tv Fast Money Halftime Report CNBC May 1, 2012 12:00pm-1:00pm EDT
the dow 30 are in the green, and the only one in the red is pfizer, which is just barely in the red after a pretty negative earnings report out this morning. we'll talk more about the rally as the day goes on. that does it for us here. let's get back to hq and "the fast money halftime report." >> carl, thanks so much. four hours to go until the close, and here's where we stand on a day where the dow hits its highest levels since september of 2007. take a look behind me, you will see the green. the dow industrials up 117 points, highs of the day. the s&p 500, there it sits at 1,414. needs to get to 1,419 to meet the dow in the highs since 2007. tech, energy and financials leading the way today. let's look at gold and crude oil as well. you will see a similar story here. both are higher on this day. let's get to the top stories we're following on "the halftime show." stocks hitting a four-year high, but are there names you should be selling in may? we're talking to the analyst who downgraded april's highest flier, expedia, to sell. changes at chesapeake.
aubrey mcclendon out as chairman, but how should you trade the stock ahead of its earnings report? and hot money. is latin america your best investment bet right now? we're talking with blackrock's will landers about his favorite stock picks. welcome to "the fast money halftime report." lots of trade. let's talk to the traders now. i sure hope they didn't sell on this first day of may, pete najarian, because when the ism report came out and it was better than expected, the market started to move higher. >> absolutely exploded to the high side. look at the volatility index. the latter part of april, we started to slip underneath the 50-day. we're back there again. just for a number look-up, 1710 on the volatility index. we're wl below that now, trading in the 16s. but look at big-cap tech, look at coal, look at the copper names, the steel names, the participation. even yesterday on a down tape, look at some of those coal and steel names, some of that participation from names like peabody energy. take a look at southern copper, walter energy. a lot of these names have been
performing. but big-cap tech, going to and through highs. intel, ibm, all across the board, microsoft, you're seeing great performance. and these are names that have performed already, so you're right, don't sell in may and go away. >> checking financials, bk leading the way today. they were absent in april, but will they be the leadership story here if it's not sell in may? >> yeah, i think they are, particularly big-cap tech because you have a couple different factors there. you have, one, companies trying to increase their productivity. we've already seen that with ibm in their earnings. and then number two, they're certainly heavily exposed to asia, which is really the growing area of the world right now. so, i think that's absolutely right. and on pete's point about the vix, the one thing that the market hasn't priced in here is a melt up. everybody's so worried about this huge deflationary event, but bottom line is, the economic news isn't that bad. things are pretty good. >> you certainly haven't factored in a melt up. >> well, i came into the day long. by the way, happy may day.
i am celebrating this socialist holiday in the paragon of capitalism, the new york stock exchange. and it has been a good start for capitalism in may and i came into today long, but i'm not nearly as excited about technology as my comrades. and the reason, and you know, brian, i guess i would challenge you on this when you say that asia is the growth driver. i think, in fact, asia is the problem and the asian stock markets certainly have reflected that. i think that's why we saw the royal bank of australia last night lower rates much more than expected -- >> but that's not because of tech, cortez. that's because of coal and commodities. i mean, australia's got itself a case of dutch disease. that has nothing to do with technology. >> well, i would argue it does, because i think it means weak asia and i think that means be careful about technology -- >> listen -- >> didn't -- [ everyone talking at once ] >> didn't apple actually tell you something about everybody saying there's no way apple's going to do well over in the asian markets, there's no way they can penetrate into china? they still don't even have an actual carrier over there, and yet, they blew the doors off. and when you look at the numbers coming from the asian markets,
they were extreme. so, i don't really fully understand what you're talking about, that asia's going to be the pullback as far as the market's concerned -- >> maybe for industrials. you've gotten some commentary about china from the industrials, korcortez, but i tk pete's right on. >> yes, talk about the industrials, emerson electric gapg down just today, as a matter of fact, their ceo citing and talking very bearishly about china, saying things have changed materially in just the last 90 days. on the apple thing, i think it's also important to note that foxconn's parent missed earnings huge over the weekend. so i think we're getting divergent signals even in technology from asia. look, i am long the market here. i'm just saying that i want to be long in what i think are safer areas. i want to be long dividend names. i'm very long pharmaceuticals, very long energy. both are doing great here. but with a ten-year yield below 2% -- >> if you're long energy, you have to be bullish asia. that's where the demand's coming from. >> not necessarily because energy has so vastly underperformed. if you look at the xle, it's massively underperformed -- >> then how it's going to
