about 20% of their business coming from europe. that's still growing in the low to mid teens in europe. that's still very much a good middle ending story for them. and then in asia, they're just getting started there. less than 10% of their revenue is going there. they've been buying back
licenses from licensees and putting their capital back to work. they actually bought back europe from a licensee around 2000. that's been a wonderful story for them over ten years as they've invested in that as well. >> is the bull case intact for coach? the noise surrounding coach, was it a little bit overdone? >> i think it has been a little bit overdone. the stock is pushing up towards its all-time highs. they have a great growth story going on in china right now. they're getting some success going with extending their brand over to men's. there's some slowdown in their business in the factory outlets in the u.s. but otherwise, they have a really good global story going on for that brand as well. >> michael, thanks for coming on. cortes, if you take a look at what ralph lauren had to say, this sort of flies in the face of your high-end retail story, sort of falling apart? >> i'm no longer on that theme. i have no positions in equities. i the lel you coach and ralph
lauren tend to be extremely stock-market dependent. i'm not surprised these shares are doing well. if you're bullish the market broadly, you should be long these names because you tend to get a higher beta version of the s&p being long them. i will say on the bearish side, what worries me most about the retail sector is the performance of amazon which used to be best in breed. it's a company i still like fundamentally. but the technicals have really broken down there. when i see that kind of disparity of the high-end shares trading well, it tells me the sector is a bit of a puzzle and just stay away. >> doesn't it tell you that amazon has issues they're trying to deal with. they're spending a lot of money, sacrificing short-term profits for what they expect to be long-term benefits. you can't tell me that what's going on at amazon is a referendum on all of retail. >> it's not a referendum. but it's important to note. what i'm saying is you have data points on each side. on the bull side and the bear side. on the bear side, tiffany,
abercrombie & fitch and amazon. but because you have such strong arguments like ralph lauren and coach on the bull side, it tells me that's not a place to play. retail, i should point out, is a sector that is full of dispersion meaning it does not trade monolithically the way xle, energy stocks tend to all go up and down together. within retail, there's a lot of disparities. >> which is a great thing for a stock picker. i own nordstrom. i wouldn't own jcpenney because the stock's already reflecting success in the turnaround and you have ron johnson who is selling stock. if i owned that, i would definitely sell. it's too tough in that space. nordstrom, however, that's a unique offering. macy's also luxury is another good one. time now for "pops & drops," sprint dropping 2%. b.k.? >> yeah, the iphone actually cost them. be careful what you wish for here. costing too much to have the
iphone. that's the story of a lot of different places. stay away from sprint. >> it's the overarching story here. you have to have the iphone but it's a lost leader. a lot of subscribers, but paying a hell of a lot of money in the subsidies to have the iphone. western union dropping 8%. >> they guided lower for their 2012 earnings. the stock's getting hammered. one thing that's interesting, the shares traded over 17 million shares already today. a huge washout. i think if the stock can hold this 18 level f you're a day trader, maybe you get a little bit run back up towards that $19 level after this big washout. we'll see if it holds by the end of the day. >> cortes, you're shorting silver. but that's probably not why it's down 1 percent, right? >> no. it's down because the dollar's finally gotten off its back. i did short the euro currency this morning up against 1.33. i do think that it's rallied enough, the euro currency has, that we probably cleaned out weak shorts if the dollar is going to recover here, silver
and gold are vulnerable. >> a pop at13% -- >> we talked about it before. this is a health care technology space which helps service providers and health care digitize their records. the government has a $30 billion subsidy to help these providers to it. great space. this and all scripts. >> a pop for the lager flat -- i guess that's how you say it. iceland is buzzing over a water creature that looks a lot like the loch ness monster. eerily similar to the monster similar to the loch ness monster. i don't know. doesn't look fake, does it? >> it looks like your sewage ran over, if you ask me. next on the "halftime report," groupon soaring almost 20% in five days.
but is the stock too hot to handle. ? a bull and bear battle it out next. with a new view of the market, you could see an investment opportunity you didn't see before. fidelity's next generation ipad app lets you see what's trending around the world, as well as what over a million fidelity customers are trading throughout the day. and advanced charting lets you customize your views and set up your own comparisons. our ipad app can help refine your strategy or even find a new one. i'm velia carboni, and i helped create fidelity's next generation ipad app. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades and explore your next investing idea.