overperform? if there's no demand for energy, how's to going to overperform? >> no, there's demand for energy. >> from where? >> i'm saying if you're counting on asia for business growth and particularly for businesses already out-performing, i don't think asia's the place for growth. it's part of the problem. >> let me get a comment from patti edwards. it's a story in and of itself that cortes is long the market, but pete is positive, cortes is largely positive, bk is positive. are you some. >> yes, actually, i am. we are absolutely 100% into this market at this point in time. it is rarely the dog that you see coming toward you that bites you in the rear end. everyone's been talking about may day and selling may and go away. the fact of the matter is, i think a lot of that happened last month. and so, at this point in time, i think the information we are getting, generally speaking, is coming out a lot better, as the guys have already said very loudly. and so, i'm thinking, frankly, you've got to be in this market until it signals otherwise. >> an interesting note on that
light today, may may amaze was the headline, saying the bad news may be discounted. patty, perhaps that's to your point. steve weiss with short hills capital is on the fast line with more on this market rally. we're watching the market take off. ism better than expected. are you a buyer in today's market and what are you buying? >> these were actually the easiest trading days i have seen because the ism number put to bed a lot of fears. if you look at what happened in the market, it's almost as if the market thought somebody had the numbers early and they were going to be disappointing, so you can get in. i actually bought steel stocks today, letter x and mt, purely as a trade. so, far be it for me to be the one that's the voice of reason here, but we've got a lot of economic numbers from europe coming out tomorrow and the next day, and the u.s., of course, the jobs number. i don't think the news is great. i think it's good for the u.s., but china is definitely slowing. i don't believe their numbers that came out overnight. and we're hearing more and more
companies -- >> hold that thought, stephen. i want to get to bertha coombs with more on this story with herbalife. >> scott, herbalife triggering two automatic stock halts this morning. the stock dropped really precipitously. that came during the conference call. traders are saying that david i knowhorner, noted short seller, was asking the company about its disclosures with regard to some of its distributors. the company answered that some of the issues had to do with the way they reported the change in their cfo and said that its objective is to be completely transparent. that's what they're quoted as saying on fly on the wall. the stock has resumed trading, as you can see. it bounced a little bit off of the bottom there, but these are some of the issues that folks are concerned about when you talk about what you put on your 10k and a noted short seller points it out. apparently, a lot of folks getting spooked this morning. back to you. >> bertha, no doubt. steve weiss, this is the power of david wieinhorn.
we saw what happened to the stock. >> exactly why i was at salmon brothers, i was part of the lead management team that took herbalife public. i'm not saying there's anything wrong with it. i'll defer to david einhorn, but it's very tough to understand the marking and accounting of these companies, whether it's an avon or an herbalife. >> patty edwards, you're in these shares. >> this is a stock i've owned for two years. today is a little painful. i'm still up 140% since july 2010. fact of the matter is, this is essentially a way for folks in latin america, for folks in china, to get into their own business and do their own sales. so, i think it's a fairly robust model it worked very well for avon for a long point of time. i don't know about david's comments because i actually haven't been on the conference call. identi i've been prepping for this tv show thing i do. >> i understand, but if you've been in the stock for some two years and a guy like david einhorn, with the megaphone that
he always carries around, you can see what his comments or his apparent comments are doing to the shares. does it make you second guess the fact that you're still in this stock? when you get off the show, for example, will you consider selling out of these shares just because of what you're seeing today? >> well, what i'm going to do is i'm absolutely going to go through the conference call with a fine-tooth comb, find out what's really going on first. at this point in time, i have taken profits all the way along, scalps some off of the top of the position, so i'm not overly concerned about it today. but i will be doing my homework and finding out exactly what his concerns are. >> good enough. shares of sears, meantime, topping today after the retailer gave a stronger-than-expected quarterly outlook. what's the best way to trade this stock ahead of its earnings release on may 17th? pete, what do you think of sears here? >> this is about as volatile a stock as it gets as far as retail's concerned, so i think it's a difficult call, quite frankly. i continue to look at the discount stores. obviously when you're looking at sears, you're talking about a variety of different reasons why the stock goes up and down.
obviously, some very large players are involved on both sides as far as the stock's concerned. i'm not in this name. i'm in tjx, i like some of the discounters, but i'm not in this name. >> patty edwards, our resident retailing expert, what about sears? >> you know, sears, as pete said, this is really a firm that's controlled completely by eddie lampert. the numbers that they're putting out there, they're saying that sales slowed less than expected but they were still down. you know, i'm looking at it, i can't see a reason to own it for fundamental reasons, and i think, you know, if you've made money, great, but if you're looking for a retail story, that's not where i would be going. >> weiss, are you still with us? >> here's what i think about sears. i've been short it periodically. >> yeah. >> in order to short the stock, you've got to pay a 50% carry on that position. so, you've got to be really, really right. i'm not involved at all. i am short jcpenney, though, because i hear their sales, and they don't report sales, are really trending down. >> yeah, which one of you
guys -- was it cortes or bk? >> i think the important reason retail's doing well, and particularly low-end retail, and i'm long walmart, is gasoline. gasoline prices at the wholesale level were down 6% in april. that's extremely helpful to the family dollar or walmart shopper. in the case of walmart, i think this mexican situation is frankly overblown and overdone. i think walmart belongs back above $60 and i own it. >> all right, guys, let me bring in herb greenberg. there's so much happening with this herbalife story and herb has more on it. herb? >> hey, scott, listen, in trying to figure out -- i'm out of the office right now, but you know, what effectively happened is david asked some questions about disclosure. he asked a variety of questions. one of the important questions that has to be asked here is how much of the product actually goes out to end customers. and the company tried to answer that question. but a more important question is one of disclosure. i've certainly raised questions about the company's disclosure the amount of money spent on research and development.
but i'll tell you that another important disclosure -- and remember, this is a multilevel marketing company -- an important disclosure that the company stopped disclosing in 2006 is how much -- how many of its distributors fail, what percentage of its distributors fail. at the time, 90% failed. the company stopped disclosing that so it could -- just about the time the federal trade commission embarked on a new rule called business opportunity rule that would have required a lot of important disclosure for companies like herbalife. this is a very interesting story, and i can tell you that david is probably just, you know, scratched the surface. >> i would just wonder, herb -- >> according to my research. >> do we even know if einhorn is short these shares or are these just questions that he's raised on a call? i mean, i don't have his portfolio in front of me so i don't know. >> look, i have no idea what david einhorn is up to.
i can tell you, i have no idea why somebody would go on a call and ask questions unless they're involved, whether it's long or short. >> unless he's thinking about making a move. i don't know, but it's something we're certainly going to look into. herb, thanks for your insight. >> sure. >> weiss, i'm going to let you run, too. thanks for calling in to talk to us, not only about herbalife, but sears and so many other things. >> appreciate it, scott, thank you. coming up on the "halftime report," big changes at chesapeake and now carl icahn is increasing his stake. should you follow? we've got that trade. 15 minutes of fame? we can't promise that, but what about 15 seconds on "fast money"? go to tout.com/cnbcfastmoney, and submit a video question for the traders. we'll play the best questions on air. download the tout app to your smartphone or submit from your computer. #askfast. looking for a better place to put your cash? here's one you may not have thought of:
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all right, welcome back to "the halftime show." the market is rallying after the ism report for april came in better than expected, the highest since june, in fact. energy, technology, financials doing quite well today. the market is at multiyear highs, at least the dow jones industrial average touching its highest level since december of 2007. the s&p 500 just a few points away from joining the dow in that regard, 1,419 is the key level to watch for the s&p 500 today and we'll certainly keep you up to date on what the
markets are moving throughout our program. expedia was the best performing s&p stock in april, but is it time to sell in may? barclays capital downgrading the stock today. and analyst anthony diclementie joins us now to explain why. anthony, welcome to the show. great to have you on the "halftime report." >> thanks for having me. >> the stock's obviously had a great run over the last couple months. why has it rallied so much, do you think, and why is it time now to pull the rip cord? >> it's really more short term, since the company reported earnings on thursday, the stock's up more than 30%. so we're just saying that there was a number of one-time tailwinds that hit the company's model in the first quarter. one of those was an easier year-over-year compare on airline packages. another one was tailwinds from foreign exchange, and those go away in the second quarter. the first quarter for expedia is only 10% of the full year. so when you look at kind of this stiff stiffening comp in the q-2, we
think it might be time to take profits. >> you think the company's overly optimistic about the growth? i saw a note from a competitor of yours on the street today touting the share buyback as a reason to stay in the stock, a reason that the stock will continue to go higher. are you not sold on either of those fronts? >> yeah, the market, the bulls are getting real excited on the buyback, and we would just say if you look at expedia's balance sheet and you back out deferred merchant bookings, which are $1.6 billion, back out international cash, and you think about the acquisitions they've talked about internationally, the pace of that buyback might come in a bit slower than the market is thinking, so i get it on the buyback. i just think that, you know, there -- i mean, i would be a little more cautious on how quickly they can buy back 20 million shares, which would be between $800 and 900 million bucks. >> anthony, you're talking fairly bullishly it still sounds as far as expedia's concerned, you're more hesitant due to the recent absolute move to the up side. at what point do you think it's time to jump back into the shares then? here we are at $42. it basically traded closer to $30 to $35 for quite a while.