"halftime" show. let's check on three of the top trades we're watching halfway through the show. first on our radar, caesars entertainment, huge pop after pricing its ipo at the midpoint of the range at nine bucks. this is just off the highs of the day. this is a crazy ipo, up 81%, weiss. >> it is crazy because there's no float. they tried to do it last year. they couldn't get it done. some of the minor partners wanted liquidity, which is why they did it. i'm not sure i would play it. if i bought in the ipo, i'd be getting out. >> a lot of shares have already been flipped numerous times. >> the liars and the buyers. they went to buy them, but they were lying. >> second on our list, rambus announcing a deal with nvidia. rambus always involved in a contract dispute. >> if you are long rambus, take profits. i don't like the headline in this stock. >> and wti crude holding above 98 bucks a barrel.
substitu stutts, what do you do with crude? >> the asian countries are making compromises. eau would make up for lost supplies coming out of iran. crude spiked a little bit but not aggressively. crude continues to -- economies worldwide start to reaffirm themselves in a growth mode. you could see oil move higher but not significantly. >> groupon shares up 20% in the past week alone. but is it too hot to handle? joining us is jeff houston, he has an outperform rating and a $30 price target. on the bear side is rick summer. he says sell groupon. his target is eight bucks a share. gentlemen, good to have you both with us. jeff, perhaps -- maybe you have the harder case here to make just based on the fact that i
know i have a lot of naysayers on groupon sitting around the table in our traders on the panel today. the stock's had a nice run. why do you think that it's justified and that it can keep going? >> hi, scott. thanks for having me on your show. and it's good to meet another chicago tech analyst. the way i think about groupon is much like over innovators on the web, such as amazon and google, groupon has created a brand-new business category called discounted group purchasing. and it's really a platform that connects local businesses with consumers. and one thing that stood out to me during my due diligence process is that 65% of groupon's revenue is generated outside the united states. it has a presence in 46 countries. it has a dominant number one market share in most of those countries. so i think there's also a significant upside potential to both the topline revenue and
bottomline eps. if you look at -- think about revenue, for 2011, we project $1.6 billion of revenue, that's up 400% year over year. the street consensus for 2012 is -- the growth rate is one-thent of that, about 40%. that's extremely conservative, especially given groupon's dominant global market share lead -- >> let me get rick's take. give me something i don't know about a risk on groupon. everybody says there's no barrier to intri industry. that's one of the -- the competitive threat is out there. what else do you see? >> one of our concerns we're going to look at in the quarter is this category mix issue. i think certainly connecting local businesses to consumers is valuable. we have some assessment on that. but as they get into groupon
goods, groupon getaways, that's a much bigger concern. it's a different profile margin long term. but more importantly is macy's going to need to run a groupon two years from now when they're still doing it today. we don't see a big repeatable business in these other new categories. the value proposition is just substantially different. we're seeing what we think to be declines or much more stabilization around pure local deals at the same time, at least in north america. >> rick, it's steve weiss. do you have any concerns about management, andrew mason? i see him on youtube, not willingly, but saw him on youtube in his underwear playing air guitar. away from that, what about his management style, his ability to run this company? is that an issue for you? >> it's a great question. i think the question is, if it's not andrew mason, who would b it be? who has the moral authority to run that business and who really has, quite frankly, the patience? they need a heavy investment rate to lock in these merchants. that's a way of saying, we may not be excited but we're not going to indict the man as well.
you have to look, these guys have made some incredible -- had some incredible momentum and they've done a really good job thus far. we don't see a $20 price on this thing. >> jeff, question for you, it's brian. you threw out these numbers that are an incredible growth story. what i know about businesses like that, everybody wants to get into that business. so on your $30 price target, do you have anything built in for competitors coming in? what's to stop a macy's from just running a discounted group buying opportunity just for macy's only? >> right. so the way i look at the competitive landscape is there are hundreds of small groupon clones. and these companies are dropping like flies. so really i think the way the industry is going to shake out in a couple of years is there's just going to be two, maybe three players in this kind of group purchasing space -- >> why are they dropping like
flies? wouldn't groupon be subject to the same thing? >> one thing management says, which i think makes sense, is that there are low barriers to entry but high barriers to success. and groupon really has a significant scale advantage. another thing that surprised me about the company when i dug into it a bit, it has 11,000 employees. it has almost 170 million subscribers. it has relationships with over 250,000 merchants around the globe. it's just incredibly difficult for a small start-up to replicate that. >> guys, thanks so much, jeff and rick. what's the trade on groupon? >> i'm a little leery of groupon, personally. i think there's other areas of social media, networking type areas to get into. one of them, google, having such low valuations and such huge cash amounts on their balance sheets to get into some of these areas. i wonder if google becomes a competitor of groupon.
i'd rather stick with that a name like that. next on the "halftime report," two stocks went soaring, one plummeting, both lighting up the twitterosphere. we'll reveal the stocks and the trade when we come back. ♪ our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter. if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that. [ jocelyn ] my name is jocelyn, and i'm a cancer survivor.