>> yeah, i mean, i think if you got the stock back into the low to mid-30s, we'd look to jump in. but one thing i would say is that there are a lot of folks that say, well, here's a company that's a turn-around story, and by the way, they have secular tailwinds, which true about a lot of the stocks we cover in the internet space. in that vain, we would own the market leaders in that way. so, if you're not looking at it short term and want to own this on a longer-term basis, we would say own the market leader. in this case, it's priceline. for expedia, we just believe that because of the quick pop in the stock, you've got valuation expansion. remember, the company didn't raise guidance for the full year. we didn't raise our estimates, so we would just maybe take profits here with the stock having squeezed up. remember, the short interest is very high, so short interest in excess of 25% heading into the last couple of sessions. so with the stock having squeezed up, maybe we'll use it as a chance to rotate into a market leader and that's all we're saying on the call this morning. >> what do you think has been driving the hotel bookings growth for expedia? i mean, priceline seems to be
growing in that category faster than expedia. is that right? >> yeah, particularly in international. i mean, priceline's bookings are in the 60% to 70% range, whereas expedia's are really in the mid-teens. so europe has been an area of weakness. i think one thing where expedia is experiencing bookings growth is on pricing. they're deeply -- we think they're discounting, and you could look at this and analyze it. we did this morning, the gap between pricing and adrs, but they're discounting on properties like hotels.com, hotwire. you could argue that prooits priceline's kind of getting out of the low end because name your own price is becoming less of an emphasis for them, as opposed to booking.com. and so, the question is, how much growth is there on the low end of the market? >> so, you would make the case that it's the discounting is having more of an impact than say the new technology platform, for example? >> certainly, yeah, the discounting in the quarter at hotels and hotwire at, you know,
selling those volumes through at perhaps a lower margin i think helped them beat numbers on bookings, which of course, was a bigger beat than the revenue beat. definitely true. >> anthony, great to have you on the show. welcome back to the "halftime report." we'll look forward to doing it again soon. >> take care. >> anthony diclemente. your trade here. >> i like the sound of it, but he's kind of convinced me to wait for a pause, any kind of a pause. you get closer to $235, i think it's certainly a buy. it doesn't trade on crazy valuation, either, so just because of the huge move to the up side, if you get the opportunity on a pullback, i think it would be a great opportunity. >> cortes? >> scott, i think this pair of stocks, expedia versus priceline, is really a microcosm of the larger issue, u.s. versus world. so, i think the reason expedia's doing better lately than priceline, which it has in the last couple weeks, is because the u.s. is stronger. i would disagree, i don't think you want priceline because you don't want the international exposure, so i would prefer expedia. >> wait a minute. you've got about half of the revenues from expedia coming from outside the united states. so you've got exposure there,
too. >> but the point is the growth of priceline is overseas, and so the stocks are pricing in the future growth. priceline to be from primarily europe and secondly asia. i do not believe that's the case in the longs of expedia. all right, coming up on the "halftime report," we're trading the aubrey mcclendon story at chesapeake with somebody who's made money on the stock in thest past three days. plus, will apple and samsung boost broadcom's bottom line? you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today
wanted to give you some more color on this herbalife story. you can see shares down more than 19% after david einhorn asked questions about the company's disclosure on a call. i had speculated if maybe einhorn was short the name, but i'm told that it was not mentioned in his last letter. so, perhaps the move you're seeing in the stock is the market expecting that it will be his next short. again, just all speculation, but david einhorn asking key questions there on the call about the company's disclosure, apparently causing that slide in the stock of just about 19%, as
we follow the interesting story of herbalife in today's market. there it is right there. our next trade is chesapeake energy and our own jon najarian recommended buying the stock on friday. let's listen. >> the stock had already made a pretty big move to the down side, and just as dan dicker was saying, single digits and so forth yesterday, the stock hasn't budged hardly, judge, even with the additional information that's out there. so, if you get to a point where this bad news, bad as it is, can't push this stock significantly lower, then i think it might be near a tradeable bottom. >> well, shares are up today after the company announced it will separate the roles of chairman and ceo. let's welcome jon najarian now on the fast line with a realtime trade update. doc, what do you think here? they've also said they're going to end the well participation program early in 2014. >> yeah, well, that's a good idea, judge, of course, because nobody really bought aubrey mcclendon getting a minority stake in these wells was a good idea. and clearly, the pressure
mounted last week. again, this is not to slam dan dicker at all. it's just we were seeing a different story. dan, of course, saw the turmoil that was going on between the board and aubrey, and we were looking instead at the fact that the stock was doing one of those guy adamis, where it pounds down to a level and a lot of turnover of shares. in fact, it was trading two or three times normal levels wednesday, thursday, friday of last week, and they couldn't push it any lower. when all the news is out like that, and you can't push a stock lower, like we were saying it was a nice time to buy? the stock has popped by almost $3 from that level. i am out of that one, but i'm watching right now, judge, groupon, because similarly -- >> board shake-up there. >> yeah. schultz has just left immediately, didn't even wait. just said i'm gone. and this stock is actually up on the day. i mean, looking at that, it might be a similar sort of situation, where if you push everything you can at the stock and they can't push it down further, it might be time to take a look. >> just wondering what all of
that means for andrew mason's future at groupon, doc. i mean, when you buy the stock today, do you have to take that into consideration? >> i think you do, but you might get a similar sort of bounce. i mean, imagine, judge, if indeed they did force mason out. now, he's a genius and gets a lot of kudos for starting the company, but is he the right guy to run it? so far, the answer that wall street's seeing is no. >> yeah. i don't know how easy that would be to do, either. doc, thanks. >> thank you guys. >> let's bring in fidel gate, senior energy analyst at oppenheimer. he says the changes at chesapeake today are a positive for the company. fidel, welcome to the program. >> thank you for having me. >> this move alone is worth the out-perform rating or did you think it was worthy of that before this move? >> it's a step in the right direction. it will restore all investor confidence in management and in the board findly, hopefully, it will get the stock where it should be. >> so, you think some of the calls -- you know, we had one on
the program last week that the stock was going to go down to single digits, which obviously seemed a little hyperbolic at the time. you think that the stock goes where from here? >> well, the question that's not asked is when and by how much? >> are you confident that aubrey mcclendon, this is the right move here, taking away the chairmanship? he's still the ceo. he should be the guy running this company? >> absolutely. he is still running the company, but you have an outside chairman, which i think is very positive and is good. and basically, at the end of the day, what we're trying to do is to restore shareholders' confidence in the company, and i think this is a very good start. >> let's broaden it out and talk about bp today, bigger than expected drop in profits on a drop in production. what'd your take on bp, fidel? >> longer term very positive. they are certain it is a key issue, very cheap stock, one of the cheapest that you can have,
high dividend yield, very valuable asset. they are back full throttle in the gulf of mexico. they are the largest operator, the most profitable company in the gulf of mexico. so, i think bp is a buy here. >> cortes, you and bk were having an interesting argument at the top of the program regarding oil. i'm sure you must have a question for fidel. >> well, fidel, i am long the xle, and i'm sure as you know, chevron is driving the uptick there. what do you think of cvx here? it's really out-performed exxonmobil lately. it's had a good run. can we continue to buy chevron here? >> chevron has the industry's high of profit. they are 75% of their mix is oil. most of it is linked to a brand which does higher value. chevron also is developing the largest gas field in the whole world. so, outlook is very positive, balance sheet is very strong. th h actually, $10 billion cash more than debt. so, the company has all the
attributes that you would want to have -- good dividend yield, good growth, strong balance sheet. you can't ask for a better spot. >> fidel, does today's ism report along with the china pmi, if you get a better-than-expected jobs report on friday, does that change your near-term trajectory for where crude goes from here? >> well, i basically think crude oil prices are still inflated. don't understand supply-and-demand fundamentals, but it is what it is. improving economic, you know, trends, if you will, would push crude higher. >> fidel, great to have you on the show, as always. thank you so much. >> thank you. >> fidel gheit for us from oppenheimer. look at the biggest performing sectors. the xle is higher by 2%. financials, there is the xlf, higher as well. discretionary stocks all up more
than 1% today. so, there's three key etfs outlook to the plus side with the dow jones industrial average at its highest levels in four years. now, coming up on the "halftime report," do you need to look abroad for the best investment right now? blackrock's will landers with $8 billion under management tells us where he's finding opportunity today.