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america's beverage companies are delivering. welcome back to the "halftime" show. let's find out the top tickers traders are watching on twitter. for that, we go to herb greenberg who's always plugged into the chatter on trading floor and now the twitterosphere. >> if you take a look at the number one and two stocks getting talked about, number two, buffalo wild wings, which is kind of interesting because this is a company that came out, beat the number. people went absolutely bonkers for it. but the beat was all based on tax rate. but this is one of those companies -- i really have to think about how i want to view it. and i look at one of the reports from deutsche bank today. the analyst has words that are interesting. he talks about the levers management can use going forward with things like menu costs. they could buy back -- buy more
franchisees. i've learned over the years, as long as a restaurant chain or retailer can open stores, we can have all these slicings and dicings and for some reason wall street will overlook the quality issues just to the store -- >> aren't they raising prices, herb? the fact is, if chicken wing prices are going up, that would be one of the biggest issues. >> that is their biggest headwind, yes. >> if they're able to raise prices, which they have been, how's that negative? >> it's not a negative until it is, until you see how traffic count is. right now, it hasn't been an issue. maybe it will be. but when you're telling me that you're gaining your revenue through menu price increases, you know, there's only so far that goes. this is more of a -- >> but, come on, herb, it's call pricing power, herb! >> that's a good thing if you can raise your prices on your customers -- >> herb, would you feel better
if they weren't able to raise prices, if they had to take price cuts? would you become a bull then? >> it's not a question of being bull or bear. noif opinion on this company. i was more galvanized to the fact that people got a beat that was not really a beat. >> so you hate pleasure? >> don't we have another company to talk about here? >> opentable. >> number one most chatted company right now. what about it? >> open staibtable, it's a good company, done well. let's take a look at this. the company's beat wasn't really a beat. basically a company that's cutting expenses. but look at every operating metric here. this is a company that -- metric per metric per metric is going lower, lower, lower. this is a company -- you and i as customers effectively, we don't care whether we use an opentable or urbanspoon's product. we don't care. >> i don't know. i disagree.
i use opentable all the time. >> come on, scott. you don't go to it because it's opentable. >> it's the first place i do go. speak for yourself. >> a restaurant will go to the provider that provides them the lowest cost. by the way, to keep restaurants, they're lowering their cost to the restaurants. >> herb, it's cortes. question for you. i'm with you on opentable. one of the most troubling things to me over the past year other than the fact that the stock's been cut in half is the fact that insiders have been selling. the sell-to-buy ratio is skewed heavily to insider selling. but in this new year in 2012, this stock is emblematic of st stash for trash. is today the time -- we're traders here. is today's break the end of the momentum on opentable? is it finally time to fade the 2012 rally back? >> you'll have to make that decision because i'm not the trader here. i'm trying to point out the
issues. take a look at a spreadsheet. the spreadsheet tells a heck of a story. >> and piper jaffray upgraded the stock up to overweight. he said, we expect a momentum in restaurant customer adoption and accelerating diner trends to continue over the next few months. >> two analysts -- if you want to play the upgrade/downgrade game, two analysts downgraded it. >> i'm so with herb on this. i think if stock should be sold. i don't think the restaurants care who they use. you may care -- >> i'm not saying it should be owned or sold. i'm simply presenting the other side of herb's argument. >> because you love it so much. >> herb, you make it easy. see you at 2:00. next up on the "halftime report," after a roughly couple of years, do investors have a renewed faith in cicso? we're taking positions ahead of that big, big earnings report when we come back. spark cash gives me the most rewards of any small business credit card.
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you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. coming up next on "power lunch," is it too hot to handle, bank of america? we have both sides of that story. and a big earnings week for big tobac tobacco. can you win on sin? and forget stocks, see why fine art may be your finest investment. that's next on "power lunch." now back to scott on the "halftime report." >> let's get over to steve liesman with breaking news on the sale of maiden lane to goldman.
>> the new york fed sold off $6 billion of assets -- sorry, faced value of the assets -- to goldman sachs. goldman was one of a number of bidders. the bidders by name, credit suisse, morgan stanley, rbs and barclays were all bidding. goldman bought $6 billion of assets from the maiden lane ii portfolio, this was as a result of the aig. they made a $19.5 billion loan to aig. that's been paid down. there was a $7 billion face value sale of assets along with this $6 billion one. and what the fed is saying is that is enough now to pay off the whole $19.5 billion loan, which obviously had somewhat been paid down. the reason i'm talking a little bit in code is we don't know what the actual proceeds are of the sale. we're telling you the face value of the notes that were sold. we won't get those until, i believe, the first round in april. our ace breaking news editor
here, peter, said this is nice. it's like tying up the loose ends. it's good to be alive that they're tying up these loose ends now. this is from the height of the hysteria of the financial crisis. >> steve, brian kelly has something for you on that. >> i have a question. if they released what the assets were and if they were the mortgage-backed securities, that they're going to buy back in q.e. 3 in a couple of months? >> they did not say. but these are residential mortgage-backed securities. that's what's in the portfolio. my guess is these are generally maybe not the best of the best of residential mortgage-backed securities. >> it's like a repo trade. the banks buy it and sell it back to the feds in six months. >> that could be i'm not sure in these assets are going to qualify for repo at the window. i don't know the quality of them. it was a question as to whether or not the fed should buy them at all. i imagine they are highly rated assets. it is disclosed somewhere. i'm not sure right now with the quality of those portfolio.