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the story is an internal demand story, pent-up demand, which you need to grow. we're looking for brazil to grow in the second semester at the 4.5% rate, 4.5% to 5% again. >> that was brazilian billionaire and investor eike batista on the show yesterday talking about his home country's growth. our next guest is also bullish on brazil and says latin america remains one of the best equity regions in the world. joining us now, william landers, senior portfolio manager of blackrock's $8 billion latin america equity fund. welcome to the show. >> thank you. >> you're still a big supporter of brazil. needless to say, april wasn't a great month. >> well, brazil hasn't performed very well for the last couple quarters now. i definitely agree with eike and the story that the consumption story appears to be one of the
most attractive, but what you have seen is moves by the government to weaken the currency, moves by the government to reduce spreads in the banking system. so that has hurt some of the large-cap stocks and especially the banking stocks, which are obviously some of the bigger on the consumer side of the equation. we've recently been favoring more of the dollar earners, the exporters, benefiters of the weaker currency, so in the short-te short-term, that's where you want to be. you've been talking about china and i think that's one of the best places to be invested with that theme. given that it is a dollar revenue company, trading around five times earnings with a 3.5% dividend yield and a strong management team that's been put in place over the last year. i think it's definitely a beneficiary of this environment. >> our traders are anxious to get in on the discussion. b.k., kick us off. >> i'm concerned about the pick, because in china, clearly they're switching from an expert-led and growth type of economy to more of a domestic consumption economy. so it seemed to me that vole
might not be the absolute best way to play china now. tell me why i'm wrong. >> well, i think when you look at the supply-demand equation for iron ore and look at all these new projects which are continuing to get delayed in iron ore, whether brazil, australia and of the supply-demand is still favoring the suppliers and vole has undermined the mining skills, some having to do with the taxation of foreign profits and potential increase of royalties in brazil. the news is getting better there. i think the pricing in china has already improved from the lows we saw in the fourth quarter and the stock hasn't really reacted to that. from that perspective, they have catching up to do from the other mining companies in the world. >> cortes? >> william, a couple questions. you mentioned brazil's underperformed for a couple quarters. really it's been several years. if you look at the brazilian etf, yesterday it hit a three-year low relative to the u.s., the s&p. i guess first, why should we believe brazil is going to turn
around and out-perform? secondly, that underperform for brazil has accelerated to the down side. is that an obstacle for growth? >> i think the president is a positive change for brazil. she's looking to implement some policies which should help the country grow faster in the long term without the inflationly pressure we saw in the past. maybe over the last 2 1/2 years, it's underperformed, but if you look over the last ten years, you would have quadrupled your money in brazil while the s&p hasn't given you a return. and petrobras having underperformed given the heavy capex returns they're making in the short term. but when you look at brazil ex-petrobras, brazil has actually performed much better and has been a market we think continues to look good and i expect it's also one of the cheaper emerging markets in the world. i think from all that, you need to do stock picking. you can't just buy brazil overall. but from that perspective, i think there are still great opportunities there. >> patty edwards?
>> you know, my whole thing is about the consumer. and in brazil, some of the ways that i would look to play it, and i'm curious your thoughts, is, well, herbalife has been one of those because it's been growing over 30%. >> how ironic. you're getting it at a discount today, patty. >> i know, i know! and then the other one is pricesmart. thoughts? >> i really don't focus on those stocks. when you look at brazilian consumer, i think the abi subsidiary for the americans is the best to be there. most of their business is coming from the brazilian market. if you're looking for other stocks, there are great retailers and other consumer-related stocks that are benefiting from that. but in terms of multinational companies in brazil, it's really not my area i'm focused on. >> as rates have gone up, are you confident they have inflation under control? >> yeah, rates actually coming down. inflation is also coming down. the central bank started cutting rates in august. they've cut rates 350 basis points so far and they're going
to continue to cut rates at least once more. but when you look at brazil still with a 9% nominal rate, it's still the highest nominal rate, one of the highest real rates in the world. so i think they're still in a constructive mode in terms of keeping inflation under control. i don't think anybody wants to put into risk the fact that we've put 40 million people into the middle class over the last ten years and there's about 25 million that are expected over the next five years, and the easiest way to have that undone is to get inflation under control. >> with the olympics in '16, i guess you're going to have the world cup there as well, i would imagine you still have a substantial infrastructure build-out to potentially bet on it, if you're a stock picker in brazil. >> there aren't too many infrastructure stocks to invest in in brazil, but petrobras is increasingly involved with the world cup for four or five years of investments. so, infrastructure goes much beyond the sporting events. hopefully, they'll put brazil on the tourism map. but we're looking at infrastructure, some major hydroelectric plants being built. there's a low-income housing
project that's going to build over a million homes a year and there are several other projects going on that go much beyond the olympics and world cup. hopefully, for those of us who travel to brazil, we'll get better infrastructure in the airports and hotels, which will be welcome as well. >> will, great to have you on the show. will anders from blackrock. apple supplier broadcom reporting after hours today. let's take positions ahead of that report with stacy razgon. has a market perform rating on the stock. if you look at what qualcomm has done year to date, 60%-plus. broadcom's no slouch, but it's up half that amount, 30 something percent. why the difference there? >> you have to remember, broadcom kind of got hammered through much of last year and it was sitting going into analyst day in december in the ballpark of $28. so it's had a good runoff, 20%
or 30% up since then. i think with qualcomm, they've done quite well through late last year. it was really the impact of the iphone 4s win that everybody had appreciated they were going to get. but i think people had unappreciated how much success apple would get with that platform. essentially drove a step change in market share for chipsets for qualcomm. at the same time, they've been seen within their licensing basis which drives a majority of the value add into the company. their royalties are earned as a percentage of the dollar value, essentially, of the 3g or 4g device market in the world and they've actually seen increasing pricing and increasing unit growth, which has driven that market growth and more growth in the world. so they've had a fair amount of benefit off of that. >> right. mcquarry cut u.s. semis today in part on stretched valuations and also on growing capacity. is broadcom not susceptible to some of those issues? >> well, valuations, you can always make the argument.
around capacity, broadcom is fabless. they don't own fabs. they buy wafers from a number of others who make the chips for them. if there was overcapacity, that's a positive for broadcom because they would get better pricing. right now, particular leading edge, though, it's not an overcapacity situation on the leading edge technology right now. that's actually an undercapacity situation. maybe broadly for the industry. >> right. >> now, has broadcom already jumped, in your opinion, based on what happened with apple on april 25th with the spike of 6%, or is there still more? >> you have to keep in mind, there was a lot of noise going on, actually in the wake of qualcomm's report. they guided chipsets down. people worried that that implied they were going to be really weak iphone shipments in q-2. it turned out to be strong shipments in q-1. everybody in the apple ecosystem actually got -- took a dive in advance of that. when apple reported, everybody sort of recovered.
and so, broadcom recovered whatever it was, up 6%, but it had been down quite a bit in the days before that on the apple news, and so it was recovering some of what had been lost. i think it would be important. >> stacy, thanks so much. good to have you on the show. as we head to break, take a look at one of the biggest drivers of the dow, chevron, along with ibm, jpmorgan leading that average to a four-year high. there's chevron shares, up 1.75%. take a look at ibm there, up nearly 1% and the financials are performing quite well, evidence of that with jpmorgan today. coming up on the "halftime report," we're trading the latest phone offering from rim. what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ?
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it's just another way you'll be traveling at the speed of hertz. today on "power lunch," folks, trouble in the sea. sweet news corp. chess pea ceo pay. find out where we go from here. occupy protesters ottmarch this may day, but did the movement miss its moment? and the costly things colleges are doing to woo perspective students. they didn't have maid service when i was in school. apparently, some do now. now back to scott and more "fast half." >> all right, see you in a bit. one stock that isn't participating in today's big rally is research in motion. this despite ceo thorston heinz
unveiling the prototype of the blackberry 10. jon fortt is following the details. if not now, when is that stock going to take off? it's down today as they show off blackberry 10, highly anticipated. >> yeah. hey, it's just the software, though. maybe the hardware would get it moving. heinz did touch on the look and feel of blackberry 10-os. is looks nice. the video they show, it will highlight e-mail, phone-calling and video on the phone and on a tv. they also showed a feature where you can sort of turn back time on the camera and make sure someone's eyes are open, even if they were closed when you actually took the shot. now, the new interface is snazzy, maybe too snazzy, we'll see. as we know, looks only get you so far. rim is running way behind in the smartphone platform race. we know that in the quarter that just ended, they sold 11.3 million handsets. apple sold three times that. as you can see on the chart, their handset sales lost momentum a year ago and they're in real trouble.