>> steve, interrupt us anytime. >> my pleasure. especially when the government gets out of some of these assets. next on the "halftime report," we'll trade cicso ahead of its earnings after the break. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
for cisco ahead of today's results. where are we going? >> up to $23. there's still room for cisco. dinosaur tech has come roaring back, up 50% since august lows. what we're telling our clients is look for earnings to be growing more than twice as fast as revenue. the company's taking market share and switching. they've done a great job of cen knewty. >> given that it's up this year, chambers has little margin for error. >> absolutely. but if he delivers on these results, he's safe in his seat. you have to remember with cisco, it's not just the results, it's the guidance he's going to give and he won't do that until 4:30. >> that will be closely watched. my traders all want to get involved. any one of you guys, steve weiss, first. >> it's truly old tech. it's no longer the bellwether for technology. businesses are more commodity businesses. i think it's had a big run. i would rather put my money
elsewhere. >> kyle, are there other names besides cisco that may continue to be leaders and outperform in the tech world? clearly cisco was in the fourth quarter of 2011 it led tech out of the doldrums of september and clearly looks great going forward. but are there some other names that you can continue to own rather than a cisco and play the good old blue chip tech companies? >> sure. your option would be microsoft. capture a bigger dividend. when you look at cisco, you have eesz si compares coming up for the next couple quarters because the company was in the middle of restructuring. >> not only that, but you can sort of hear it in the commentary if not the trades of my guys. they seem skeptical, right? on cisco. one guy's asking you about other plays, weiss is saying it's truly old. he's not liking it either. i mean, is it possible here -- and i guess i'm going to try and agree with you that, look, government spending may be better than expected, not as worse off than some people fear. that could be a material positive here as well. and overall technology spending in an improving economic
environment could be a positive as well. are some guys being too quick to writeoff cisco? >> absolutely. i think that's why you're going to get that -- you might get a little pop when they print a good earnings number because you have to remember not only are they doing op x controls but they've done a very good job of cost engineering their products to help drive gross margins. john chambers has been signaling that over the quarter. >> let me try to ask this another way. if dinosaur tech is cisco and it's dying, then what could cisco buy? who could cisco buy, to revive their product cycle? >> yeah, well, you're not going to see anything big, right? if there's anything that's come out of this restructuring is no more grand efforts to penetrate into the consumer marketplace. focus in on your knitting which is the underpinning of the internet. we call cisco a dinosaur, but let's be real. the internet of things, all the connectivity of devices, that's still exploding and cisco's smack in the middle of it. >> what's the biggest metric to
look at today? margins? >> yeah. gross margins. >> final comment from you because i know yahoo! is in your universe. this board shakeup, i'm sure it was expected in your world. what do you think, does it make a difference? >> so anyone who think ths board shakeup means there's a greater likelihood of a deal, you might want to think other siwise. if they do stamp a deal, it won't be one investors like. the other part is the asian assets that they're trying to spin-off, that process is going to take at least a full year before any of that cash and assets hit the balance sheet. so yahoo!'s in for a difficult 2012. >> interesting. great to talk to you as always. >> thank you. >> let's trade first cisco, cortez, and then yahoo! >> scott, i'm completely with collin. by the way, when he says dinosaur tech, i think he just means old tech. i don't think it's a dinosaur in terms of actual technology. but when you look at microsoft, cisco. >> ibm.
>> these have been the leaders the last six months. not google or oracle. i think you want to continue to stay with these. i completely agree to him. but we have some bad trade data out of germany today and a lot because they weren't exporting very well to their neighbors because of austerity in places like italy and spain. very curious to hear what cisco has to say about international spending. >> final trades when we come back. to think about your money... ♪ that right now, you want to know where you are, and where you'd like to be. we know you'd like to see the same information your advisor does so you can get a deeper understanding of what's going on with your portfolio. we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement.
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final trade. kick us off. >> i'm looking to buy put spreads so i can stay long this market and have myself hedged. >> cortez. >> put the crown back on king dollar. sell the euro. >> b.k. >> treasury auction in 30 seconds, tlt use 115 as your stop. >> weiss. >> i heard nobody talk about mcdonald's today. wasn't anybody impressed with their comps? >> very impressed. >> it just can't be that way.