rim needs blackberry 10 to turn things around. there's a long 30% time back up from the level a year ago. rim has been warning for a while that blackberry 10 won't make up the majority of handset shipments for quite a while, even after it arrives. the costs will be too high for the emerging markets where rim is now selling a lot of phones. that means they're going to have to crowd out microsoft and probably take share from apple or google for blackberry 10 to be a big hit. and it will be going against new phones like the samsung galaxy 1-3 due this week and the iphone 5 by the end of the year. blackberry 10 is certainly going to look less snazzy next to those. >> take share, jon, from apple and the iphone, really some. >> i'm just saying, that's what they have to do. >> that's a problem. >> i don't know. insurmountable odds or what, pete? >> you look, this is the second half of the year story, right, jon? and they're not convinced that after that it will be that big of an impact. this is a company with 15% of the smartphone market in the last half of 2011, now below
10%. this is a real problem. so now you've got to start looking at research in motion as sum of the parts. you've got a lot of cash, you've got no debt, but the sum of the parts, and what does that really mean as far as pattens and everything else? >> patents and everything else. >> that becomes the issue. >> they've got to do absolutely everything right. >> jon, thanks. i was going to say to any one of the traders, that becomes the issue when you have to make a decision on you see what that chart has done and that big slide down. whether you take a flier and get in on the name simply because you believe something is going to happen from a strategic standpoint, deal or otherwise. >> scotty, you have to look at it like pete says. pick over the carcass and see what it's worth. unless you're a patent attorney it's a little difficult to get a valuation on it. certainly buying patents have been hot right now. there's nothing left to it. >> it's them and nokia fighting it out to see who's going to go bankrupt first unfortunately is the way it's trading now. >> exactly. >> i look at nokia as probably the better spot to be with the microsoft, intel and some of the
partnerships. >> pete, nokia 9600? >> i threw it. i finally got rid of it. i got an iphone. tomorrow a big day on cnbc. all day coverage of the rim developering conference. brian shactman will be there with reports throughout the day. certainly want to pay attention to that as you see where these shares perhaps go from here. coming up, is there a way to play the may day european protest against austerity? your money in motion trade is next. tdd# 1-800-345-2550 i'm constantly working my screens. tdd# 1-800-345-2550 checking the charts. tdd# 1-800-345-2550 looking for support, tdd# 1-800-345-2550 resistance, breakouts, tdd# 1-800-345-2550 a few other tricks that i'll keep to myself. tdd# 1-800-345-2550 that's how i trade. tdd# 1-800-345-2550 and i do it all with charles schwab, tdd# 1-800-345-2550 because their streetsmart edge platform tdd# 1-800-345-2550 helps me trade quickly, intuitively. tdd# 1-800-345-2550 staying on top of the market is key! tdd# 1-800-345-2550 and the momentum tool, tdd# 1-800-345-2550 it lets me do it at a glance, tdd# 1-800-345-2550 so when things shift, i'm ready. tdd# 1-800-345-2550 then to track the stocks i have my eye on, tdd# 1-800-345-2550 i turn to schwab's high/low ticker. tdd# 1-800-345-2550 so i can spot a potential breakout tdd# 1-800-345-2550 before it breaks out.
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workers across europe participated in may day rallies today with unions protesting austerity measures. the euro is essentially flat. let's bring in todd gordon of aspen trading group with your money in motion trade. t.g., good to see you again. >> you guys, too. >> not trading the euro today. what are you looking at? >> not trading the euro at all. it's actually a mess right now. i think the rba is the real story. the rba came out and surprised the markets. cut interest rates by 50 points instead of 25. sub trend. cpi growth. housing sector a problem. more cuts to go in the australian economy. that's going to weigh on the australian dollar. to the benefit will be the u.s. dollar. something interesting happened this morning after the ism. the ism came out strong. stocks and a u.s. dollar rally together. a new phenomenon that's starting to take hold. as u.s. economy powers ahead you'll see the dollar strengthen and with australia cutting rates
it's going to pressure the aussie. >> seb.k., you're our other big currency expert here. weigh in. >> i guess so. the only thing that concerns me about this trade -- >> you don't have to like it, b.k. tell todd he's crazy. >> here's what concerns me. the rba surprised with a bigger cut than expected. yet the currency really didn't break any new lows. and somewhat rebounded. so it's got me confounded. >> aussie is the biggest loser today. the australian dollar and australia against the yen as well. >> it's not breaking any significant levels. it's not even breaking the levels that it rallied last week from. to me, it's not that exciting. >> aussie is a good one. here's another one if you want to play u.s. strength. the canadian dollar. obviously what's good for the u.s. is good for canada. a big winner today is the canadian dollar. you want to go short aussie you can do it against the dollar and
also look at the canadian dollar. that can stand to benefit. >> i agree with that one. hit the ticker and trade some of your tweets. trader investor go away and sell in may or stay and play in may or sail away in may or get on your knees and pray in may? i'm confused. cnbc fast money. pete, we talked about this at the top. you'd say buy in may. >> i don't know i'd necessarily say buy. obviously you've got to be very selective. smart in may. it's a trader's month. it's been a trader's market for a long time now. i think that's the trade is the trade. don't go away. >> coming up, final trades from our team.
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